In 2014, a tumbling ruble led to a reduction in Russian visitors. Despite a recovery in the market over the last two years, some businesses were forced to restructure. Ai Vuong investigates.
With international tourism on the rise, Vietnam has set the objective of welcoming one million Russian tourists by 2020. Russia has become one of the top seven international source markets of tourists to Vietnam, a momentum that is propelled by a free trade deal that became effective on 5 October 2016. As business and trade increases, tourism is bound to follow suit as well.
Mr. Nguyen Van Tuan, General Director of the Vietnam National Administration of Tourism (VNAT) has “reaffirmed the importance of the Russian Federation market” to Vietnam, as mentioned in the Vietnam Business Forum.
For years, Russian tourists have flocked to the sunny beach resorts in Phan Thiet, Nha Trang, and Phu Quoc Island to escape the dreary winters. These popular destinations have become even more accessible through direct flights from St. Petersburg and Moscow. According to Nikkei Asian Review in 2014, Russian tourists had made themselves “extremely popular” by outspending other foreigners, averaging a total of $2,500 per person per trip, versus $1,200 by the South Koreans and $1,500 by the Japanese.
For years, Russian tourists have flocked to the sunny beach resorts in Phan Thiet, Nha Trang, and Phu Quoc Island to escape the dreary winters (Photo credit: Bien Nguyen)
However, a string of political and economic factors have affected the Russian tourism market in the past few years, including the Russian ruble dropping as much as 19% in one day in 2014, and overall tourism in Vietnam also declined.
The number of Russian tourists dipped drastically in 2014, but statistics state Vietnam has received about 300,000 Russian arrivals this year.
The number of Russian tourists dipped drastically in 2014, but statistics state Vietnam has received about 300,000 Russian arrivals this year, up 26.5% from last year. Russian tourism in Vietnam had undoubtedly faltered, but the situation is looking up again.
“After some political decisions in 2016, Russian tourists lost an opportunity to go abroad to Egypt and Turkey, so the flow moved to Asia. One of the reasons is that finally Russians got used to the new currency rate and the Russian ruble stabilized,” informed Kirill, Social Media Manager of Story Beach Club and Restaurant, one of the largest attractions in the city.
“A lot is dependent on the economic situation in Russia, but from what we’ve seen, the number of tourists hasn’t been affected, but more so their spending ability,” said Sergey Makeev, General Director of Central Park.
Makeev remarked that even though the volume of tourists mattered, it was actually the quality and expense of the travel that became the pressing factor.
Indeed, some large companies had suffered. It was the large luxury hotels and restaurants that had sold blocks of rooms before the start of the tourist season that felt the pain of losing guaranteed guests, stated Egor Sorokin of Shisha Palace in Nha Trang.
Local businesses, on the other hand, may have benefitted. Former Sales consultant at Saga du Mekong Olia Bardasova says, “I believe local businesses, not all, but a few, gained from the downfall of the ruble, because Russian tourists who traveled here in that time had much less money due to the new exchange rate, therefore they’d have to save money. Local services tend to offer less pricy products, which is highly welcomed by a budget tourist.”
Central Park, Nha Trang (Photo credit: Nha Trang Tourism)
Furthermore, the decline of Russian tourists happened to coincide with an increase in tourists from different countries.
“Initially [the decline] even slightly changed the situation with business real estate in town, but the market quickly bounced back as a lot of Chinese tourists started to arrive,” noted Andrey Zaidel of Nha Trang Fun Divers, one of the top scuba diving operators in the city.
Bardasova also draws attention to “the rise of Asian tourism” with “the lucky coincidence of Chinese tourism” as well as the expansion of tourists from South Korean, Japan, Taiwan, Hong Kong, and Singapore.
The Temple Lounge also experienced a changing trend in their customer base. Sorokin compares, “In the first few months after opening, the proportion of our visitors from Russia was 90-95%. Currently it is about 60%. But, it is not associated with the flow of Russian tourists, but only with an increase in tourists from other countries, including Vietnam, in our bar.”
The rise of Asian tourists propelled businesses to adapt and change their strategies to comprise other demographics, including their marketing campaigns. Zaidel noted that even though Nha Trang Fun Divers had been “badly affected by the decrease initially,” the company had actually grown in sales the last four months due to targeted policies and marketing efforts.
The rise of Asian tourists propelled businesses to adapt and change their strategies to comprise other demographics.
In order to take advantage of the diversifying tourist markets, companies should continue transforming their marketing strategies and products instead of focusing on a singular market from one country. Both Nha Trang Fun Divers and Shisha Temple offered new experiences for visitors in Nha Trang, a still developing town with much potential for entertainment and services.
Even though the initial decline in Russian tourists was worrying, the rising number of Asian tourists has tempered that anxiety. With the right formula of infrastructure development, marketing campaigns, and different products, companies have high hopes for the future of its expanding clientele, including – but not limited to – Russian tourists.
This content is also available in: Vietnamese