What, Me Worry?

Steven Caron has time on his hands, and with unique reason. For with all the talk in the U.S. media about the dangers of Russia and the “Mafia-controlled businesses” there, the congenial 26-year-old Californian entrepreneur has such reliable Russian business partners there’s not enough to keep him busy.

“It runs itself,” Caron says of Russian Youth Hostels and Tourism, a joint venture among Caron and two Russian friends. “I mean, I can go in to work and putter around a bit, but we’ve got such a great staff that I’m not really needed there anymore.”

Caron went to Moscow in 1990 to sit in on classes at the Moscow Art Theater, a move meant to advance his first love, a career in acting. But on a visit to St. Petersburg, he found himself spellbound by the 17th-century city, so he decided to transfer there and study Russian in earnest.

Over the next 1 1/2 years Caron, along with two administrators from the Moscow Art Theater, Nikolai Travinin and Oleg Dzanagati, formulated a plan to create the first youth hostel in the Soviet Union that would operate under Western standards.

In February 1992, an exceptionally good lawyer slashed through miles of what was still the Soviet Union’s red tape and registered the joint venture in a record two weeks.

Booked Solid
Caron’s Russian Youth Hostel officially opened in June 1992, and was semi- filled throughout the year as word of its existence filtered through the backpackers’ grapevine. But most important, it opened in time to be included in budget travel guides aimed at young travelers. Since 1993, the hostel has been booked solid.

While his partners ran the day-to-day business, Caron began the gargantuan task of insinuating his hostel into the worldwide hosteling network.

“On my first visit to the hostel in Helsinki,” says Caron, “I found out that some Estonians had just set up a hostel in Tallinn. I met with them, and we all decided that we should get together and promote that route – Helsinki, St. Petersburg, Estonia – as a Baltic Triangle.”

Establishing the Triangle was fortuitous in more ways than one: While Caron insists that the Mafia in Russia is in no way as bad as it’s made out in the Western media – that it concentrates on local businesses, not tourists – it still poses a real enough threat.

“We have to be extremely careful,” he says. “We don’t advertise in the city, but we advertise in Moscow and Helsinki and Tallinn, as well as in guidebooks; anything that the ‘no-necks’ won’t read. It’s a constant battle of promoting the hostel in the West but not gaining too much publicity here in town.”

But a far greater threat than the Mafia to the hostel’s existence are the Byzantine tax regulations imposed on businesses by the fledgling Russian government.

“If they stick another tax on me, I’m going to jump out the window,” says the otherwise preternaturally calm Californian.

Big Obstacle
The tax situation has long been one of the biggest obstacles to foreigners doing business in Russia. Laws change so suddenly and frequently that accountants use the day’s newspaper to determine what taxes their clients are required to pay.

Enforcement is organized, with tax police empowered to raid businesses’ books, make arrests and freeze bank accounts. And there’s a great incentive for the tax police to find new ways of catching non-payers: They work on commission.

“One friend of mine owned a cafe in town,” says Caron. “One day the tax police pulled up outside his place driving BMWs and wearing expensive suits – they had more money than he’d ever seen!”

So far, though, the tax situation hasn’t been enough to stop Caron.

Last year he established another joint venture, with the state museum that operates what has become St. Petersburg’s trademark: the Peter and Paul Fortress.

Caron now operates concessions within the fortress, providing sorely needed food and beverage stands as well as stands selling T-shirts. And Caron is hopeful that his company will be St. Petersburg’s first distributor for Ben & Jerry’s when the Vermont-based ice cream giant begins sales in the city (the company is currently operating in Petrozavodsk, about 100 miles north of St. Petersburg).

True to Hostelling
But over time, hosteling remains the purpose to which Caron is true. He’s upset by what he considers to be unfair reporting of the dangers in St. Petersburg, pointing out that “in two years of doing this, I’ve had two guests have serious trouble on the streets; both were drunk, and both were out very late at night walking in deserted sections of town.”

Indeed, security in the city has never been tighter. Police were on practically every street corner to keep order during the Goodwill Games in July, and there’s a plan to create a “tourist police” force, similar to those in Egypt, Indonesia and, more recently, Miami, composed of multilingual police officers to assist visitors.

For his part, Caron uses his “down time” to organize hosteling in Russia and improve St. Petersburg’s tourism infrastructure. He was instrumental in creating the Russian Youth Hostel Federation, which is composed of five hostels – his own and ones in Moscow, Novgorod, Irkutsk and Petrodvorets.

Caron’s energy seems endless, and if it ever does falter, he has a precious resource from which to draw in the community of foreigners living in St. Petersburg. In a city of more than 5 million, the expatriates have managed to create a community as tight as any town of several hundred, and they all get involved.

“The ex-pat community is larger than it was, but it’s still very small and very tight,” he says.

“The American Business Association here now has a sports committee and a social committee, and we see each other all the time – it’s amazing how close we all are, and how much we support one another.”

Obvious Western Influence
To guests at the hostel, the Western influence is readily apparent. The clean, well-lighted, five-story brownstone is guarded not by hulking security guards, but by grandmotherly types who admonish those who arrive too late at night.

Inside, while the Russian staff keeps things clean, backpackers from all over the world gather in the lobby area to do what hostelers everywhere do: drink coffee, laugh, share war stories and travel tips and make connections at the hostel’s crowded bulletin board.

To understand how Caron achieved his dream in a system fraught with pitfalls and booby-traps designed to thwart his every step, one need only look at how he relates to people.

When Caron bought an apartment last year, the seller, an emigrating Russian, took very little cash up front and Caron’s word to wire the balance to an account in the West. When the Russian arrived at his new home, the money was waiting for him.

The Russian Youth Hostel is near St. Petersburg’s Moscow Train Station off Ploschad Vosstaniya. Reservations can be made by calling Russian Youth Hostels and Tourism in Redondo Beach at (310) 379-4316 or in St. Petersburg at 011-7-812-277-0569. There is a $10 one-time reservation fee. Rates at the hostel are $15 a night including breakfast. Russian Youth Hostels also arranges visas for hostel guests.