Hospitality industry development in Russia and CIS and why still nationals prefer traveling abroad

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Hospitality industry development in Russia and CIS and why still nationals prefer traveling abroad

Hospitality industry in Russia is showing a dynamic growth annually since 2011. The country received 29.8 million visitors in 2014 showing a 5.3% growth compared to the previous year. Thanks to the weakening of the Ruble that is driving more abroad tourists. This has also forced the Russians to opt for domestic vacations that have impacted positively on the occupancy rate of the Russian hotels.

Domestic tourism in Russia has seen a 20% increase in 2015. In 2016, the expenditure on domestic tourism grew by 88%. But with the improvement of geopolitical situations and rising spending power of Russians, the trend for outbound tourism would be more, which may not go in favor of the country’s hospitality industry.

After the huge success of 2014 Winter Olympics in Sochi, the country has attracted leading players of the hospitality industry. With the impending FIFA World Cup to be hosted in this country in 2018, the hospitality industry is eyeing for 1 million tourist visits expecting additional revenue of 1$ billion.

Leading foreign brands have been significant contributors in the growth of Russian hospital market operating about 105 hotels with almost 26,500 rooms as published in a tourism review report.

Considering the hotel development scenario in CIS countries, it can be divided into 2 groups.

-The first group comprises Kazakhstan, Azerbaijan and Ukraine where 84% of the hotels are operated by international brands catering to the economy, mid-scale and luxury market segments.

-The second group comprising of Armenia, Belarus, Kyrgystan, Tadzhikistan and Uzbekistan do not have a well developed hospitality market. Internationally branded hotels operate only in the capital cities.

Of these, Kazakhstan, Azerbaijan and Ukraine are showing appreciable growth in hospitality industry mainly due to the devaluation of their local currencies that had made vacationing in these countries much affordable by the foreign tourists.

All this being said Russia’s hospitality industry is plagued by some problems which demand a serious consideration to maintain a steady growth curve. No doubt, the number of hotels in Russia is rising but the quality of services offered is far below the international standards. This is mainly due to the lack of trained and qualified hospitality professionals operating in these hotels.

The 30% hike in prices in the hotels in the Black sea resorts back in 2016 would heighten the skeptical view regarding the proper value-for-money services offered, which is not likely given the prevailing below standard services offered.

In view of the growing traveling trends across the globe with internationally reputed hospitality brands vying for the bigger market share, the trend will be more towards customer satisfaction to create a loyal band.

Quality of services is bound to matter a lot along with the pricing structure to entice travelers from all segments of the population. It is to be noted that many less visited destinations with exotic locales are turning out to be star attractions mainly due to their attractively priced packages and quality service.

With the booming global hospitality industry, customer expectations are also soaring where they are seriously looking value for the money spent. In a survey carried out on 7000 travelers, it was revealed that apart from high-level of services provided by the hotel, travelers prefer personalized service based on their lifestyle and customs to make their stay more convenient which will make them feel cared and honored.

Again, the range of personalized services varied largely with the age group. Younger group prefer more entertainment facilities while aged travelers are inclined on healthy food and drinks. Travelers from emerging nations desire personalized service more than those from developed nations. This has been greatly observed in tourists from China, Brazil and UAE.

Hence, hotels offering personalized tailor-made packages at attractive prices are sure to win the hearts of the greater chunk of travelers. Ease of booking accommodations and flights, appreciating the travelers’ likings, flexibility in check-in check-out timings, exciting activities, personalized attention in room service, food and tour planning and smart guides well versed with the tourists’ mother tongue are some features that Russian hotels should incorporate in their packages.

Author, Anna Guchok, CEO of  Travel Image  – tourism marketing and representative company in Russian Speaking countries, global traveller, tourism marketing speaker & trainer, wellness expert.

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