PETER The streets of Russia’s “northern capital” are busy in the summer, but there are no western tourists to be seen.
Russia’s war of aggression in Ukraine, a “military special operation” as Russian officials call it, froze tourism from Europe and the United States. Even before that, of course, the tourism business suffered from the pandemic.
Last year, tourist trips to Russia decreased by 96.1 percent compared to the year before the pandemic, the Russian Association of Tour Operators has calculated.
St. Petersburg’s tourism industry is eagerly awaiting the return of Chinese tourists now that the corona restrictions have been lifted.
The St. Petersburg-based travel agency Merkuri used to provide Russian tourists with trips to Europe, primarily to Italy. First Corona and then the war changed everything.
– That’s why our main direction now is literally all of Asia. The most popular are the Maldives, Seychelles, Mauritius, Vietnam, South Africa, Kenya, safaris, says the director of Merkur’s development department Jelena Kormilitsina.
Any crisis also provides opportunities, he points out optimistically.
– I think it is possible that this is a moment for growth. Europe was very established. We turn the other way and look for new routes and find them.
Consulting company Forwardkeys tellsthat Thailand, the United Arab Emirates, Turkey, the Maldives and Egypt have been the biggest beneficiaries when Russian travel to Europe became more difficult.
Merkur’s Jelena Kormilitsina says that depending on the occasion, they still direct tourists to Europe. The logistics are more difficult now, and there is no guarantee of getting a visa.
– Russians have always loved Europe. I think we have a similar mentality. Yes, it is beautiful and exotic in Asia, but in Europe we are like at home, Kormilitsina says.
On the other hand, the same difficulty is ahead when tourists from other parts of the world are attracted to St. Petersburg. Russia and Europe are historically close and the operating models are established. For example, tourists from the Middle East may have completely different expectations.
Reorienting the economy is hard work
The international economic forum held in St. Petersburg in mid-June reflected Russia’s efforts to reverse the direction of the economy. There were hardly any guests from Western countries and not even journalists from “unfriendly countries” were accredited to the event.
This year’s guest of honor was the United Arab Emirates.
Economist Alexander Prokopenko wrote In the weekly newsletter of The Bell publicationthat the St. Petersburg Economic Forum had turned into the backdrop of Potemkin in the 21st century: “The Kremlin’s desperate attempt to show that Russia has foreign partners and its economy is dynamic.”
Vice-chairman of Yrittäjäliito, representing small and medium-sized companies in St. Petersburg Sergey Dmitriyenko instead praises that the event had a huge number of representatives from different parts of the world and Russia.
He saw in the forum a good opportunity to create new relations with China, India and the rest of the world, when the old relations with Europe have been broken.
– During this six months, we have seen that the representatives of other countries have been very active. They are happy that a market niche was freed up, says Sergei Dmitrijenko.
Entrepreneurs in St. Petersburg now generally have to adapt to the prevailing conditions. Dmitrijenko frankly admits that it is not easy to change familiar and proven business partners to new ones.
– I wouldn’t say that we would be happy that there would be growth and prosperity. Difficult and tense work is going on, says Dmitrijenko.
– But we see that the authorities are listening to us and we are trying to change the situation for the better.
Dmitrijenko says that at the St. Petersburg Economic Forum, a lot of attention was focused on the relations between small and medium-sized companies between the countries. The forum discussed examples of successes and failures.
He gives an example: A Russian manufacturer made a contract directly with the Chinese. The Chinese got the right to the brand and large fines for delivery times were entered into the contract.
Due to the pandemic and logistical difficulties, the Russian company failed to meet the promised delivery times. It was heavily fined and the Chinese started making the same product in China.
Building new relationships takes time.
– We never worried about honesty when we cooperated with the Finns, Dmitrijenko says.
– Working with other countries has its own peculiarities, psychological nuances. With the Arab countries and Turkey, it must always be confirmed that the agreements will be implemented. There must be someone on site to check the situation.
According to Dmitrijenko, companies have a labor shortage of engineers and technical workers, as Russia increasingly has to replace imports, i.e. produce goods that were previously imported from Europe.
– All in all, we don’t have enough people. We don’t have unemployment. The Russian economy is working fiercely and actively, Dmitrijenko says.
The bus company is booming when the flights were interrupted
The new restrictions have not been negative for all companies in the tourism industry.
When direct air and train traffic to Europe is cut off, there is a demand for buses. The Finnish and Estonian border are still windows to Europe.
– As for last year and the beginning of the military special operation, it was a unique situation. This has never been the case, says the manager of the Carsbook charter company Pavel Surtayev.
– The closed sky was a breakthrough for us, a real heartbeat. We transported such a number of people last year that it is impossible to comprehend. It all continues to this day.
Despite the travel restrictions imposed on Russians, travel continues. Very many have dual citizenship or a residence permit.
The spare parts are organized in a roundabout way
Western sanctions made it difficult to get essential spare parts for the transport industry. Surtajev also has German equipment, Mercedes-Benz cars.
– Now, somehow, the logistic chains have settled down, Surtajev says.
When spare parts cannot be bought directly from Germany, they are bought from the United Arab Emirates and end up in Russia via Turkey or Kazakhstan. In Russia we talk about parallel import, parallelnyj import.
Surtayev says that Chinese manufacturers take advantage of the situation: the market is filled with Chinese goods. He says the Chinese have also made huge progress in bus production.
Of course, there are certain high-tech parts such as microchips that are not easy to obtain, Surtajev admits.
– The problem exists, but it can be solved, it is neither critical nor global. The time frames are only slightly increasing, he says.
– If you really want and need a spare part, you can get it somehow.
There are also difficulties. In Finland, traffic insurance premiums have been raised sharply.
– It cannot but affect the price of transport, says Surtajev.
A single trip to Finland in a month would not necessarily be worth it. Surtajev just bought insurance for two buses, because he knows that there are at least four trips to Finland per month. Then the insurance partially pays for itself.
Western sanctions are felt in everyday life, but Russian entrepreneurs are proud of their ability to survive. There have always been enough difficult times in the economy.
– The situation forces you to concentrate more than before, you become more mobile, you adapt to the situation, you try to survive in the current difficult conditions, says Surtajev.