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Bold Decisions and Fresh Opportunities: The future of UK-Russia tourism relations, post-Brexit

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The real voyage of discovery consists not in seeking new landscapes, but in having new eyes.” 

– Marcel Proust 

As Britain begins to plan for a post-Brexit future, intense discussions about the economic implications of our looming divorce from the European Union (EU) have not subsided. My own interest in this topic naturally relates to post-Brexit economic relations between the UK and Russia, in all their guises. My previous post addressed some of the implications for business and trade moving forward. In this post, I want to focus specifically on the future prospects for tourism between the two countries, both in terms of the exchange of visitors and sector investment more broadly.

Free movement of peoples has always been one of the fundamental tenets of the EU’s vision for integration on the European continent – a vision that has been tested to near-breaking point in recent years. When it came to the Brexit referendum, migration and border control were among the most pertinent issues on the agenda. Whilst this debate on free movement has mostly focussed on the rights of EU citizens to live and work in the UK, it might yet have significant – even positive – implications for international tourism (see the FT and the Guardian for example). Experts – including Vsevolod Samokhvalov of Cambridge University’s Department of Politics – suggested that entry requirements for Russians and others citizens of former-Soviet states could be simplified post-Brexit. This could enable a stable, positive relationship between the UK and Russia, as well as a thriving tourism industry.

One of the most crucial variables that any aspiring traveller needs to consider is currency exchange. Following the Brexit referendum, international financial markets trembled, sending the value of the pound to a 30 year low. It continued to plummet until mid-October. Although its value against the dollar has improved in recent weeks, the pound still remains at near-historic lows – bad news for many, one would think. Yet for visitors the world over, London has long been a coveted yet overpriced destination. This has especially been the case for Russian visitors. Over the last two years, their travel plans have been hindered, thanks in part to the depreciation of the rouble. Now, a weaker pound could offer better value to Russian tourists visiting the UK.

Looking back to December 2014, when the rouble collapsed, foreign visitors to Russia would have been delighted – even the most exclusive sushi bars on Tverskaya Street suddenly seemed that little bit more affordable. Since the Brexit referendum, we have begun to see the makings of this phenomenon working in the opposite direction. According to City A.M., Bond Street reported increased summer sales, thanks in part to the greater spending power of overseas tourists. There is cause to hope that the recent tremors in the exchange rates could see an increasing number of Russians turning to the UK as an attractive tourist destination.

Russia, meanwhile, should do its utmost to attract foreign visitors. There is no doubt that it remains an enticing – if often misunderstood – destination for British tourists. Reading a recent Telegraph piece by Marcel Theroux about his family holiday in Moscow and St. Petersburg, I was pleasantly surprised, as he dispelled a number of prevailing myths and opened his family’s eyes to the authentic Russian experience.

An excellent opportunity for this kind of first-hand discovery will be the upcoming 2018 FIFA World Cup in Russia. As England, Scotland, Wales and Northern Ireland begin their qualifying campaigns – and Russia prepares to welcome the world to its eleven host cities – the prolonged build-up over the coming two years will coincide almost exactly with the unfolding Brexit negotiations.

Undoubtedly, like the Sochi Olympics, the World Cup signals a key moment for Russia to market itself to potential visitors – and investors – from all over the world. Under a new law, ticket-holding fans of all qualifying teams will be able to visit Russia during the tournament visa-free (ESPN). For anyone travelling to the matches, this will also be a golden opportunity to discover Russia; sport can bring people together in a truly unique way. For England and Russia especially, this could spell the makings of a much-needed reconciliation, following the unfortunate travesty that erupted between the two sides this summer on the streets of Marseilles.

When it comes to the subject of tourism between Russia and the United Kingdom, one cannot ignore the issue of sanctions (see my blog Foreword). As the UK extricates itself from the European Union, British businesses will have the potential to emancipate themselves from many of the restraints to which they had previously been subjected.

The EU, of course, is no monolith. As I have mentioned before, it is no secret that some of the most ardent advocates of the EU’s sanctions against Russia can be found in Britain’s own political establishment. However, the disengagement of political ties with the EU might allow British companies to invest and expand into areas previously off-limits to them – namely Crimea. A forbidden fruit to European investors since 2014, the peninsula’s people and industries (some of which were founded by the Romanov tsars, long before the arbitrary border changes of the Soviet era) have been isolated from the international financial community.

In spite of this, Crimea’s tourism sector continues to thrive. Over the last couple of years the peninsula has produced some luxury world-class hospitality, the likes of which even the most discerning international travellers can appreciate. One such example, the brand new, state-of-the-art Mriya Resort and Spa was recently named the best leisure resort in Europe by the World Travel Awards 2016.

All sorts of opportunities are also opening up across the Russian mainland, from its historic European cradle to the largely untapped charm of the Far East. This week, the head of Rostourism, Oleg Safonov, stated that Russia is particularly keen on attracting tourists from the Asia-Pacific region, as well as Europe and North America. Among the most popular destinations for international travellers is the Golden Ring, the quaint cities of Russia’s medieval heartland. Thanks to specialised package tours and greater investment in budget hotel provision, it is becoming increasingly practical and comfortable for first-time visitors to Russia to make this journey.

One of the most ambitious large-scale tourist developments currently underway in Russia is Vladivostok’s designated gambling zone. The city is already home to the $800 million Tigre de Cristal super casino – the grandiose creation of the Hong Kong businessman Lawrence Ho. Investors see this as just the first phase of a long-term project that will revitalise Vladivostok’s economy, positioning the city as a prime destination for wealthy visitors from across the Asia-Pacific region. Vladivostok’s impressive transformation began ahead of the 2012 Asia-Pacific Economic Cooperation (Apec) summit, with a focus on modernising infrastructure – generous injections of federal funding led to the construction of two suspension bridges and an international airport. More interesting than the changing urban landscape itself is the special status that Vladivostok has recently been granted, harking back to its pre-Soviet past as a free port city. Tax and customs regulations have been loosened, and foreign visitors can now enter and remain for 8 days without a visa – a sure sign that Russia is open and ready for business.

With such a range of dynamic developments taking place across Russia’s tourism sector, now is the optimum time for international investors to shed their inhibitions and grab a slice of the pie. In a post-Brexit world, UK businesses would be missing a trick by not welcoming Russia in from the cold – something which could truly help to strengthen bilateral relations.

 

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