Asia is truly making its way to the forefront of global travel and tourism and the rest of the world is taking note.
Former British PM Tony Blair stated in his keynote speech at the World Travel and Tourism Council (WTTC) Asia Summit that Asia represents the future for travel and tourism, stating that power is shifting to the East and the West has to work with them to avoid falling behind.
The evidence and numbers certainly back the rise of Asia as a travel and tourism powerhouse. According to WTTC, by 2020, two out of every five travellers are expected to be from the region and will account for nearly half of global tourism expenditure.
In turn, this is expected to stimulate approximately 47 million new jobs in Asia by 2023, with an expectation that these figures will continue rising until 2050.
This will be a period when China and India are expected to be the world’s largest and third-largest economies respectively, with an estimated three billion people having the financial means to travel.
At the by-invitation Asia Travel Leaders Summit (ATLS) 2012, a joint-study by STB, The Boston Consulting Group (BCG) and Visa also noted the emergence of the middle and affluent class (MAC) travellers.
Meanwhile on the business end, the region’s business travel and meetings, incentives, conventions and exhibitions (BTMICE) industry is set to benefit from the increasing attention of the international business community eyeing the growth opportunities and relatively strong economies in Asia.
With travel and tourism in Asia set to increase on both the leisure and business fronts, there will be more travellers, flights, jobs, revenue and importantly, more consumer needs.
Therefore, in a diverse market like Asia, it is critical that businesses are equipped with a deep understanding of the region’s multi-faceted environment.
And while Asia presents many attractive opportunities, there are also challenges for companies seeking to attain a share of the consumer and corporate travel markets.
The Asian Opportunity
Of course, within the wider opportunity presented in Asia, Asian MACs and corporate travellers are not a homogenous bunch, and actually account for several different opportunities across various sub-segments.
With an increasing number of Asian MACs having the resources to travel, this will lead to various changes in travel and tourism in the region for which the industry needs to be prepared for.
Specifically, companies need to rethink present strategies and create new business frameworks to effectively reach the Asian MACs and corporate travellers.
The surge in online travel in Asia in particular, is getting travel businesses even more excited. Asian MACs are increasingly using the internet in their travel research and purchases, and as internet penetration, especially mobile internet, increases in China, India and Indonesia, more MACs are turning to the web for their travel needs.
Online platforms are also gaining momentum as the desired way to purchase travel products.
Yeoh Siew Hoon, editor and producer of Web in Travel Conference, an event of TravelRave, says that the convergence of several factors – such as increased web penetration, leapfrogging of technology to mobile first, more low cost carriers and the emergence of a new generation of consumers – will lead to accelerated growth in the online travel market across the region.
The opportunity for travel businesses therefore lies in impulse travel.
The spontaneous nature of today’s travellers also means that an increasing number of Asian travellers are leaving their bookings until the last minute, driving the importance of mobile booking channels within the travel and tourism industry.
As many as two-thirds of Indonesian MACs and about a third of Chinese MACs plan short trips – holidays that are less than or equal to a week – within a week of the trip itself.
At a media roundtable held in Beijing to promote TravelRave, CC Zhuang, CEO of China travel search portal Qunar.com, agreed that Chinese impulse travellers are a market that is gaining in size as travellers increasingly turn away from package deals towards independent bookings and shared that his company constantly experiments with marketing strategies targeted at last-minute travellers.
“A good number of last-minute bookings are initially made by retirees who are not bound by rigid work schedules and who have the means to spend,” he continued.
“They are later often accompanied by their working-adult children and their families, given the Asian tendency to travel as a family, translating to higher level of travel expenditure.”
Siew Hoon concurs and says customers will become “increasingly sophisticated and informed”.
“They will know very well how to search and shop online, and where to look for the best bargains,” she adds. “They will increasingly wield more power in how they express themselves about their experiences.”
As today’s travellers become increasingly last minute, more mobile and more demanding, they naturally expect that the rapid improvement in technology and connectivity should improve their experience when they travel.
With technology ever-evolving, travel providers need to innovate with the times or risk becoming obsolete.
But it is not just technological advances that are powering the travel and tourism demand in Asia.
Forward-thinking tourism destinations in Asia have begun billion-dollar investments in the development of tourism infrastructure and concepts to ensure that their infrastructure offers a user-friendly and efficient gateway for visitors.
Certainly, Southeast Asian economies are increasingly garnering investor attention with their growth opportunities generated by the rise of the middle-class alone and these will be discussed in greater detail at the Asia Pacific Tourism Destination Investment Conference at TravelRave this October.
Domestic travel and tourism spending is projected to grow significantly faster than foreign visitor spending in China and India over the next ten years.
Specifically in China, where domestic spending already accounts for 90% of the industry’s total contribution to GDP, domestic spending will grow by almost 9% per year to 2023.
David Scowsill, president and CEO of the WTTC asserts, “This means that these countries need to place a strong focus on developing infrastructure and services to meet the domestic demand.”
Constant enhancement of existing infrastructure is also needed to ensure that the specific needs and preference of the travellers are met.
For example, to cater to the increasing demand for more flexible spaces which can combine exhibitions with conferences or ‘Confex’ events, Singapore Expo opened a new wing MAX ATRIA in 2012 while Suntec Singapore Convention and Exhibition Centre completed its SG$180 million (US$144m) modernisation programme this year.
The application of technology in tourism, whether in the vacation-planning process or during the actual vacation, is another aspect of infrastructure that is changing the entire travel industry.
To stay on top, the Asian travel and tourism industry needs to look towards technology solutions such as 3G and wireless broadband access that provide connectivity as well as mobile payment gateways to empower bookings.
For companies to continue thriving on Asia’s growth, industry collaboration is vital.
Mindful of the need to be sensitive to the diverse demands and cultures of local markets, businesses are increasingly looking towards collaboration and the forming of alliances to leverage each other’s networks and expertise.
Within the travel and tourism industry, intra and inter-industry are the more common forms of collaborations and alliances.
Intra-industry alliances are most visible within the aviation industry and carriers have started forming alliances to leverage the growing opportunities in the Asian travel market and increase their footprint in the region.
Beyond leveraging each other’s strength, inter-industry alliances also provide the parties involved with a more in-depth insight on trends in the partnering industries.
Building the next generation of industry talent
One of the greatest areas of potential for industry collaboration is in the development of talent and leadership. At last year’s Asia Travel Leaders Summit (ATLS), there was unanimous agreement amongst leaders on the pressing talent crunch the industry faces.
This resulted in the development of working groups in which leaders from companies such as Thomas Cook (India) Limited, TAUZIA International Management, and Patina Hotels & Resorts, re-convened post-Summit to explore specific ways to cooperate on strategic human capital and leadership development issues.
Local knowledge is also a powerful differentiator in driving business success. In addition to strong personal attributes and broad management skills, leaders should have sufficient local knowledge.
According to Madhavan Menon, managing director, Thomas Cook (India) Ltd., increasing numbers of companies are looking to expand their footprint in Asia.
“Tourism businesses also need to attract and retain a healthy mix of local talent and knowledge among working teams along with encouraging greater inter-cultural learning and exchanges which result in a more adaptable, innovative and globalised organisation,” he adds.
TravelRave: Unlocking invaluable opportunities and insights
Indeed, the future of Asia is a vast landscape of growth and opportunities and it is timely for the industry to come together to gain a deeper understanding of the region.
It was with this in mind that TravelRave, Asia’s most influential travel and tourism festival was conceived three years ago – to provide a unique platform for Asian travel leaders representing the entire spectrum of the industry to share insights and spark off collaborations and finding effective ways to ensure sustainable growth.
Held from 21 to 25 October 2013, TravelRave will continue to see an exciting line up of travel and tourism-related events featuring a range of quality Asia-focused content and networking opportunities across related sectors from hospitality (Hotel Technology Conference), tourism investment (Asia Pacific Tourism Investment Destination Investment Conference), technology (Web in Travel) to aviation (Aviation Outlook Asia).
Other highlights include the inaugural UIA Roundtable Asia, their first foray in Asia for international association representatives; and ITB Asia – an established B2B trade show and convention for the Asian travel market.
At the strategic high-level Asia Travel Leaders Summit (ATLS) this year, the summit will delve deeper into discussions on Asian millennial travellers (AMTs) who will enter their peak spending and travelling period, to become the industry’s core consumer group in the next five to ten years.
With limited research on AMTs currently available, an original research will be presented at ATLS to spark discussion and thoughts on how to capture this target market.
Also held as part of TravelRave this year, the Singapore Tourism Board will be partnering ITB Asia and Nanyang Technological University to curate a for-students-by-students initiative. Held at ITB Asia, the conference, ‘Future Leaders- Building Quality Tourism Careers’ is aimed at cultivating future talent for the travel and tourism industry in Singapore and will be a platform that brings together local students with the industry to bridge the gap between job-seekers’ aspirations and what the industry has to offer as employers.
Last year’s ATLS participant, Azran Osman-Rani, CEO of AirAsia X says that TravelRave is unique as it provides participants with a sense of the broader global issues the industry is facing through the alignment of issues and priorities.
“This gives us more confidence heading into the turbulent world ahead. Coming together to network and meet people who are in similar situations reinforces or even challenges your current understanding,” he asserts.
“That’s what makes the TraveRave experience invaluable.”
Find out more
Get connected with the best travel minds ahead of TravelRave 2013, the most influential travel trade festival in Asia. Follow us @TravelRaveSG or visit www.travelrave.sg for the latest industry updates.