New Karelian Tourist Brands
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By the end of 2013 Karelia’s organized inbound tourist flow grew more than 9% as compared to 2012 and amounted to 595 thousand people. Total revenue from all kinds of inbound tourism in the region has reached 6 billion rubles, as opposed to 5.25 in 2012, and the number of specialists employed in the sphere of tourism is now 3,130. These results, which used to be just aims that we set for ourselves in 2013, have been achieved completely, or even slightly topped. TRN magazine sat down with Chairman of Karelia's State Committee for Tourism Valery Kiryanov to discuss the future of the regional tourism.
- Valery Aleksandrovich, do you think that 2013 was a good year for tourism?
- I would say that it was. As of today, the Republic of Karelia is the third most sought-after destination among Russians. In 2013 it was visited by 1.9 million people, and this number has been steadily growing since the crisis of 2008. However, tourist groups and excursionists account for about a third of the total number of visitors. The absolute majority of tourists come to Karelia from the Moscow region and from St. Petersburg. Scandinavian countries are third in this statistic.
By the way, currently the accommodation facilities in Karelia can offer 3 million nights a year. Additionally, from 500 to 1,000 families can provide accommodation for visitors from other regions.
In addition to the statistics, we can also look at the results of a poll among Russians, which was conducted on one of large travel portals of the country in 2013. The poll showed that Karelia was leading in the nominations ‘Best destination for active holidays’, ‘Best destination for winter holidays’ and ‘Best website on tourism in the region/city of Russia’. This data differs from the official ratings mainly in that it reflects the objective evaluation of the region’s tourism infrastructure and its appeal to the consumers of travel services.
- How much is the region spending on developing tourism infrastructure?
- Right now a fourth program, ‘Development of tourism in the Republic of Karelia for 2012-2015’, is being implemented. The government support best demonstrates the main priorities in the development for travel companies. I should add that the sector is being developed with minimal financial support from the republic’s budget. The total amount of money spent on all kinds of state support in 2013 was 7.5 million rubles ($209,600). Money from the federal co-sponsorship will start coming in after the republic’s projects in the federal program ‘Development of domestic and inbound tourism in the Russian Federation (2011-2018)’ have been approved.
Aside from direct financial support, various measures of supporting investment activities for both big and small businesses have been developed and implemented.
Among the most notable procedures is lowering the income tax rate to 13.5% as opposed to the standard 18% (in respect to the amount that goes to the republican budget). Also, zero property tax for investment projects. These benefits are valid throughout the actual payback period, but not longer than during five years.
Those travel agencies that utilize the simplified tax system are entitled to a lower rate of 10% as opposed to 15% that are stipulated in Article 346.20 of the Tax Code of the Russian Federation. This rate is used if the income from tourism activities constitutes more than 70% of the total revenue.
Also, funds from the republic’s budget can be used to partially reimburse the expenses incurred when paying the interest on the credit for financing investment projects. Grants of up to 300 thousand rubles ($8,384) for business start-ups (some of which are travel businesses) are given out through competitions.
A lot is being done for the international cooperation. Karelia boasts a wealth of experience in this sphere – more than 100 collaborative tourism projects have been carried out during the last 12 years as part of various programs.
- Is the region included in the Russian federal program for tourism development? If yes, what are the projects that are being implemented?
- Federal Tourism Agency has proposed that we merge the key zones for tourism development – Zaonezhskaya and Priladozhskaya – into one tourist and recreational cluster ‘Southern Karelia’ in order to draw up and submit a consolidated application for the federal program ‘Development of domestic and inbound tourism in the Russian Federation (2011-2018)’. The presentation of the cluster is slated to take place at the Coordinating Council for the federal program on February 28.
- What are some of the new things that Karelia is planning to show at the Moscow exhibitions in March?
- Karelia’s government pays great attention to promoting tourist brands of the republic. Our museums, travel companies and hoteliers have a constant presence at the international, Russian and local travel exhibitions.
In 2014, in addition to the regional ones, the republic’s representatives are slated to visit five international exhibitions. Karelia has long been widely represented at the MATKA Nordic Travel Fair in Helsinki. At the international exhibition MITT/ Travel and Tourism 2014 in Moscow Karelia will be represented by 16 travel firms and organizations, and the republic’s Tourist Information Center will work at Intourmarket.
- What will the republic concentrate on when developing the regional tourism in the coming years?
- The republic is quite multi-faceted when it comes to travel potential. Karelia has interesting sights, rich natural resources, unique historical, natural and architectural monuments, religious establishments, and its population, in its turn, has many unique cultural and national peculiarities. The region is well-suited for various kinds of tourism: educational tourism, health tourism, ecological, sports and rural tourism.
The whole scope of the republic’s tourism industry can be viewed at Tourist Information Center of the Republic of Karelia – visitkarelia.travel. The number of unique visitors of this site for Northwestern Federal District is topped only by that of St. Petersburg’s similar portal.
- Is Karelia’s hospitality industry actively supporting this trend?
- At the very start of the first program there were about 40 accommodation facilities with a little more than 3 thousand rooms in the republic, and today there are more than 130 lodging facilities, and the total number of rooms is 8.5 thousand. However, this is still only 58% of the number of accommodation facilities recommended by the World Tourism Organization in order to meet the industry’s demands in the region. But there has been a substantial increase in the quality of hotel services, which often meets modern international standards.
By the way, there are about 40-50 construction or reconstruction projects in the sphere of tourism infrastructure being carried out each year in Karelia. In Petrozavodsk, the republic’s capital, the hospitality sphere is developing quicker. The new Onego Palace, located on the shore of Lake Onega, was named the best hotel complex in Karelia in 2012 and 2013. Park Inn by Radisson, which opened in 2013, is a world-class hotel.
Karelia’s districts have their own specialization. For instance, holiday resort Hunter Paradise, situated on the shores of Lake Yashezero 70 km from Petrozavodsk, was named ‘The best country hotel of Russia’.
- Are there any problems with the infrastructure, with the availability of transportation?
- A distinctive feature of tourism, one that sets it apart from other industries, is the fact that it is largely reliant on the adjacent economic sectors: transport, communication, commerce, banking services and even public utilities. I can safely attest to the fact that accommodation facilities, restaurants, cafés and tourist sites are all of top-notch quality.
However, underdeveloped transport, engineering, social, communications and service infrastructures are still hindering the development of tourism. The situation is slowly changing for the better, though. Cluster approach, implemented in the republic’s program for tourism development, allows for accumulating resources and utilizing executive bodies and state programs in order to achieve maximum results in the shortest time possible.
For instance, Karelia is now connected to St. Petersburg not only by railways and roads, but by air as well. During navigation periods tourists go on organized cruise holidays.
Massive reconstruction of roads and railways is currently underway, international bus and rail transportation is being actively developed. A new international car checkpoint is being built in Lakhdenpokhsky District, in addition to the ones that already exist in Sortavala and Kostomuksha. Future projects include resuming the international air link Petrozavodsk-Helsinki and developing flight network in Northern Europe.
- How active are the local DMCs?
-Quite active. There is a rapid increase in the tourist flow to diving centers at the White Sea and to mountain park ‘Ruskeala’ in Northern Priladozhye. New tourist brands are emerging in Karelia. Dogsled racing, jeep trials, regattas, mountain ski complexes, other kinds of active tourism and rural tourism are all getting more popular. It goes without saying that both the established tourist sites and new tourist brands are regularly represented at large exhibitions.
Large Moscow and St. Petersburg tour operators are currently offering Karelian tourism products in their regions, but it is still much too early to speak about their participation in developing and creating new tourism projects in Karelia.
- Valery Aleksandrovich, do you think that 2013 was a good year for tourism?
- I would say that it was. As of today, the Republic of Karelia is the third most sought-after destination among Russians. In 2013 it was visited by 1.9 million people, and this number has been steadily growing since the crisis of 2008. However, tourist groups and excursionists account for about a third of the total number of visitors. The absolute majority of tourists come to Karelia from the Moscow region and from St. Petersburg. Scandinavian countries are third in this statistic.By the way, currently the accommodation facilities in Karelia can offer 3 million nights a year. Additionally, from 500 to 1,000 families can provide accommodation for visitors from other regions.
In addition to the statistics, we can also look at the results of a poll among Russians, which was conducted on one of large travel portals of the country in 2013. The poll showed that Karelia was leading in the nominations ‘Best destination for active holidays’, ‘Best destination for winter holidays’ and ‘Best website on tourism in the region/city of Russia’. This data differs from the official ratings mainly in that it reflects the objective evaluation of the region’s tourism infrastructure and its appeal to the consumers of travel services.
- How much is the region spending on developing tourism infrastructure?
- Right now a fourth program, ‘Development of tourism in the Republic of Karelia for 2012-2015’, is being implemented. The government support best demonstrates the main priorities in the development for travel companies. I should add that the sector is being developed with minimal financial support from the republic’s budget. The total amount of money spent on all kinds of state support in 2013 was 7.5 million rubles ($209,600). Money from the federal co-sponsorship will start coming in after the republic’s projects in the federal program ‘Development of domestic and inbound tourism in the Russian Federation (2011-2018)’ have been approved.
Aside from direct financial support, various measures of supporting investment activities for both big and small businesses have been developed and implemented.
Among the most notable procedures is lowering the income tax rate to 13.5% as opposed to the standard 18% (in respect to the amount that goes to the republican budget). Also, zero property tax for investment projects. These benefits are valid throughout the actual payback period, but not longer than during five years.
Those travel agencies that utilize the simplified tax system are entitled to a lower rate of 10% as opposed to 15% that are stipulated in Article 346.20 of the Tax Code of the Russian Federation. This rate is used if the income from tourism activities constitutes more than 70% of the total revenue.
Also, funds from the republic’s budget can be used to partially reimburse the expenses incurred when paying the interest on the credit for financing investment projects. Grants of up to 300 thousand rubles ($8,384) for business start-ups (some of which are travel businesses) are given out through competitions.
A lot is being done for the international cooperation. Karelia boasts a wealth of experience in this sphere – more than 100 collaborative tourism projects have been carried out during the last 12 years as part of various programs.
- Is the region included in the Russian federal program for tourism development? If yes, what are the projects that are being implemented?
- Federal Tourism Agency has proposed that we merge the key zones for tourism development – Zaonezhskaya and Priladozhskaya – into one tourist and recreational cluster ‘Southern Karelia’ in order to draw up and submit a consolidated application for the federal program ‘Development of domestic and inbound tourism in the Russian Federation (2011-2018)’. The presentation of the cluster is slated to take place at the Coordinating Council for the federal program on February 28.
- What are some of the new things that Karelia is planning to show at the Moscow exhibitions in March?
- Karelia’s government pays great attention to promoting tourist brands of the republic. Our museums, travel companies and hoteliers have a constant presence at the international, Russian and local travel exhibitions.
In 2014, in addition to the regional ones, the republic’s representatives are slated to visit five international exhibitions. Karelia has long been widely represented at the MATKA Nordic Travel Fair in Helsinki. At the international exhibition MITT/ Travel and Tourism 2014 in Moscow Karelia will be represented by 16 travel firms and organizations, and the republic’s Tourist Information Center will work at Intourmarket.
- What will the republic concentrate on when developing the regional tourism in the coming years?
- The republic is quite multi-faceted when it comes to travel potential. Karelia has interesting sights, rich natural resources, unique historical, natural and architectural monuments, religious establishments, and its population, in its turn, has many unique cultural and national peculiarities. The region is well-suited for various kinds of tourism: educational tourism, health tourism, ecological, sports and rural tourism.
The whole scope of the republic’s tourism industry can be viewed at Tourist Information Center of the Republic of Karelia – visitkarelia.travel. The number of unique visitors of this site for Northwestern Federal District is topped only by that of St. Petersburg’s similar portal.
- Is Karelia’s hospitality industry actively supporting this trend?
- At the very start of the first program there were about 40 accommodation facilities with a little more than 3 thousand rooms in the republic, and today there are more than 130 lodging facilities, and the total number of rooms is 8.5 thousand. However, this is still only 58% of the number of accommodation facilities recommended by the World Tourism Organization in order to meet the industry’s demands in the region. But there has been a substantial increase in the quality of hotel services, which often meets modern international standards.
By the way, there are about 40-50 construction or reconstruction projects in the sphere of tourism infrastructure being carried out each year in Karelia. In Petrozavodsk, the republic’s capital, the hospitality sphere is developing quicker. The new Onego Palace, located on the shore of Lake Onega, was named the best hotel complex in Karelia in 2012 and 2013. Park Inn by Radisson, which opened in 2013, is a world-class hotel.
Karelia’s districts have their own specialization. For instance, holiday resort Hunter Paradise, situated on the shores of Lake Yashezero 70 km from Petrozavodsk, was named ‘The best country hotel of Russia’.
- Are there any problems with the infrastructure, with the availability of transportation?
- A distinctive feature of tourism, one that sets it apart from other industries, is the fact that it is largely reliant on the adjacent economic sectors: transport, communication, commerce, banking services and even public utilities. I can safely attest to the fact that accommodation facilities, restaurants, cafés and tourist sites are all of top-notch quality.
However, underdeveloped transport, engineering, social, communications and service infrastructures are still hindering the development of tourism. The situation is slowly changing for the better, though. Cluster approach, implemented in the republic’s program for tourism development, allows for accumulating resources and utilizing executive bodies and state programs in order to achieve maximum results in the shortest time possible.
For instance, Karelia is now connected to St. Petersburg not only by railways and roads, but by air as well. During navigation periods tourists go on organized cruise holidays.
Massive reconstruction of roads and railways is currently underway, international bus and rail transportation is being actively developed. A new international car checkpoint is being built in Lakhdenpokhsky District, in addition to the ones that already exist in Sortavala and Kostomuksha. Future projects include resuming the international air link Petrozavodsk-Helsinki and developing flight network in Northern Europe.
- How active are the local DMCs?
-Quite active. There is a rapid increase in the tourist flow to diving centers at the White Sea and to mountain park ‘Ruskeala’ in Northern Priladozhye. New tourist brands are emerging in Karelia. Dogsled racing, jeep trials, regattas, mountain ski complexes, other kinds of active tourism and rural tourism are all getting more popular. It goes without saying that both the established tourist sites and new tourist brands are regularly represented at large exhibitions.
Large Moscow and St. Petersburg tour operators are currently offering Karelian tourism products in their regions, but it is still much too early to speak about their participation in developing and creating new tourism projects in Karelia.
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