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APAC: outpacing global tourism growth

International tourist arrivals in Asia and the Pacific grew six per cent in 2017 to reach 323 million, according to a report by UNWTO/GTERC Asia Tourism Trends. The report further states that Asia and the Pacific has played a defining role in the recent expansion of tourism, accounting for 37 per cent of the world’s international tourism expenditure and nearly one-fourth of global arrivals. Between 2000 and 2017, the region has seen an average seven per cent increase per year in international arrivals, the fastest growth amongst all world regions.

Almost  half  of  all  international  tourist  arrivals  in  Asia  and  the  Pacific  were  recorded  in  North-East  Asian  destinations  in  2017  (160  million  arrivals),  while  37 per cent  were recorded in South-East Asia (120 million), eight per cent in South Asia (27 million) and five per cent in Oceania (17 million).

A rapid economic growth coupled with rising air connectivity, travel facilitation and large infrastructure projects have boosted international travel in the region. This has had a large impact on Asian destinations’ tourism earnings, which have steadily increased from 17 per cent of the world total in 2000 to 29 per cent in 2017, equivalent to US$ 390 billion in tourism receipts, the report says. The region expects to achieve a total of 535 million tourist arrivals by 2030, 30 percent of world total.

According to Mastercard Asia Pacific Destination Index 2017, tourism made up 8.5 percent of Asia Pacific’s GDP and 8.7 percent of its total employment in 2016. In absolute terms this translates to US$2.06 trillion and 156.6 million jobs in 2016, making Asia Pacific’s tourism industry the largest in the world by GDP contribution and employment.

With two of the major outbound tourism giants present in the region namely, China and India, Asia Pacific is the region to watch out for the future tourism growth. By 2030, China and India will dominate both in terms of traveller numbers in the region and in total expenditure. Today, a lot of destinations in the APAC region also understand the benefits of the tourism sector and are opening up to welcome the world.

Current Scenario

The entire region is currently witnessing a similar kind of boom with some countries being far more advanced in the curve. At present, there are a lot of emerging economies in the region and most of them are now prepared to realise the potential of tourism. According to available reports, in 2011, Asia Pacific’s middle class consisted of around 700 million people which will increase to 2.1 billion by 2030 with most of the growth coming from India, China and Indonesia. This will cause a sea change in the distribution of middle-class expenditure globally as large numbers of people cross the $5,000 a year household income threshold, therefore creating a significant increase in discretionary spending.

Talking about the current tourism situation in the region, Arzan Khambatta, Head of Macao Government Tourist Office (MGTO) India, states, “Asia Pacific has become one of the largest and fastest-growing economic sectors in the world with tremendous GDP growth rate, increase in the middle-class population and rise in the per capita disposable income. These factors have helped in growing the tourism industry on the whole. The travel marketers are also working constantly to cope up with the existing market by using innovative new ways and approaches to meet up with the demands and expectations of the consumers who are highly influenced with the growing awareness through various means of social media.”

Various trends picked up in the Asia Pacific region in recent years offering a newer model to world. One of the key factors for this significant increase in tourism in the region is the rise of Low Cost Carriers (LCCs). Today, even small unexplored destinations are connected with major cities, which were once difficult to access. This topped up with sharing economy has created an excellent value proposition and has increased the number of travel. India is no stranger to these changing scenarios.

“The millennials are embracing the sharing economy model introduced by Airbnb and Uber. The value seeking Indian traveller doesn’t really mind travelling on a LCC - a segment that is today dominating the Indian domestic aviation industry. We’ve observed that the first generation of Indian families (our parents) took their first international holiday at the age of 55. The second generation (we) embarked on our first outbound sojourn at the age of 25 whereas the third generation (our kids) are enjoying their first overseas vacation at the age of five. As India has a youthful demography, young India is travelling at a much younger age, and this is the primary driver of the Indian outbound travel market,” Nishant Kashikar, Country Manager – India & Gulf, Tourism Australia informs.

India as a source market

With Indian outbound expected to touch 28 million marks, India is expected to fuel the tourism growth across the region. Today, the Indian outbound is growing with 9.5 per cent annually (Economic Survey 2019) and most of the international destinations are looking to harness this potential. Within the region, India has been in the top 10 source markets for most of the major destinations.

The Mastercard Asia Pacific Destination Index 2017 ranks Bangkok, the capital of Thailand,  as top city in terms of international overnights arrivals. “India is one of our key markets which is evolving every year as the Indian travellers are now opening up to travel differently. The new age travelers are seeking adventurous and experiential modes of vacationing and Thailand as a destination can cater different arrays of activities and experiences to choose from. India is now one of the fastest growing outbound tourism markets in the world, second only to China,” Cholada Siddhivarn, Director, Tourism Authority of Thailand, Mumbai, informs and says that arrivals from India in 2018 up by 12.84 per cent to 1.596 million. The preliminary statistic from January-July, 2019 has shown the growth of +22.7 percent in number of Indian visitors (approximately 1,127,000 visitors) to Thailand over the same period as last year. India is currently holding the 6th position in the ranking of primary source markets for Thailand,” Siddhivarn reveals.

Japan currently contributes to fourth highest number of total nights and the fourth highest expenditure to Asia Pacific. Although the contribution of Japanese market to India is low but the growth rate is quite high. Japan witnessed 14.6 per cent growth in Indian tourist arrivals with 1.54 lakh travellers visiting the country in 2018. Keeping up with this growth trajectory, Japan has already witnessed a 14.3 per cent increase in the period of January to July 2019 with 106,200 Indian visitors to Japan in comparison to 92,937 during the same period in 2018. “Last year, 1.5 lakh Indian travelers visited Japan. India is a huge Nation; people are now travelling more than ever. So we now want to grow the Indian arrivals in Japan. We are doing a lot of B2B and B2C promotions in India. This year we will also organize five familiarization trips to Japan. We are also promoting new itineraries in India market. From India we witnessed a 14.6 per cent growth. From January to July we witnessed a 14.3 per cent growth from India market. We witness an average 15 per cent growth year on year, but we need to increase these numbers,” Yusuke Yamamoto, Executive Director- India, Japan National Tourist Office, says.

Another important destination, Australia attracted 9.3 million short-term international visitors in the year ending December 2018, according to data published by the Australian Bureau of Statistics. Countries in the region accounted for 11 of its top 15 tourism markets, and 5.7 million sightseers in 2018. The number of arrivals from these 11 markets has grown by 8.5 per cent per year over the past five years and now accounts for 61 per cent of total overseas tourist arrivals in Australia. India has also been emerging as a major growth market for Australia.

“India has always been a priority market for Australia. In fact, it is one of our fastest growing inbound markets with five consecutive years of double-digit growth. The total Indian visitor arrivals to Australia for the year ended May 2019 were 367,000, which is an increase of 11 percent relative to the same period the previous year. This makes India the 8th largest inbound market for us. We have also registered approximately Rs 8,300 crores in spends by Indian visitors for the year ended March 2019, thereby recording a 12 per cent increase over the previous year. This makes India the 6th largest source market for us in terms of expenditure,” adds Kashikar.

Tweaking marketing strategy

Today, as travelers are looking for more than mere sightseeing, destinations are striving to create story and experiences to woo arrivals. “Macao’s tagline is ‘Experience Macao your own style’ and it truly lives to this tagline. Given the geographical location, Macao is not only easily accessible but also offers a plethora of unique experiences. Macao has something to offer for everyone who visits the city,” Khambatta says adding that MGTO plans to reach out to newer cities in 2019 and expanding its reach in tier 2 and 3 cities. “We are expecting an increase in MICE movement as Macao is a visa free destination ideal for MICE. With excellent air connectivity, world class hotels and availability of Indian food, Macao is a perfect destination to conduct corporate events. We are also focused on consumers and conducted several activities that help us reach our direct target audience,” Khambatta adds.

Japan Tourism is now promoting beyond its traditional and popular itinerary in India. As per the new marketing strategy, the destination is focused to promote MICE and weddings segment in India market. Speaking about the new strategy for India market, Yamamoto says, “In India, we promote the golden route, Tokyo, Osaka, Kyoto, and Hiroshima. This is a very popular route for Indians. We are also promoting the Alpine route in the India market. A lot of Indian travelers are looking for such experiences. We are also promoting the Hokkaido and Tohoku in India market.  Indians are also looking out for the Bullet Train experience, as it is comfortable and easily accessible. Indian travelers visit a lot of destination. MICE is a very big market for us, especially Mumbai is a major market for MICE. A lot of companies plan to go for MICE to Japan, we focus on the incentive segment. We are also focused on the destination weddings segment. Today a lot of Indians are organizing their weddings abroad, in Japan we not only have mountains but also beaches which are untouched. Last March, we took wedding planners from India to showcase our destination. We also organized a seminar for wedding planners in July, which witnessed a good response.” 

Expanding product basket

Today, destinations keep constantly upgrading so as to offer something new to the travelers. With the ICC T20 World Cup happening in Australia in 2020, the destination is confident in attracting Indian fans during the event. Also, Australia has introduced a whole array of new attractions.

 “We are constantly coming out with new experiences, and enhancing already existing ones, keeping in mind the evolving needs of our travellers. Today, the high value traveller is seeking travel destinations that deliver unique and authentic experiences which tap into their passion points. To fulfil this need, we have curated outstanding tourism experiences within a variety of niche areas and special interest categories. Branded as ‘Signature Experiences of Australia’, this program offers the finest elements such as luxury lodges, premium wineries, guided walks, fishing adventures, wildlife journeys, golf holidays, cultural attractions, and Aboriginal guided experiences, along with a peak into Australia’s friendly and relaxed culture. In addition to this, Indian travellers visiting Australia for the ICC T20 World Cup can also look forward to curated experiences and special packages so that they can explore the best of what Australia has to offer along with the next big event in cricket,” Kashikar adds.

 Another destination which is very keen on attracting the repeat clientele is Thailand.  India has been one of the major markets for the destination over the years, now Thailand is looking to promote unexplored destinations which will in turn help in boosting the economy of local provinces. “Thailand is one such destination which most Indian outbound travelers have visited and is on the wish-list of travelers who are planning an international trip in the recent future. However, the most visited and anticipated places in Thailand are Bangkok, Phuket and Krabi. It is essential to educate and introduce the consumers on what the country beholds for tourists beyond these above mentioned places. Thus, TAT is aggressively promoting the less explored destinations across its North (Chiang Mai, Chiang Rai, Mae Hong Son, Pai), East (Trat, Chantaburi, Ko Chang,Rayong), Northeast (Khao Yai)  and Central (Ayutthaya, Kanchanaburi,) regions,” Siddhivarn says.

Macao being a comparatively smaller destination, the island focuses on enhancing the experience through various festivals and celebrations. “Macao is set to reach newer heights this year.  2019 will be dedicated to the 20th year anniversary celebrations of the establishment of Macao SAR. Art Macao is a mega international and cultural art festival that begun in June and will culminate in October this year. Art Macao will feature a total of 41 events held at 55 locations, offering new cultural experience for tourists visiting Macao,” Khambatta adds.

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