Dec 21, 2014 6:29 AM

Tourism suffers in winter of EU-Russia discontent

The Associated Press

PARIS (AP) Russia's tensions with the West over Ukraine and the slump for the ruble are echoing through the French Alps and unfortunately for some businesses, just in time for ski season.

Hoteliers, taxi drivers and ski stations in France's wintertime hotspots and beyond say a tourism boom by big-spending Russians in recent years is about to melt away because of Russia's economic crisis, Western sanctions and a drop in oil prices that is keeping both uber-rich and middle class Russians away as the year ends.

As Moscow and the West began a faceoff over violence in Ukraine this year, Russian President Vladimir Putin warned that U.S and European sanctions would cut both ways. At times, they have: Few places have felt them as have European tourist getaways in the Alps or the Mediterranean. Tourism chiefs cite a one-two punch to Russian travel to the EU: First political strains over Ukraine dent enthusiasm for traveling to the EU, then the financial pain of a falling ruble and oil prices hit Russian pocketbooks.

The pain of falling Russian tourism also has been reported in Austria, Germany, Cyprus and England.

In France's Alps, the Russian reticence is yet another hit to a region suffering from a sluggish domestic economy and a recent lack of snow that forced the cancellation of World Cup races in Val d'Isere this month. Many Russians may be staying home for patriotic reasons, such as to test out the Sochi slopes of this year's Olympics instead of traveling abroad, some analysts say.

The ruble has sagged in recent months and hit a record low of 80 to the dollar this week. That depreciation has come alongside a tumble in the price of crude oil a crucial cash generator for Russia's economy to roughly half its summertime high of $107 a barrel.

When their pockets were bulging thanks to high oil prices in previous years, Russians rose to outstrip German and Swiss travelers and took fourth place among the most-frequent foreign visitors to the French Alps in winter after Britons, Belgians, and the Dutch, consulting firm Comete Conseil says.

"We've received fewer reservations from Russian clients this year. We can draw parallels with what happened on the coast this summer, where they too were less present," said Carole Genevray, marketing director for Comete Conseil, which counts many French Alpine towns as clients. "It's more the geopolitical context than the financial one that has in fact limited Russian visits ... It is Ukraine, plain and simple."

In the Alps both in France and beyond, the impact will likely still be limited: other industry analysts note Russian visitors make up a tiny percentage of the total tourist traffic far below domestic travelers, for example. Still, Russians' bulging pockets in recent years have made them a welcome customer base for old-school ski slopes eager to drum up new business.

Plus, the Russian holiday schedule, which has links to the Orthodox Christian calendar, brings in many Russian travelers in early January when many western Europeans are back at work and school, giving an extra influx of cash and extending the wintertime boom for hoteliers and ski stations by up to two weeks.

Adeline Roux, director of the tourism office in Courchevel, perhaps the biggest single mecca for Russian visitors in the French Alps, told France's i-Tele that both super-rich and middle-class Russians may stay away and not just this year. "Depending on the evolution of the crisis that Russia now faces, we run the risk especially of facing an impact next winter (too)."

The highest-elevation of three ski slope zones in Courchevel, which is the most frequented one by Russians, now offers menus in Russian; regular supermarkets stock Champagne costing hundreds of euros. In February, the daily Le Monde noted how ski instructors and receptionists in the resort town were learning Russian.

These days, statistics and corporate decision-making tell a drearier tourism tale.

Take Austria, a top Russian wintertime destination in recent years. Russian carrier Aeroflot, which has had weekly flights from Moscow to Innsbruck over the past few years, suspended them this season reflecting what Austrian hoteliers say is the drop in Russian guests in the Austrian Alps.

In Germany's Oberbayern region in Bavaria, the number of Russian visitors fell nearly 4-1/2 percent from January to September compared to the same period in 2013, according to Bayerische Rundschau TV. The local statistics office reported a 20 percent decline in September alone versus the same month a year ago.

"We've still had a lot of inquiries from Russia," said Andreas Griess, a spokesman for Hotel Zugspitze in Garmisch-Partenkirchen, one of the region's best-known ski resorts and a popular spot for rich Russians. He told the Rundschau that if December bookings do not pick up significantly, the number of Russian holidaymakers at the hotel could drop by 40 percent.

It's not just wintertime getaways facing the fallout.

In Cyprus, another favored spot among Russians, hotel association boss Haris Loizides said the situation with the ruble and European Union sanctions "is definitely having an effect. It's a late booking market, but it seems we won't be able to avoid a 20-25 percent drop in arrivals."

Ayda Hassas, a Rolex boutique supervisor at London's famed Harrods department store, said the boutique has noticed a "significant drop in Russian clients" compared to the holiday season a year ago, adding: "I think is connected with the currency exchange rate."

In Egypt, Ihab Moussa, who heads a tourism-support coalition, said 3 million Russian tourists visited the fabled North African country this year the highest number ever. But he expressed fears that the ruble weakness would shrink the number of Russian tourists next year.

Even in the Alps, some remain optimistic or at least hope to limit the damage.

Franck Jaulneau, the managing director for Hotel Alpaga in the French resort of Megeve north of Courchevel, said: "Not so fast. Yes, there are diplomatic problems, but the Russians aren't ready to desert us just yet."

He noticed a delay, not a decline, in bookings, and said hotels that cultivate Russian business could fare better.

"I'm really confident," Jaulneau said, noting that he visits Russian two to three times a year. He said he is more worried about a lack of snow than a lack of Russians.


Whitney Saldava in London, George Jahn in Vienna, Maggie Michael in Cairo, David Rising in Berlin, and Menelaos Hadjicostis in Nicosia, Cyprus, contributed to this report.


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