Country report RUSSIA

Fact File Country Name: Russian Federation (Russia) Capital: Moscow

Fact File Location: North Asia bordering the Arctic Ocean, extending from Europe (the portion west of the Urals) to the North Pacific Largest country in the world in terms of area (17,075,400 sq km ) Has Europe’s tallest peak, Mount Elbrus Has the deepest lake in the world, Lake Baikal, estimated to hold one fifth of the world's fresh water

Fact File Time Difference: Three hours ahead of GMT in Moscow and St Petersburg; ten hours ahead of GMT in Vladivostok . Russia is divided into 9 time zones. Public Holidays: January 1st-4th (New Year) January 7th (Orthodox Christmas) February 23rd (Day of the Defenders of the Motherland) March 8th (International Women's Day) May 1st-2nd (Labour Day); May 9th (Victory Day) June 12th (Independence Day) November 4th (Day of National Unity) December 12th (Constitution Day)

Administrative Divisions Russian Federation comprises 83 Federal Subjects. Federal subjects are grouped into eight federal districts. 46 oblasts (provinces) 21 republics 9 krais (territories) 4 autonomous okrugs (autonomous districts) 1 autonomous oblast (the Jewish Autonomous Oblast) 2 federal cities (Moscow and St. Petersburg)

Administrative Divisions Oblasts: Amur, (Blagoveshchensk), Arkhangel'sk, Astrakhan', Belgorod, Bryansk, Chelyabinsk, Irkutsk, Ivanovo, Kaliningrad, Kaluga, Kemerovo, Kirov, Kostroma, Kurgan, Kursk, Leningrad, Lipetsk, Magadan, Moscow, Murmansk, Nizhniy Novgorod, Novgorod, Novosibirsk, Omsk, Orenburg, Orel, Penza, Pskov, Rostov, Ryazan', Sakhalin (Yuzhno-Sakhalinsk), Samara, Saratov, Smolensk, Sverdlovsk (Yekaterinburg), Tambov, Tomsk, Tula, Tver', Tyumen', Ul'yanovsk, Vladimir, Volgograd, Vologda, Voronezh, Yaroslavl‘ Republics: Adygeya (Maykop), Altay (Gorno-Altaysk), Bashkortostan (Ufa), Buryatiya (Ulan-Ude), Chechnya (Groznyy), Chuvashiya (Cheboksary), Dagestan (Makhachkala), Ingushetiya (Magas), Kabardino-Balkariya (Nal'chik), Kalmykiya (Elista), Karachayevo-Cherkesiya (Cherkessk), Kareliya (Petrozavodsk), Khakasiya (Abakan), Komi (Syktyvkar), Mariy-El (Yoshkar-Ola), Mordoviya (Saransk), North Ossetia (Vladikavkaz), Sakha [Yakutiya] (Yakutsk), Tatarstan (Kazan'), Tyva (Kyzyl), Udmurtiya (Izhevsk)

Administrative Divisions Autonomous okrugs: Chukotka (Anadyr'), Khanty-Mansi (Khanty-Mansiysk), Nenets, (Nar'yan-Mar), Yamalo- Nenets (Salekhard) Krays: Altay (Barnaul), Kamchatka (Petropavlovsk-Kamchatskiy), Khabarovsk, Krasnodar, Krasnoyarsk, Perm', Primorskiy [Maritime] (Vladivostok), Stavropol', Zabaykal'sk (Chita) Federal cities: Moscow [Moskva], Saint Petersburg [Sankt-Peterburg] Autonomous oblast: Yevrey [Jewish] (Birobidzhan)

Holiday Entitlement State employees are entitled to 24 days holiday a year, in addition to the 10 public holidays. Other employees are typically entitled to 14-31 days holiday. Many also take additional days to extend weekends or national holidays.

Holidays & Travel Seasonality School Holidays Russian schools are on holiday from 01 June to 01 September and over Christmas and the New Year. The May and November holidays May be used for a short sun & beach trip or for a cultural or educational trip to a nearby destination (generally with a flight of about 4-5 hours).

Population 141.7m (mid-2010 estimate) Decline in the population since the mid-1990s is attributed to social and health problems which followed the collapse of the old regime Russia has 1,067 major cities, 11 of which have a population of 1 mn or more. Largest cities are Moscow, St Petersburg, Novosibirsk, Nizhny Novgorod and Yekaterinburg. Vladivostok and Khabarovsk, the two main cities in Russia’s Far East region, both have fewer than 600,000 inhabitants. Moscow, the capital, has a population of about 10.5 mn and is the largest city in the country, as well as being the economic and political centre, the seat of the president, the government and the Duma (Parliament).

Population, Age - wise Breakdown (%) 2010 2020f 0 - 4 years 5.4 5.4 85+ 0.9 1.4 Source: ETC

Age Group : Growth Pattern 0-24 years: 29%; 25-59 years: 53%; over 60: 18%. This compares with world averages of 45%, 35% and 11%. According to the UN, the numbers of children and young people (aged 0-24) will fall by 13% by 2020 and those aged 25-59 will fall by 7%, while the numbers of those over 60 will increase by 20%.

Historical Averages(%) Economic Indicators Annual Data 2011* Historical Averages(%) 2007-2011 Population(mn) 143.0 Population Growth 0.1 GDP (US$ bn; market exchange rate) 1,857.8 Real GDP growth 2.8 GDP (US$ bn; purchasing power parity) 2,386 Real domestic demand growth 4.5 GDP per head (US$; market exchange rate) 12,990 Inflation 10.0 GDP per head (US$; purchasing power parity) 16,681 Current-account balance (% of GDP) 5.3 Exchange rate (av) Rb:US$ 29.4 FDI inflows (% of GDP ) 3.5 *Actual Source: Economic Intelligence Unit

Travel & Tourism Indicators T&T industry, 2010 estimates Percent 2011-2020 of Total Annual Growth (% forecast) GDP (US$ millions) : 16,412 1.1 4.8 Employment (1,000 jobs) : 642 0.9 -0.7 T&T economy, 2010 estimates GDP (US$ millions) : 92,583 6.0 5.7 Employment (1,000 jobs) : 3,538 5.1 0.1 Source: World Travel & Tourism Council, TSA Research 2010

Increasing Consumer Income & Expenditure

Ultra High Net Worth Individuals (UHNWIs) Greatest UHNWI growth has been in the BRIC nations of Brazil, Russia, China, and India. Russia has more than 100 billionaires ranking third in the world after US and China. Russian UHNWIs are younger; the average age of the UHNWI in Russia is just 49. Note: UHNWI has minimum net worth of US$1 billion. Source: Forbes Insights, 2011

Travel & Tourism Competitiveness Index Travel & Tourism Business Environment & Infrastructure Out of 139 countries Russia ranked 30th for Air Transport Infrastructure, , 45th for Tourism Infrastructure, 46th for Information & Communications Technology Infrastructure, 75th for Price Competitiveness in Travel & Tourism Industry and 95th for Ground Transport Infrastructure. Travel & Tourism Regulatory Framework Ranked 11th for Health and Hygiene, 98th for Environmental Sustainability, 102nd for Prioritization of Travel & Tourism, 113th for Safety & Security and 126th for Policy , Rules and Regulations. Travel & Tourism Human, Cultural & Natural Resources Ranked 27th for Natural Resources, 35th for Cultural Resources and 78th for Human Resources Source: The Travel & Tourism Competitiveness Report 2011

Russian Outbound

Outbound Tourism Only 20 years ago Russians were banned from travelling abroad. Good growth of outbound tourism in the last decade driven by Russia’s gas and oil - rich economy, which generated increased prosperity, rising incomes and a strong rouble. In 1995 only 2.6 million Russians went on holiday outside the former Soviet Union; by 2006 the figure had trebled, to 7.7 million.

Rebound From Financial Crisis 2008 was the best year ever for Russia’s tourism industry - 11.3 million Russians took vacations abroad. In 2009 outbound tourism declined by 15.5% to 9.5 million due to global financial crisis. In 2010, the number of Russian passengers travelling abroad soared by 38% in the first 4 months rising to approximately 1.5 million people. Intourist, Russia’s largest operator, reported a threefold increase in the number of Russians buying travel offers in the first quarter of 2010 compared to the same period in 2009.

Outbound Trips The figures include same-day trips – mainly cross-border trips for shopping and shuttle-trading as well as trips by those not classified by UNWTO as ‘tourists’, such as coach drivers and the crews of ships, airlines and rail companies. Holiday trips probably include some travel for business purposes, as visas for business trips are often more difficult to obtain. The average annual growth in total trips from 2003 to 2008 was 12%; that for holiday trips was 15%. Both total and holiday trips are thought to have declined by 18% in 2009.

Central Eastern Europe - Main Outbound Destination

Top non - CIS destinations for 2005-2008 ('000 trips)

Luxury Travel Market Source: ILTM Report The demand for luxury travel is expected to grow, especially in relation to emerging economies, e.g., in the BRIC countries (Brazil, Russia, India, and China). In Europe, the main luxury outbound markets remain the U.K., Germany, France, Italy and Holland. Russia represents the fastest growing market for outbound travel, and Russian tourists demonstrate a preference for leading brands, opulent hotels, and exclusive restaurants. Russians have contributed to the emergence of a luxury segment in new destinations like Montenegro, and have revitalised traditional destinations like the French Riviera and Courchevel Source: ILTM Report

International Tourism Expenditure

Purpose Of Travel Official figures on the purpose of outbound trips are not considered reliable due to the large numbers of business travellers who report that they are travelling for leisure purposes in order to simplify visa and other processes. IPK International’s Russia Travel Monitor suggested in 2006 that holidays account for 56% of total trips, other leisure (including VFR) for 19%, and business travel for 25%. The breakdowns reported by individual destinations vary widely. Main purpose of visit was 47% business (an unusually high proportion), 24% holidays, 19% VFR, 10% study and other(VisitBritain, 2008)

Source Regions More than 40% of all Russian outbound travellers live in Moscow followed by St. Petersburg Demand from big provincial cities such as Yekaterinburg and Novosibirsk had been growing faster than that from the capital, but it suffered more from the economic recession in 2008-09.

Travel Formalities Visas are required by Russians for most countries in Europe and others. Turkey, the leading holiday destination, gives visa-free access for Russians. Croatia, Montenegro and Serbia also have visa-free access for Russians. Israel and Egypt (important competitors for European destinations), among others, also offer visa-free travel or visas on arrival for Russians.

Information Sources Internet - Internet users also prefer personal recommendations for travel information. Word of mouth Travel agents According to travel trade, the main sources of travel information are  printed materials, such as catalogues, booklets and leaflets, outdoor advertising (banners,  billboards), and radio and television.

Booking Methods Russians frequently use the internet to compare prices of flights, hotels and package prices but very few actually book over the internet - partly because e-commerce is still not well developed in Russia and partly because they need the support of travel agents for their visa applications. A small number of Russians do book hotels directly. These tend to be more experienced and independent travellers. A number of surveys in recent years have noted a shift from group to FIT travel. However, many destinations have also reported a shift towards all-inclusive holiday packages over the last five years (from 20% to 54% in Greece and 5% to 17% in Croatia and Montenegro, for instance).

Online Population Internet World Stats puts the number of internet users in Russia at 45.25 mn (32.3% of the population) in December 2009. In December 2008 there were 30.5 mn internet subscriptions (21.5 per 100 inhabitants - compared to 30% in advanced economies), but only 9.3 mn broadband subscriptions (6.6 per 100 inhabitants, compared with the 25-30 in advanced economies). Popular search engines are Yandex and RamblerMedia Russians have become intensive users of social networking sites. ComScore found that in June 2009, of 31.9 mn internet users that month, 18.9 mn (59%) had visited at least one social networking site. The most popular are Vkontakte, Odnoklassiniki, Mail.ru and Fotostrana

Russian Inbound

Foreign Tourist Arrivals (Top 15 Countries) Russia For 2011: Jan – Sep person -times

Foreign Visitors, Different Continents

International Tourism Receipts

Major Tourism Events Intourfest, St. Petersburg www.restec.ru/exhibitions/ INTOURMARKET, Moscow www.itmexpo.ru/en/ Moscow International MICE Forum, Moscow www.miceforum.ru Moscow Boat Show 2013, Moscow www.eng.mosboatshow.ru/ MITT , Moscow www.mitt.ru/ Leisure without borders. Summer, St Petersburg www.old.restec.ru/exhibitions/featured/travelexpo/summer.en.html Horex Siberia, Novosibirsk www.sibfair.ru/en-GB/home/about.../HOREX-Siberia.aspx

Major Tourism Events TOURSIB, Novosibirsk www.toursib.sibfair.ru/eng/ Boat and Yacht Show, Novosibirsk www.sibextreme.sibfair.ru/eng/ Moscow Golf Show, Moscow www.moscowgolfshow.ru/ MITF Moscow, www.zapaday.com/event/66762/1/Mitf.html MIB Expo, Moscow www.mibexpo.ru/en/ Otdykh Leisure, Moscow www.tourismexpo.ru/en/ MATIW-Leisure ,Moscow www.msiexpo.ru/en/leisure/ INWETEX CIS Travel Market, St. Petersburg www.travelexhibition.ru/en/index/

References Goskomstat World Tourism Organisation World Travel & Tourism Council European Travel Commission Euromonitor International Economic Intelligence Unit CIA Factbook

Disclaimer The report is based on the information from the published sources and references mentioned and inferences drawn are from them. Stark Tourism Associates and its parent organization, The Stark Group and the Group Companies - Stark Communications, Stark Expo, Stark World Publications are not responsible for errors/omissions that could have crept in knowingly or unwittingly.