As the flow of tourists out of the country dries up, European hoteliers are turning to Brits to make up the shortfall
A spate of four travel firm collapses in the past three weeks has left more than 50,000 tourists stranded overseas. Luckily, this problem is not the UK’s, however, but Russia’s, where five of the country’s tour operators have folded this summer alone.
The most recent collapse last week, of travel firm Labirint, meant that up to 27,000 Russian consumers were stranded in countries including Turkey, Bulgaria and Egypt. While further sanctions from the US and the EU in the wake of last month’s MH17 tragedy are yet to bite, it seems the crisis in Ukraine is already making itself felt in Russia.
A sharp decline in the rouble’s value and a growing belief that a domestic holiday is the patriotic thing to do are now playing havoc with the fortunes of the country’s outbound tourism industry. And that it is presenting the UK travel industry with opportunities in some of the most popular European summer destinations.
Two months ago, Kirker Holidays managing director Ted Wake predicted that luxury hotels would be beating a trail to British tour operators with offers of stock that previously would have gone to the Russian market, where higher rates are paid.
This prophecy is now being fulfilled, he says, with an increase of up to 40% in offers from the operator’s top hoteliers leading to a 15% rise in business for Italy since July 1. Business to France has also grown between 8% and 10% in the same period.
“It’s proved to be the catalyst for a significant increase in demand,” Wake says. “There’s no question that there’s a notable rise in demand from [UK] consumers who are growing in confidence as the economy settles down.”
He adds that the offers are typically for a free extra night, which Kirker is continuing to see being made available throughout September and October. “It is so important to maintain momentum in terms of the travel sector and this is a fantastic way to do it,” Wake adds.
"We’ve been getting a lot of offers where the Russian market is very strong, particularly around Cyprus and Turkey"
Classic Collection deputy managing director Matt Rice agrees, claiming that he has seen a 40% increase in offers from hoteliers as a result of problems in the Russian market.
He adds: “We have been getting a lot more offers, in particular where the Russian market is very strong and particularly around Cyprus and Turkey in Antalya and Belek.
“There has become more room availability in Turkey… that is good from the British point of view.”
He points out that as a result, the lates market is being stimulated not just by the pricing but by the fact that certain room types, such as family rooms, are becoming available.
The reduction in the number of Russian tourists, Rice says, is a mixed blessing for hoteliers, who appreciate the higher rates they pay but are less pleased that they tend to holiday only in July and August, missing out the valuable shoulder seasons.
But he warns that it is not all positive news for the UK market. “Long term it is not good for hoteliers as some are getting a bit twitchy about payment,” he says.
Meanwhile, Sunvil managing director Chris Wright admits that the move has helped drive the operator’s late flight-only business, with the sudden arrival of large amounts of available bed stock meaning customers are dynamically packaging their own last-minute trips.
The situation has also had a more far-reaching impact than just on the lates market. “Some of the hotels that we feature had decided to put their rates up hugely for 2015 and they’re starting to realise that’s not possible,” Wright adds.
Anatolian Sky managing director Akin Koc however is less excited by the extra capacity on offer. He admits that although he has seen the impact that the collapse in the Russian market has had on the Turkish hoteliers, he is wary of setting up new partnerships with those suddenly feeling the pinch.
“I’m interested in a stable relationship with a stable hotelier who really appreciates having my business,” he insists. “They can offer you something now, but if Russia recovers tomorrow, then they will stop offering the deals and that’s why I won’t work with them.”