Importance The article overviews political and economic changes that happened in Russia in 2014 and outlined new approaches to tourism. The approaches are being implemented in the Russian Federation and the Pskov region, in particular. The research studies innovative renewal of tourism that implies systemic and consistent activities that would ensure positive shifts in the sector. Objectives The article provides an evaluation of the cluster approach used in the tourism sector, diversifies a tourist product, outlines new tourism types, and public private partnership, which mitigate the damage the economic recession caused. Methods The research relies upon a horizontal comparative analysis and trend analysis based on statistical data. I also formulate proposals to generate long-term prospects for developing tourism and recreation clusters at the regional level, and provide recommendations on the ways to improve tools for stimulating demand for tourism services development. The article summarizes the best practices of the Pskov region and presents the content analysis of regulatory documents. Results Following the research, I identify promising areas for innovative development of tourism and recreation at the regional level, articulate recommendations on how to coordinate the tourism market actors. It requires simultaneous and coherent activities in various segments (excursion services, transport, services and amenities, information, leisure, souvenirs, etc.). When the process fails to operate smoothly, the market experiences coordination failures that the external regulator can eliminate only. The State acts as the regulator assuming financial, organizational and coordinating functions. Conclusions and Relevance I conclude that the State should intervene in the tourism sector, since multiple executive bodies have no common idea and understanding of the way to manage the sector due to their divergent and uncoordinated duties. Tourism should be regarded as an economic sector that generates substantial financial benefit ensuring revenue to budgets at each level. The main provisions and conclusions of the article may be useful to develop the region's development strategy and prepare regional development programs.
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