Eastern By ROB GILL Y
OU MIGHT HAVE NOTICED THAT RUSSIA HAS BEEN IN THE HEAD- LINES a lot recently – unfortu- nately most of the coverage involves alleged Russian
interference in the US presidential election and Russia’s alleged ties with President Donald Trump. With the appointment of an independent
special prosecutor in the US to look into these allegations, this is a story that will only run and run – despite Trump’s assertion that it’s all “fake news” and Russian premier Vladimir Putin calling it “hysteria”. But what all this headline news is obscuring is that the Russian economy is starting to show signs of recovery after two years of recession in 2015 and 2016, which was largely brought about by the worldwide collapse in energy prices, plus sanctions imposed in 2014 by the US and European Union in the wake of the ongoing conflict in eastern Ukraine.
84 BBT July/August 2017
progress
Business travel in Russia and Ukraine has suffered in recent years but are there finally some reasons to be more positive?
Russia’s central bank is predicting
GDP growth of 1 to 1.5 per cent during 2017. While this is hardly a stellar rate of growth, the world’s largest country in terms of landmass is at least pulling out of recession. Although the World Bank admits, however, that “important downside risks persist”, particularly as the country remains reliant on oil and gas prices, and has limited access to international capital due to the sanctions.
SLOW GROWTH IN BUSINESS TRAVEL This economic landscape has also had profound effects on the business travel environment in Russia, with major consolidation going on both within the TMC (travel management company) sector and airline industry over the last couple of years. Philipp Lookianenko, managing director
of HRG Russia, says: “The main trend in 2017 is that business travel has stopped decreasing. In other words there is no reduction, but we see very small organic
growth of transient business and MICE [meetings, incentives, conferences and exhibitions]. “Moreover, MICE seems to be growing compared to last year for the Russian market, so we may see a certain level of recovery thanks to this business segment.” Tomas Tachovsky is general manager
for north and east Europe at FCM Travel Solutions. He says the recession in Russia has led to changes in the way major global TMCs are operating within the country. “Quite a few TMCs went out of business, plus there have been several takeovers and acquisitions,” he says. “This has enabled FCM to bring considerable new business on board, as we have seen the redistribution of the Russian business travel market volume between the global TMC players.” But he adds that there continue to be “challenges” in the market, including the comparatively high 9 per cent bank interest rate, as well as “instability” within the Russian banking sector.
BUYINGBUSINESSTRAVEL.COM
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