Tax incentives for investment projects implementation

Prospects of the tourism industry in Sevastopol p.1

Юлия Рогачова

Travel industry for Sevastopol is a budget-poietic sector and now makes 3-5% of the total city budget. Taking into consideration the potential of the Sevastopol tourism industry it"s a sobering thought that income from tourism industry is inconspicuous and as a result, tourism potential of the city is not implemented. Following the results of the 2011 the number of tourists visiting the Crimea is about 6 million people, wherefrom, according to official figures, Sevastopol visited no more than 260 thousand people. The duration of tourists staying on the territory of Sevastopol is one of the lowest in the Crimea (7-8 days).

Today, Sevastopol has to compete with other Crimean resorts (such as Yalta, Alushta and South Coast as a whole). Within the territory of the Crimea operate more than 170 hotels and almost three hundred of resorts, and the number of private rental housing is almost incalculable.

There are also varieties of objective causes that affect negatively on the tourist flow in Sevastopol. The main negative factors are:
• a short tourist season, which is 2.5-3 months;
• low hotel room capacity, with lack of high-class hotels and cheap youth hostels;
• insufficient number of modern bathing beaches;
• low level of catering development;
• poor rest and amusement infrastructure.

The low level of investment attractiveness of the tourism industry in Sevastopol is attributed to seasonality of the tourist business. It"s a well-known fact, that for the investors the key role play constant tourists flow within at least 6-7 months a year. In fact, tourist industry in Sevastopol, have not been upgraded since Soviet times, it characterized by high prices and low service level. The tourist infrastructure of the city is also very poorly developed, because there is no competition between market participants - in peak season demand exceeds supply, and therefore there is a clear discrepancy between price and quality of services provided. And as the beach season is short enough, the tourism industry participants write up the prices so that cover their losses in the low season. As of today, beach-related rest price in Sevastopol is comparable to the waybills to Egypt, Turkey, Bulgaria or Croatia, while the quality of service there is much higher.
In comparison with Turkey Sevastopol is losing, because the tourist season there is 8 months a year. Moreover, the level of service and infrastructure is much higher, which makes Turkish resorts more attractive in Turkey among the Ukrainian tourists. For example, in June 2011 Ukraine was inside the top ten countries whose citizens visited Turkey, and their number was more than 91 thousand people, it"s 3% higher than in the same period of 2010.
Also, another rival of Sevastopol are the resorts of Krasnodar region, main advantage of which is variety of climatic zones that makes the Kuban available for rest throughout the year. Following the results of 2011 the number of tourists visiting the Krasnodar region was 10 million. And what"s important, the demand for tours in September-October increased by 60% comparing with the same period in 2010, moreover also grown up the demand for the November tours. The numbers of hotels, inns and resorts, which can accept tourists all year round, are coming up and it"s essential to note is active promotion of the tours since the winter. In Sevastopol, there is no clear system of promotion and stable advocacy focused on the resorts of the Southern coast of Crimea.
It is important to understand that from year to year situation will only get worse if we continue not to take measures to attract tourists and create a competitive environment for the development of tourism industry. Seeing that the price / quality of services don"t reflect the actual situation, it"s more gainful to go to the resorts of Turkey and the Krasnodar Territory for the same money.