Market News

 

Russian Leisure Travel: 21% Growth in 2008

According to the Russian State Tourism Agency (Rostourism), over 11 million Russians traveled to foreign countries for leisure purposes in 2008, which was a 21% growth compared to 2007. The overall no. of Russians traveling abroad in 2008 was over 36 million, or 7% more than in 2007. Rostourism predicts that for 2009 the number of Russians traveling abroad will drop by up to 20-25%, with long-haul destinations being the most affected. Most of the key players in the industry share this vision.

Leading Destinations for 2008

In 2008 Turkey and Egypt remained the most popular destinations for Russian leisure purposes, especially for the mass market segment. Over 2.8 million Russians visited Turkey and over 1.8 million went to Egypt. Over 2 million Russians went to China, but that was to a large extent cross-border traffic from the Far East and for business travel. The biggest growth of arrivals from Russia in 2008 was Israel, which became a visa-free destination in September 2008, and received over 365,000 Russian visitors.

As the Egypt Tourism Authorities report, the traffic from Russia in January-February 2009 dropped by 28% compared to the same period of 2008 from 309,000 to 223,000 in 2008. However, bookings for March and April show very good results with about 10% increase.

According to the Turkish NTO, in December 2008 the traffic from Russia decreased by 30% but it still remains the most popular outbound destination for the Russian market. In 2009, Turkey is planning to spend $60 million on promotion in Russia, with over $50 million coming from the private sector.

China recorded a 50% decline in arrivals from Russia in January 2009 compared to January 2008. To stimulate the demand, Chinese hoteliers are ready to reduce the prices, and the Chinese authorities doubled the number of Russian tour operators entitled to send visa-free groups to China.

Leading Destinations for January - March 2009

Russian Tourism Surveys Service Banco asked 700 top managers of Moscow-based tour operators and travel agencies, which destinations were in demand for leisure in the winter season of 2008-2009. The leading destinations were the following:

 

They also interviewed another 500 specialists selling ski tours which destinations were the most popular for Russians this winter for skiing. The Alpine resorts of Austria, Italy and France were the leaders, followed by more budget destinations like Bulgaria, Finland, Turkey and Slovenia. Andorra, Switzerland and Germany are also in the Top Ten. Russian ski resorts like Krasnaya Poliana were also mentioned among the most popular ski destinations this winter.

 

Russian MICE Market: Over $500 million in 2008

According the organizers of the annual MICE Forum in Moscow, the Russian MICE market is annually growing by 20-25%. They estimate this sector for 2008 to be over worth $500 million. During the latest MICE Forum this March, TMI Consultancy interviewed 12 leading MICE agencies about how they see their business in 2009. All the companies noted that their clients have reduced budgets for incentive trips but continue to organize outbound corporate meetings but continue to attend conferences and exhibitions but with cheaper accommodation. Among the industries affected the most by the economic slowdown are the banking and IT sectors, whereas FMCG companies and especially the pharmaceutical sector are still very active and continue to book incentive and trainings abroad.

Regarding the key factors that today defines a destination choice, the agencies noted:

All the agencies unanimously noted a great interest from their clients to discovering new MICE destinations, especially in the geographical proximity to Russia and preferably visa-free or on simplified visa regimes. They mentioned that as most of corporate clients started their MICE trips by going to Western Europe they are now looking for new destinations in Central and Eastern Europe, the Baltic States and also selected CIS countries.

Among the destinations which have already been booked this season, MICE agents named the following destinations: Jordan, Latvia (Riga), Estonia (Tallin), Istanbul and Antalya in Turkey, Ireland, Scotland and also Iceland. However, since budget reductions have been introduced, many of their clients who used to choose long-haul destinations (for e.g. Cuba or the Dominican republic), this winter could afford only Egypt, and many had to hold their conferences and trainings in the Moscow region.

No Buyer for Kuda.Ru

Another investor has refused to buy a chain of retail travel agencies "Kuda.Ru". The owners of "Kuda.Ru" are trying to sell the company, which was estimated to cost $54 million. By the end of 2008 the chain had 150 travel agencies, but due to financial difficulties and debts, the majority of them closed.