Russians rolling back to Phuket

Phuket is experiencing two trends: a short term spike in the number of Russians tourists arriving on cheap package tours (see story here), but also an undercurrent of longer-term growth that began six months ago where the focus is on the growing trend for more, higher-spending Russian tourists making their way to Phuket.

The Ministry of Tourism and Sports (MoT) reported 599,140 travellers from Russia visited Thailand in January-July, up 19.39% from same period last year. In July alone the arrivals from Russia grew 20.02%, nearly doubling the average growth rate of 10.85% recorded by MoT.

“The increase in the number of Russian tourists this year is undeniable, and the number of charter flights to Phuket is increasing,” notes Sathirapong Na Takuatoong, President of Phuket Tourist Association.

“The Russians coming now are different from the mass tourism Russians who came two years ago,” Mr Sathirapong told The Phuket News.

However, while the new arrivals are spending more on their holidays, they are more selective about what they spend their money on and are seeking out fair value.

“I can’t say that these Russians will be higher quality than those who came two years ago, but they are spending more – about B5,000 per person and a day,” Mr Sathirapong noted.

Russia ranks sixth on the list of Thailand’s largest source markets and tops the list of non-Asian countries. Thailand’s five top markets – China, Malaysia, South Korea, Japan and India – are all within the Asian region, while Russia is number one source market outside it, outstripping Europe, Australia and USA in terms of volume and often in terns of length of stay and tourist spending.

Tanes Petsuwan, the Tourism Authority of Thailand (TAT) Executive Director for Europe, Africa and the Middle East, earlier this year already stated that while the overall volume of Russian arrivals is now lower than in 2012-2014, their overall “quality” is improving, with Russians now spending more on hotel accommodation and activities.

According to the TAT, spending by each Russian visitor to Thailand in 2013 stood at an average of B3,800 a day. That amount has risen to B4,500 – about B300 more than the average spending by the European tourist visiting Phuket. As Mr Sathirapong noted, Phuket is enjoying about B5,000 a day.

The TAT expects to see a clear shift in terms of quality versus mass market tourists from Russia this year, predicting that quality tourists will form 50% of total Russian visitors, up from 30%, meaning more clients for luxury hotels and villas, spas, high-end restaurants and entertainment venues, Mr Tanes said.

Phuket is their primary destination, with many now visiting Krabi province and Khao Lak in Phang Nga province, he added.

According to major Russian tour operator Inturist, the volume of visitors to Phuket grew by 30% in January-May – Koh Chang enjoyed an increase of 5% and Koh Samui and Krabi remained level, with Pattaya being the main loser.

“Phuket shows steady growth while Pattaya is on the decline,” agrees Anna Malinina from Natali Tours. The average price for bookings to Phuket through Natali Tours hovers around US$1,000-1,1000 (more than B34,000), while the average duration of trip was about 10-12 nights, she said.

The resurgence in Russian tourist interest in Phuket has been attributed to several factors beyond Phuket’s attraction, with the vale of the ruble collapsing in 2014, and tours to Egypt and Turkey being suspended following a terror incident over the Sinai Peninsular and a political conflict between Moscow and Ankara last year.

Yet even Russia’s Ambassador to Thailand Kirill Barsky noted earlier this year, “As the economic situation gradually stabilises, people begin to live, begin to do business in a new reality, plan their winter and summer vacations. There appear again signs of Russian tourists coming back to Thailand.”

Whether the trend of Phuket attracting higher-spending Russians is sustainable remains matter of debate.

“The prices of the flights that have brought this latest surge seem to indicate that the tourists are more likely workers and couples,” PTA President Sathirapong said.

However, he noted that the steady climb in the number of new Russians arriving in Phuket has yet to be bolstered by the traditional Russian family holiday period. While Egypt is still out of the game and Turkey is not a winter destination.

“The families will come at the end of the year, as they usually arrive from about December 25 to January 23 every year, during their long vacation season. This trend is well upheld by historical data,” he said.

“It is hard to say whether this trend is truly sustainable, as that depends on many things, but it is a good thing for now,” he added.