Russian Toursim Market Report July 2013

Russia Outbound Tourism
Market Report
July 2013
by
Unique Hotels Marketing
2013
Moscow, Russia

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Contents
Overview...........................................................................................................................4
SWOT................................................................................................................................5
Strengths............................................................................................................................5
Weaknesses........................................................................................................................5
Opportunities.....................................................................................................................5
Threats...............................................................................................................................5
Macroeconomic Data......................................................................................................6
GDP Growth.......................................................................................................................6
Export And Import.............................................................................................................6
Industrial Production.........................................................................................................8
Retail Sales.........................................................................................................................8
Unemployment Rate..........................................................................................................9
Population Income Structure...........................................................................................10
Top 50 Outbound Tourism Destinations — 2012.............................................................13
Top 50 Outbound Tourism Destinations — 1st Quarter 2013..........................................14
Market News by Trend..................................................................................................15
Russian Airports Reach Capacity Limits..........................................................................15
Domodedovo Delays Flights........................................................................................................................15
Vnukovo And Domodedovo Raise Rates......................................................................................................15
Chelyabinsk Airport Expands......................................................................................................................15
St Petersburg Pulkovo Airport Optimizes Passenger Flows ........................................................................16
Tour Operators Bankruptcies Continue...........................................................................17
Sinyaia Ptitsa Stops Operations.................................................................................................................17
Ascent Travel Announces Stop Of Operations.............................................................................................17
Changes of Visa Regime...................................................................................................18
Pilot Project Of Passports With Fingerprints Launched In Moscow............................................................18
Fiji Abolished Visas For Russian Tourists...................................................................................................18
The Hungarian Consulate Will Reduce the Number Of Accredited Tour Operators ....................................18
Poland Changed Visa Issuing Rules............................................................................................................19
Kosovo Announced Visa Regime For Citizens Of Russia..............................................................................19
Italian Visa Will Be Easier For Citizens Of St. Petersburg...........................................................................19
Italy Announces Annual Multivisas ............................................................................................................19
Visa To Bulgaria Becomes More Expensive ................................................................................................20
First Results Of Croatia New Visa Regime..................................................................................................20
Russian Debtors Released Abroad..............................................................................................................20
15 Days Maximum Stay Without Visa In Vietnam Re-Confirmed...............................................................20
Portuguese Visas Are Issued One Day Before Departure.............................................................................21
Announced Flights...........................................................................................................22
Sunrise Tour Wins Airflot Winter Flight To Innsbruck................................................................................22
Transaero Airlines Opens Regular Flights To Turkey..................................................................................22
TUI Russia Announced Skiing In Czech Republic........................................................................................22
Biblio Globus Extended Charter To Jamaica...............................................................................................23
Mahan Air Starts St. Petersburg - Tehran Flights.......................................................................................23
Biblio Globus Introduced New Czech Republic Destinations.......................................................................23
Pegas Touristik Returns To Sales Of Sardinia. ...........................................................................................23
Pegas Touristik Launches Direct Flights To Vietnam From St. Petersburg..................................................24
RUSSIA OUTBOUND TOURISM MARKET REPORT, © Unique Hotels Marketing, July 2013, gm@uniquehotels.ru

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Transaero Received Permission To Fly To Dubai From Eight Regions.........................................................24
Low-Costers Enter Russian Market..................................................................................25
Wizz Air Will Launch Flights To Budapest..................................................................................................25
Aeroflot Will Create Its Low-coster ............................................................................................................25
Growing Destinations......................................................................................................27
Increasing Flow Of Russian Tourists To Georgia ........................................................................................27
Cyprus Arrivals From Russia Continue To Grow.........................................................................................27
The Russians Show Record Growth For Abu Dhabi ....................................................................................27
Biblio Globus Arrivals To Rhodes Grew By 58% .........................................................................................28
Tourist Flow To Crete Grows By 49%..........................................................................................................28
Tourist Flow To Spain Increased by 34% ....................................................................................................28
General News...................................................................................................................30
Russian Travel Agents Prefer Social Media Marketing................................................................................30
Workshop By Mauritius Tourism Promotion Authority In Moscow.............................................................30
Flight Rates Don't Decrease Despite The Increasing Number Of Carriers...................................................31
Biletix And Svyaznoy Travel Became Partners............................................................................................31
St. Petersburg Tour Operators Cancel Charters .........................................................................................31
Siberia Notes Supply And Demand Balance In Greece................................................................................32
Transaero And UTair Became Strategic Partners........................................................................................32
Development Of the Aviation Industry Until 2015 ......................................................................................32
Yandex Launches Tours Search...................................................................................................................33

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Overview
Crisis and recession in Eurozone consequences are seen now in slowdown of Russian
economy due to lowered demand for hydrocarbon resources estimated at 70% of export of
the country. Considering the influence Russia has on the neighboring economies it's
obvious that it will be negative for the region in the whole, however for the countries rich
in natural resources, such as Turkmenistan, Kazakhstan and Azerbaijan, the impact will be
less.
The slowdown is not only caused by the external market situation, but also by the internal
economical flaws, main being infrastructure limitations, low production efficiency and
expensive financial instruments. Current development programs signed by the
Government have their goal to relaunch the transport infrastructure of the country.
In terms of local aviation, the main processes approved by the Government are
modernization of the airports to eliminate current capacity limits (reconstruction of
airports in Saratov, Vladivostok, Chelyabinsk, St Petersburg, Samara, Irkutsk, Lipetsk,
Moscow Air Hub development), liberalization of the flights approving legal measures for
the low-cost transportation.
In the same time to reduce transportation costs increasing economical efficiency of
internal processes the authorities continue development of land transportation
infrastructure: high-speed railways and road network.
For the outbound tourism industry these processes seem to be a cure for the problem of
drastically centralized flight routes with very limited offer of outbound flights from major
cities except Moscow. Also the development of Moscow Air Hub and local transportation
will serve for increase of choice of flight routes and destinations for the regions of Russia.
Other major trend affecting the outbound tourism is the changes in visa regime with
number of countries. Although current political situation between Russia, US and
European Union doesn't lead directly to abolition of visas that could drastically affect the
incoming tourism of currently visa countries, the simplification of visa procedures for
Russian citizens is an obvious trend.
In general the tourism industry in Russia follows the consolidation trend, with continuing
bankruptcies of tour operators, other tour operators leaving the industry due to new legal
regulations (e.g. Tourpomosh' mandatory participation), or focusing on FIT sales. With the
growing penetration of internet sales via OTAs or direct sales by the hotels and air
carriers, the overall market volume for tour operators seems stagnating if not shrinking.
Outbound tourism for the country seems to continue growing as despite the general
economy situation, the incomes are still growing, the unemployment rate is declining and
share of savings and currency purchase in private expenses is lowering showing general
confidence.

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SWOT
Strengths
• Large domestic market
• Political stability with strong parliamentary majority of the government
• Economical stability with large resource base as a key factor
• Declining foreign dept, high reserve holdings, current account surplus
Weaknesses
• Country dependence on the oil export and international hydrocarbon market
• Corruption making barriers for business and causing low production efficiency
• Growing state influence over business
• Development disparity between Moscow and other parts of Russia
• Underdeveloped and expensive local transportation
• Infrastructural limitations to transportation
• Visa regime with multiple countries complicating transits and limiting the choice
of travel routes
Opportunities
• Reform turn to non-oil economy
• Bank sector actions making financial instruments more affordable
• Support and liberalization of small and medium sized business
• WTO accession improving operational transparency
• Priority of fighting corruption declared by the government
• Modernisation of airports, railways road network, infrastructure investment
• Simplification or elimination of visa regime with partner countries
• Regional development
Threats
• Continuing world market recession affecting hydrocarbon market and export
income of the country
• Change of economical course to investment causing challenges to stability
• Tough foreign policy causing tension in visa negotiations

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Macroeconomic Data
GDP Growth
Russia's economic growth is expected to slow to 2,4% in 2013 in comparison with 3,4%
annual growth in 2012 following decline of hydrocarbon prices. According to Federal State
Statistics Office and Ministry of Economic Development data year on year growth in first
two quarters slowed down to 1,6% and 1,2% respectively.
Export And Import
2008M1
2008M4
2008M7
2008M10
2009M1
2009M4
2009M7
2009M10
2010M1
2010M4
2010M7
2010M10
2011M1
2011M4
2011M7
2011M10
2012M1
2012M4
2012M7
2012M10
2013M1
2013M4
-60
-40
-20
0
20
40
60
80
100
Exports, Imports, % chg y-o-y
Export Import
2008Q1
2008Q2
2008Q3
2008Q4
2009Q1
2009Q2
2009Q3
2009Q4
2010Q1
2010Q2
2010Q3
2010Q4
2011Q1
2011Q2
2011Q3
2011Q4
2012Q1
2012Q2
2012Q3
2012Q4
2013Q1
2013Q2
-15
-10
-5
0
5
10
15
GDP, % chg y-o-y

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2008M1
2008M4
2008M7
2008M10
2009M1
2009M4
2009M7
2009M10
2010M1
2010M4
2010M7
2010M10
2011M1
2011M4
2011M7
2011M10
2012M1
2012M4
2012M7
2012M10
2013M1
2013M4
0
20
40
60
80
100
External Turnover and Merchandise Trade Balance, USD bn
External Turnover Merchandise Trade Balance
2008M1
2008M4
2008M7
2008M10
2009M1
2009M4
2009M7
2009M10
2010M1
2010M4
2010M7
2010M10
2011M1
2011M4
2011M7
2011M10
2012M1
2012M4
2012M7
2012M10
2013M1
2013M4
0
20
40
60
80
100
120
140
Urals Oil USD/barrel

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Industrial Production
Retail Sales
2008M1
2008M4
2008M7
2008M10
2009M1
2009M4
2009M7
2009M10
2010M1
2010M4
2010M7
2010M10
2011M1
2011M4
2011M7
2011M10
2012M1
2012M4
2012M7
2012M10
2013M1
2013M4
-20
-15
-10
-5
0
5
10
15
Industrial Production, % chg y-o-y
2008M1
2008M4
2008M7
2008M10
2009M1
2009M4
2009M7
2009M10
2010M1
2010M4
2010M7
2010M10
2011M1
2011M4
2011M7
2011M10
2012M1
2012M4
2012M7
2012M10
2013M1
2013M4
-15
-10
-5
0
5
10
15
20
25
Retail Sales, % change y-o-y

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Unemployment Rate
2008M1
2008M4
2008M7
2008M10
2009M1
2009M4
2009M7
2009M10
2010M1
2010M4
2010M7
2010M10
2011M1
2011M4
2011M7
2011M10
2012M1
2012M4
2012M7
2012M10
2013M1
2013M4
0,0
1,0
2,0
3,0
4,0
5,0
6,0
7,0
8,0
9,0
10,0
Unemployment Rate %
2008M1
2008M4
2008M7
2008M10
2009M1
2009M4
2009M7
2009M10
2010M1
2010M4
2010M7
2010M10
2011M1
2011M4
2011M7
2011M10
2012M1
2012M4
2012M7
2012M10
2013M1
2013M4
-8,0
-6,0
-4,0
-2,0
0,0
2,0
4,0
6,0
8,0
10,0
12,0
Consumer Services Total, % chg y-o-y

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Population Income Structure
2008Q1
2008Q2
2008Q3
2008Q4
2009Q1
2009Q2
2009Q3
2009Q4
2010Q1
2010Q2
2010Q3
2010Q4
2011Q1
2011Q2
2011Q3
2011Q4
2012Q1
2012Q2
2012Q3
2012Q4
2013Q1
0
10
20
30
40
50
60
70
80
90
Private Expenses Structure
Products and Services Mandatory Payments Savings Currency Purchase
2,20%3,70%
7,00%
12,10%
18,80%
25,30%
13,30%
17,00%
Population by per capita income
110$ and less
110$ — 150$
150$ — 210$
210$ — 300$
300$ — 450$
450$ — 750$
750$ — 1060$
1060$ and more

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1 - 5,20%
2 - 9,80%
3 - 14,90%
4 - 22,50%
5 - 47,60%
Population groups by income 20%
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
0,36
0,37
0,38
0,39
0,4
0,41
0,42
0,43
Gini Index
Gini Index

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1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
0
2
4
6
8
10
12
14
16
18
Income Disparity Index
Income Disparity Index

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Top 50 Outbound Tourism Destinations — 2012
1 TURKEY 26 CROATIA
2 EGYPT 27 NETHERLANDS
3 CHINA 28 KOREA, REPUBLIC OF
4 THAILAND 29 LATVIA
5 SPAIN 30 CUBA
6 GERMANY 31 QATAR
7 GREECE 32 POLAND
8 ITALY 33 BELGIUM
9 UAE 34 KAZAKHSTAN
10 FINLAND 35 MEXICO
11 CYPRUS 36 HONG KONG
12 BULGARIA 37 ARMENIA
13 CZECH REPUBLIC 38 MALDIVES
13 UKRAINE 39 AZERBAIJAN
15 FRANCE 40 LITHUANIA
16 AUSTRIA 41 HUNGARY
17 ISRAEL 42 NORWAY
18 TUNISIA 43 ESTONIA
19 MONTENEGRO 44 PORTUGAL
20 SWITZERLAND 45 INDONESIA
21 UNITED KINGDOM 46 MOLDOVA, REPUBLIC
22 VIETNAM 47 SWEDEN
23 DOMINICAN REPUBLIC 48 DENMARK
24 UNITED STATES 49 SERBIA
25 INDIA 50 JAPAN
2 516 136 108 715
1 906 637 93 208
1 328 850 92 417
885 113 92 185
792 084 62 162
713 096 53 906
690 412 48 855
570 764 43 475
549 382 43 411
512 547 43 407
404 741 40 927
389 424 40 509
379 723 39 153
315 843 35 831
299 313 33 458
219 408 33 423
219 019 30 703
207 545 30 337
192 382 29 902
177 508 29 647
163 964 29 437
149 711 28 978
141 177 25 933
134 536 25 746
109 338 24 778
1995 2000 2005 2010 2011
0
2000
4000
6000
8000
10000
12000
14000
16000
Total Outbound Tourism Travels, thousand

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Top 50 Outbound Tourism Destinations — 1st
Quarter 2013
1 EGYPT 26 LATVIA
2 THAILAND 27 HONG KONG
3 FINLAND 28 CUBA
4 CHINA 29 MALDIVES
5 UAE 30 QATAR
6 GERMANY 31 GREECE
7 ITALY 32 ESTONIA
8 TURKEY 33 MONTENEGRO
9 CZECH REPUBLIC 34 POLAND
10 SPAIN 35 BELGIUM
11 FRANCE 36 INDONESIA
12 INDIA 37 SWEDEN
13 AUSTRIA 38 HUNGARY
13 VIETNAM 39 JAPAN
15 SWITZERLAND 40 ARMENIA
16 DOMINICAN REPUBLIC 41 AZERBAIJAN
17 ISRAEL 42 DENMARK
18 UNITED STATES 43 SINGAPORE
19 UNITED KINGDOM 44 NORWAY
20 UKRAINE 45 SERBIA
21 BULGARIA 46 KAZAKHSTAN
22 KOREA, REPUBLIC OF 47 PORTUGAL
23 NETHERLANDS 48 SLOVENIA
24 MEXICO 49 MOROCCO
25 CYPRUS 50 MOLDOVA, REPUBLIC
575 312 19 454
379 825 17 805
259 089 17 056
227 627 15 558
218 092 15 535
202 939 14 121
150 038 11 110
106 718 10 191
101 933 9 995
101 766 9 242
88 702 8 918
84 098 8 839
79 446 8 804
61 958 7 594
60 907 6 925
56 631 6 027
52 419 5 935
38 683 5 767
36 439 5 567
34 347 5 388
31 275 4 827
30 000 4 414
25 374 4 349
21 782 4 068
21 261 3 874

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Market News by Trend
Russian Airports Reach Capacity Limits
Domodedovo Delays Flights
Moscow Domodedovo airport faced deviation from the flight schedules in June. The reason
for the delay of flights was an increased load on the airport because of high holiday
season, which coincided with failures of the catering production and logistics system
software.
Operation of the system has been fully restored, but the cumulative adjustment in the
schedule shipment of food, which coincided with the peak period of the airport traffic
before the weekend in the summer season, have led to the total deviation from the flight
schedules.
Flight schedule was generally normalized and the airport continued to work in normal
mode, in full compliance with the schedule. The management of Domodedovo reports to
take all necessary measures to prevent the occurrence of such in the future.
Vnukovo And Domodedovo Raise Rates
The Federal Tariff Service has agreed to increase airport charges at Domodedovo and
Vnukovo. They will grow by 8,8% in Domodedovo, and by 7,8% in Vnukovo. Domodedovo was
requesting a 15 percent increase but received only 8%.
Sheremetyevo airport is content with the existing rate. Thus, right now it is the cheapest
airport of the Moscow aviation hub.
According to experts, the rate increase is not likely to significantly change the flight rates.
Chelyabinsk Airport Expands
Chelyabinsk airport plans to open a new departure hall of the international lines by
September. Construction and finishing works are completed, the airports tests equipment
and prepares documentation necessary for the start of operation.
The measures will increase the space by 600 square meters, renovated hall can fit 500
passengers.
All rooms will be equipped with modern air conditioning and ventilation, with enclosed
smoking area. Duty Free shopping area will grow to 210 square meters.
As a result of the reconstruction, the hall will be more comfortable for passengers with
reduced mobility due to new ramps, dedicated dressing room, special seating.
The renovation will complete the first phase of the reconstruction of the international
sector of the Chelyabinsk airport. The second phase is planned to update the arrival hall of

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the international airlines.
St Petersburg Pulkovo Airport Optimizes Passenger Flows
While the St Petersburg Pulkovo airport is finishing the new centralized passenger
terminal, old Pulkovo-1 and Pulkovo-2 are being optimized to fit the requirements of high
season.
The airport added ten passport control booths and self check-in terminals, thus, compared
to the previous season, now Pulkovo-2 serves up to 600 people per hour more and Pulkovo-
1 has increased its capacity by 400 people per hour.
Commercial area was reduced in both terminals, and gave space to 2 additional gates.
Pulkovo-2 now has a temporary 600 square meter lounge where passengers who just
arrived can wait for their turn for the passport control. It is equipped with seats, air
conditioning and drinking water coolers with maximum capacity of 500 passengers.
Pulkovo-1 mounted two interactive navigation stands in the registration hall showing
location of all services of the terminal.
The number of vans plying between Pulkovo-1 and Pulkovo-2 has risen for comfort of
transit passengers .
Also Pulkovo has increased the number of staff that helps passengers navigate the airport
services.
The new terminal of Pulkovo is designed as a complex of buildings: a three-story
main building, North Landing Gallery, tiered parking ramp exit to the terminal,
pre-terminal rink, hotel and business center.
Total area of these buildings will be 150,000 square meters exceeding five times
the area of Pulkovo-1 and Pulkovo-2 together.
It is expected that the first passengers will be able to take advantage of the new
Pulkovo in December of this year.
After the launch of the centralized terminal Pulkovo-1 will be closed for
reconstruction. On its completion the airport will re-open, not as an independent
entity but as a part of the new terminal. Over time, the same will be done with
Pulkovo-2.

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Tour Operators Bankruptcies Continue
Sinyaia Ptitsa Stops Operations
About 600 tourists affected as a result of the stop of operations of Sinyaia Ptitsa (“Blue
Bird”) tour operator. According to market players, it is a small company, and insurance
coverage is enough for all travelers involved. The tour operator was specializing in medical
tourism to nearby Belarus.
Ascent Travel Announces Stop Of Operations
The group of companies operating under Ascent Travel brand suspended its activities by
technical and economic reasons on July 22, 2013.
Financial liability of the company is insured by Alfa Insurance and Insurance Company
Pomosh' for the total amount of 167 million rubles. According to Ascent Travel, to the
moment of suspension 1342 tourists of the company stayed abroad.
The company worked in the travel business since 1992. During 2012 the company has
served more than 100,000 tourists. Ascent Travel had its branches in St. Petersburg,
Yekaterinburg, Novosibirsk, Kazan, Nizhny Novgorod and representative offices in Croatia,
Montenegro, Italy, Austria, Finland. The main summer destinations were Croatia,
Montenegro, Italy, France, as well as fishing trips to Finland and Norway, and medical
tourism on European lakes in Austria, Italy, Switzerland and Slovenia.
Until the spring 2012 Ascent was a member of the Swiss Hotelplan Group, that sold its
share to a Russian investor. According to unofficial information, the shares were
purchased by one of the Russian banks.
Experts consider several reasons for the stop of operations acting simultaneously.
The main destination of the company was Croatia, which required visa for Russian
citizens since April 2013, that limited the demand instantly.
In the same time, tour operators working on the destination held the same amount
of accommodation following quite stiff contract conditions with Croatian hotels.
The same year, Biblio Globus tour operator, one of the biggest in Russia, launched
the sales of Croatia.
All this caused the rates to go well below the profitability limits, and the situation
became worse due to low rates in nearby countries due to economy crisis.
Strict destination specialization of the company is noted to be the main risk factor.
Experts believe that the market share previously occupied by Ascent Travel won't be
consolidated but will be split between the market players.

- 18 -
Changes of Visa Regime
Pilot Project Of Passports With Fingerprints Launched In Moscow
Along with launch of passports with fingerprints the Federal Migration Service announced
that the State Duma is planning to approve the bill requiring fingerprints as mandatory
additional biometric information for passports starting from January 1st
2015.
Head of the Federal Migration Service Konstantin Romodanovskiy comments: «It provides
additional protection. We understand that the document can not in any way be transferred
to another person.
…
We are moving to the same standards with the EU. We go to the United States, the United
Kingdom, we are all to be fingerprinted, we have to move in a single echelon."
The head of the Federal Migration Service also reported that Russian citizens will be able
to get passports with fingerprints from age of 12 which corresponds to international
requirements.
Fiji Abolished Visas For Russian Tourists
Prime Minister of Fiji, Mr Bainimarama Voreke personally visited tourist presentation of
this island nation in Ararat Hyatt Moscow for over two hundred tour operators and
journalists. He informed that the countries confirmed a mutual visa-free regime for up to
90 days.
Tour operators note that there was almost a visa-free regime before, but this decision
shows the interest of the island state to increase the number of Russian tourists.
The Republic of Fiji receives more than half a million tourists yearly, mostly from
Australia, New Zealand and the United States, accounting the Russian tourist flow a few
hundred tourists mostly because of difficult travel route. Fiji Airways informs that the
recent changes in the company, probably will make the flight to Fiji more enjoyable.
The most convenient flight options from Russia in Fiji to date are via Hong Kong or Seoul
with about 19 hours in flight.
The Hungarian Consulate Will Reduce the Number Of Accredited Tour Operators
The Hungarian consulate has 70 travel companies accredited in Russia but plans to reduce
the number in the near future, said the Head of the Consular Section of the Embassy of
Hungary Andras Jacob.
The purpose of the consulate is to reduce the number of applicants for Hungarian visa,
who do not plan a vacation in Hungary, and to increase the number of actual visitors.
The number of requests for Hungarian visa in 2012 has increased by 30%. This year is

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expected to grow at 20-25%, which is about 80,000 visas. At the same time, the Consulate
notes, about 20% of applicants for a tourist visa are not really planning a vacation in
Hungary.
The consulate will closely trace the visa story of a tourist and will deny visas to those who
have already received the visa of any of the Schengen States, but did not actually travel to
them. The consulate requests tour operators to closely monitor the application of such
tourists and deny them a visa service. Сompanies failing to do so may lose accreditation.
This measure is likely to be applied to small tour operators with low volume of documents.
In addition to reducing number of accredited operators, the consulate sees the solution to
the problem of increased load in the opening of the visa center in Moscow.
Poland Changed Visa Issuing Rules
According to Poland visa application center in Kaliningrad, under the new rules, which
came into force on July 1, multiple tourist visa for a period of six months to a year will be
issued to citizens who have had at least two Schengen visas past two years, including one
Polish. In addition, applicants will need to provide proof of payment for the Polish hotel
for 6 days at least during the last two years.
Kosovo Announced Visa Regime For Citizens Of Russia
Kosovo announced that citizens of 87 countries will have to obtain visa to Kosovo,
including such countries as Russia, Moldova, Belarus, Ukraine, Egypt, India, China,
Indonesia and Pakistan.
Italian Visa Will Be Easier For Citizens Of St. Petersburg
Due to start of the Year of Italy Tourism in Russia, Consulate General of Italy in St.
Petersburg and visa center announced that if a resident of St. Petersburg has a Schengen
visa, the person may request a multiple-entry visa to Italy for a year, or a two-year visa if a
person has two Schengen visas.
It should be noted that the procedure is simplified for the citizens of St. Petersburg
in particular due to location near Finnish border and their regular travels to
Finland.
Italy Announces Annual Multivisas
Italian Ambassador in Russia informed that Russia currently provides more than half of
Italy granted visas and diplomatic services are doing everything they can to keep this
popularity.
With the approval of the Ministry of Foreign Affairs of Italy, Russian citizen already
having at least one Schengen visa will be granted a multivisa for a year automatically. For
frequent travellers two or three-year visa can be issued.

- 20 -
Visa To Bulgaria Becomes More Expensive
As reported on the official website of the visa application center of Bulgaria, the cost of
the visa fee will grow by 10%.
Russians can visit Bulgaria not only on the national Bulgarian visa, but also using open
multiple-entry Schengen visa. Bulgarian consulate has promised to issue six-month or
one-year multiple-entry visa for tourists who previously visited the country, but it is not
happening always.
First Results Of Croatia New Visa Regime
Croatia officially joined the European Union on July 1st
. It resulted in requirement of visas
for Russians, which affected the tourist flow of Russian citizens in the country.
According to statistics from the Ministry of Tourism of Croatia, during the first half of the
year the number of Russian tourists in the country amounted to 51.1 thousand, with a
12% decrease compared to the same period in 2012.
According to the Minister of Tourism of Croatia Darko Lorenzin, statistics shows that
countries introduced a visa regime lose about 20% of the tourists, thus the situation was
expected.
Croatian authorities have made a small step towards the simplification of the procedures.
Starting July 8th
, Russian citizens can fill out an application for a visa on the website of the
Ministry of Foreign Affairs of Croatia.
The system allows unlimited number of times to edit the data. However, the final version
of the questionnaire still needs to be printed and provided to consulate or visa center.
Russian Debtors Released Abroad
President Vladimir Putin signed a law allowing Russian citizens to travel abroad, even
with debt. The restriction will be imposed on departure only if the amount of the debt
exceeds 10 thousand rubles (300USD approximately).
Also, now at imposing travel restrictions, it is necessary to specify the place of birth of the
debtor. This item has been added in order to avoid mistakes identifying a possible deptor
on the border.
15 Days Maximum Stay Without Visa In Vietnam Re-Confirmed
The Vietnamese government has decided to keep the Russians visa-free regime for a
period not exceeding 15 days, regardless of the purpose of the visit. The flow of tourists to
Vietnam from Russia reached nearly 200,000 people by the end of 2012.
Experts note that the previously planned increase in the period of visa-free stay to a
month would contribute to the development of tourism in this country for tourists
combining sightseeing and beach holidays.

- 21 -
Portuguese Visas Are Issued One Day Before Departure
Tour operators working with Portugal, anxiously point out that recently the time needed
to receive visas has grown significantly. However, they are not linking the delay to the
increased tourist traffic, but with the opening of the visa center of Portugal.
Before the discovery of visa center documents were issued in four to five days. Now,
however, tour operators have to wait for several weeks. The visas are issued exactly one
day before the flight, not before.
Experts believe that the problems are caused by the fact that the visa center was opened at
the high season and the interaction between them and the consulate is not flawless.

- 22 -
Announced Flights
Sunrise Tour Wins Airflot Winter Flight To Innsbruck
Sunrise Tour tour operator took part in open electronic trading in blocks of seats by
Aeroflot for the winter season of 2013-2014 and won a lot to Innsbruck. This Austrian
destination will be exclusive for Sunrise Tour as the auctioned full board Airbus 320.
"We are fully satisfied with the result: our company has the category of clients who are
interested in this transportation, so we focus on it. We actively promote our programs
“Sunrise Tour Premium” and “Ski & More. More than skiing”, as well as a network of
children's mini-club in the Alps,” - announces the tour operator.
Sunrise Tour flights to Innsbruck will be the Saturday scheduled flights SU2360/2361 from
21 December 2013 to 29 March 2014.
Transaero Airlines Opens Regular Flights To Turkey
The Interdepartmental Commission for the admission of carriers to international air
transportation Transaero Airlines has now the right to perform seven scheduled flights a
week between Moscow and Antalya, Moscow and Istanbul.
Until now, Aeroflot was the only Russian carrier entitled to operate regular flights to
Turkey. All charter flights had to be confirmed with the major carrier. Designated carrier
from the Turkish side was Turkish Airlines. Now Transaero Airlines was accredited as
second Russian carrier, Onur Air, Atlasjet and Pegasus are to fly to Moscow from Istanbul
and Antalya.
Transaero Airlines has become the first Russian air carrier performing charter flights to
Antalya, opening the Turkish Mediterranean resorts for Russian tourists. For ten years, the
airline has transported nearly 6 million passengers between Russia and Turkey. The share
of Transaero Airlines of all charter flights between Moscow and Antalya is more than 85%.
Now the airline operates flights to Antalya from three Russian cities - Moscow, St.
Petersburg and Yekaterinburg. It also operates flights from Moscow to the Turkish cities of
Bodrum and Dalaman.
TUI Russia Announced Skiing In Czech Republic
TUI Russia tour operator announced that in addition to Andorra, France, Austria, Bulgaria
and Italy, the company begins offering tours to ski resorts in the Czech Krkonoše region:
Shplinderuv Mlyn, Pec pod Sněžkou, Harrachov, Mlada-Buki.
Tours will be sold on the basis of weekly Sunday flights Moscow - Pardubice - Moscow of
Kolavia Airlines, and in high season additional flights will also be organized.
Experts are skeptical about the prospects of destination, and refer to the fact that now it is
a FIT destination, without the mass market and with a fairly high price compared to

- 23 -
similar resorts of neighboring countries.
Biblio Globus Extended Charter To Jamaica
Direct flights to the island declared to last till end of October 2013, are now extended until
mid-March 2014. The charter will be carried on Transaero flights once in 10 days.
For the first half of this year, Jamaica has received about 6000 tourists of Biblio Globus tour
operator , despite the fact that regular number of Russians visiting the island was 2000 per
year.
The increase was also caused by launch of visa-free regime for citizens of Russia, started
March 7, 2013. Russian tourists are not required to make Jamaican visa upon arrival, the
cost of which was previously around $ 20.
According to Biblio Globus tours to Jamaica are preferred by young people from 18 to 30
years as well as couples.
Experts note that as a result of this charter, the demand for Jamaica grew at the
expense of the other Caribbean mass-market lines for other tour operators also.
However, it's not so about actual sales, as other tour operators can not offer a
comparable price without money loss. In addition the market fears transformation
of Jamaica to a cheap destination losing luxury travelers.
Mahan Air Starts St. Petersburg -Tehran Flights
Iranian Mahan Air started to operate flights to Tehran from St. Petersburg on 21st
July,
2013. Charter flights will be carried out once every two weeks until 15 September 2013 on
Airbus A300 and A310.
Biblio Globus Introduced New Czech Republic Destinations
Biblio Globus expanded the range by introducing destinations new for Russian tourists:
Belograd Lazne, Lazne Bohdanec and Trebon with direct Transaero flight from Moscow,
St. Petersburg and Yekaterinburg to Pardubice, where it is more convenient and faster to
get to these resorts.
Departures from Moscow is carried out every day, two times a week from Saint-Petersburg
and every Friday from Yekaterinburg. Tours are designed for a period of 7 to 21 nights.
Pegas Touristik Returns To Sales Of Sardinia.
The company has already tried to sell tours to the island in 2011. Now the tour operator
adjusted the volume of transportation, making it more moderate. Previously, Pegas
Touristik was flying to Cagliari from five Russian cities, including Moscow, St. Petersburg,
Ufa, Yekaterinburg and Rostov-on-Don, this year they consider only three (Moscow, St.
Petersburg, Yekaterinburg), with ten-day chains. Ground handling is built on the same
concept as in Turkey and Egypt: Pegas has its DMC and his own hotel Dessole Arbatax Park
Resort Telis 4 * operating on an ultra all inclusive. The island considered to be FIT

- 24 -
destination with above the average budget , is being provided with mass-market type of
holiday.
The volume of transportation for the destination is considered adequate by tour operators
with not a lot of changes. PAC Group and Karlson Tourism took a block of seats on Utair
flights. Jet Travel took limited blocks of seats on Gazpromavia. The volume of traffic
remained at the same level as a year ago. Italian Meridiana Fly continues to make weekly
direct flights from Moscow to Olbia with blocks taken by Karlson.
Pegas Touristik Launches Direct Flights To Vietnam From St. Petersburg
Pegas Touristik announced the charter chain to Nha Trang from October 23. Flights will be
operated by Nord Wind on Boeing 767-300 with 13 nights intervals. According to plans, the
flight will run until May 18, 2014.
For a long time, tour operators offered programs to Vietnam with connections, for
example, via Bangkok and Dubai.
Transaero Received Permission To Fly To Dubai From Eight Regions
Transaero received permission to operate regular flights to Dubai from Yekaterinburg,
Krasnoyarsk, Novosibirsk, Rostov-on-Don, Samara, St. Petersburg, Tyumen and Ufa with a
frequency of 7 flights a week. The carrier has already operated charter flights from all
these regions (plus Kazan, Perm and Chelyabinsk) in winter season 2012/13.
Other airlines including foreign ones also expand the presence in Russian regions .
Flydubai adds three more cities to current five, including the ones where it
intersects with the Transaero and other competitors. Novosibirsk and Rostov will
be served by Flydubai as well as Air Arabia, plus Russian airlines.

- 25 -
Low-Costers Enter Russian Market
Wizz Air Will Launch Flights To Budapest
European low-coster Wizz Air announced the launch of regular flight from Moscow
Vnukovo airport to Budapest on September 23. Flights will be operated five times a week,
on Monday, Wednesday, Thursday, Friday and Sunday.
Wizz Air flight rate starts from 40 Euros one way including taxes. Tickets are now on sale
at the official website of the carrier.
After the bankruptcy of Malev airlines in 2012 there was only Aeroflot operating the
destination.
Wizz Air also expects to launch second Russian route between Budapest and St.
Petersburg. Currently St. Petersburg - Budapest - St. Petersburg flights are operated by
UTair twice a week - on Wednesdays and Sundays.
Wizz Air fleet currently consists of 45 Airbus A320, each of which is designed for 180
passengers. Wizz Air has an extensive network of routes in 36 countries around the world.
Passenger traffic in 2011 was 10.7 million pax, and 12 million in 2012.
Aeroflot Will Create Its Low-coster
The Board of Directors of Aeroflot has approved the concept of a low-coster. The airline
reports that cost-effective business model, including the rejection of a number of
amenities that many passengers consider insignificant, will allow to achieve discount of
20-40% compared to traditional carriers.
The airline plans to start operations in 2014. The first two years it will develop the most
profitable routes in the European part of Russia, gradually expanding the area of activities
to Russian regions and abroad, including the countries of the CIS. The company is
considering one of the airports of Moscow as the base airport. The investment in this
project are considered around $100 million. Initially the flights will be operated from
Moscow to eight Russian cities: St. Petersburg, Samara, Yekaterinburg, Makhachkala,
Krasnodar, Ufa, Kaliningrad and New Urengoy. Over the next five years, the park of the
low-coster is to increase from eight to 40-50 planes.
It is known that Transaero is also exploring the possibility of establishing the budget
carrier. Transaero considers budget flights from Moscow to Central and Southern Russia,
as well as to St. Petersburg.
Earlier this year it was reported that UTair, the third airline of the country, has been
allowed to base it's low-coster at the Ermolino airport in Kaluga region, 80 km from
Moscow.
This summer there were reports that Red Wings can resume flights after the transition to
the new owners.

- 26 -
By 15 September, the Government of the Russian Federation should decide on the
establishment of the airport for budget carriers , according to the instructions given by
Vladimir Putin at a meeting on the development of Moscow air hub. The considered
options are Ostafyevo, Klin and Ermolino.
Experts note that the success of this project depends partially on development of
laws regulating aviation industry in Russia and development of airport
infrastructure. However majority believe that all key decisions are already made
and the government will be involved both financially and legally. Tour operators
assume that the creation of this low-coster will push direct sales of flights due to
usual business-model of such carriers.

- 27 -
Growing Destinations
Increasing Flow Of Russian Tourists To Georgia
According to statistics of information-analytical department of the Ministry of Internal
Affairs of Georgia, for the first half of this year Georgia was visited by 260.6 thousand
Russians, which is 68.6% more than the same period in 2012.
Due to dense relationships between the countries, this ex-USSR country was not a popular
tourist destination last years. However, this year the Russian-Georgian cooperation in the
tourism sector has intensified, which affected the growth of arrivals of Russian citizens to
the neighboring country.
In June, the number of tourists from Russia increased by 51% compared with June of last
year to 76.3 thousand. Russia ranks fourth on the number of visits following citizens of
Turkey, Armenia and Azerbaijan.
In total Georgia was visited by 2,189,000 foreigners in January-June this year which is
29.2% more than in the first half of 2012. Of these 813.9 thousand people were tourists,
410.6 thousand visited the country in transit , the remaining 964.2 thousand business
visitors, relatives visiting and alike.
Cyprus Arrivals From Russia Continue To Grow
According to the Statistical Service of Cyprus,44.2 thousand Russian touristsvisited
Cyprus in first four months of 2013 which is 7.5% more than the same period last year. At
the same time, the total number of received tourists during this period decreased by 12.2%
to 339,600. Last year Cyprus was visited by 42% more Russian tourists than in 2011.
According to forecasts of Moscow office of Tourism of Cyprus Russian tourist flow to
Cyprus will increase to 550,000 tourists or by 15% this year.
Tour operators note the excessive amount of flights to the destination leading to
certain margin decrease, however the figures are not critical for the profitability of
destination.
The Russians Show Record Growth For Abu Dhabi
In general Abu Dhabi shown a 12 percent increase in the number of tourists who stayed in
145 hotels and apartments of the emirate for the first half of 2013 .
Department of Tourism and Culture of Abu Dhabi notes that the average length of stay of
visitors to the emirate also increased, which has a positive impact on the workload (+8%)
and revenues of hotels (16%). For the first six months of 2013 hotels in the emirate
received 1,330,000 people who spent a total of 4.23 million nights here, a 25% increase
compared with the figures for 2012.
The average length of stay in the emirate was 3.17 nights, which is also a positive growth
of 12% compared with last year.

- 28 -
Tourists from Russia are still in the lead for the duration of stay in Abu Dhabi, with the
average more than six nights. As compared with 2012 for the first six months, the current
flow of tourists from Russia increased by 46% and amounted to 13.1 thousand people, and
the number of nights spent reached 79.7 million, up 54% over last year.
Biblio Globus Arrivals To Rhodes Grew By 58%
According to statistics of Biblio Globus tour operator, Rhodes was the most popular Greek
island for Russian tourists in the summer season of 2013 . Overall growth in tourist traffic
to the island from Moscow, St. Petersburg and Yekaterinburg was 58% compared to last
year's summer season.
The growth in tourist traffic to Rhodes explained not only by increase of flights, but also
by changed policy of hoteliers who shifted from the European to Russian market focused
on tourists from Russia.
Many hoteliers have switched to work on an "all inclusive" basis, considering the interests
of Russian tourists. The spa centers are run by Russian-speaking specialists, also there's a
lot of Russian-speaking employees in hotels in all positions - from animation to the
reception managers. In addition, each restaurant at the hotel now offers a menu in
Russian.
The company expects plans to send about 270-300 thousand tourists to Rhodes this
summer.
Tourist Flow To Crete Grows By 49%
In June Crete received 94,512 visitors from Russia, which is 49% more than in June 2012
and the majority of the island's visitors, leaving behind Germans (69,744) and British
(58,975). Ukraine showed a 76-percent increase with 18,895 tourists.
According to experts, the dynamics was achieved by massive discounted sales,
which was a result of the huge oversupply of transportation. The increase in
tourist traffic in the area planned for 30-40%, while transport was increased by 70-
80%.
Tourist Flow To Spain Increased by 34%
According to the Institute of Tourism Studies of Spain, during the first half of 2013 587.9
thousand Russian tourists visited Spain, which is 33.6% more than the same period in
2012. According to the Federal State Statistics Service data for the first quarter of this year,
Russian tourist flow to Spain was up 27%. Tour operators predict further increase in
demand for the destination of about 25-30% compared to last year.
Tourists from Russia amounted to 2.2% of all foreign travelers who visited Spain during
this period. First by the number of arrivals are British tourists (23.6% of all foreign
tourists).
Despite the increase in the transportation by 30% and the outflow of tourists to

- 29 -
drastically cheapened Greece, Spanish market this season is balanced. Experts
generally predict positive business results for the destination in the season.

- 30 -
General News
Russian Travel Agents Prefer Social Media Marketing
According to survey by tourprofi.ru web portal, 67% of respondents regularly use social
media promotion, including 22% those who consider it the main platform for promotion
of their company's services.
49% of respondents regularly use other types of web promotion: banners, context
advertising.
47% regularly use outdoor advertising (including bilboards, branded transport, etc.)
52% use the targeted mailing and sms campaigns, 15% use TV advertisement, 33% use
print media advertisement, and only 12% use BTL activities on regular basis to promote
their services.
63% of the respondents estimate the number of clients attracted by the advertising
campaigns to be not more than 25% of total quantity.
The survey also shows that the most popular subject of promotion is the product by itself:
interesting offers, news, popular tours (26%). Early booking bonuses, discounts, additional
services are promoted by 18% of respondents, and 14% of the companies are making their
company itself the subject of advertising.
Workshop By Mauritius Tourism Promotion Authority In Moscow
Mauritius tourism workshop, organized by the representative of Mauritius Tourism
Promotion Authority was held in Moscow following the similar events in St. Petersburg and
Yekaterinburg. It was attended by leading tour operators and hotels of the island.
According to the Mauritius Tourism Promotion Authority, the island was visited by 5113
tourists from Russia from January to March 2013. During the same period, Mauritius was
visited by 627 guests from Ukraine and 136 from Lithuania. Total number of visitors from
Russia in 2012 was 19,429.
Growth of interest in the island was mainly caused by direct flights of Transaero. Experts
note that for the same reason the structure of the visitors change. Despite the image of
Mauritius as an expensive destination, today there is more and more requests for
accommodation in 4 and 3-star hotels with high season for Russian market in May, New
Year period and November. In addition to a beach holiday, the Russians are engaged in
fishing, diving and hunting.
It is expected that starting October 25th
, when Transaero relaunches direct flight to
Mauritius, the number of tourists will rise, as according to experts, the absence of
reasonable cost and convenient flights inhibits the growth of tourist arrivals to Mauritius.

- 31 -
Flight Rates Don't Decrease Despite The Increasing Number Of Carriers
Aviasales metasearch engine conducted research of flight rates before and after the
appointment of the second air carriers in a number of routes.
The study included Paris, Barcelona, Rome, where Transaero began to fly since last
summer, and London (easyJet began to fly from London to Moscow in March) and Nice,
with added Rossia flights.
According to Aviasales, additional air carriers did not affect the rates and the average
ticket price remains the same. The cost of flights from Moscow to Nice decreased by only
2.2%, and the flights to Barcelona went up by 10%.
The company suggested that after the new carriers approved by Federal Air Transport
Agency for flights from Moscow to Istanbul, Dubai (Transaero), Chisinau and Ljubljana
(UTair) rates will remain the same.
The experts believe that rising dollar just leveled the entire visible difference in
price, however noted that existing carriers slightly improved their rate policy in
regards to group bookings and the decrease of rates can be expected.
Biletix And Svyaznoy Travel Became Partners
Online-Travel-agency Biletix, b2c-project of Russia's largest consolidator, Vipservis holding
and Svyaznoy Travel, a tourism project of the largest independent mobile retailer,
announced a strategic partnership. Biletix IT booking solution will be integrated into
Svyaznoy Travel in WhiteLabel format.
Svyaznoy Travel used to offer its clients a wide range of air and rail tickets, hotel
reservation services and tours. Start of cooperation with Biletix allowed the company to
have a substantial difference on Airfare offer. Now, users of the Svyaznoy Travel have
access to a range of tariffs of more than 500 airlines.
Tickets and other services of Svyaznoy Travel are available on the project website as well as
at any of the 3,362 Svyaznoy stores in 892 cities of Russia.
Biletix is the only service in the Russian market, conducting online sales of regular and
charter flights, which are now also available on the portal Svyaznoy Travel. The solution is
already integrated in the online services of Alfa-Bank, Russian Standard bank, Malina
loyalty program, Oktogo hotel service, Workle employment service .
St. Petersburg Tour Operators Cancel Charters
Companies involved in outbound market in St. Petersburg are making active efforts to
stabilize the situation in July, canceling mass-market summer flights to destinations with
up to 5 thousand seats per week.
Tour operators have adjusted the traffic of almost all mass-market directions (Bulgaria,
Greece, Tunisia, Cyprus, Turkey, Italy, Egypt).
Especially significant are the changes for two leading countries, Turkey and Greece (2,000

- 32 -
seats and 1,300 seats).
According to some experts, it is critical to adjust the volume on Greece, which
amounts to 40% of the St. Petersburg market. Tour operators expect that at least
August tour rates will be adequate and will stop dumping. The experts link the
difficult situation on the market due to actions of Biblio Globus, which, combined
with other market players, increased the volume of transportation twice in
comparison with the previous year.
Siberia Notes Supply And Demand Balance In Greece
The participants of the tourism market of Siberia ascertain the absence of specific
proposals on the major areas where the European part of Russia is actively dumping,
especially Greece. In some areas, in the absence of dumping has been a marked decline in
rates to a reasonable minimum. Another trend is the consolidation of competitors, which
was ultimately successful. Labyrinth and Coral Travel have put the combined flight to
Rhodes with the frequency of twice a month. Sales are going smoothly, with good
profitability.
Transaero And UTair Became Strategic Partners
Transaero and UTair signed an agreement on strategic cooperation. It is aimed at the
development of the Russian domestic and international markets for passenger and cargo
air transportation.
Parties will consider proposals for agreements of interlining, special prorate agreements,
agreements on the transfer of passengers in case of errors, as well as an agreement on the
joint operation. Partners are to take steps to synchronize schedules, the frequency of
flights in order to ensure the most convenient connections, as well as frequent flyer
programs.
The companies also consider mutual training and staff development, maintenance and
repair of aircraft, monitoring of compliance with quality standards, improvement of on-
board and ground service.
This step is following the agreement signed in December 2012 of transfers and tariffs for
Vnukovo airport traffic.
According to the international rating of tourist traffic flow, published by the Airline
Business edition, Transaero is the sixth largest in the world by number of passengers
carried. Operating since 1991, the company has the largest fleet of long-haul wide-body
aircraft in Russia, the CIS and Eastern Europe. Constantly growing and renewing the
company's fleet consists of 99 planes. The route network covers more than 190
destinations in Russia and foreign countries in Europe, Asia, America and Africa.
Development Of the Aviation Industry Until 2015
Prime Minister Medvedev approved a plan for the development of the aviation industry
until 2015. According to the program, 78.3 billion rubles will be allocated from the budget

- 33 -
in 2013 for the implementation of measures for the development of the aviation industry,
in 2014 the figure will grow to 107 billion rubles, and to 123.5 billion rubles in 2015.
This plan is a part of the state program "Development of the aviation industry in the years
2013-2025", which was approved by the Government in December last year.
As a result of the government program, it is expected to increase the share of Russian
manufacturers of aeronautical products on the world market by 2025 to reach 3.6% and
11.9% in the civilian and military sectors, respectively. In the aircraft industry, these
shares are targeted 3.2% and 10.9%, helicopters - 12% and 16.5% of the market
respectively.
Yandex Launches Tours Search
Yandex search engine launched a publicly available beta version of a new search platform
called Islands. As stated, the interface shows search results, combined with interactive
features that simplify everyday tasks. For example, a search query "tickets online" returns
not just a list of the various services, but finished blocks that allow you to not leave the
Yandex to start the process of ordering your ticket. Entering the parameters is followed by
transition to the website of the operator or travel agency for the booking.
At the moment, Islands are in the test regime, and the final version will be
introduced in the end of 2013. Experts believe that Islands may lead to an increase
in direct sales as airlines and tour operators will be able to easily get direct clients
without reservation systems and agent portals.

Russian Toursim Market Report July 2013

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Russian Toursim Market Report July 2013