Finding ways for the travel industry to bounce back from crises

There have been a number of challenges from the external environment that the travel industry has had to keep an eye on over the past 18 months.

Finding ways for the travel industry to bounce back from crises

There have been a number of challenges from the external environment that the travel industry has had to keep an eye on over the past 18 months.

The financial stability of the Euro zone, factors impacting the flow of oil and consequently its price and growth rates in markets like China, India, and Brazil were some of the issues that were expected to shape up the travel industry this year.

At the same time, Asia’s travel market has been growing steadily despite facing tougher market conditions and a global economic slowdown.

In order to assess the current sentiments associated with the Asia Pacific (APAC) region,’ Ritesh Gupta spoke to Stu Lloyd, Senior Director of Marketing and Membership Services for the Pacific Asia Travel Association (PATA), who is scheduled to speak at the forthcoming Travel Distribution Summit Asia 2012, to be held in Singapore (May 9-10) this year.


2011 was marked by several external challenges, including flooding in Asia, the earthquake and Tsunami in Japan, and, of course, the economic instability affecting many European countries. How do you assess the current sentiments pertaining to the travel industry at this juncture?

STU LLOYD: Crisis is a constant these days it seems, thanks to natural and geo-political causes. PATA’s new Rapid Recovery Taskforce to be officially launched in Sendai, Japan, (this month) helps to prepare for and mitigate such challenges so the travel and tourism industry can get accurate impartial information out to the traveling public and bounce back in a more timely manner without further punishing affected destinations.

Sentiment is largely affected by mass media, which has shown itself to be rather sensationalist in situations such as the Thailand floods in which only 20 percent of Bangkok was actually affected in a real way … however, by watching the nightly news you would be forgiven for thinking that the entire kingdom had become Underwater World. A tool from our partner, Sinotech, is allowing us to monitor sentiment of the Chengdu earthquake and Japan tsunami aftermath by aggregating mentions across two million websites.

Asia’s travel market is growing steadily despite facing tougher market conditions and a global economic slowdown. What do you think stands out in this region? Can you provide an insight into growth/performance?

LLOYD: The noticeable growth trend in 2011/12 is intra-Asian travel, and many in the industry are switching tacks to capitalize on this. Two words: Middle Class. Middle Class is a strong indicator of travel intent, desire, and ability. China is producing 25,000,000 new people classified as middle class each year, and Indonesia will soon reach 60,000,000 of its population deemed to be middle class. India, too, cannot be ignored for the same reasons.

Can you provide an insight into macro-economic factors that are driving change across the APAC markets in 2012?

LLOYD: The traditional western markets of UK, Europe, and US are performing poorly on the back of economic doldrums, with a cumulative average growth rate over the past few years for the former at zero percent and for the latter markets at only two percent. This scenario will only be exacerbated by the punitive APD “detention tax” in the UK and the EU’s ETS tax. And this “Misery Index,” while apparently has plateaued already, seems set to continue through till 2016.

How do you think the emerging economic engines of Asia continue to power travel growth across the region? How are China and India shaping up the industry in the region?

LLOYD: The PATA forecast through 2014 shows a nearly six percent increase for international visitor arrivals in Asia. Chinese arrivals into South East (SE) Asia are rising around 15 percent year-on-year off a large base, India almost 10 percent. Interestingly, large outbound growth rates into SE Asia are emanating from Indochina, especially Cambodia, Vietnam, and Laos. So yes, clearly these are outstripping global recessionary trends.

Inbound, the big beneficiaries are countries such as Bhutan, Sri Lanka, Myanmar, and Nepal (all with growth rates of between 21-37 percent year-on-year). Keep an eye on Myanmar as it opens up … it will go ballistic this year, hampered only by its ability to build capacity across the tourism supply chain.

The Asia travel landscape is being fuelled especially by the growth of mobile. How do you think the face of the travel industry is changing?

LLOYD: The face of the travel industry is not changing … it has changed already. Google is reporting 20 percent of all searches come from mobile devices these days, and in America 10 percent of hotel bookings are being made from a mobile device. That figure is generally lower in Asia but rising fast, especially as some countries like Indonesia and the Philippines leapfrog the use of landlines altogether. Indonesia is also one of the most social-media connected markets in the whole world. Social media such as TripAdvisor, Facebook, etc., has given the tourism industry a wake-up call – you do not own your brand anymore, the consumer does.

How do you think the travel industry, be it for suppliers or intermediaries, are trying to gain a competitive edge especially in the areas of mobile and electronic transactions?

LLOYD: You just need to look at the financial performance of Google to realize how important Pay Per Click has become in the travel world, with massive competition for keywords, plus increased resource being poured into areas such as SEO and partnership marketing and affiliate marketing. Online is the new battleground and invisible blood in large quantities is spilt every day.

As for PATA, we have just launched PATA mPOWER, an online data vehicle, which delivers powerful interactive insights to your mobile while you are on the go. Previously, to access this much data would have meant lugging around half a ton of papers in your briefcase.

Technology continues to evolve the dynamics within this huge sector as consumers find ways to better serve their needs and companies test new models to find the next big one. What sort of innovation (new ventures/tools for the entire travel planning and buying process) due you foresee in this region?

LLOYD: There are some really cool innovations coming into play now, such as augmented reality. Imagine that QR codes are now becoming considered “old school” … such is the rate of change. Now, you can have a glorious four-color photo of, say, a boat on a river on your business card or brochure. Scan that with the 4 More app on your mobile phone, and the boat image suddenly comes to life, cruising down the river and playing a full video presentation display of your destination or attraction. Wow! That’s a really compelling way for the travel industry to tell stories.

[PATA members can now claim a 15 percent discount to attend TDS Asia 2012. Contact Ivy Chee, Regional Director-Asia, PATA, at [email protected] for more details.]

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