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Viewing cable 09MOSCOW838, RUSSIAN TRAVEL AGENCIES LOOK TO THE MEDIUM- TO LONG-

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Reference ID Created Released Classification Origin
09MOSCOW838 2009-04-02 09:28 2011-08-24 01:00 UNCLASSIFIED Embassy Moscow
R 020928Z APR 09
FM AMEMBASSY MOSCOW
TO SECSTATE WASHDC 2682
INFO AMCONSUL ST PETERSBURG 
AMCONSUL VLADIVOSTOK 
AMCONSUL YEKATERINBURG 
AMEMBASSY WARSAW 
AMEMBASSY KYIV 
AMEMBASSY TALLINN 
AMEMBASSY HELSINKI 
AMEMBASSY TALLINN 
AMEMBASSY RIGA 
AMEMBASSY VILNIUS 
AMEMBASSY OSLO 
AMEMBASSY LONDON 
AMEMBASSY ANKARA 
AMEMBASSY CAIRO 
AMCONSUL ISTANBUL 
AMEMBASSY ABU DHABI 
AMEMBASSY BANGKOK 
AMEMBASSY TUNIS 
AMCONSUL DUBAI
UNCLAS MOSCOW 000838 
 
 
FOR CA, CA/VO, CA/OCS, AND EUR/RUS 
 
E.O. 12958:  N/A 
TAGS: CVIS PGOV BEXP EIND RS
SUBJECT:  RUSSIAN TRAVEL AGENCIES LOOK TO THE MEDIUM- TO LONG- 
TERM FOR GROWTH IN TRAVEL TO UNITED STATES 
 
1. (U) Summary:  Russian travel agencies who sell trips to 
America remain optimistic about their medium- to long-term 
business prospects despite the recent, marked decline in 
airline passenger volumes.  While conceding that their numbers 
will not be as strong as they were in 2008, particularly among 
corporate clients, the agencies we spoke with feel Russian 
tourists increasingly appreciate the customer service, value 
for money, and prestige an American vacation represents.  As 
proof of this, Russian agencies, spurred by FCS advocacy, 
easily filled the country's participation quota at an upcoming 
U.S. travel industry event in Miami.  Although many Russian 
tourists still prefer the security and ease of booking 
packaged travel through an agency, particularly for popular 
sun-and-beach destinations catering to the Russian market, 
they also appear open to the myriad opportunities travel to 
the United States offers.  End Summary. 
 
2. (U) In recent years, Russian tourism to the United States 
has increased markedly.  B1/B2 visa applications in Moscow are 
indicative of this trend: 65,930 in 2006; 76,657 in 2007; and 
96,224 in 2008.  In the past few months, however, tourism has 
been hit by the overall decline in economic activity, with 
2009 B1/B2 visa applications in Moscow down 11 percent to 
date. 
 
3. (U) Russian airline passenger numbers also fell sharply in 
January 2009, the most recent month for which statistics are 
available.  According to the Russian Federal Agency for Air 
Transportation's website, airlines' passenger volume for the 
month was down 16.7 percent from January 2008.  In 2008, 
airlines flying out of Russia transported 49.8 million 
passengers, 10.4 percent more than in 2007.  Although exact 
figures are unavailable for travel to the United States, the 
agencies we spoke with indicated that corporate travel, 
business incentive travel in particular, has declined much 
further and faster than tourist travel. 
 
And The Survey Says 
------------------- 
 
4. (U) To better understand Russian travelers and their travel 
patterns, we recently surveyed several travel agencies in 
Moscow (America Travel, Holiday Time, KMP Group, and Holiday- 
M), which sell tours to the United States. In addition to 
discussing these issues, we also asked them how the current 
economic situation is affecting their business.  Despite the 
recent decline in business, the agencies? representatives 
remained upbeat with regard to medium term prospects.  With 
anywhere from two to fifteen years? experience selling their 
clients travel to the United States, the agencies also were 
very optimistic about the longer term prospects for growth in 
the number of Russian tourists going to the United States. 
 
5. (U) The key findings of our research are the following: 
 
-- The most popular U.S. destinations for Russian tourists are 
New York, Miami, Las Vegas, Los Angeles, and Hawaii, for 
anywhere from 7 to 21 days. Cruise packages are popular, and 
are often combined with one or two weeks of mainland travel. 
 
-- Russian tourists travel to the United States because they 
have already been to Turkey, Egypt, and other sunshine 
destinations and wish to experience more than relaxing on a 
beach. 
 
-- Many Russian tourists still consider travel to the United 
States exotic and prestigious, in part because it remains 
beyond the financial reach of much of the traveling populace. 
Increasingly, however, and for repeat tourists in particular, 
travel in the United States represents an excellent value-for- 
money proposition both in terms of customer service and 
shopping bargains. 
 
-- 2008 was a boom year for Russian tourism to the United 
States, with travel agencies experiencing traveler and revenue 
growth of 20 to 50 percent over 2007 figures.  At present, the 
companies we spoke with forecast their numbers would be down 
on 2008 but no worse than in 2007. 
 
U.S. Travel Trade Show Attracts Russian Interest 
--------------------------------------------- --- 
 
6. (U) Local travel agents are attuned to this burgeoning 
market.  The Foreign Commercial Service in Moscow succeeded in 
recruiting 27 Russian delegates for the U.S. industry's major 
travel and tourism event, International Pow Wow, that will be 
held in Miami from May 16-20.  Attendance from Russia would 
have been even higher considering the numerous expressions of 
interest and inquiries but the show organizer limited the 
delegation size based on previous years' attendance.  The last 
delegation that FCS organized was in 2007 and it totaled 20 
participants.  The high level of interest among Russian tour 
operators and travel agents in this major U.S. industry trade 
show that features U.S. destinations, lodgings, and services 
for the tourism industry is indicative of the attraction that 
the U.S market has for Russian tourists. The Russian travel 
agents participating in the event are paying their own way, at 
$995 per person (with a discounted rate of $695 for Early 
Birds). 
 
Visa-Free and Beachfront: Catering to the Russian Market 
--------------------------------------------- --------- 
 
7. (U) According to a recent report issued by the European 
Travel Commission, most of the travel growth out of Russia in 
the last four to five years has been for sun-and-beach 
destinations, notably Turkey and Egypt, both of which are 
increasingly sold on a year-round basis.  At the same time, 
destinations that have attracted consistent growth are those 
for which no visas are necessary, or which offer visas on 
arrival, such as Turkey, Egypt, Dubai, Tunisia, and Thailand 
(although, this year tour travel to Egypt and Turkey is down 
significantly ? 40 percent or more).  Many trips are decided 
and booked at the last minute so Russians, notoriously late 
bookers, prefer to avoid the possible hassle of applying for 
visas.  That said, for other destinations such as the United 
Kingdom (and, presumably, the United States), Russians plan 
ahead because they know they will need to obtain visas. 
Current visa requirements undoubtedly discourage some Russian 
tourists from traveling to the United States. 
 
Thoughts on Current and Future Trends 
------------------------------------- 
 
8. (U) Embassy Moscow anticipates resumed strong growth in 
B1/B2 visa demand in Moscow once economic recovery sets in. 
At over 96,000, B1/B2 visa applications in CY 2008 were 26 
percent higher than in CY 2007 (which saw an increase of 16 
percent over CY 2006).  Despite a slump for the first three 
months of this year, which showed an 11 percent drop in B1/B2 
visa applications and thus indicates a strong probability of a 
decline for 2009 overall, post anticipates that there will be 
a return to growth in annual B1/B2 visa applications in the 
medium to long term, once Russia?s commodity-dependent economy 
recovers from the current global downturn.  Such a future 
upward trend in B1/B2 visa applications would reflect what 
post has seen in years past when the number of visa issuances 
here went through troughs that coincided with hard times, for 
example in 1998 (following the mid-1998 crisis) and 2002. 
 
9. (U) Comment:  Despite current economic worries and the 
recent downtick in airline travel numbers, the United States 
is an attractive tourist destination for many middle to upper 
class Russians, and could become even more so in the future. 
Once the economic situation here improves, the United States 
seems well-positioned to benefit from an influx of Russian 
tourists.  As more Russian tourists travel to the United 
States and return to Russia to share their positive 
experiences with others, we expect more and more Russians to 
vacation in the United States.  End Comment. 
 
BEYRLE