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.
Markets
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.
Destinations
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.
Hotels
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$22 billion in 1997. Over the last 12 months it has continued to
expand. UK-based ETI Hogg Robinson has acquired Kuoni Travel's French and
Italian business travel operations and bought out its own Finnish and Russian
agency partners. The company's most recent purchase, in May 1998, was 51
percent of the Rider Travel Group one of the largest business travel
agents in Canada and BTI Hogg Robinson says that further acquisitions are
planned in North America and Asia.
The acquisition of leading independent national travel agents by the
global agency chains creates opportunities to penetrate the business travel
sector of small to medium-sized companies which has, to date, provided
the bread-and-butter earnings sector for independent corporate travel agents.
The importance of marketing consortia, franchising, partnerships and
alliances is likely to increase further in the next five years, especially
in the corporate travel sector, and we may well start to see consolidation
among consortia and alliance partnerships as they themselves
look to achieve greater marketing clout and economies of scale. |
The Leading International
Travel Agency Chains and Consortia,
1996-1997
Group |
Global Sales Volume, US$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
|