Asia Pacific to be Key Driver of Growth for Tourism Industry Globally over Next Decade

The tourism industry is on course for significant growth over the next decade with the fastest growth expected in the Asia Pacific region, according to presentations made by speakers at the MasterCard Forum on “The Future of Travel and Tourism in Asia Pacific” Wednesday.

According to data from Asian Demographics, the overall spend on travel and tourism by Asia's economies is projected to reach a value of US$165 billion by 2014, equivalent to Hong Kong’s current GDP (in 2004 dollar terms) and 1.5 times Singapore’s.

Presenters at the forum highlighted the effects that will shape the tourism landscape in the region over the next 10 years. The presenters included:

• Dr. Michael Goldberg, Chief Academic Officer, Universitas 21 Global 

• Prof. Christine Ennew, Dean, Faculty of Law and Social Science, Prof of Marketing, Nottingham University Business School

• Dr. Clint Laurent, Director & Chief Technical Officer, Asian Demographics

• Dr. Yuwa Hedrick-Wong, economic advisor, Asia/Pacific, MasterCard International.

Tourism is, and will continue to remain, an integral contributor to the long-term growth of economies around the world. Last year, the tourism industry witnessed the largest growth in the number of tourists since 1984. Globally, the number of tourists grew by 10% year-on-year to reach 760 million, with all regions of the world benefiting from the positive growth.

Across the Asia Pacific region, the rate of the growth of the industry over the next decade will be fueled by a number of shifts, both in the type of travel and the demographic profile of the new breed of travelers. By 2015, China will be the second largest destination globally in terms of tourism’s contribution to its economy and will lead in terms of jobs created to service industry demands.

“The tourism industry is surging toward exponential growth,” said Dr. Yuwa Hedrick-Wong. “Increasing wealth and better access to credit, strong growth in first-time travelers across a broad cross-section of income groups, the diversity of Asian source markets and the proliferation of low cost carriers, will set the stage for tourism demand both intra-regionally and from overseas.

“These advantages will be counter-balanced by increased competition from non-Asian destinations and the availability of long-haul flights which will impact the inflow of stop-over tourists,” he explained.

The New Tourist Paradigm: Changing Demographics and Spending Patterns

Based on an analysis of the core lifecycle stages of tourists, the overall target market (persons from households with over US$4,000 per annum income) will grow more than 66%, from 384 million in 2004 to 639 million tourists by 2014. This growth will come mainly from the volume market and will be fueled by China and India.

Moderate growth in GDP figures forecasts a huge impact on the affordability of leisure travel. The expected rise in discretionary income, better access to credit, increased accessibility of travel among younger age-groups, new regional attractions and political liberalization will all combine to propel the tourism industry forward.

These factors will be coupled with the growth and purchasing power of Asian women travelers, who will contribute significantly to the emerging ‘traveler-shopper’ phenomenon. The Asian traveler-shopper segment alone is forecasted to spend US$13.4 billion by 2011 in four key destinations: Hong Kong, Seoul, Singapore and Bangkok. This implies a substantive opportunity for developing, managing and marketing tourism products.

Average per capita spend on recreation services (a proxy for tourist spend) ranges from US$55 per capita per annum (lower income group) to US$800 per capita per annum (highest income group). In terms of importance measured by tourist spend China will grow to become a dominant force in the lower income brackets, capturing over 68% of the volume and value markets. Japan will dominate the high value and luxury markets with an 88% share.

The profile of the future traveler will also evolve: young singles and families will decline as a proportion of all tourists. Working-age empty nesters and the retired will grow as a proportion with retirees emerging as a very lucrative segment in the more affluent market segments.

The MasterCard Forum on “The Future of Travel and Tourism in Asia/Pacific” was held in conjunction with Universitas 21 Global in Hong Kong on August 23, and Singapore on August 24. Eminent industry experts shared predictive market intelligence and insights on emerging trends that will shape the travel and tourism industry in Asia/Pacific in the coming years. Forum attendees included key players in the travel, hospitality, and transportation sectors and government agencies tasked with managing and promoting the tourism industry.

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