Russian Market Overview

1
Russian Market Overview

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

2
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

3
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

4
Total land area 17m sq km 12 Time Zones
5
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

6
The Russian Economy

• Russia possesses 5 of the worlds 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

7
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

8
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)

9
General Travel Trends

• Who Travels..?
• Re-emerging middle class family
• Business Traveller
• New Russians the noveaux riches
• English Language and Youth Sector

10
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

11
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

12
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

13
Travel Market to Britain
Russian Visitors to Britain 1999 - 2003
Source IPS 2003
14
Travel Market to Britain
Average spend per day by Russian Visitors
Source IPS 2003
15
Travel Market to Britain
Length of time spent in Britain by Russian
Visitors (2003)
Source IPS 2003
16
Travel Market to Britain
Age range of Russian visitors in 2003
Source IPS 2003
17
Travel Market to Britain
When does the Russian visitor travel
Source IPS 2003
18
Travel Market to Britain
Where did they visit in 2003?
Source IPS 2003
19
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

20
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)

21
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

22
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

23
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.

24
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.

25
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

26
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.

27
Getting your Product into Russia

• Reaching the Press
• Britain Calling 900 key overseas media
  contacts and VisitBritain press officers
• Familiarisation Visits

28
VisitBritain Contacts

• London
• Kevin.jones_at_visitbritain.org
• Overseas Markets Consultant, Central Europe
• Berlin
• alla.zunk_at_visitbritain.org
• Emerging Markets Executive - Russia