28 February 2003As the region's travel trade
gathers in Berlin next month for ITB, TravelWeekly
highlights the key trends that will influence discussions
and negotiations at the world's largest travel fair and
Asia's best barometer for European leisure travel to the
This year's ITB takes place as war clouds loom over
Iraq, and as Asian tourism boards and suppliers cobble
together contingency strategies to protect their inbound
business, and battle for market share in a crowded,
Already, post September 11 and amid the global economic
slowdown, markets have started shifting for destinations in
Asia. Most countries have seen marked increases from
shorthaul markets and declines from longhaul sources in the
Despite the difficult conditions, Asia's inbound tourism
industry remained resilient, mainly thanks to shorthaul
Take these key indicators.
The city state managed to squeak through 2002 with a 0.6
percent growth to reach 7.57 million but it was clear the
region was its saviour.
China was its fastest growing market in 2002, growing by
34.7 percent to 670,058. In terms of market share, it moved
from fifth place to third place, overtaking Malaysia and
Australia. India rose from ninth to seventh position,
overtaking USA and Korea.
The UK saw a 0.3 percent drop to reach 458,466 arrivals
The kingdom managed to achieve a 7.3 percent increase over
2001 to reach 10.8 million arrivals last year. Thailand was
one of the few major destinations in the region to see an
increase from Europe. Between January and November 2002,
Thailand received 2,340,720 arrivals from Europe, up 5.03
percent. ASEAN arrivals however grew by 12.32 percent to
reach 2,175,924. China alone increased 9.8 percent.
The territory achieved a record-breaking year with arrivals
topping 16.5 million, an increase of 20.7 percent over
2001. And there is no mistaking where most of that growth
is coming from. China dominated the picture with 41.2
percent of all arrivals, nearly 6.83 million in total, and
growing by more than 50 percent over 2001.
Malaysia also managed to post a growth in inbound last
year, with arrivals growing by four percent to 13.3
million. Its top six markets - Singapore, Thailand,
Indonesia, China, Japan and Brunei - are within the
The UK comes in at seventh place with 239,294 arrivals
Up to November 2002, the UK delivered 539,400 visitors to
Australia, a three percent increase. In the same period,
German arrivals totalled 121,800, down nine percent. In
comparison, arrivals from China and Korea rose 19 and 13
percent respectively in the first 11 months of 2002.
These trends, coupled with fears of a war that would
affect travel over the Middle East as well as economic woes
in Germany and the US, are prompting Asian tourism boards
to intensify efforts to drive even more quick-fix,
In a survey undertaken by the Pacific Asia Travel
Association (PATA) in which 12 tourism boards were asked
what they would do in the case of war, most indicated that
they would be looking closer to home for business.
One said, "It will be difficult to attract long-haul
tourists, and travel and tourism in the region will depend
mainly on short-haul travel within neighbouring
Another added, "Arrivals from Europe and Americas (in
some areas) will decrease because of the need to fly
through the Middle East. Travellers will look for other
markets which are safer and away from conflict. They will
definitely find such markets in the Pacific Asia region.
Therefore there will be increased tourism activities and
travellers in the region."
Concerns were however expressed that a war would have a
negative impact overall due to anti-US sentiment among
countries in the region and "overarching fears of travel to
a region where there is a significant Muslim
The Tourism Authority of Thailand (TAT) said last week
that it would shift its focus yet further towards the Asia
region to counter the imminent threat of war on Iraq.
TAT governor Juthamas Siriwan said that it had to be
prepared to shift focus away from the Middle East, which is
one of three major markets targetted by the TAT last year.
In the event of war, she said, its marketing budget for the
region would be withdrawn.
Key markets identified by the TAT are India and China,
as well as Russia and Eastern Europe. With or without a
war, most tourism boards have already drawn up 2002
strategies that reflect the market shifts.
The Singapore Tourism Board (STB), under the new
leadership of chief executive Lim Neo Chian, has a new
structure in place. As part of the revamp, seven geographic
areas have been identified, five of which are focused on
Asia. Western markets, including Europe and the Americas,
have been lumped into one division.
"We now have to look at how we distribute our resources
and how we channel those resources into our growth areas,"
Malaysia has said it would continue with its strategy of
tapping the ASEAN and Asian markets.
HKTB's executive director Clara Chong said that although
the mainland was a "natural" market for Hong Kong and would
again be a focus of its marketing strategy in 2003, the
other shorthaul and longhaul markets would continue to
command a significant share of the board's marketing
resources and budget.
Their push towards new Asian markets is finding
resonance in source markets like India where during the
recent Outbound Travel Mart held in New Delhi, tour
operators predicted that Indian travellers would head to
South-east Asia this year. China, for instance, which saw
an increase of 10 percent in Indian arrivals last year, is
planning to open an office in Mumbai.
With such focus on Asian markets, suppliers are
predicting a bloodbath in terms of competition as everyone
goes after the same piece of the pie.
Already a competitive region, suppliers are predicting
even further drops in yields as businesses compete for the
Chinese and Indian markets in particular.
This, they say, could spell opportunities for those who
persevere and continue to invest in the longhaul
In the PATA survey, a couple of tourism boards, for
example, indicated they would be increasing promotional
activities in the longhaul markets including North
The shift in focus by Asian tourism boards has fuelled
debate within the Asia/Pacific travel trade as to whether
shorthaul markets could ever replace longhaul markets in
terms of yield and long stays. The private sector is
anxious that the high yield, long stay markets not be
neglected as tourism boards play the arrivals game.
In Singapore, for instance, despite the small rise in
arrivals, the average occupancy rate of hotels in 2002
dropped 1.8 percent to 74.5 percent while average room rate
dipped 5.3 percent to S$126.3. Revpar (revenue per
available room) decreased by 7.6 percent to S$94 in 2002,
according to STB statistics.
Tom Nutley, chairman of Reed Travel Exhibitions, perhaps
summed up the state of play for this year when he said at
AIME, "Everyone is looking to spread their business and
reduce reliance on particular markets because you never
know which markets are going to be hit when."