Tourism OverviewAlthough foreign visitor arrivals were up slightly year-on-year (y-o-y) in 2007, foreign tourist arrivalswere down 9% y-o-y. Germany remained the most important source market last year, accounting for 16%of total tourist arrivals, followed by the US (8%), Finland (7%) and the UK, Italy and China (eachaccounting for some 6% of the total). All these markets recorded positive growth in tourist arrivals, withthe exception of the US, down a marked 23.3% y-o-y, and China, falling 17.5% y-o-y. The most recentdata are relatively positive, with foreign visitor arrivals up 3% y-o-y in Q108 to over 4.8mn, while foreigntourist arrivals increased a favourable 10% y-o-y. Of the major source markets for tourist arrivals,Germany, Finland and China all recorded strong growth compared with the corresponding period in 2007.
Forecast Scenario
We hold to our positive macroeconomic view for Russia with real GDP growth forecast to average 6.6%annually through to 2012. Going forward, continued strength in the commodity sector will help tounderpin export growth though we expect household consumption and capital investments ininfrastructure to play an increasingly important role in driving the economy. We anticipate furtherweakness in foreign tourist arrivals in the short term (after a disappointing year in 2007). This is largelydue to the poor shape of the US economy and downward revisions to growth in the eurozone - majorsource markets. Inflation, which reached a five-year high of over 14% y-o-y in April, is also likely tohave a negative influence on the tourism sector, while continuing forecast appreciation of the Russianrouble is expected to undermine potential tourism. In addition, heightened tensions between Russia andboth the US and EU over Georgia are likely to damage Western perceptions of Russia as a touristdestination.
Aeroflot
Financial results for 2007 show a net profit of US$313.4mn for Russian national airline Aeroflot,representing a healthy 21% y-o-y increase in US dollar terms. Revenues totalled US$3,807.8mn, up astrong 27% y-o-y, while total operating costs amounted to US$3,229.8mn (an increase of some 24% y-oy).Latest passenger figures for the first seven months of 2008 show numbers continuing to rise strongly,up 14.8% y-o-y to over 5.3mn passengers. However, due to higher jet fuel prices, Aeroflot expects to beless profitable in 2008, despite planned ticket price increases of some 8-10%.
S7 Airlines
In H108, S7 Airlines transported over 2.8mn passengers, up a buoyant 26% compared with thecorresponding period of 2007. In July, the airline opened a new international route between Moscow andMinsk (Belarus) under a code-sharing agreement with Belavia Airlines. Also, in August 2008, S7Airlines began flights on the Yekaterinburg-Sochi route, while a daily flight from Yekaterinburg toDomodedovo International Airport will commence from September.
Domodedovo International Airport
Latest data for the period January to July 2008 show continuing buoyant growth in passenger numbers atMoscow’s Domodedovo International Airport of 19.5% y-o-y to almost 12mn passengers (after verystrong growth in the previous three years). Flights to St. Petersburg, Frankfurt, Kaliningrad, Munich,Sochi, Bangkok, Sharm-El-Sheikh, Vienna and Krasnodar registered the highest growth rates.
(0 items)
