Russian economic slowdown is considered to be the most significant factor that will impact its tourism development during the forecast period. Outflow of international financial investments was noted in Russia at the end of 2013 and the beginning of 2014. For example, the majority of chained international hotels that had previously announced their ambitious expansion plans in Russia, now can hardly meet these plans. Moreover, the value of local currency against the euro declined significantly since the beginning of the year, from RUB45 in January to RUB48 or even RUB60, depending on the month. This has already started to affect both business and consumers negatively.
Series of tour operators face bankruptcy in Russia
In summer 2014, the Russian tourism industry was significantly affected by a number of serious bankruptcies of local tour operators. Eight tour operators did not manage to solve their financial issues and announced their bankruptcies. Most companies were not able to settle their affairs with honour. More than 10,000 tourists were left stranded in foreign destinations. This caused lack of consumer confidence in tour operators’ activities. Together with consumers’ declining disposable incomes it caused a collapse in travel and tourism in Russia.
Domestic tourism sees active development
According to the federal target programme entitled Domestic and Inbound Tourism Development 2011-2018 Russia is focusing hard on domestic tourism development. The main goal of this programme is to increase the number of domestic trips by 150%. Moreover, based on the latest economic slowdown and local currency fluctuations, it has become more affordable to go to domestic destinations instead of taking outbound trips. Additionally, Russia every year improves infrastructure and the quality of the tourism service in the country. One of the most active regions is Kazan, which recently held the World University Games.
Online travel growth
Online travel retail sales were one of the driving factors in 2013. Internet transaction value in all categories of travel retail recorded double-digit growth. Growing internet and mobile internet penetration, better consumer awareness and a growing number of online travel agencies in the country impacted the category’s development significantly. Moreover, technologies have changed not only the way of purchase, but also the whole consumer experience. Russians also actively use a wide variety of local and international social media websites such as VKontakte, Odnoklassniki, YouTube, Facebook and Twitter. These services have become a more important tool for travel and tourism companies to communicate with their customers, organise promotional activities, publicise offers and retail a variety of different products. Based on that growing popularity, internet travel retailers showed significant expansion in Russia. anywayanyday.com, ozon.travel, OneTwoTrip and others are showing double-digit growth on the market.
Despite certain issues the forecast is still positive
Despite all the economic issues that Russians face, in the long term tourism and traveling in Russia is still expected to perform positively. Inbound, outbound and domestic tourism is predicted to increase during the forecast period. First of all, Russia has put a lot of effort into improving the image of the country as a destination for traveling in the global arena as well as to improve tourism infrastructure. Russia has held a number of global events such as the World University Games in Kazan during 2013 and the Winter Olympic Games in Sochi in 2014 and it should be continuing to do more of this in future.
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