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Asia Pacific Travel set for more Growth in 2005

Search ASIA Travel Tips .com 3 June 2005

Asia Pacific travel is growing strongly as it enters the second quarter of 2005, according to the latest booking figures issued today by Abacus International.

In April 2005, total bookings on the Abacus system rose over the previous month by 7 per cent to more than 2.9 million and posted 10 per cent growth over the corresponding period in 2004, which in itself was the best year in a decade for the Asia Pacific travel industry. Intra-Asia travel represented the vast majority of bookings made at more than 78 per cent.

Abacus President and CEO, Don Birch, said, “As we enter the second quarter, which is traditionally when travel picks up, we are seeing the signs of solid growth, which barring unforeseen circumstances, we expect to continue for the rest of the year.”

Mr Birch said that while Asia Pacific travel as a whole is growing healthily, a number of markets are “enjoying exponential expansion”.

He cited the Indochina and Central Asia region, which posted 14 per cent growth of FIT bookings in April, while Vietnam was up 25 per cent.

North Asia’s growth was strong and steady, with well-established markets such as South Korea and Hong Kong exceeding the previous month’s figures by 22 per cent and 16 per cent respectively.

“While the whole of the South Asia region is experiencing a travel boom, Pakistan is currently the market to watch. The Abacus investment in people, presence and our systems has really begun to take off, with substantial growth gained from our stronger competitive activity,” said Mr Birch.

Tsunami regions’ recovery steady

“The recovery of the tsunami-affected areas is taking a little longer than originally expected - particularly for Krabi and Phuket. Also, the April-May period is the traditional lull season for Andaman destinations. Comparing this period with last year, we are seeing a 60-70 per cent drop in bookings. But we are encouraged by stronger tourist returns to the Malaysian resorts of Penang and Langkawi,” said Mr Birch.

E-ticketing

E-ticketing growth as a percentage of total tickets issued was flat in April but in terms of total tickets issued it was up 105 per cent over 2004, with close to 1.4 million e-tickets issued.

The Philippines e-ticketing growth is stellar with four fold year-to-date.

Abacus has played a key role in enabling e-ticketing in 10 regional markets - Australia, Hong Kong, Indonesia, Malaysia, New Zealand, Philippines, Singapore, South Korea, Taiwan and Thailand. Its goal is for 30 per cent of all Abacus-issued tickets to be electronic before the end of 2005. This is in line with the IATA industry goal of being 100% e-ticket by end 2007.

Cash-rich, time-poor Singaporeans change travel habits

Higher disposable income, lack of free time and the advent of low cost airlines are some of the factors transforming the personal travel behaviour of Singaporeans, with many taking up to five short trips a year within the region.

The recent MasterIndex of Travel by MasterCard estimates that Singaporean departures will rise by 12.5 per cent in the first half of the year, and account for around 2.76 million outbound travellers. The index also showed that 96 per cent of respondents said they will make at least one personal trip on a commercial airline to an international destination in 2005.

The growth in personal travel is illustrated by the growth of passenger numbers at Singapore’s Changi Airport, which rose by 8 per cent in April 2005. Abacus Singapore bookings grew at a healthy 7 per cent in April, according to Abacus’ latest statistics.

“As with the rest of the region, Singapore’s outbound travel growth is very healthy and is running ahead of economic growth, which is predicted to be between 2.5 and 4.5 per cent for 2005,” explains Mr Birch.

The top Asia-Pacific destinations for Singaporean travellers are Hong Kong, Malaysia, China, Thailand and Japan, according to the MasterIndex.

However, Robert Khoo, CEO of the National Association of Travel Agents Singapore (NATAS) suggests that other “new and interesting places”, including parts of Indochina such as Myanmar and Vietnam as well as Southwest Asia, are now on the Singapore traveller’s radar.

Mr Khoo said the trend was now for people to take four or even five short trips around the region.

“Previously, many Singaporeans saved, sometimes for years, to go on one long international vacation often to see family and friends. Now, many have the money but not the time to take long vacations so the trend is to take several short trips on a free-and-easy basis,” says Mr Khoo, whose organisation represents around 360 travel agencies and related companies that control around 90 per cent of the Lion City’s travel agency business.

Mr Khoo estimates that the vast majority of bookings are still being made through travel agents and that Internet and direct bookings reservations represent perhaps 10% of the total. He adds weight to this point by highlighting the rise in the number of travel agencies in Singapore. There are now around 700, representing a rise of 15 per cent per cent over the past five years.

His claim is borne out by busy local travel agencies. “We have no shortage of business,” says Alicia Seah, General Manager for lSingapore-based travel agency SA Tours. “The main difference now is that there is perhaps less emphasis on booking flights and more on-the-ground such as organised tours, cars, restaurants and cruises.”

“I believe the market is finding a balance between the traditional bricks-and-mortar travel agency, the online booking channel and direct sales. The overall rise in demand for flights and a range of related products, and the changing consumer demands are indicative that there will be sufficient business to support all channels,” said Mr Birch.

In terms of consumer segmentation, the female traveller is increasingly important in Singapore and throughout Asia Pacific. Regionally, the ratio of male to female travellers is going through a sea change. Thirty years ago, it was 90:10 (males to females), today it is around 60:40 and within 10 years women are likely to overtake men, according to the Asian Lifestyles Survey.

In Singapore and elsewhere, there is a growing trend for women – often young, single and professional – to take short breaks either alone or in small groups – perhaps to shop in Hong Kong or pamper themselves at super-exclusive spas or “wellness” facilities in Thailand or Bali.

Ms Seah confirms that SA Tours is catering more for women offering spa, shopping and wellness packages. 

The survey suggests female travellers are the fastest-growing sector in Asia Pacific. It claims that by 2010, an estimated US$13.4 billion will be spent by women in four leading Asia-Pacific destinations –Seoul, Hong Kong, Singapore and Bangkok. 

Moreover, women are not only shaping travel demand patterns by travelling independently, they are also the travel organisers and decision makers for the entire family, making around 70 per cent of all travel decisions, according to the Pacific Asia Travel Association (PATA).

Not to leave the men out, Mr Khoo says NATAS members are also helping increasing numbers of Singaporean men to secure packages to the burgeoning number of high-quality golf courses that are springing up all over Asia Pacific. 

As Singaporeans’ personal income increases, customised and luxury travel services are a growing sector for travel agents. 

The luxury traveller has many requirements that can’t be easily researched and secured via the Internet. The travel agency, therefore, has a role to play as a trusted partner with intimate knowledge of the location, the best accommodation, tours, restaurants etc. The travel agency that can provide this kind of service will have a competitive advantage.

While the luxury market is growing, the growth of budget airlines has also opened up personal travel to a whole new sector of the public - known as LINT (Low income new travellers) - that previously couldn’t afford to fly.

Indeed, LCCs accounted for around 7 per cent of weekly flights from Changi last year and have helped Singapore reinforce its status as the leading gateway for intra-regional travel. 

While LCC statistics are not yet prevalent, an examination of air traffic between Singapore and Bangkok suggests that they are perhaps influencing travel trends. In 2004, for example, arrivals from Singapore at Bangkok reached 413,931 – up 28 per cent on the previous year.

LCCs have made network airlines scrutinise their costs and pricing, which has blurred the lines between full service and economy air travel. Right now, this means there are many bargains available for the consumer. In the longer term, as the market settles down, it is quite possible that LCCs will need to be able to offer increasingly demanding customers more than just cheap flights.

Mr Birch predicts that more LCCs will adopt GDS distribution, particularly in markets where the effectiveness of direct sales is impacted by Internet availability and or connectivity. 

“In our experience, most travellers in Singapore and throughout Asia-Pacific are more comfortable with the one-stop shopping experience offered by the traditional travel consultant. The key for them is to be able to cater for all consumers’ demands – from no-frills flights to complex travel packages,” concluded Mr Birch.

See other recent news regarding: Abacus

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