Looking ahead to 2012: Bullish on Asia, cautious on the rest

If there are three words that will characterise the year ahead, it will be 'Asia', 'low-cost' and 'online'. In this year-end issue, P@SSPORT looks at these three drivers of growth.

After a spectacular 2011, Singapore's travel industry is entering the new year with some degree of bullishness tinged with caution and concern over what may unfold in Europe and the US as both markets struggle with their economic malaise.

The continued strength of Asia is key. As more destinations turn their sights towards the region to drive growth, 2012 looks set to be a highly competitive year for the tourist dollar from Asia.

In its Asia Travel Insights Survey, Abacus International noted that international tourist arrivals in Asia Pacific reached a historic high of 204 million in 2010 with a $7.7 billion profit, the largest worldwide, accounting for 22 per cent of global share, ahead of the Americas and with a sharp increase of almost 13 per cent from 2009 to 2010.

Up through July this year, Abacus booking data showed a two per cent increase in Asia bookings as compared to the previous year. The crisis in Japan among other challenges has slowed growth, but passenger air travel demand remains strong.

Mr Robert Bailey,President and Chief Executive Officer of Abacus said, "Asian economies are continuing to grow, and this is a boost for the travel industry in Asia. However, all eyes are now on the global economic outlook, and how this will affect local economies as well as consumer and business confidence."

The latest ITB World Travel Trends Report also confirms the strength of Asia as a source of travellers. A year-on-year comparison shows that in the first eight months of 2011, the number of Asians who travelled abroad rose by six per cent and next year's figure is forecast to rise by a further five per cent.

Increasing prosperity among the middle classes, particularly in China, India and Southeast Asia, is driving the tourism boom in the Asia-Pacific region. China's continuing economic boom is indication that the Chinese are particularly keen to travel outside their own country, a development which will benefit all destinations.

The report, compiled by IPK International and commissioned by ITB Berlin, is based on extracts from the Asian Travel Monitor and on assessments by more than 50 tourism experts and scientists from around the world.

The results of the IPK International trend analysis show that prospects for Asia remain good. When asked about their travel intentions next year, 32 per cent of the respondents said they aimed to travel more than in 2011, 37 per cent wanted to travel as often, and only 19 per cent said they would travel less.

The report observes that this trend will also result in an increasingly diverse range of travel products. Upmarket urban life in Asia has generated a demand for specialised products, such as history and culture, 'edutainment' parks, adventure holidays, luxury travel and sports tourism.

Dr Martin Buck, the director of the Competence Center Travel and Logistics at Messe Berlin, said, "Asia remains one of the world's fastest-growing travel markets and also has great potential for the European travel industry. Many tourism companies have realised this trend. Simply describing one's products in Mandarin is not enough. Marketing efforts must also take typical local aspects into account."

In the area of corporate travel, Carlson Wagonlit's 2012 Travel Price Forecast, which projects supplier prices for airlines, hotels, ground transportation providers and meetings and events (M&E) spend, noted that the Asia Pacific market is thriving, leading the way in many economic indicators and, correspondingly, in business travel volumes.

However, it said, APAC travel prices will be flatter in 2012 on a quarter-over-quarter basis; given that the region was not as affected by the economic downturn as other parts of the world, and has already been experiencing strong growth rates throughout 2011.

Here are the report's forecasts for APAC.

• Airline pricing in APAC will increase by 3.1 to 3.8 per cent in 2012 as a dynamic mix of legacy airlines and a growing group of low-cost carriers compete for travellers, holding down fares in the region.
  
• Average daily hotel rates in APAC will range from a 1.9 per cent decrease to a 2.1 per cent increase in the first half of 2012, and a 0.9 per cent decrease to remaining flat for the second half of the year. APAC's business hubs currently boast the highest occupancy rates in the world, which will present travellers with continued challenges in securing available rooms. Even so, strong supply growth across APAC will keep overall average daily rate growth in the region more modest than one might expect.
  
• Car rental rates in APAC will remain relatively flat, ranging from a decrease of 1.7 per cent to an increase of 3.9 per cent in 2012 in Australia and New Zealand, two of the primary rental car markets in the region.
  

See related articles:

Low cost, high stakes, good news for travel growth

Where low cost goes, online follows