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PROFI.TRAVEL NEWS
Profi.Travel held a business breakfast for representatives of NTOs and Russian regions
Profi.Travel Analytics Centre presented a large report on market dynamics and changes in tourist behavior at the business breakfast on March 16 in Moscow, that brought together more than 50 representatives of regional tourism departments and national tourism offices from 20 countries.
Despite the closure of destinations and a drop in sales, the traffic of tourist websites and aggregators has not collapsed, and tourists continue to plan their holidays. This and a number of other signs indicate the accumulation of strong pent-up demand. However, does quarantine alone determine today's agenda for the travel industry? Or can we now take advantage of the experience of the previous crisis?
Interestingly, unlike sales, traffic to major aggregators — such as Booking.com and others — has not shown any signs of downfall so far. The dynamics of queries for hotels and plane tickets almost remains within the usual seasonal values. As for air tickets, here the drop in bookings for March and April is followed by a noticeable increase in bookings as soon as in May. Probably, due to the fact that the airlines made it possible to return the money or postpone the reservations at irrevocable tariffs, the Russians felt more confident, and a falling ruble exchange rate encourages them to buy. Moreover, starting in September, the number of reservations is even ahead that of last year.
Despite the closure of destinations and a drop in sales, the traffic of tourist websites and aggregators has not collapsed, and tourists continue to plan their holidays. This and a number of other signs indicate the accumulation of strong pent-up demand. However, does quarantine alone determine today's agenda for the travel industry? Or can we now take advantage of the experience of the previous crisis?
Interestingly, unlike sales, traffic to major aggregators — such as Booking.com and others — has not shown any signs of downfall so far. The dynamics of queries for hotels and plane tickets almost remains within the usual seasonal values. As for air tickets, here the drop in bookings for March and April is followed by a noticeable increase in bookings as soon as in May. Probably, due to the fact that the airlines made it possible to return the money or postpone the reservations at irrevocable tariffs, the Russians felt more confident, and a falling ruble exchange rate encourages them to buy. Moreover, starting in September, the number of reservations is even ahead that of last year.
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The expert compares the current situation with the crisis of 2014-2015: then a series of bankruptcies, the fall of the ruble, sanctions, the closure of Turkey and Egypt and other disasters hit the Russian travel industry strongly. However, by the end of 2016, demand began to recover gradually, and tourists got used to the new economic reality.
Today's economic difficulties are aggravated by the quarantine and the actual closure of many important destinations all at once, causing losses to all participants in the tourism market at the same time, and not just tour operators and travel agents. Nevertheless, a decrease in demand within 10% due to economic factors began to manifest itself even before the outbreak of coronavirus. In addition, we need to take into account the risk of a chain reaction that bankruptcies of tour operators can trigger, which was also noted in 2014.
All these factors considered, with a high degree of probability, we expect two waves of recovery in demand. The first one — after the removal of quarantines and the release of pent-up demand. The second one is expected when consumers adapt to a new reality. Despite the fact that the market has frozen now, we can — and as well we should — prepare for this process today.
The experience of other countries is also indicative here: for example, a week before March 1, when China announced having taken control of the virus, the number of hotel reservations in China increased by 40%, daily peak requests for domestic flights increased by 230%. And this is in the country most affected by COVID-19. If the situation is more or less normalized by the summer, experience shows that Russia can recover faster.
The analytical report presented at the Profi.Travel business breakfast will be published within a week.
Today's economic difficulties are aggravated by the quarantine and the actual closure of many important destinations all at once, causing losses to all participants in the tourism market at the same time, and not just tour operators and travel agents. Nevertheless, a decrease in demand within 10% due to economic factors began to manifest itself even before the outbreak of coronavirus. In addition, we need to take into account the risk of a chain reaction that bankruptcies of tour operators can trigger, which was also noted in 2014.
All these factors considered, with a high degree of probability, we expect two waves of recovery in demand. The first one — after the removal of quarantines and the release of pent-up demand. The second one is expected when consumers adapt to a new reality. Despite the fact that the market has frozen now, we can — and as well we should — prepare for this process today.
The experience of other countries is also indicative here: for example, a week before March 1, when China announced having taken control of the virus, the number of hotel reservations in China increased by 40%, daily peak requests for domestic flights increased by 230%. And this is in the country most affected by COVID-19. If the situation is more or less normalized by the summer, experience shows that Russia can recover faster.
The analytical report presented at the Profi.Travel business breakfast will be published within a week.
