— Man quickly gets used to anything. I remember how when I first arrived in Moscow twenty years ago, I was struck by many things. At first, the people all looked alike to me, and all the smells seemed completely alien.
Born in India, studied in Moscow. Graduated from the D. Mendeleev University of Chemical Technology of Russia. 2005, set up the company Veda Travel in Moscow, specializing in the Indian market. 2013, in partnership with BLS International, and under their brand name, opened a visa office in Moscow, which also specializes in India.
— What was it that brought you to Moscow?
— I wanted to train as a manager with the emphasis on finance. And I was planning to go to Australia, to some university. But my friends advised me to go to Russia as it is traditionally a friendly country which treats those from India well. In short, I chose Moscow and the D. Mendeleev University of Chemical Technology of Russia. The money to study was given to me by my father who, at the time, was Dean and Professor of Physics at the university in Nalanda, in the eastern state of Bihar. It is, by the way, the oldest university in India and almost the oldest university in the world (Russian sources confirm that the university in Bihar was founded in the year 500. – N.M.). I was awarded my degree and returned home.
— You didn’t consider staying in Russia?
— At the time – no. I looked for work at home. In India, it isn’t easy. I went from job to job. One day, I saw an announcement in the paper saying that an Indian travel agency was looking for a manager for its office in Moscow. The interview seemed to go quite well, but didn’t come to anything. I soon landed a job in a local bank. Then, a year later, I suddenly got a call from that travel agency, and they offered me a three-year contract in Moscow.
— So you went?
— It didn’t go down well. My parents were completely against it. My father remonstrated with me, “What’s so wrong with your home country?” My mum was worried that I would get married in Russia and stay there. And although I solemnly swore to return in three years, and that there wouldn’t be any Russian wife, I still left without my parents’ blessing…
— And so, three years later…
— Three years later, in 2005, I set up my own travel company in Moscow. We sent parties to India, Sri Lanka, and the Maldives. The business was expanding brilliantly, and then, in 2008, the financial crisis struck… Now, my company, Veda Travel, deals pretty much only with India. In both directions, though: one office deals with trips from Russia to India, and the other with those from India to Russia. We organize those, as well as other trips, in Moscow, too.
— Where have your successes come?
— Last year, Veda Travel sent 700 people from Russia to somewhere in India. And, for inbound tourism, we even received an award from Rostourism: of the 10,000 Indians visiting Russia in 2014, approximately 6,000 did so through our company.
— Seven hundred people from Russia is not such a large number…
— But we are not aiming for the mass market. We prefer to deal with individual clients and small groups of 10-15 people. Mass tourism allows you to keep prices down, increase turnover. But the risks are greater. We always have room to manoeuvre in difficult circumstances, like quickly changing one hotel for another one of the same class. Our emphasis is on the level of service. We also work with large corporations which regularly send groups of employees on breaks. We are already known: one client recommends us to another… This, by the way, allows us to save on conventional advertising, as well.
— As well as a travel company, you have visa offices, too…
—Yes, in October 2012, we won the tender to set up an Indian visa office. Or, more precisely, the tender was won by the Indian company BLS International, which has been in this business for a long time, and has such centres in 23 countries. It won the tender and handed the business to us in something approaching a franchise. In other words, we are answerable for all of the work, and they, as partners, receive their share of the profits. We opened the visa centre in Moscow in May of 2013, and then the one in Petersburg. In the first twelve months, we arranged visas for almost 250,000 people.
— But as of autumn of last year, Russians are now able to get a visa for India on arrival. Has that had any impact on your business at all?
— Virtually none. At first, I won’t hide it, we were a little worried that the visa centres would get less business. But that didn’t happen. Really, the name visa “on arrival” is something of a misnomer. You still need to have the visa in Moscow, even if you apply for it over the internet. You fill in the forms online, and then send them to the consulate. You receive confirmation from them, and then print it out. And when you are in India, they put an entry visa on your passport.
All the visa documentation is completed in English. Those working at our visa centre know both English and Russian. They can always help you, make suggestions, corrections. But, on the internet, you are on your own. What is more, a visa via the internet costs 60 dollars which, at the current exchange rate, is not cheap. Whereas in the Moscow visa centre, the process costs 1,880 roubles.
In short, last December, 560 people obtained the visa “on arrival”. Whereas, the number using the visa centre was approximately 20,000. So, that is not a huge loss for us.
— Have the recent upheavals in the rouble exchange rate caused greater problems?
— The crisis, of course, is making itself felt. If last year, taking the resort of Goa alone, the companies working with India were sending 8-10 chartered flights from Russia every week, then now, it is four or five, maximum. And the visa centre figures back this up. In 2014, January to February, 2-3,000 passports were presented each day; this year it was 500-800… But in this, we can also see benefits to ourselves. Although Russians’ material resources have decreased, and prices have risen, competition has lessened. If before the main competitors with India were the cheaper destinations of Egypt and Thailand, now Thailand has become much more expensive, and Egypt, well, you know yourself what is going on there. Added to which, last year in Moscow two firms selling trips to India, and three in Petersburg, closed down. But people are still going on holiday. And will continue to. And, our company is being compensated in some measure for the loss of Russian tourists by visitors from India. Those coming to Russia pay in dollars, usually, and that, as you know, at the moment is profitable.
Moscow is the business centre of Russia, in which the main share of the tourist flow consists of business tourists. Accordingly, traditional tourism is so far less prevalent in the capital: for a long time, Moscow was viewed as a very expensive city. In recent years, the situation has changed rapidly, and now Moscow, on the contrary, wins on the cost of accommodation: there are variants to suit every pocket. Furthermore, due to the rise in the rate of the dollar and euro, accommodation prices for foreign tourists today look extremely attractive. Moscow undoubtedly has growth potential in the field of cultural and educational tourism, and once all the political-economic sanctions have passed into oblivion, the flow of tourists is sure to increase.
Do not forget that the climate in Russia is quite cold (by comparison with Europe) so to keep tourist activity going, particularly in the winter, tour operators must make sensible offers. If the price corresponds to the quality, the demand for tours of the capital will grow significantly.
— What difficulties did you encounter when you started working in Russia?
— The difficulties were to do with a lack of experience. I remember we had hardly started our travel business when in Russia a law came in on the necessity of all transactions with clients being carried out through a cash register. We were a little careless, and missed the boat. The tax inspectors came round and fined us 60,000 roubles… We bought the till there and then, but, after that, I started to follow the changes in the law here very closely.
Then, we made another mistake. After Moscow, we opened a visa centre in St. Petersburg. Someone advised us to establish it as a branch of the Moscow firm. Three months later, it came to light that with this branch we had “fouled up” to the tune of 18% of VAT. And we immediately ended up in the red.
Then we went to the tax authorities and confessed. And they were understanding, and even reduced the tax bill by half. We had to close the previous company along with the branch in Petersburg and establish it anew, this time in a different legal form, one exempt from VAT.
So now, not only do we know the ropes when it comes to the finer points of Russian legislation, and know all the new laws, but we even give advice to businessmen arriving in Russia on issues related to starting one’s own company, and on tax and customs procedures. It has become another aspect of our business. You have to take the positives from mistakes.
— You give advice to “rookies” in the Russian market. Can you give a short instruction to overseas colleagues on starting a business in our country?
— I would say that engaging in business in Russia is easier than it is India. The problems are fewer, for sure. Taxes here, by comparison with many other countries, are not high. And the average profit margin is considerably higher.
Yes, it is hard now, with the crisis. But I, personally, have already lived through both the crisis in Russia in 1998, and the one in 2008. It was tough. But everything gradually became restored, and again it became possible to earn good money. Given the will. You just have to learn. And not fall foul of the laws.
— The office we are talking in – most of the employees are your compatriots. How do you recruit your staff?
— This is the office which deals with inbound tourism. And Indian tourists feel more comfortable if they are greeted by, and attended to, by their own. Generally, we have working for us both Russians who speak English, and Indians with a knowledge of Russian. We usually recruit staff in Moscow through the employment centres.
In 2014, Moscow was visited by about 1,500,000 foreign tourists. Two factors influenced this figure: the Olympics and the Ukraine situation. Because of the Olympics, the flow of tourists in the first half of the year rose considerably, but in the second half, the number of tourists, particularly from Western countries, fell sharply – from 30 to 50 percent, depending on the country. It is also worth mentioning that the number of tourists from Asian countries has hardly changed at all, they are more loyal to Russia. These trends are continuing in 2015.
Accordingly, the volume of the Moscow entry tourism market in 2014 was about 15-18 billion roubles, Or at the current rate, 300,000,000 US dollars.
Unlike certain Western countries, in Russia tour operator and agency activities can be combined. Speaking only of agency activity, which is the most widespread, it costs about 7-8000 US dollars at the present rate to enter the Russian market.
Ninety percent of the travel agencies in Russia employ not more than 10 people. Accordingly, the average size of the office of such a company is around 50 sq.m.. The cost of equipment and publicity are minimal.
The average amount of commission levied by Russian travel agencies is 10-12%, while tour operators take five percent. The highest commission is levied by agencies providing individual tours – up to 20%. This makes the share of individual tours of Russia higher than for Western countries. Accordingly, the payback period for a travel agency offering tours of Russia is less than one year.
Another difference between the Russian and Western markets is that seeing historical sights is predominant among the reasons for coming to Russia, whereas in Western countries, the share of this form of tourism is not more than 55%.
Russia is now actively working on raising the foreign tourism figures: in 2015, it is planned to set up a marketing agency called “VisitRussia”, which will promote Russia as a tourist destination and try to improve the country’s image abroad. The priority targets are such countries as China, Japan, Iran, South Korea, Turkey, Germany, Italy and Spain.
It can therefore be expected that the tourist centre in Moscow will prove to be quite a successful business project. The rate of growth of the tourist centre in the next five years will most likely exceed the statistical average of 10%.
— That’s the Russian staff. What about the Indian staff?
— We tend to find them back home. The choice of candidates in Moscow is not very large at the moment. Although, I hope that before very long it will be larger.
— How do you mean?
— In Canada, for example, there live half a million of my compatriots, in Britain it’s about the same, in Dubai, a million, all told. As for Russia, in the first half of the nineties, there were a lot of Indian students here. Half of them went back home, and half stayed on. But from the whole of Russia, I think you would struggle to muster 5,000 Indians, businessmen included.
Finding work in India within the area of your training is not easy for young people, even for the highly qualified. But there are a lot of talented fellows. Our computer technicians and programmers are known throughout the world. A Russian friend and I worked on a project with the provisional title “Study, Work, and Russian citizenship.” As of this year, foreign students are allowed to study and work at the same time in Russia. As well as which, there is a programme that receives foreign workers and specialists, from, in the first place, the CIS. They have to sit a Russian exam, and pay a certain fee to enable them to work. But there are still more vacancies and opportunities than those who want to take them up. This opens up good prospects for my compatriots, too…
We have already found about 200 young experts in India prepared to come to Russia.They will come at their own expense, with some of them taking out a bank loan to do so. We have already made arrangements with the technical college in Zelenograd, where they will be studying, in the main, Russian language, and with the meat-processing plant in the Moscow satellite town of Yegoryevsk: they have in the region of sixty different vacancies. These fellows will be working and studying.
— What do the Russian authorities make of this idea?
— They are positive about it. In November, for example, I was in Delhi at the latest Russian-Indian Forum on Trade and Investment where I was discussing this very subject with Sergey Cheremin, Minister of the Moscow Government, Head of the Business Council for Cooperation with India, and member of the Russian-Indian Intergovernmental Commission on Trade, Economic, Scientific and Cultural Cooperation. He lent his support to this project.
— You have plenty going on. But how do you spend your spare time in Moscow?
— I don’t have much of it. And I spend most of it with my family. My wife and I go to the theatre, the circus, and now that it is winter, we go skating…
— Why not? We also visit friends. Indian friends and Russian friends.
— And you live where?
— We have bought a flat in New Moscow, in Great Domodedovo, but it isn’t ready yet. So we are renting another one not far from the office.
— By all appearances, you feel quite at home in Moscow…
— When I was living permanently in India, I thought that there was no better country in the world, nor could there be. There were my friends, my family, great food. Now, though, I have got completely used to Russia. I go to India and feel, of course, as if I am home, but after a month, I start to feel the pull to go back.