Travel in 2022 – how Russia is reshaping the world’s travel industry

Russians were the most visible travellers heading to Thailand post February 1, 2022, when the Thailand Pass Test & Go option was rebooted. Even with its 2 days of pre-booked SHA+ quarantine and PCR tests, along with US$50,000 Covid insurance (which has since been reduced to $20,000), the Russian travelers were delighted to jump on a plane and take the long trip to the much warmer Land of Smiles.

That situation has now radically changed and the world is reverberating to the full impact of Russia’s aggression and the invasion of Ukraine.

Now there’s a mere trickle of daily flights between Russia and either Suvarnabhumi or Phuket in Thailand. Whilst much of the rest of the world have said ’nyet’ to the arrival of any planes from Russia, Thailand is still allowing them to arrive. But even if the planes are still coming (albeit in vastly reduced numbers), the pressure of world sanctions, bans and the plunge of the Russian Ruble has already made the decision for any potential Russian travelers.

Now, the latest data from ForwardKeys, shows that the Russian invasion of Ukraine, now into its 9th day, has prompted an instant spike in flight cancellations to and from Russia, worldwide. On the day after the first tanks rolled into Ukraine, every booking that was made for travel to Russia was outweighed by six cancellations of existing bookings.

Russians escaping their bleak winter and heading to sunnier destinations were suddenly cancelling their trips. The cancellation rates between February 24 – 26 were Cyprus (300%), Egypt (234%), Turkey (153%), the UK (153%), Armenia (200%), and Maldives (165%).

Bookings for March, April and May were already reaching 32% of the pre-Covid levels of travel for outbound Russians. They were heading to Mexico, Seychelles, Eygpt and Maldives. And Thailand.

The outlook for Q3 this year was looking even stronger.

All that Russian travel enthusiasm has now collapsed and, given the harsh economic weapons thrown at Vladimir Putin, his banks, his ‘friends’ and his citizens, any recovery will be a long, long way down the track. Even if there was a swift and unexpected reversal of the Ukraine situation, Russia has already been dealt a fatal economic blow – in just one week the country been turned into a pariah state and much of the rest of the world seems happy to punish the entire country for Putin’s violence.

For countries like the Seychelles, Maldives and Cyprus, Russian arrivals represented a high percentage of their international arrivals. In Thailand that was about 8% of the total tourist mix. And, whilst the Chinese are still in China for at least the rest of this year, the loss of the Russian travel market probably represented an even higher percentage of tourists that won’t be coming to Thailand in 2022.

Sourse - The Thaiger

According to ForwardKeys, before Russia invaded Ukraine, the top twenty destinations most booked by Russian travelers in March, April and May were…. Number one, Turkey, then the UAE, the Maldives, Thailand, Greece, Egypt, Cyprus, Armenia, Seychelles, Sri Lanka, Hungary, Bulgaria, Mexico, Spain, Azerbaijan, USA, UK, Qatar, Italy and Uzbekistan.

The world travel industry will be further hit by rising airfares (due to the sharp surge in oil prices), cancellations of routes (across Eastern Europe), a higher resistance to international travel (for perceived safety reasons) and a lingering instability in world politics.

While the Thailand Pass is still seen by many potential travelers as a significant barrier to their choice of Thailand as their next travel destination, and the Russian and Chinese traveler-tap turned off, Thailand’s immediate travel future looks bleak. And this follows nearly 2 years of border closures, false restarts, over-hyped TAT arrival projections and the former Thai tourism workforce heading home to find other work.

The loss of the Russian travelers underscores a critical need for the Thai government to quickly modify the Thailand Pass, or scrap it completely. With so many other factors now making international travel difficult, Thailand will have to rethink their short to medium term tourism strategies to retain its share of the international travel market.

Of course there is no comparison of the humanitarian tragedy underway inside the borders of Ukraine at this time, but Russia’s aggression will likely have much more long-term, and far-reaching, effects than the clear and present danger it poses on the Ukranian nation right now.

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Russian flights keep arriving in Thailand, for now

Aeroflot, Ural Airlines and S7 Airline planes are still arriving on schedule in Thailand today as nothing has changed, thus far, as flights into Thai airports from Russia are concerned.

But Thailand’s tourism tzars continue to monitor Russia’s invasion of Ukraine, as the world looks to ways of pressuring and sanctioning Russia, including access to its airlines across the world.

At this stage there has been no official comments coming from the Thai government about the invasion of Ukraine or any Thai reaction to the conflict, beyond assuring Thais in Ukraine that they will be evacuated.

Russian arrivals ranked Number One in Thailand during the first 22 days of the resumption of the Test & Go program, from February 1 – 22. 13,063 Russian tourists arrived in Thailand over that time, followed by 10,412 visitors from Germany and 8,900 from France.

Both Russia and China were two of Thailand’s top feeder markets before 2020, the start of the Covid-19 pandemic. The Chinese will remain notably absent until, probably, later in 2022. Now the Russian tourist tap may be switched off as well.

But with the developing conflict in Ukraine, the Russian Ruble has dropped around 18% against the Thai baht, since February 9, putting further pressure on Russian tourists travelling to Thailand at this time. Despite fluctuations, the Ruble is again on another downward trend versus most international currencies since the invasion on Thursday.

The other major threat to tourism arrivals, from just about anywhere in the world, is the huge surge in oil prices which will eventually hit plane ticket prices, including domestic flights within Thailand.

Oil prices briefly topped US$100 a barrel on Thursday reflecting panic in the first hours of the Russian invasion, the first time they’ve surpassed the US$100 mark since 2014, but they fallen back slightly since. In the 2020’s the average price was about US$39 a barrel.

So far there hasn’t been any immediate, or tangible, increase in flight prices inside Thailand, or internationally, but aviation experts believe that it’s just a matter of time.

They note that airlines with the youngest fleets, and the most fuel-efficient aircraft, will suffer the least as a direct result of the rising oil and, consequently, av-gas prices.

Thai Airways still has Thailand’s oldest fleet of aircraft.

Following this week’s alteration of Test & Go program requirements, removing the pre-paid PCR test and night of accommodation on Day 5 (and replacing it with a self-ATK test to be uploaded onto the Mor Phrom App), tourism operators expect an uptick of new bookings, but fresh applications for the Thailand Pass remain under original predictions.

Tourism operators also believe that nurturing the newer feeder markets, of India and Saudi Arabia, will play a crucial role, both during the ongoing tensions in Central Europe, and the onset of Thailand’s low season.

Then there’s the surge in cases of Omicron in Thailand and how the government will react to that over the coming month.

Source - The Thaiger

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