General Overview
Scottish Enterprise and Scottish Development International commissioned research into the International Tourism Markets of Brazil, Russia, India and China. This report focuses on the Russian international tourism market and provides you with the key facts and motivators for that market. This report will help you identify and maximise the opportunities for tourism in Scotland by providing you with information about what Russian visitors to Scotland want and expect.
Russia is a recognised world power, with a total population of over 142 million people and over 1,060 major cities. Stable economic growth, declining inflation and low unemployment result in consumer purchasing power in Russia continuing to grow. Outbound travel from Russia has increased vastly in recent years, with some 11.3 million travelling in 2011 compared with 2.6 million in 1995. In 2007, Russia became the ninth largest outbound travel market in the world, with tourists spending on average $1,000 per head on trips. In terms of expenditure, that generated an estimated $22.3bn overseas spend, £200 million of which came to the UK. Russians choose destinations based upon visa requirements, there is evidence to suggest that many wealthy Russians are travelling to Europe on long term visas.
Planning and booking international holidays amongst Russians tends to carry a lead time of 2-3 months but can also be short notice, say 1-2 weeks. Visa requirements, particularly the time it takes to arrange these, has an influence on plans. Russians are late bookers, often less than 30 days prior to departure. Some 75% of leisure trips are booked within 14 days of departure.
Most travelling Russians come from the major centres of Ekaterinberg, Moscow and St Petersburg. Holiday travel accounts for some 56% of trips, with visiting friends and relatives 19%, and business travel the remaining 25%. Statistics suggest that of the trips made to the UK, two fifths are for leisure. The summer holidays are long in Russia, extending from 1 June through to 1 September. Further breaks include 11 days in late December through to 9 January and on 4 November, the National Day of Unity.
Market Analysis
In 2011, Russians made 17,000 visits to Scotland, generating 77,000 bed nights and a total spend of £7m. On average, between 2009 and 2011, 56% of visits represented holiday travel, and a further significant percentage of 15% came to study. Around 9% of all Russian visitors to the UK visit Scotland, and while London attracts the largest number, Edinburgh ranks second in a study of top UK visitor destinations. The profile of Russian visitors to Scotland contains a high number of travellers in the 16-24 and 45-54 age groups.
Scotland certainly features in Russians’ dream activities and iconic images. For example, in a VisitBritain survey, the third most iconic image of a holiday in the UK was a Scottish castle, selected from a pre-determined list of 15 images. Around 25% of Russian visitors want to spend a night in a Scottish castle; the fourth top activity chosen in a separate study of what Russian visitors would like to do while in the UK.
By far the largest group of Russian visitors to the UK and Scotland is the upper middle class young professionals, followed by couples and, increasingly, family groups. Group travel tends to be dominated by lower middle class travellers. The ‘super rich’ make up a small segment and their travel tends to be managed by niche agents.
Interestingly, at the end of the Soviet Union, families inherited their houses from the state and, consequently, many do not have mortgages. For middle class young professionals on £4-5k monthly salaries, this can mean much higher disposable income than their European equivalents.
Russians, like European visitors, enjoy many of the same activities. Cultural experiences, eating and drinking, shopping, events, city breaks and destination hotels in rural locations all feature. VisitBritain’s Market Plan for Russia to 2020 sees themed targeting of the luxury market segment through promotion of ‘luxury Britain’, ‘self-development’ and ‘cultural Britain’.
Russians rate spending time with family and friends highly. Russians on holiday like to visit famous locations, and scenic beauty is often a key influence upon destination choice. They are also a visitor group more likely to take trips to a museum, art gallery, theatre or live music event than other groups. Conversely, while they enjoy gardens and parks, they are less likely on average to go for a walk in the countryside or by the coast. More than half of Russian holiday trips to the UK includes a visit to a pub and the Russians love to shop!
Younger visitors in their 30s and 40s enjoy adrenaline sports and other outdoor activities. Robert Burns is a Scottish ‘brand’ with a lot of Russian impact since he is studied by them in school. Films located in Scotland also help to create a strong image for potential Russian travellers.
Russians would recognise and rate hotel brands such as Kempinski, Hyatt, Intercontinental, Four Seasons and Marriot. Select independent hotels would also be popular where these are ‘known’ in a particular destination. It is worth pointing out that Russians favour easy access, newly refurbished hotels; shabby chic is not on their radar!
Well known brands would commonly be booked direct, particularly by Russians travelling on a visa. Generally Booking.com would be preferred since it is in Russian; however, Expedia is also popular.
Again, like Europeans, Russians eat and drink in a similar fashion. Alcoholic drink and cocktails are popular, with wine and beer generally the drinks of choice. Dietary requirements differ little from European tastes. The love of vodka is certainly outdated nowadays, particularly among well travelled younger generations. VisitBritain has produced some insights on food and drink preferences:
- Three meals a day are considered usual.
- Russians like to treat themselves to the best while on holiday, this includes food.
- Full cooked breakfasts are appreciated.
- Russians in general are hearty eaters and prefer hot meals at lunch and dinner.
- Healthy nutritional trends see vegetables replacing heavy meat dishes.
- Russians love bread, particularly brown, and expect it served with every meal.
- British pubs are popular, albeit regarded as a ‘fast food’ option.
- British ales and ciders are attractive, and those who enjoy strong spirits, love Scotch whisky brands.
The Online Trend
In 2012, the Russian Federation ranked as the fifth largest internet audience worldwide and as the largest online population in Europe. That said, Russia has the lowest online travel sales of the emerging countries despite a strong GDP.
Russians certainly use the internet to research their travel destinations and forecasts suggest that online travel sales are set to increase by almost 10% on an annual basis, rising from $1.48bn in 2010 to $3.38bn in 2016.
Statistics show that website searches (65%), and family or friends’ recommendations (57%) are the main information sources that influence destination decisions. General search engines and travel review websites constitute the main sources for destination selection, at 77% and 62% respectively. Travel product selection statistics generally mirror those for destination choices. Insights suggest that the majority of researching and booking of holidays occurs during working hours through PCs and lap tops.
In Russia, airline websites (41%) lead over online travel agencies (12%); however, offline travel agents are a major booking channel, with 23% calling travel providers and 10% using the services of retail travel agents. Offline travel agents also provide a significant channel for travel lodging, with around 20% using retail travel agents. Statistics suggest that Russian travellers do not distinguish particularly between online travel agents and travel search engines since the use of the latter at 19% seems unlikely.
The online travel market in Russia is supported by the major online travel conglomerates, Priceline and Expedia. The visual search engine Quintura identifies five online travel companies to watch now:
- Aviasales.ru - 1.5m unique visitors monthly, with the most comprehensive travel search for Russian speakers.
- Oktogo.ru - An online hotel booking service accessing more than 250,000 hotels worldwide, again, for Russian speakers.
- Eviterra - One of the fastest growing Russian airline ticket sales websites.
- Travelmenu - Corporate travel, B2B and B2C provider.
- Travel.ru - The success of this travel portal, providing a wealth of travel content, is likely to be due to the fact that 70% of Russians research travel online.
Russians outstrip their German, Indian, American, Brazilian and UK counterparts in their reliance on other travellers’ ratings decision making. More than 50% of Russians find the reviews of others very useful. Notably, Tripadvisor has only been available in Russia since late 2010.
Ranking sixth in the world for social network users, Russia had over 57 million users in 2013. This number is estimated to grow to over 62 million by 2014, representing 79% of internet users, and over 45% of the Russian population. Vkontakte (VK.com) was the number one site in 2013, with almost 44 million unique visitors. Following VK.com in popularity is odnoklassniki.ru and ‘Moi mir’ provided by Mail.ru. Facebook was the twelfth top website in Russia in 2013, with 13 million unique visitors.
Blogs are also popular in Russia, with millions of users writing and reading these each day. Popular sites include livejournal.com, liveinternet.ru, Mail.ru, and yandex.
While Russians over 50 would be likely to enquire for information at a reception desk, younger generations increasingly turn to new media and investigate for themselves.
Business Tourism
Statistics show that business visitors from Russia tend to spend double that of holiday visitors and that this is a segment generating the biggest share of visitor spending, albeit against the lowest number of visits and visitor nights.
While the major destinations for business travel are visa-free, the considered view is that for business travellers to the UK on the right visa, staying for an extended period, and on individual travel itineraries, visiting Scotland would be likely.
How to Reach the Market
Most Russian travel agencies are found in Moscow and St Petersburg. Moscow controls some 65% of market sales currently, but estimates suggest that strongest growth in the next decade will come from the regions. Cities including Vladivostok, Rostov-on-Don, Kaliningrad, Irkutsk, Yekaterinburg and Novosibirsk all have agency concentrations.
The top tour operators offering the UK in Russia are BSI Group, Inna Tour, Megapolus Tours, Meridien Express, Pac Group, Planeta Tour and Quinta Tour. MICE companies and VIP travel agents tend not to specialise in particular destinations. Large Russian agents will generally bypass local Destination Management Companies(DMC) by setting up their own offices in London. MICE companies would always look to work with a DMC with expert knowledge on destinations such as Scotland.
In working with operators, it is useful to understand that research for their main season programmes happens in February and March for the summer season, and in August and September for the winter season. Some will travel to the UK to visit accommodation, new attractions, partners and travel fairs.
Important trade shows for these agents include:
- Intourmarket (ITM) – Supported by the Russian Federal Tourism Agency, an exhibition that includes an extensive business programme.
- MITT – a leading annual forum in the Russian tourism industry with over 120,000 buyers across Russia.
- Leisure – a leading international trade fair and forum, offering a dual platform for MIBEXPO and Luxury.
When developing their tour programmes, Russian operators can be relatively late to finalise, often in February or March. Notably, and unlike some European counterparts, they do not produce brochures. Main holiday times fall within 1– 10 May, June to the end of August, and New Year. Scotland has a great opportunity for the New Year season because by following the orthodox calendar, Russians celebrate their ‘New Year’ on 7 January and their ‘Old New Year’ on 13 January.
Doing business in Russia requires an understanding of Russian business etiquette. To work effectively, personal contact is a must. Businesses really need to travel to Russia and meet face-to-face and also bring people to Scotland and show them around. Building relationships is critical. Russians are notably very polite.
Other important advice includes making appointments before arriving and following up with a brief call on arrival. Dressing smartly is vital as is removing gloves before shaking hands. Never shake hands across a threshold since Russian tradition dictates this may lead to arguments! Information provided in Russian will also be appreciated, even if it is a flyer accompanying a brochure. Finally, doing business in Russia is not dissimilar to doing business in the Middle East. If they like you and trust you, you will win the business. Personality is everything and personal contact cannot be under-estimated.
Cultural Implications
There are very few cultural implications to consider that affect travel decisions and movement of Russian visitors. The major religions in Russia are Orthodox Christianity and Islam. Estimates suggest that Russia has large populations of non-practicing worshipers, likely resulting from the legacy of seventy years of Soviet rule.
Did You Know?
- Russia has the fifth largest internet audience worldwide the largest online population in Europe, and with enormous growth in the last year.
- Websites and personal recommendations from friends and family are key influencers in destination decision making.
- Russia is experiencing robust growth, expanding at 43% in 2011, and estimated to experience compound annual growth of almost 10% from 2011 to 2016.
- While airline websites outstrip online travel agencies, offline travel agencies are important booking channels for travel and lodging.
- Russia ranks sixth in the world for social network users, this group representing over 40% of its population. VK.com is the biggest site and the fourth largest in Russia.