President, Amadeus Asia Pacific
DESPITE warnings to the contrary, signs remain positive for the travel industry in Asia-Pacific in line with overall economic indicators.
While the International Monetary Fund has scaled back its annual economic growth forecast for China to 8.25 per cent from nine per cent, this remains a very positive projection in relative terms.
According to a report by Carlson Wagonlit, the only market in Asia-Pacific expected to experience a decline in overall economic performance in 2012 is Japan; which of course is continuing its recovery from the natural disasters of 2011 as well as ongoing deflation and debt hurdles.
On top of a positive economic outlook, there are several other trends that will help to further boost travel volumes for our region.
Good value travel deals
The silver lining of the economic clouds hovering over Europe and the US is cheaper travel deals and stronger currency conversions for Asia-Pacific leisure travellers.
For example, a flight to the US is available at a much cheaper fare. Once in the country, travellers will get more US$ for their Singapore dollar, Thai Baht, or other Asia-Pacific currency.
This spells opportunity for travel consultants and online travel sellers in our region.
Corporate travel growth
After several years of cutbacks and caution, corporate travel is on the rise once again.
According to a recent Deloitte survey, more professionals plan to travel for business in 2012 than they did during 2011.
And several industry sources including Egencia and American Express have predicted growth in corporate travel prices of up to six per cent for flights and hotel rooms in Asia-Pacific based on this projected increase in demand.
This important growth area will buffer any decline in leisure travel that stems from a drop in consumer confidence and spending.
While online travel penetration varies greatly across the Asia-Pacific region, the overall picture is one of rapid growth and adoption.
In mature markets such as Japan and Australia, online travel bookings are slowing. But at the same time, online bookings in emerging markets such as China and India are propelling the region’s overall growth.
The online travel booking market in Asia-Pacific is expected to grow by 30-40 per cent per year, compared to a projected five-per cent growth in the US.
These growth signals put in context the media stories of impending economic doom.
Yes, we have been cautious and disciplined in our efforts to cushion our business should there by an impact on the travel industry. However, we are optimistic that the fundamentals of our business in Asia-Pacific are strong, and the market, while still evolving, is resilient.
Looking back, we see evidence of Asia-Pacific’s propensity for rapid recovery.
In 2009, we experienced global market chaos, where cutbacks and layoffs dominated the news and had a marked impact on the travel sector. As the storm cleared, however, Asia-Pacific proved to be somewhat sheltered from the fallout. Our region proved buoyant, bolstered by growth in emerging markets, such as China and India.
The statistics back this up too: according to PhoCusWright, the Asia-Pacific travel market declined just seven per cent in 2009, while Europe and the US fell by 15 per cent, more than double.
The projected growth in corporate travel and online bookings, as well as an increase in longhaul leisure travel resulting from weaker global economies, point to a positive outlook for Asia-Pacific travel in 2012.
These signs suggest that it’s not the perfect storm brewing, but rather a not insignificant storm in a teacup, that will be overcome by the same market strength and resilience that we’ve experienced before.
By David Brett, president, Amadeus Asia-Pacific