Russia’s role in the global travel market

The UNWTO report, International Tourism Results 2018 and Outlook 2019, states that the global tourism industry has experienced significant growth for two consecutive years. By the end of the year, the industry’s market grew by 6% and recorded 1.4 billion international trips.

However, it is worth noting that the global travel industry market has surpassed not only the overall economic growth rate (which was around 4%) but also the earlier projected market trends until 2030, as predicted by UNWTO experts in 2010.

The expansion of the travel industry can be attributed to various factors, including:

• A favorable economic environment
• Robust demand for outbound travel from major source markets
• The recovery and stabilization of key destinations affected by past crises
• Improved connectivity between regions
• Increased facilitation of visa processes.

The Middle East and Africa experienced the highest growth in inbound tourism with an increase of 10% and 7% respectively. Meanwhile, Asia and the Pacific saw a growth of 6%.

UNWTO’s Projections for the Global Travel Market in 2019

It is expected that the growth rate of world tourist flow will be around 3-4% in 2019, according to the UNWTO forecasts:

• Europe: +3% to +4%
• America: +2% to +3%
• Asia and the Pacific: +5% to +6%
• Africa: +3% to +5%
• Middle East: +4% to +6%

The experts have predicted that developing markets such as Russia and India will experience dynamic growth in outbound tourism. According to UNWTO, the main drivers of this growth are:

• Stable fuel prices, which make air travel more affordable
• Improved air connectivity
• Strong demand for outbound travel from emerging markets

However, the world economy’s slowdown, uncertainty surrounding Brexit, and geopolitical and commercial tensions may cause investors and travelers to adopt a cautious approach.

The Evolution of the Russian Travel Market from 2018 to 2019

The outbound tourism market had a modest growth in the number of tourists in 2018 compared to the growth rates of 2017. At the end of 2018, the outbound tourist flow increased by only 6.1% as compared to 35.9% in 2017.

Trend of Tourist Travel to Distant Countries

Based on the report by the Border Guard Service of the Federal Security Service of the Russian Federation, the number of trips made by Russian citizens outside the country reached 44.5 million in 2018, a 6.1% increase compared to the 42 million trips made in 2017. However, when it comes to countries that are far from Russia (China, Mongolia, Poland, Finland, Lithuania, Latvia, and Estonia), there were only 10,326,137 trips made by Russian citizens, indicating a minimal growth of 0.9% from the previous year.

As before, the majority of Russians traveled to the aforementioned countries for non-tourism purposes. Finland had the highest number of trips with 3.671 million, but only 271,000 of them were for tourism. China came in second with 2.251 million trips, of which 739,000 were for tourism, according to the Border Guard Service. Estonia took third place with 1.8 million trips, and 29,000 of them were for tourism, according to the FSS RF.

On the other hand, the outbound flow to countries in the far abroad (excluding near-border countries) experienced a much larger increase. In 2018, it accounted for almost half (45.7%) of all Russian trips abroad. Russians made a total of 20,353,710 trips to these countries last year, a 10.8% increase from 2017. Russians traveled to these countries primarily for tourism purposes, including business tourism.

Top 10 Far Abroad Countries

These are the most popular countries that hosted the largest number of Russian tourists in 2018:

1. Turkey (5.901 million trips, with a growth rate of +26.64% compared to 2017)
2. Germany (1.408 million, +5.9%)
3. Thailand (1.224 million, +7.4%)
4. Italy (1.167 million, +22%)
5. Spain (1.015 million, +3.7%)
6. UAE (966 thousand, +23.25%)
7. Cyprus (867 thousand, -4.70%)
8. Greece (839 thousand, -5.45%)
9. Tunisia (632 thousand, +17.6%)
10. Vietnam (556 thousand, +3.8%)

These top 10 countries account for 71.62% of the entire outbound tourist flow from Russia to countries outside of the former Soviet Union, or 47.5% of the total outbound flow to foreign countries (excluding neighboring ones).

Projected Increase in the Russian Travel Market for 2019

• The desire of tourists to save on trips abroad is expected to persist in 2019, as the main mass outbound market, Turkey, experiences a price increase and the Russian ruble continues to fluctuate.

Tour operators are observing changes in the behavior of tourists, who are looking to save money on trips abroad even with early booking prices in Turkey being 10-30% higher than last year. This includes shorter holiday durations, booking during “low” periods (such as April, May, early June, late October, and November), and opting for more affordable hotel options.

• Based on the analysis conducted by specialists from the Association of Tour Operators of Russia, Turkey is predicted to remain the dominant player in the outbound tourism market. Nevertheless, Greece and Cyprus are expected to see a surge in popularity in 2019, primarily due to their more practical pricing strategies, including lower early booking rates compared to the previous year.
• In 2018, there was a trend towards polarization in product assortment, characterized by a decline in demand for middle-priced products, an increase in offerings in the low-priced segment, and a steady market for high-end products. This trend is expected to continue and become even more pronounced in 2019.
• The low-end market segment is expected to experience heightened demand for Turkey, Tunisia, and to some extent, the UAE. Additionally, budget-friendly travel options to destinations like China, Vietnam, and Thailand are likely to see an increase in availability in the Far East and Siberia regions.
• If Egypt becomes available as a tourist destination in the spring, the demand for travel may see a significant shift. Specifically, Egypt is expected to draw a considerable portion of tourist traffic, particularly from Turkey and Tunisia.

Get your complimentary copy of “The Russian Tourism Market Report: Trends, Analysis & Statistics” to gain further insights into the Russian travel industry.