Russian economic crisis helps save Putin’s post-Olympic dream at Sochi
President Vladimir Putin spent $50 billion on the Olympics, and had hoped his investment would leave behind a skier’s paradise in the mountainous Russian subtropics. But holiday bookings in Sochi were sluggish over the past year, as Russia grappled with a political crisis and increasing international economic isolation because of its involvement in Ukraine.
In the past several weeks, however, the resorts around Sochi have had a resurgence. Russians have tripped over themselves to reserve hotel rooms, book last-minute ski packages and fill Black Sea mountain getaways to near capacity.
Russia’s economic and political crisis, it turns out, just might have saved Putin’s post-Olympic dream.
It started around the time the ruble tumbled, trading in late November around 60 to the euro, compared with about 45 at the start of 2014. (It’s now almost 80). That made the cost of a European ski vacation jump for Russians who were accustomed to going on foreign holidays.
“It meant that for the first time in many years, people opted for cheaper vacations at home,” said Maya Lamidze, executive director of the Association of Tour Operators. With the memory of the Winter Olympics fresh in mind, vacationers poured into Krasnaya Polyana, which hosted the Games’ ski and snowboarding events and is now the No. 1 vacation destination in Russia.
“It’s never been like this in previous years,” Lamidze said, crediting the ruble’s fall as the key reason for the spike in interest. “It was the perfect opportunity for our resorts.”
Russians who have the means traditionally put aside some money during the year for vacations, and many go abroad for the approximately two-week-long winter holiday that extends past Russian Orthodox Christmas on Jan. 7.
“It was so expensive to go to Europe this year that we decided to come here instead,” said Marina Gubskaya, 28, who works for a leasing agency in Moscow. “It’s much cheaper to fly here, and you don’t need to pay for a visa.”
Still, budgetary woes only explain part of the shift by Russian vacationers to the Sochi area.
Skiing isn’t a poor man’s sport, and as many Russian tourists hitting the slopes at Krasnaya Polyana this month pointed out, they probably could have managed to pay for European trips if they had really wanted to. But in the current political climate, they just didn’t.
“Usually we go to Austria or Italy, but this year we decided this will be our answer to sanctions,” said Maxim Zdor, 37, of Ulyanovsk, a city about 550 miles east of Moscow, referring to penalties the European Union and the United States slapped on Russia over its involvement in Ukraine this summer.
“Putin told us that it’s better for us to support Russia and Russian resorts like Sochi,” said Natalia Shchelkonova, 28, a lawyer and economist, who was skiing the Mountain Carousel slopes at the Gorky Gorod resort, the newest of the ski complexes at Krasnaya Polyana, with her husband.
“Of course, these mountains aren’t quite so high as the Alps,” Shchelkonova said, gesturing to the slope and explaining that her husband’s first choice would have been to spend the winter holidays surfing in Bali. “But the dollar and the euro were so expensive, and when I was looking at the bookings, all the prices were in dollars, so we decided to wait. Now I think it was a good decision for us to come here.”
Sochi has long been a summer vacation destination, but it was not a popular winter holiday spot for Russians before last year’s Olympic Games.
The post-Olympic glow helped motivate accountant Natalia Vasiliyeva, 41, and her friends to pile their respective families into three cars and drive the approximately 1,000 miles from Moscow to Sochi,where they spent a week by the seaside and driving into the mountains to ski.
“We were very curious to see what it was like after the Olympics,” she said. “And you know it’s good to have a chance to go together. It doesn’t depend on currency exchange, and you don’t need a flight — and as you know, airline tickets can be very expensive, especially for 11 people.”
The early numbers from surveys by Russian banks suggest that many people chose to spend their depreciating rubles closer to home this winter. VTB24, a large bank in Russia, announced Thursday that its customers spent 40 percent less on New Year’s vacations abroad in 2015 than they did a year before. But its clients shelled out over 50 percent more than usual closer to home.
If those numbers don’t quite add up to money saved, the culprit could be the exchange rate: Prices across the country, on everything from groceries to luxury goods, have risen. Also, many Russians opting to vacation in Sochi didn’t quite find the deals they were looking for.
“I have to say, unfortunately, in Krasnaya Polyana, the prices aren’t any different than they are in Europe,” said Marina Kiselyova, 34, who said she made last-minute plans to come to Sochi from Moscow. “Maybe it was a little cheaper for us because we came by car, but next year we’re going to have to do some better planning and accounting.”
According to Lamidze of the Association of Tour Operators, Russian travelers often make their winter plans just a few months ahead of time. But this year, most booked their rooms within just a few weeks of the holidays. That left travelers susceptible to price hikes, such as the ones the Rosa Khutor resort instituted on ski passes in early December as a consequence of the unexpected spike in tourism.
Some tourists in Sochi worried they weren’t getting quite enough value for their money. While visitors praised the quality of the hotels, some griped about underwhelming food and confusing public transportation. There were also a bevy of complaints about the wait times for overcrowded ski lifts, people said.
“Compared to Europe, there’s just not enough space,” said Igor Kim, 41, of Moscow. “It’s not quite good enough. But we know it will get better.”
Still, almost every one of several dozen people interviewed in the resorts around Sochi talked of probably returning in the future — next year, or maybe down the line, once some of the kinks have been worked out.
“If you’re talking about services, okay, maybe this place isn’t quite at the level of Europe. But here everyone is Russian, so you know where to go, what to do — it’s easier,” said Aysa Magnayeva, 27, of Moscow.“Also, yes, our choice had a little something to do with the exchange rate. But we didn’t come to save money. We came for a vacation.”
