Market News

Where Russians Spend the May Holidays

A top Russian tourist portal for consumers, travl.mail.ru, held a survey asking its users about their preferences for spending the May Holidays (May 1-10), traditionally the second most popular public holiday period for Russians after the New Year. Out of over 20, 000 participants who took part in the survey, only 6% mentioned that they intended to travel to Europe. Another 9% said they plan to go to resort destination, but did not mention where. The overwhelming majority of the respondents (45%) said they were going to spend the May holidays in the countryside. Another 22% said they usually stay home, and 7% intend to travel within Russia. For 11% of respondents the current economic down turn has made them postpone their travel plans for this holiday.

Source: www.travel.mail.ru, May 2009

Russia Will Be Visa Free for 3 Days for the Cruisers

To stimulate the falling demand for Russia among foreign visitors, the government has passed a new allowing those coming to St-Petersburg on a cruise ship, to stay in the country for 3 days without a visa - as of June 2009. In general, this will affect the following coastal entry points to Russia including: St-Petersburg, Kaliningrad, Vladivostok and Sochi.

According to the Russian Federal Agency for Tourism, in the first quarter of 2009, the number of foreign tourists visiting Moscow dropped by 25% compared to 2008. In St-Petersburg, which is the top destination for over 80% of foreign leisure visitors to Russia, a decrease of 30% in arrivals is expected this year. This is a serious problem for a city such as St-Petersburg, where as many as 20% of all jobs are dependent on tourism. Last year, nearly 2.3 million foreign visitors went to St-Petersburg, and 500,000 of them arrived by cruise ship.

Demand for Low-Cost Bus Tours is Down

Russian tour operators selling low cost bus tours to Europe, report a decline of between 20 to 50% for this product during the first third of 2009. Bookings for the summer holidays for this budget-end product are also slow. This is mainly due to the fact that the middle class, who are the main consumers of such tours,  have more affected by the economic crisis than other segments of the market for e.g. the luxury or FIT end of the market. More expensive FIT tours show a much lower decrease in demand.

Natalie Tours Launches Travel Agency Retail Chain

One of the top 5 tour operators in Russia, Natalie Tours, announced the launch of its own retail chain. All the agencies included in the chain will sell only the TO's products. Also starting from September 2009, Natalie Tours will start to sell Egypt as an Autumn and Winter destination. For the first year, the plan is to have 300 agencies working under Natalie Tours brand on a franchising agreement. Experts believe that the main reason for the TO to start its own retail chain to create a more centralized distribution channel as the Russian market continues to consolidate and Russian TO's face increasing competition from foreign competitors such as TUI.