World News

Weak ruble rouses tourism to Russia

People walk past boards showing currency exchange rates in Moscow, December 17, 2014.
Maxim Zmeyev | Reuters

A weaker ruble has helped inbound Russian tourism jump 13 percent in the first nine months of the year, despite simmering geopolitical tensions that have marred diplomatic relations and trade ties with the West.

Figures from the Russian Tourism Industry Union show that foreign tourists made 2.53 million trips to the country between January and September, hitting levels not seen since 2008. Chinese tourists outstripped Germans as Russia's most frequent visitors, up 63 percent from a year earlier.

Notably, Iranian tourist numbers have also boomed, up 111 percent in the first nine months of the year, with the country's citizens now tracking as one of the top 15 foreign visitors to Russia.

Vladimir Kantorovich, the first vice president of the Association of Tour Operators of Russia, told Russian news site Kommersant said a devalued ruble was helping boost numbers.

"Russia for many has become a very cheap destination," he said.

The U.S. dollar has appreciated against Russia's currency by 20 percent since January, and the greenback has gained 113 percent over the past two years with tensions over Ukraine beginning in early 2014.

The report from the tourist union suggests that a further jump in visitors should be expected closer to 2017, when further preparations are made for the 2018 World Cup.

Not all is rosy

Moscow, with the Kremlin in the background.
No rate change from Russia as ruble tumbles

Americans accounted for the third most frequent visitors, followed by Turkey — though both are currently facing diplomatic spats with Moscow.

Washington has grown impatient over Russia's continued influence with separatists in eastern Ukraine, while Ankara is still getting the cold shoulder from Russian President Vladimir Putin after downing one of Russia's fighter jets near the Syrian border last month.

However, the real impact of the row with Turkey won't rear its head until full-year figures are available, with the tourism union also suggesting that we're unlikely to see similar results next year. Russia has since revoked visa-free travel for Turkish citizens, which had been in place since 2011.

The Netherlands chalked one of the most dramatic declines for Russian-bound tourists, down 23 percent to 19,200 visits following the tragic downing of the MH17 flight over Ukraine that is now widely believed to have been shot down by Russian-backed separatists.

Staycation for Russians?

A Russian one Ruble coin is shown on the Russian flag.
Russia plots FX move as ruble nears 2015 low

The news also comes amid plummeting outbound travel for Russian citizens, who have felt the sharp edge of a weaker ruble that has extremely limited the impact of their currency abroad. That's also paired with high domestic inflation, currently at 15 percent, that is chipping away at consumers' disposable income.

The Federal Tourism Agency reported in June that the worsening economic crisis had seen travel abroad fall 30 percent in the first quarter alone, with more Russians choosing to vacation at home.

The Russian Tourism Industry Union already expects domestic demand to push prices higher in traditional holiday destinations like the former Winter Olympic host city of Sochi, which could put further pressure on local holidaymakers' wallets.

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