Defying economic uncertainty, Russia's online travel market marches ahead. Monday, 30th June 2014 Source : PhoCusWright Inc.
Russia's economic difficulties and geopolitical challenges have been well documented in recent months, the country's economy is in a major slump, with some predicting another recession.
Meanwhile, Russia's military actions in Ukraine have been condemned by Western nations, leading to strong economic sanctions. Yet according to a new report by travel industry research authority PhoCusWright, Eastern European Spotlight: Russia's Online Market Springs to Life, this upheaval has had little or no impact on the country's travel industry – at least not yet.
And while Russia can still be characterized as an emerging online travel market, it now shows clear signs of maturation.
Online travel in Russia has raced ahead over the past several years, and is finally catching up with its Eastern European neighbors in terms of the share of travel transactions conducted online.
Online penetration sat at 19% in 2013, but is projected to soar to 33% by 2016. Russia's online travel market is growing at more than double the rate of the country's total travel market, and boasts one of the highest growth rates in the world.
"This online surge is being driven by two main factors," says Krassi Simonski, PhoCusWright market analyst for Eastern Europe. "Russians are very eager to see more of their own country – and the world beyond. They value their vacation time and are disciplined about putting money aside in order to travel. The second driver is the explosion of reliable online travel services that have become available to Russians recently, including improved supplier websites, dynamic OTAs and other intermediaries."
While unfavorable exchange rates have made it difficult for some Russians to travel abroad, this, along with a recent wave of patriotism, has contributed to a notable increase in domestic travel.
The market is making great strides, but prolonged economic uncertainty could still have significant implications for Russia's travel industry in the future.
Sizing and key projections through 2016 for Russia's total and online leisure and unmanaged business travel markets
Market size and trends across travel product segments including air, lodging, tour operators, car rental and rail
nalysis of the primary online booking channels – supplier direct vs. intermediaries
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