Russian wellness tourism - current state, trends and opportunities, Nina Tsymbal

Wellness Tourism in Russia

Nina Tsymbal, MBASpa Consultant, Russia

2014

Population: 143.7 million

Cities with more than 1 million inhabitants: 15

Population in urban areas: ¾ of pop.

Population in the European part: 80%

Time zones in Russia: 9

Currency: Ruble (RUB) (1 USD = 35 rubles (app.))

GDP in 2013: USD 2,118.01 billion (per capita USD 14,949.25)

Middle Class: > 27% of pop. with annual income > USD 20 000

Climate: humid continental except for tundra and extreme southeast

Boundaries: with 16 countries

General Information about Russia1

Direct contribution of tourism to GDP: RUB 953.1bn (1.4%) in 2013

Share of Russian tourism market was 2.6% of global tourism in

2012

Russians spent US$ 43 billion on travel abroad in 2012

Domestic tourists spent US$ 21.1 billion in Russia in 2011

T&T Competitiveness Report 2013 (World Economic Forum):

Russia ranked 63rd out of 140 countries

Average 4.16 points (on scale from 1 to 7)

- Government prioritization of the T&T industry – rated 124

- T&T government expenditure, % government budget – rated 89

- Effectiveness of marketing to attract tourists – rated 126

- Quality of the natural environment – rated 120

- No. of World Heritage cultural sites (17) – rated 16

- No. of World Heritage natural sites (10) – rated 4

- Health and hygiene – rated 14

Statistics on Tourism in Russia

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Statistics on Tourism in Russia

In 2013 total number of tourists:

• 18.3 million of Russians travelled abroad (15,3 in 2012) - 13% of pop.

• 33.0 million of Russians travelled in Russia (35 in 2012) - 23% of pop.

(64% of Russians didn’t travel at all for financial reasons)

• 2.7 million of foreign tourists visited Russia (2.6 in 2012)

(Germany (+1.3%), China (+8.4%), the USA (+9.7%), the UK (+16%))

Estimated number of wellness tourists

(outgoing and incoming):

10% - 30% of all Russians travelling abroad

< 1% of all foreign tourists visiting Russia

Rosstat

№ of Russian

visits abroad

(in million)

№ of foreign

visits to Russia

(in million)

in 2012 47,806 28,168

in 2013 54,064 30,791

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Curative & Wellness Tourism in Russia

Types of tourism: Recreational / Health-improvement / Business /

Cultural / Sport / Ethnic / Religious / Transit / Educational

Health tourism (medical, curative, wellness)

- Treatment of diseases and rehabilitation after illness, traumas)

- Prevention & health maintenance (anti-ageing/ anti-stress/ beauty)

Features of curative & wellness tourism

Journey to a modern resort or traditional sanatorium

Curative and wellness services based on natural resources

Accommodation, recreation and entertainment services

Elements of medical services and health rehabilitation

Potential wellness tourists

• Adults and children with chronic diseases

• Parents with children

• Everybody interested in healthy lifestyle

4

History of Russian Wellness System

✔ Slavic health traditions

✔ European curative model (18 -19th century)

✔ Soviet curative and wellness system

- government funding

- prevention/rehabilitation

- sanatorium/profilactorium/resort complex

In 1990 in Russia

health tourism market

USD 5 billion sales

50 million tourists

14 thousand resorts

for 2.5 million guests

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Sanatorium & Resort Complex

Features

• Main specialization - health prevention and rehabilitation

• Methods – curative (balneotherapy, physiotherapy)

• Resort medical science - research centers for

balneology, climatology, physiotherapy and rehabilitation

Types of wellness establishments

• Traditional sanatoriums and profilactoriums

• Modern spa/wellness hotels and resorts

• In the past: medical type with clinical atmosphere

• Now: western standards in wellness resort sector

Federal Law (2011) “…sanatorium and resort treatment of working

citizens and their families is not financed by the state”

38% - medical sanatoriums regulated by the state

5% - resorts belong to large financial-industrial groups

57% - privately owned health resorts

6

In Russia in 2013

Number of health resorts – app. 2 000

Total capacity – 450 000 people

Number of visitors - 8 million people

Since 2000

No of tourists in health resorts increased by 2 times

No of sanatoriums decreased by 20 % (profilactoriums by 2 times)

In 2013 sales of sanatorium services

10.5 % of total Russian tourism market (RUB 953 billion)

1 736.80 rub – av. price/per person/per day

(grown by 28.6% for last 5 years)

Rosstat In 2013

№ of sanatoriums 1 250

(inc. 565 for

children)

№ of profilactoriums 637

Sanatorium & Resort Complex7

Advantages of spa & wellness services in sanatoriums

- increase in competitiveness

- increase in occupancy rate (in low season)

- diversification of services (packaging of medical diagnostics with

short spa programmes at weekends)

Redeveloped or new sanatoriums with spa facilities Luxury sanatorium «Rus» (Sochi), sanatorium&spa “Aquamarine” 4* (Anapa), centre

for medical rehabilitation “Bolshiye Soli” (Yaroslavl), sanatoriums “Dyuny” and “White

Nights” (St. Petersburg region), sanatoriums «Dolina Narzanov» 4* and «Plaza SPA

Hotel» in Kislovodsk (the Northern Caucuses)

Redeveloped or new spa hotels and resorts «Grand Hotel & Spa “Rodina”» 5* (Sochi), «Riviera Club Hotel&SPA» 4* (Anapa),

“Dovill Hotel & Spa” 5* (Anapa), hotel «Imperial & Champagne SPA» 4* (Abrau

Dyurso), “Luxury Barvikha Hotel & Spa” (Chenot spa centre), «Cronwell Resort

Ugorskaya Dolina» (Khanty-Mansiysk region), “Royal Falke Resort and Spa” 4* (the

Kalinigrad region), Eco Resort and Spa “Fox Lodge” (the Yaroslavl region)



Example: Hotel & SPA «Dovil»

5* (May 2013) - first 5-star

hotel «All inclusive» in Anapa:

beach resort, 3 children's

clubs, spa (2 300 sq. m.)

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Services

• health tests (medical-diagnostic centers with latest equipment)

• curative and medical treatments individually adjusted

• touristic and leisure programme: excursions, sports and entertainment

• Russia's natural environment (landscapes, woods, sea and mountains)

Choice of treatments

• wide and diverse

• specific - based on the resort natural curative factors: climatic treatments,

mud therapy, balneological treatments, speleotherapy, herbal medicine

Duration of stay

• in the Soviet time: standard stay - 3 weeks

• now: recommended stay 12 - 24 days / average stay 10 -14 days

• short wellness programmes from a few days:

- "Anti-Stress", "Burn-Out” - treatment of nervous diseases

- "Woman’s Health", "Beauty&Health", "Beauty Week" - for women

- "Man’s Health", "Urological Check-up”– for men

- "Detox", “Slimming”, “Beautiful body”, “Get In Shape” – weight loss

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Every 5th Russian tourist is a wellness tourist

In 2013 (estimated by Russian Union of Travel Industry)

51.3 million Russians (35% of the pop.) had vacations

out of which at least

11 million went on curative & wellness holiday:

- 8 million went to sanatoriums in Russia

- 3 million (10-30% of outgoing tourism) went

on wellness holidays abroad

The demand of Russian tourists for curative and wellness tours

in Russia is growing by 10% every year

Russian tour operator "ALEAN”:

10% of total sales accounted for health tours in 2007

30% - in 2013

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• Russians (in general) prefer classic resort offer:

- sanatorium/resort type of holiday with all-inclusive prepaid package

- medical check-up

- at least 3 or 4 daily treatments

• Aim of the trip - improvement of health/emotional state/appearance

• People aged 40 years and older prefer sanatoriums

• Younger people prefer beach holidays and spa centers

• Before, the majority were aged 45-70 but now - aged 30-50

• Most of the 30-40 year old tourists

- not familiar with the sanatorium-resort system in Russia

- have resort experience abroad

- accustomed to western standards of service

• More than 50% of customers are women over 45 years

• Trip to resort/sanatorium is usually planned in advance

• 60% of clients choose resort by its therapeutic profile

Profile on Russian Wellness Tourists

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• High degree of loyalty

• High proportion of repeat visits

• Crucial factors for the choice of resort

- past experience of friends

- level of treatment and medical care

- reputation for good service

• "Experts" in his/her health problems and eager “advisors” to friends

• Join in communities:

- by types of diseases: diabetes, cerebral palsy, etc.

- by goals: weight loss, cellulite reduction, etc.

• Group on forums and social networks to exchange

of positive and negative experience

• About 42% of the tourists find information on the Internet,

30% from friends, 8% - from TV and radio (www.sankurtur.ru)


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Priorities in choosing a sanatorium

• Therapeutic profile (32 %)

• Location of sanatorium (12%)

• Friends' advice (12%)

• Doctors' advice (8%)

• Cost of the package (35%)

• Advertising (1%)

Selection criteria when choosing a spa/wellness destination

• Natural healing factors – climate, mineral waters and curative muds

• Medical equipment and staff qualifications

• Variety and level of services:

- spa, fitness, wellness, TCM, Ayurveda

- resort infrastructure: sports, ski, diving, sand or shingle beach, golf

- tourist activities: excursions, sightseeing (historical and cultural)

- entertainment: at the resort (e.g. animation for kids), local events


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Foreign resorts vs. Russian resorts

Popularity (TripAdvisor®) (survey with 600 respondents, 2013)

• Those who only plan a wellness holiday

- 51%: desire to relax and improve their health outside of Russia

- 9%: loyal to Russian health resorts

• Those who already had a wellness holiday

- 33% - vacated in foreign resorts

- 30% - vacated in Russian resorts

Choice against Russian resorts

“insufficient level of service and quality”

Satisfaction

- 13% satisfied with Russian level of service (TripAdvisor® survey)

- only 30% satisfied with foreign resort services

(the Ministry of Health, Russia)


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Wellness resort popularity

1. The remoteness of the resort and travel expenses

2. Awareness of the resort brand

3. The price policy of the resort

For Russian wellness tourists most popular resorts:

- in Russia

• Krasnodar region

• Caucasian Mineral Waters

• Crimea

• Belokurikha

- in foreign countries (TripAdvisor):

Central and Eastern Europe including Belarus and Ukraine

300 resorts from 35 countries exist on the Russian market of

outgoing tourism


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Eastern Europe

Czech Republic (Karlovy Vary, Marianske Lazne), Hungary (lakes Heviz,

Balaton), Bulgaria (Golden Sands), Slovenia (Rogaska Slatina)

- affordable treatment packages and rich excursion programmes

- loyal visa policy and affordable transportation cost

- availability of the Russian-speaking staff

Belarus and Ukraine

- historical “domestic” tourist areas

- resort medical system based on the Soviet balneology

- affordable pricing and high quality of curative and medical service

- moderate comfort of accommodation

Baltic States

Estonia (Parnu), Lithuania (Druskininkai), Latvia (Jurmala)

- fundamental basis of the Soviet balneology

- prices below European and Russian resorts

- high quality of treatment, food and accommodation

Outgoing Wellness Tourism in Russia 18

East and South Asia

• Russian Far East - close proximity to China and South Korea

• Demand for health resorts grows annually by 15%

China - treatment in sanatoriums (Wudalianchi, Dalian, Harbin, Heihe)

- natural curative factors (mud, radon springs, thermal water) and TCM

- specialization (spine, rehabilitation after injuries, heart attacks etc.)

- cheap treatments

South Korea - diagnostics and surgery

- demand for diagnostics, cosmetology and plastic surgery

- affordable prices and assistance of Russian speaking coordinators

India

• Ayurveda (Kalari Kovilakom in Kerala, Ananda SPA in the Himalayas)

• 100% annual sales growth of Ayurvedic tours to Kerala ("India-tour”)

• Russians are among leaders in Kerala and other Indian resorts

- greater demand for luxury resorts

- special offers during summer low season and Russian-speaking staff

Outgoing Wellness Tourism in Russia 19

Resort Regions in Russia

1 - North-West and North of Russia / 2 - Central European Russia /

3 - Volga region / 4 - Urals / 5 - Siberia / 6 - Far East /

7 - Caucasian Mineral Waters / 8 - Black Sea Coast / 9 - Crimea

Types of resorts by natural curative factors

Climatic resorts / Balneological resorts: mineral waters / curative muds

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The resorts of Krasnodar regionIn 2013 - 2 700 hotels with 450 000 beds

• Average occupancy rate - 86 %

• 22 000 new beds for the Olympics-2014

“Radisson Blu Paradise Resort & Spa”, "Sochi”,

“Radisson Hotel Rosa Khutor”, “Swissotel Sochi Kamelia” etc.

• 12 000 tourists were expected in 2014

Problems

• Lost competitiveness to other beach countries

• Internal region competition and “external" competitor (the Crimea)

• Sochi has the image of expensive luxury destination

• New competitive image: diverse and affordable accommodation, beach

and mountains vacation and extensive sightseeing


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The Crimea• 800 km of coast of the Black and Azov seas

• Resort and tourist sector - 825 establishments

(151 - sanatorium & resorts, 224 – vacation)

• 55% - for beach vacations and 25% for wellness

• in the past 40% of the tourists - health tourism

Problems

• This year it lost 70% of its main tourist flow

• 3 million tourists in 2014 (6 million last year)

• Russia shows great demand for budget holidays

• Lack of flights and other means of transportation

• Requires serious investment and reconstruction


22

Caucasian Mineral Waters• Dated back to 1803

• 30 types of mineral waters

• Therapeutic mud (Lake Tambukan)

• 200 sanatoriums in 5 resort areas:

• In 2012 - 800 thousand tourists

(by 2025 – 2.5 million)

Belokurikha - Balneology and ski resort in Altai region in Siberia

• Thermal springs with radon mineral waters (known since 1867)

• Healing muds from salty lakes of the Altai region

• 15 sanatoriums, 15 hotels

• 127 000 wellness clients and 66 800 tourists


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Latest trends in the tourist industry

- Increased demand for health-improvement tourism

- Reduction in tours duration

- Combination of different types of tourism

- Development of IT-technologies and online sales

New trends in curative & wellness tourism

1) constant growth in construction of wellness complexes

2) reconstruction of hotel/resort chains with wellness centres

3) combination of different types of tours with spa offers

4) adjustment of tourist offers according to age, ethnics and nationality

5) sanatoriums combine medical curative elements and spa treatments

6) growing interest in wellness tourism from the CIS countries

7)decrease in average age: people of 30-50 years prefer holidays in 4-5

stars sanatoriums

8)increase in number of tourists who want to improve their health on

holiday (not in sanatoriums but in hotels with spa and wellness)

Trends in Russian Wellness Tourism24

- High cost of travel

- Unsatisfactory accommodation, equipment and staff qualification

- Unsatisfactory level of services

- Lack of state control over curative resources

- Lack of effective advertising (especially through the Internet)

- Lack of detailed info on sanatorium services included in tour packages

- Treating wellness tourists as patients and lack of customer service

- Increased competition with foreign wellness resorts

- Lack of effective system in selling wellness tours

in the Soviet times: medical doctors recommended resorts

now: staff of tourist agencies has little knowledge

1) about diseases and diagnosis

2) about treatments and curative factors of the resorts

Problems of Russian Wellness Tourism25

• To strengthen the legislation for the sanatorium and resort system

• To develop wellness tourism together with the social tourism

(system of social tourism "Holidays”)

• To improve the transport accessibility of the resorts

• To develop measures that will increase the resorts occupancy

• To create a programme of education for sales of wellness tourism

(medical centers - travel companies - sanatoriums and resorts)

• To improve the quality of services in the sanatorium and resort system

(mandatory certification and voluntary classification of hotels)

Measures in the Krasnodar region (Sochi):

1)classification of 1 140 hotels: 185 hotels - 1 "star", 200 – 2 “stars”,

235 - 3 “stars”, 74 - 4 “stars", 30 - 5 "stars" and 416 - "mini-hotels"

2)research in 5 categories: meals, treatments, accommodation, ecology,

excursions, entertainment

3)"5 stars” Award in the field of resort hospitality

Measures for Improvement26

Statistics on Russian-Finnish Tourism27

Tourism flow from Finland to Russia

Tourism flow from Finland to Russia (number of trips, in thousands):

93.8 in 2013, 120.3 - 2012, 133.6 - 2011, 139.2 - 2010, 149.9 – 2009

Tourism flow from Russia to Finland

Over 5 million Russian tourists visited Finland in 2013

- majority - residents of St. Petersburg and Leningrad region

- 41% went to Lappeenranta, 22% of the visits - to Helsinki

- 60% - for shopping / 40 % - for relaxation and leisure

In 2013, Russians spent in Finland 1.21 billion euro

908 million euro - for purchase of goods; 301 million euro - for

services

- seriously reduced their spending on shopping

- spend more on hotels and services

The average Russian tourist spends 266 euro for the trip to Finland:

200 euro accounts for purchase of goods, 66 euro for various services

Statistics on Russian-Finnish Tourism28

Summer holidays in Finland for Russian tourists

- less popular than in winter

- mostly visited by individual tourists

- in cottages - for fishermen and families with children

period of 2-3 weeks

7% in 2012, 14 % in 2013

- popular spa hotels - complex Naantali SPA , the Haikko Manor Spa

Satisfaction

- majority of Russian tourists are satisfied with their tours to Finland

- most Russians like the cleanliness, quietness and silence in Finland

Dissatisfaction

-queues at the border, working hours of shops and attractions

- the price level

Finland must focus on wellness tourism for Russians: developed spa

sector, famous Finnish sauna, good ecology and pure food products

Nina Tsymbal, MBA

Spa Consultant

Sources of information• RATA-News (Electronic newspaper of the

Russian

Union of Travel Industry, http://ratanews.ru)

• ROSSTAT (The Russian Federal State Statistics

Service, www.gks.ru)

• Sankurtur (Informational portal about resort

complex in Russia http://sankurtur.ru)

• Federal Agency for Tourism, Ministry for Culture

of the Russian Federation, www.russiatourism.ru)

• Moscow Medical & Health Tourism Congress

(MHTC, 2011-2014, www.mitt.ru)

• Other publicly available sources of information

St. Petersburg, Russia, mob. +7 921 962 16 85, [email protected]

2014


Russian wellness tourism - current state, trends and opportunities, Nina Tsymbal

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