Hotel and tourism privatisation in Eastern Europe: progress and process

This article considers aspects of the privatization process in the context of the Eastern European hotel and leisure sector. Early investment opportunities in 'fast track' reformers such as Poland, the Czech Republic and Hungary have been capitalized upon by major hotel chains. Now investment opportunities are being considered in more potentially high risk locations. The privatization programme in Russia is of an unprecedented scale and the potential for hotel and associated tourism developments are contingent on how the transition of the economy progresses. Investment must move outwith the main cities so that an evenly balanced tourism industry can be seen to be developing. The paper outlines the obstacles that must be overcome if the Russian government is to successfully attract foreign investors, including economic and political instability, bureaucratic constraints and an inadequate infrastructure. It is concluded that the potential for tourism investment remains good, with the prospect of yielding very high returns if investors are willing to take the necessary risks.