International Sanctions and Russia's Hotel Industry: The Impact on Business and Coping Mechanisms of Hoteliers

Abstract

This research aims at evaluating the impacts of the international sanctions on Russia’s hotel industry and the action undertaken by the hoteliers to mitigate the negative impacts of the sanctions. The sample includes 103 hotel managers from 11 popular tourist destinations in the Russian Federation. Mann-Whitney U-test, Kruskal-Wallis χ2 test and t-test are used to analyse differences in respondents’ answers by category, size, location, and chain affiliation of their properties. The findings show that hoteliers use different tactics to counteract the economic shocks to their businesses – mostly by cutting costs and increasing their marketing efforts. The findings further indicate that not all hotels experience the same shocks and that they therefore employ different tactics in response to the economic shocks experienced. This is the first research paper that measures the impact of the international sanctions on Russia’s hotel industry. The paper assesses the impact on microlevel – from the perspective of hotel managers.

Keywords: Russia, sanctions, politics, impacts on tourism, hotels, political instability