Russian Market Overview March 2005

Russian Market Overview: 

Russian Market Overview Kevin Jones Overseas Markets Consultant – Central Europe An Insight into the Russian Outbound Tourism Market 7 March 2005

Overview: 

Overview Key Facts about Russia The Russian Economy General Travel Trends Travel Market to Britain The Russian Consumer The Russian Travel Trade Getting your Product into Market VisitBritain in the Market Place

Country Snapshot: 

Country Snapshot Population: 143,782,338 (July 2004) Currency: Roubles (£1= 53 rub) Religion: Christianity & Islam Departure Gateways: SVO, LED, SVX Arrival Gateways: LHR, LGW, EDI Visa required for travel to Britain Who Travels? Business Extenders, Youth, Affluent Boomers Top Motivators for Travel Culture, Shopping, Heritage, Business

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Total land area: 17m sq km 12 Time Zones

The Russian Economy: 

The Russian Economy GDP Growth Rate 2004: 6.8% GDP per capita world ranking: 86th Inflation decreasing 20% in 2000; 12% in 2003 Imports: $84.5 billion (Jan – Nov 04) Exports: $163.3 billion (Jan – Nov 04) Since 2000, political stabilisation under President Putin (70% of vote) Taxation: lowest level of income tax in Europe at 13% Jan – Sep 03 real disposable income rose 13.3% compared to previous year

The Russian Economy: 

The Russian Economy Russia possesses 5% of the world’s oil and 33% of its gas supplies Attracting more foreign investors: Britain significant in these - BP Jan – Sep 03 household spending on foreign currency rose from 5.7% to 7.6% 5 million Russians classified as “elite” with an average spend of $600 per day

General Travel Trends: 

General Travel Trends In 2003 there were 17.3million visits abroad Britain ranked 9th in International Visits 1. China 6. Egypt 2. Turkey 7. Finland 3. Dubai 8. South Korea 4. Italy 9. United Kingdom 5. Germany 10. Greece 31 NTOs based in Moscow National TV (59%) & Local Press (47%) main sources of information Female partner usually the decision maker 17% have access to the internet

General Travel Trends: 

General Travel Trends Traditional Holiday Periods January 1 – 14 (school, college holidays) Last week of March May 1 – 10 July – August (school holidays) November 1 – 7 (school holidays)

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General Travel Trends Who Travels…..? Re-emerging middle class family Business Traveller New Russians – the noveaux riches English Language and Youth Sector

Travel Market to Britain: 

Travel Market to Britain Perceptions of Britain…… Britain a high status destination An elite business centre and fashionable playground London considered very fashionable & safe Interest in Scotland extremely high Brand Tracking Research: 77% have a favourable opinion of Britain Scored poorly for being welcoming to visitors, innovativeness, liveliness. 93% thought Britain had “lots to see and do” 95% thought the British population is very traditional

Travel Market to Britain: 

Travel Market to Britain Segmentation in 2003 Business Tourism 59,000 visits spending £84 million Education 16,000 visits spending £25 million English language very high status 12,000 Russian students in higher education in Britain 6,000 visit Britain to learn English every year Overall 138,000 visits spending £159 million

Travel Market to Britain: 

Travel Market to Britain The British Consulates Moscow 15%  visa 1stQ 2004 on 1stQ 2003 95% requests approved 58,390 total Jan – Jul 04 (multiple entry) St Petersburg 9,932 total Jan – Jul 04 Yekaterinburg 4,703 total Jan – Jul 04

Travel Market to Britain: 

Travel Market to Britain Russian Visitors to Britain 1999 - 2003 Source: IPS 2003

Travel Market to Britain: 

Travel Market to Britain Average spend per day by Russian Visitors Source: IPS 2003

Travel Market to Britain: 

Travel Market to Britain Length of time spent in Britain by Russian Visitors (2003) Source: IPS 2003

Travel Market to Britain: 

Travel Market to Britain Age range of Russian visitors in 2003 Source: IPS 2003

Travel Market to Britain: 

Travel Market to Britain When does the Russian visitor travel Source: IPS 2003

Travel Market to Britain: 

Travel Market to Britain Where did they visit in 2003? Source: IPS 2003

The Russian Consumer: 

Caring for the Russian Visitor to Britain… Russian guides and itineraries in Russian Be friendly, approachable and knowledgeable High Expectations of Service Hearty Eaters – traditionalists Point out local attractions and facilities The Russian Consumer

The Russian Travel Trade: 

The Russian Travel Trade An Overview…. Mostly based in Moscow and St Petersburg Not always a clear division between tour operators and agents Many agents keen to deal directly with hotels / attractions RST: Russian Tourism Union (formerly RATA)

The Russian Travel Trade: 

The Russian Travel Trade Key Products Required High end luxury products 5 star hotels & spa retreats Chauffeur Transfers Personal shoppers Golf Traditional sporting pursuits Premium Language Schools Fine dining

The Russian Travel Trade: 

The Russian Travel Trade Tour Operators Around 20 leading operators 60 – 100 employees T/O: $15million to $120million BSI Group The Park Group Emerald Travel Transaero Tours Agent network and direct sales Smaller operators single destination and mainly F.I.T. Pooling tendency VisitBritain maintains a travel trade directory

The Russian Travel Trade: 

The Russian Travel Trade Key Carriers to the Market…. Aeroflot Generally cheaper ticket prices. Transaero Four times a week LGW to Moscow. Weekly EDI to Moscow. BA Twice a day LHR to Moscow. Five times a week LHR to St. Petersburg. Three time a week LHR to Yekaterinburg.

Getting your Product into Russia: 

Getting your Product into Russia Reaching the Trade…. Sales Calls. Visa required – allow at least 10 days. Make appointments before you arrive. Expect a cold telephone manner. If many appointments in 1 day, hire a driver – ask potential business partners. Dress smartly and bring as much material as possible.

Getting your Product into Russia: 

Getting your Product into Russia Working day can be 10am until late in the evening Expect to negotiate on price Tourism is a new industry in Russia – be prepared English ranges from excellent to non-existent Trade Newsletter Bi-monthly e-DM to 395 key trade contacts

Getting your Product into Russia: 

Getting your Product into Russia MITT Trade Fair. Moscow International Travel & Tourism show is the leading annual forum for the travel industry in Russia. 4 day event: 23 – 26 March 2005. 2004: 120,000 visitors and 2,700 exhibitors from 110 countries. 2005 VisitBritain will have a high-profile stand presence with 30 stand partners.

Getting your Product into Russia: 

Getting your Product into Russia Reaching the Press “Britain Calling”: 900 key overseas media contacts and VisitBritain press officers Familiarisation Visits

VisitBritain Contacts: 

VisitBritain Contacts London Kevin.jones@visitbritain.org Overseas Markets Consultant, Central Europe Berlin alla.zunk@visitbritain.org Emerging Markets Executive - Russia