MARKETSCAN RUSSIA 2017

Transcription

1 MARKETSCAN RUSSIA 2017

2 MarketScan Russia MarketScan Russia 2017 Inside knowledge of the Russian travel market is essential in order to gain access to this market. In this MarketScan, you will find a brief overview of the travel market as well as an insight into relevant trends and developments. De MarketScan Russia 2017 is a report of NBTC Holland Marketing (NBTC). NBTC is responsible for branding and marketing the Netherlands nationally and internationally. Using the 'Holland' brand, NBTC puts the country on the map as an attractive destination for holidays, business meetings and conventions. We carry out marketing activities in 13 markets, under the name of NBTC Netherlands Board of Tourism & Conventions. In cooperation with public and private partners, we attract visitors who spend money in the Netherlands. We cultivate countries and regions that supply the most visitors to the Netherlands. Based on this philosophy, NBTC is active in Europe, North America, Asia and South America (Brazil). 2

3 Content Russia in a nutshell population 4 Russia in a nutshell economy 5 Russian travel market 6 Internet and travel 9 Incoming tourism to Holland 11 Image of the Netherlands 16 Trends and developments 17 Destination Holland: SWOT 19 Holland Marketing in Russia 20 Contact 21 References 22 Page 3

4 Russia in a nuttshell - population Size of population (x millions) For a long time, the number of births had been lower than the number of deaths. This caused a decline in the Russian population from 149 million persons in 1993 to 143 in From 2010, the population shows growth again. On January 2016 Russia had a population count of million inhabitants, of which 74% in urban areas. Moscow is the biggest city with over 12 million people, followed by St. Petersburg with over 5 million and Novosibirsk with over 1.5 million people. Millions of Russians live abroad; most of them in CIS countries (ex-ussr), Germany, the US and Israel Source: Federal State Statistics Russia (2017) Age 14% 17% younger than 15 years 14% 11% years years years Approximately 28% is aged under 25 and 28% is 55 years or older (2015). 14% 14% 17% years years 65 years and older Source: Federal State Statistics Russia (2017) 4

5 Russia in a nuttshell - economy Development GDP (%) * 2018* -0.2 The Russian economy stabilized in 2016, contracting by just 0.2 percent of GDP, after being hit in 2014 by the dual shocks of lower oil prices and sanctions. The more stable oil prices and improved financial conditions will support a return to growth in 2017 with an expected increase in real GDP of 1.4 percent. Growth is forecast to continue at 1.4 percent in Inflation is declining quickly: from an average of 15.6% in 2015 tot 7.1% in 2016 and probably 4.0% in Higher wages and lower interest rates, which will boost household consumption and business investment * = Forecast Russia Exchange rate 1 - Russian Ruble Source: IMF Country report July 2017; Visit Finland, Russian Market Update (2017) 90,00 80,00 70,00 60,00 The exchange rate of the Ruble has strengthened in 2017 after the dip in ,00 40,00 Jan '15 Apr '15 Jul '15 Oct '15 Jan '16 Apr '16 Jul '16 Oct '16 Jan '17 Apr '17 Jul '17 Source: Currency-converter.net 5

6 Russian travel market Number of trips abroad (x million) Tourism Business n.a. n.a. Private reasons* n.a n.a Total * Private trips are visits for attaining education and training, participation in scientific/cultural/political/ sporting/religious events, pilgrimage, charity actions, medical treatment, visiting friends and relatives. Top 5 countries 2016 Total trips abroad (x million visits) 1 Finland Germany Spain Greece Italy 0.7 For tourism purpose (x visits) 1 Thailand Germany Spain Greece Cyprus Russian citizens made 9.9 million tourism trips abroad in 2016 which was 18.5% less than the year before. 28% of population 18+ have passports for international travel. The Russian tourist market that had been slumping since 2014 started to recover late This recovery is made possible by a significant strengthening of the Russian ruble and a growth of consumer confidence because of better economic perspectives. Among the countries most affected by the fall in Russian tourist traffic in 2016 was Turkey (from 2.7 million tourist trips in 2015 to 481,000 trips in 2016). Until the end of July 2016 Turkey was closed for Russian tourist because of the tensions between Russia and Turkey over the downed aircraft. Now the ban is lifted, Turkey is again a popular goal for Russian tourist. More than 3 million Russians are expected to travel to Turkey in 2017, according to experts. The outbound travel market is expected to further increase if Egypt opens up to Russians. The total Russian outbound tourism could grow by 30-40% in 2017, the experts say. Seasonal characteristics of the Russian travel market: o New years holiday: approximately 10 days after January 1 st o May holiday: at the beginning of May there are two national holidays (the May day and the Victory day) and there are 4-5 bank holidays in connection to these celebrations. Many people take vacations in between (10-12 days for travelling) Source: Rosstat & Border Guard Services (2017), Tourism Review (2017); Aviareps (2017) 6

7 Russian travel market Way of making travel purchase 25% 26% 26% 26% 26% 30% 37% 75% 74% 74% 74% 74% 70% 63% Personal purchase Travel agency Russia is still a traditional market with 63% of trips booked via TO/TA. Independent tourism is becoming more popular (37% up ste quarter 2017). The greatest growth potential shows the segment of the young audience of year. Women from Russia travel more than men and spend more money. Russian travelers are getting younger and older at the same time Tourism expenditure (US $ billions) Source: Travelhubr (2016); Visit Finland, Russian Market Update (2017) Russian expenditure on travel abroad reduced with more than 30% from 35 US$ billion in 2015 to 24 US$ billion in Russia moves from the 6th to the 11th place on the 2016 edition of the world s top tourism spenders ranking. In the first quarter of 2017 Russian travelers were spending approximately 40% more in comparison tot * * = Forecast Source: UNWTO (2017), Visit Finland, Russian Market Update (2017) 7

8 Russian travel market Of the Russian population aged 18 years or over, 28% own a passport with which they can travel internationally. 40% has travelled at least once outside the CIS-countries (the former Sovjet-Union). In Moscow the passport penetration is more than twice as high; 60% own a passport in this capital. This is based on a poll in 130 cities and towns across 45 Russian regions. More than 40% of the outbound travelers are coming from Moscow. After that, most travelers come from St. Petersburg. Via the programme Culture and Tourism Development, which was introduced in 2013, the Russian government stimulates domestic and inbound tourism. The programme covers the development of culture and tourism in Russia until In January 2016, the Russian government orders to provide (financial) support to domestic tour operators. A biometric information collection was introduced in From September 14th 2015 Russians have to undergo a fingerprinting procedure to obtain Schengen visa. Schengen countries (dark blue) 8

9 Internet and travel Internet penetration Norway Denmark Netherlands Sweden Japan UK Germany Belgium USA France Spain Russia Italy Brazil China India 35% Online sales of online travel services (billions Rubles) % 96% 95% 93% 93% 92% 89% 88% 88% 88% 82% 73% 66% 66% 53% Russia has the largest number of internet users in Europe. It is estimated that 105 million Russians currently have access to the internet, which accounts for 73% of the population. Furthermore, there are 102 million active mobile internet users in Russia (71% of the total population). 95% of the adult Russian population owns a mobile phone. 61% owns a smart phone. Internet adoption is highest among younger Russians, living in big cities. Approximately 39% of the total population (55,9 million) are active social media users. The most used social networks by Russians (16-64 years) are You tube, Vkontakte, Odnoklassniki, Facebook and Google+. From the Russians 64 percent searched online for a product or service to buy online and 46% purchased a product or service online. Source: Wearesocial & Hootesuite (2017) In the span of six years (from ) the volume of the Russian online travel market grew tenfold to $ 11.2 billion in 2016, according tot research agency Data Insight. Online sales of transportation services have been the main grower, while online hotel booking has been growing more slowly. The Russian upper-middle class, as well as citizens aged from years of age, are the most promising target group for the e-travel to grow further. OTA s are expected to control 56% of online market share by There is a significant growth of self organized travel and online bookings. Source: Russian Search Marketing (2017); Phocuswright (2017) 9

10 Incoming tourism to Holland Development inbound tourism (x 1,000) * * Change in research design guests nights 130,000 Russians visited Holland in 2016 This is a decrease of -14% compared to The number of guests represents visits of Russians with business or leisure motives. After a decrease of the number of Russian overnight guests in 2009 due to the recession, the number showed a positive development from 2010 until Political tension and the depreciation of the Ruble are the main reasons for the recent decrease in the amount of guests. For 2017 NBTC expect a recovery of the number of Russian guests to approximately 145,000 (+12%) Russia is the 13th country of origin in terms of visitors to Holland. Russians form 1% of all overnight visitors to Holland. Source: CBS (2017); NBTC Statistics Incoming Tourism (2014) Russian visits per quarter of a year 27% 20% Jan-Mar Apr-Jun Jul-Sep Oct-Dec Spring and autumn are the most popular periods to visit Holland for Russians. 24% 29% Source: CBS (2017) 10

11 Incoming tourism to Holland - Business trips Purpose of visit 14% 51% Leisure Business Approxemately half of all trips by Russians to Holland are for leisure purposes. Over a third has a business motive. 14% of the trips have other motives such as sports or visiting friends and relatives. 36% Other Source: NBTC Statistics Incoming Tourism (2014) More information of the business market on 11

12 Incoming tourism to Holland Russian overnight guests 5 big cities 1 Amsterdam 75,000 2 Rotterdam 4,000 3 The Hague 4,000 4 Utrecht 2,000 8 out of 10 Russians stayed in one of the five main Dutch cities in Amsterdam received most of them (75,000; -14% compared to 2015). 5 Maastricht 1,000 Source: CBS (2017) Spending Russian visitors Per person per day 255 Per person per stay 1,173 Russian guests spent 1,173 per person per stay (average all incoming tourists 2016: 719) In total the Russian visitors spent 152 million in the Netherlands. The average stay of Russian guests in Holland is 4.6 nights. Source: NBTC Statistics Incoming Tourism (2014); CBS (2017) 12

13 Incoming tourism to Holland Amsterdam Schiphol KLM and Aeroflot are the airlines that connect Russia with the Netherlands. There are 5 daily flights from Moscow to Amsterdam and 2 from St. Petersburg. Ekaterinburg is the biggest market after Moscow and St. Petersburg. Source: Amsterdam Airport Schiphol (2017) Flight capacity Russia-NL The flight capacity (both seats and flight departures) from Russia to Holland showed an decrease in Last year there were nearly 2,200 flights from Russia to Holland. For 2017 a recovery of the number of flights and seats is expected. The low-cost transportation segment in Russia continues to grow and Russian and foreign low-cost airlines introduce new flights from Russia to European cities * Seats (x 1,000) Departures *Forecast Bron: RDC Apex (2017) The figures provide insight in the capacity of seats and flights, not in the occupation. Stopping flights are included in the numbers.. 13

14 Incoming tourism to Holland Travelparty 4% 2% Alone 25% Two adults, no kids 33% More adults, no kids A quarter of the Russian travellers with a leisure motif travels alone. 36% Families with young kids (0-12 yr) Other Source: NBTC Statistics Incoming Tourism (2014) Top 5 activities in Holland 1 Walk through a town/city 74% 2 Walking 69% 3 Funshopping / shopping 61% 4 Visiting notable places / places of interest 57% 5 Visit museum 55% Almost three quarters of the Russian visitors went for a walk through a town/city during their trip in Holland. This was also the most important activity for 33% of the Russian guests. Furthermore, they like to go walking (69%) and shopping (61%). However, these activities are seldom the most important reason for visiting the Netherlands. Source: NBTC Statistics Incoming Tourism (2014) 14

15 Incoming tourism to Holland Visited before 16% In the last 3 years More than 80% of the Russian visitors with a leisure motif are first-time visitors. No, never 84% Source: NBTC Statistics Incoming Tourism (2014) Intention to re-visit 2% 22% 8% Certainly would Probably would Of all Russian visitors, 69% say they will definitely visit Holland again in the future. 22% answered with probably and 8% maybe. Only two percent said they will probably not return for a visit to Holland. 69% Maybe Probably not Source: NBTC Statistics Incoming Tourism (2014) 15

16 Image of the Netherlands Image of the Netherlands lots of (window) shopping possibilities offers a lot to be active\sporty short breaks 90% 80% 70% hospitable country family-friendly offers a lot in terms of nature (reserves) high quality culinary range good price/quality ratio in hospitality mainly tulips, windmills and clogs many things in close proximity 60% 50% 40% 30% 20% 10% 0% expensive well accessible surprising destination easy going good service Russia total Holland linked a lot to tulips, windmills and clogs, 8 out of 10 Russians* associate Holland with mainly tulips, windmills and clogs. Besides that, many Russians* believe that Holland has got more to offer than Amsterdam. Relatively few Russians* think Holland is expensive, but also few think Holland offers a good price/quality ratio in hospitality. offers a lot in terms of good quality architecture and design offers a lot in terms of art variety, diversity and culture more to offer than A'dam Source: NBTC Holland image study, *Russians from Moscow and St. Petersburg (2012) Image of the Dutch people pragmatic/result-oriented internationally-oriented businesslike sporty reliable 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% enterprising innovative open tolerant Russia total More information on this image study on Most Russian* people consider the Dutch tolerant, friendly, hospitable/welcoming and not arrogant. Relatively low scores were given by the Russians* for reliable and internationally-oriented. arrogant ingenious/inventive hospitable/welcoming helpful Source: NBTC Holland image study, *Russians from Moscow and St. Petersburg (2012) friendly 16

17 Trends and developments Russians like shopping (especially souvenirs, clothes, shoes and accessories and jewelry). Almost a quarter of the travel budget abroad is spent on shopping. Despite the decrease in the number of holidays abroad, Russians still spend most on international shopping. Especially the city Milan is popular. (source: Global Blue, 2015) Young Russian people speak English fairly well, elderly people from the Sovjet-regime most likely don t. Learning foreign languages was not being encouraged during this period. This makes information in Russian more than welcome/necessary. The English language is becoming more popular amongst Russian students. (source: todiscoverrussia.com) While choosing a destination Russians tend to look at the climate (beach holidays are popular), price level and historic/cultural attractions first. More experienced travelers are focusing more on transport, possibilities for shopping and the trendiness of a destination. Most Russian prefer an all-inclusive stay when looking for a hotel. Besides that, free Wi-Fi access is a new high priority criteria. (source: ators.ru, 2015) As individual travelling is getting more popular, travel trade started to re-build their own product to make it more tailormade. (source: Aviareps, 2016) The demand of VIP tours (with the trip price starting at Ruble 8100 Euro) has grown by 20-25%. Another important trend in this segment is the growing trip length. (source: Visit Finland Russia Market Report, 2017) The marketing of Turkey destinations intensified after the introduction of charter flights in September Turkish authorities continue to subsidize charter flights with Russian tourists, just like in the previous three years. (source: Visit Finland Russia Market Report, 2017) The major competitor is the Russian government that makes great offers in order to increase inbound traveling. (source: Visit Finland Russia Market Report, 2017) The years of the Russian oil boom brought many newcomers tot the travel market. The end of the boom has already reduced the number of travel agencies with 2014 seeing a lot of bankruptcies of big companies. According to industry associations, the number declined further by a dramatic 70% in 2015 and in 2016 a decrease is predicted by a further 50%. Russians are starting be more active in looking out for a new way tot travel abroad, for instance by buying services from non-russian travel agencies. (source: I. Stupachenko; 5 Russian tourism trends to know about, pus risks and opportunities for the market from ) Social Media are becoming an essential tool in destination marketing. Travel industry depends a lot on word-of-mouth and spread of opinions social media provide an ideal platform for this. With high prices in traditional media advertising social media are becoming more attractive for tourism marketing. (source: Aviareps, 2017) 17

18 Trends and developments After two years of poor performance, indicators from the Russian tourist market are extremely positive for the first quarter of 2017, providing a welcome boost to European and Asian destinations. Russian outbound tourism increased by +58% year-on-year during the first quarter of Favored destinations such as Turkey, Greece and Cyprus remain high on Russian wish lists. Yet data analysed by ATOR reported a +61% increase in Russian interest in European destinations. This resulted in more than 6.5 million requests for trips to Europe in March (source: Global Blue, 2017) The most travelled segments among Russians are: The members of the developing middle classes (25 million people) are highly interested in the all-inclusive cultural tours (mostly in Northern and Western Europe) and sun and beach holidays (often in Mediterranean Europe and North Africa). They are status conscious and keen shoppers, assuming that it is cheaper to purchase various products abroad. Funky young professionals, aged years and the golden youth offspring of the very rich Russians tend to travel abroad quite often. Average incomes ranges from 1,000 to 3,000 per month. They most likely decide to visit European destinations and are interested in shopping. (source: Aviareps, 2017) 18

19 Destination Holland: SWOT Strengths Holland and Russia are connected through daily flights from Moscow and St. Petersburg, which are also the more economical developed cities in Russia Long historic ties between Russia and Holland Dutch contemporary culture and historical heritage High popularity of Europe due to its rich cultural and historical heritage Weaknesses Visits to Holland require visa No direct connections between Amsterdam and other Russian cities than Moscow and St. Petersburg Awareness of Holland can be improved Perception of the price/quality ratio in hospitality is relatively low Opportunities Concentration of population in cities Russians are interested in culture Russian travelers have high purchasing power and spend a lot on shopping Growing Internet usage Expand of network of Dutch visa centers Economic growth and increase of the real disposal income of Russians Increasing travel demand from regional cities Threats Organisations on the Russian market and the preference of Russians to book directly with a travel agent Russian government is stimulating domestic travel with a programme (2013 until 2020) Developments in Russia and Ukraine causing geopolitical risks and slow down economic growth Depreciation of the Ruble makes trips abroad for Russians less affordable Economic slowdown increases the interest in all inclusive holidays 19

20 Holland Marketing in Russia 20

21 Contact More information or advice? The MarketScan is a product of NBTC Research. NBTC Holland Marketing can offer your organisation tailor-made advice for instance about local network (trade and press), local market opportunities, cultural expertise, advice on marketing, communication, co-marketing opportunities etc. Office Contact NBTC Holland Marketing Ms. Carola van Rijn P.O. Box JL The Hague The Netherlands +31 (0) cvanrijn@holland.com 21

22 References Amsterdam Airport Schiphol, 2017 ( Association of Tour Operators of Russia ( Aviareps, Target Market Profile, 2017 CBS Statline, 2017 ( Currency-converter ( Federal State Statistics Russia, Rosstat, Russia in Figures Global Blue ( of Russia) ( ( IMF, World Economic Outlook Database ( NBTC Statistics Incoming Tourism, 2014 NBTC Holland image study, 2012 Phocuswright, Russia and Eastern Europe Spotlight 2017 RDC Apex, 2017 Russian Search Marketing ( billion-in-2016/) Tourisme Review, 2017 ( 22

23 References Travelhubr, 2016 UNWTO, 2017 Visit Finland Russia Market Report June 2017 ( Wearesocial & Hootesuite, 2017 ( Europe) 23