Bookmakers, betting shops and computer repair technicians — who earned money during coronacrisis?

How much Russian companies’ turnovers dropped during the pandemic and who managed to amend the situation

Russia is evaluating the real damage of theatres, cinematography, museums, concert halls and exhibition galleries in 2020. Vice Premier Tatiana Golikova named culture as the most affected sphere during the pandemic because of ticket sale incomes they fell short of. As Realnoe Vremya has calculated, turnovers of Russian organisations working in culture, sport, entertainment catastrophically fell during the lockdown and reduced three times — from 27,8bn to 9 billion rubles. During the coronacrisis, logistics, transport, HoReCa also seriously suffered. However, the situation began to improve by the end of the year and in the first quarter this year. Read more in our report.

Film distributors are counting losses, constructors are counting profits

Turnover is one of the key criteria of a business’s liveability. Realnoe Vremya has examined the dynamics of reduction in turnover in sectors and annual growth to evaluate consequences of the forced suspension of activity of a lot of organisations during the pandemic.

For obvious reasons, the worst numbers were in March-May. Russian enterprises’ turnovers in all the sectors dropped by more than 22%, from 17,6 trillion to 13,7 trillion rubles. But revenue reduced even three times precisely in culture, sport, leisure time and entertainment, from 27,8bn to 9bn rubles.

Turnover in the activity of hotels and restaurants decreased seriously, almost twice: from 100 billion to 55,2 billion rubles. Education is the third most affected sector, organisations’ revenue dropped by 42,4%, from 47,6bn to 27,5bn rubles.

But some, in contrast, managed to not only save their turnover but also augment it, though symbolically. It is construction companies (1,8%) and organisations dealing with water supply, water discharge, collection and disposal of waste, elimination of pollution (1,4%). Moreover, the growth in the first group was provided by the construction of roads and railways (+45,3%), from 68,2bn to 99bn rubles, the rise in the second group was secured by waste recycling enterprises and companies disposing of waste (48,4%), from 2,2bn to 3,3bn rubles.

How did businesses overcome the “forced pause”?

No matter how tough it was for Russian business during the coronacrisis, almost all businesses increased turnovers by February 2021 compared to February 2020. In general, they did by 11,1%, from 15,9tr to 17,6tr rubles.

The biggest growth revenue was seen in other services (76,1%) from 18,3 billion to 32,2 billion rubles. The group was chaired by computer and communication equipment repair (+183,4%), which, indeed, was topical during the mass transition to remote work and online education in schools and universities.

If during self-isolation, culture, sport and entertainment were the most affected sectors, the situation bounced back late last year and earlier this year, though not all industries started to feel better. So libraries, archives, museums and other cultural establishments were at a loss (-21,5%): turnovers dropped from 1,7bn to 1,4bn rubles over the year. However, the rest of the companies in this industry showed 50% growth jumping up from 25,9bn to 39bn rubles (by February 2021). Betting shops and bookmakers distinguished themselves the most (+158%) by increasing revenue from 6,9bn to 17,9bn rubles.

We would like to separately note that turnovers of companies that organise and host lotteries grew 26 times — from 131,4m to 3,5bn rubles. Director of Alpari’s Analytic Department Alexander Razuvayev assumed that this happened because some of these players stepped out of the “shadow”.

Businesses specialising in information and communications (+28,2%) occupy the third line of the rating of turnover growth over the year. It increased from 306,4bn to 393bn rubles.

However, some sectors didn’t manage to amend the situation. It is companies providing financial services (-81,5%, a decrease from 1,7bn to 313,4m rubles), working in finance and insurance (-66,5%, a fall from 247,6m to 83m rubles) and organisations operating in public administration, providing military security, social protection (-26,2%, a drop from 12,6bn to 9,3bn rubles).

Tatarstan businesses responded faster than Russian ones

Turnovers of Tatarstan entrepreneurs’ companies went down in April. Moreover, the local record low was also registered during this month. A general reduction from March to April amounted to 21% (from 520,8bn to 411,3bn rubles). The economy’s leading sectors plummeted nearly by a quarter (-24,3% from 253,4bn to 191,8bn rubles in April).

HoReCa enterprises suffered the most (-52,9% from 2,4bn to 1,1bn rubles). Enterprises providing other services were also severely hit. Here turnovers decreased by more than half (-51,3% from 339,7m to 165,6m rubles).

Turnovers in education also significantly went down. So if they owned 1,7bn rubles in March, in April, they had just 957m rubles, or -45,1%. And if we compare April with February 2020, the sector fell short of a billion rubles.

Not everybody augmented turnovers

By February 2021, Tatarstan organisations offering other services showed the biggest growth, from 231,7m to 461,2m rubles, almost twice as high. Constructors are second when it comes to revenue increase (+70,7%), growth from 10,3bn to 17,6bn rubles.

Organisations from water supply, water discharge, collection and disposal of waste, elimination of pollution (+68,2%) and professional, scientific and technical activity (+66,4%) turned out approximately at the same level regarding growth. Revenue of the first group rose from 2,1bn to 3,5bn rubles. While the professional, scientific and technical activity rose from 6,5bn to 10,8bn rubles.

It is noteworthy that hotels and restaurants, which were hit by the pandemic the most, increased turnovers by February 2021 (+35,5%) from 2,8bn to 3,8bn rubles. Moreover, if we have a closer look, restaurants and food delivery services saw a rise (+88,9% from 1,3bn to 2,4bn rubles). While the activity of hotels and other types of accommodation, unfortunately, didn’t survive the crisis (-33,8% from 587,1m to 388,8m rubles).

“People fear travelling, few of them have received a vaccine. People have had less money, they have started to travel less. Companies now have fewer business trips. Unfortunately, I think that everybody will reach a pre-crisis level only next year, in 2022. Business activity isn’t yet back,” Alexander Razuvayev commented on the situation with hotels.

Vadim Prasov, a managing part of Alliance Hotel Management MC, vice president of the Federation of Restaurateurs and Hoteliers, thinks that turnovers of regional hotels bounced back, give or take, if we compare them with 2019:

“Considering that we don’t so far see a third wave, unlike European countries. I think that our businesses more or less bounced back from a perspective of current indicators. But they haven’t compensated for the losses they carried last spring and early summer. As for the current situation in general, the situation isn’t so sad. Last April — June was a period of quite serious financial losses for many hotels, thanks to the quarantine. The occupancy rate hit the bottom, revenue was very low.”

Companies dealing with transportation and storage are among those who didn’t manage to return to pre-coronavirus revenue numbers. Their turnovers reduced by 18,7%, from 29,1bn to 23,7bn rubles.

Talking about consequences for businesses, experts think all restrictions are reasonable. Thanks to them, the country avoided a worse scenario.

“The state was already ready during the second wave, which was tougher. Consequently, everything was much better than it could have been. Russia decreased by 3,1%, the global economy did by 3,5%, while G7 countries fell much more. Their share of services in GDP is much higher than ours. Our state of affairs isn’t as bad as it is in many other countries, including because strict quarantine was imposed,” Alexander Razuvayev concluded.

Nevertheless, Vadim Prasov assumed that hotels could have been allowed to work, as it isn’t difficult to organise safe work and a social distance:

“As practice showed, there weren’t any famous coronavirus outbreaks in hotels. This is why it seems to me that the restrictions could have been softer. In that complicated situation, hotels could have been operating and providing safety of their guests.”

By Yevgeny Khramov
Tatarstan