Ukraine's Crimean peninsula, edged with pebble beaches and historic sites, should be in the thick of the summer tourist season right now. But the region's annexation in March by Russia and clashes in other parts of Ukraine between the military and pro-Russian rebels have made tourists and travel operators skittish.
The situation hurts Ukraine's economy two ways: travel and tourism's total contribution to the country's GDP was 8.6% in 2013 -- and a large part of that was generated by visitors to Crimea. With Crimea now part of Russia's economy and travel to the region down overall, nobody wins.
Carnival Corporation (NYSE:CCL) and Royal Caribbean International (NYSE:RCL) have routed upcoming cruises away from the Black Sea resort area despite pleas from the Ukrainian Sea Ports Authority and the city of Odessa that the region is safe for passengers to come ashore. Flights by Ukraine's flagship carrier from Kiev to Crimea's main airport have been cancelled, and the Russian government is now pressuring companies to pay workers to vacation in Crimea rather than in other destinations farther afield.
While Crimea and the Donetsk area have been the focus of security attention, the U.S., U.K., and other countries have warned their citizens away from Ukraine as a whole for leisure travel. The U.S. State Department advises citizens to avoid any sort of travel to the peninsula and the Donetsk, Kharkiv, and Luhansk regions near the Russian border. American travelers are urged to "exercise caution" in the port city of Odessa, northwest of Crimea.
Change of plans for cruise and air travel
The Crimean peninsula's beaches are known for their Mediterranean climate and a rich trove of nearby Greek, Ottoman, Viking, and Russian architecture. But cruise travelers won't be relaxing onshore or exploring Crimean history any time soon.
Royal Caribbean International's Celebrity Cruises has rerouted its three fall Black Sea excursions on the Constellation to avoid Odessa and the Crimean port cities of Yalta and Sevastopol. Those cruises will now carry passengers to Turkey, Russia, Bulgaria, Romania, and Greece. Carnival Corporation's Holland America line has no port calls at Sevastopol scheduled before the end of September 2015.
Swiss-based Viking River Cruises AG cancelled spring and early summer sailings of its 12-day Dneiper River cruises, according to TravelPulse. Those voyages were slated to sail from Kiev to Odessa with port calls in Sevastopol and Yalta, although as of this writing Viking has removed the Ukrainian itinerary from its site. Silversea, based in Monaco, announced earlier this month that it's switching out Ukrainian stops on its Black Sea voyages this year for Greek and Turkish ports.
Getting to Crimea by air is harder now, as well. Flagship carrier Ukraine International Airlines announced in April the cancellation of all its flights between Kiev and the Crimean city of Simferopol. That suspension was originally set to last through the end of June, but UIA corporate press secretary Evgeniya Satskaya told The Motley Fool that the route is now closed "up to the end of 2015."
Satskaya said it's too soon to tell if the unrest in Ukraine will affect bookings on the UIA's nonstop flights from New York JFK to Kiev -- a route that went into operation on April 25.
In the meantime, the Associated Press reports that while the Russian government tries to lure workers to the peninsula to prop up the faltering tourist economy, many are reluctant to go or can't get there. Passenger train service, the main mode of transport for Russian vacationers to Crimea, has been disrupted by the conflict.
Cloudy forecast for Ukrainian tourism
The World Travel & Tourism Council's most recent report, compiled before the conflict erupted, projected steady growth Ukraine's tourism industry over the next decade, with its total contribution to the country's GDP rising by about 4% per year. International tourist traffic was forecast to hit 23.5 million visitors this year -- something that's unlikely to happen until the conflict with Russia is fully settled. In the meantime, Ukraine and Crimea's tourist destinations -- and coffers -- will be mostly empty.
Casey Kelly Barton has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.