Features of Economic and Legal Regulation of Development of

Russian Tourism during Pandemic Period

Svetlana M. Vasina

, Aleksey S. Kuskov

and Elena V. Shestakova

Volga State University of Technology, Yoshkar-Ola, Russia

Saratov Regional Public Organization "Center for Legal Protection of Consumers", Saratov, Russia

Orenburg State University, Orenburg, Russia

Keywords: Agreement on the Sale of a Tourist Product, Coronavirus (Covid 19), Pandemic, Tourist, Tourist Cashback,

Tourist Product, Tour Operator, Force Majeure.

Abstract:

In the presented paper, the features, directions and problems of economic and legal regulation of the

development of russian tourism in the context of the coronavirus pandemic are identified, measures of state

support for the tourism industry are analyzed, directions for reforming the legislation on tourism activities in

the coronavirus period are highlighted, and the relevant law enforcement practice is studied. Special attention

is paid to the analysis of the existing measures of state support for the tourism industry in the leading foreign

countries in terms of tourism, the identification of models of state tourism policy in the new economic reality.

On the basis of the studies carried out, conclusions are drawn about the need to improve the efficiency of

existing measures of state support for the tourism industry in Russia and to further reform the current tourism

legislation

1 INTRODUCTION

The beginning of 2020 was marked by the emergence

of a new objective threat – the epidemic of

coronavirus infection, which has rapidly spread

throughout the world in just a month. As a result,

WHO officially recognizes the coronavirus epidemic

as a pandemic on March 11, 2020, and, as a result,

almost all countries of the world, in order to

counteract the further spread of the pandemic, have

introduced a quarantine regime, expressed in the

closure of state borders and a reduction in domestic

movements.

As a result, the global economic impact of

COVID-19 has led to a significant decrease in the

values of most macroeconomic indicators

characterizing the level of development of

international tourism (Table 1).

These negative trends have not passed Russia, as

a result of which the tourism industry is included in

the list of industries approved at the federal level that

are most affected by the pandemic , as "the activities

https://orcid.org/0000-0001-5173-0423

https://orcid.org/0000-0001-8182-6637

https://orcid.org/0000-0001-8082-8286

of travel agencies and other organizations providing

services in the field of tourism".

Table 1: Impact of COVID-19 on macroeconomic

indicators of tourism development.

No. Indicator

Value

in 2020

Reduction

(by 2019), in

1. World Tourism Industry

Revenue (US $ Billion)

396.0 42.2

2. Share of tourism in world

GDP

(

in %

)

5.50 -4.90

3. Gross Domestic Product

(

US $ Billion

)

4.71 49.1

4. Number of jobs (million

eople)

272.0 18.6

5. Number of tourist arrivals

(

in million

)

490.0 73.0

6. Travel expenses of

tourists

(

US $ Million

)

630.6 70.1

Vasina, S., Kuskov, A. and Shestakova, E.

Features of Economic and Legal Regulation of Development of Russian Tourism during Pandemic Period.

DOI: 10.5220/0011110400003439

In Proceedings of the 2nd International Scientiﬁc and Practical Conference "COVID-19: Implementation of the Sustainable Development Goals" (RTCOV 2021), pages 49-54

ISBN: 978-989-758-617-0

2 STUDY METHODS

The study is based on a quantitative and qualitative

assessment of tourism development trends in the

context of a pandemic and in the context of the

implementation of measures of economic and legal

regulation of tourism development at the state level.

The study is based on the assumption that the new

reality has led to the need to move from strategic

instruments of state tourism policy to tactical ones

that take into account the “weather of the moment”.

This, in turn, led to the emergence of new government

support measures that stimulated the positive

dynamics of domestic markets.

3 STUDY RESULTS

In many foreign countries, various measures of state

support for tourism have been offered (Table 2).

Table 2: State support measures for the tourism industry in

some foreign countries (compiled by the authors).

No. Countr

State su

ort measures

1. United

Kingdom

Waiver of tourist taxes and fees,

grant support, government loans at

low interest rates, a moratorium on

offs, em

ee com

ensation

2. Germany Subsidies for organizations

developing green tourism and

tourism related to local culture,

deferral of social security

contributions, waivers from the

collection of tourism-related taxes

and fees, subsidies for small and

medium-sized enterprises, grant

ort, credit incentives

3. Greece Tax breaks, earmarked subsidies

and grants, reduced staffing

requirements, vouchers to purchase

domestic tours, deferred social

security contributions, lower rents,

moratorium on la

offs

4. Spain Reduction of the tax burden,

deferral of mortgage and rental

payments, reduction of labor costs,

support for workers with

discontinuous contracts

5. Italy Vouchers for the purchase of

domestic tours, reimbursement of

the costs of canceled events,

government guaranteed loans,

deferred loan interest payments, a

moratorium on dismissals

6. China Programs for subsidizing tourist

ackages with an open date,

incentives for paying for electricity

services, subsidies for recruiting

and training personnel, tax

incentives

7. Scandinavian

and Baltic

Countries

Subsidiary programs for the

restoration of previously laid off

workers, investment loans,

rants

8. France Subsidies for small and medium-

sized enterprises, government

guaranteed loans, deferred social

security contributions, waiver of

taxes and fees, reimbursement of

utilit

costs, moratorium on la

offs

9. Czech

Republic

Discount coupons for domestic

tourists, deferred social security

contributions, interest-free

government loans

10. Japan Subsidies in the form of rebates

and vouchers for consumers,

grant support, government

guaranteed loans, moratorium

on la

offs

The analysis allows us to speak about the

existence of four models of tourism policy: a)

sectoral, associated with supporting the industry

through the development of territories, the creation of

infrastructure, and etc.; b) entrepreneurial, focused on

supporting business through a system of tax

incentives, subsidies, loans; c) consumer, which

involves the provision of discounts and benefits to

tourists when purchasing domestic tours; d) mixed,

including measures aimed at comprehensive support

for tourism.

The instruments of economic and legal regulation

of russian tourism are in many ways similar to the

measures of state support for tourism implemented

abroad, and are linked to the following trends:

1. The number of tourists inside the country

decreased by 35-40 % (from 68 million in 2019 to 40

million in 2020), tourists entering the country – by

94% (from 5.7 million in 2019. up to 0.52 million in

2020), tourists leaving the country – by 80 % (from

12.2 million in 2019 to 2.8 million in 2020).

2. The lack of transport links with foreign

countries led to a drop in demand for international

travel and a compensatory rise in domestic tourism

with a slight change in the geography of tourist flows.

3. However, the activity of tourist demand

remains maximally connected not with domestic

tourism, but with open directions of outbound

tourism, but with a simultaneous reorientation of 50-

60 % of tourists to the russian market.

4. In the industry, there was an increase in demand

for premium tours (by 20 %), a change in the ratio

between organized and amateur recreation in favor of

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the latter (40-45 % of russians refused organized

tours), an increase in demand for short and combined

(foreign + domestic) tours.

Such "shock therapy", despite the fact that the

total losses of the tourism industry amounted to 1.3

trillion rubles, and the number of travel agents

decreased by 20 % (4500 travel agencies were closed

in 2020, 20 % of travel agencies went online, 50 % of

travel agencies diversified their activities), had not

only a negative, but also a sobering effect on russian

tourism.

Results of 2020-2021 allow us to conclude that the

russian tourist market has shown a fairly high level of

self-organization due to the support of the industry

from the state and consumer loyalty. The

reorientation of tourist flows, coupled with measures

of state support for the industry, made it possible to

keep many tourism organizations “afloat”, to

stimulate them to sell a tourist product on the

domestic market.

In 2020, at the federal level, more than 30

different measures were offered to support the

tourism business, of which 11 measures are focused

only on small and medium-sized enterprises. As the

analysis has shown, the following measures are

among the three most effective.

1. Adoption of regulatory legal acts that provided

the opportunity to defer the fulfillment of obligations

by tour operators and travel agents under those

contracts that were concluded before March 31, 2020.

2. The "tourist cashback" program is a special

loyalty program, which implies a cash refund (in the

amount of 20 % of the cost of the voucher, but not

more than 20 thousand rubles) of the part of the funds

spent by tourists on the purchase of tourist services

with a bank card Mir registered in this program.

Currently, four waves of this program have been

implemented.

Over the entire period of the program, tours and

accommodation services were purchased in the

amount of 34 billion rubles, of which tourists received

a return in the amount of 6.7 billion rubles, and

regional economies received an additional 13 billion

rubles in 2020. The implementation of tours under the

cashback program in 2021 increased 1.6 times

compared to 2020. Over the entire period of its

implementation, 1.9 million tourists and 3,500 hotels

and tour operators took part in the program, the

volume of bookings for which increased by 20 and

40%, respectively.

The qualitative effect of the program was

expressed in stimulating the development of domestic

tourism, redistributing tourist flows within the

country, reducing the interest of tourists in foreign

destinations, popularizing children's recreation (the

"children's tourist cashback" program), and etc.

Implementation of the cashback program

redistributed funds allocated to support the industry,

the development of tourism infrastructure, and the

development of new territories.

However, the importance of the program shall not

be overestimated, since it also carries some threats,

including the "shrinking" and fragmentation of the

tourist space, that is, deepening regional disparities in

the level of development of domestic tourism,

"overheating" of popular tourist destinations, which

took 1.5 -2 times more tourists, increased discrepancy

in price, availability and quality of services,

insufficient consideration of the real needs of tourists,

discrepancy of 80 % of tourists to the requirements of

the program.

3. Provision of state subsidies for the payment of

wages to employees of tourist organizations in the

amount of one minimum wage (12,130 rubles), which

were used by only 3 % of tour operators. Small and

medium-sized enterprises could receive such

payments in April and May of 2020, provided that at

least 90 % of employees were retained in relation to

March 2020. In total, 81 billion rubles were allocated

for subsidies, and more than 3 million people received

payments. Each tourist organization received for an

average of 150 thousand rubles in such payments.

4. The system of tax support measures (deferral

and installment plan of tax and rent payments,

moratoriums on bankruptcy, tax audits and fines,

provision of tax incentives) turned out to be

insufficiently effective, despite the successful

experience of some regions (for example, the

abolition of regional taxes in St. Petersburg made it

possible to return in tourism 3.6 billion rubles).

The low degree of the regulatory impact of tax

support measures is due to the fact that the obligation

to pay taxes is not leveled, but only postponed. If the

existing trends continue, it will be very difficult for

tourism organizations to pay taxes at the end of 2021.

Moreover, the freed up funds are used to pay off debt

obligations, and not to develop a business in domestic

tourism.

Next, we will stop in detail on the purely legal

instruments of regulatory impact. As we already

wrote above, the most effective tool for supporting

the tourism business was the adoption of regulations

that provided tour operators and travel agents with a

deferral to fulfill their obligations to tourists until

December 31, 2021.

On March 25, 2020, at a meeting of the Presidium

of the Coordination Council under the Government of

the russian Federation to combat the spread of a new

Features of Economic and Legal Regulation of Development of Russian Tourism during Pandemic Period

coronavirus infection in Russia, a decision was made

to temporarily suspend air traffic from russian

airports to airports in foreign countries and in the

opposite direction, with the exception of flights

related to export russian citizens in connection with

the spread of the coronavirus. In connection with the

ban on flights with foreign countries, as well as

between individual regions of the country,

Rostourizm and Rospotrebnadzor recommended tour

operators and travel agents to completely stop selling

the tourist product and individual services until the

epidemiological situation normalizes.

In the context of a pandemic and in order to

minimize its negative impact, the following

regulatory legal acts have been adopted:

1) Federal Law of November 24, 1996 No. 132-

FZ "On the Basics of Tourist Activity in the Russian

Federation" (hereinafter – the Law on Tourism)

supplemented by Art. 11.8, where cases of restricting

the entry of tourists into the country (place) of

temporary stay are defined as a special ground for

terminating the agreement on the sale of a tourist

product (the list of countries that have established

such restrictions is posted on the Rostourism

website);

2) Order of the Government of the Russian

Federation dated of April 04, 2020 No. 898-r based

on Art. 11.8 of the Law on Tourism establishes the

possibility of returning funds from the personal

liability fund of the tour operator; the period for such

a return was extended by the order of the Government

of the Russian Federation dated April 15, 2021, No.

977-r;

3) Resolution of the Government of the Russian

Federation of April 08, 2020 No. 461 "On Approval

of the Rules for the Return to Tourists and (or) other

Customers of Money paid by them for a Tourist

Product from the Funds of the Tour Operator's

Personal Liability Fund" fixed the procedure and

conditions for the return of funds from the personal

responsibility of the tour operator on the basis of Art.

11.8 of the Law on Tourism;

4) Resolution of the Government of the Russian

Federation of July 20, 2020 No. 1073 "On Approval

of the Regulations on the Specifics for 2020 and 2021

for the Execution and Termination of the Agreement

on the Sale of a Tourist Product, concluded by March

31, 2020 inclusive, by a tour operator operating in the

field of domestic tourism, and (or) inbound tourism,

and (or) outbound tourism, or by a travel agent selling

a tourist product formed by such a tour operator,

including the grounds, procedure, terms and

conditions for the return to tourists and (or) other

customers of the tourist product of the sums paid by

them for the tourist product or provision at other times

of an equivalent tourist product, including in the

presence of the circumstances specified in part three

of Article 14 of the Federal Law "On the Basics of

Tourist Activity in the Russian Federation"

(hereinafter – Resolution No. 1073).

It is Resolution No. 1073, possessing a high

degree of regulatory impact on the development of

the tourism industry, at the same time, it maximized

the degree of conflict potential in the relationship

between consumers and entrepreneurs and led to an

obvious violation of the balance of interests of the

parties in favor of the latter. So, as of December 2021,

the total debt of tour operators is 43 billion rubles,

which causes serious concerns among consumers

about the fulfillment of obligations by tourism

organizations in the future under previously

concluded agreements. This also increases the level

of expected risk of massive bankruptcies in the tour

operator sector.

As the law enforcement practice shows, the

application of Resolution No. 1073 faced a number of

problems.

Firstly, Resolution No. 1073 did not give russian

consumers, unlike European ones, the right to choose

between a refund and the provision of an equivalent

tourist product. So, on May 13, 2020, the European

Commission adopted Recommendation No.

2020/648 "On Vouchers Offered to Passengers and

Travelers as an Alternative to Refunding Canceled

Trips and Transport Services in Connection with the

COVID-19 Pandemic", according to which tourists at

their own choice can claim reimbursement the cost of

travel or the provision of a voucher for services.

Secondly, Resolution No. 1073 was adopted on

the basis of Art. 19.4 of the Federal Law of April 01,

2020 No. 98-FZ "On Amendments to Certain

Legislative Acts of the Russian Federation on the

Prevention and Elimination of Emergencies" , from

which it follows that its application is "launched" only

in emergency conditions. However, neither an

emergency regime nor a high alert regime was

introduced in the country and its regions. Moreover,

introduction of an emergency regime always entails

the application of the rules on force majeure, which

excludes any liability of the parties to each other and,

accordingly, there is no need to apply the provisions

of Resolution No. 1073.

Thirdly, Resolution No. 1073 does not allow to

differentiate and qualify the grounds for "Significant

Change in Circumstances" (Article 10 of the Law on

Tourism), "Emergence of a Threat to the Safety of

Life or Health of Tourists" (Article 14 of the Law on

Tourism), "Force Majeure" (Art. 401 of the Civil

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Code of the Russian Federation), which is of

fundamental importance from the point of view of the

onset of legal consequences corresponding to these

grounds;

Fourthly, the problem of mass refusals of tour

operators from providing tourists with an equivalent

tourist product at the price that was valid at the time

of the conclusion of the contract was actualized. If

tourists refuse to receive a tourist product at a higher

price and they declare a demand for a refund, tour

operators, referring to Resolution No. 1073, indicate

that the refund period has not yet come. The

circumstances that have arisen have led to the

emergence of a new claim structure – a claim for the

obligation to provide an equivalent tourism product.

The so-called “coronavirus” reviews of the

Supreme Court of the Russian Federation made some

clarity in resolving the emerging problems. Thus, the

Review on certain issues of judicial practice related

to the application of legislation and measures to

counter the spread of a new coronavirus infection

(COVID-19) No. 1 in the territory of the Russian

Federation (approved on April 21, 2020) contains

answers to two important questions:

Question No. 7 about the possibility of

recognizing the epidemiological situation, restrictive

measures or the self-isolation regime as force majeure

circumstances (clause 3 of Art. 401 of the Civil Code

of the Russian Federation):

1) recognition of a pandemic as force majeure

cannot be universal for all debtors, regardless of the

type of their activity, the conditions for its

implementation, including the region in which the

organization operates, due to which the existence of

such circumstances shall be established considering

the circumstances of a particular case (including the

deadline for the performance of the obligation, the

nature of the unfulfilled obligation, the

reasonableness and good faith of the debtor).

2) to exempt from liability, the party must prove:

a) the presence and duration of force majeure

circumstances; b) the presence of a causal

relationship between the circumstances that have

arisen and the impossibility or delay in the

performance of obligations; c) non-involvement of

the party in the creation of force majeure; d) taking in

good faith by the party reasonably expected measures

to prevent (minimize) possible risks.

Question No. 8 about the possibility of

recognizing the epidemiological situation, restrictive

measures or the self-isolation regime as grounds for

changing or terminating the contract: if the contractor

violates the deadlines for the work, the provision of

the service, the consumer shall have the right to refuse

to fulfill the contract and demand the return of the

price paid by him/her on the basis of Art. 28 of the

Law of the Russian Federation "On Protection of

Consumer Rights" minus the costs actually incurred

by the contractor related to the fulfillment of

obligations.

In the Review on certain issues of judicial practice

related to the application of legislation and measures

to counter the spread of a new coronavirus infection

(COVID-19) in the territory of the Russian Federation

No. 3 (approved on February 17, 2021), three

questions (No. 7-9) related to with application of

Resolution No. 1073, where the Supreme Court of the

Russian Federation concluded that Resolution No.

1073 does not establish a special mandatory pre-trial

procedure for terminating the contract, and the right

to demand termination of the contract and refund is

granted to the tourist who is the customer of the tour.

In the russian legal realities, attempts were also

made to appeal against Resolution No. 1073 in the

order of administrative proceedings (decisions of the

Supreme Court of the Russian Federation of

September 30, 2020 in case No. AKPI20-521, dated

December 09, 2020 in case No. AKPI20-630, dated

February 03, 2021 in case No. AKPI20-837). The

Supreme Court of the Russian Federation,

disregarding the main issue of giving or not giving

retroactive effect to Resolution No. 1073 in cases of

termination of an agreement on the sale of a tourist

product before its entry into force, nevertheless made

two fundamentally important conclusions that:

1) Resolution No. 1073 was adopted in full

compliance with the law, does not violate consumer

rights and does not allow unlawful withholding of

paid services and funds under the contract;

2) if, after conclusion of the agreement, a law has

been adopted that establishes other rules binding on

the parties than those in force at the conclusion of the

agreement, the terms of the concluded agreement

remain in force, except for cases when the law

establishes that its effect applies to relations arising

from previously concluded agreements (cl. 2, Art.

422 of the Civil Code of the Russian Federation).

The Supreme Court of the Russian Federation put

an end to the disputes when resolving one of the civil

cases, directly indicating that Resolution No. 1073

does not violate the rights of a tourist, has retroactive

effect and extends its effect to all agreements on the

sale of a tourist product concluded before March 31,

2020, including the agreement concluded between the

parties to the dispute (ruling of the Supreme Court

dated September 07, 2021 in case No. 78-KG21-40-

KZ).

Features of Economic and Legal Regulation of Development of Russian Tourism during Pandemic Period

Disagreeing with this position, we note that it is

not entirely justified to make Resolution No. 1073

retroactive in relation to tourist contracts terminated

before the entry into force of Resolution No. 1073,

since this contradicts the norms of cl. 1 of Art. 4 of

the Civil Code of the Russian Federation and leads to

a paradoxical situation of “reanimation” of an already

terminated agreement with the aim of subsequent

application of Resolution No. 1073 to it.

4 DISCUSSION OF RESULTS

The results of the analysis of measures to support

domestic tourism in their economic aspect are

discussed in the papers of O.E. Afanasyev, I. V.

Bushueva, D.D. Kuznetsova, M. I. Kuterin, V. V.

Lavrov, E. G. Leonidov, V. V. Lysenko, E. I.

Makrinova, L. B.-Zh. Maksanova, N.V. Rubtsova, E.

А. Rybochkina, O.A. Stepurenko, L. I. Studenikina,

I. V. Falimendikov, I. Yu. Shvets, S. Aldao, D.

Blasco, D. Chikodzi, K. Dube, M. P. Espallargas, G.

Nhamo, C. Pasquinelli, S. P. Rubio, M. Trunfio, et al.

Features of the legal impact on the development of

tourism are discussed in the papers of D.V. Volodina,

N.V. Litarenko, P. E. Morozov, N.A. Nikitashina, I.

Е. Otcheskiy, N.V. Sirik, V. А. Urmatskikh.

5 CONCLUSIONS

Despite the effectiveness of the existing measures of

economic and legal regulation (state support) of the

tourism industry, their application has exposed a

number of the following problems that need to be

resolved.

1. The strategic (evolutionary) vector of

regulation of the tourism industry has drastically

changed to tactical (revolutionary) one, which

requires taking into account the "weather of the

moment", operational changes taking place in the

economic and legal environment. This, on the one

hand, demonstrated the unpreparedness of the state

and the tourist business to respond quickly to the

changed environmental conditions, and, on the other

hand, led to the launch of a set of measures without

their proper elaboration and determination of the

expected economic effect.

2. At the state level, more than 30 measures have

been taken to support the tourism industry, of which,

including for the above reasons, only those isolated

measures have demonstrated their effectiveness,

which made it possible to postpone the fulfillment of

obligations to consumers and receive non-repayable

and interest-free subsidies and loans.

3. The improvement of the legal regulation of

tourist activity in the last two years has been carried

out without taking into account the requirements of

its harmonization and unification with international

legislation, in the conditions of the emergence of

contradictions with previously adopted normative

legal acts regulating similar or similar legal relations,

and also leads to a violation of the balance of interests

of the parties to consumer relations.

4. The current regulatory legal acts adopted in the

period from march of 2020 to the present, shall be

applied only in accordance with the conditions of

emergency and high preparedness, which does not

correspond to the existing realities either in the

country as a whole or in its individual regions.

5. In law enforcement practice, the problem of

distribution of responsibility of tour operators,

airlines and hotel organizations often arises in

connection with the conflict of certain provisions of

resolutions dated of july 06, 2020 no. 991, july 20,

2020 no. 1073, july 20, 2020 no. 1078.

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