Russians have scaled back plans to travel abroad following the outbreak of the U.S.-Israeli war with Iran in late February, with demand for overseas trips and tourism services falling sharply in the first quarter, industry data showed.
Conflict in the Middle East, a key hub for Russian tourists, alongside rising travel costs are dampening demand, even as the industry had shown signs of recovery earlier this year.
Demand for travel agency services fell 6% year-on-year in January-March, while bookings for foreign hotels dropped 18%, according to data from MTS Bank cited by the Kommersant business daily.
Analysts at fiscal data operator Platform OFD’s Chek Index reported a similar trend.
The decline marks a sharp reversal from February, when transactions at travel agencies were still running 11% higher than a year earlier.
The closure in March of the United Arab Emirates and other popular Middle Eastern destinations caused the tourism market to contract by at least 30%, Maya Lomidze, executive director of the Association of Tour Operators of Russia (ATOR), told Kommersant.
Russian tour operator Russky Express reported a 35% year-on-year drop in total sales in March.
Domestic tourism has failed to offset weaker outbound demand. Bookings for trips within Russia fell by 4-5% in the first quarter, according to Sergei Romashkin, general director of tour operator Delfin. Some destinations saw steeper declines, with visitor numbers to Sochi down 8% and to Dagestan down 20%.
Romashkin linked the drop in domestic travel to weakening purchasing power among Russian consumers.
Egypt emerged as the most popular foreign destination in the first quarter, accounting for 31% of total sales, according to travel service Sletat.ru. Its share rose by 10.5 percentage points from a year earlier, likely reflecting a shift by tourists who had previously favored the UAE.
Turkey’s share was largely unchanged at 18.4%, while Thailand accounted for about 12%, also broadly stable year-on-year. China’s share nearly doubled to 4.8% from 2.6%.
Demand is now gradually recovering but remains constrained by a stronger ruble and rising airfares driven by higher fuel costs, Lomidze said.
In early April, tour operators began receiving additional fuel surcharge bills from airlines for previously booked trips. The average surcharge amounted to $57 for a two-person tour to Egypt, $119 for Thailand and $161 for Vietnam, ATOR said.
Those costs are adding to broader price increases. The average transaction for travel agency services rose 9% year-on-year to 74,000 rubles ($930) in the first quarter, according to Chek Index.
Read this story in Russian at The Moscow Times' Russian service.
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