Newsletter December 2014

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Introduction: 

Considering down turn in the economic growth of Russia and Ukraine, Azerbaijan and Kazakhstan are both holding up well and outbound travel continues to grow, although numbers are still restricted to the growing Upper Middle class which means mainly FIT traffic and high spend individuals rather than group business from these countries. Online travel has not much impact yet, but Booking.com is making serious inroads to Kazakhstan so the emergence of online travel is not far away, as travelers become more experienced and the visa procedures more transparent.

One of the most positive pieces of news however is the list of the ban on flights to Europe on Air Astana, as a result, European countries are likely to see a definitive increase in travelers from Kazakhstan, particularly Paris and Prague where Air Astana plans direct flight to shortly, they also plan to continue the summer flight schedule to Crete and Barcelona as they did this summer. Air Astana recently introduced direct flights to Hong Kong and reopened flights to Dubai, after a temporary closure. The National carrier of Azerbaijan, AZAL, already has direct flights to most Europe destinations is opening new flights to Geneva (Switzerland) and New York.  All these new flight connections mean one thing, these travel markets are growing and it is only a matter of time and increased competition before the Middle class starts to travel more extensively.

This month we are pleased to welcome our new B2B Luxury & MICE Workshop international participants: Relais & Chateaux and Aerports de Paris that will come again after the successful attendance in 2014. We are also expecting the tourism boards of Crete and Costa del Sol region to join us this year.


 

Market insights:

Azerbaijan and Kazakhstan are the most dynamic tourism markets among the post-Soviet countries.

Favorable economic conditions and a growing population, has resulted in the booming outbound travel industry. According to the UNWTO statistics, Kazakhstan and Azerbaijan became the fastest growing tourism markets among CIS countries for the past years. For the last four years the number of the outbound trips in Azerbaijan grew by 82% and reached over 3 million. In Kazakhstan international trips increased by 69% and marked 9 million departures.

Azerbaijan and Kazakhstan – high spending markets.

The outbound travel markets of Azerbaijan and Kazakhstan are characterized by their high spend tourists, as most travelers are still from the Upper Middle class and therefore belong to the  upmarket segment. Tourism expenditure in Azerbaijan in particular grew at the exceptional rate of +268% making Azerbaijan the second highest spender among the CIS countries in terms of spending per trip. Kazakhstan’s spending has also seen increase due to the strong economic growth.  Kazakhstan’s GDP per capita in 2013 almost reached 13 000 USD and is the 2nd highest among CIS countries after Russia.

Europe is the leading destination for tourists from Kazakhstan and Azerbaijan.

Over half of the trips are made to European destinations and they show the fastest growth rates. For the last years, trips to Europe from Azerbaijan doubled while leisure travel from Kazakhstan to Europe increased by 71%. The Middle East is also in high demand for shopping and beach holidays, especially for Azerbaijan. Southeast Asian destinations are very popular among Kazakh tourists and grew by 30% over the last years. 


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One to one Interview with the CEO of Turan Asia, a leading Tour operator from Kazakhstan 

This month we had a pleasure to interview Gulgaisha Kaseikhanova, the CEO of Turan Asia who gave us some insights about the latest trends from the Kazakh market.  Turan Asia is one of the leading multi- destination tour operators based in Almaty and a regular participant of the B2B Luxury & MICE Workshop. 

Could you tell us a few words about your company and your clients.

Turan Asia was established in 1994, so we now have 20 years of experience of working in the tourism industry. Turan Asia is active in both the inbound and outbound sectors and what we are seeing is a good growth in both sectors. Due to the increase in inbound, we have established a specialist MICE department. Concerning outbound travel, our clients are generally people from the upper to medium middle income bracket. We sell package tours to popular destinations such as : Turkey, the Emirates, Spain, Greece and Italy but we also offer more luxury products for an upper segment such as high-end hotels in Sardinia. Also Ski resorts in Italy and Switzerland are becoming increasingly popular too.

How would you describe the summer season 2014?

We have had good results this, particularly for inbound tourism, the outbound market also grew but not at the same very rates as the past 3-4 years, as the economic situation in Russia is having some impact and has resulted in a high lvel of  competition between tour operators and price dumping, especially to popular tourism destinations..

What are your plans for the upcoming season and which destinations will be most popular among Kazakh tourists?

We expect to see an increase the number of outbound tourists, this summer one of the largest tour operators in Kazakhstan for Turkey went bankrupt, Gulnar-Tur. This negative trend mostly affected mass tourism destinations. On the contrary, VIP clients have traveled more frequently and increased their spend, so we have a good prognosis for the Luxury sector in 2015.

Regarding the top destinations, last year Air Astana launched direct flight to Vietnam and it became a popular destinations. Air Astana is also planning to launch flights to Japan and we see this as a potentially popular destination in 2015.

Do you see any changes on the Kazakh market for the recent years? 

We can say that MICE segment is growing fast, especially into Kazakhstan. We expect the business travel segment to grow even more over the time. We have also attended a number of tourism exhibitions such as EMITT exhibition in Istanbul where our stand won the prize for the best design. As for the international destinations, we have recently organized MICE groups to London, Goa and France.

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