Not Quite Paradise

You're dropped in by a military helicopter, and off you go, reveling in some of the finest untouched powder skiing in Europe. This isn't France or Switzerland but southern Russia, on the slopes of Krasnaya Polyana, 2,800 meters high in the Caucasus Mountains. President Vladimir Putin is among the aficionados who seek out this "Russian Courchevel." But few foreigners have ever heard of it.

And that's the problem. A year after Putin proclaimed the importance of tourism for the country, Russia's travel industry is sinking. The number of foreign visitors dropped by close to 10 percent this year, to under 3 million--fewer than half the 7 million who came during Soviet times. "That's a laughable figure for a country such as Russia," so rich in culture and physical beauty, says Sergei Shpilko, president of the Russian Tourism Industry Union.

By rights, you'd think tourism in Russia would be thriving. Communism is long gone; Moscow and St. Petersburg, in particular, sparkle with cosmopolitan new wealth. Yet clearly, the bloom is off the rose. Tourism officials cite red tape, poor infrastructure, poor service, security fears--and, most recently, cost. A weeklong visit to Moscow or St. Petersburg has tripled in the past four years to $1,700, many times more expensive than any of their Eastern European neighbors (who are closer to Europe and are often more scenic). "An ordinary middle-class French or German tourist now prefers Poland or Turkey, where prices are three times lower," says Lyudmilla Shirenova, a travel agent at Aerotour in Moscow.

Then there are the hotels. Even finding a place to stay in Moscow and St. Petersburg has gotten tough these days. Business visitors have flocked to the cities in recent years, driving up prices and taking up rooms that might otherwise be discounted for less financially well-padded tourists. Instead of building more to meet demand, Moscow's city government seems intent on committing hotelcide. Thousands of rooms were lost recently as some of the city's biggest hotels fell to the wrecking ball. Among them was the iconic Hotel Moskva, just steps from Red Square; its only legacy is its image on bottles of Stolichnaya. Another behemoth from the Soviet heyday, the Rossiya, is also set to go, along with its inexpensive rooms and next-door views of St. Basil's.

Moscow's real-estate boom is partly to blame. With prices rising so quickly, and demand for new condos and apartments seemingly insatiable, investors are reluctant to put money into long-term investments such as hotels. So though the city has set a target of 5 million tourists by 2010, it's not likely to reach its goal.

Indeed, sometimes tourists can get the feeling that the last thing the government wants is, well, tourists. There are very few signs in English or any other language besides Russian. In September, a new migration card was introduced for foreign visitors--printed (natch) only in Russian. Red tape saps the good will of visitors before they even arrive. As countries in Eastern Europe and Southeast Asia relax their visa regulations, Russia's have become even more anachronistic. Independent tourists (as well as business visitors) must procure official "invitations" in order to even apply for a visa, costing $140 on average, and running as high as $300. Compare that to the $42 Russians pay for going to Europe. Notably, Ukraine has seen an increase in tourists since it relaxed its visa regulations this year.

St. Petersburg, the jewel in the Russian tourist crown, has seen a huge 19 percent drop in visits this year, despite being rated the eighth most attractive destination in the world by UNESCO. A spike in robberies helps explain the plunge; so does petty extortion by police and other officials. Hoping to repair its image, the St. Petersburg city council announced in October that it would train volunteers to patrol the streets in parts of the city frequented by tourists.

Tourism chiefs want the government to help. Russia spent a trifling 3 million rubles advertising the country abroad last year--nearly three times less than tiny Slovenia. "They say, 'Sorry, we just spent $30 million on Russia Today'," says Sinitsyn, referring to the news channel just set up by the Kremlin. How, he asks, do bureaucrats think that will help draw foreign visitors? Meanwhile, the slopes of Krasnaya Polyana are empty, save for a few intrepid foreign visitors who can afford the helicopters. "I genuinely rate the skiing there as good as anywhere," says James Morland, managing director of Elemental Adventure, which charges 1,226 pounds plus airfare for a three-day trip.

If President Putin has his way, this might soon change. The Russian government plans to invest billions developing Krasnaya Polyana into a world-class resort as part of Sochi's bid for the 2014 Winter Olympics. Whether tourism will improve elsewhere in Russia will depend on a similar change of attitude.