About 15% of travel agencies have closed in Russia

In the last year, the number of travel agencies in Russia fell by 10-15% due to the low profitability of the business, according to a survey conducted by Interfax-Tourism.

"Agencies are closing. In the last year, about 10-15% of travel agecies left the market, if judged by our network," Sergei Agafonov, the General Director of MGP (one of the biggest network of travel agencies in Russia with 420 offices) said. He added that the main reason that travel agencies, who sell products of tour operators to consumers, close their business, is unprofitability of travel agency business.

"As we know, outgoing tourist flow decreased significantly. Domestic tourism, though growing, is not able to compensate the loss of agencies in outbound market. In addition, this is low-margin business. Companies that are not able to earn a steady clientele, are forced to leave," Sergey Agafonov sad.

The director of marketing and sales of tour operator ICS Travel Group Valeriya Romanenkova agrees with this opinion.

"I see the reduction in number oftravel agencies on the basis of those, through whom we sell our tours. Of course, it is not very large reduction, but still it is rather significant. Agencies who do not earn something to pay the rent, have to be closed. Those who previously had about 30 clients and therefore small profit simply cannot survive. Larger and more stable companies would remain. So, there is a cleansing of the market, as in the tour operator segment, "Valeriya Romanenkova noted.

Experts believe that only the largest and the oldest travel agencies would remain on the market, regardless if they belong to a network or not. Reliable customer base and good reputation are more important to stay alive on the marke.

There are about 50 thousand travel agencies in Russia (according to SPARK system). At the same time, most of such companies are located in Central Federal District, about 20 thousand agencies. Only in Moscow there are about 15 thousand agencies. Among the federal districts, in addition to the Central Federal District, the leader in the number of travel agencies is Northwestern Federal District (7.1 thousand agencies according to SPARK) and Volga Federal Disctrict 4.2 thousand agencies according to SPARK). The last positions in rating by the bumber of travel agencies (accroding to SPARK system), are taken by Crimea (413 agencies), the North Caucasus Federal Districs (835 agencies) and the Far Eastern Federal District (1.7 thousand agencies).

Nevertheless, according to the largest Russian tour operators there are not more than few thousand agencies who actively sell their products. Others are involved in the industry only time to time, or do not deal at all. According to Sergey Agafonov, no one knows exactly how many travel agents operate in the Russian market; there are many small companies that are difficult to count.