Latest Market Insight
18 November 2021
Russia’s Central Bank
The growth in real income has accelerated to its highest for 11 years to 8.1% year-on-year in July-September, after rising 7.4% in the second quarter, this is mainly due to the high rate of inflation.
The Russian rouble continues to recover having strengthened by almost 10% compared to October last year and now at its highest level since before the outbreak of the pandemic last year. This is particularly positive for outbound travel and any costs set in Euros are steadily decreasing.
On November 18, Russia confirmed 37,374 Covid-19 infections which is a 10% decrease compared to the peak indicator recorded on November 6. Moscow reported 4,062 new cases which is a 52% decrease compared to peak on October 28 and 2,645 were reported in St. Petersburg (-26% compared to peak on October 31). The situation in these two cities seems to have stabilased and the number of new cases is starting to gradually decrease, at the same time the Russian regions are still under much pressure.
Russia implemented a nationwide non-working holiday aimed at curbing the spread of the coronavirus from 27th October until 7th November as death rates reached beyong 1,000 persons per day, which are the highest rates recorded during the pandemic. Since 8th of November businesses reopened in the capital and St Petersburg, but the restrictions continue to be in place in some regions, while many others are implementing digital passes to prove vaccination or recovery from Covid-19 in order to be able to circulate freely.
108.8 million doses of the Sputnik vaccine have been distributed resulting in almost 38% of the Russian population being vaccinated, which is very low compared to the European average, but similar to the rates of Bulgaria and Romania. The vaccination rate is highest in Moscow which is 41.6% (50% of the adults), 52% of Moscow region has fully vaccinated (65% of adults). In St.Petersburg, 37% of the population is fully vaccinated (48% of adults).
Russia will introduce health passes for access to public places, restaurants and intercity trains, domestic and international flights in a radical move designed to boost Russia's sluggish vaccination campaign. The requirement to present a QR code on trains and airplanes will come into effect on February 1, 2022 and will be valid untill June 1, 2022.
It is expected that QR codes can significantly reduce the demand for air transportation, up to 50%. For this reason, the Ministry of Transport is considering the possibility of allocating subsidies for airlines due to the introduction of QR codes for passengers.
From December 1, Russia resumes flights with Brazil, Costa Rica and Argentina and any remaining flight restrictions on Mexico and Cuba will also be lifted. Flights will also resume to Bangladesh and Mongolia.
From December 12, Russia will resume passenger railway communication with Finland, including the rapid Allegro train that connects St. Petersburg to Helsinki.
Cyprus Ministry of Tourism registered 418 thousand arrivals from Russia from January – September 2021, including 89 thousand visitors in September along. Russia now leads the 2021 source markets. Other traditional players in the top-5 source markets include the UK (208 thousand), which is traditionally no. 1, followed by Poland, Ukraine, Greece and Israel. In September every fourth foreign tourist in Cyprus was Russian. Russians usually choose Cyprus for the Spring and Autumn season, and the tourist flow in September-October is 5-7% higher that during the summer months. For the November holidays (long weekend 4-7 November) and mid-term school holidays, travel packages with 5* hotels and suites were sold out.
The Head of the Italian Ministry of Health said that Russians vaccinated with Sputnik will be able to receive an Italian COVID certificate by having a booster dose of the Pfizer or Moderna within 6 months of receiving the first vaccine. It is believed that this may allow Russians vaccinated with Sputnik V to receive a Covid digital pass if they have a foreign booster abroad.
According to ATOR, the Russian Association of Tour Operators, over the pandemic period the quantity of travel agencies has fallen by 30%, which is around 5000 – 6000 companies. The estimate is based on the number of contracts reported by tour operators. 150 tour operators have also ceased business out of a total of around 4000 before the pandemic. Tour operators have lost around 20% of their staff.
Tour operators received an increase in requests for vaccination tours, and recently added new destinations, such as Greece as a destination for this kind of package. The main segment for this service are middle aged people who want to have a European vaccine in order to be able to travel more freely. Serbia, Croatia and Slovenia are the most popular destinations to obtain a Western recognised vaccine.
According to the Statistical Department of Central Bank, Russian tour operators sent 2.1 million organized tourists to 150 foreign countries in 2020. Among the leading destinations are:
- Turkey (49.7% of the total number of outbound tourists)
- Thailand (13.9%)
- UAE (7.6%)
- Vietnam (6.3%)
- India (3.4%)
- Dominican Republic (2.5%)
- Cuba (2.3%)
- Abkhazia (2%)
- Tanzania (1.3%)
- China (1.3%)
- Italy (1.3%)
Most often, Russians traveled abroad for beach holidays (77.2%), 17% of tourists - for medical purposes followed by cultural and educational trips (3%).
Russian Airlines has permission for a number of international flights, including charter flights with tour operators. This includes additional flights to Greece, Egypt, UAE, Indonesia, Peru, Thailand, Turkey and other countries. Royal Flight will run charter flights to the Dominican Republic from five regional cities.
Aeroflot Airlines resumed regular flights from Moscow to Burgas (Bulgaria) on a weekly basis from November 13. Rossiya Airlines (based in St. Petersburg) has also launched daily flights from Moscow to Sofia from October 31.
Wizz Air Abu Dhabi will add its first Russian destination to its route network by the end of 2021. The carrier will connect Abu Dhabi with Moscow from December 15. Flights will initially be four times per week before increasing to a daily frequency from February 6, 2022.
Pobeda budget airline also plans to increase the flight frequency from Moscow to Dubai. Currently, it operates on a weekly basis but will increase to 4 times a week from November 26 and then to daily flights from December 17.
According to TUI Russia, Egypt is making an incredible come back in Russia, after it opened early this year and due to the increase in flight capacity to the destination. It is now taking business from both Turkey in the shoulder period and will compete with Dubai for the Winter season. The key destinations for the Winter holiday period include:
- Egypt 40%
- Turkey 21%
- UAE 20%
- Russia 10%
- The Maldives 3.2%
- Cuba and Bulgaria 3%
- Cyprus and Abkhazia 1%
The remaining 2.8% of the total number of tours are to Mexico, Seychelles, Hungary and Serbia.
Meanwhile, the OTA, OneTwoTrip identified the most popular New Year's international destinations for independent travellers, based on current bookings which is led by Turkey. In total, international bookings made up only 9% of all bookings, this is due to the high risk associated with independent travel due to covid restrictions. The current leader is Turkey (22% of all international bookings), followed by Armenia (12%) and Moldova (10%), Hungary (5%), Georgia (4%), Belarus (4%), the UAE (3.5%), Kyrgyzstan (3.5%), Serbia (3%), Azerbaijan (2.5%) and the Maldives (2%).
Since November 9th, the European Union has removed Ukraine from the list of safe countries for travel due to the high incidence of coronavirus in the country. As a result, many EU member states are considering restricting non-essential (tourist) travel for Ukrainians, unless they are fully vaccinated and with a PCR test.
However, Ukraine is not totally excluded from the EU green list, there will be no total closure of the EU borders. This is a recommendation, and the final decisions will be made by each individual EU country. “The Ukrainian Foreign Ministry is actively working with partners to preserve maximum freedom of travel for Ukrainians," the head of the Foreign Ministry stressed.
The following EU countries have announced that remain open to vaccinated Ukrainians: Austria, Belgium, Croatia, Cyprus, Czech Republic, Denmark, Estonia, France, Greece, Ireland, Latvia, the Netherlands, Slovakia, Spain and Sweden. Other countries will apply more restrictive measure such as a PCR test before and after arrival, etc.
Kazakhstan is finally restoring flights to leisure destinations, including popular destinations such as: Turkey, Egypt, UAE, Georgia, Maldives, as well as neighboring Russia, Uzbekistan and Ukraine are now open for leisure travel. Air Astana has a direct charter flight to the Maldives due to the increase in demand and traffic flows there.
From November 19, Qatar Airlines launches regular flights from Almaty to Qatar. Also, direct flights were launched to Thailand from the end of October. The low-cost airline Jazeera Airways launches direct flights from Kuwait to Almaty from December 2.
For the first time Air Astana will start direct flight to Colombo (Sri Lanka) from Almaty from December 3. There will be direct flights to Goa (India) from Almaty from December 10th run by Sunday Airlines, a subsidiary company of SCAT airlines.
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