Could you make Russian tourism less viable than it is already? Well, St. Petersburg’s Mayor, Valentina Matvienko, has just thought of something. A new tourist tax.
While the amount may appear small, it comes on top of increased visa price hikes and hassle and against a background of crisis. Any Laffer curve analysis would show the tipping point for tourist budgets was reached a while ago. Ms. Matvienko had only to read her own city’s newspaper last April:
‘The city, which claims 80 percent of the country’s tourists, expects a 30 percent drop in foreign tourists and a 10 percent to 15 percent drop in Russian tourists this summer’, said Mariana Ordzhonikidze, head of St. Petersburg’s tourism department.
‘We are all very troubled and discouraged,’ Ordzhonikidze said. A lot of people in St Petersburg will be troubled by the idea too. Tourism employs 18% of the city’s workforce.
In the meantime, Mr Medvedev has come up with another bright idea. Forget foreigners and encourage Russians to holiday at home. The Federal Tourist board is now subsidising flights for cash-strapped Russians – retirees and people under 23. Just one snag, though. This group comes up against exactly the same problem as foreigners who take a cheap flight to St. P. The destination isn’t cheap.
Vladimir Gusev, director of the State Russian Museum, nails it.
‘Tourism is hardly thriving in a city, which is infamous for its high prices,’ Gusev said. ‘There is a shortage of mid-range hotels and affordable places to eat, especially in the historic centre.’ He expressed doubts about Valentina’s initiative. The tax will work against the city, it will be viewed as yet another piece of bad news from Russia.’
Ms Matvienko was recently listed by Forbes as one of the world’s most powerful women. Marketing, however, doesn’t appear to be one of her strong suits.
[...] Petersblurb writes about the harm that the new tourist tax proposed by St. Petersburg government would do to the city. [...]