Travel sector looks upbeat for Asia-Pacific region?
According to a study conducted in 2013, the year was good for international tourism and strongest for destinations in the Asia Pacific region – Asia saw six per cent growth. Moreover, the number of international tourists increased by 14 million to reach 248 million. South-East Asia (as a sub-region of the Asia-Pacific) registered a 10 per cent increase. China emerged with a record number of international tourist arrivals in 2013, at 55.69 million.Asia’s tourism industry employs 65 million people and supports one in 12 jobs – exceeding industries such as financial services.
Needless to say, this growth also led to the generation of 1 million new jobs and accounted for USD2 trillion in contributions to GDP, equivalent to roughly nine per cent of the region’s gross domestic product (GDP). This signifies that at present, this sector employs approximately 65 million people and supports one in 12 jobs – exceeding industries such as financial services.
What tourism brings to the table
With more inbound tourists exploring different cities in the Asia-Pacific region as holiday destinations, the benefits abound.
The contribution of the travel and tourism sector to this region’s GDP is expected to grow by 5.4 per cent per annum by 2024. More employment opportunities will also emerge in sectors like hospitality, airlines, transportation services and restaurants, to name a few. By 2014, travel and tourism will account for 79 million jobs.
As the tourism industry matures, social media platforms are making headway. Most of these online platforms, including online forums and travel blogs, are being increasingly used by companies to disseminate information to larger audience. Needless to say, social media is leading to greater awareness of travel among Asians. This has been one of the factors driving the upsurge in budget air travel within Southeast Asia.
Sustainable tourism is emerging as one of the key growth drivers for this sector. Members of the Asia Pacific Economic Cooperation (APEC) group are making joint efforts in the direction of a sustainable future in tourism. APEC’s Tourism Working Group is an initiative to help promote growth in travel and tourism in the region.
Where are the opportunities?
As the Asia-Pacific region becomes an increasingly popular holiday destination, it is gradually emerging as a leader on the global tourism stage.
How will this evolution take place?
Emergence of new traveler segments
A clear shift is underway in the preferences of travelers wherein a customized approach would best cater to their travelling demands. This has given rise to an array of categories for travelers under the female business traveler, small business traveler, visiting friends and family traveler as well as the senior traveler, not to mention the lesbian and gay or LGBT traveler. This growing consciousness of segmented demand will create opportunities for service providers to produce more targeted offerings.
Technological advancement in the region
Online transactions and mobile devices are emerging as key mediums for travel bookings. In countries such as Thailand and Indonesia, the standard fixed internet phase has evolved to mobile device-centric internet usage. Thus, it has become crucial for agents and travel service providers to support mobile solutions or become obsolete.
Moreover, social media is now emerging as a powerful medium of information and decision influencing. 61% of Indonesians mention that they use social media during travel as a means of seeking advice from friends and contacts.
Consumers aged 18-30 are showing strong interest in cruise holidays.
Many travellers have expressed a keen interest in cruise holidays – with the strongest interest cited by the 18-30 age group. This represents a market opportunity for travel agents. But infrastructure is holding back the cruise industry. Many terminals in the region lack the capacity to accommodate larger vessels.
Growth of budget airlines
The global middle-class is expanding rapidly and is expected to reach, 2.1 billion by 2030. Most of the increase is coming from Indonesia, India and China. According to research in 2013, 47% of leisure travelers have taken at least one international flight with a budget airline in the past 12 months.
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The Asia-Pacific’s travel industry seems to present many business opportunities. Can growth be sustained?
Easing travel access within Asia-Pacific countries
As Asian governments focus on economic integration through trade and investment liberalization, travel between nations will pick up. A strong indicator of liberalization is the increase in bilateral free trade agreements (FTA). With just 53 in 2000, there are now 250 FTAs in various stages of development as of September 2012. Further liberalization is on the cards. Asian governments are bringing down trade barriers via the AEC, RCEP and TPP multi-lateral agreements. One barriers that trade agreements could help address is reducing visa restrictions. This is a huge impediment to the industry, particularly in terms of capturing demand from China and India, as Chinese and Indian travelers tend to require visas for most destinations in this region.