Latest Market Insight

23 June 2021

Economic Update

Russia’s economy has become one of the first in the world to reach its pre-coronavirus size with just a 3% contraction in 2020, according to Russia’s Central Bank governor. Consumer activities began to grow again in May 2021 both in retail and service sector. Private consumption is likely to return to the pre-pandemic level in the early summer. Apart from high inflation expectations and low deposit rates, restrictions on overseas travel and the rapid growth of retail lending are also pushing consumption up.

The labour market recovery is another factor adding to the rise in consumer expectations. Employment demand has already overcome the "coronavirus shock" and returned to levels recorded in the first quarter of 2020. Currently the number of job offers has exceeded that of the registered unemployed people.

However, a third wave of infections could still disrupt the recovery. Moscow reported its highest-ever number of new coronavirus infections on June 19th, as the city’s health authorities warned that “a new, aggressive mutations” of the virus were spreading at an alarming pace.

COVID-19 update

As on June 22, there were 6,555 new cases recorded in Moscow, which is a 28% decrease compared to the absolute daily maximum recorded on June 19th which is of great concern to the government. Nearly 90% of Moscow's new infections are the Delta variant of the coronavirus first detected in India.  Russia has nationally reported 16,715 new coronavirus cases, which is an overall 7% decrease. As of June 18th, only around 12.5% of Russians have received a first dose of a coronavirus vaccine which means that the vast majority of the population could still get infected.

The week of 14-18th of June was announced as a "non-working" week in Moscow, with non-essential workers told to work from home, as Covid-19 cases hit a six-month high. A number of restrictions are in place again. Restaurants, cafes and bars must close by 11 p.m. and companies must ensure at least 30% of their non-vaccinated staff work from home. All the restrictions have been extended until June 29. At least 17 regions of Russia have reintroduced Covid-19 restrictions, including Euro 2020 host city St. Petersburg. 

Russia resumes flights with 9 more countries including Turkey

Russia has resumed flights with Turkey on June 22 and another eight more countries including:  Bulgaria, Cyprus, North Macedonia, Italy, Jordan, Ireland, Belgium and the USA on June 28.

Italy and Belgium are still closed for tourists. The frequency of flights is the following from Moscow to Rome and Milan 4 flights per week, from Moscow to Venice and Naples 2 flights per week and from Moscow to Brussels 4 flights per week. Ireland (Moscow - Dublin 2 flights per week) still require a two-week quarantine.

Cyprus opened up to all tourists from April 1. Russians need to take two PCR tests. Travellers vaccinated by Sputnik V no longer need to take a PCR test. Available flights are Moscow - Larnaca 4 flights a week and Moscow – Paphos 3 flights a week.

Bulgaria agreed to accept Russian tourists from May 1. Russian tourists need to have one of three documents: a certificate of full vaccination (incl. Sputnik V), a negative PCR test or the certificate of presence of anti-bodies. Available flights connections are Moscow – Sofia, Varna and Burgas 4 flights per week; Yekaterinburg – Burgas and Varna 1 flight per week; Mineralnye Vody and Rostov-on-Don - Varna 1 flight per week; Samara and Rostov-on-Don - Burgas 1 flight per week.

The number and flight destinations to Greece have increased extensively. Russians can now travel not only to Athens but also to Thessaloniki, Heraklion, Rhodes, Corfu, Araxos and Zakynthos. Available flights include: from Moscow to Athens, which have increased from 4 to 7 flights per week, from Moscow to Thessaloniki and Heraklion 5 flights per week, Moscow to  Rhodes and Corfu 4 flights a week, Moscow to Araxos and Zakynthos islands 2 flights a week, Rostov-on-Don, Mineralnye Vody and Samara to Thessaloniki 2 flights a week.

In addition to the flight from Moscow to Zagreb, now Croatia can be reached from Moscow to Split, Dubrovnik and Pula with a frequency of 2 flights per week on each route. The country receives tourists with PCR tests and vaccination certificates.

The frequency of flights to Switzerland has been increased from 3 to 7 flights per week from Moscow to Geneva and Moscow to Zurich routes. The number of flights to Austria increased from 2 to 7 per week. However, the countries do not accept tourists yet.

To enter Jordan,Russians must either pass two PCR tests or provide a vaccination certificate (Sputnik V is accepted) and take a PCR test upon arrival. Available flights: Moscow to Amman 2 flights per week; Moscow to Aqaba 2 flights per week.

In addition, the number of flights and the number of destinations has increased to Azerbaijan, Armenia, Qatar and Finland.

At the moment, international flights from Russia have been resumed to Armenia, Azerbaijan, Belarus, India, Kazakhstan, Vietnam, Venezuela, Greece, Germany, Singapore, Serbia, Ethiopia, Qatar, Kyrgyzstan, South Korea, Egypt, UAE, Switzerland, Sri Lanka, Uzbekistan, Finland, Japan, Maldives, Cuba, Seychelles, Iceland, Malta, Mexico, Portugal and Saudi Arabia, Austria, Hungary, Lebanon, Luxembourg, Mauritius, Morocco and Croatia, as well as charter flights to Albania. However, not all these destinations are available for leisure tourist.

Country

Regular flight

Quarantine

Comment

Armenia

yes

no

Belarus

yes

may be required

Brazil

no

no

Bulgaria

yes

no

Columbia

no

no

Costa Rica

no

no

Croatia

yes

no

Cuba

yes

yes

Cyprus

yes

no

Ecuador

no

may be required

Egypt

yes

no

Ethiopia

no

yes

Georgia

no

no

Greece

yes

no

Jordan

yes

may be required

Kazakhstan

yes

no

Kenya

no

no

Kyrgyzstan

yes

no

Maldives

yes

no

Mexica

no

may be required

Montenegro

no

no

Oman

yes

yes

Serbia

yes

no

Seychelles

yes

no

Sri Lanka

no

yes

Tanzania

no

no

Closed till 19 July

Tunisia

yes

no

Turkey

yes

no

UAE

yes

no

Abu Dhabi - quarantine

UK

yes

yes

Ukraine

no

no

Uzbekistan

yes

may be required

tour groups only

Source: Skyscanner.ru, updated June 21st

Russians mostly choose Cyprus for summer holidays this year

Cyprus, Greece, the Maldives and the United Arab Emirates have become some of the leading destinations in terms of demand for outbound travel. According to a study conducted by Russian Standard Bank (based on the data of RS TLS travel concierge services), Cyprus has become the leader in terms of bookings as the warm Mediterranean Sea and beautiful views attract an increasing number of tourists. According to the calculations made by analysts of Russian Standard Bank, the average value of purchases by cards in the country is 67$ per purchase.

Greece, the Maldives and the United Arab Emirates, particularly Dubai, are also among the leaders in terms of Russian outbound travel. This is due to the fact that the majority of destinations remain unavailable for tourism. However, Tukey which is the absolute leader in the Russian market will reopen on June 22nd, so we can expect to see a very different picture over the next few weeks.

Russia for the first time became the leading market for the Seychelles

Back in April, when direct flights were launched from Russia to the Seychelles, Russians were the first in terms of the number of tourists and continue to lead. If in April the share of Russian travellers accounted for 26% (3,726 tourists) of the total number of international arrivals to the Island, in the first two weeks of June, it became even higher with Russian tourists reaching almost a third of all foreign tourist traffic.

With all the impressive indicators, the Russian tourist flow to the Seychelles is still much lower than the tourist flow to the Maldives. At the same time, the average prices in the Maldives and Seychelles are comparable and in the same range of 4,800 to 6,800USD for two for a 10-day trip.

Tour operators explain this discrepancy between the two premium exotic vacation destinations by a combination of several factors, including the difference in the flights availability, the number of hotels, prevalence of the all-inclusive offer, and finally, promotion of these destinations in the Russian market.

The Seychelles were opened for Russia on 1st April and for the first time regular direct flights to the islands were organized. Now, Aeroflot Airlines flies twice a week from Moscow to Victoria (Mahe Island) route. In addition, tourists can get there on the connected flights by Emirates, Egypt Air, Qatar Airways.

“If we compare Seychelles to the Maldives, tourists have a more diverse choice of flights to the Maldives, and the frequency of flights is more convenient (daily direct flights by Aeroflot, AZUR Air charters, connecting flights of airline companies, including high-end carriers such as Singapore Airlines, Qatar Airways, Etihad, Emirates). The flight program to the Seychelles has less frequency in terms of departure dates compared to the Maldives," the leading Russian tour operator Intourist notes.

According to Russian tour operators, tours to the Seychelles are sold quite actively, with an average lead time of 1-2 months, but the share of last-minute bookings is also significant. Some of the more sophisticated tourists are already booking New Year's Eve on the islands. The most popular hotels among the Russian tourists according to the tour operators’ feedback are:

  •          Constance Lemuria 5* deluxe
  •          Anantara Maya Seychelles Villas 5*deluxe
  •          Raffles Seychelles 5* deluxe
  •          Constance Ephelia 5*
  •          Hilton Seychelles Labriz 5*
  •          Story Seychelles 5*
  •          Savoy Seychelles Resort & SPA 5*
  •          Kempinski Seychelles 5*

Latvia cancelled PCR tests for transit tourists

On June 16, new rules for travellers came into force in Latvia. Now, transit passengers are no longer required to provide a negative PCR test when connecting at Riga airport. The requirement has been canceled for passengers who do not leave the airport and stay in the transit zone for less than 24 hours. Currently Air Baltic operates direct flights from Moscow and St. Petersburg to Riga four times a week. Thus, the route network allows connecting flights from Russia to Greece, including island airports, Cyprus, Croatia, Georgia and Ukraine.

Domestic resorts are not alternative to a foreign holiday

According to ATOR survey of almost 4,000 travellers among the Russian tourists who have canceled tours abroad due to the imposed restrictions on air traffic, 72% are still waiting for the opening of their chosen foreign destination. 25% replace the chosen outbound destination with another country, and only 3% are ready to consider Russian resorts. The resorts in Southern Russia are fully booked until the end of summer, the prices are outrageously high while the service is not up to the level that people are used when they travel abroad.

"The entire Black Sea coast is full and in some places overloaded. The problem is that today there is a shortage of high-quality, modern hotels, therefore, in the face of limited international air traffic, demand has multiplied and there is a shortage of properties of this category. This is expected to lead to an overheating of the market and dynamic price growth", said Zarina Doguzova, the Head of the Russian Agency for Tourism.

 

 

 

 

 

 

 

 

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