Russian-Ukrainian conflict could slow travel resumption, experts say

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Progress towards recovery in the international travel industry could be slowed by Russia’s invasion of Ukraine as the impact of the ruble’s collapse, flight suspensions and economic sanctions are felt, said experts.

The widely condemned invasion, which began on February 24, has reportedly created a cloud of uncertainty over the industry and is expected to impact Russian consumer spending.

Russia is the third largest source market for tourism in Dubai, according to Jaap Meijer, head of research at Arqaam Capital, and the second for the whole of the United Arab Emirates according to Vijay Valecha, chief investment officer of Century Financial. Russia is also the third largest source market for the Greater Middle East region.

Meijer said that the decline of the ruble against the dollar, which reached a new record low on Tuesday morning, as well as the collapse of the stock market, limits on foreign exchange and interest rates reaching 20% ​​in connection with sanctions imposed by Western countries, will all have an impact effect on Russian consumer spending.

“2022 was set to be a year of recovery for the travel industry hard hit by the pandemic. But Russia’s invasion of Ukraine may have slowed progress,” Valecha added.
After two years of disrupted travel due to ever-changing COVID-19 restrictions, airlines and tour operators are once again bracing for closed skies, cancellations and a cloud of uncertainty over international travel.

“More than 30 countries have so far closed their airspace to Russia, with Moscow reacting accordingly.”

Carriers will have to divert flights south, leading to longer travel times on some flights, he said, and continued economic sanctions involving flight cancellations will chill the Russian outbound market as Russians are uncertain about their ability to return home after travelling.

“This could have a medium-term impact on the tourism industry in the Middle East, as a significant part of Russians prefer the Gulf as a tourist location,” he said, adding that the bearish sentiment had set in. , which may take some time to fade. .

However, wealthy Russians are unlikely to be affected and could still travel to the Middle East, he said.

Online travel company Cleartrip said a sharp decline in inbound and outbound Russian tourism is to be expected, with companies that have huge exposure to the Russian market being particularly hard hit and the effects already seen on bookings and future routes.

“Businesses that rely heavily on Russian tourists will need to diversify and protect themselves from disproportionate exposure,” the company said.

(Reporting by Imogen Lillywhite; editing by Cleofe Maceda)
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