Russia. The one country so many misunderstand, and the one market with room for a gold rush in profits is still possible. Outside Latin America, the Russian Federation holds more potential than any other market on Earth. This begs the question; “why has Russia not been properly engaged then?” The answer is, in all probability, misunderstanding.
Scanning news this morning, I ran across at least two Wall Street Journal articles that deal with the multi-billion dollar possibilities, especially online, in dealing with the Russian Federation. I must admit too, seeing two so closely together, made me raise an eyebrow for more than one reason, but the investor or travel expert will be more interested in Russian possibility, than in media idiosyncrasies. The “rub” from these stories is not “if” Russia travel will boom, but when and how.
This article in Tech Europe outlines many of the factors that have curtailed Russian Federation boom expansion already. Of course, Argo Travel has proclaimed all this many times, without so much as a trackback link. The $30 to $50 billion dollar booking bonanza possible from Russia, was and is one premise behind not only our own startup dreams, but those of other industry magnates. So far though, only the investors with confidence in Serge Faguet and his partners over at new startup OTA Ostrovok, have made any significant move digitally.
According to the WSJ article dealing with Ostrovok, some 40% of all expenditures online are in travel. Now, if you think about it, this is one heck of an incentive for everyone to pay attention. Even take some chances. I look at investors in a funny light, I know, but it seems logical to me that if Hilton or others can spend a billion building a hotel in Russia… You see my point. And, Ostrovok is the only major online startup to address this market? Holy Toledo. Booking.com, at least according to the WSJ, is the only real competitor in the world’s largest country.
Cultural context, infrastructure, a myriad of special cases make the Russian Federation a difficult puzzle. But, is this not what investment and growth thrives on? No other model of growth, besides emerging markets, presents itself as a positive in travel or any other industry. The Russian Federation symbolizes one of the only VAST opportunities left for business on planet Earth. There cannot be any argument there. Execution on the right plan is key, more on this later on too.
We leave you with video from the Wall Street Journal and an interview with Ostrovok CEO Serge Faguet. Interestingly, Faguet suggests his investors bought in over Skype, without having previously known him or his collaborators. At least we know some money people have a bullish attitude, and some brains. Unfortunately for them, the travel market may be about to pass many by. More later on this. Is Russia the “last travel gold rush?” A better question might be; “Can businesses afford NOT to bet on it?” (Think future marketing spend)