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Russians return to Tax Free Shopping with reviving rouble


07 June 2017 - 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.

Highlights

  • Russian spending rises by 40% during Q1 2017
  • More than 6.5 million requests for trips to Europe in March 2017
  • Russian foreign transactions rise by a third in March 2017
  • Average spend when travelling abroad rises to 1,000 EUR
     

Many factors can explain the drop in Russian tourism over the last couple of years. December 2015’s oil price crash for example, seriously damaged the country’s economy and its inhabitants’ ability to spend and travel abroad. Diplomatic tensions rising following Russia’s seizing of Crimea in March 2014 did nothing to improve the situation.

A challenging period for the Rouble followed, with the impact felt by all Russians, including the richest citizens who had historically been prolific travellers. As a result, many Russians stayed at home, causing outbound tourism to fall to an 18-year low in 2015 according to the Russian Union of Travel Industry (RCT).

2017 first quarter
Russia’s recent economic growth, has had a positive impact on the Russian tourist market. Russian spending rose by +40% in the first quarter of 2017 according to financial firm UBS, and Russian outbound tourism increased by +58% year-on-year during the first quarter of 2017.

Russian banks reported that the number of transactions made abroad rose by a third in March 2017, with average spend in foreign countries at 1,000 EUR (vs. 600 EUR in 2016). Yet, Russian tourists are still mindful of expenses and restaurant bills, purchase few souvenirs and always ensure they claim VAT refunds when shopping

Europe back in favour
Favoured destinations such as Turkey, Greece and Cyprus remain high on Russian wish lists. Yet, data analysed from Yandex by the Association of Tour Operators of Russia (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 2017.

France, UK, Spain and Italy have benefitted, with Russian bookings to each country increasing between +10% and +15% year-or-year during March. Italy has been a primary beneficiary, with demand for Italian trips up +91% year-on-year during March, while Spain saw a +87% increase. In Paris, the growth of Russian tourism has continued steadily since the city’s ten-year attendance record was set in January 2017.

2017 outlook
Russian high net worth spenders are making up for lost time, with bookings for European luxury accommodation in high demand. However, we are not fully back to the glory days of 2013, when Russian average spend abroad reached 1,700 EUR. Destinations around the globe will have to work even harder to meet Russian tastes and demands.

Yet, this positive trend is here to stay. Tour operator Russian Express reports that demand for outbound Summer holidays is higher than 2016, with many packages fully booked until October for destinations such as France.


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