2013-04-06 00:37:46 - New Consumer Goods market report from Business Monitor International: "Ukraine Tourism Report Q2 2013"
BMI View: We believe that despite the undoubted success and large influx of tourists seen during the UEFA Euro Championship football tournament, Ukraine's tourism sector has been plagued by the economic uncertainty seen across Europe. This has not only affected it domestically with internal tourism, but has also affected its main source markets, all of which are in Europe. Equally, the continued economic uncertainty has had an impact on Ukraine's outbound tourism figures. However, the country is well placed to take advantage of the burgeoning CEE inter regional tourism industry, with borders shared with seven other countries, and well-developed rail and road networks.
This quarter BMI has revised and restructured its tourism reports, incorporating a greater range of data and focusing
on the hotel industry, the value of the tourism industry itself, and the impact of macroeconomic factors.
Full Report Details at
Ukraine co-hosted the UEFA Euro Championship with Poland in the summer of 2012, which has had a beneficial impact on the Ukrainian tourist industry in a number of ways. Firstly the large amount of investment in transport infrastructure and accommodation, secondly the influx of tourists and eager football fans, and thirdly the publicity for Ukraine during and after the event. Despite being overshadowed by the Olympics in Britain, and although many British football fans opted to go to the cheaper and more conveniently located matches in Poland, Ukraine still saw an estimated 23.4mn tourists in 2012.
Although many of these opted to come by air, taking advantage of various new airport extensions and developments, in general, given its location, the majority of Ukraine's inbound tourists from central and eastern Europe (CEE) come by road and rail. This is largely because the country is well placed in Europe for overland travel, as it is bordered by 7 countries, including Russia, its largest tourism market, with an estimated 890,000 visitors in 2012. It is unsurprising, therefore, that there has been so much investment in road networks and railways in recent years.
However there has also been a great deal of investment in the accommodation infrastructure, and a number of the largest hotel groups have been drawn to Ukraine, either forming partnerships with domestic companies, setting up franchises, or building their own hotels. For example, Intercontinental Hotels Group is reputed to be planning to open 15 hotels in Ukraine by 2029, while Wyndham Hotel Group is also expanding in Ukraine after signing an agreement with Ukrainian Hotels to build 15 Ramada Encore hotels over 10 years. Carlson Rezidor is building a Park Inn by Radisson Troyitska (franchise group) in Kiev, due to open in Q3 2013, while Starwood Hotels & Resorts plans to open the Sheraton Kyiv Olympiysky hotel in the capital in 2013, and earlier, in August 2012, Marriott International announced the opening of its first hotel in Ukraine. This will be a 173 room Renaissance Hotel in Kiev, which will open mid-2013.
However, a vague regulatory framework and lack of judicial enforcement will remain the key risks to foreign participation in Ukraine's economy. Despite this, chronic underinvestment by both domestic corporations and in public infrastructure since the early 2000s present the possibility of attractive investment opportunities in the years ahead as Ukraine increases its capital spending. Moreover, World Trade Organisation (WTO) membership and a need to anchor confidence in the economy will help provide a key business environment reform anchor going forward.
Ukraine's increase in tourist arrivals and departures coincides with the instigation of a visa free regime for EU members, who do not need visas to enter Ukraine, nor do tourists from the US, Canada, and Japan (amongst others).
Key Views and Events:
* In September 2012, Ukraine embarked on a pre-feasibility study for the Winter 2022 Olympics bid.
* Total arrivals are forecast to grow by 9.75% in 2013, reaching 2.55mn.
* Of this, 2.47mn will be from Europe, by far the largest regional market for the Ukrainian tourism sector.
* To cater for this increase, hotel numbers are forecast to increase by 4.4% in 2013, reaching 1,910.
* The top three inbound markets by country are Russia, Moldova and Belarus.
* The top three outbound tourist destinations are Hungary, Romania and Turkey.
* Ukraine is relatively politically and economically stable, albeit not at the top of the pack, and not involved in any major conflicts giving it a composite security score, of 61, placing it in joint 19th place with Russia and Uzbekistan.
* Meanwhile for the Tourism Industry, we have given it an overall Rating of 46.6, putting it in 15th position, between Bulgaria and Romania.
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