Despite the fact that Russia opened up to mainstream tourism more than two decades ago, and despite its wide recognition as a travel brand and inherent intrigue as a destination, it still lags far behind other major nations in terms of foreign arrivals.
Russia welcomed 20.3 million foreign arrivals in 2010, according to the United Nations World Tourism Organization. And while that number is significant, considering that the country had a very niche tourism market prior to 1989, it still has a long way to go when compared with other large countries. China, for instance, counted 55.7 million international arrivals in 2010, and Malaysia made it into the Top 10 last year, with 24.6 million arrivals.
"For many years this country was closed," said Valery Fridman, general director of St. Petersburg-based Mir Travel Co., a large Russian ground operator, with slight exaggeration. When restrictive rules eased during perestroika, the pent-up demand was considerable, he said.
Since the collapse of the Soviet Union in 1989 and the gradual reopening of Russia to foreigners, the country's tourism market has been growing, primarily organically. Russia does little tourism marketing and does not maintain a tourism ministry. Most of its investment in tourism is made through private channels.
Nikolay Kakora, deputy general director for the Moscow-based inbound operator Intourist, a descendant of the state-run company that controlled inbound tourism and tourists during the Soviet era, said the country's rich history and culture is the first and foremost draw.
But he said that travelers from around the world also come to Russia because they "wish to see for themselves the changes that took place" since the fall of the USSR.
In other words, it is precisely the complex history that kept visitors away from Russia for all those years that now draws them in.
They come to see not only Russia's opulent past, the palaces and artwork that defined the monarchies and dynasties that ruled the country for centuries but to see its more recent and controversial past, defined by former communists and oligarchs.
Stephen Busch, hotel manager of the Viking Pakhomov, one of the four Russian river cruise ships owned and operated by Viking River Cruises, said that many of Viking's passengers, elderly and retired travelers for the most part, lived through the Red Scare, the Cold War and the nuclear threats. "All these people, they couldn't ever imagine [that they could] come here before," he said.
Sergey Shpilko, chairman of the committee on tourism and the hotel industry in Moscow, said that while Russia does do some tourism marketing, "it will never be as aggressive as, say, China."
However, in the lead-up to the 2014 Winter Olympics and the 2018 FIFA World Cup soccer tournament, both being held in Russia, tourism executives are hoping for a major marketing boost, and that the pressure of being on the world stage will light the fire under some of Russia's much-needed infrastructure and tourism improvement projects.
Russia "will be noticed," said Shpilko of marketing campaigns currently in the works.
From perestroika to private enterprise
Once the Iron Curtain came down and polarizing ideology no longer divided the world into two distinct camps, tourism to Russia was able to grow. And it became more profitable after the state-run tourism monopoly ended, because market competition led to improved quality of service and better infrastructure, according to Mir's Fridman.
Today, the vast majority of Russia's tourism investment money comes from private enterprises, Shpilko said.
He said that less than 1% of Moscow's budget is devoted to tourism development, even though tourism accounts for 10.3% of the city's revenue.
Indeed, entrepreneurs are aware of the potential return on investment as the market grows in advance of the Olympics, taking place in Sochi on the Black Sea, and the World Cup, which will take place in cities around the country. Russia continues to see new hotel, cruise and retail developments as it looks to attract more foreign visitors and spending.
And there is one area the government is active in developing tourism: It is "doing its best to attract major events," Shpilko said. "These projects take billions to realize, [but] such projects help to attract more tourists."
The country has come a long way, Shpilko observed, but it still has a lot of work to do.
The Russian hurdle
There are plenty of reasons to visit Russia. But there are also plenty of reasons why people hesitate to go there.
Among them, Fridman said, are the country's complicated visa policy and the absence of well-developed infrastructure.
It's relatively costly and time-consuming for U.S. citizens to obtain visas. The U.S. State Department notes that "the Russian government maintains a restrictive and complicated visa regime for foreigners who visit." Every foreign traveler must have a Russian-based sponsor, which could be a hotel, tour company, relative or employer. A Russian visa costs upwards of $140.
Several Russians interviewed for this report mentioned the visa issue and expressed a desire that things will change for the better in this regard.
There are several other aspects to Russia's tourism that fall short of some Westerners' expectations. When people mention that the country's tourism infrastructure is lacking, they could be referring to anything from the absence of air-conditioning in museums such as the Hermitage in St. Petersburg to the outdated tour buses in smaller villages and towns.
There is another problem tourists are very likely to notice in Russia's two most popular tourist cities, Moscow and St. Petersburg: horrendous traffic that can make sightseeing quite difficult and time-consuming.
Traffic is one of the most common complaints mentioned by Russians in the tourism industry, whose businesses rely on getting passengers to and from their desired destinations according to a schedule.
Rudi Schreiner, president of Ama Waterways, which just launched a newly refurbished river cruise ship in Russia, said that until the problem is resolved, Ama works around the traffic by making amendments to the itinerary, such as having lunch on a sightseeing vessel on the Moskva River in the center of Moscow rather than fight traffic to return to the ship for lunch.
And there is hope that traffic will be addressed in advance of the World Cup and Olympics in order to accommodate an influx of visitors.
According to Shpilko, several proposals are in place to improve the traffic situation in Moscow, including a bus-only lane that motorcoaches could use to bypass gridlock.
As regards hotels, one issue for travelers is that there's a dearth of hotels between the high-end properties that break the bank and those that do not meet Western standards.
But there is increasing activity in the hotel sector. Just last month, Best Western International reflagged Moscow's Vega Hotel, making it the brand's first hotel in Russia and the largest property in Best Western's portfolio.
The Best Western Vega Hotel & Convention Centre has 970 rooms and serves almost 200,000 people annually with its 15 meetings spaces, according to the company.
"As Russia continues to attract more business and leisure travelers, we felt it was a perfect time to join Best Western's global family of hotels and take on its internationally recognized name and reputation," said Best Western Vega General Manager Valery Maximov.
Shpilko noted that 20 years ago, when people traveled from Sheremetyevo Airport to the center of Moscow, they would have seen maybe four hotels along the way. "Now, it will be 15 four- and five-star hotels, starting with two hotels right at the airport," he said.
Shpilko anticipates numerous new hotel properties in the coming years as Russia gears up for the major sporting events.
There is also lingering concern about Russia's safety image.
In January, a suicide bombing at Moscow's Domodedovo Airport, Russia's largest airport, killed 35 people. A Chechen militant claimed responsibility for the attack, the latest in the ongoing clashes between Chechen rebels and Russia.
Less than one year prior to the airport bombing, in March 2010, two female suicide bombers launched an attack in Moscow's Metro, killing 38 people. And few can forget the Moscow theater hostage crisis of 2002 in which nearly 130 hostages were killed after a three-day standoff between Chechen rebels and Russian authorities.
But, Shpilko said, tourists are generally not targeted. There were only 24 criminal reports filed by tourists in Moscow in 2010, he said, and 39 filed in 2009.
And while he acknowledged that images such as those of the bombing at Domodedovo raise concerns about the city's safety, he hopes to get the word out about the other side of Moscow.