It’s safe to say that the Crimea has made a breakthrough this holiday season (spring-summer 2005); the peninsula has finally become a real international resort. This season, a German chartered flight program will start ferrying three flights from Frankfurt every week, along with tourist groups from Finland and Poland.
According to the Web site www.podrobnosti.com, the Crimea has a total of 169 operational resorts with almost 56,000 beds (23 resorts more than last year) and another 11,500 beds. The occupancy rate is 48%, with 25,000 vacationers now basking in the Crimean sun.
In other words, neither the 10-15% increase in the value of a Crimean vacation in 2003 nor the 10-20% rise in costs last year have dampened tourists’ enthusiasm. Officials at the State Tourist Administration believe that this tourist season will mark a turning point for the Crimea: first, because a number of tourist sanatoriums will be testing their pricing policies and second, many resorts offering accommodations will have to submit service quality reports, especially in regard to foreign tourists, who have finally begun arriving en masse to the Crimea. However, there is one big problem that must be resolved: the tourist influx overload on the southern seacoast and the lack of such an influx in the eastern part of the peninsula, including Feodosiya, Chornomorske and Leninske district (Kazantyp). Feodosiya experienced a major breakthrough this year, when a German cruise liner, the first ever in the past two years, arrived for the May holidays. Last year 240,000 tourists visited the Crimea, and this year the local authorities expect 300,000. All the necessary prerequisites are here, says Volodymyr Tsaruk, head manager of a local travel agency: new pensions and hotels, an adequate number of beaches, and finally, a reasonable price-setting policy, which may be regarded as Crimean know-how. Feodosiya Mayor Volodymyr Shaiderov says an aqua-park and entertainment center investment project will be carried out in the next two years.
On the negative side, experts say that all the new pensions and hotels are being built in a chaotic fashion. The local authorities need to work out and approve a master plan for this region, but this will cost the autonomy’s budget a total of UAH 3.5 million.
It stands to reason that this is not a very large sum, considering that last year the Crimean sanatorium and resort complex generated around a billion hryvnias. However, as Crimean Resorts Minister Oleksandr Tarianyk complained toward the end of last year, the money was transferred to the central budget as sums reflecting commerce, housing and utilities, communications, transportation, and other revenues. “For example, Cokes, Obolon beers, and Soyuz Viktan vodkas were sold all summer in the Crimea,” podrobnosti.com quotes the minister as saying, “but we had to send all this money to Kyiv, where the manufacturers are legally registered.” Meanwhile, the Crimea is spending money, among other things, on the recycling of mind-boggling quantities of garbage left by vacationers.
In a word, Oleksandr Tarianyk is adamantly opposed to the existing system of tallying holiday season revenues. He says that all over the world such revenues are calculated on the basis of how much money every tourist leaves behind. In the Crimea, the resort complex’s efficiency is measured by the sums payable as taxes. It is also common knowledge that out of every ten dollars spent in the Crimea by a vacationer only one dollar is spent on accommodations in a hotel, which had to pay taxes to the republican budget. The rest of the money that a vacationer spends goes on air/rail/taxi fares, buying resort goods, food, and paying for various kinds of entertainment. According to the minister, the autonomy plans to hire leading Ukrainian economists to work out a new method for calculating revenues from the tourist season. Afterwards, they will have a better leg to stand on when the time comes to discuss the question of profit redistribution.
Speaking of revenues, despite the optimistic indicators of foreign tourism to the Crimea, this year the central government has almost done the peninsula a disservice — and not just the peninsula. Associations of tourist agencies are complaining about cabinet’s annulment of the zero- tourist import VAT (envisaged by amendments to the 2005 central budget), and they insist that this will increase tourist service costs and damage Ukraine’s image. According to a letter sent to President Yushchenko, the cancellation of the tourist entry VAT (effective as of March 31, 2005, actually backdated) shocked a number of foreign partners of Ukrainian tourist operators and damaged Ukraine’s image as a country with a civilized business environment. Tourist operators’ statistics indicate that this innovation will lead to a 20% increase in the cost of services provided under contracts made with foreign partners in 2004. The sharp decline in the dollar’s exchange rate will add another 6%. Accordingly, associations of travel agencies and companies, together with Derzhturadministratsiya [State Tourist Administration] experts and parliamentary committees, have revised the tax rate amendments and are asking cabinet to consider them. They also want the president to instruct the government to change these norms to reflect the expert’s suggestions as soon as possible. Viktor Yushchenko has yet to respond.
