Tourism industry in a ‘new reality’ and regional development opportunities: the case of Russia

Abstract

ABSTRACT The COVID-19-related crisis had a strong negative effect on the world tourism industry, as has the current military conflict in Ukraine. However, with crises come opportunities as this research shows in the case of the Russian tourism industry. The 2020 crisis created the preconditions and opportunities to change the tourism industry’s historically distorted outward-oriented structure and promote regional development through domestic tourism. Active communications between the government and business during the pandemic helped reduce uncertainty for firms and design and implement appropriate governmental sectoral policies. The demand for such policies increased after large-scale international sanctions imposed on Russia in 2022. However, the allocation of large federal budget financial resources to support the industry also creates risks of opportunistic behaviour. The tourism industry’s development in Russia will depend on the government’s ability to resist pressure from rent-seeking interest groups.