Hotel Online Special Report
The Youth Travel Market - 
Important Generator of Tourism
also: The Big Global Travel Agencies Are Getting Bigger
Chart: Leading International Travel Agency Chains and Consortia,  1996-1997
Although the industry has long recognised that the youth travel market is an important gener-ator of tourism and more significantly, offers better than average potential for future growth, mea-surement of its size and importance has not been easy because of a shortage of supporting statistical data. This is the main reason why the market still tends to be neglected. 

Another reason is that it is widely seen as one of the least rewarding sectors of the travel and tourism industry because young people are considered low spenders. This argument is flawed - as has been ably demonstrated by the Australian  Tourist  Commission (ATC), one of the few national tourism organisations around the world to analyse the market seriously. Young travellers' daily spending may be low, but they stay at their destinations far longer than the average tourist, so their overall expenditure in a country is relatively high. This explains why the ATC has invested heavily in promoting to two key sectors of the youth market: backpackers and language learners. 

Estimates from the different organisations and associations involved in the youth tourism busi-ness, such as the Federation of International Youth Travel Organisations (FIYTO), have put the size of the youth travel market as high as 20 percent of all international travellers - although this depends, of course, on how the sector is defined. 

Recent research by the UK-based consulting group, Aviation & Tourism International (ATI), published in Travel & Tourism Intelligence's (TTI's) Travel & Tourism Analyst, suggests that Asia Pacific has shown the highest growth in arrivals by young people during the 1990s of all regions worldwide. ATI's recent  research is an update of a study originally commissioned by the European Travel Commission (ETC) and conducted in 1994. 

During its research for the ETC in 1994/95, ATI estimated the market at around 13.5 million arrivals for the region, forecast-ing seven percent growth a year to the end of the decade. In the last 12 months this average has almost certainly fallen, but all the evidence suggests the sector should pick up faster than the market over - as Asia pulls out of its economic crisis The only negative factors young people under the age of are that the population of 26 has been falling steadily in the western world. and that the age group continues to suffer from a very high level of unemployment  in western Europe at least. 

It is unfortunate, ATI says in its report, that the Australian research did not extend further than direct spending. A comprehensive assessment of the real benefit of youth tourism requires a careful study of its economic impact. There is no evidence of any such study having been carried out at any time anywhere. 

However, superficial observation leads to the conclu-sion that the economic impact of youth travel is much more favourable than would appear from spend per transaction, ATI says and even higher than would appear from spend per visit. ATI cites several reasons for this: 

  • Spend by young people is more likely to benefit local people at each destination as their purchases are more often locally produced and involve relatively little leakage.
  • Their spend is more likely to require a much lower level of capital investment and this will encourage investment and employment in small enterprises.
  • Young people tend to be in the vanguard in visiting new places and attractions and are thus playing a major role in the development of a destination's tourism product.
  • Finally, and perhaps most importantly; once a young person has become a satisfied customer he not only has a potential buying life of half a century; but he becomes an easier sales target.

South Africa residents made 860,000 trips abroad in 1997, according to the country's Central Statistical Service. Of these, just under 600,000 were for overseas (non-African) destinations-split 50 percent Europe, 14 percent North America, 42 percent Asia, eight per-cent the Middle East, seven percent Australasia and the balance the Indian Ocean Islands and Latin America. Australia was the favourite destination in Pacific Asia, followed by India, Thailand, Hong Kong and New Zealand. 

  • The  results  of  the  latest  Reiseanalyse survey;  conducted  by  the  Hamburg-based Forschungsgemeinschaft Urlaub und Reisen (FUR), suggest that demand for Asia among German holi-daymakers could be three times higher over the next three years than it was from 1995-97 inclusive-six million trips as against two million actually taken in the last three years.
  • In 1997, 245,000 Canadians took cruise holidays abroad-a 25 percent increase on 1996. This means that the industry's five-year growth projection of seven percent in cruise passenger demand to 2000, made in 1995, has already been surpassed.

There were some disappointing performances for leading tourism destinations in Pacific Asia in the first half of 4998 with the exception of Thailand. Thanks to growth of close to 20 percent out of Europe and 13.5 percent out of North America, Thailand's arrivals rose 4.8 percent. 

By comparison, preliminary estimates point to a 2.4 percent drop in China's foreign visitors over the six-month period and Australia's arrivals were down 4.7 percent. Increases of 10.1 percent and 14.6 percent out of Europe and the Americas respectively for Australia failed to compensate for sharp declines out of Asia. 

The downward trend was even more marked for Singapore and Hong Kong. For the former, which reg-istered a 17.2 percent drop in arrivals overall, the only growth markets in the six months were Oceania and Africa. Hong Kong recorded a drop of 21 percent. All its source regions declined - Europe was down nearly 26 percent. Even more disappointingly, revenue earned by Hong Kong's tourism industry fell by 35.6 percent in the first half to HK$25.6 billion. 

However, there does now appear to be light at the end of the tunnel for Hong Kong. Arrivals in July showed an increase for the first time in 12 months - up 26.5 percent on July 1997. China showed the biggest per-centage rise but most other market regions also showed growth. Arrivals from Australia, New Zealand and the South Pacific increased by 23.9 per-cent, the Americas were up 18.7 percent and Europe, Africa and the Middle East 11.8 percent. 

  • The decision by Thailand, Hong Kong and Singapore to exhibit at London's World Travel Market in November in one cost-sharing pavilion is a major step towards increased regional collaboration. With increased pressure on national tourism organisation budgets, joint marketing and promotions is clearly the way to go forward. This will help free up funds for other critical activities.
  • Sri Lanka is planning two new duty-free shopping complexes-the first at Colombo's Bandaranaike International Airport and the second in one of Colombo's hotels-in a bid to attract international shoppers and boost tourist arrivals from abroad. The longer-term goal is to develop Sri Lanka as an air and sea travel hub.
  • The Queensland Tourist and Travel Corporation is launching an A$200,000 marketing campaign to target Indian tourists-the first campaign of its type in Australia targeting the Indian travel market. The cam-paign coincides with Qantas' new daily services to Mumbai via Singapore. India is one of three emerging markets seen as having great potential for Queensland. The others are China and the Middle East.
  • Welcome news for India's tourism industry An inter-ministerial steering committee has been set up to coor-dinate tourism affairs in the country and the Indian Railways has proposed to set up a Railway Catering and Tourism Corporation (RCTC) as part of its plans to promote tourism. The RCTC will be an autonomous body, whose role will be to addressing tourism issues and improve the railway catering services. Two new tourist trains are also due to be intro-duced, in collaboration with the private sector, on the Delhi - Jaipur -Agra- Gwalior - Jhansi - Varanasi - Lucknow -- Delhi and Bangalore - Mysore - Chennai - Kodaikanal -- Puran - Kochi - Mettupal - Ayam - Bangalore routes.

Hongkong and Shanghai Hotels expects another slow period in the second half of 1998. Initial indications suggest mat it could be worse than last year. The corn-pany's reported profits declined by 29 percent in the first six months of 1998. This was attributed mainly to the downturn in visitor arrivals and in local con-sumer spending in Asia. Occupancy and average room rate (ADR) at the company's flagship hotel, The Peninsula in Hong Kong, hit all-time lows-45 per-cent occupancy, as against 70 percent in the first six months of 1997, and an 18.5 percent drop in ADR. 

  • Inspired by Bass Hotels & Resorts, a broad-image promotional campaign has been launched, initially in the U.S., under the name "Impressions of Asia." Bass-the new name for the group that includes the Holiday Inn, Crowne Plaza and Inter-Continental hotel brands-aims to counter any negative images of the region with this campaign. The idea is not specifically to promote its own hotels, but primarily the region. However, the first tactical programme under the scheme does promote specific Bass hotels. It features Crowne Plaza, Holiday Inn hotels and Visa, promoting the group's summer dis-count programme.
  • Days Inn, a division of Cendant - previously HFS Hotels - has added its name to 10 hotels in China, representing a total of 1,500 rooms. The U.S. compa-ny wants to add 20-30 more hotels before the end of 1998, which would give it more than any other brand in the country. Bass has 21 Holiday Inns and Crowne Plazas, plus one in Hong Kong. However, developers in China have often been thwarted. In 1993 Accor planned to add 50 hotels over the following three years - yet it still has only five in China today.
Travel Agents & Tour Operators 

One of China's many myths is that the CTS and CITS travel agency groups are actually groups. Before eco-nomic liberalisation, which began in 1978, they were part of the state and therefore the offices around the country were technically part of the same body. However, after liberalisation, most of the offices fol-lowed their own economic development paths as set out by their new administrators, which for the most part were the local municipal and principal bodies. 

As development priorities and operational practices were usually different among the CITS offices, a CITS in one centre might work with a non-CITS agency in another centre. So an unusual situation evolved in which Beijing-based China International Travel Service Head Office (CITS HO) has no other outlets, despite its name. However, even with such In appar-ent handicap, CITS HO may be China's biggest agency-it handled 533,000 clients, up 11 percent, in 1997. Its rapid growth over recent years has doubtless encouraged CITS HO to try to rebuild the link with the 120 agencies around the country that also carry the CITS name. This will not be easy; because priori-ties and business practices are still so different throughout the country 

The Big Are Getting Bigger
By Nancy Cockerell 

The global travel agency chains and consortia continue to increase their domination of the market - largely through acquisitions - at the expense of the smaller players. 
Moreover, the emphasis is increasingly on agency ownership rather than alliances. 

The  leading  global  agency  alliance, Business Travel International (BTI), now has 55 partners in 67 countries generating over US$22 billion in 1997. Over the last 12 months it has continued to expand. UK-based ETI Hogg Robinson has acquired Kuoni Travel's French and Italian business travel operations and bought out its own Finnish and Russian agency partners. The company's most recent purchase, in May 1998, was 51 percent of the Rider Travel Group  one of the largest business travel agents in Canada and BTI Hogg Robinson says that further acquisitions are planned in North America and Asia. 

The acquisition of leading independent national travel agents by the global agency chains creates opportunities to penetrate the business travel sector of small to medium-sized companies which has, to date, provided the bread-and-butter earnings sector for independent corporate travel agents. 

The importance of marketing consortia, franchising, partnerships and alliances is likely to increase further in the next five years, especially in the corporate travel sector, and we may well start to see consolidation  among  consortia  and  alliance partnerships as they themselves look to achieve greater marketing clout and economies of scale.

The Leading International Travel Agency Chains and Consortia,  
Group Global Sales Volume, US$bn Corporate Business Share % - 1996
1996 1997
Business Travel Internation (BTI) 21.0 22.0 88
Internet Worldwide Business Travel Maangement 20.0 21.0 100
Woodside Travel Trust 17.5 19.3 83
American Express 16.2 17.8 na
Carlson Wagonlit 10.0 11.0 75
First Travel Management International (FTMI) 7.5 8.0 70
Synergi Global Travel 7.2 8.0 70
Rosenbluth International 2.6 3.7 90
Uniglobe Travel 2.7 2.9 70
Source: Respectvie companies; Fremdenverkehrswirtschaft
For additional information contact:
 Ms. Nancy Cockerell, Editor and Researcher
   Pacific Area Travel Association
 Web Site:
  Email: [email protected]
Also See:
German Market Has Huge Potential for Pacific Asia According to PATA Outbound Market Study / July 1998 
The Changing Marketplace / PATA / July 1998 

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