Latest Market Insight

26 April 2022

RUSSIA

Inflation

The annual inflation in Russia increased to 16.7% and could reach 20% by the end of 2022 to help alleviate the hardship, the government announced the indexation of the minimum wage, pensions and other social payments.

The Rouble rate sabilises

Due to the Central Bank currency regulations, Rouble rate has stabilized, but this is only likely to be temporary and it likely to be around 100 Roubles to the Euro by the end of June, 2022 and will probably stabilize there.

 

Where can Russians travel?

Most European countries have removed the final restrictions on leisure travel and have resumed issuing tourist visas, however the lack of direct air connection between Russia and EU means that travel to Europe is only possible via connecting flights such as Istanbul. Flights are substantially much more expensive than before due to the low numbers of direct flights.

The following destinations have direct flights with Russia:  Turkey, Egypt, UAE, Qatar, Thailand, Sri Lanka, Indonesia, the Maldives, Mauritius and Iran as well as several neighboring countries in the CIS including Uzbekistan, Azerbaijan and Armenia. 

Lack of internationally accepted credit cards makes travel challenging

Visa and Mastercard issued by the Russian banks no longer work outside of Russia. The Russian card system called MIR payment system is accepted on a few countries mainly: Turkey, Vietnam, and CIS including Belarus, Kazakhstan, Uzbekistan, Kyrgyzstan and Tajikistan. China finally suspended future negotiations to collaborate with Russia’s largest bank, Sberbank by sharing access to the Chinese created UnionPay, which could have been a potential substitute to Visa and Mastercard. As a results, Russian bank holders can no longer book airlines tickets or hotels on international booking sites, but only via a tour-operators.

Meanwhile, Russians are being offered ‘credit card tours’ to Kazakhstan and Uzbekistan where they can obtain Visa and Mastercard from foreign banks.

Russians are relocating

Since 24 February when Russia started military operation in Ukraine, thousands (estimated about 200 000) of Russians relocated to Armenia, Kazakhstan, the Baltic states, Turkey, Israel and the UAE. Hundreds of companies, mainly IT industry but not only are relocating their offices and staff. 

Turkey increases the flights capacity to Russia while S7 is suspended from One World

Pegas Turistik launched Antalya-based Southwind. The fleet of five Airbus planes will start regular flights to Russia in May. Rossiya airlines increased its flight programme to Turkey with flights Sochi to Bodrum and Dalaman, four flights per week to each destination. On 19 April Oneworld alliance stopped agreement with S7.

KAZAKHSTAN

Return of flights connectivity to Kazakhstan

The war in Ukraine has had very little impact on the outbound travel market of Kazakhstan. There are now 276 direct flights per week to 25 countries, including 49 flights to Turkey, 47 flights to UAE, 39 to Uzbekistan, 31 to Russia, 22 to Georgia; Saudi Arabia, Qatar, as well as 4 flights per week to the Maldives and 3 flights a week to  Egypt, South Korea, Thailand and India.

For European destinations there are 10 flights per week to Germany, 3 flights per week to Amsterdam, 2 to Warsaw, 2 to London and 1 flight per week to Budapest. As of June, there will be long awaited direct flights to Italy by the Italian budget airline Neos, there will be twice weekly flights from Almaty to Milan.   

Kazakhstan outbound tourism in 2021

The official outbound traffic data from January – September, 2021 confirm that leisure travel was 2.6 times higher than in 2020, and almost 6 times more than during the first 9 months of 2020.  Egypt, Turkey and UAE are the top leisure destinations, followed by the Maldives, which has seen a large increase since Covid.

The leading European destinations after Germany, the United Kingdom, Hungary which have currently have direct flights, are France, Czech Republic and Italy.

In the first nine month the outbound tourism travel reached almost 85% the same period of pre-pandemic 2019 (387 175), and the industry experts believe that the outbound tourism have a good chance to recover, due to deferred demand and more destinations opening.

 

AZERBAIJAN

Azerbaijan's GDP grew rapidly by 6.8% during the first quarter of 2022.

Growth was seen across all sectors, but it is also benefiting from the high price of oil, this is likely to have a positive impact on the outbound travel market.

AZAL Airlines restarts flights to Europe

Azerbaijan starts regular flights to Italy from Baku to Milan from 21 May and from 29 May there will be twice weekly flights to Berlin resumes, and from June flights to Prague connection will also resume.

Outbound traffic

Pre-pandemic 2019, 5.6 million Azeri’s travelled abroad, while only 52, 000 people bought packages from travel agents.  The average stay was 6.6 days.  The leading travel destinations (based on travel trade data about packages) were: Turkey, Russia, UAE, Georgia and Ukraine, followed by Germany, Italy and France. 

GEORGIA

Air Traffic recovered 69%

During Q1 of 2022 flight traffic increased by almost seven times higher compared to 2021.   By the summer Georgia will have air connection with 30 counties operated by 34 airlines. In 2021 40 international airlines had flights to Georgia, with 2.5 million traffic.  Pre-pandemic, there wee 46 airlines and the 2019 traffic was 5.2 million passengers. Georgia benefits from hosting the regional hub for Wizz Air in the Caucasus region which is based in Kutaisi which has flights to many  European destinations (Athens, Barcelona, Berlin, Katowice, Larnaca, Madrid, Thesalonica, Warsaw etc.).

Outbound travel

According to official Georgian statistics, the total outbound travel from Georgia was 533 thousand trips, 78% less than 2019 (2.4 million trips).  Trips by destination number is not available, however in 2019 EU member countries were 12% of all outbound trips

According to the Georgian travel trade, Turkey dominates the market, followed by Spain, France, UAE, Croatia, Montenegro as well as Egypt.  In 2019, 46% of all outbound trips were made to Turkey. 

THE BALTIC STATES

Ukraine's largest tour operator Join UP! starts operations in the Baltics

From April 2022, Join UP! One of the leading Tour operators in Ukraine will start operations in the Baltic states, travelling to leading destinations such as Turkey as well as Montenegro, Albania and the Greek islands. The operator also plans to introduce new destinations to the market such as Sri Lanka and Zanzibar.  Join up! will use its own charter operator tailwind’ to bring tourists to Turkey.

Join up will compete against the leading tour operator in the Baltics Novovaturs/ Novotours and Tez Tour.

Lithuanians are planning to travel in 2022

Lithuanian Airports showed an excellent recovery during Q1 of 2022 with passenger numbers increasing by 5.5 times the same period last year exceeding all forecasts for this year.  There was a total of 818,000 passenger trips during the first quarter. Kaunas Airport has recovered the most rapidly up by 93% and adding more routes than in the pre-pandemic period.

Latvian tour operators record return of demand for travel

Interest of Latvians in travels has returned, even though it dropped during the first weeks of the war in Ukraine, said tour operators surveyed by LETA. According to Novatours representative Sanda Roze there was a rise in demand for trips for the summer reason, but after February 24, 2022, the number of new bookings stopped. However, this was a temporary halt and bookings now remain stable.

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