27 Jan 2016
China Dominates Asia Travel Sector as Destination and Tourism Source
More than 408 million tourists now visit Asia-Pacific destinations every year, with China taking the lead as both the preferred destination and the largest source of outbound tourists. Japan, though, is also enjoying a distinct resurgence.
With their increased appetite for new experiences and the incomes to fund such pursuits, Asia's expanding middle classes are a growing force in the global travel sector – especially for Asian destinations – according to the industry professionals at the ITB Asia travel show in Singapore. It is China, though, that remains the powerhouse for the sector, both as the leading travel destination and the source of the largest number of outward-bound tourists.
Japan, meanwhile, is also enjoying something of a boom as a travel destination, largely thanks to the combination of the weak yen and more relaxed visa requirements. In terms of more general trends, stressful modern living is driving a rise in 'wellness' travel, with a number of urban dwellers prioritising health benefits as part of any getaway.
According to data from the Bangkok-based Pacific Asia Travel Association, the travel and tourism industry enjoyed strong growth across the Asia-Pacific region during 2014. This saw an overall increase of 30.6 million visitors, taking the total to 408.4 million, a 5% rise year-on-year. South Asia was the largest growth area (8.4%), while Southeast Asia saw only a 1.5% increase, largely due to reduced visitor numbers from three key markets – China, Russia and Malaysia. Overall, China retained its position as the largest tourist destination – attracting some 107 million visitors – and also proving the major source of outbound tourists.
Sun Gouhui is Director of International Ticketing for Qunar, a leading Chinese travel site. Assessing the trends driving the mainland travel market, he said: "Some 89.5% of Chinese tourists travelled within the Asia-Pacific region. The top five destinations were Australia, Japan, Hong Kong, Korea and Thailand. We forecast that, by 2019, there will be 174 million outbound Chinese tourists, representing a spend of some US$264 billion. By 2016, China will also be the largest business traveller market, even overtaking the US. We estimate that these business travellers will spend around US$334 billion per annum."
Dr Michael Frenzel, Chairman of the London-based World Travel & Tourism Council, was also upbeat about prospects in the sector, saying: "Despite the economic turmoil of the past seven years, we are seeing strong and continued growth in the travel and tourism sector. In 2014, this sector accounted for about 10% of the world's GDP, representing a spend of US$7.6 trillion and the creation of some 77 million jobs.
"Despite the economic slowdown in China, it is having no impact on the sector. In Asia alone, we now estimate it is worth some US$2.3 trillion. This year, there will be 1.2 billion international travellers and, by 2030, this number will grow to 1.8 billion. The drivers of this growth are the growing number of middle class travellers in Asia, the rise of low-cost carriers and a general thirst for new experiences. All of these, however, present a number of challenges to the industry, most of all in terms of training staff to the required levels, while delivering a tourism experience that is sustainable and eco-friendly."
Frenzel's views are largely supported by figures from GfK, a Germany-based specialist travel market research firm. Laurens van den Oever, the company's Global Lead for Travel and Hospitality, said: "Today, there are 1.8 billion middle class citizens around the world. This number will grow to 3.2 billion by 2020 and to 4.9 billion by 2030. It is the middle class that will drive growth globally, especially in Asia, which will be home to 66% of the world's middle classes by 2030. Over time, these Asian tourists will place less of an emphasis on shopping and eating – a case of been there, done that. We will then see greater emphasis on seeking out new experiences – exploring local cultures and history, as well as participating in unusual activities."
This drive for experiences, rather than the desire to simply purchase and consume, is already proving a factor in the changing popularity of various destinations across Asia. Commenting on these shifting priorities, Ayesha D'Souza, Travel Industry Manager for Google Singapore, said: "Over the past three years, Hong Kong has remained the top destination searched for. It's very interesting, though, that Osaka has climbed from number five in 2013 to number two in 2015. In 2015, New Delhi and Kyoto also entered the top ten search ranks for the first time. There has also been a marked increase in searches for second and third tier cities in Japan, India, Indonesia, and Vietnam, including Da Nang, for example. In the case of the Japanese cities, a major driver, of course, has been the weaker yen."
Japan's rising popularity as a travel destination had also been picked up on by STR Global, a London-based hotel data benchmarking company. Ma Fenady Uriarte, the company's Southeast Asia Business Development Manager, said: "Japan has seen strong growth in terms of travel and tourism over the past three years. In 2015, to date, the hotel occupancy rate has been 83.3% – or 15 million rooms. There has also been 15% increase in revenue per arrival, as well as 16% increase in revenue overall. All of these represent record figures for Japan.
"Apart from the weaker yen, there has been some relaxation in visa requirements, while more low-cost carriers are now offering flights to various Japanese cities for the first time. Both of these factors have made a significant contribution to the rise in visitor numbers.
In another change for Asia, D'Souza noted that Airbnb, the private home rental listings website, is now the eighth most searched travel brand by the region's would-be travellers. She said: "Compared to the big hotel chains, Airbnb is playing the digital space very aggressively. It is successfully tapping into what today's traveller wants. Airbnb says it is offering you the next experience, rather than simply making you a great offer."
Mike Orgill, Airbnb's Director of Public Policy for the Asia-Pacific Region, said "In 2015, we will have had more 60 million guests, up from a mere four million as recently as 2013. People are now travelling to experience.
"Airbnb empowers both the traveller and the host. It can also help with specific conditions. During the 2014 World Cup in Brazil, Airbnb provided accommodation for additional visitors without the need for increased build. One of out of five visitors during the World Cup – some 120,000 football fans – stayed with Airbnb hosts. Partly as a result of this, Airbnb is now an official partner for the 2016 Olympic Games in Rio."
Despite its successes elsewhere, Orgill acknowledged that the company still faces legal hurdles in many Asian countries. He said: "China, among a number of other countries, is currently reviewing its regulations. In China, inbound travel is not our focus at the moment. Outbound travel from China, however, is our fastest growing segment. It has grown by some 700% this year, as increasingly tech-savvy Chinese travellers makes use of Airbnb for accommodation arrangements in the US, Europe and elsewhere."
Another theme to emerge at this year's event was the growing significance of the 'wellness' traveller. Dr Jenny Panchal, Professor at JCU Singapore, sees this as one sector that is growing rapidly. She said: "Wellness tourism is being driven by an aging population that is increasingly urbanised, leading stressful lives and plagued by lifestyle diseases. The global wellness market is not just related to the travel and tourism industry, but also extends to other service industries, creating a market that was worth some US$3.4 trillion in 2013."
Panchal estimates that one direct impact of the growth of wellness tourism has been the creation of 14.5 million jobs worldwide. She said: "Between 2012 and 2017, the number of wellness trips undertaken is expected to have increased by 8.3%. The third largest wellness market in the world – after the US and Europe – is now the Asia-Pacific region. Growth here is expected to continue to be brisk, driven by both the burgeoning middle classes in Asia and demand from tourists in the developed countries looking to travel to Asia."
Nilusha Kodithuwakku, Managing Director of Ayurva Traveller, a Sri Lankan wellness travel specialist, believes the profile of the typical wellness traveller is also changing. She said: "Our typical customer used to be female, but now we are seeing increasing numbers of males. The males, though, are more interested in de-stressing rather than enhancing their appearance.
"Both sexes, though, are focussed on their mental health, as well as how a spa experience may enhance their productivity. They are also interested in sleeping better, meditation and detoxing. Increasingly, during business conferences, we see them seeking out mini-spa experiences or massage breaks. Such travellers are also looking for spiritual wellness and are always concerned about the authenticity of their experience."
ITB Asia 2015 was held at the Sands Expo and Convention Centre, Singapore from the 21 to 23 October. The event featured 760 exhibitors and 10,300 delegates from 73 countries. New participants included Azerbaijan, Iceland, Laos, Lithuania, and Portugal.
Ronald Hee, Special Correspondent, Singapore