1999 Year End Tourism Development Report

Aaltje van Zoelen

General trends

Tourism Development in the year 1999 has not changed very much from that of the past few years, except the strong trend of most tourism companies to adopt the word eco-tourism in marketing themselves and their programs. This change even though in some cases reflects a true change in operations, in most cases only reflects the fact that funding for tourism development purposes has been restricted to that specific aspect of tourism.

The recent emphasis of funding sources towards eco tourism also has influenced tourism development assistance by volunteers formerly given to more mainstream tourism companies, which now is no longer offered. This was evident during the Eco Tourism Problems and Opportunities meeting in Khabarovsk where in 1998, five volunteers gave briefings on different aspects of tourism, in comparison to none this year.

The emphasis on eco tourism which we support wholeheartedly, in our opinion is also a somewhat one sided development as in most cases it is targeted towards operations, with too little thought given towards whether or not the project is a viable opportunity for sustenance in the current or future market place. This relates only to projects in which viability and sustainability depends on opening the project for tourism development. We feel strongly that market research to qualify the projects as to its market potential and if so, a targeted marketing campaign should be part of the ongoing development. of such projects.

There are some projects which have already taken these steps, such as Eurasia with the funding provided to Yelizovo Tour Service in Kamchatka, WWF with funding provided to its zapovednik development projects in the Primorski and Khabarovski Krai, Pacific Environment Resource Center in San Francisco in its upcoming training programs for small eco tourism related firms from various areas in Russia, Ecotourism Development Fund “Dersu Uzala”, Moscow and IAITO through its marketing seminars and not yet funded projects of Eco Tourism seminars in Khabarovsk, Vladivostok and Sakhalin. If we left any one out, we did not do so purposely, so please let us know and we’ll add them to this list.

Marketing any type of tourism product remains a problem for specifically smaller to medium sized tourism companies in Russia. And by marketing we mean the entire process of creating a client oriented program which starts with the focus of the company, to how management supports its staff in its marketing and hospitality tasks, to the actual process of advertising and promotion. It is interesting to note that the smaller the company, the more there is an acute awareness of the lack of marketing, while the larger companies, which in most cases are supported in some manner by government resources seem to think that marketing happens by osmosis

In June we participated in the Ad Hoc Working Group meeting in Vladivostok. We had good support in the Tourism Sector by the Vladivostok Administration and the meeting was attended by a number of tourism firms from Vladivostok, Khabarovsk, Buyratia and Yakutia. While marketing and access to US operational and marketing training were part of the issues discussed, the main focus of the meeting was to develop cooperation between the ecology and tourism sectors. This culminated in a proposal to try to find ways to facilitate better cooperation between scientists and nature specialists with eco tourism firms to operate and market a more viable eco-tourism product. There are several efforts under way to actually get this project of the ground.

One of the facts that was brought out again is the lack of cooperation between the various regions in tourism development. Some regional companies do have partners in other regions but there is no cohesive and targeted effort to work together to promote the region and all its assets as a whole. This diminishes the potential of the region to push through and get support of the federal government to put a priority on tourism development as one of the potentially high income producing industries in the Russian Far East. It also limits its marketing potential because operating in more than one region, for example expedition cruising, is such a bureaucratic nightmare that most western companies would not dream of getting involved. Most of the lack of cooperation we feel is due to the fear of competition and that there is not enough business to go around for all involved to benefit. Of course, this is an economic truth, but the potential for the region which in our opinion is great, is greatly diminished by this lack of vision.

In November/December we traveled to Kamchatka (see below) and also had a chance to visit with the Consulate in Vladivostok. We had been urged by our Russian partner companies to approach the US Consulate on the issuance of visas to Russian travelers wishing to visit the US. The additional reason to visit was to clarify exactly what the rules are and how they are applied. Kim Richter told us that there were no changes in policy, that they were issuing visas on a regular basis and that I had to keep in mind the fact that Russians were in a very difficult situation and that therefor they look at every Russian w to go to America as a potential immigrant. Guilty until proven innocent. The reality is that the majority of visas even to those who already have visited the US multiple times and always returned, and those that have legitimate reasons to travel, have lately been denied, for reasons that are unclear. This creates very difficult circumstances to do business which harms both the US and Russia. How much is difficult to tell as we would have to monitor almost every business sector.

Our meeting with Lysbeth J. Rickerman, the new Consul General lasted for about one hour. She mentioned that one of the reasons she was so anxious to accept the appointment was because she thinks there are so many opportunities in the Russian Far East, including eco tourism. She is very supportive of the industry and looks forward to giving her assistance wherever possible. She also mentioned the Ad Hoc Working as a facilitating instrument to bring this about.

Kamchatka Tourism Development

We were honored by the request to deliver a marketing and hospitality seminar in Kamchatka. Support for offering these programs was created in joint cooperation between a Eurasia grant made to Yelizovo Tour Service from Yelizovo and the Winrock Foundation.

Approximately 15 representatives from small to medium sized companies participated in the seminars. For a partial listing of tour companies and their product, see attached press release. The seminars covered four days and covered all topics of marketing, including brochure development, Web Site marketing and other means of promotion. The seminars were followed up by private consultations. A concept outline can be obtained from IAITO at the above contact addresses.

It was evident form the input of participants that this group of people is aware and thinking about

· issues of security and well being of the client

· issues of weather or other circumstances beyond control influencing the duration of a tour and how to deal with that

· monetary transactions

· the lack and quality of air transportation affecting the feasibility of their operations

· the lack of support by their own governments in the support of smaller tourism companies

Product content in Kamchatka is growing and many of the companies in attendance were specialty companies. New trends developing are car camping, horse back riding, snow boarding and cross country skiing. New areas which have opened up or tours that are being offered are multi-sport activities and camping in Malki, trekking, hiking, skiing and climbing in the Nachylevo Nature Park, volcanology tours lead by a team of volcanologists around the Ust Kamchatsk and Klutchi area, bird and bear viewing at the Kronotsky Preserve and at Kurilskoe Lake.

A new Eco tourism project in Malki

One of our most gratifying discoveries was a company called “Aquarius” which holds a lease on a piece of land in Malki, which is the site of historically well known hot springs.

This is a small company which received its funding through a conglomerate of fishing companies. They have on the property developed a camping site which has become very popular by the Russians. The camping ground has received over 10,000 visitors this summer. What is new that each camper is asked to keep the property cleaned by collecting their own trash, while camp ground personnel oversee that the process is being followed through. More over the company is now planning to create non-car camping because it realizes that cars are damaging the existing road system and the fragile springs.

Camp personnel by the way is hired form the village of Malki which up to now was suffering economically.

In addition, Aquarius, has used their lease of the land to produce mineral water which is distributed by a modern factory using foreign equipment and distributed all over Kamchatka. The company is currently reconstructing a small hotel, has bought rafts for use by the tourists (Bistraya River), and is clearing some tails for nature walks. Aquarius by the way is looking for assistance with its ecological utilization of the park and the construction of wooden cottages.

The Nalychevo Park and the Kronotsky Preserve

Nalychevo National Park through funding from WWF, Germany has increased its infrastructure to welcome tourists. There is now a visitors center and small museum. A small building has been constructed to facilitate changing in swimwear for the hot springs and four wooden cabins have been build to accommodate tourists.

Tourism services are still rudimentary, as one tourism company explained when they brought their tourists in, they had to install the toilets themselves and operate them, as the park personnel did not have a clue how to do that, or perhaps did not want to.

Some good news, which totally astounded us since I had asked numerous times and always got a negative answer, you can access the Valley of the Geysers by foot. Routes are being developed carefully avoiding areas which are under strict protection by the staff of the nature preserve which criss cross the Preserve and include the Valley of the Geysers and also the Uzone caldera. We will have more news on this in another update.

Overall we feel that tourism development in Kamchatka looks very bright, even though, the question of sufficient quality accommodations and air transportation still have to be solved. No new hotels, except for the cottages build in the Nachylevo Park have been added in the past year.

Disturbing facts

One of the disturbing facts we found is that the Kamchatka government is inclined only to support the bigger companies such as Kamchatintour and Krechet. As a matter of fact one of the statements made by a Department of Foreign Affairs Official regarding their support of other companies than cited above, is that they do not need any other companies.

We also cite a report by a BISNIS representative which states that other tourism companies are intermediaries between tourist and one tour operator Krechet, which has exclusive licenses to operate a dozen certified tourist routes and invests in infrastructure, including a helicopter fleet and cabins with modern facilities and western fixtures. What they do not mention is that Krechet, gets all federal and regional funding dedicated to tourism development and on a regular basis provides free transportation for any and all of their financial supporters, even if it has already contracted with, for example a local tourism company for the exact same services, for which the tourism company has paid them in advance. It is easy to see why Krechet therefor can provide everything listed in the Bisnis report.

The general opinion about Krechet both in Kamchatka and outside by people who have dealt with Krechet is universally negative. Their service is bad, they are the least customer oriented company known in Kamchatka, they lie about the availability of their services and they are notoriously late and overcharge for their services. But there is no alternative.

The BISNIS report also cites that Krechet has a need for marketing services. Again the local viewpoint is that by virtue that they exclusively hold permits on most every route and every facility, forces the other companies to send their clients for these services to Krechet, which means the companies who can ill afford marketing themselves are in fact providing these services for Krechet. A fact which is clearly understood by the tourism companies but which on a positive note entices them to find alternate ways and routes which Krechet has not yet discovered. .

Another negative element was the article in Outside Magazine in December 1998, called Where the Bear and the Mafia roam by Bob Chacochis. Copies can be obtained from our office. Anyone who has traveled in Kamchatka will be able to discount most the facts in this article. This does not happen to anyone who is under the care of legitimate tourism company but might happen to some one who is clearly not well informed or perhaps wishes to make himself look like a hero. It is a form of negative press that seems to hang on to an image of Russia that is predominantly negative.

The article in Conde Naste March issue of 1999 is in contrast very supportive and lists Kamchatka as one of the 26 hottest tourism destinations of the future. Copies of the article are available from our office.

Also in September 99, IAITO’s US Director gave a presentation on Kamchatka as a newly developed adventure destination at the World Congress of Adventure Travel. A copy of that speech is also available from our office. The speech was well received by US tourism companies.

Other travel destinations in the Russian Far East.

The most popular routes to and in the Russian Far East remain the Trans Siberian Express routes from Moscow and/or Irkutsk to Khabarovsk and Vladivostok. Very few US leisure travelers make it to Sakhalin or the Kuriles, other than by expedition cruise ship. In general the fact that one region does not have sufficiently developed tourism product to offer to make up for the high airline transportation cost and the unreliability of local air transportation still makes this a very difficult product to sell for foreign tour operators.

Circumpolar Expeditions, an Anchorage Alaska based company has been successfully selling three day and weekly program to Chukotka. Air transportation being offered by Bering Air.

Future trends and travel programs - US/Europe/Australia

It appears that expedition cruise travel seems is continuing to prosper in the region. Both Society Expeditions (World Discoverer), Zegrahm (Clipper Adventurer) and Clipper Cruise Lines (Clipper Adventurer) are offering programs in the year 2000 in Kamchatka and the Kuriles. Oceanwide Expeditions, a European company based in the Netherlands, will station one of their ships, a Russian vessel in the Russian Far East for ten journeys in the year 2001, including the Primorski Krai Zapovedniks, Sakhalin, the Kurile Islands, Kamchatka, Chukotka and Wrangel Island.

As far as land programs are concerned, Kamchatka is definitely gaining acceptability in the Japanese and European markets and somewhat with adventure oriented tourists in the US. Lake Baikal is still one of the places favored by US travelers. Interest from Australia is growing even though long flights are involved.

MIR Corporation this summer is offering a program including Sakhalin, Vladivostok Kamchatka. Red Star Travel in Seattle and Nomad Travel Planner in Alaska are offering programs in Kamchatka operated by Lena Friends, and IAITO Sponsored World Wise Eco Expeditions offers a variety of programs in Kamchatka, the Primorski and Khabarovski Krai, Sakhalin and the Kuriles operated by member companies.

Russia

WWf which recently received USAID funding to assist the zapovedniks in both building infrastructure and developing eco tourism programs will be offering study programs and participatory programs for those who wish to be involved in the ongoing work of the zapovednik. Three of the zapovedniks which offer great opportunities for birders, biologists and botanists the Far Eastern Marine Preserve, the Kedravaya Pad Preserve and the Lazovsky Preserve are the focus of their efforts. We will be featuring these opportunities on our Web Site www.iaito.net in a few weeks.

One of our cooperative partners in Vladivostok, Primorye Travel has announced that they have three small ships available, one with a capacity for twenty people to take people to the Far Eastern Marine Preserve for diving, birding and other excursions.

Another travel company, Inter Business Serve currently offers weekly voyages from Vladivostok to Fushiki Japan on a large vessel the Antonina Nezhdanova. Round-trip tickets third class are $320 and the journey takes one day and two nights. You can take your care or motorcycle with you.

Air Transportation

Reeve Aleutian is still the only carrier flying from Anchorage to Kamchatka and on to Alaska on Saturdays and returning on Mondays. No plans have been announced yet on whether they will add another flight during the summer months, but it seems likely. Aeroflot has suspended their flights from Seattle to Khabarovsk and Vladivostok until a solution is found to their noise problems with the FAA.

There are rumors that Japan Airlines might look into flying directly from Tokyo into Khabarovsk, but that is all there is, just rumors.

The month of May will be a busy month for conferences and trade shows in Russia. There is an international meeting scheduled by DALtour which includes the United Nations Tuymen Project. Dates are unknown at this time. Khabarovsk will have its won Problems and Opportu ities in Eco-tourism meeting (no date yet) the Sustainable Communities Targeted Grants program will hold a conference and IAITO is supposed to hold eco-tourism marketing seminars also.

We will keep you updated on the dates as soon as we know.

This report only reflects the opinions of the editor, Aaltje van Zoelen. Ms. van Zoelen has been involved in tourism development in the RFE since 1990. She is the Us Co-Chair of the Tourism Sector of the Ad Hoc Working Group, US. Director of IAITO and President of her won company Far East Development.

1-9-2000