Market News
Emergence of the Russian market leaders
The Russian travel sector is experiencing the largest consolidation of the market in recent times, many smaller tour operators are focusing on only their core destinations, while the market leaders are expanding the number of destinations they offer. Tez Tour, a leading tour operator for Turkey and Egypt will expand into the ski market this winter by offering Austria, while Capital Tour started charters to Morocco this summer and will develop the Philippines as a new winter destination.
Natalie Tours, the market leader for Spain, will expand into Egypt this winter with the aim of acquiring 5-10% of this market share, they will also start selling Austria and France as a ski destination. Pac Group, a leading company for Italy will focus on European destinations including Scandinavia, ski holidays and cruises and drop FIT programs to Latin America and South-East Asia which they were offering last year.
Russian Tour Operators Numbers to Shrink by 10-15%
According to the head of the Association of the Russian TO's, Maya Lomidze, the number of Russian Tour operators will reduce by at least 10-15% by October 2009. This is partly due to the economic situation in the market but is mainly linked to the law implemented in 2007 requiring all TO’s to have financial guarantees. The cost of the guarantees increases each year and deadline for payment at the end of September is expected to see a no. of TO who cannot pay the fees, to start working as travel agents.
Increase in Flights to Thailand for the Winter Season
The leading Tour Operators selling Thailand, plan to increase the no. of flights to Phuket for the winter 2009-2010 season by 1.5 times, and to create up to 6 flights per week. Experts this might severe price damping which may create financial losses during the New Year season for some players.
Another destination, with an increase in winter flights is the Dominican Republic. Transaero will fly from both Moscow and St-Petersburg to Punta Cana, while Aeroflot will start flying to La Romana. Many believe that this destination has great potential due to its competitive prices and the ease and flexibility of the hoteliers. The following market leaders plan to offer Dominican Republic: Capital Tour, Intourist, Megapolus Tours and also Youzhny Krest and Lanta Tour Voyage. Flights are expected to be organized not only from Moscow and St-Petersburg but also from the regional cities of Yekaterinburg, Novosibirsk and Samara together with Transaero Airlines.
Demand for Island Up, Bus Tours Down
As the mass-market destinations are loosing 15-30% of demand, the FIT segment remains almost unchanged. Companies selling exotic island destinations such as the Maldives, the Seychelles, Mauritius as well as Dubai, noted that high-end clients used to spend their summer vacations in luxury resorts, have not changed their habits. Also, due to the great offers by airline and hotels, some countries are now accessible for less affluent clients than previously.
The Canary Islands had a 14% increase in Russian tourist arrivals in July. Operators selling Dubai reported a stable demand this summer and even a slight increase, but noted that the reservations for the winter season were slow. Air Seychelles will resume direct flights from Moscow to Mae from November. The Maldives Tourism Ministry reported a reduction of 20-30% in the first 6 months of 2009 and many tourists booking 4* hotels instead of 5* as in 2008.
Coach tours for group to Europe noted a 15% - 30% reduction in demand. The cheapest tours which travel during the night, are the worst affected. This is because the travelers choosing them are some of the most vulnerable sections of the lower middle class. However, more expensive bus tours to Germany, Switzerland and combined tours with resort hollidays, are still in demand.