Travel and Tourism in Russia to 2018, New Report Launched

The travel and tourism sector in Russia is still in the initial stages of development, especially for leisure purposes. Due to the high cost of tours in the country, many Russians prefer outbound trips over domestic tours. This is also a key reason behind the small size of the inbound tourism market with a total of 29.4 million trips in 2013. Both inbound and outbound tourism are largely dependent on neighboring countries such as Ukraine and Kazakhstan. As these countries are well connected to Russia through roads, land is the preferred mode of transport for tourists.

Key Findings

The Ukrainian crisis had an adverse impact on the inbound and outbound tourism markets in Russia and this affect is expected to remain throughout the forecast period. Inbound trips are estimated to decline at a rate of -13.3% in 2014 while outbound trips will fall by -20.89%, from 54.1 million in 2013 to 42.8 in 2014. The decline in outbound trips is expected to encourage the growth of domestic tourism over the forecast period. Domestic trips are expected to increase from an estimated 37 million in 2014 to 55.1 million in 2018

Several tour operators, particularly those dependent on outbound tourism, went bankrupt in 2014 due to the depreciation of the Russian ruble against the US dollar. This increased their difficulties as they had to pay their foreign partners in foreign currency for hotel bookings and airline tickets. A total of 14 tour operators went bankrupt from mid-July to mid-September 2014 as the Ruble depreciated by 23.7% during the first 10 months of the year. Price wars, weak legal framework, a sudden drop in Russians traveling to Ukraine, and a fall in tourist volume to Russia from Ukraine also affected tour operators

The growth of the Russian tourism sector is hampered by various factors including strict visa requirements and difficulty in accessing tourist destinations apart from Moscow and St. Petersburg. Access to locations with immense tourism potential such as Caucasus, Altai, Kamchatka peninsula, and Lake Baikal involves long flights. Moreover, many flights to these destinations are not direct and the airports are far away from places of interest. Additionally, these regions are significantly far from each other and even road infrastructure is not well developed

Aeroflot, Russia's largest airline, introduced its low-cost subsidiary, Dobrolyot, in June 2014. Dobrolyot, the only domestic low-cost carrier in Russia, initially introduced four daily flights from Moscow to only one destination, Simferopol city in Crimean Peninsula. Subsequently, it launched flights to Samara and St. Petersburg in August 2014 and will gradually expand its operations to other parts of country. The budget carrier plans to launch international flights, particularly to the Commonwealth of Independent States (CIS) and Europe, by 2016. As of June 2014, Dobrolyot's fleet consisted of only two Boeing 737 aircraft, which it plans to increase to eight by the end of 2014, and to 40 in 2018, consequently enabling it to fly on 45 routes and carry 10 million passengers annually

Branded international hotels such as Accor announced plans to expand their presence significantly in Russia over the forecast period. As of 2013, these brands operated 103 hotels with total room stock of 25,000. Apart from strong economic growth, hosting the 2014 Winter Olympic Games supported the rise in demand for accommodation and the consequent increase in expansion of hotels. By the end of 2017, 151 new hotels will be constructed with 30,722 rooms. The hosting of the 2018 FIFA World Cup will be a major reason supporting this growth. Consequently, if all the announced hotels open by 2017, Russia will have a total of 254 hotels operated by international brands offering a total of 55,722 rooms. However, many of these announced hotel projects are likely to be put on hold due to the collapse of inbound tourism in the wake of the war with Ukraine.

Synopsis

The report provides detailed market analysis, information, and insights, including:

• Historic and forecast tourist volumes covering the entire Russian Travel and Tourism sector
• Detailed analysis of tourist spending patterns in Russia for various categories in the Travel and Tourism sector, such as accommodation, sightseeing and entertainment, foodservice, transportation, retail, travel intermediaries, and others
• Detailed market classification across each category, with analysis using similar metrics
• Detailed analysis of the airline, hotel, car rental, and travel intermediaries industries

Reasons to Buy

• Make strategic business decisions using historic and forecast market data related to the Russian Travel and Tourism sector
• Understand the demand-side dynamics within the Russian Travel and Tourism sector, along with key market trends and growth opportunities

Spanning over 150 pages, 138 Tables and 80 Figures “Travel and Tourism in Russia to 2018” report Covering Executive Summary, The Travel and Tourism Sector in Context, Country Fact Sheet, Tourism Flows, Airlines, Hotels, Car Rental, Travel Intermediaries, Tourism Board Profile, Company Profiles, Market Data Analysis, Appendix. This report Covered 21 Companies - Aeroflot Group, UTair Group, S7 Group, Ural Airlines, Transaero, AMAKS HotelsandResorts, The Rezidor Hotel Group, Intourist Hotel Group Management Company, Azimut Hotels Company, Marriott International Inc., Intourist VAO OAO, PEGAS Touristik OOO, Real Russia, Aviasales, Oktogo, Europcar International, Hertz Car Rental, ROLF Group of Companies, Avis Rent A Car System, LLC, National Car Rental.

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