Russian tourism market: situation, trends and prospects
Despite all the external challenges, the Russian travel and hospitality industry is developing steadily
In the past few years, the Russian tourism market has faced a number of major challenges. The coronavirus pandemic and certain geopolitical factors drove a substantial transformation of the market. However, these factors cannot impede the steady growth of the domestic tourism market. So let us discuss the main results of 2023, trends and prospects of the industry.
Key results of 2023 — Statistics
Based on 2023 results, experts of the Russian Union of Travel Industry estimate that the internal tourist flow in Russia has reached 78 million trips, which is 20% higher than in the previous year. This is a record number that came as a result of not only the shutdown of many popular tourist routes, but also through systemic work on the improvement of tourist attractiveness of Russian regions and the quality of services provided.
But the volumes of outbound tourism have also grown. In total, 8.1 million people chose tourist destinations abroad in 2023, which is 16.4% higher than in 2022.
And in total in 2023, the travel industry provided service for the amount of 4.3+ trillion roubles. The data are gained from the Rosstat (Federal State Statistics Service). It is 1.5 times higher than in pre-pandemic 2019 (2.8 trillion roubles). It is evident that the main portion of this increase results from the internal tourism which is also vigorously supported by the state. For instance, starting from July 1, 2023 tour operators selling tours inside Russia are exempt from VAT payments until June 30, 2027. Also, this year 85 Russian regions will receive 6.2 billion roubles in total as subsidies for development and improvement of tourist infrastructure.
Key Trends of the Russian Travel and Hospitality Market
One of the main trends of the domestic tourism market is the increase in demand for event-related travel. With every year the demand for designer tours in unusual locations, and it applies both to internal and outbound tourism. For modern tourists it is not just about changing the scenery, it is about new impressions and unforgettable emotions, and immersion in an unfamiliar environment. This is why tour operators bet on impressions and hyper-local experience — and it applies both to travel program and cuisine, as well as accommodation options taking into account the local specifics. For instance, glampings in ethnic style are becoming increasingly popular. Such offers can be found both in our country (in Murmansk and Altai regions, for example) and abroad (in particular, this type of recreation is popular in China). Another example is the establishment or maintenance of a tourism brand through local identity (ethnic villages in Chuvashia and Tatarstan), local produce or cuisine (Sol, Seasons, Fishdealers restaurants in the Kaliningrad region).
The interest in non-standard travel options is growing as well. For instance, the demand for caravanning or RV (recreational vehicle) travelling is on the rise. Until recently, this type of tourism was seen as an oddity for our country, but it has become one of the most dynamically developing in the past four years. This was facilitated by new, relatively affordable offers of vehicles based on the domestic models, as well as the approval of the automotive tourism development concept in 2024, which among other things provided for creation of an infrastructure for this type of tourism.
Another trend is the offer personalisation. It includes a number of areas, such as targeted ads, target pages, individual offers in applications and on web-sites, omnichannel service. Moreover, the development of technologies makes it easier to analyze, for instance, the collected data on previous travels, and use the results to create an offer that fully meets the customer's demands.
Speaking about technology, we should mention the increase in popularity of remote booking services. Undoubtedly, the exit of Booking and AirBNB has left Russian market, but the alternative options (Yandex.Travel, Ostrovok, Ozon Travel, etc.) were able to adapt to the new operation specifics relatively fast. Such platforms significantly facilitate the process of hotel selection.
Speaking about accommodation, we would like to highlight another interesting trend. In recent years, the world has experienced a fundamental shift in its perception of the travel and hospitality industry which has become a full-fledged healthcare tool. Modern travelers see recreation not just as a "change of scenery", but as a comprehensive opportunity to recharge and recuperate — and improve their health in the process. Due to this, we see an increased demand for accommodation that includes healthy food, SPA and fitness facilities, as well as spa retreats providing medical services. Demand for the latter in our country exceeds the supply by approximately 50%.
We would like to discuss the most popular destinations. The most attractive locations, apart from Moscow and Saint Petersburg, are Northern Caucasus (Dagestan, Kabardino-Balkaria, Karachaevo-Cherkessia), Altai, Baikal, Murmansk Region and Krasnodar Krai.
Compared to pre-pandemic times, travelers from Russia are now much more interested in such destinations as UAE, China, India, Thailand, Maldives, Bali, Turkey and Egypt. Speaking about these destinations, it needs noting that China is viewed not only as an option for immersion in a new environment, but also as a destination for beach tourism and event-related travel. The latter option is relevant for India too, since more and more tourists are becoming interested in the millennia-old history of the country. Out of the former USSR republics, Russian citizen mostly prefer Belarus, Armenia, Georgia, Azerbaijan and Uzbekistan.
Prospects of the Russian Travel and Hospitality Market
Russian Tour Operators Association (ATOR) forecasts that the internal tourism flow in 2024 will increase by 10–15% compared to 2023, reaching the number of 90 million trips. This estimation is deemed as correct by the federal government, too. Moreover, the Ministry of Economic Development of Russia estimates the internal tourism growth potential as up to 140 million trips annually.
The state support measures will help with hitting these targets, as it is planned to allocate 400+ billion roubles to the national tourism support project by 2030. These funds will be invested in the establishment and improvement of infrastructure, such as construction of new and repair of existing hotels and spa resorts, construction of roads and utilities for tourism industry facilities, creation of new attractive locations. The market players also have access to preferential deals provided by the state, such as beneficial loans and subsidies, provision of land plots on preferential terms, VAT exemption.
The growth in outbound tourism is estimated to be at 7–10% by the end of 2024. We can expect further shifting of the destination vector towards Asian countries, including for event-based tourism.
MITT Exhibition as a promotion Tool
The growing tourism market offers a wide range of opportunities for its participants, and one of the most important business tasks is to find a way to make your company known to the broadest audience possible. One of the most effective solutions here is to participate in the MITT International Travel and Hospitality Show.
Every year the event gathers the largest B2B-community of experts from Russian regions — in 2024, 909 companies from 30 countries and 58 Russian regions took part in MITT. 16 210 specialists from 59 countries and 83 regions of Russia visited the event this year. 23% of the visitors were interested in offers in the Glamping category, and 14% paid attention to the Caravanning section.
