Market News

Leading Summer Destinations

The leading Russian publication for travel professionals, Goriachaya Liniya Tourisma (Tourism Hot Line), has published a chart of the most popular summer destinations, based on the survey among 700 Moscow travel agents. They were asked what destinations they plan to sell most actively in the summer season of 2009. The results came as following:

              1. Turkey
              2. Greece
              3. Spain
              4. Egypt
              5. Italy
              6. Croatia
              7. Russia
              8. Tunisia
              9. Bulgaria
              10. Cyprus
              11. Montenegro
              12. France

 

Turkey

cappadociaThe director of Tez Tour Vladimir Kaganer said that the summer demand for Turkey from his company is down by 20-25% compared to this time last year. 2 and 3* hotels are more frequently requested than previously and most of bookings are made less than 10 days in advance of departure. For Pegas Touristik, the decrease in demand for Turkey is also around 25%, according to its director Anna Podgornaya, Moscovites tend to book Turkey only 4-5 days in advance. The most popular Turkish resort for Russians is still Antalya. According to the Turkish tourism board, 359,000 Russians visited Turkey during the first 5 months of 2009, which is 15% less than for the same period in 2008. Russia is now the second source market for Turkey, after Germany, where traffic is down by 11%.

 

Greece

zakyntosRussian tour operators selling Greece note the demand for this destination is at a similar level as last year. The Director of Youzhny Krest (Southern Cross), Andrey Kuznetsov noted a 26% increase of demand. The Head of Muzenidis Travel, Alexander Tsadekidi expects their total traffic to Greece from Russia, Ukraine and Belarus to grow compared with 2008. Both Muzenidis Travel and Roza Vetrov, both noted an increase in demand for 3 star hotels, whereas previously 70-80% requests requested 4-5* hotels.

 

Spain

spainOne of the leading Russian TO's for Spain Ascent Travel, reports a 15-20% decrease in demand compared to the summer 2008. According to its Boris Burykin, from January to May demand for Spain did not go down as it is both a popular sightseeing and ski destination for Russians. He also said that over 50% of their customers book their holidays not more than 2 weeks in advance of departure. The Head of Rusiber, Dmitry Marin expects a drop in demand this summer for Spain of around 10-15% - but he believes that arrivals from the UK and Germany have already decreased by 40%.

Sales and marketing director of VKO Travel, (which is now a part of TUI) Gennady Kosarev thinks this season is more or less similar to last summer, but many customers now request a holiday of 7 day instead of 14-day. The most popular tours are for 10 days with half-board packages. VKO, has however increased the number of charters to Majorca by 50% this year.

 

Regional news

Apart from the impact of the economic crisis, there is an even larger challenge to the regional tour operators in the key Russian cities. which are far enough from Moscow, to work independently from the capital. For Yekaterinburg, Samara, Novosibirsk and potentially cities in the Far East, The challenge comes from the Moscow monster TO, such as Tez Tour and Coral who are undercutting prices for package tours to mass tourism destinations, mainly Turkey to such an extent that regional Tour operators are too afraid to organise their own charters to complete with them. As a result many regional TO's are now becoming travel agents as this is less risky during these more testing economic times.

St-Petersburg: The leading St-Petersburg company Neva, specializing in mass tourism, noted a 25% decrease in demand for the sun and sea destinations, and 30% decrease in demand for sightseeing tours to Europe.

Samara: The Director of one of the largest travel companies Samara-Intour, reports a 30% decrease in sales for the first half of 2009 for all leisure destinations and 35-40% drop in demand for business travel. Samara is city was has been particularly hard hit by the economic recession as it is a major car-manufacturing city.

Rostov-on-Don: The head of the leading local TO Pink Elephant, Alexander Mkrtchan, says that due to the lack of demand he has cancelled several summer charters planned to Croatia, Montenegro, Cyprus, Genova (Italy) and Bodrum (Turkey), and reduced charters to Barcelona by 50%.

Novosibirsk: Industry specialist Anna Naumova from STI (Siberian Travel Industry Association) noted a large reduction in local tour operator activity due to the aggressive tactics of Moscow based TO's dealing with mass tourism destinations (mainly Turkey). Due to the large no. of charters available, local TO and market leaders are no longer willing to risk investing in their own charters - because of the price damping from the Moscow companies. Although this has reduced the price of the average package tour, it has also reduced the no. of destinations being offered. Moreover, if a year ago Novosibirsk had 15 TO's now the majority of them have become travel agents just selling on packages for Moscow TO. This pattern is being mirrored in a number of other large cities across Russia and signals more consolidation in the future, as the lack of financial resources and the new financial regulations required by the Russian government only exacerbating the situation further. (Novosibirsk is Russia's 3rd largest city in terms of population size and is a 4-hour flight away from Moscow).

The Far East: According to the local office of the Russian Travel Industry Union, 10% of their travel companies have already closed, and due to the new law on financial guarantees another 30% may close by the end of 2009. Over 90 out of 125 Far East travel companies have less than 5 million Rub annual turnover, as a result they are trying to lobby for a change in the newly proposed law on financial guarantees.