Lydia Parkhomchik: ‘The cruise project has been and still is the crucial direction for the joint development of tourism in the Caspian Sea’ - VIDEO PODCAST

  14 July 2022    Read: 639
  Lydia Parkhomchik: ‘The cruise project has been and still is the crucial direction for the joint development of tourism in the Caspian Sea’ -   VIDEO PODCAST

by Seymur Mammadov

Lydia Parkhomchik, an expert on the Caspian Sea region at the Kazakhstan Institute of World Economy and Politics shares her views on how to revive tourism after the pandemic, trends for the near future and many more in her interview to

The COVID-19 pandemic has brought enormous damage to the global economy. The decline in tourism accounts for around 70 percent of the GDP drop globally. Many countries are now busy reviving tourism and actively promoting it. The long break has left a heavy blow on the economies of these countries. Many countries have been active this year, but experts believe global tourism will not be able to recover fully until 2024. What are your views on the state of tourism worldwide? What are the trends for the development of the tourism industry with the ongoing pandemic?

‘Tourism is going through difficult times. More countries are beginning to lift the COVID restrictions on international flights. Experts expected fairly high growth in traffic and tourist movement early this year. The number of international flights has gone up almost three-fold in the first quarter of the year compared to the same timeframe in 2021. Now that there are no COVID restrictions, planes are flying among 45 international destinations. Tourist inflow has gone up by 182% to date compared to the first quarter of the previous year, arrivals growing from 41 million to 117. This is a fairly significant increase. Europe and America remain the undisputed leaders, which have welcomed more tourists than any other part of the world. But, even with such four-fold growth in the number of tourists, Europe is still 43% behind the pre-pandemic 2019 numbers. We clearly see that the tourism industry still has a long way to go to reach pre-pandemic indicators. The World Tourism Organization confirms the data, reporting that international tourism remained 61% below 2019 levels in Q1 2022.

We must imagine the full scope of the road ahead of us for the industry to rebound to its pre-pandemic glory. You also need to understand that international tourism has lost up to 2 trillion USD in 2020-2021. Borders shut, quarantine and no air traffic have hurt the bottom line and most experts expect a full recovery of international arrivals to the 2019 levels only by 2023. Others are even more pessimistic than that, believing 2024 to be the year of rebound. It is not as simple as we, tourism representatives, would hope for.’

How do the Caspian countries fit into this agenda?

‘We must admit that tourism in the Caspian Sea was unfortunately attractive in the pandemic 2020 season only as a domestic destination. For example, the local residents not only in Western Kazakhstan but also in other regions of the country discovered Aktau as an alternative to Turkey and Egypt. The population in West Kazakhstan is growing rapidly, which therefore will continue increasing the demand for tourism infrastructure facilities to be further built regardless of whether our fellow citizens from eastern or southern regions choose to travel there. Mangystau Akimat reports that over 225 thousand tourists visited the region last year. But, only 9 thousand of these were foreigners.

The gap between domestic and international tourism is obvious. The plan for the year is to expect the same tourist inflow, which allows us to say that the country is maintaining its focus on domestic tourism. The same scenario is unfolding for other Caspian countries, particularly Russia. All tourist websites have issued warnings that the Caspian region, meaning not only Russia, has certain difficulties with the organization of recreational areas. We must mention the Russian-Ukrainian conflict at this point, which is already affecting tourist flows, especially Russian domestic ones. The shut airport in Simferopol and high tour prices to Sochi might prod tourists to notice the beach resorts in Dagestan, which has started the year with a bit of good news. A charter flight has opened to the region. We have never before had a flight to this part of Russia.

This may consequently boost domestic tourism in the Caspian region, which can amount to an increase of about 40% compared to 2021. This is quite substantial growth. Preliminary estimates allow us to hope that half a million tourists might visit Dagestan this year. In fact, this will become a historical record for Dagestan. This advancement also concerns domestic tourism. We are not saying that the Caspian countries did not intend to organize international tourism en masse and become a tourism hub.

It certainly is not so. Turkmenistan is probably the most obvious example. They completed the construction of a tourist zone there a few years ago where they have already held several large-scale international events. Unfortunately, this zone failed to become attractive for international tourists, even within the Caspian region. There are many obstacles on the way that we have to work on so that potential zones are accessible for international tourism.’

Tourism has gone through a series of challenges worldwide. I mentioned the ongoing pandemic. Since day one of the coronavirus pandemic to this day inflation has been on the rise globally, prices for food and non-food products are growing, and jobs are being axed. All these factors cannot but affect people’s well-being, motivation, and desire to travel abroad. Not fully over the first test, global tourism is facing another curveball. The Russian-Ukrainian conflict has started unexpected and, perhaps, irreversible processes in food security. So much so that experts are predicting a global food crisis. How would you evaluate the influence of the current conflict on world tourism? If the war continues for too long, how badly will global tourism suffer?

‘The economic situation, coupled with events in Ukraine, may indeed lead to a slowdown in the recovery of global tourism. This is an undeniable fact. The events in Ukraine have so far had a rather limited impact on the overall performance in the field. However, the economic consequences of the conflict also include price hikes for oil, inflation, and disruptions in international logistics chains. All of these factors will lift the transport costs and accommodation in hotels.

A World Tourism Organization report has found that the cost for one international trip has risen from an average of 1,000 USD in 2019 to 1,300 USD in 2022. The hikes are not going to stop, because the prices are rising not only for foreign trips but also locally. We also have to consider inflation and growing prices. Losing the Russian segment will affect the performance. International tourism may lose around 7 billion USD due to events in Ukraine.

Russian tourism market accounts for only one percent of global travel spending, which is rather an insignificant loss. Russians spent about 9 billion USD in 2021, which international tourism can easily do without. It will not have any global impact on the industry, but this loss will have significant consequences at a certain regional level. Euromonde International agency says tourism expenditure will grow by 92% worldwide this year compared to the last. At the same time, the tourism industry will receive much less than expected due to the Russian-Ukrainian conflict, which is quite upsetting.’

-How can Caspian countries pull out of this situation and develop the tourism sector together? How can they cooperate in the field to minimize the aftermath of the pandemic?

‘We must admit that the Caspian countries have been attempting to coordinate efforts in a multilateral format for a long time. The cruise project has been and still is the crucial direction for the joint development of tourism in the Caspian Sea. The countries have been discussing the idea of developing joint marine recreation, including cruise traveling, both in multilateral and bilateral formats. One of the most discussed projects was expanding marine tourism in Iran, Azerbaijan, Astrakhan, and Aktau. Russia and Azerbaijan have proposed several plans. However, the most central initiative was the project proposed by Russia on building Peter the Great, a river-sea cruise liner, designed for 300 passengers. Astrakhan shipyard is now completing the construction. They are planning to start the first sea trials of the liner this September. Astrakhan's governor forecasts that the ship will have a capacity of serving 30 thousand tourists a year. They are also planning to bring the tourist infrastructure in the ports on the route, Makhachkala, Baku, Turkmenbashi, and Aktau, to shape.

However, a single cruise shape cannot turn the Caspian region into an international tourism center. All the Caspian countries have many shortcomings when it comes to recreational beach facilities. Developing sea tourism does not finish with just a port that the ship can sail into. It requires a complex of interdependent services. These are bringing the quality of services offered in beach recreation up to the international level, expanding the network of recreational zones, and developing other infrastructure. These include everything up to shaping technological infrastructure to be able to offer a variety of services, such as diving, fishing, and boat trips. Developing all these facilities as a complex can create an opportunity to attract international tourists. No one can say that we are not trying our best to build it. In fact, the governments of all Caspian countries are keeping the development under special control.

That being said, domestic tourism remains our priority. This is a forced measure, at least at this stage. How do we direct the trend towards international tourism? We must firstly improve infrastructure domestically. Only then can the region become appealing to international travelers.’

What does the future of international tourism look like? Will we be able to travel around the world like we used to and what do we need to do for that?

‘We all want to be a little on the optimistic side. Experts predict that international tourism will grow by 30 to 70% in 2022 compared to last year. The numbers will still fall short of the pre-pandemic records. Nevertheless, the upward trend is enough to inspire certain optimism. The pandemic is clearly here to stay and it will continue to be a stress factor for tourism. A little over 60% of the world population has been vaccinated and herd immunity will take several more years if the vaccination continues at this rate. COVID restrictions are still in place in Asia-Pacific, Middle East and some African countries. We expect Asian countries to be the last to resume international tourism fully. China, for instance, maintains a strict zero-COVID policy, which is quite impactful on the tourist flow to Southeast Asian countries. Another factor pressuring tourism recovery is the complicated economic situation, which includes global oil price hikes, growing inflation, rising interest rates, high public debts and ongoing disruptions in logistics chains.

This is critical for the tourism industry. All we can say is that international tourism is just starting to perk up and domestic tourism remains an incentive for the recovery of the industry as a whole. Experts believe that domestic tourism will become one of the main trends in 2022. Things may change in 2023, depending on how we go about health and safety. The industry is starting to recover gradually and it needs our support. The growth tempo is not what we had expected, but it is there nonetheless. The Caspian region can play a positive role in some respect. At the same time, the Caspian region is only relevant in regard to domestic tourism, so it will be of little interest to international tourism.


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