Amid the ongoing pandemic, what are some best practices and ways that travel businesses in APAC should adopt to keep a steady trickle of tourism dollars coming?
Based on its data on travel bookings, ForwardKeys highlights key learnings that travel businesses in the region should take note of.
Seize new opportunities in your domestic market
Investing in a sound domestic tourism plan with healthy airline promotions and tour operators in sync has its merits — just look at China.
China reached pre-pandemic domestic arrival levels as early as September 2020, thanks to twinning its national public holidays with airline deals for couples (two-for-one offers) and the introduction of tax-free perks for shopping holidays to Hainan.
With international travel still on hold, a strong desire for revenge travel has spurred more mainland Chinese travellers to visit Macau. In the first week of June, issued tickets for travel from mainland China to Macau reached 48% of 2019’s level, while in general, outbound Chinese travel recovered only 4%.
Rethink destination strategies and flight connectivity
“The world has changed, like it or not. That means what you once knew is no longer valid and past historical data is not useful,” says Jameson Wong, Director of APAC for Tourism & Hospitality at ForwardKeys.
This period is ripe for travel businesses to reinvent themselves and seize new opportunities backed by data, according to ForwardKeys, drawing on examples of Phuket, Jeju Island and the Maldives.
The Phuket Example:
What is surprising is the strength of the Israel market this summer in Phuket. For the first time, Israel, a relative newcomer, ties with the UK as the top source for Phuket in July-September, with Germany as the second biggest source. El Al started operating a daily direct flight from Tel Aviv to Phuket on July 1.
“This shows the industry needs to look at other factors, beyond travel restrictions, that will shape travel decisions and change traditional market sources and segments. These factors include airline connectivity, currency and safety perceptions such as anti-Chinese sentiment,” says Wong.
Europe (including Israel) is the dominant source for Phuket this summer, accounting for 78% of issued tickets, followed by Americas at 12% and Africa/Middle East at 6% (see chart). In a reversal, Asia/Oceania is only 4%, a significant drop from 59% in 2019, due to travel restrictions and/or quarantines upon return.
The Jeju Island Example:
Fun fact: the flight path between Seoul-Busan is the busiest route in the world (in terms of domestic travel). Not only are the urbanites from South Korea’s capital in a rush to escape to Jeju but the passenger profile has changed too. There has been a growth in passenger shares for those who travel in groups of three to five — i.e. families and couples.
Seoul’s Incheon Airport has also seen an important shift in its relevance as a regional hub. In 2021 it doubles its share in connecting international travellers, up from 10% in 2019 to 20% in 2021, vying neck to neck with Singapore’s Changi Airport.
The Maldives Example:
Russia is now the top market in terms of arrivals to the Maldives since the country reopened its borders in July 2020. Flight connectivity greatly assisted in the Maldives receiving such international travellers via Dubai Airport — which has stayed open throughout the pandemic.
“Our marketing promotions in the past year has had an impact in increasing the demand for the destination and also the increased connectivity has positively helped the boost in arrivals from Russia,” says Thoyyib Mohamed, Managing Director of Visit Maldives.
Make early border announcements
Forwardkeys recommends Asia destinations to take a leaf from Europe's clear and early announcements regarding the reopening of borders and the applicable travel conditions.
Well in advance of the popular summer season in Europe, Croatia and Greece announced in Q1 that they will be welcoming vaccinated international travellers from the US, which swiftly led to the latter's meteoric rise to become a top source market for both countries.
“We even noticed a spike in first-class travel from NYC to Athens for the summer season,” adds Olivier Ponti, VP of Insights.
Invent new promotions & activities
Last-minute bookings have become part of the new normal, and Forwardkeys' ticketing data demonstrates that each region is showing the habit of booking closest to departure.
Nan Dai, Forwardkeys' China Market Expert shares, “In China, we are seeing domestic travel booked under four days and people have adapted to this new habit as the airlines and hotel offers have become more flexible in terms of ticket changes and refunds."
If travel marketers know the origin cities that key source markets are coming from, they can improve marketing spend and enticing offers to suit the relevant audience. For example, Beijing inhabitants are more likely to fly to Sanya while to Haikou 50% of the arrivals are from Chengdu.
People are also staying longer on their trips. Macau used to be a one-night or two-day experience for Chinese mainlanders as they paired their holiday with a few days in Hong Kong. Nowadays, Macau is the sole highlight and people are staying on average of three to five nights. What activities and promotions exist to capture this audience and make them return?