Phuket Russian Tourism Market March 2017
Russian tourism market to the island valued at THB30 billion in 2016 51% of Russian travelers to Thailand visited Phuket last year “Phuket experienced a strong recovery in its Russian tourism market in 2016, with total passengers arriving via international flights to the island up by 51% year-on-year. This is substantially higher than the growth of the total market of travelers from Russia to Thailand, which rose by 23% in the same period. A major attribute to the uplift was the crash of Metrojet flight from Sharm El Sheikh to St. Petersburg in October 2015. The event resulted in tour operators suspending flights to Egypt and diverting to alternative holiday destinations such as Phuket.
Russian International Passenger Arrivals Number of Passengers 2,000,000 1,750,000 1,500,000 1,250,000 1,000,000 750,000 500,000 250,000 2012
2013
2014
2015 Phuket
2016 Thailand
Source: Thailand Ministry of Tourism and Sports and C9 Hotelworks Market Research
Another factor that helped increase the overall number of outbound Russian tourists on a global basis is the strengthening of the Ruble, which began appreciating early last year due to rising oil prices. This leading indicator is expected to continue as Russia’s political and economic relationships improve with their key trading partners.
We foresee the momentum continuing throughout this year, as the demand pressure in 2016 allowed the island to tap into the Russian tourism market. This will broaden demand for Phuket and will help to diversify the source market profile of international visitors.”
Trends
Forward Outlook
• Brick-and-mortar travel agencies are currently the
• Frequent Individual Travelers (FITs) are a growing
• Families make up 65% of total visitors followed by
• Despite tour operators resuming flights to Egypt in
• Russian tourists typically spend THB5,520 per
• Wholesale agents report a trend towards basic
most influential distribution channel for airlines and hotels, accounting for approximately 80% of total Russian tourists. couples, friends and solo travelers. These segments favor four-star hotels and increasingly use nontraditional accommodation. person per day, with an average length of stay (ALOS) of 10.5 days.
Bill Barnett, Managing Director, C9 Hotelworks
segment amongst Russia’s outbound tourism, as younger tourists are more focused on value for money and personalized trips. January 2017, Phuket will continue to attract Russian tourists as it is an affordable holiday destination with favorable brand sentiment. packaged tours, which only consist of flight and accommodation components.
TOURISM OVERVIEW Airline Indicators • In 2016, Phuket International Airport hosted a total of 524,073 passengers flying directly from Russia on international flights. This is a 53% year-on-year increase, with non-scheduled routes accounting for approximately 75% of total inbound flights.
Scheduled & Non-Scheduled Flight Arrivals from Russia Number of Flights 2,000
1,600 1,200 800 400
2012
2013
2014
2015 Scheduled
2016 Non-Scheduled
Inbound flights from Russia rose 42% in 2016 versus the previous year due to strong uplift in charter traffic
Source: Airports of Thailand and C9 Hotelworks Market Research
• Last year, inbound direct flights to Phuket from Russia totaled 1,767 flights, with approximately 49% of passenger arrivals coming from Sheremetyevo and Domodedovo (Greater Moscow).
Key Russian Feeder Airports to Phuket Sheremetyevo 541 Flights
Koltsovo 101 Flights
Irkutsk 100 Flights
St. Petersburg Moscow
Yekaterinburg
Novosibirsk
Khabarovsk Irkutsk
Domodedovo 275 Flights Data refers to inbound flights for FY2016
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C9 Phuket’s Russian Tourism Market Update: March 2017
Tolmachevo 119 Flights
Yemelyanovo 89 Flights Source: Airports of Thailand and C9 Hotelworks Market Research
TRENDS & CHARACTERISTICS Economic Indicators • After hitting a record low in February 2016, the Ruble rebounded by 35% throughout the year. This helped drive tourism demand in the second half of last year, punctuated by high season which kicks off in October.
Russian Airport Arrivals vs. Ruble Exchange Rate Number of Passengers
In THB
600,000
1.2
500,000
1.0
400,000
0.8
300,000
0.6
200,000
0.4
100,000
0.2 2012
2013
2014
2015
Russian inbound tourism recovery to Phuket has been aided by a redirect from Egypt, which has been a popular destination
2016
Russian Arrivals
Ruble to Thai Baht
Source: Airports of Thailand and C9 Hotelworks Market Research
Demand Characteristics Average Spend Per Person Per Day Number of Visitors
In THB
600,000
6,000
550,000
5,500
500,000
5,000
450,000
4,500
400,000
4,000
350,000
3,500
300,000
Average spend for Russian tourists in Phuket is higher than the Thailand-wide average by 11%
3,000 2012
2013
2014
2015
Russian Arrivals
2016 Average Spending Per Visitor
Source: Airports of Thailand and C9 Hotelworks Market Research
Key Excursions for Russian Tourism Market 26% 6% 14%
21%
10% 11%
Phi Phi Island Khao Sok
17% 16%
Distribution of Average Spend
23%
34%
James Bond Island Khao Lak Similan Islands
Accomodation Food and Beverage Retail
22%
Spa Excursions
Others Source: C9 Hotelworks Market Research
Source: C9 Hotelworks Market Research
C9 Phuket’s Russian Tourism Market Update: March 2017
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About C9 Hotelworks C9 Hotelworks is an internationally recognized consulting firm with extensive experience in the Asia Pacific region. Its core business focus includes: Hotel and Resort Development Asset Management / Ownership Representation Project Feasibility and Analysis Key competencies include international hotel operator search, selection and contract negotiation, mixed use hotel and residential planning and operation reviews.
Bill Barnett Managing Director
A wide range of both institutional and private developers and a comprehensive portfolio of completed projects give C9 the skill set and background to focus on key issues, evaluate complex ones and assist clients in achieving solid results. Based in Phuket, Thailand and led by Managing Director Bill Barnett, who has 30 years of experience in Asia PaciďŹ c, the ďŹ rm is well positioned to serve an increasingly demanding marketplace.
C9 Hotelworks Company Limited 9 Lagoon Road, Cherngtalay, Thalang, Phuket, 83110, Thailand (Office located at the entrance of Laguna Phuket) T: +66 (0)76 271 535 F: +66 (0)76 271 536 www.c9hotelworks.com info@c9hotelworks.com