New measures to support the tourism industry were adopted by the Legislative Assembly of Saint Petersburg in the third and final reading

23 December 2020

Saint Petersburg will be the first region of Russia to provide unprecedented measures to support the tourism sector at a cost of 3.66 billion rubles to preserve and quickly restore the hospitality industry.

In October 2020, in connection with the repeated aggravation of the situation with the COVID-19 pandemic, the Governor of Saint Petersburg Alexander Beglov instructed the Saint Petersburg Committee for Tourism Development to develop an additional package of measures to support the tourism industry, as one of the most affected by the spread of the new coronavirus infection.

«As a result of joint work with representatives of the professional expert community, the Committee prepared proposals for new tax benefits. They were submitted for consideration to the Saint Petersburg Legislative Assembly as part of amendments to the draft law of Saint Petersburg «On Amendments to Certain Laws of Saint Petersburg on Taxes and Fees». The amendments provide for the exemption in 2020 and 2021 of hotels, travel companies, health resorts, transport organizations from paying a number of regional taxes. The main and most important condition for the city to receive the benefits provided for by the amendments is the preservation of employment and professional personnel in the tourism sector» - commented the adoption of the amendments, Chairman of the Saint Petersburg Committee for Tourism Development Sergey Korneev.

In addition, fifteen Saint Petersburg tourist organizations, supported by the Committee, received grants from Rostourism in the total amount of 40 million rubles. For the subsequent restoration of the tourism sector, the result of the information campaign to attract attention to Saint Petersburg and the speedy recovery of tourist flows will acquire exceptional significance. For this, the program «New cultural and tourist geography of Saint Petersburg» is being developed and implemented. The city participates in the development of the Silver Necklace of Russia program as a travel hub. In 2021, the mechanism of a unified electronic visa will be launched, which will become an additional opportunity to visit Saint Petersburg, which must be told to foreign partners now. Today, the city sets itself the goal of informing about its classic and new tourist opportunities, including modern thematic locations and routes, antiquarian, creative and leisure, scientific, educational, health, medical, family, business, gastronomic, industrial and many others.

These measures will allow to unfold the interest and deferred demand from millions of travelers to our city. The main goal for Saint Petersburg now is to preserve the infrastructure base of the industry, first of all, the modern hospitality infrastructure that has been formed over the past twenty years, and in the future, after the removal of COVID-19 restrictions, the restoration of the tourist flow. This will assist in the restoration of the economy not only in the tourism sector, but also in dozens of related industries and spheres of city life, and will return tourist flows to the northern capital after the weakening of the pandemic.

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Representatives of the city's tourism business, in particular, the North-West Branch of the Russian Union of Travel Industry and the Russian Hotel Association, did a lot of work together with the Committee. The list of new support measures for the tourism industry:

The Saint Petersburg Committee for Tourism Development, together with the tourism community, prepared proposals for new tax benefits for the tourism sector of the city. On December 11th 2020, proposals were introduced in the Legislative Assembly by an amendment to the second reading of the draft law of Saint Petersburg «On Amending Certain Laws of St. Petersburg on Taxes and Fees» (https://www.assembly.spb.ru/ndoc/doc/0/777342641).

1. Exemption for 2020 and 2021 from paying property tax for:

- hotels;

- sanatorium-resort organizations;

- travel companies.

Condition: maintaining the average wage at least the minimum in Saint Petersburg (minimum wage - 19,000 rubles).

2. Exemption for 2020 and 2021 from payment of land tax for:

- hotels;

- sanatorium-resort organizations;

- travel companies.

Condition: maintaining the average wage at least the minimum in St. Petersburg (minimum wage - 19,000 rubles).

3. Cancellation of the tax on the property of organizations and the land tax for 2020 and 2021 for lessors - owners of real estate (OKVED 68.20), leasing premises with an area of ​​at least 500 square meters:

- hotels;

- health resort organizations.

Conditions: - after March 13, 2020, additional agreements have been concluded that provide for a reduction in rent for the period from March 13, 2020 to December 31, 2021, not less than twice the amount of the tax benefit; - maintenance by the property owner of an average wage of at least the minimum in St. Petersburg (minimum wage - 19,000 rubles).

4. Reduction for 2021 of the tax rate levied in connection with the application of the simplified taxation system to 1% when taxing “income” for:

- hotels;

- health resort organizations;

- travel companies.

Condition: maintaining the average wage at least the minimum in Saint Petersburg (minimum wage - 19,000 rubles).

5. Exemption for 2020 and 2021 from payment of transport tax for:

 - travel companies;

- organizations operating in accordance with OKVED 49.39 «Activities of other land passenger transport, not included in other groups»;

Condition: SMEs, maintaining an average wage of at least the minimum in Saint Petersburg (minimum wage - 19,000 rubles).

In ten months of 2020, international arrivals dropped 72% due to the pandemic, leading to the worst year in tourism history, the United Nations World Tourism Organization (UNWTO) reported. According to the latest UNWTO data, from January to October, countries received 900 million tourists less than in the same period in 2019. This translates into a loss of $ 935 billion in export revenue from international tourism, more than 10 times the 2009 loss from the global economic crisis. Saint Petersburg is a recognized world tourist destination and one of the most popular travel destinations in Russia. In 2019-2020, with the support of the city administration and the Government of the Russian Federation, a number of large-scale projects of the international level were implemented, record-breaking economic indicators for the city in the tourism industry were achieved. On November 27th, Saint Petersburg was recognized as the best world cultural destination and received a prize from the World travel awards. We went around Paris, Rome, London, New York, the organizers celebrate an unprecedented number of voters. Saint Petersburg today can surprise the most sophisticated travelers and offer pastime options for tourists with a wide variety of interests and preferences. During the pandemic, an additional incentive for domestic tourism and travel in Saint Petersburg was the cashback program from Rostourism. Saint Petersburg lost 90% of the international flow of tourists, and all other areas also suffered: business, children, sports, sanatorium-resort and so on, but due to the active work of the city and market participants, the growth in demand, including the cashback program from Rostourism, domestic tourism won back about 20% of the losses. According to the results of summing up the results of the second stage of the cashback program, the city is in 5th place in terms of the total cost of bookings. At the same time, the average duration of a trip to Saint Petersburg is 4 nights, and the average cost of hotel bookings and purchased tours is 24 thousand rubles (excluding funds spent on the spot on additional services). The average check in 2019 was 36 thousand, became 42, and the duration of stay also increased - from 3-4 days to 5-7. After the introduction of additional New Year restrictions, Saint Petersburg turned to Rostourism with a request to extend the cashback program. Now under consideration is a draft amendment to the corresponding government decree, which provides for a mechanism for transferring tours with cashback. Tourism is a driver of economic development in Saint Petersburg and shows outrunning growth. In 2019 alone, tourists spent 376.8 billion rubles in our city. Tourism is 12% of all exports of Saint Petersburg and 44.5% of its non-energy non-raw materials exports, while tourism is the most environmentally friendly export. The employment of the population in the hospitality industry in the normal season is more than 107 thousand people, in the high season this figure rises to 300 thousand, and in total in tourism and related industries during the peak period up to 500 thousand people are involved. Note that in 2019 Saint Petersburg was visited by 10.4 million tourists, which is 26.8% higher than the same indicator in 2018.

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