$5 bn plan could turn Russia's Sochi into one of Europe's best ski resorts

PanARMENIAN.Net - Russian President Vladimir Putin’s dream of turning Sochi into a rival for the Alps has gotten a boost as Russian tourists stay home after the ruble’s collapse -- so much so that the resorts say they face overcrowding, Bloomberg reports.

Vladimir Potanin -- who spent about $2 billion, among the most from the billionaires tapped to build the slopesand stadiums for the 2014 Winter Olympics -- is planning another $90 million on his Roza Khutor ski area to increase capacity by 2018. At the same time, he’s told the president a wider expansion, which may cost $5 billion, is needed to turn the spot by the Black Sea into a real rival for Europe’s biggest resorts.

Russia’s economic woes have helped domestic tourism as the ruble lost raised the cost of foreign travel. International vacations dropped by more than 30 percent last year, the largest annual drop since 1998, as the ruble plunged about 55 percent since the start of 2014 and the government banned sales of package vacations to Egypt and Turkey, according to the Russian Tourism Industry Union, Bloomberg says.

Roza Khutor earned more than it spent for the first time ever this winter season, which ran from mid-December through April, with visitor numbers jumping 33 percent to 800,000 people, according to the resort’s chief executive officer, Sergei Bachin. The crowds swelled in January to the point where management hiked prices to control the influx. Roza Khutor and the two competing resorts in the area, one owned by natural gas producer Gazprom PJSC and another developed with backing from state-controlled Sberbank PJSC, are bumping up against the area’s capacity of about 20,000 people a day, Bachin said.

Putin ordered the government to weigh further developments, in the Sochi National Park, after Potanin wrote a letter to the president about the future of the region. Only two areas of the park are suitable for projects and each may take up to a decade to build up, costing a combined $5 billion, Bachin said. Rosa Khutor and Potanin’s Interros Holding don’t plan to invest, he said.

The price tag may not be the only obstacle. Environmental groups have decried any expansion, saying it threatens the area’s biodiversity and its integrity. But Bachin says some of the areas -- farms during the Soviet era -- are zoned for recreational use. “Without development of new territory, it’s impossible to make a second Courchevel,” Bachin said, referring to the French ski resort long favored by Russia’s rich. “Many guests complain that we can offer three to four days of skiing, which is better than in Europe, but we don’t have enough slopes for a longer stay.”

In the expansion planned for the next two years, Roza Khutor is planning to build four new ski lifts, bringing the total to 20, and extend the slopes to 100 kilometers (62 miles) from the current 77 kilometers. The $90 million project will eliminate bottlenecks, boosting capacity by as much as 50 percent, Bachin said.