18 Mar, 2014

As massive travel shift looms, Asia, Africa, Latin America set to gain big-time from Ukraine crisis

Imtiaz Muqbil

The geopolitical confrontation between Russia and the United States / Europe over Ukraine is almost certain to generate a significant boost for Latin America, Asia and Africa as both European and Russian travellers shift towards destinations where they may feel more welcome.

Good geopolitical relations between countries are the bedrock of travel & tourism flows, and vice versa. In recent years, many countries and regions have experienced the impact of such shifts — India-Pakistan, China-Japan, China-Philippines, the Islamic world and the West, and many more.

As the marketing research data below indicates, Russian visitors have become an important component of the visitor profile to Europe, almost matching that of the growing legions of Chinese visitors. Similarly, European travel to Russia has also boomed.

IF Russian travellers avoid Europe and vice versa, the resulting upheaval in visitor flows could prove to be the most significant in the history of travel & tourism.

IF it drags on, the confrontation could lead to major changes in visa policies, airline connections, business and MICE travel, student travel, marketing budgets, and more. European economies, now barely recovering from one of the worst crises in their history, could suffer even more.

Third countries will benefit big time, especially those in Latin America, Asia and Africa which provide visa-free access to both Russians and Europeans. Russians need a Schengen visa to visit Europe, and this visa process is now likely to tighten.

Although the full impact of the shift will become more clear and measurable over the next few weeks, it underscores one of the most important points repeatedly flagged by Travel Impact Newswire Executive Editor Imtiaz Muqbil over the years: Geopolitical events have long overtaken economic crisis and climate change as determinants of travel & tourism flows.

The travel & tourism industry continues to live in denial about this reality.

Although the confrontation was brewing in the background of the world’s most biggest travel show, the ITB Berlin, earlier this month, travel & tourism industry leaders ensconced in their lofty meetings had nothing to say publicly about it — a head-in-the-sand attitude that does great disservice to the millions of ordinary people who get affected by poor decision-making at the global level.

Just about every forecast by the futurists, analysts and pundits at the ITB Berlin is now at risk of not being worth the paper it is written on.

Here is some additional information that may help readers gauge the full extent of the potential shift to come:

Russian tourism to Europe – Facts & Trends 2013

Source: http://www.slideshare.net/axentale/paspartu-russian-tourism#

1. Russian outbound tourism to Europe – Facts & Trends. Prepared by Paspartu.Travel

2. One of the largest travel markets. Key facts: Russia has become the 7th largest travel market by expenditure, and is the 2nd only to China in terms of travel growth prospects Annual spend on travel (EUR bn, 2012, UNWTO) 1 Additional trips per annum expected by 2017 from 2012 base (Euromonitor)

3. Growing Russian travel market to Europe. Strong economic growth continues to drive purchasing power and travel expenditure by Russians Thousands of Russian tourists abroad (RosStat, ATOUT) 7–16% expected growth in number of trips abroad by Russians between 2012 and 2015 (Roland Berger, ATOUT) 77% proportion of Russians who named Western and Central Europe as the most appealing destination (Roland Berger, ATOUT) 2

4. Russian middle class embracing travel. Russian middle class is the main growth driver for the outbound travel market in Russia 45% percentage of Russians forecasted by Merrill Lynch to be in middle class segment by 2020, up from 14% in 2012 We expect Russian travel abroad to grow in tandem – from 16% travelling abroad in 2011 (source: Levada study) Distribution of household income in 2012 (ATOUT, 2012) Poll results: how often do you travel abroad? (Levada, 2012) 3

5. Russian travellers – who are they? Middle class with families: mainly in the market for beach holidays, more susceptible to promotions and last-minute deals. Traditionally book via retail travel agents Young professionals: travel is part of lifestyle and number of destinations visited is a status symbol. Adventurous and techsavvy. More likely to book online and explore new destinations & experiences. Ultra Wealthy: discerning and very demanding travellers, cash & time rich. Often most visible but hard to reach segment of Russian clientele covered by concierge services and VIP TAs 4

6. Where do they typically go? Cold weather and lack of local infrastructure lead Russians to holiday abroad Thousands of Russian tourists per destination (RosStat, 2012) Traditionally most popular destinations were best value, sunny, visa-free or visaon-arrival: Turkey, Egypt & Greece China & Finland are popular day-trip destinations (for shopping) Germany is also a popular transit hub Spain is the largest fast-growing market in W Europe (40% in 2012) Russian tourism to Thailand has grown by 49% CAGR since 2008 5

7. Where do they want to go in the future? European countries mentioned as most appealing for a beach holiday European countries mentioned as most appealing for a ski holiday Spain & Greece are increasingly popular for quality beach holidays… ..while France meets their growing appetite for ski, wellness and cultural vacations. European countries mentioned as most appealing for a visit holiday 6 European countries mentioned as most appealing for a spa/ wellness holiday

8. How do they plan? 65% Sources influencing the choice of a holiday destination by discretionary travellers percentage of Russian discretionary travellers who used websites to decide on their next destination (source: PhoCusWright) 7 Type of websites used for research by discretionary travellers

9. How do they spend? Russian are notorious high spenders: 54% percentage of Russian tourists in France who stayed in 4 or 5 star hotel (survey by Roland Berger for ATOUT, 2012) Average spend per person per trip by destinations (Euromonitor, 2012) 8 Breakdown of a typical spend by a Russian tourist in France (ATOUT, 2012)

10. What to watch? Relaxation of visas to Western Europe Low cost airlines Online shopping – growing rapidly from a low base Shift from packaged tours to independent travel 9

11. About Paspartu.Travel Paspartu is a unique online travel platform for Russian speakers Combining proprietary travel guides, booking engines and planning tools we strive to empower independent travellers to experience “travel as it should be – designed by you” Paspartu works with a growing number of travel & hospitality providers & intermediaries, providing them with: Business listings on our pages Targeted discount & promotion arrangements with relevant Commission-based sales channels via APIs or affiliate programs To find out more: email us at info@paspartu.travel or visit https://paspartu.travel/about 10

Russian travel to Europe booming

Source: http://business.globalblue.com/news-archive/russian-tourism-to-western-europe-booming/

For many Western European countries, 2012 was the year when Russian tourists became, if not the dominant source market, then certainly one of the most important source markets, rivalling even the Germans and British.

Russians have become a major source of income for Italian retailers, and now the same is true for Spain as well. In 2012 Russian tourists spent more than €1.5bn in Spain, according to a report in RIA Novosti, which also said that there were 750,000 Russian visitors to Spain last year.

Turkey has long been favourite sun holiday destination for Russians, and 2012 saw a massive increase of 40% in the numbers of holidaymakers visiting the country, to around 1.8 million, according to the main tour operators. 20% more Russian holidaymakers visited Greece during 2012, according to reports from tour operators, who estimate around 900,000 Russians visited Greece on holiday in 2012.

Russian tourists are increasingly looking beyond sun and sand destinations such as Turkey, Greece, and Egypt, and countries including Germany are benefitting. Tour operators report a jump of around 20% in Russian tourists visiting Germany to around 760,000. According to Rosstat, in the first half of 2012 Russians made 334,600 visits to Germany (up from 324,400 last year), and as a result Germany is now one of the five most popular destinations.

According to the Austrian National Tourist Office 396,600 Russian tourists visited Austria between January and October 2012, an increase of 17.8% this year. The total number of Russians visiting Austria in 2012 was around 490,000, and in 2013 the Austrians hope to attract half a million. (Source: tourbus.ru)

The number of Russians visiting Italy on organised tours in 2012 is estimated at 666,000, a rise of around 15%. Cyprus received 25% more Russians in 2012, with the total number of tourist approximately 640,000, according to Russian tour operators.

Russian tourism across Europe is booming partly because visas for the Schengen zone are being issued in more and more Russian cities by countries including Slovakia, Austria, and Poland. (Sources: euromag.ru, tourinfo.ru, travel.ru)

The most popular countries among Russian independent tourists in 2012 were Spain, Italy and Germany, according to Skyscanner, followed by Thailand, France, Ukraine, Turkey, USA, Czech Republic, and China. However, few Russians dare to travel without tour operators: according to polls, only 5% of Internet users in Russia buy tickets or accommodation online. The countries with the largest growth in searches were Lithuania (+145%), Malta (+126%), and Denmark (+119%). (Source: Atorus.ru)