Tourist destinations around the world are taking a hit to their economies as Russians stay home due to war-related sanctions, with possible long-term effects on international tourism.
It comes as European countries bordering Russia say they could ban all Russian tourists.
Russians were the seventh largest consumer of tourists in the world before the pandemic, spending $36 billion a year.
Nha Trang in Vietnam, nicknamed “little Russia”, attracted a large number of Russian tourists before the war. The resort has seen a rapid post-pandemic recovery thanks to the return of Russian tourists in 2019. Russian tourists spent an average of $1,600 per stay in Vietnam, while the average for foreign visitors is $900.
Upscale Vietnamese hotels, once popular with Russian tourists, are nearly empty or have been sold. The tourist guide sector has also been affected.
Nha Trang is not alone. In the Thai resort town of Phuket, shops and bazaars would normally be bustling with Russian tourists. Hotel companies remain uncertain about their future after many Russians canceled their holidays when Russian airlines suspended flights to Phuket in March 2022. While foreign arrivals made up 59% of arrivals at Phuket airport before pandemic, this figure was 35% in the first half of 2022. .
Today, resorts dotted around the world, from Sharm el-Sheikh in Egypt to Varadero in Cuba, are all taking economic hits with low levels of hotel occupancy leading to job losses, bankruptcies and revenue declines.
Turkey attracted seven million Russian visitors in 2019 to tourist destinations such as the Mediterranean resort town of Antalya. It was popular with Russians due to its beaches, all-inclusive tourist packages and easy-to-obtain tourist visas on arrival. The city welcomed more than 3.5 million Russian visitors in 2021.
With less than 2 million Russian tourists expected in 2022 and a $3-4 billion drop in tourism revenue, the shift has led to job losses, just as fuel and other prices rise.
This is a blow to the economy, as every tourist in Turkey generates about three temporary jobs and every dollar from tourism generates up to $2.50 in revenue for industries that supply tourist resorts, according to Al Jazeera.
Falling tourism receipts and hard currency are putting pressure on the Turkish economy and its currency, with tourism accounting for 13% of GDP before the war and the pandemic.
The EU has already suspended the visa facilitation agreement between the European Union and Russia, which made it relatively easy for Russians to obtain travel documents. Previous sanctions included bans on European and Russian airlines from flying to and from Russia. They have also limited Russian tourists’ access to international credit abroad.
Many wealthy Russian tourists have opted for trips to Dubai. However, high-end boutiques in New York, London and Milan, as well as glitzy destinations like St. Moritz and Sölden and popular spa towns such as Karlovy Vary in the Czech Republic, miss out on the bargains of wealthier Russian visitors.
On the French Riviera, luxury boutique hotels and pricey seafood restaurants have seen a drop in business. They have not been able to replace wealthy Russian tourists with enough travelers from countries like Bahrain.
Smaller countries, which received large numbers of Russian tourists as lockdowns eased, including Cyprus, the Maldives, the Seychelles and the Dominican Republic, saw their post-pandemic tourism pick up short-lived. Cyprus, whose service sector, including tourism, represents more than 80% of the economy, risks losing up to 2% of its annual GDP if Russian and Ukrainian tourists do not return to the country.
Cuba saw a 97.5% increase in the number of Russian tourists in 2021, according to the country’s National Statistics and Information Office. When that market crashed, Cuba’s economic recovery plans were hit. Russians were expected to make up 20% of visitors to Cuba in 2022, with far fewer tourists visiting the resort town of Varadero.
Find alternative visitors
Thai resorts are hoping for a growth in Middle Eastern and Indian visitors to help fill their hotels. Egypt is looking to increase the number of visitors from Latin America, Israel and Asia. Germans and others, including Iranians, are already replacing the Russians in Antalya. In Vietnam, efforts are being made to increase the number of visitors from Korea, Japan, Western Europe and Australia.
However, many destinations were unprepared for the shortage of Russian tourists and are unable to replace 30-40% of their market with new travellers.
Now that Russian tourists are canceling trips to Crimean resorts as it comes under fire from war in Ukraine, some destinations are hoping Russians will seek an escape by transiting through Serbia, Dubai and Qatar. Destinations such as Armenia, Vietnam and Turkey are also adopting the Russian Mir payment system to facilitate payment for Russian tourists.
Efforts by destinations to replace Russian visitors will require considerable diversification, marketing and time, as tourists from new markets seek different activities. While Vietnam hopes for 5 million tourists in 2022, this is far from the 18 million visitors it received in 2019.
Even when the war is over, tourism is unlikely to return to normal. Many European countries might not want to welcome Russian tourists for a while.
It will be interesting to see if the signs written in Russian in the Egyptian seaside town of Sharm el-Sheikh or in Varadero in Cuba will remain or be replaced by Chinese or other languages during the next tourist seasons.
Michael O’Regan is a lecturer in international tourism management at Glasgow Caledonian University.
This article first appeared on The Conversation.