Feature
Ukraine Outbound Market
Key Facts
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Currency: Ukrainian Hryvna (UAH)
1 USD = 7.95
1 euro =10.7
The Ukrainian market is the 2nd largest after Russia in the region of the former Soviet Union region. It is still estimated to be 7 times smaller than Russia, with one third of the population. Although the market has suffered over the last 2-3 years, it is starting to move out of recession.
The structure of the Ukrainian market is similar to that of the Russian market and the luxury sector in particular follows very similar tendencies to its Russian counter parts. The Middle class segments like Families and Experience Seekers are less wealthy than Russia and are more Eurocentric in terms of their holiday destinations, due to their geographic position, which means some Europe countries can be reached overland.
Due to the global economic slowdown in 2008, Ukraine saw its first decrease in outbound tourism since 2000. This was partly due to the large price increases in tour packages in 2010 , caused by the devaluation of the local currency, the Hryvna. However, the Ukrainian Association of Tour Business reported that generally the outbound traffic from Ukraine in 2010 increased by 15-20%, and although this is less than total numbers sent in 2008, they expect an overall increase in 2011.
Key Outbound Travel Segments in Ukraine
- Young Professionals - mainly Europe but can be attracted to Asia
- Emerging Middle Class - mainly cheaper, mass tourism destinations
- Culture Vultures - poorer FIT travelers (or groups) mainly to Europe
- Upper Middle Class - FIT travellers going to Europe, Middle East and Asia
- Super Rich - go to internationally famous resort such as Sardinia, Monaco, attracted to Maldives and Mauritius and other Indian Ocean islands and the Caribbean.
Leisure outbound traffic from Ukraine in 2009-2010
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Outbound tourism (Million pax) |
Inbound tourism (Million pax) |
2009 |
11.60 |
16.50 |
2010 |
12.00 |
16.60 |
Top 10 Outbound destinations for Ukraine in 2010 (January – September)
Source: Ukrainian Ministry of Tourism and Sports, 2010
Market Share of Top 10 Destinations
Source: Ukrainian Ministry of Tourism and Sports, 2010
As the diagram shows, the majority of Ukrainians travel to neighboring countries in CIS and Eastern European Countries, with Russia in the first place, however travel to Russia is mainly for work purposes or to visit friends and family. Moldavia and Belarus can also be accounted for by traffic for migrating work forces and also VFF. Poland, Hungary and Slovakia are in also in the top 10. In many cases trips to these countries are for private visits or for work, however in the case of Hungary and Poland sales include more tourism packages for leisure travel.
In the 6th position is Turkey, which received between 388,000 and 500,000 in 2010 depending on which statistics are used. If we take the higher rate, this is still has 200,000 less visits than in 2009. In 2008, 700,000 Ukrainians went to Turkey. Egypt in the 10th position and can be considered as a pure leisure travel, with 36% growth compared to the first 9 months of 2009 which is the biggest increase in the Top 10.
The UAE, Greece, Israel and Spain are also popular as leisure destinations, but with a much smaller % of all traffic than the top 10 destinations.
A rapidly growing destination in Ukraine is Thailand. Tez Tour reported a 30% growth rate in 2010 from Ukraine. However, long haul flights to Thailand have increased the price of travel to Thailand and many, prefer to fly via Moscow and obtain a much lower and more competitive package.
Spain is another destinations expected to grow in 2011. In December 2010, one of the largest Russian tour operators, Natalie Tours, announced that they will start operations from Ukraine in 2011 and intend to send 15,000 Ukrainian tourists to Spain, as well as another 5,000 to Cyprus and UAE, each. Natalie Tour believes they can achieve a 30-40% of the market from Ukraine to Spain, although local industry players believe this is quite ambitious. The Spanish Embassy in Ukraine will try to facilitate visas reducing the visa application process to 2-3 days and has opened Visa Centers in such regional cities of Odessa, Kharkov and Donetsk. Natalie Tours says that with the introduction of these new rules Spain will be able to compete with Turkey to be the most popular outbound destination for summer of 2011.
The Italian low cost carrier Wind Jet will launch flight from Kiev to Rimini (Italy), on a weekly basis in 2011, they have excellent connections in Italy, which allows easy access to Sicily and Verona.