Russia’s travel agency industry is growing at an astounding pace, with more than $3.5 billion worth of contracts awarded to Russian travel agents in the first three months of 2017.
In the same period, the number of Russian travel agency contracts awarded by travel agencies in China fell by 2 percent.
Russia’s travel agents are among the most expensive to work with.
For a one-way trip from Beijing to Moscow, an agency can expect to pay up to $2,500 (roughly $1,800 in Beijing) and up to an additional $2.50 (rough: $1.50) per person in the country, according to the State Duma’s Standing Committee for Foreign Trade.
However, Russia’s top travel agency is a relatively low-priced company.
Vitaly Kasyanov is the CEO of Russian agency Vitova, which offers services such as hotel and car rental, with an average price of around $3,000 (rough $2K in Beijing).
For a three-hour stay, he estimates that a one way trip costs about $4,000 ($1,200 in Beijing), and a one and a half hour stay costs about nearly $5,000.
The Russian travel agent market is still relatively young.
“This is the first time we see this kind of growth,” said Kasyansov.
“I think we have the opportunity to see the growth of the market.”
While the Russian travel industry is relatively young, it is booming, with some agencies already offering more than 50 percent discounts for international travel.
For example, one Russian travel service called RTRTravels offers two-day and three-day stays at a cost of around two million rubles ($4,400) in Moscow and four million rubbles ($6,100) in Beijing.
And while some agencies such as Vitova have struggled to attract a large number of clients, other travel agencies such the ones at Vitaly Ketyanov’s company have experienced strong growth.
“The industry has grown at a good rate, but it is still very early to say if the market will continue to grow and whether the price of travel agents will continue its rapid growth,” Kasyansky told The Washington Post.
“But I believe that the market is already growing at a pace that could be very attractive for a travel agency.”
Travel agencies can also benefit from foreign exchange, according the International Institute for Travel Research.
Foreign exchange rates are usually around 10 percent to 20 percent higher in countries where travel agencies are established.
However in Russia, the market has not yet developed enough to provide a significant discount for travel agents.
“If you go to the airport, the prices are much higher than in the United States, so the travel agency can charge more than the average.
But that does not mean that it is not good to be able to charge more.
That’s why we do not have a big advantage here,” Kassyanov said.”
For many years, it was not a problem for travel agencies.
Now, it has become a big problem because the travel agents have to pay the costs of their travel agents, so they have to charge a higher price than the airport.”
Kasyanovsky added that many of the agencies in the Russian market have already lost their customers.
“They have to cut costs, or face the loss of customers,” he said.
Kasyanyans company recently signed a deal with the Russian government to provide financial support for travel agency workers, but that deal has not been signed yet.
A representative of Vitova declined to comment to The Post.
The number of Russians travelling to the U.S. has also grown, with many companies offering to provide discounts to their customers, according an article on the Russian Travel Agency Blog.
The travel agency Kasyanyanov runs, Vitova Travel, has already opened up a program for U.K. customers, offering up to 40 percent off the price for travel on flights to the United Kingdom.
And Vitaly, the company’s CEO, recently opened a U.k. office for Russian travel, to expand the reach of Russian travelers.
For now, Russia remains one of the world’s top destinations for Russian travelers, but the industry is struggling to attract and retain them.
“Russia has always been a place for foreign money to come and the growth is only accelerating,” Kutyanovsky said.
“The situation is not sustainable for any Russian agency.”
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