Right now, five out of the world’s top 10 Travel destinations are cities in the Asia Pacific. But it is widely acknowledged that the region punches well below its weight in tourism, which is why there is plenty of room for growth. How will Asia’s tourism industry evolve?
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.
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.
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.
Challenges ahead
The Asia-Pacific’s travel industry seems to present many business opportunities. Can growth be sustained?
Upcoming trends in travel
Catering to various types of travelers is big on the agenda of travel service providers as a one-stop approach is no longer practical. Some of the upcoming trends include:
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.
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.
- Economic growth
- Social benefits
- Eco-friendliness
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
- 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.
- Cruise control
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.
The Asia-Pacific’s travel industry seems to present many business opportunities. Can growth be sustained?
- Easing travel access within Asia-Pacific countries
- Lack of infrastructure
- Enhancing customer experience
- Human capital crunch
Catering to various types of travelers is big on the agenda of travel service providers as a one-stop approach is no longer practical. Some of the upcoming trends include:
- Focus on millennials
- Senior citizens
Contrary to popular belief, senior citizens are no less keen on travelling. They are not just enthusiastic but very demanding as well. Customer service is a crucial component of their travelling experience.
- Taste for luxury
As the number of millionaires continue to grow, so do the number of affluent U.S. households – with an increase from 10.5 million in 2012 to 20.5 million by 2020. This has fuelled the rise of luxury holidays. This particular sector will be dominated by the U.S., Japan and Europe, but significant demand will come from China, India and the Middle-East in future.
On the other hand, luxury travellers are active in writing hotel reviews, representing 52 per cent of all hotel reviews globally between 2012 and 2014 – adding another target segment of interest.
Moving forward
The Asia Pacific region’s travel industry is growing at a fast pace, carrying economic, social and environmental benefits in its wake. Ample opportunities have emerged for investors with the rise of new travel segments, technological advancements and the as yet under-served cruise industry picking up, alongside the phenomenal growth of budget airlines, which have opened up Asian travel destinations to budget travelers.
At the same time, challenges remain. Infrastructure is under-developed and too many travel service providers are not differentiating their offerings enough by segment. Millennials, seniors and luxury travellers, for example, have very different needs and wants when travelling. And most industry players have not yet fully capitalized on the incredible rise in mobile internet usage in the region.
Going forward, the tourism industry in Asia is likely to move into a maturation stage, when more differentiated and segmented offerings start to appear, both online and off-line. We can expect different sections of major tourist cities to increasingly focus on different tourist segments. We can also expect that national tourism promotion boards will increasingly try to position their countries to cater to a wide range of inbound as well as domestic tourist segments.
And one final word: travel clubs and travel agents should not be written off yet. The personal touch cannot be completely replaced by a website.
https://www.spireresearch.com/spire-journal/yr2014/q4/destination-asia-pacific-an-upcoming-tourism-hub/
