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The study discusses the experience of «Veliky Ustyug – Ded Moroz Homeland» - one of the most successful Russian projects of regional tourism development in scarcely populated and depressed areas of the Russian North. Founded in 1147, Veliky Ustyug is among the oldest towns of the Russian North with a ‘historic city’ and ‘open-air museum’ status. However, in the 1980-1990s it was a typical small town with depressive socio-economic structure based on forestry, small enterprises, folk crafts and distinctive social challenges such as migration, high unemployment, et al. The project «Veliky Ustyug – Ded Moroz Homeland» comparable to Santa Claus Village in Rovaniemi, Finland has increased greatly the tourist flow to the town and improved considerably its socio-economic situation. The research is based on extensive field studies, theoretical observations and includes statistics analysis as well as the results of in-depth interviews with experts and regional stakeholders taken in 2011-2016, review of official legislation. Study reveals that the  main idea of the project is to revitalize the depressed community with a wide range of social, educational, economic, infrastructural, cultural, leisure and tourism activities to promote its future sustainable development. The project life cycle is discussed within the birth, growth and maturity periods; each of them is provided with quantitative characterization. Key problems of the project and their possible solutions are identified. The main constraints to the project connected with poor transport accessibility of the destination and high seasonality of tourism demand are considered.

REVITALIZING DEPRESSED AREAS OF THE RUSSIAN NORTH (THE CASE OF VELIKY USTYUG)