Russian Travel Digest

The competition between suppliers and agents is increasing

On Tuesday, October 24, the participants of the Online Travel 3.0 exhibition summed up the results of the year and told about the main trends in the air ticket market. The results are similar to those trends, according to which the tourism industry has recently developed. So, Biletix CEO Alexander Sizintsev at the session "Key trends on the OTA market" reported that the sales volumes of tickets are growing, but the profitability is decreasing. So, if in the first half of 2015 his company sold more than 513 thousand tickets and in the same period of this year - more than 552 thousand. But the turnover for the same period fell from 9 ($156 213) to 6 ($104 140) billion Rubles.

The Head of the online travel agency explained this by lowering the average check - both on the internal (from 7.6 thousand Rubles ($ 132) in 2015 to 6.4 thousand Rubles ($ 112) in 2017) and on international directions (from 12, 1 thousand Rubles ($ 210) to 9.4 Rubles ($ 163) respectively). As well as an increase of the low cost segment in total sales - for the past two years it has increased by 6%.

Another factor is competition of airline suppliers. The leadership is shifting more and more from OTA towards direct sales of carriers.

The same trends are also observed on the tour market. According to its participants, the results of this season are quite good, but the travel agencies could not earn a lot. The reasons are actually the same - instead of lowering the average check for tours, the profitability of the agency business is reduced due to a decrease of commission. And the competition between tour operators in the industry is also growing.

The ways out of the situation, that ticket agencies are looking for - also coincide with the solutions, which were found in the travel agency environment. The way is the searching of additional sources of income on the tourist market. OTA are activating non-core sales - railway tickets, hotels and various additional options. Travel agents in the same way try to find alternative ways of earning, offering clients various additional services. However, there are more questions than concrete results. There is also an idea of tourist retail to get money from clients for consulting services. But among vast majority of travel agencies it is still in the plans - they fear to lost all their tourists.