English language posts Украина Реформы

The UBN 2019-02-01

With an expected surge in European tourism to Kyiv this spring and summer, the capital needs more hostels and two and three star hotels, Maryna Rymarenko, partner at DEOL partners, tells reporters. “This segment can have a fast payback period – from three to five years. However, it should be located in the center of the city, and the cost per square meter is growing.” For high end hotels, low occupancies of about 45% depress room revenues and rule out new projects. She said: “For the five-star hotels [the average room revenue] was $89, for the four-star hotels it was $70. Compared with other countries, it is too catastrophically low to talk about the prospects of opening new facilities next year.”

On the ground, Mukachevo will become Ukraine’s rail hub for trains to Hungary, Slovakia and Romania, predicts Minister Omelyan. As a legacy of the Austro-Hungarian empire, European gauge tracks reach Zakarpattia’s second largest city. Last fall, Hungarian Railways trains started traveling from Mukachevo to Záhony and Budapest. This year, dedicated trains are to start from Mukachevo to Košice, Slovakia. Next will be trains to Satu Mare, northern Romania. Express trains now run from Lviv, through the new Beskidy Tunnel, to Mukachevo in 3h45 min. 

To make air travel easier for the 8 million people living within a 300 km radius of Boryspil, a 16-platform bus station will be built this spring next to the Boryspil Express train terminus, at Terminal D. The shortest domestic flight to Boryspil is from Vinnytsia, 300 km to the southwest. The new train to the plane carried 100,000 passengers in its first two months. With this growth, Ukrzaliznytsia plans to expand the single car train to carry 1 million passengers this year.

Southern Ukraine’s Kherson airport has the best growth prospects for a regional airport in 2019. After passenger traffic grew last year by 69%, to 106,000, airport officials released their development plan to the Center for Transportation Strategies. The airport lists 20 ‘promising destinations’ and targets Belavia and five discount airlines: Wizz Air, Ryanair, Ernest, Pegasus and Moldova’s FlyOne. In addition to talks with Wizz Air and Ryanair, work is underway to create a Kherson-based low cost carrier. Omelyan says “four to five” passenger jets would be based at the airport, the gateway to a dozen increasingly popular Black Sea resorts.

Odesa, the growth laggard of Ukraine’s top five airports, will see new flights this year. In May, flights start from Baku, on Buta Airways, Azerbaijan’s discount airline, and from Prague on Czech Airlines. On June 2, SkyUp starts flights from Kharkiv and Kyiv Sikorsky. The real game changer will be rebuilding the 2.8 km runway, a $130 million project. Infrastructure Minister Omelyan predicts the job will be finished this year. In advance, he predicts, Ryanair or Wizz Air will start EU flights to Odesa this summer.

Overall, public level of pessimism over the economy has changed little over the last four years. Asked if the country is ‘going in the right direction,’ 70% said ‘no’ – the same as in July 2015. Asked about their household finances, 39% said they had improved or stayed the same – virtually unchanged throughout 2018. Asked about joining the EU, 53% were in favor, little changed since March 2014. On joining the Moscow-led Eurasian Customs Union, 13% were in favor, virtually the same as the 14% registered in July 2015.

Voters give President Poroshenko poor marks on the economy, according to a nationwide poll conducted in the second half of December for the International Republican Institute. With Poroshenko facing voters March 31 in a bid for a second term, he comes in third for “Best for the economy,” with about 8.5% approvals, half those of Yulia Tymoshenko, who leads in the poll preferences. Poroshenko comes in 6th place for “Improving social protections of the poor” and “Fighting corruption in state bodies.”

Wage remittances to Ukraine from labor migrants hit $11 billion last year, according to Ekateryna Rozhkova, first deputy head of the National Bank of Ukraine. Assuming this figure is accurate, it means that money sent home by Ukrainians working outside the country increased by 50% since the summer of 2017, when the EU adopted a ‘no visa’ policy for 90-day stay stays by Ukrainians.

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