Ukraine’s enduring political crisis is hitting the hotel industry in a major way. The industry is seeing huge drops in room bookings as market players struggle to promote the country as a safe and fascinating destination.
Andriy Skipyan, president of hotel industry
association Hoteliero Club, says that the hotel industry has been “very
negatively” affected by the crisis.
All the hotels the Kyiv Post contacted in Kyiv,
Donetsk, Lviv, and Odesa reported a decline in bookings and cancellations,
however none said that they were laying off staff or closing their doors. The
only exception is hotels in Crimea, where the entire
tourism industry is under threat because of the Russian occupation.
Hotels that
cater to vacationers are suffering the worst, especially those in places where
Ukrainians traditionally spend their time off. “A huge number of early bookings
were withdrawn for the coming May Day celebrations,” said Skipyan, referring to
Labor Day and Victory Day that fall on May 1 and May 9, respectively.
One popular
destination is the Black Sea resort city of Odesa. “I have worked in the hotel
business for nine years, and I have not seen it this bad,” laments Yulianna Mykhailova
of the Continental Hotel in Odesa. “In 2008, when the currency was in trouble,
we had troubles, but the guests kept on coming. Today, guests are nearly
absent. Hotels are feverishly reducing prices and cutting costs.”
Recovery of
the industry is not expected soon. The main criterion is stability. “For this
year, we are expecting slow growth, especially before the May 25 presidential
election. That will be key,” says David Mohren, Manager of Opera Hotel in Kyiv.
“Full
recovery this year is not possible,” Mykhailova argues. “However, even if the
situation stabilizes nothing will improve before June.”
The number
of visitors to Ukraine has been on an upswing since it hosted the European
football championship in 2012 when 25 million foreigners came to the country that
year. Numbers swelled by 15 percent the year after.
According
to the Ukraine Economic Impact Report of UK-based World Travel and Tourism
Council, travel and tourism contributed Hr 114 billion to the Ukrainian economy
in 2013 accounting for 8 percent of gross domestic product, though official
statistics provide a much less significant figure of Hr 3.4 billion, or 0.2 percent
of GDP, which does not include the nation’s vast shadow economy. Economists
estimate that the underground economy is 40-60 percent of the nation’s GDP.
Ukraine has
3,144 hotels, according to the United Nations World Tourism Organization, similar
to the number in Poland, and fewer than Turkey’s 5,900.
At the
Ukraine Travel and Tourism exhibition held in Kyiv on March 26, State Tourism
and Resorts Agency head Olena Shapovalova presented a new national brand and
strategy to popularize Ukraine as a tourist destination, which is no mean feat.
“The
strongest challenge is changing the image of Ukraine,” says Mohren of Kyiv’s
five-star Opera Hotel. “Life is almost back to normal, yet many people are being
given the message that the place is still chaotic and close to civil war. We
must change this message, and that will take time.”
“We have had
no security threats,” says Jonas Amstad, manager of Donetsk’s five-star Donbas
Palace hotel. “In fact, things were quiet early in the year. I came (dressed)
in a suit everyday and everybody saw me as a foreigner and said nothing. The
media distorted the whole event. At most there were only 6,000 demonstrators on
the main square – and I can count. We need to fight the negative impression.
“In Russia
and Belarus especially, the media has been planting the seeds of fear in
people,” says Lyudmila Borysevych of Rubel hotel and recreation complex in
Yaremche in the Carpathian Mountains, “but more than that, they have thrown technical
impediments to visiting Ukraine. Belarusian President Aleksander Lukashenko has
advised his citizens not to travel to Ukraine for safety reasons, and our
colleagues there have said that because of this they cannot insure travelers.
Guests are perfectly safe in the Carpathians. There is no one running around
with guns here, and we want to show people this.”
The crisis
has not affected all hotels equally. Managers at Opera Hotel in Kyiv and Donbas
Palace in Donetsk saw a slight downturn in bookings, “but nothing all that
serious.”
The crisis
is having some unexpected positive consequences for the hotel industry. The
decline of traditional guests in Kyiv and Donetsk are being compensated with a
rise in bookings from journalists and international delegations.
And people
still want to vacation. “Because of the situation with the Crimea, the majority
of our citizens are likely to look for an alternative to their native Black
Sea, maybe the Carpathian Mountains,” suggests Hoteliero Club’s Skipyan.
“The political
crisis has essentially given Ukraine free advertising, and there is much
sympathy for Ukraine in Europe and the Middle East. In fact, we have seen
growing interest in European men wanting to meet Ukrainian women,” Borysevych from
Yaremche says with a smile.
Kyiv Post business journalist Evan Ostryzniuk
can be reached at [email protected].
