Business travel market analysis

Business travel market analysis

During a press conference at the NSN site, the executive director of the Association of Tour Operators (ATOR) Maya Lomidze announced the results of 2020 for Russian tourism, named the main figures for the industry and spoke about possible scenarios for the development of events in 2021.

ATOR Executive Director Maya Lomidze announced the main conclusions of the analysts of the Association of Tour Operators on the results of the outgoing 2020 during an online press conference at the site of the National News Service.

DOMESTIC TOURISM: REDUCTION BY -%

Due to the closure of borders, domestic tourism has become the main type of tourism in the country, many tourists have reoriented themselves to Russian resorts. Nevertheless, losses at the end of the year are obvious for this segment as well.

According to the tourist administrations of the regions of Russia and the forecasts of experts, in the Krasnodar Territory the tourist flow by the end of 2020 will fall by 11.5 million trips (-33% compared to 2019), in the Moscow region - 11.5 million (-50%), in Moscow up to 7 million (-72%), in Crimea up to 6.1 million (-18%), in St. Petersburg up to 2 million (-80%), in Tatarstan - up to 2 million (-44%), in the Altai Territory - up to 1.3 million (-40%), in the Kaliningrad region - also up to 1.3 million (-30%), in Karelia - up to 500 thousand (-40%), in Buryatia - up to 200 thousand trips (-49%). But in the Altai Republic, 1.74 million trips are predicted, which is even slightly (+ 0.4%) more than in 2019.

The total flow of domestic tourists in Russia at the end of 2020, according to ATOR's expert estimates, decreased by 35-40% - from 68 million trips in 2019 to about 40 million in 2020. Beach tourism took off mainly and rest in the resorts of the South of Russia.

Due to the closure of many foreign destinations, both in summer and in the autumn-winter season, there was an increased demand for premium class properties and resorts in Russia, with a corresponding increase in prices for them. This segment was booked in advance, there was no low sales depth.

At the same time, the share of organized tourism (tourists sent through tour operators) in 2020 increased by about 1% compared to 2019 and amounted to 21% in the domestic market. The number of returning tourists vacationing in Russia also increased by 8-10% (due to the opening of new recreation opportunities in the country). At the same time, most of the increase in returning tourists fell on the Krasnodar Territory.

Domestic excursion tourism suffered the most in 2020. Due to the closure of a large number of cultural and historical sites, a decrease in demand for cultural and educational trips was recorded by 40-60% compared to 2019.

For the New Year, most tourists will choose accommodation in the Krasnodar Territory, Crimea, the Volga region will also be popular (primarily Kazan - due to the absence of serious restrictions).

ENTRANCE TOURISM IN RUSSIA: SCALE OF LOSSES PER YEAR

In total, from January to September 2020, foreigners made 326.8 thousand visits to Russia for tourist purposes (almost all in the first quarter). In the same period last year, 2019, this number reached 4.3 million

ATOR summed up the tourism results of 2020 and talked about three scenarios in 2021

The industry collapsed within a month, it will take from six months to one and a half years to revive it.

Continent Express expects domestic travel demand to recover first, with a predominance of intercity rail and short flights. Business tourism will start its recovery first, because business cannot exist without staff mobility. Of course, all trips will be more targeted, targeted and focused on specific tasks. But they will.

Compared to businesses that continue to stall business travel, those who are the first to move around the world will have significant strategic advantages. By returning to the old way of doing business, of which business travel is an integral part, these companies will demonstrate confidence and send a clear signal to the market that they are strong, continue to grow and are open to business. The relationships they build in the immediate aftermath of the crisis will pay them tangible dividends, whether it's a new business or expanding their market share.

The MICE market (Meetings, Incentives, Conferences, Events) will recover later. But already now we have a lot of confirmed orders transferred from this spring-summer to autumn-winter 2020-2021. We also received a lot of requests and tenders from clients for major events in Russia and abroad, including cyclic conferences.

A full recovery of the business travel industry will take 6 to 18 months.

The Global Business Travel Association predicts that business tourism will double by 2025. Yes, that was the forecast for the beginning of 2020, and we are aware that it will be adjusted. But this will be a correction in time (not by 2025, but later), and not a correction of the trend itself, that's what is important.

Internet services are not a panacea

The demand for meetings and conferences will eventually return to its previous level and will continue its previous systemic progressive growth after the crisis is over and business travel is restored.

Video conferencing is not a substitute for business trips and events. This is a great opportunity that complements and expands the channels of our human communication, it is ideal for instant, operational communication and for clarifying some routine current issues.

The synergy of business travel and videoconferencing is very similar to the synergy model of traditional airlines and low-cost airlines.

In the 1990s, experts said that low-cost airlines would destroy traditional carriers. In fact, something else happened. The new business model expanded and supplemented the capabilities of conventional airlines: low-cost airlines "lifted" into the air a new target audience, that is, those who had not previously flown by air.

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