Table of Contents Acknowledgements Executive Summary Introduction Scope of the Study 1 Introduction to Russia 1.1 Country Overview 1.1.1 Geographical and Cultural Diversity 1.1.2 Wealth of Mineral Resources 1.2 The Russian Federation 1.2.1 Population 1.2.2 Ancestry, Migration, Language and Religion 1.2.3 Administrative Regions 1.3 Historical and Political Background 1.3.1 Emergence of Muscovite Russia 1.3.2 The Soviet Century 1.3.3 The Cold War 1.3.4 Glasnost and Perestroika 1.3.5 The Unravelling of the Soviet Union 1.3.6 The Resurgence of Russia 1.3.7 Current Outlook 2 Operating Environment 2.1 Economic Indicators 2.1.1 Summary of Key Indicators 2.1.2 Gross Domestic Product (GDP) and Growth Rates 2.1.3 Oil and Gas Production 2.1.4 Foreign Trade 2.1.5 Foreign Direct Investment 2.1.6 Spending Power 2.1.7 Medium-term Prospects 2.2 Key Issues Affecting Tourism 2.2.1 Business Realities 2.2.2 Government Legislation 2.2.3 Airline E-ticketing 2.2.4 The Visa Issue 2.2.5 Education and Training 3 The Russian Consumer 3.1 Propensity to Travel 3.1.1 Expenditure on Travel Abroad 3.1.2 Pent-up Demand 3.1.3 Incomes 3.1.4 High Net Worth Individuals 3.1.5 Foreign Travel Propensity 3.2 Russians Buying Power 3.2.1 A New Breed of Shopaholics 3.2.2 Retail Spending Abroad
3.3 Understanding the Russian Consumer 3.3.1 Different Consumer Segments 3.3.2 The Rapidly Emerging Middle Classes 3.3.3 Funky Young Professionals 3.3.4 The Upper Income Group 3.3.5 The Golden Youth 3.3.6 Russia s Ultra-rich 3.4 Importance of the Internet and Mobile Telephony 3.4.1 The Fastest-growing Internet Population in Europe 3.4.2 Retail Sales through the Internet 3.4.3 Mobile Phones and Wireless Access 4 Outbound Travel Overview 4.1 Recent Trends 4.1.1 Strong Growth in Spending on Travel Abroad 4.1.2 Statistics Need to be Interpreted with Caution 4.1.3 Mixed Performances from One Destination to Another 4.1.4 Outbound Travel from St. Petersburg 4.2 Purpose of Trip 4.2.1 Limitations of Official Statistics 4.3 Business Travel and the Meetings Industry 4.3.1 A Higher Share than for More Mature Markets 4.3.2 Leading Destinations for Meetings Industry 4.3.3 Incentive Travel 4.4 Holiday Travel 4.4.1 Patterns of Demand 4.4.2 Sun and Beach Holidays Dominate Leisure Travel 4.4.3 Europe is More than Sun and Beach 4.5 Organization of Travel 4.5.1 A Fragmented Industry 4.5.2 Moscow Controls Two-thirds of the Tour Operating Market 4.5.3 Package Tours Generate One Quarter of Total Sales 4.5.4 Airline Travel Gains Market Share 4.5.5 Travel Agents and Distribution 4.5.6 Online Travel Is still in Its Infancy 4.6 Russian Tour Operators 4.6.1 Tour Operator Turnover Is over US$ 3 billion 4.6.2 Foreign Groups Increasingly Enter the Market 5 Europe s Performance in the Russian Market 5.1 Caveats 5.1.1 A Variety of Different Measures 5.2 Overall Trends 5.2.1 Arrivals Growth 5.2.2 Overnight Growth 5.2.3 Arrivals at Frontiers versus Arrivals at Accommodation Units 5.2.4 Tourism Receipts from Russia in European Destinations 5.2.5 Purpose of Trip 5.2.6 Average Length of Stay 5.2.7 Age Breakdown 5.2.8 Seasonality 5.3 Trends by Subregion 5.3.1 Central and Eastern Europe
5.3.2 Northern Europe 5.3.3 Western Europe 5.3.4 Southern/Mediterranean Europe 6 Air Transport 6.1 Introduction 6.2 Airports 6.2.1 Strong Annual Growth 6.2.2 Modernization under Way 6.2.3 St. Petersburg Pulkovo 6.2.4 Moscow s Airports 6.2.5 Sheremetyevo 6.2.6 Domodedovo 6.2.7 Vnukovo 6.3 Air Transport 6.3.1 Outbound Travel Main Driver of Air Traffic Growth 6.3.2 Russian Airlines 6.3.3 Aeroflot 6.3.4 S7/Sibir Airlines 6.3.5 Transaero 6.3.6 Increasing Acquisition of Foreign Aircraft 6.4 Air Travel to Europe 6.4.1 Germany Is the Leading Destination in Europe 6.4.2 but Aeroflot Is the Leading Airline in Flight and Seat Capacity 7 Entering the Russian Market 7.1 Establishing a Presence on the Ground 7.1.1 A Growing Number of National Tourism Organizations (NTOs) 7.1.2... as well as Foreign Hotel Groups 7.2 Marketing Challenges 7.2.1 Market Realities 7.2.2 Having the Right Product and Knowing How to Market It 7.2.3 Education, Training and Raising Awareness 7.2.4 Growing Number of Exhibitions 7.2.5 Advertising Remains Pricey but Generates Good Returns 7.2.6 Main Difficulties in Dealing with the Russian Market 7.3 NTO Budgets 7.3.1 Big Differences from one NTO to Another 8 Propects for Russian Tourism to Europe 8.1 Overall Growth Potential 8.1.1 Increasing Propensity to Travel Abroad 8.1.2 despite Some Negative Demographic Shifts 8.1.3 Holiday Entitlement 8.1.4 More Sophisticated and More Demanding Clients 8.2 Opportunities for Europe 8.2.1 Increasing Competition but Europe Holds Its Own 8.2.2 Marketing to the Right Segments
9 Travel Trade Interviews 9.1 Introduction 9.1.1 Objectives 9.1.2 Method of Approach 9.2 Perception of European Countries 9.2.1 Segmentation of European Countries 9.2.2 Use of Segmentation by European Countries to Attract Tourists 9.2.3 The Most Popular Destinations 9.2.4 Europe s Competitors 9.3 Promoting European Destinations 9.3.1 Sources of Information on Tourism Destinations 9.3.2 Ways of Attracting Russians to European Countries 9.4 Various Types of Leisure Trips 9.4.1 Sun and Beach Holidays 9.4.2 Mountain Ski Holidays 9.4.3 Touring Holidays 9.4.4 Health/Wellness Holidays 9.4.5 Nature-based Holidays 9.4.6 Active Holidays 9.4.7 The Meetings Industry Conference and Incentive Travel 9.5 Deterrents to Travel in Europe 9.5.1 Visa Support 9.5.2 Lack of Information 9.5.3 Inadequate Airline Capacity 9.5.4 Hotel Booking Problems 9.6 Europe s (ETC) Logo 9.6.1 Perception of the Logo 9.6.2 Strengths and Weaknesses of the Logo 9.7 Development of Outbound Tourism 9.7.1 First-time versus Repeat Travellers 9.7.2 Traveller Groups 9.7.3 Families with Children 9.7.4 Elderly People 9.7.5 Young Travellers 9.7.6 Middle-aged Travellers (over 35 years) 9.7.7 Types of Trips 10 Consumer Interviews 10.1 Introduction 10.1.1 Scope of Research and Methodology 10.1.2 Objectives of the Research 10.2 Structure of Trips to European Destinations 10.2.1 Frequency of Trips 10.2.2 Duration of Trips 10.2.3 Travel Companions 10.2.4 Criteria for Choosing European Destinations 10.3 European Travel Destinations 10.3.1 The Most Visited Countries 10.3.2 Countries Respondents Plan to Visit 10.4 Booking Trips 10.4.1 Difficulties in Booking Trips to European Destinations 10.4.2 Booking Methods for Travel to Europe 10.4.3 Money Spent on Holidays
10.5 Europe as a Tourism Destination 10.5.1 Europe s Appeal as a Tourism Destination 10.5.2 The Image of Europe: Associations with the Destination 10.5.3 Assessment of Different European Regions 10.6 Europes (ETC) Logo 10.6.1 Evaluation of the Slogan: Europe, a never-ending journey 11 Consumer Focus Groups 11.1 Introduction 11.1.1 Objectives 11.1.2 Methodology 11.1.3 Participants Comments and Related Notes 11.2 Participant s Travel History and Favourite Types of Holiday 11.2.1 Popularity of Different Destinations 11.2.2 Favourite Types of Holiday and Characteristics of a Good Holiday 11.2.3 The Meaning of a Good Holiday 11.2.4 Expectations of a Good Holiday 11.3 Europe as a Holiday Destination 11.3.1 First/Spontaneous Impressions 11.3.2 Experiences of Europe as a Holiday Destination 11.4 Image of Europe 11.4.1 Europe as a Tourism Destination 11.4.2 A Typical Russian Holiday Traveller in Europe 11.4.3 The Most Appealing European Destinations 11.4.4 Appeal of Europe for Repeat Russian Visitors 11.4.5 Europe in a Competitive Context 11.5 Future Travel Plans and Europe 11.5.1 Non-European Destinations 11.5.2 Europe as a Destination 11.5.3 Travel Seasons 11.5.4 Travel Spending 11.6 Package Tours 11.6.1 Advantages and Disadvantages 11.6.2 Transport Problems 11.6.3 Possible Touring Destinations 11.6.4 Length of Tour 11.7 Organising a Trip to Europe 11.8 Europe s Regions 11.8.1 Respondents Definition of European Regions 11.8.2 Image and Appeal of the Different Regions of Europe 11.9 Promoting Europe as a Tourism Destination 11.9.1 Information Channels 11.9.2 Promoting Europe 11.10 Europe s (ETC) Logo 11.11 Europe s (ETC) Web Portal Annexes Annex I Schengen Countries Annex II Russian Public Holidays, 2008 Annex III Scheduled Airlines Traffic from Russia to Europe Annex IV Travel Trade Events in Russia, 2008 Annex V The Media in Russia Annex VI Key Contacts in Russia s Travel and Tourism
Annex VII NTO Questionnaire on the Position and Image of Europe in the Russian Travel Market Annex VIII Questionnaire for Travel Trade Interviews Annex IX List of Retail Travel Agents and Tour Operators Interviewed Annex X Questionnaire for Consumer Interviews Annex XI Discussion Guide for Focus Groups in Moscow and St. Petersburg (Potential first-time travellers to Europe) Annex XII Discussion Guide for Focus Groups in Moscow and St. Petersburg (Those who have travelled to Europe in the past five years) Annex XIII Pre-assignment Questionnaire for Focus Group Participants (Potential first-time travellers to Europe) Annex XIV Pre-assignment Questionnaire (1) for Focus Group Participants (Those who have travelled to Europe in the last five years) Annex XV Pre-assignment Questionnaire (2) for Focus Group Participants (Those who have travelled to Europe in the last five years) Annex XVI Summary of Focus Group Comments on Different Destinations Annex XVII Information Sources for Participants in Focus Groups Annex XVIII European Travel Commission (ETC) Member Organizations Bibliography