A YEAR AFTER THE CRASH:Post-Crisis Tourism Picking Up

Memories of crisis-related cataclysms are swiftly fading away among travel agents as Russia's tourism industry begins to take off.


Last August's economic chaos and the soaring inflation that followed dealt a heavy blow to the young and promising travel sector. Tour companies struggled to stay afloat while Moscow hotels operated at half-capacity. The number of Russians traveling abroad dived 15 percent to 20 percent as the weaker ruble bit into their buying power.


However, to many travel agents those hard times are now water under the bridge as sales pick up and domestic tourism booms thanks to inflation-reduced prices.


"[The situation] is stabilizing and there won't be any more change," said Svetlana Kourkovich, sales and marketing manager at the UCS Travel agency, regarding business tourism in Russia.


UCS Travel, which works mainly with corporate clients, has a typical post-crisis tale to tell.


"September '98 was excellent but a month later we had to reduce our staff by 15 to 20 percent," director Anna Fenten said.


"Our clients' budget was reduced significantly," added Kourkovich. "Now we have more clients but their budgets are still limited."


The agency says that business did not really start to pick up until April, when demand forced it to start recruiting new employees. Now the number of staff at UCS Travel exceeds that of last year.


What was the secret? "We didn't increase our prices," Fenten said. "We acted so as not to lose a kopek of our clients' money. We didn't lose our mind over the inflation."


The stabilization and recovery of business at UCS Travel appears to be a typical example of what is taking place with many Russian travel agents.


"Two months after the crisis we had to cut down on salaries," said Maria Goncharova, reception manager at the Russia Travel agency. "We have also had to reduce advertising and choose cheaper ads."


But with business now booming, the agency is quickly climbing back on top, opening new offices last month in Riga, Latvia, and the Urals Mountains city of Yekaterinburg.


Officials at Intourist, once the tour operator with a monopoly on Soviet Union travel, said they slightly reduced their staff and restructured the company following the crisis.


But now "the situation is becoming very stable," said Inna Kamurina, Intourist's deputy director of marketing and advertising.


In 1998 Intourist registered 200,000 foreign clients who came to Russia and 100,000 Russians who went abroad. Figures for this year are already showing a similar trend, she said.


Foreign travel by Russians grew robustly from 1993 to 1997 as the emerging middle class took advantage of post-Soviet freedoms, according to the Committee for Youth Matters, Physical Culture and Tourism.


Travel agencies mushroomed across the nation, reaching a high of about 9,000, The Russia Journal weekly reported.


The number of Russian travelers peaked at 4.142 million in 1997 and showed signs of growing even more in early 1998. Then travel abruptly plummeted 20 percent after Aug. 17, 1998, the Committee for Youth Matters, Physical Culture and Tourism said.


Arkady Kevorkov, marketing manager of travel agency Akademservice, said at his company reservations of Russians going overseas fell 15 percent.


"The crisis has definitely affected our business," he said. "But it's not a catastrophe. The tourism industry is still alive."


Egypt, Turkey, Poland, Finland and Spain remain among Russians' favorite foreign destinations, tour officials said.


Meanwhile, domestic tourism is enjoying a fresh boost as cash-poor Russian tourists choose to stay at home and foreigners take advantage of inflation-cheapened excursions.


Sergei Gurkin of the Intellectual Fund travel agency said Russians are deciding that traveling within Russia is a much cheaper and more convenient vacation option, without any hassle for visas or other documents. He said many of those Russians were among the ones who "discovered" the West when the Soviet Union opened its doors in the early 1990s and now they want to see what Russia is really like.


Adventure-starved foreigners are also showing curiosity, with a steady flow of tourists heading for fishing and hunting tours in Siberia and the other vast, unexplored lands of Russia, Gurkin said.


Sergei Timofeyev, deputy director of Intourist's special interest department, said the August crisis has had no effect at all on their hunting excursions. A five to seven-day bear hunting trip to the Tverskaya region in European Russia costs $2,000 to $2,500 with food and lodging included.


Cheaper tour and transport tickets have played no small role in the rise of domestic travel. However, high inflation has kept ruble-earners' purchasing power at an all-time low.


"I've already been on holiday this summer - to my dacha," said Tatyana, a pensioner from Moscow. "I can't afford to go anywhere, I hardly have enough money for food."


Anna, a young metro attendant, said she went to a sanatorium in New Jerusalem, 35 kilometers from Moscow, while Dasha Pereyolgina, a lawyer, is venturing further: "I'm going to Odessa," she said, awaiting the train at Kievsky Station. She called the 800 ruble one-way fare "normal."


However, some old Soviet evils persist. The lack of quality infrastructure and services has put a brake on what many consider Russia's huge potential as a tourist attraction, and the hotel industry still lags behind Western standards.


"There is a huge difference between a two-star hotel in Russia and one in France," said Natalya Romanova of the Orpheus travel agency. "The services, the comfort are of a much lower standard here."


Anna Pikalyova of Continent Express said the demand for hotel rooms often exceeds what is available. "Last Saturday my husband and I went to the Ryazan region and we couldn't find anywhere to stay," she said. "Everything was fully booked."


That is a good sign for travel agencies, a sign that the idle business days following the crisis are well behind them.


Agencies like UCS Travel say they are now only looking ahead.


"[The crisis] has defined how companies should react to political crises, what is profitable, what is not," said Fenten. "It was difficult, it was a shock, but it has helped us. It has made us stronger."


Kourkovich agreed: "It was a good exercise."