At the EEF they told how to give a powerful impetus to domestic tourism in the Russian Federation
For the construction of new hotel and resort complexes, in addition to preferential interest rates, credit holidays are required for 3-4 years, until the facility is put into operation and begins to make a profit.
The shortage of hotel rooms throughout the country limits domestic tourism, and not everywhere banks are ready to finance the construction of hotels - this business has too low a margin at the start, reports a PolitNavigator correspondent.
At the plenary session “Travel to the East: opportunities for investors and tourists” within the framework of the Eastern Economic Forum in Vladivostok, ex-governor of the Krasnodar Territory Alexander Tkachev noted that the adopted decision to apply a zero VAT rate for newly opened facilities is revolutionary, but not sufficient for the extensive development of tourism in country.
“The payback period for tourism projects is 15-20 years. And our partners from other countries somehow overcome these difficulties, and above all, in several ways. One of them is preferences and benefits,” he noted. – Take Turkey, where VAT on tourism is 1%, and we have been saying for many years that with a VAT of 20% we cannot compete with Turkey, Italy, Germany, Switzerland, where VAT is 5–7%. And only this year they heard us. This is a real revolution, this is 20% of the income that we earn from operating systems, we used to give it to the state, but today this money remains with the business and will be invested in development and modernization. We will return them in 5-7 years and not in the same volume, but much more, due to the number of services, new hotels, and so on.
But any investment in the tourism industry takes a long time, and when we go to the bank, it’s difficult for them to part with money and they don’t really believe in us that this project will pay for itself in the coming years. Thank you, today we are already receiving a subsidized rate. We're talking about vacations. Because without this we will not be able to change our tourism industry, which means changing our country.”
In addition to the construction of hotels, large entertainment industry facilities are needed, such as Sochi Park or Dream Island. The government is considering four similar centers, one of which will be located in Yalta, as part of the national project “Tourism”. This will entail the creation of year-round hotel complexes according to modern standards to replace converted Soviet-built hotels.
“Building a five-star hotel is the dream of any region; it’s prestige, it’s a standard, it’s a face. Moreover, if the hotel is of any brand. But in order to build such a hotel with 400-600 rooms at the metropolitan level, you need to invest from 5 to 10 billion rubles,” Tkachev clarified. – I myself have gone through this several times and counted it several times with banks - even a subsidized rate of up to 5% does not break, and the model cannot withstand such loads. Of course, we need to look for a way out. Today we live in a five-star hotel, which is barely worth three “stars”, and in general, all hotels in the Russian Federation are converted Soviet hotels. This is a travesty of the hotel standards that we want to bring to our residents, to our guests.”
There is not a single resort or spa complex on the ocean coast of the Far East, while the very prospect of spending a vacation on the ocean is “fascinating” for residents of Moscow and St. Petersburg. Not to mention the residents of the Far Eastern Federal District themselves, who go on vacation to China and Vietnam, taking money there. State support mechanisms in the form of tax holidays, preferential loans, etc. will be a signal to the banking sector to protect investments.
“The margins of this business are not the highest,” explained Anton Perin, senior managing banker of the VEB.RF business unit. – It is clear that during the peak season in a popular location, the load and profitability are probably high, but on average in the industry they are not very high, therefore, from the point of view of government support, we advocate stability and the preservation of all instruments so that banks can predict repayment. Much has been said about the need not only to build hotels, but also swimming pools, water parks, parks - all this is included in the price, this all increases the price tag. The average annual occupancy of hotels is 40-50%, is it 40-50% of the number of rooms that is only working?
There is sensitivity to weather and other conditions; business has very high risks, especially when we are not talking about popular places, but about territories that are desirable to visit, but not developed. Such projects are actually venture capital in nature. Investors are told: take risks, play around, but that’s not how they work with a bank. Because we fall into a trap here: no infrastructure - no flow, no flow - no infrastructure.”
Long-term lending, including for transport infrastructure, is possible only on preferential terms and with government guarantees. Miscalculations affect the entire region as a whole and should be reflected in a master plan for the development of the territory, covering 12 main indicators. The issue of attracting tourist flow cannot be solved by building infrastructure alone, since there are climatic, seismological and logistical features. In Vladivostok, where VEB is taking place, according to the calendar it is beach season. But the arrival of a typhoon cut short the already short period of vacations on the coast.
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