The word Baikal may be made an officially registered national brand of Russia, and this initiative has already sparked heated debate in the Irkutsk region. Authorities and tourism businesses are arguing whether this will support the region or instead raise costs, make tours more expensive, and create problems for companies using the name. The article gathers opinions on who should receive the brand revenue and whether its monopolization will hurt small business and tourism development.
The word “Baikal” may soon become one of Russia’s officially registered national brands. This year, the Institute for the Development of the Far East and Transbaikalia, operating under the administration of the President of the Russian Federation, came forward with such an initiative. The word “Baikal” could well be elevated to the level of a brand just like “Russia.” It should be recalled that not long ago the state charged a fee to commercial entities for using the latter in company names. Since 2008, private businesses have been prohibited from using the word “Russia” and derivatives of it altogether. Does this mean that all Irkutsk and Buryat tour companies whose names contain the word “Baikal” will have to pay for it, or even register a different trademark altogether? The initiators of the idea have not yet given a specific answer to that question.What do representatives of the authorities and the tourism business in Irkutsk Oblast think about the possible innovation? In their opinion, will the creation of an official “Baikal” brand help our region, and where should the income from using the brand go in that case — to the federation or to the constituent entities of the Russian Federation located near the lake? With these questions, a Baikal Land correspondent turned to people competent in the fields of tourism and branding.
Agnia Shangina, Deputy Head of the Tourism Agency of Irkutsk Oblast:
– I consider the idea of making Baikal a federal brand and, even more so, making money from it to be completely absurd. The word “Baikal” is, first and foremost, a geographical name, not a trademark. Turning Baikal into an official brand is the same as registering the trademarks “Texas,” “Mississippi,” “Africa” and forbidding all enterprises located there from using these words in their names. The word “Baikal” in the names of local firms indicates their geographical location. And what else could a hotel or tour company located here, on the shore of the lake, be called? I do not understand why our tour operators should pay anyone for using the word “Baikal.”
Maxim Digas, Chairman of the Baikal Club of Marketers:
– In my opinion, the federation may claim income from the use of the “Baikal” brand by tour companies if it invests significant funds in the development of tourism in our region and in environmental protection. If these expenses are shared between the federation and the regions located near the lake, then the income from the brand should also be divided proportionally between the federal and regional budgets. In general, from a marketing standpoint, the regions that are in the most economically advantageous geographical position relative to the lake should have preferential rights to the “Baikal” brand.
Sergey Perevoznikov, General Director of the Baikalinfo Visitor and Information Center, member of the board of the Siberian Baikal Tourism Association:
If the state becomes a monopolist in the use of the word “Baikal” as a brand, this will lead to increased costs for tour companies. And, consequently, travel agencies will raise package tour prices. If the old name is abandoned, costs will still increase — because a new trademark will have to be promoted. And companies will cover these expenses through the cost of tour packages. At the same time, it must be taken into account that tourist traffic in Irkutsk Oblast is currently declining largely because of the high cost of tours; if the services of local tour operators become even more expensive, the outflow of tourists will increase many times over. I believe that the state should promote the development of tourism and promote the “Baikal” brand, but by no means monopolize the rights to its use.
Sergey Evchik, Head of the Press Service of Grand Baikal:
– The idea of turning the name of a natural object into a brand is not entirely logical. This will create serious problems for small and medium-sized enterprises that use the word “Baikal” in their names. To create a federal brand, it will be necessary to register the trademark “Baikal” and issue permission for its use to interested parties. That is, there must be some rights holder. This will require significant effort: first, to identify all users of the trademark, and second, to bring their activities into compliance with legal norms. It seems to me that such an initiative will negatively affect companies that used the word “Baikal” in their activities and names long before the creation of the federal brand. To preserve their name, they will need to obtain permission to use the trademark “Baikal” and conclude a license agreement, which will entail very serious costs. Refusing to use the traditional name may also cause the company serious damage — it may lose a significant share of clients. If this project is nevertheless implemented, then, in my opinion, deductions from the commercial use of the brand should go to regional budgets and be spent on solving the environmental problems of Lake Baikal.
Aleksey Nikiforov, General Director of the tour company Baikal Discovery:
– If they start collecting money for the use of the word “Baikal,” this will primarily harm small tourism firms. And it is they who are the backbone of the tourism business. I believe that as a result of creating a federal “Baikal” brand, the business rights of tour operators may be infringed. We have already invested enough money in promoting the names of our enterprises, which means that to some extent we have also invested money in promoting the lake’s brand. And now officials from Moscow will collect money from us for our names? All this will create yet another field for corruption. I think that new firms should perhaps be charged a fee for the word “Baikal.” But for those who have already made a name for themselves in the tourism market, this would be unfair.
Anatoly Kazakevich, Director of the tour company Baikal Adventures:
– The monopolization of rights to the “Baikal” brand will lead to consolidation in the tourism business in Irkutsk Oblast. Small firms will simply be pushed out of the market or will begin to merge. I do not consider this a positive trend, since tourism on Baikal developed and will continue to develop thanks to small companies. True, I think it is unlikely that any fees will be charged to those tour operators who already have a registered trademark containing the word “Baikal.” Although in our region such firms can be counted on one hand. As for very small enterprises, little shops of one kind or another — it will be difficult to keep track of all of them.
Sergey Kuzmin, Deputy Director for Marketing and Development at the IRA Teleinform news agency:
– In general, the creation of such a federal brand should have a positive effect on the development of tourism in the Baikal region, but the question is whether regional commercial companies will want to pay for its use. They already pay taxes, spend money on land rent, and on the use of the lake’s natural resources. So it would be excessive for them to pay additional deductions to the state budget. It seems to me that it would be more correct to collect money for the use of the “Baikal” brand from companies registered outside Irkutsk Oblast and Buryatia, since they do not invest in the development of regional tourism.
The state’s idea of patenting the rights to the “Baikal” brand is apparently not at all welcomed by Irkutsk tour operators. Some representatives of the regional tourism business expressed concern that monopolizing the rights to the brand could backfire on them just like the notorious law on financial guarantees: innovations in the tourism sector will increase tour companies’ expenses, and therefore hit consumers’ wallets, and then tour sales will sharply decline. As a result, tour company executives believe, what was intended as a benefit may turn out to be harmful.
By the way, in China, some company has somehow already managed to acquire exclusive rights to use the word “Baikal” as its brand. Now all companies with the names “Baikal,” “Baikalsky,” and so on, operating in the PRC market, must pay “tribute” to this enterprising businessman.
And one more thing. In the event of monopolization of rights to the “Baikal” brand, the tourism publication “Baikal Land” will also fall into the “risk group.” The editorial board hopes that the ominous innovation will not apply to names written in Latin script. In the worst case, to avoid extortion, it will be possible to add some extra letters to the name of the lake, for example “Baikall” or “Baikall.” I wonder whether the authors of the idea took such a possibility into account?