Russian travel agencies and tour operators in the mass market travel and tourism industry
It has been previously mentioned that Russian travelers have a tendency to opt for organized tours. Over 60% of Russians seek the help of travel agencies and tour operators in selecting and arranging their trips. In this article, we will examine the composition and developments within the mass market of travel and tourism in Russia.
Market Structure of Travel Agencies and Tour Operators
Tour operators and travel agencies are the two main components of organized tourism in Russia. Tour operators are responsible for creating and providing travel services, while travel agencies sell these tour packages and offer additional information and support. Although both are important, there are more travel agencies than tour operators in Russia.
After experiencing a decline in demand from 2014 to 2016, organized tours in Russia have begun to rebound. The number of tour packages purchased by Russians for foreign travel increased from 1.625 thousand in 2016 to 2.605 thousand in 2017.
The state of mass market travel and tourism in 2018
The recent economic challenges, including the devaluation of the ruble and the ban on travel to Egypt and Turkey, as well as the bankruptcy of Transaero Airlines, have led to some tour operators struggling to stay competitive, resulting in them leaving the market or ceasing their operations. In 2018, the tour operator Natalie Tours encountered problems and failed to fulfill its obligations to nearly 8,000 customers who had purchased tickets for the summer season. Additionally, three other major operators ceased their operations: Raduga Travel on June 10, Polar Tour on June 15, and Martyoshka Tour on June 22. These events may cause another credibility crisis in the market.
In 2017, Russians spent $3.8 billion on tour packages to other countries.
Travaleta.Ru’s 2018-2019 Tour Operator Rating
Travelata.ru, an online tour hypermarket, has compiled a credit rating of tour operators based on 10 key criteria that affect a tour operator’s credibility and market position.
The aim of this rating is to provide a transparent assessment of tour operators based on open data, without any intention to predict the bankruptcy of any specific company. This rating can be useful for all travelers who want to evaluate the performance of major tour operators based on their data.
The tour operators were assessed based on 10 key criteria, and the maximum possible rating that a tour operator could get was 100 points. The rating included 24 of the largest tour operators. These criteria were used to evaluate the credibility of each tour operator.
In comparison to last year’s rating, Biblio Globus improved its position in March 2019, gaining 2 additional points. The other operators maintained their positions in the top 10.
We dedicated an entire chapter in our study to analyzing the mass travel market in Russia. For a more in-depth understanding of the statistics, please download our Russian Tourism Market Report: Trends, Analysis & Statistics.
Trends in the Russian Travel and Tourism Mass Market for 2019
As of December 2018, there were 4,377 companies listed in the Unified Federal Register of Tour Operators, with over 530 of them involved in outbound tourism. However, due to the decrease in demand, which is expected to continue in 2019, the market is likely to experience further consolidation, resulting in the exit of companies that lack sufficient resources to cope with these challenging times.
According to experts from the Association of Tour Operators of Russia, small and medium-sized companies operating in popular mass travel destinations such as Turkey, Tunisia, Greece, UAE, and Thailand are the most vulnerable. On the other hand, the tour operator market is expected to see an increase in the role of large players, who have diversified businesses, a wide range of products, advanced technological solutions, and access to their own financial reserves.
The year 2019 is expected to witness the emergence of digitalization trends in the travel industry. As a result, technological solutions will play an increasingly important role in ensuring the stability of tour operators. Advanced technological solutions include real-time dynamic packaging systems, new B2B booking services, as well as online services for direct sales of tour packages and customized travel services.
The tour operator business will evolve beyond the traditional format of package tours and venture into new areas that will require modern digital tools, such as hotel management systems, automated host company operations, and pricing and demand forecasting based on big data.
The consolidation of the tour operator industry through mergers and acquisitions is expected to accelerate, resulting in a minimum of 20% reduction in the number of legal entities operating in the travel sector. These processes are primarily driven by intense competition and will be mostly invisible to consumers. Despite these changes, there are no indications of a systemic crisis in the organized travel industry for 2019.
Quarter Billion Agency Travel provides a range of services to facilitate networking and collaboration with travel operators and agencies in the Russian market. These services include organizing breakfast meetings, presentations, press tours, and other marketing and PR initiatives aimed at connecting with major players in the Russian travel mass market.