Market News

  • The ban on Turkey and Egypt forces Russian tour operators to look for other destinations

The ban on Turkey and Egypt has forced Russian tour operators to look for alternative destinations, this has created a flurry of activity as many destinations see this as a unique opportunity to gain market share. It is somewhat unique for a country as large as Russia simultaneously to have its top 2 leisure destinations banned within less than 2 months of each other.

Israel has the most active destination to date, aiming to pick up the traffic which was originally destined to the Red Sea in Egypt and redirecting it to the Red Sea in Israel (mainly Eilat). They have invested 2.6 mln USD to attract Russian tourists to redirect flows from Turkey and Egypt to Israel. With the financial support of the Israeli Ministry of Tourism, Special packages were created with prices starting from 350 USD (excluding flights), to attract Russian tourists who would previously have travelled to Egypt. A number of Israeli resorts have also agreed to start offering “all-inclusive” hotel options.

Apart from Israel, a number of destinations have seen positive growth rates in December, they include: Thailand (+8%), India (Goa) (+4%) and Vietnam (+3%), according to Association of Russian Tour Operators. Pegas Touristik, also launched a charter program to the Dominican Republic, while Tez Tour is looking into domestic resorts. The Russian tour operator Brisco which previously specializing in trips to Turkey and Egypt, launched a charter programme to Burgas, Bulgaria. The flights will operate from Moscow, Saint-Petersburg and Samara.

  • In 2015 the number of outbound tour operators have decreased from 2,050 to 650 companies

The rouble devaluation and the decrease in outbound tourism combined with new much stricter regulations on the insurance of tour operators has led to a large market consolidation. In 2015, the number of tour operators decreased by 69% from 2,050 to just 650 companies, according to the tour operator register. The reduction in the number of players is likely to continue in 2016 and is expected to reach 300-500 companies. Part of the reason for the reduction is due to closure of regional tour operators, who no longer have enough scale to cover the financial guarantees and have been more adversely affected by the economic recession than companies in Moscow and St Petersburg. Most of these tour operators do not leave the market completely but instead start operating as a travel agency.

  • Russia revoked licenses of 19 tour operators with Turkish origins

As part of Russia’s sanctions against Turkey, on December 30 Rostourism revoked licenses of 19 tour operators associated with Turkish companies and individuals. The measure, which came into force on Jan. 1, affected leading tour operators including some of the best known names in the market, such as Coral Travel, Anex Tour, Sunmar and Pegas Touristik. Despite the anti- Turkish actions, many of the Turkish-owned companies are still managing to operate via their Russian-based legal entities. The Russian government has announced that Russia could restore the licenses of Turkish-owned tour operators after reviewing their documents.

  • Reduction in the number of Russians travelling abroad for the New Year holidays

According to Maya Lomidze, the spokesperson of Russia's Tour Operators Association, the number of Russians going abroad for the New Year holidays decreased by 30 -35 % compared to last year. Many Russians spent the holidays at home due to the increased costs of trips abroad caused by 45% devaluation of the currency and the total ban on tours to cheaper destinations such as Egypt and Turkey. On the other hand, domestic travel saw a 6-10% growth compared to 2014, according to Tour Operators Association's data.

  • European Commission recommends visa-free travel for Georgia and Ukraine

The European Union’s executive backed Ukraine and Georgia’s bid for visa-free access to the bloc in December, opening the way to more than 40 million people to potentially travel visa-free to the EU

The European Commission said both countries had carried out the reforms they promised to enact to win Brussels’ backing and they planned to make the formal legal recommendation in early 2016. It will then be for EU governments and the European Parliament to sign off. If approved by EU member states and the European Parliament, citizens could travel to the EU without visas as soon as 2016.

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