Russians’ tax-free purchases in Finland have declined by more than a quarter since the start of the year, largely as a result of the declining value of the Russian ruble.
Russian tourists have provided an important boost to Finnish retail businesses during the downturn, hoovering up items that are hard to find or more expensive back home.
The goods are cheaper for them, as they do not pay value-added tax on anything they buy, but now that comparative advantage is threatened by the weak Russian ruble. Tax-free purchases by Russians have declined by 27 percent since the start of the year as Russians seek cheaper destinations.
”Russians’ holiday destinations are now cheaper countries: Estonia, Greece and Thailand,” says Timo Lappi, Managing Director of the Finnish Hospitality Association. ”The prices and costs are on a completely different level to Finland.”
Last April Russian travellers needed 40 rubles for each euro they brought to Finland, now the euro is trading at more than 50 rubles. Lappi expects at least a ten percent drop in Russian tourism compared to last year.
Source: YLE
http://yle.fi/uutiset/weak_ruble_hurts_russian_tax-free_spending/7144080