Russian travel industry’s losses from the coronavirus outbreak reach $30 bln – expert

The Russian tourism market is in a critical state, with several destinations now closed, reservations getting canceled, and customers asking tour operators for refund.

The losses incurred by Russian tour operators have exceeded $30 bln and continue to grow with the further spread of the coronavirus, President of the Rustime association for the protection of the rights and interests of timeshare product owners and timeshare industry participants Anna Vinogradova said.

The expert has analyzed the recent changes in the most popular tourist destinations. With Italy and Turkey out of bounds, tourists are increasingly choosing Malta, but this tiny island nation in the Mediterranean Sea cannot handle more than 3-5% of the Russian tourist flow to popular resorts.

“It is difficult to predict price changes yet, but, as we know, demand creates its own supply, and this situation is unlikely to involve any dumping, so we will not see lower price offers for popular destinations. On the contrary, tour operators would rather raise prices of Malta tours to compensate for their earlier losses,” Anna Vinogradova said.

According to the expert, Russian outbound tourism may suffer even more seriously depending on the spread of the coronavirus. If the situation does not change soon, and there is an immediate threat of catching the infection outside Russia, the bulk of potential tourists will stay at home.

However, as some epidemiologists estimate, if the coronavirus situation is taken under control by April-May, the markets will begin to recover rapidly, eager to compensate for the losses. Consumer interest may revive just as fast – people would be tired of being scared, and many would venture abroad, triggering a sharp increase in demand.

“With this scenario, we also expect prices to rise to a level exceeding last year’s by tens of percent,” Anna Vinogradova says. “The average annual market turnover will quickly regain last year’s level.”

In any case, the expert believes, the tourist flow will probably take at least 6-8 weeks to recover after the infection is contained and eliminated. The process would perhaps take even longer – up to six months, she added.

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