People Save by Foregoing Tour Operators Because of Falling Incomes

10 may 2017 | Rossiyskaya Gazeta

In 2016, almost RUB 8.4 trillion worth of paid services were provided to the public in Russia. And this amount remained practically unchanged in 2015-2016 despite the fact that the real household income declined in the same period. However, Russians are not spending on paid services more either. The second half of 2016 saw some barely detectable signs that demand was recovering but this was followed by a new slump in demand in Q1, 2017. Thus, Russians kept going on vacations, but they began foregoing the services of tour operators. The amount of tour operator services provided to the public in 2016 was 16.6 % less than in 2013, Analytical Center experts note in their bulletin on the Public Demand for Paid Services.

Alexander Golyashev
Alexander Golyashev
Department for Expert Analytics

"As household income continues to fall people are foregoing tour operator services, planning their trips on their own," Analytical Center expert Alexander Golyashev said in an interview to a Rossiyskaya Gazeta correspondent. As a result demand has soared for hotel reservations, which people are now making on their own.  "The trend towards planning their own trips among Russians is very well illustrated by the fact that demand for hotel reservations went up 8.1 % in 2016 while demand for tour operator services fall by 8.2 %. Another factor that urged people to opt for planning their own trips was the temporary closure of the main tourist destinations that offer all-included trips, namely Turkey and Egypt," the analyst said. 

Since 2014 consumer spending on paid medical services has not been growing either; however, people are still buying them.   "The main consumers of paid medical services are the 20-40 % of the more affluent Russians as they are the ones that can afford to buy better quality private medical services instead of having to use the poorer quality health care provided by the state," Mr. Golyashev explained. 

2014-2016 also saw consumer spending on education services decline, even though in this area the decline was rather modest at just 2-3 %.