How Russia’s war on Ukraine is affecting travel and tourism

Russia’s brutal war against Ukraine, while primarily a humanitarian tragedy, has caused widespread economic damage across the world, particularly in travel and tourism. Between them, Russian and Ukrainian tourists typically spend around US$45 billion a year on trips abroad, much of it to countries in emerging Europe.

No sooner had the Covid-19 pandemic subsided than Russia invaded Ukraine, presenting the travel and tourism sector across emerging Europe with a new challenge.

According to the Economist Intelligence Unit, the war will affect the European tourism industry in four ways: a loss of Russian and Ukrainian tourists; restrictions on airlines and use of airspace; higher food and fuel costs; and a blow to traveler confidence and disposable income.

The loss of Russian and Ukrainian tourists, who spent a total of US$45 billion per year before the Covid-19 pandemic (about 8% of the global total), will affect many countries in emerging Europe.

However, some regional experts also see the positive side of the reduced reliance on tourism from Russia in particular.

Loss of tourists in the Baltic countries?

Estonia, Latvia and Lithuania could also lose 10% or more of their annual visitors due to the effective ban on Russian travelers as more Schengen countries choose to stop issuing visas. tourism to holders of Russian passports.

“The war in Ukraine came as we were all still recovering from the impact of the past two years and tourist numbers were not yet at pre-Covid levels,” Kadri Gröön of Travel Estonia tells Emerging Europe.

She points to a 50% decrease in the number of cruise ships docking in Tallinn as a direct effect of the war. She further argues that this is not the result of fear, but because they could no longer visit St. Petersburg, a key attraction for Baltic Sea cruises.

Nevertheless, she is optimistic about the future of the Estonian tourism industry.

“We have heard of the impact of war as a reason to cancel group travel, but we have not seen the direct impact of war in tourism statistics. The number of passengers has gradually improved every month,” she said.

Regarding cruise ships, she says those who come to Tallinn will stay longer than before. Also, more cruise ships visited other ports than in previous years, for example Estonia’s largest island, Saaremaa.

It is a similar situation in Latvia.

“The Covid-19 pandemic and the war in Ukraine have had an impact on the tourism sector, reducing the number of travelers from North America, Asia, Russia, Belarus, Ukraine”, said Janis Kovalevskis of the Latvian Investment and Development Agency. Emerging Europe.

“The war in Ukraine had an immediate impact on booking figures for the spring and summer season, especially for the group segment. A large number of booked group reservations were canceled in March and were not renewed for the summer season. According to estimates provided by the tourism sector, reservations have been canceled at around 60-70%. Currently, inbound tourism is mainly based on individual travelers and small tourist groups, as well as domestic travel and national and regional business travel.

She explains that in order to mitigate the effects of the war, in close collaboration with industry players, the Latvian tourism marketing strategy has been revisited in order to redefine priority markets and products.

“Due to the geopolitical situation, a large part of our tourism marketing budget is now invested in campaigns in our target markets in Scandinavia and Western Europe. Most tourists come from Lithuania, Estonia, Sweden, Finland, Germany and other European countries,” says Kovalevskis.

Loss of tourists in the Balkans?

Montenegro, which has attracted wealthy Russians to its exclusive resorts and marinas, is also expected to see a sharp drop in tourism-related income, although some Russians have still traveled to the country via Serbia. Belgrade is one of the few European airports still open to flights from Russia.

In May, the World Bank lowered Montenegro’s economic growth forecast for 2022 to 3.6% from 5.9% previously, partly due to an expected drop in the number of spending tourists.

“Russia and Ukraine have represented one of the most important markets for Montenegro as a tourist destination in recent years, as both were among the top five countries from which the largest number of tourists came. Before the war, Russian and Ukrainian tourists accounted for 15.8% of foreign visitors and 21% of those staying overnight in the country,” said Milena Vujović of the National Tourism Organization of Montenegro. Emerging Europe.

She says the country’s tourism industry has seen a significant change as a result of this crisis, but still managed to have a successful tourist season by attracting tourists from the region, Western Europe, but also from Israel, Kazakhstan, as well as new markets in Montenegro, such as Saudi Arabia and Egypt.

“According to our data on the number of tourists since the beginning of this year, on average, we register a growth of 9.91% compared to the same period of the pre-pandemic year 2019,” Vujović says.

The Bulgarian Black Sea was another major tourist destination for Russian and Ukrainian tourists, and Deutsche Welle Bulgaria estimates that more than 350,000 Russians own property on the country’s coast.

“In our country, the war has had a detrimental effect on tourism. In January, we recorded a very high number of reservations for the start of the spring and summer season. During this period, we were also experiencing a rather satisfactory winter tourist season. In February, hostilities in Ukraine started and this practically stopped all sales,” said Pavlina Ilieva, president of the organization Future of Tourism, which offers independent representation of the Bulgarian tourism industry. Emerging Europe.

A government program to boost tourism and help some of the 297,000 Ukrainian refugees who had settled in or passed through Bulgaria at the end of May included payments of 20 euros a day for food and accommodation given to hoteliers who hosted more than 40,000 refugees in seaside resorts.

However, according to Ilieva, the lack of clarity on when the program will end has made it difficult for attendees to take reservations.

Tourists need not be afraid

Lieva further argues that some tourists remain confused about Bulgaria’s location, which has also contributed to the low number of seaside visitors.

“Some tourists have the false impression that Bulgaria shares a border with Ukraine, which has led to bookings being canceled from the western market.”

Some Bulgarian travel agencies reported receiving calls from long-time customers in Western countries asking if Russian shelling of Ukraine could be heard from Bulgaria.

Kadri Groon from Travel Estonia would also like to point out that currently there is no military threat against Estonia.

“It’s the same distance from Tallinn to Kyiv as from Berlin or Vienna. Although we share a border with Russia, we are a proud northern European country, a member of the EU and NATO and located just 80 kilometers across the Gulf from Helsinki,” says -she.

Bulgaria, Estonia and all other eastern EU member states in between currently have the lowest travel warning status (Level 1) issued by the US State Department.

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Mary I. Bruner