The Russian travel industry is currently experiencing something of a boom. In 2012, Russians spent US$ 43 billion on travel abroad, making it the 5th biggest market in the world. However, the majority of this travel is booked offline with a recent report showing that just 14% of Russians book their holidays online. This figure is considerably lower than countries such as the UK and the US, and even slightly lower than other BRICS countries. Russia obviously has some way to go when it comes to encouraging consumers to book their holidays online. Let’s take a look at the changing trends in Russian travel, and ask what it means for companies wanting to take advantage of the huge growth potential.
A new breed of traveler
In 2012, an astounding 35.7 million Russian tourists traveled abroad, compared with just 7.7 million in 2006. But what is driving this increase? The emergence of a new Russian middle class with a disposable income and a taste for travel has helped this figure along. And with visa rules gradually changing, Russian citizens no longer need a visa to enter some countries and most EU countries are relaxing their requirements to make traveling there easier.
As the statistics show, the majority of Russian travelers prefer to book offline. According to the data below, even when they do book online, they tend to mainly book flights and hotels.
Russian consumers seem to prefer vacation packages which they usually book through a traditional travel agent. This, added to their fear of online fraud, means that they need to be shown that it is not only possible to book a vaction package online, it is also safe. However, as credit/debit cards are becoming more widespread in Russia, along with the growing popularity of e-commerce, consumers are gradually gaining confidence in online transactions.
A great time to get involved
While global companies, such as Booking.com, Tripadvisor and Kayak continue to play a major role in the market, Russian start-ups, such as Ostrovok, Oktogo, Hipway and Travelata are also receiving more investment opportunities.
Up until 2013, online hotel booking was dominated by Booking.com, but other companies are starting to catch up — hinting at an online fight for a share of the online travel market. The data below shows that while there is overall growth in travel queries, the gap is steadily decreasing, with Booking.com queries down by 20% and other companies, such as Ostrovok.ru showing increases of up to 83% for the same period.
The Russian online travel market is still in its infancy but there is huge potential for further growth. Visa restrictions are becoming more relaxed and consumers are starting to spend more money on traveling. They are gaining more confidence in online transactions and generally becoming more confident about traveling abroad. There’s no doubt that with more major players wanting a bigger share of the market, this is an exciting time to get involved.