Hryvnia devaluation has led to the collapse of the tourism industry

Hryvnia devaluation has led to the collapse of the tourism industry
Photo: UNIAN

Despite that we are in the middle of the vacation season, Ukrainians are forced to reject the option of vacationing at sea resorts abroad. In August, the sales of travel packages dropped 30-40% compared with the same period in 2013, Director of travel agency chain Poyekhali s nami (Travel with us) Oleh Kulyk told Capital. He says that in August the sales traditionally fall by only 5-10% compared with July, but this year they dropped by over 30%. «The market practically came to a standstill. I don’t remember this kind of August,» notes Commercial Director of Natalie Tours Ivanna Chuchman. Co-owner of the Bronnikova Travel Agency Rodion Bronnikov speaks of an even more serious collapse. He says that over the past three weeks, sales have dropped twofold. «At the moment, there are singular sales of tour packages to Bulgaria, Egypt and Turkey, while there are no sales at all for early booking for the winter season,» confirms Director of the Kyiv agency Hot Tours Oleksandr Kovalchuk.

Lower than the cost value

The decline in sales is due exclusively to the growth of the exchange rate, notes Bronnikov. A new sharp devaluation of the hryvnia has been observed since the beginning of August. According to the National Bank of Ukraine, in the period from August 1 to August 20, the rate of the national currency on the interbank foreign exchange dropped by 10.5% to UAH 13.22/US $1.

Unlike in previous months, the anti-terrorist operation has not substantially influenced the current decline in sales of travel packages. «Unrest in the east of the country has been observed for several months,» says Bronnikov. In order to attract clients, travel agents are forced to offer «hot tours». For instance, today, one of the major Ukrainian companies offered a tour to Egypt for nine nights for US $450 for two, which is lower than its cost value.

Deputy Commercial Director of New Travel Vadym Chertkov says that only a roundtrip to Egypt by plane costs US $320 per one tourist. «All destinations are suffering,» he says. Tour operators are cancelling charter flights, explains Chertkov. For instance, summer programs, which were scheduled to be completed at the end of September, are being closed by the tour operators a month earlier. Yesterday, for example, the flights to Varna and Burgas (Bulgaria), Antalya and Bodrum (Turkey) were closed, says Chertkov. «Every day four-five flights [are cancelled or merged], tells the expert.

Looking for the bottom

Despite the overall negative picture, there are destinations where sales have increased compared with 2013, notes Sales Director of the Travel Professional Group Olena Boyko. «This is primarily Cyprus, which although factually requires a visa, in practice an electronic visa is issued quickly and with no troubles,» she explains. Tour operators selling tours to Montenegro and Bulgaria have managed to increase the tourist flow due to inexpensive tour packages offered to these countries (there are a lot of «hot tours» to Montenegro) and easy entry. Egypt can be saved by the traditional autumn increase of demand to this destination, believes Kulyk.

Tourists will fly for vacation after the hryvnia rate stabilizes, hopes Deputy Director of Hot Tours Vladyslav Bezverkhniy. This, however, will not save the situation. In the summer season the organized tourist flow will drop by around 25%, predicts Chertkov. Refusal of Ukrainians to go for vacation to Crimea and Azov Sea is saving the situation from total collapse. Otherwise, the decline of tourist flow would have reached 50% of that of the last year.

In 2014, the organized tourist flow will decrease by 30% to 1 mn people compared with 2013, predicts Kulyk. «Perhaps it will be even less,» he says. Furthermore, sales will drop for all popular resorts in Turkey, Greece, Spain, the UAE and long-distance destinations, such as Thailand, Sri Lanka, Vietnam and the Dominican Republic.

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