Tourism in Ukraine - a New Industry But More and More Important

Tourism is one of Ukraine fastest growing industries. Based on population density, the Ukrainian market is more than 50% larger than Hungary, Czech and Slovakia combined.

Tourism has become one of the key factors driving the Ukrainian economy, generating approx. $ 4 billion in 2001, calculated in accordance with WTO (World Tourism Organization) methods. The State Tourism Administration reported that 5.8 million foreign tourists visited Ukraine in 2001, which represents a 31% growth compared with 2000. Overall in 2001, the State Border Control Service recorded nearly 11 million foreign arrivals in Ukraine. However, it should be noted that almost 75 percent of all foreign visitors arrived from Russia and other Newly Independent States.

Non-NIS tourists who visited Ukraine were predominantly from Hungary, Poland, Germany, and USA. Almost 54, 000 U.S. citizens visited Ukraine in 2000. An average foreign visitor spends 4 days in Ukraine, leaving in the country $ 600 per trip. The most popular destinations with foreign travelers are Kyiv (attracts 30% of all foreign visitors), Crimea (another 30%), Carpathian region including Lviv, and Odessa. Most of western travelers prefer either individual travel or cruise tours. Western Ukraine is a traditional destination for U.S. and Canadian travelers (who represent over 2 million Ukrainian Diaspora in these countries). Crimea, an old soviet tourism Mecca, has become a popular vacation spot for medium-to-lower financial strata of Germans.

The modernization of Ukraine’s tourism infrastructure is becoming an important priority for the Ukrainian and Crimean governments. [Note: Crimea has the status of an autonomous republic within Ukraine with its Constitution and Government.] Tourism is recognized for its potential in generating hard currency revenues. In 1999, the Ukrainian President by his Decrees created incentives for the development of a tourism infrastructure by establishing special economic zones in major Ukrainian tourist regions.

During the years of independence (since 1991) Ukraine’s tourism infrastructure has been gradually changing ownership from government to private. The private sector is developing rapidly, especially Kyiv, Odessa, Crimea and the Carpathian region. To host visitors Ukrainian tourism facilities include over 1 300 hotels, motels, campsites, tourism centers, and about 3000 recreational facilities. Ukraine considers these recreational centers (sanatoriums, spas, mud treatment facilities and others) as tourism facilities, rather then medical treatment institutions. During the years of independence (since 1991) Ukraine’s tourism infrastructure has been gradually changing ownership from government to private. The private sector is developing rapidly, especially Kyiv, Odessa, Crimea and the Carpathian region. To host visitors Ukrainian tourism facilities include over 1 300 hotels, motels, campsites, tourism centers, and about 3000 recreational facilities. Ukraine considers these recreational centers (sanatoriums, spas, mud treatment facilities and others) as tourism facilities, rather then medical treatment institutions.

Seaside resorts, with centers in Crimea and Odessa, face a relatively short season and serious competition from other destinations. This region was the center of recreational tourism in the former Soviet Union, and is therefore flooded with outdated resorts and sanatoriums formerly managed by trade unions. Crimea offers ideal climatic conditions, many curative mineral waters, peat and mud. In order to extend the season in Crimea, local companies and municipalities have developed attractive investment projects for the construction of winter sport facilities, hiking, marinas, entertainment centers and cruises. In addition, Crimea has historic sites associated with the Ancient Greek and Ottoman periods. The archeological relicts of old Greek towns Tyra, Olvia, Chersonesos, and Panticapaea attract many international visitors. The Crimean tourism industry generates over 50% of the Crimean GDP, evidencing the significance of this sector for the republic.

The Carpathian region offers a unique combination of mountains, clean air, curative spas, historic sites and ethnic culture. This is where most travelers from the United States, Canada and Western Europe tend to congregate. Development of hotels in regional centers (Lviv, Ivano-Frankivsk, Chernivtsi, and Uzhgorod) cities, resort hotels, convention centers, ski facilities, spas, hiking grounds, and convention centers, offer good opportunities for investments. Lviv medieval historic center is included in the UNESCO list of historic treasures, making it especially interesting for construction and design companies.
During the years of independence (since 1991) Ukraine’s tourism infrastructure has been gradually changing ownership from government to private. The private sector is developing rapidly, especially Kyiv, Odessa, Crimea and the Carpathian region. To host visitors Ukrainian tourism facilities include over 1 300 hotels, motels, campsites, tourism centers, and about 3000 recreational facilities. Ukraine considers these recreational centers (sanatoriums, spas, mud treatment facilities and others) as tourism facilities, rather then medical treatment institutions.
Skiing is a major Carpathian tourism draw. Long-lasting and reliable snow conditions make Carpathian skiing popular. U.S. community ski fans report that the slopes in Slavsko (Lvivska Oblast) and Yaremcha (Ivano-Frankivska Oblast) compare well to Piks Peak and the Killington ski areas in Vermont. Zakarpatska Oblast has several three-kilometer downhill runs, desirable for slalom. Other popular skiing areas in the Carpathian Mountains are Dragobrat, Tissovets, Vorokhta and Yaremcha. Most of skiing enthusiasts come to the Carpathian Mountains from Russia, the Baltic States, Eastern Europe, and the local foreign community. Crimea, in an effort to extend the season, has come up with attractive proposals to create modern ski resorts in the Crimean Mountains.
Farm Tourism. Bed and breakfast, home stay and farm tours offer potentials and could form accommodation development in the mountain villages. Farm and cottage tourism have potential because visitors interested in nature tolerate a minimal level of services which are in short supply in Ukraine.

The long mountain ridges, rural roads, and farmlands provide a good opportunity for mountain biking in the Carpathians and Crimea. The market is presently undeveloped: mountain bikes, equipment and spare parts are difficult to find. In addition, local tourism officials are unfamiliar with this large specialty market developing in Europe and North America.

The Carpathian streams offer class III rapids during the spring months. With appropriate marketing, the Carpathian streams may become a popular destination with western white water enthusiasts. Yachting is gaining in popularity with local high-class population of Ukrainians and locally headquartered international business community. Projects for developing marinas on the Crimea Black Sea coast are being in the pipeline. Alushta Marina project in Alushta, Crimea, is included in the state tourism development program as a priority investment project in the tourism infrastructure area.

Historic and cultural sites are concentrated in Kyiv, Lviv, Chernihiv, Odessa, and Crimea. Local governments in these cities are developing historic preservation programs and are seeking investors and construction firms for their implementation. Lviv city medieval downtown is included in the UNESCO Record of Historic and Architectural World Treasures. Almost half of all Ukrainian architectural relicts are located in the Lviv Oblast. There is a state program of “Lviv Downtown Rebirth”, whereby the Ukrainian government will support any effort aimed at the reconstruction of the 16th0-18th century city center.

One of the advantages that Ukraine has over its neighbors, Poland, Slovakia and Hungary is that traditional styles of life continue to be preserved. In the villages of the Carpathian National Park traditional dress and farming practices continue to be maintained. Western travelers express an ongoing interest in the artisan studio tours in the Ivano-Frankivsk Oblast. Local wood and woven crafts are extremely popular with Ukrainian diaspora.

Development of golf clubs is apparently not a Ukrainian government’s priority. After 11 years of independence, a 50 million people country does not have a single golf course. However, recent developments show that one may be open soon near Kyiv. An 18-hole golf course is being developed by Kyiv-based Golden Gate Golf Club. Given the slow pace of business development outside of Kyiv, opportunities for the construction of more golf facilities is unlikely. However, adding a small golf facility to a luxury hotel built in Crimea may be a reasonable expectation.