December 1998
Asia's economic and financial crisis has had less impact on travel and
tourism worldwide than earlier feared, according to the results of a survey
of national tourism organisations (NTOs) just released by the World Tourism
Organization (WTO). The next two years could be difficult, the WTO report
concludes, hut strong growth rates-at least in terms of arrivals-are expected
to return soon after.
WTO estimates point to an increase of 1.5-2 percent in international
arrivals worldwide in 1998. This compares with 2.8 percent in 1997 and
5.6 percent in 1996. The majority of the world's destinations will record
positive growth in arrivals in 1998-the impact of the Asian crisis has
been very limited outside the region.
A survey of key NTOs in Pacific Asia-South Asian countries were, for
some reason, not included-highlights the different performances from one
destination to another in the region. Singapore and Hong Kong turned in
the most disappointing results in the first eight months of 1998-of -17
percent and -14 percent respectively-but the first seven months produced
healthy increas-es for Korea-ROK (+7 percent) and Thailand (+6 percent).
Both are confident of maintaining growth levels through the full 12 months
of 1998.
Hong Kong's performance, meanwhile, has picked up in the
second half of the year, with the result that it is now pre-dicting a less
severe drop in arrivals of six percent by year end. For the Pacific Asia
region overall (excluding South Asia), total arrivals are expected to fall
by 5.6 percent in 1998 to 84.2 million. Intra-regional arrivals are estimated
at 64.1 million, down 9.8 percent on 1997's level, while long-haul markets
are projected to grow by 11.7 percent-an additional 400,000 arrivals from
the Americas, +6.4 percent, and another 1.5 million from Europe, +15.0
percent. The only important source market in Europe to record a decline
in arrivals for the region is Russia.
A word of warning, meanwhile. Although a use-ful indicator of trends-not
to mention welcome news for Pacific Asia - these forecasts should nevertheless
be considered in the light that they focus almost entirely on arrivals
and do not address other meaningful measures of performance such as overnight
volume and receipts.
As an example, Indonesia's international tourism receipts fell by a
reported 24 percent in the first half of 1998 and the decline for the full
12 months of this year is expected to be far worse that the six percent
fall in arrivals currently projected. As for Hong Kong, China, despite
a steadily improving arrivals outlook, its receipts are down 30 percent
on 1997's level. Industry analysts, meanwhile, all seem to agree that while
there are clear signs of a revival in tourism in some countries of the
region, yield is likely to remain severely depressed for some time to come.
Arrivals in Pacific
Asia by Selected Markets,
1997 - 1998
Market
|
1997
|
% Change Actual ( No. of months)
|
Estimate (Year end)
|
Australia |
4,286 |
-5 (8) |
-5 |
China |
23,770 |
-3 (7) |
5 |
Hong Kong |
10,406 |
-14 (8) |
-6 |
Indonesia |
5,036 |
na |
-6 |
Japan |
4,223 |
-4 (6) |
na |
Korea-ROK |
3,908 |
7 (7) |
7 |
New Zealand |
1,615 |
-10 (8) |
na |
Singapore |
6,542 |
-17 (8) |
na |
Thailand |
7,263 |
6 (7) |
6 |
Sources: Respective national tourism organizations
(NTO's);World Tourism Organization (WTO).
Markets & Destinations
According to the latest survey by travel research consultancy JRA Data
& Forecasts, Singapore's Changi airport is considered the best in the
world for shops and variety of goods for sale, while Dubai comes out top
for best prices. No other Pacific Asia airport was rated among the world's
best airports for shopping by the 10,000-plus business travellers polled
for the survey. However, Singapore, Sydney, Kuala Lumpur and Bangkok were
all ranked among the top 10 airports in terms of prices.
-
Overseas arrivals to the U.S. fell by one percent in the first half of
1998. As expected, Asia's economic situation was the main reason for the
overseas short-fall, with the region's arrivals declining by 13 percent.
Despite a six percent fall, Japan remained the top overseas market for
tourist arrivals, with 2.4 million. By comparison, Western Europe increased
by four percent.
-
In the first nine months of 1998, Canada registered a 16.0 percent decline
in arrivals from Japan. Chinese Taipei (Taiwan) was down by 16.5 percent,
Korea (ROK) by 59.6 percent and Australia by 3.1 percent. Among the growth
markets, Hong Kong, China increased by 6.3 percent, Mexico by 16.9 percent
and the U.S. by 10.2 percent.
-
The Australian Tourist Commission estimates that backpackers made up eight
percent of all visitors arrivals in 1997 while their contribution, excluding
airfares, was 15 percent of all visitor expenditure.
Top 10 Airports for
Shopping and Prices
Best Airports for Shopping
|
Best Airports for Price
|
1. Singapore |
1. Dubai |
2. Amsterdam |
2. Amsterdam |
3. Dubai |
3. Singapore |
4. Copenhagen |
4. Copenhagen |
5. Zurich |
5. London Heathrow |
6. Frankfurt |
6. Sydney |
7. Rome Fiumicino |
7. Kuala Lumpur |
8. London Heathrow |
8. Frankfurt |
9. Paris Charles de Gaulle |
9. Bangkok |
10. Vienna |
10. Zurich |
Source: JRA Data & Forecasts
Hotels & Resorts
The Japanese have never been as successful internationally in the hotel
business as they have been in other sectors such as the motor industry
or electronics. Among the existing hotel groups, Okura and Prince have
little international presence and ANA's and Nikko's expansions are currently
constrained by the problems of their airline parents. All Nippon Airways
has sold its San Francisco and Washington hotels and removed them from
ANA Hotels' portfolio.
That leaves Tokyu, which once showed an interest in international expansion-when
it started a joint venture with what became an independent Regent Hotels-but
which has changed direction significantly since then. It has been reasonably
aggressive in terms of regional expansion with its Pan Pacific Hotels,
but there are no signs of an aggressive move onto the global stage.
-
Room revenue at the Peninsula hotel group dropped a startling 60 percent
in the first half of 1998. Travel Business Analyst (TBA) says the Hong
Kong group is not alone in experiencing a drop of this magnitude, but it
points out that many weaker companies in the travel business in Asia would
not be able to sustain revenue falls like this. Travellers themselves are
certainly getting great travel bargains, TBA points out, but will they
still travel in this economic climate when those bargains have gone? Worse,
will the travelling public now be counting on travel bargains before booking
any kind of trips?
Aviation
Airline alliances in Pacific Asia are increasing. All Nippon has joined
the Star Alliance, as have Air New Zealand and its Australian partner Ansett,
and Singapore Airlines is almost a Star member. Cathay Pacific and Qantas
have joined Oneworld and Japan Airlines and Cathay have linked with each
other. One aspect of alliances has yet to be addressed, however-that of
liability regarding code-share flights-although a legal precedent may already
have been set.
Just one month before the Swissair crash into the Atlantic, the U.S.
Department of Transportation found against Swissair and its code-share
partner Delta in a case which occurred earlier this decade. In 1994, the
U.S. government had issued an order to stop U.S. airlines overflying Afghanistan-at
that time considered a security risk. In 1995 this ban was extended to
code-share partners. In other words, a Swissair flight also operating with
a Delta flight code was considered a Delta flight, and therefore the over-flight
ban applied to the Swissair flight as well. The U.S. decision on that case
was to fine Swissair for over-flying Afghani air space. Given this precedent,
would Delta also share responsibility for a Swissair flight that crashed?
Or would Cathay Pacific, for instance, be responsible for what happens
to its passengers when they fly on other airlines in the same alliance?
-
Some short air routes might produce fuel savings, but they cost more in
en route navigation charges. The most costly routing in terms of navigation
charges for Cathay Pacific flying Hong Kong, China to London, for example,
is over China and Germany.
-
Whether or not the result of the economic down-turn, two ventures to build
a 100-seat jet aircraft in the Pacific Asia region have been abandoned
in 1998. One was in Japan. The YSX project was originally a venture with
Boeing and was kept going for almost a year after Boeing bought McDonnell
Douglas. It has since decided to develop the B717 at the Douglas factories
as a 100-seater. Also after 40 years, Airbus and its partners-Avic from
China, Alenia from Italy and Singapore Technologies-have cancelled plans
to build a 400-seat jet aircraft in China. Airbus now plans to build the
A318, a shortened version of its A319, for the 400-seat market segment.
These moves indicate that after attempts to develop a full aircraft manufacturing
industry, aircraft companies in the region will once again have to be satisfied
being parts' suppliers to the two big U.S. and European companies, Airbus
and Boeing.
Travel Agents & Tour Operators
Japan Travel Bureau says its revenue through convenience stores over
a three-month period in early 1998 was US$8.5 million (YI.2 billion)-a
fairly modest US$2.8 million monthly, and US$237 per store. Bookings for
tour packages, hotels and domestic tourism attractions can be made from
terminals, first installed in June 1997 and now available in 12,000 stores
throughout the country. However, JTB says almost 50 percent of the total
transactions were made during the early mornings or evenings-when JTB offices
are closed-so these could be producing additional revenue for the company.
-
A new' wetland tour has just been introduced-not in Bangladesh, Borneo
or India, but in Hong Kong, China! The destination is generally associated
with a city culture built around skyscrapers, shopping and dining. However,
the World Wide Fund for Nature (WWF) and Grayline have started half-day
tours to the territory's Mai Po Nature Reserve, which not only has its
own resident animal, insect and bird life, but is also on an annual migration
route for thousands of waterbirds.
-
Another new tour may soon become accessible to international travellers
Twice-weekly ferries are due to start at the end of November between North
and South Korea (Korea-ROK). Costs for the overnight trip on a 1,200-passenger
ship, will be between WI million and W3 million.
-
The Australian tour operator/travel agency sector achieved revenues of
A$1,980 million in 1996/97 (ended June 30, 1997), according to the Australian
Bureau of Statistics. Some 65 percent of total earnings came from ticket
sale commissions and international business accounted for 62 percent of
this. The overall profit margin of the industry was two percent, although
retail travel agencies recorded an operating profit margin of 8.1 percent
and inbound tour operators achieved 6.5 percent. Wholesalers and ticket
consolidators, on the other hand, had a negative profit margin of -16.8
percent.
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