Russian Arrivals To the Asia-Pacific Spike

Russian arrivals to the Asia-Pacific region are soaring on the back of substantial increases in air seat capacity, especially to Vietnam and Thailand.

From May 2018 to April 2019, Russian arrivals to the Asia-Pacific rose 54.5%, far outstripping total international arrivals growth to the region of 3.8%, according to ForwardKeys.

This makes Europe the top growing source for Asia-Pacific, up 6.3% year on year, followed by the Americas, up 4.2%, and Asia-Pacific, up 3.9%, the analytics firm said. Arrivals from the Middle East and Africa to the Asia-Pacific dropped 1.5% during the period.

The huge spike in Russian travelers is propelled by a doubling of direct flights from Russia to Asia-Pacific, with seat capacity increasing by 38% overall, according to ForwardKeys’ vice president, insights, Olivier Ponti.

“Charters and low-cost carriers are driving growth, even though capacities from legacy carriers are also on the rise,” he said.

“In Russia, most economic indicators have improved in the past 12 months. Improving economic conditions make it more likely for people to travel. Many low-cost carriers, and some legacy carriers, have been quick to identify pent-up demand to Asia-Pacific and agile enough to increase seating capacity to destinations like Thailand or Vietnam,” noted Ponti.

Vietnam saw the highest increase in seat capacity, 153%, followed by Thailand and the Maldives, which saw a growth of 125% and 58%, respectively. South Korea and India also saw seat capacity rising by more than 30%.

And those seats were filled by more Russian leisure travelers (up 63%) than Russian business travelers (up 28%), with Russians staying in the region for 16 nights on average.

Vietnam has become a real alternative to Thailand, a long-time Russian haunt, and for reasons other than just more direct air connections from multiple secondary and tertiary cities in Russia to the Asian destination.

The capacity increase is being matched by a lot more rooms in Vietnam, which means cheaper accommodation. Plus, Vietnam is a novelty compared to Thailand, and the flight time is about the same to either.

“Vietnam is certainly going through a tremendous growth in demand from the Russian market,” said Stephan Roemer, CEO of Diethelm Travel Group.

“The country attracts the visitors due to its geographical location and the vast variety of cultural experiences guests can enjoy — it’s so different from north to south — plus it offers great beach holidays, which are a must for most Russian travelers.

“There are continuous openings of new hotels and quality properties all over the country, covering different budgets. Specifically, Phu Quoc has become a very popular charter destination, which immediately brings up the numbers of arrivals.”

Thailand, by comparison, is no longer perceived as a “cheap” destination, especially with the strengthening of the Thai baht, added Roemer.

“Vietnam is seen as a newcomer, where people can get good value for money holidays,” he said. “Majority of Russian travelers who regularly go abroad have been to Thailand at least once or twice, so Vietnam becomes the next alternative destination for them to explore.”

But at this growth rate, will Vietnam go from alternative to mainstream and even topple Thailand as Russians’ favorite destination in Asia-Pacific?

Roemer does not think so. “Vietnam has, of course, all the potential to continue increasing the volume and numbers of Russian tourists, but Thailand will remain the key country in the coming years in volume,” he said.

Comparing apples to apples, however, Vietnam is already on the same par as Thailand with Russian arrivals. Last year, Vietnam received 15.5 million arrivals, of which Russian tourists totaled 606,637, or 4% of total arrivals. Thailand received 38.3 million arrivals, of which a similar 4% are Russians (or 1.5 million). –