Russian Tour Operators Losing Business to Unfair Chinese Competition

Russian tour operators are losing Chinese business as operators from the world’s most populous country are selling tour packages below cost while using black-market tactics to recoup money, Kommersant writes in a detailed investigative piece published Saturday.

Chinese operators are offering an eight-day Russia tour with visits to Moscow and St. Petersburg for an average of 30,000 rubles ($475), including flight, hotel, food, and some excursions.

The operators often use the services of unauthorized and unpaid guides, who steer the tourists to stores that service only Chinese groups, the paper reported. The stores, including many jewelry shops, overcharge the Chinese tourists and split the profits with the guide and tour firm.

“Constant damping by the Chinese has led to Russian firms either leaving the [Chinese tourism] market or reselling the group business to unauthorized Chinese firms,” Kommersant cited Alexandr Agamov, director of Russian tour association World Without Borders, as saying.

The number of Chinese tourists visiting Russia has surged over the past four years as the ruble declined in value, reducing the price tag of tour packages, and as more airlines began offering charter flights between the two nations.

About 1.25 million Chinese tourists visited Russia last year compared with 410,000 in 2015, the paper reported. There are now 23 airlines offering flights to Russia from 24 Chinese cities, up from 10 cities in 2015.

Chinese tourists officially spent $264 million over the first three months of the year, according to official Russian state data. The unofficial revenue from Chinese tourists, including black-market transactions, is more than double that number, the paper said, citing experts.