Today, I’m in Scotland at the annual HEDNA conference, where I’ve been taking part in a panel discussion about how to capitalize on the growing Russian market.
Russia will soon be in the international spotlight, thanks to the 2014 Winter Olympics, which will be taking place in host city Sochi. And in 2018, Russia will also be hosting the FIFA World Cup, with matches being held in 11 cities across the country.
For hoteliers, this is undoubtedly excellent news, adding inbound travellers to an existing travel boom within Russia itself. More Russians are travelling around their country; lured by the promise of sun and sand at resorts such as Sochi by the Black Sea, where summer temperatures can reach 30°C. International and domestic hotel bookings have increased year-on-year since 2011; by 2016, it’s estimated that Russia & the Commonwealth of Independent States (CIS) will generate over 10 million domestic hotel bookings and almost 18 million international bookings annually– nearly 30 million in total*. Of these international bookings, the majority are holiday rather than business travelers.
Russia and its close neighbors are all well-known to Amadeus. We have a leading market share in Russia, the Ukraine, and the Commonwealth of Independent States (CIS); working with major regional OLTAs such as 12Trip, Ozon, and tickets.ua; and with national chains such as Aviacentr, Kiy Avia, and Transavia.
However, anyone who knows these regions well will also know that market trends dictate a highly customized approach to guest segmentation. For example, although Russia’s travellers are highly tech-savvy – travel bookings and tickets make up 35% of all products and services bought online, which is a significant proportion – they are also bound by administrative red tape, which can limit travel beyond Russia. This also applies to inbound travellers, who require visas for most regions, except the Ukraine and Georgia.
The popularity of online booking also contrasts with the sadly-common risk of fraud, which in turn has led to the continued popularity of travel agents – travellers value the human touch, not only as an additional guarantee against fraud, but also to guide them through all the admin paperwork that must be completed. For corporate travellers, similar preferences apply: companies must adhere to strict legal processes when booking travel and accommodation, and so TMCs recognize the value of working with in-market partners, who will have a much better understanding of these processes.
Amadeus has a regional solution tailored specifically for Russia’s leisure specialists, taking into account the popularity of leisure travel in the region. This solution provides hoteliers with local billing, collection and sales support, and financial clearing. For bookers, aggregated prepaid content is available through fully-localized solutions. Prepaid bookings are popular for a number of reasons – such as limited available payment methods, meaning that prepaid bookings give more peace of mind. For business travellers, Amadeus offers TMCs and local business specialists the best available rates and corporate rates. For corporations, we provide solutions for offline sales via travel agencies and for employees – Amadeus e-Travel management. This means that corporations can ensure full visibility and control over their corporate travel programs.
While the Russian travel market grows, the most important thing for hoteliers to remember is this: Russian travel agencies demand content from multiple channels to serve different customer segments with vastly different needs. Hoteliers that can cater to these needs across all channels will be on the path to Russian success.
* Source of Russian & CIS hotel booking figures: Business Monitor International, ITB Berlin and IPK International, European Travel Commission and Amadeus internal analysis.