Asian Travel Demand Slows but Bright Spots Remain

Travel News Asia Latest Travel News Podcasts Wednesday, 25 February 2009

As the final numbers on Asias 2008 tourism performance are tallied, preliminary results from different sources suggest that the winners in terms of inbound tourism included Indonesia with 17% and Macau with 10%. Southeast and South Asia tied for best performing sub-region, with average increases of 4% each.

Yet the general trend for Asia, usually a star performer in terms of both inbound and outbound international travel, was very mixed in 2008 due to rising fuel costs and surcharges. Inbound international arrivals growth of 6% from January to June 2008 turned to a 2-3% deficit in the second half, according to the World Tourism Organization (UNWTO), as economic clouds gathered and the oil price hikes hit home.

2009 is likely to be an even more challenging year. In addition to Japan, which has been soft for a few years now, a number of other leading source markets for Asia suffered declines in outbound travel in 2008 that are likely to continue in 2009, said Rolf Freitag, President & CEO of IPK International, founder of the World Travel Monitor, on which much of the ITB World Travel Trends Report 2009 is based.

Mr Freitag said continued economic downturns in Japan, South Korea, China and Taiwan will hit travel across much of Asia, which receives around 70% of its arrivals from within the region.

It is still possible that Asia could start to recover before the end of 2009, said Dr Martin Buck, Director of the Competence Center Travel & Logistics at Messe Berlin, which commissions the ongoing research from IPK.

Initial findings in the World Travel Trends Report still point to a modest overall growth in outbound travel demand from Asian markets in 2009. We expect short-haul travel to gain at the expense of long-haul demand. And if oil prices stay low, there could be another surge in low-cost flights in the region, Dr Buck said.

Economic weakness in Asia has implications for the rest of the world. Japan is still the only Asian outbound travel market to rank among the worlds top ten source countries for travel and tourism. The Japanese made an estimated 16.5 million trips in 2008 a 1.5 million drop on 2007. While China's official outbound trip count is much higher, at around 40 million, some 70% of these trips are to Hong Kong and Macau, special administrative regions of China. Non-Hong Kong and Macau outbound trips were 13-14 million, according to IPK. Official Chinese data says this was still 14% up on 2007.

Residual travel demand from China in 2009, despite rapidly slowing economic growth, will mean China remains a much sought-after source market this year.

Young consumers across Asia, not just in China, are becoming an increasingly powerful market for travel too. According to Dr Yuwa Hedrick-Wong, economic advisor, Asia Pacific, MasterCard Worldwide, personal travel in Asia was seen as an item of luxury expenditure 10 to 15 years ago. An overseas trip was a rare treat for the average young consumer.

This has now changed, said Mr Hedrick-Wong. Young consumers in Asia Pacific now typically see personal travel as a key activity in their lifestyles. Our research on consumer purchasing priorities shows personal travel ranking among the top discretionary spend priorities for consumers in the region. For young consumers, travel is not something they want to put off. Younger consumers in Asia would postpone buying a car, but not put off going somewhere for their next vacation.

More details on trends out of Asias source markets, and other emerging markets around the world, will be available from the ITB Berlin Message, the annual event held during the ITB Convention on ITB Future Day, Wednesday 11 March. In the Message, IPKs Rolf Freitag will present final tourism results for 2008, with an update on prospects for 2009 all of which will be published later the same month in the ITB World Travel Trends Report 2009.

ITB Berlin 2009 will be taking place from Wednesday, 11 to Sunday, 15 March, and will be open to trade visitors from the Wednesday to the Friday. Parallel with the trade fair, the ITB Berlin Convention will be taking place from Wednesday, 11 to Saturday, 14 March 2009.

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