Issue #112 - 5 Travel Recovery Stories You May Have Missed This Week in Asia Pacific!
Recovery is a work in progress Globally, in China, Australia, Indonesia & New Zealand
Welcome to issue 112 of Asia Travel Re:Set.
Asia is a region of mega-markets.
India. China. Indonesia.
These three countries have, respectively, the 1st, 2nd and 4th-largest populations in the world. Together, they are home to around 3.1 billion people.
Each will play a distinctive roll in the reshaping of travel and tourism in this new era.
So let’s follow that train of thought…
Thanks for checking-in.
PS: You can watch my keynote presentation discussing this subject at the recent Worldline Rise Travel conference in Phuket. Click HERE.
- “IN THE NEWS”
- 5 Travel Recovery Stories You May Have Missed This Week in Asia Pacific!
Recovery is a work in progress Globally, in China, Australia, Indonesia & New Zealand.
- Key Factors Driving Tourism & Hospitality Expansion in Indonesia
In conversation with Jakarta-based hospitality investment expert Ross Woods.
“IN THE NEWS”
"While China’s outbound travel market has skyrocketed over the last two decades, India’s boom has come a bit later, which is due in part to how different their aviation sectors are." This is an often overlooked differentiator between the Chinese and Indian travel markets. Click HERE to read this thoughtfully structured piece by CNN's Tara Subramaniam with comments by myself and Omri Morgenshtern of Agoda.
This week, I joined John Grant & Becca Rowland for the monthly OAG Webinar to discuss air and travel industry trends and developments worldwide, and the changing nature of Blended Travel. Click HERE to watch the webinar, with some eye-catching data about the global and Asia Pacific air travel landscape in mid-2023.
5 Travel Recovery Stories You May Have Missed This Week in Asia Pacific!
1) "Full Global Air Recovery" vs "What Might've Been"
Above is a compelling graphic from this week’s OAG Webinar about the current state of recovery in global air capacity. Keep your eyes on the orange line.
The travel and tourism industry uses 2019 as a benchmark for a “full recovery”, but the entire sector would have likely continued growing from 2020-2022. So a full recovery to the 2019 level is an economic falsity.
The graph projects a "what if" global air capacity model had the world not undergone a pandemic and governments closed borders for varying lengths of time. It applies 3% compound annual growth to highlight a potential capacity gap of around 76 million seats across the pandemic era.
Click HERE to watch the webinar/download the slides, including up-to-date recovery graphics from across Asia Pacific.
2) China’s Travel Recovery: A Work in Progress
“Domestic package tour revenue has already surpassed the 2019 level, while recovery of the outbound package tour business is still very limited.”
That quote by Ctrip (Trip.com) CFO Cindy Wang is worth re-reading. Package travel contributed RMB386 million of Ctrip’s impressive Q1 net revenue of RMB9.2 billion. But while package revenue was up 211% year on year, it recovered to just 37% of the 2019 level.
There are some obvious reasons. Outbound group travel didn’t restart until early February, and that was just to 20 selected destinations. Forty more were added in mid-March. This skewed the Q1 statistics. By early-June - when Ms Wang made that “very limited” comment - only 60 countries could receive Chinese group tourists, and this list excludes heavy hitters like the US, UK, Japan, South Korea and Australia.
You read a lot of analysis saying that group tour travel is diminishing as a share of the overall outbound market. This is true. However, it remains a weighty component, and is an integral factor in Chinese airlines’ route planning strategies.
3) Australia’s Travel Recovery: A Work in Progress
“Tourism would barely survive without overseas students.”
That headline is from an Australian Financial Review report that “two-thirds of tourists to Australia have some links to international education.” This is no surprise. In 2019, Austrade noted the “significant contribution that international education makes to Australia’s tourism performance.”
The difference now is that some key leisure markets (China!) are recalibrating. Like much of the region, Australia’s visitor market continues to reshape after the extended Covid shock. These are still early days.
With that in mind, Austrade launched a discussion paper, International Diversification Strategy for the Visitor Economy. The key takeaway is an objective to “grow emerging visitor markets and build market share in the Indo-Pacific region.” It identifies “10 international markets of primary interest,” 8 of which are in Asia Pacific.
Well worth a read. Click HERE.
4) Bali’s ‘Mountain Tourism’ Ban: A Work in Progress
“Of course, after it’s being finalised, it will be explained by the governor of Bali.”
As mentioned in Issue #111 (4 June), Bali’s Governor, Wayan Koster, announced a blanket ban on tourism activities at all mountains in Bali. This, along with his other recent statements about a potential Tourism Tax and a Tourism Quota, breathed more oxygen onto the media flame of negativity currently engulfing Balinese tourism.
This week, diplomatic Indonesian Tourism & Creative Economy Minister, Sandiaga Uno, confirmed the ‘Mountain Tourism’ ban - which requires legislative drive by the national government - is still under discussion. “Let's wait to see how the policy will be adopted,” he said.
As this unfolds, it’s worth noting Antara’s report of a comment by Mr Uno that Bali is the “second-largest contributor of foreign exchange to Indonesia after oil and gas.”
5) New Zealand’s Tourism Environment Plan: A Work in Progress
“The aim is to shift tourism to a regenerative model that gives back more than it takes from people, communities and the environment.”
This week, we learned Aotearoa New Zealand entered recession in Q1. Kiwibank expects “further contractions in economic activity over 2023, and possibly into 2024.” With pressure on the NZD, the tourism economy will gain importance. Or will it?
Aotearoa New Zealand is reassessing tourism as a concept as it enters phase 2 of the Tourism Industry Transformation Plan. Decarbonisation is a real policy objective.
In Issue #41 (23 May 2021), I noted: “New Zealand’s internal discussions about reimagining the visitor economy to drastically reduce the carbon impact are far-reaching.”
This week, Tourism Minister Peeni Henare issued a draft Tourism Environment Action Plan noting “The health of the natural environment is integral to our tourism offering.” It states 3 priorities: 1) Understanding and adapting tourism to the impacts of climate change, 2) Transforming the visitor economy to a low carbon emissions industry, and 3) Restoring our biodiversity and eco-systems through tourism.
Well worth a read. Click HERE.
Key Factors Driving Tourism & Hospitality Expansion in Indonesia
“Indonesia’s domestic market is underpinning the growth of tourism.” With the world’s 4th-largest population, Indonesia forecasts 1.4 billion domestic trips in 2023. In addition, a “demographic dividend,” whereby a youthful population is driving economic growth, will support expansion of tourism through the 2020s.
This week, we assess the travel outlook in South East Asia’s largest country with Jakarta-based hotel investment consultant, Ross Woods. Ross discusses the recovery of different hotel segments nationwide, and efforts to reduce the inbound air sector’s reliance on Jakarta and Bali. Plus, we look at the current status of the Five Priority Destinations project to develop different regions of the country for tourism.
Listen to The Key Factors Driving Tourism & Hospitality Expansion in Indonesia, with Ross Woods, here:
🎧 Website 🎧 Spotify 🎧 Apple Podcasts
Or search for The South East Asia Travel Show on any podcast platform
And, that’s a wrap for Issue 112.
The Asia Travel Re:Set newsletter will return on 2 July.
Until then, find me on LinkedIn and at The South East Asia Travel Show - where this week we’ll be discussing the future of airports in ASEAN.
Happy travels,
Gary