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UAE-Russia ties: A win-win for tourism, trade and investment

The trade exchange between UAE and Russia is projected to be in the $3 billion ballpark and it's having a positive effect on the travel and tourism space!

St. Petersburg has been named the World’s Leading Cultural City Destination and Europe’s Leading Cruise Destination Additional airline routes and the Russian ruble benefiting from increased oil prices are spurring tourism Among the UAE’s top source markets, tourism spend by Russia witnessed the highest growth of 13 percent

The UAE tourism industry is thriving. Close to 3.14 million tourists landed on Dubai soil in the first two months of 2019, up from 3.05 million during the same period last year. It’s interesting to note that Russia has been a major contributor, with more than 820,000 tourists visiting the UAE in 2018. Among the UAE’s top inbound markets, Russian tourist expenditure witnessed the highest growth of 13 percent in 2018, Visa confirmed.

The trade exchange between UAE and Russia is projected to be in the $3 billion ballpark, and is expected to rise with the easing of visa rules between UAE and Russia. Russian visitors to the UAE increased 64.8 percent in the first eight months of 2018 after the UAE offered Russians a free 30-day visa on arrival with the possibility of extension for a nominal fee. St. Petersburg, Russia, is now looking to draw in more UAE tourists with a wide array of leisure, MICE, luxury, recreational, as well as health and wellness tourist activities.

“The Middle East is soon becoming an important part of our tourism business. More so, this year as we are targeting high profile travelers from the luxury segment as our research indicates that they contribute quite heavily to the frequency as well as the spending habits while visiting St. Petersburg,” said Olga Redino, Deputy General Director and Vice Head of Saint Petersburg Convention Bureau.


Olga Redino, Vice Head of Saint Petersburg Convention Bureau, and Harmeek Singh, Chairman, Visit St. Petersburg for Middle East Region

With additional airline routes and the Russian ruble benefitting from the increase in oil prices, trade and tourism are expected to pick up between the two countries. Etihad Airways recently announced a second daily flight to Russia for six months, in keeping with the demand. A Colliers International projection states that Russian tourists traveling to the GCC will increase by 125 percent to 2.1 million in 2023, with a projected additional 2.9 million room nights likely to be added through the coming five years.

“Russia, specifically St. Petersburg has a largely untapped market. There is a lot of potential for smart investment from the UAE into Russia. Hospitality is a key ingredient; medical tourism and sports tourism also have a huge potential. The successful 2018 FIFA World Cup event answered the key question of safety showcasing that Russia is not only safe but also has incredible infrastructure and technology,” said Harmeek Singh, Chairman, Visit St. Petersburg for Middle East Region.

Russia is also using the tourism platform to welcome a number of key investors to the region through attractions such as ‘Luxury Russia’, which includes a highly personalized set of experiences including firing cannons, helicopter transportation, hunting expeditions, and museum auctions. St. Petersburg, which has been actively developing tourism over the last few years, has been awarded the World’s Leading Cultural City Destination 2018 as well as Europe’s Leading Cruise Destination and Europe’s Leading Heritage Destination 2018 by World Travel Awards.

Spending of international tourists in Russia from 2012 to 2028 (in billion Russian rubles)

Tech changing tourism

“The travel and tourism industry is changing very quickly. There are players in the market who are still handing out fliers and brochures, but a new “millennial” generation has demanded a change in the language and the medium through which it is spoken. Social influencers and influencer marketing are beginning to play a big role in creating awareness, informing and educating people,” Harmeek Singh said.

Digital travel sales across the globe are projected to grow more than 10.4 percent to $694.41 billion, data released by Expedia group indicates. It also shows an increase in mobile bookings for travel and accommodations. A high smartphone penetration, as well as a high youth population in the Middle East, has transformed the travel, tourism and hospitality sphere, with OTAs and digital interactions becoming the norm. Disruptions on the horizon include blockchain and mixed reality experiences.

“Data is also changing the way we function. It is helping us understand the customer and create new touchpoints. From our offices, we can give you an experiential journey through gamification, virtual tours, and the Holo-Lens. We will be rolling out mixed reality experiential concepts after Ramadan, which involves the coming together of VR and AR,” Harmeek Singh said.