Russia's tourism market reaches $42 billion

According to a report by TürkRussia, based on research by IncRussia, the tourism sector in Russia is as complex as a Swiss watch, with its complex structure, regulations, and financial obligations. Seven main tour operators, known as the "Big Seven," control 90% of the international holiday market. These companies are FUN&SUN, Anex Tour, PEGAS Touristik, Coral Travel, Sunmar (a sub-brand of the Coral Group), Biblio-Globus, and Intourist. These companies will control approximately 90% of the organized international travel market by 2024. These seven companies have established a robust infrastructure in destinations such as Turkey, Egypt, the UAE, and Thailand, including hotel blocks, charter flights, and local partner networks. Each of these companies operates with 15,000 to 18,000 affiliated tour agencies, controlling the market through a broad reseller network rather than direct sales. With access to Europe restricted after 2022, Russian tourists will shift their focus to Turkey, Egypt, the UAE, and Southeast Asia. Due to rising prices, bank card restrictions, and a decline in direct flights, interest in organized tours has increased, while the share of individual trips has fallen from 60% in 2019 to 33%. According to tourism laws, only tour operators can sell package tours, while tour agencies can market these products for a commission. The insurance liability alone for an operator focusing on international tourism ranges from 10 to 50 million rubles ($110,000–$550,000). They are also required to contribute 1% of their annual turnover to a personal liability fund and integrate with the state's electronic travel system. These requirements are less stringent for operators focusing on domestic tourism. There are over 4,300 registered domestic tourism operators across Russia, but the majority are local and very small businesses. In 2024, Russian citizens made over 29 million trips abroad. Approximately 14 million of these trips were for tourism purposes. Two-thirds of these trips were made through tour operators. The volume of international tourism reached approximately 1.25 trillion rubles (approximately $14 billion). The average per capita expenditure was 89,000 rubles ($1,000). In the same year, 85.5 million trips with hotel accommodations were recorded in domestic tourism. The domestic tourism market reached a total volume of 2.5 trillion rubles (approximately $28 billion). Automotive tourism is on the rise: for example, 70% of tourists visiting Anapa and 85% of those visiting Crimea during the summer season used personal vehicles. While the share of organized travel in domestic tourism is increasing, individual bookings and direct hotel or airline ticket purchases still dominate. Leading domestic tourism operators include Biblio-Globus, Delfin, and AleAn, while foreign players such as Anex, Coral, and PEGAS are also increasing their influence in the domestic market. However, the combined market share of all major companies does not exceed 35%. The remaining share is shared by hundreds of local, small, and medium-sized companies. According to the research, this growing market creates significant opportunities for small businesses. Online tour agencies, regional transfer and accommodation services, agricultural and culinary tourism, boutique hotel management, and nature-based glamping projects are prominent areas. Furthermore, digitalization makes it easier for local entrepreneurs to reach customers directly through social media and web-based sales. Well-located small hotels, restaurants featuring local cuisine, and unique tour concepts offer significant revenue potential by appealing to a high-average spending customer segment.