Businesses love nothing more than growth – growth for themselves and growth in the markets they serve.
This is why we should all be excited by the groundswell of opinion and statistics that point to Asia outstripping the majority of the world’s major economies.
The Organisation for Economic Co-operation and Development (OECD) estimates that the combined GDP of China and India will exceed that of the G7 countries by 2025, while the Asian Development Bank projects that Asia will account for half of global GDP by 2050.
This has bolstered the region’s tourism prospects and the UNWTO World Tourism Barometer expects Asia to witness growth of 5-6% year-on-year in 2013 where travel is concerned, outstripping the global average of 3-4%.
Heading this growth is China and at last year’s Asia Travel Leaders Summit (ATLS) 2012, a joint-study by Singapore Tourism Board (STB), The Boston Consulting Group (BCG) and Visa revealed that China’s Middle Affluent Consumers (MAC) – a growing segment in Asia, are expected to make 100 million trips corresponding to SG$300 billion (US$235bn) in spend by 2020.
The opportunities based on this figure alone are enormous and the country is already acknowledged by UNWTO as the world’s fastest growing outbound market.
But this is just the beginning as Dai Bin, President of China Tourism Academy explained at a recent TravelRave media roundtable held in Beijing. The fact that China’s total outbound traffic accounts for only 3% of the entire population means that there is “tremendous room for growth”.
Understanding the discerning Asian consumer
The opportunities are by no means limited to China – far from it. The Asian MAC include India and Indonesia, and present significant business opportunities.
Yet the industry has quickly discovered that while MAC is a significant group, the segment is not homogeneous, and research has uncovered fundamental differences in travel planning and consumption behaviour patterns across the region.
At ATLS 2012, five key observations were made. The first was the unprecedented growth rate of the Asian MAC traveller, closely followed by the group’s different behavioural patterns to OECD countries.
It was then noted that the needs and preferences of the Asian MAC traveller are evolving.
Further to this, the Asian MAC traveller market does not represent a single opportunity, but several different ones across various sub-segments.
Finally, it was asserted that the Asian MAC traveller requires companies to rethink traditional practices – what they offer, where they offer and how they offer in terms of travel products and experiences.
“In a fast growing and diverse market like Asia, businesses need to stay relevant and competitive,” says Andrew Phua, Director, Exhibitions and Conferences, Singapore Tourism Board.
“This requires a deeper understanding of the region’s multi-faceted environment, thinking beyond traditional business models as well as adopting sensitivity to the specific needs and cultures of local markets.”
CC Zhuang, CEO of China travel search portal Qunar.com, says his company constantly experiments with new marketing strategies targeted at smaller niche markets.
“Innovation in product pricing and marketing initiatives can create new opportunities for businesses, especially in a market as big as China, where the identification of a new niche travel segment can have a huge impact on your company’s bottom line,” he explains.
Increased connectivity of the Asian traveller
Fortunately for businesses, events such as ITB Asia, part of the TravelRave offering, have highlighted important information about the Asian MAC traveller.
A prime example is they tend to be technology-savvy and well-connected – a 2012 special report for ITB Asia by PhoCusWright noting that mobile and social media subscriptions in China and India stood at nearly two billion in May 2012.
This has been fuelled by a surge in online bookings thanks to increasing internet connectivity.
The second AsiaRooms.com Traveller Confidence Index released in May 2013, which surveyed 25 countries, also revealed that in the past 12 months, travellers in Asia proved most inclined to book their business and leisure trips online, with 75.2% of respondents making online bookings this year compared to the global average of 65.4%. This is a 4.9% increase from last year’s index and is slightly more than double the global average increase of 2.3%.
India is catching up and its rail systems have already introduced online ticket purchasing to allow passengers to bypass long queues.
Furthermore, Indonesia is also moving towards digital travel planning and purchase. In the past five years, online travel sales have increased tenfold and young Indonesians in particular are going online in greater numbers, particularly through mobile devices.
TravelRave: Unlocking invaluable opportunities and insight
With optimism and opportunities in abundance, it is clear why prominent travel and tourism leaders will gather in Singapore this October for TravelRave.
ITB Asia, the trade show for the Asian travel market, is a three day B2B trade show and convention held annually in Singapore. This is where international exhibitors of all sectors of the travel value chain, Asia Pacific’s leading companies and emerging small and medium-sized enterprises meet with top buyers from the meetings, incentives, conventions and exhibitions (MICE), leisure and corporate travel markets.
The Web in Travel Conference 2013 is the largest, most diverse and highest level gathering of travel industry professionals in the Asian travel distribution, marketing and technology sector. In its ninth year, this year’s conference themed ‘The Asia Factor’ will focus on emerging travel trends that are uniquely Asia.
Another highlight at TravelRave 2013 is the second edition of the Asia Pacific Tourism Destination Investment Conference, the only conference in Asia to gather all public and private sector stakeholders in tourism destinations development to discuss the best practices in destination master planning. Potential investors will see major development projects in Asia that are investment ready and will also get the chance to learn more about national strategies and policies from government officials.
These are just three of the events in an exciting line up of eight quality events under the TravelRave umbrella. TravelRave, Asia’s most influential travel trade festival, will take place from 21 to 25 October 2013 providing a dynamic platform for business leaders and industry professionals to convene, share knowledge and insights, network and discover new business opportunities and celebrate Asian tourism at its best.
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.travel rave.sg for the latest industry updates.