Airlift developments, a trend for experiential travel and good-value luxury product are fuelling growth in the Asia Pacific region while international political tensions pose the greatest challenge.
It’s a positive time for Australia (AS650), which saw 8.5 million visitors for the year ending June 2017, up 8.9% on the previous year, with spend at record levels. “The very healthy increases we’ve secured recently in aviation capacity are helping to drive extremely competitive air fares,” explains Tourism Australia managing director John O’Sullivan. The destination had 9% more inbound seats for 2017, with Asian countries and Canada (which produced an 11% arrivals increase for the year ending March 2017) the main beneficiaries.
Qantas (AS650) will introduce an eagerly awaited non-stop Perth-London Dreamliner flight next year and has set its sights on non-stop Sydney-London by 2022. After some troubled years, it recently posted its second highest ever profits, helped by cost-cutting and strong domestic growth.
While operators report high Sydney accommodation prices, Perth is benefitting from a 16% fall in rates in the past five years, thanks to a building boom – 15 more hotels are due to open there by 2020. In Victoria, the iconic Great Ocean Road touring route is receiving nearly AU$4 million investment over the next 18 months for new attractions including a wildlife park.
O’Sullivan says experiential travel is now a big driver. “Like most international destinations, we’re finding that people are taking shorter holidays but also that they have much higher expectations. We know from our research that more and more travellers are looking for authentic travel experiences… deeper connections with the places they’re visiting and the people they meet.” Asia's growing middle classes in China and south-east Asia and fast-emerging India and Indonesia are particularly demonstrating this demand.
The Tourism Authority of Thailand (TAT) (AS600) is also focusing on “local experience” in its marketing plans for 2018. “Tat will use tourism to promote sustainable development with the community as the ultimate beneficiary,” says Tat governor Yuthasak Supasorn. Niche market segments will be targeted, including weddings and honeymooners, women, luxury-lovers and foodies.
Thailand’s largest year-on-year arrivals increases for the first half of 2017 were from emerging South American markets, with Argentina and Brazil each up more than 60%.
Two resort openings in Thailand this month are Ritz-Carlton Ko Samui and a Rosewood at Phuket. Centara’s (AS600) new brand Cosi, for tech-savvy travellers, landed in Samui this year, while Movenpick added hotels in Bangkok and Ko Yai and has Hua Hin and Chiang Mai properties slated for 2018. The most innovative addition will be the Tree House Villas at Ko Yai Noi in January, accessed by private suspension bridges.
Europe will gain a Vienna-Bangkok service courtesy of Thai Airways International (AS535) on November 16. The airline last covered the route in the early 1990s. Qatar is adding Chiang Mai flights this December, its fourth Thai destination.
The trend for experiential travel is also benefitting Japan (AS940), which puts increased tourist attention down to its range of cultural activities like tea ceremonies and sushi-making, and physical activities like hiking and skiing.
On the back of healthy arrivals, Japan National Tourism Organisation has opened seven new worldwide offices this year in Madrid, Rome, Moscow, Delhi, Kuala Lumpur, Manila and Hanoi. New services from national carrier Japan Airlines (AS940) include a Tokyo-Melbourne route with a 787 Dreamliner and a second daily London-Tokyo flight.
The new experience of luxury train travel has been drawing extra tourist attention to Japan. Ten-suite Shiki–shima launched in May in the north. The Mizukaze and Royal Express then launched in June and July, the former with a route including Kyoto and the latter visiting a popular hot springs region in the south.
Luxury is a focus too for South Korea (AS850). At this year’s WTM London, the country will be highlighting its Michelin-starred restaurants, along with medical tourism and cruises. The Korea National Tourism Organisation (KNTO) will go on to exhibit at luxury travel fairs including in Shanghai in May.
It has been a difficult past few months for South Korea and Japan and the wider region on account of international political tensions with North Korea. However the KNTO is looking forward to the PyeongChang Winter Olympics in 2018 providing a more positive spotlight.
While some are seeking luxury, the weak pound following the UK’s Brexit vote means Asia’s good value is proving a driver from this source market. UK and Swiss tour operator Kuoni has noted Thailand and Bali (AS900) are particularly thriving. “Bali twin centres combining a few nights in Ubud plus a beach stay are where we see the trend, and rooms and villas with pools are especially strong. These are fantastic value,” says UK commercial and product manager for beach, Sheena Paton. Borneo and Kuala Lumpur are also hot for the operator and, in Vietnam, Ho Chi Minh City plus beach stays are popular.
“Spa and wellbeing resorts there are growing, some with selected treatments included in the price of the overall package,” says Paton.
Vietnam (AS570) has further extended its visa waiver programme. Until June 30, 2018, British, French, German, Spanish and Italian nationals will not require the paperwork for single-entry stays up to 15 days. The policy was first introduced in 2015, during which year arrivals from benefitting countries increased 15%. The country also gained a boost this year from the release of Kong: Skull Island, filmed in Ninh Binh and Phong Nha-Ke Bang National Park.
“Currently, we’re conducting a feasibility study of opening new routes from Vietnam’s tourist destinations to major cities in north-east Asia,” says Vietnam Airlines (AS570c) president and chief executive Duong Tri Thanh. North-east Asia has been demonstrating “remarkable improvement” he explains, with passengers on these routes growing by nearly 60%, to 3.7 million between 2012 and 2016. Japanese and Korean efforts to promote tourism in Vietnam and the easing of Taiwanese visa regulations have helped.
Among this year’s developments, the airline added a direct route between Hanoi and Sydney and has pledged to upgrade its fleet on European routes.
Thanh adds: “Vietnam's efforts in developing tourism over the past few years have brought great results: the growth rate of international travellers is at double-digit levels, reaching 30% in the first six months of 2017.”
Elsewhere in Indochina, Emirates added a daily Phnom Penh service via Yangon this year with good connections from Europe, while its Dubai-Hanoi service became non-stop. In hotel developments, Shinta Mani hotels (AS556) is set to open Shinta Mani Wild in Cambodia in the third quarter of 2018 – a riverside nature sanctuary with tented camp, two hours south of Phnom Penh.
Hong Kong has gained more links into Indochina at Siem Reap, Phnom Penh, Da Nang and Ho Chi Minh City. Additionally, Cathay Pacific has introduced Tel Aviv and seasonal flights to Barcelona and Auckland. Hong Kong Airlines’ new routes meanwhile include Vancouver and Los Angeles. Hong Kong Airport Authority (AS964) is exhibiting at WTM London.
One of the major infrastructure developments in the Asia Pacific region is the 26-mile estuary bridge linking Hong Kong, Zhuhai in China (gateway for the Pearl River) and Macao that is due to be completed by the end of this year, aiding twin- and multi-centre tourism.
Singapore Airlines (AS650), which flies to eight Australian cities, is exhibiting at WTM London as part of the Australia stand. In Europe, it has added a Stockholm via Moscow route and a seasonal frequency boost for Paris.
Singapore has also gained routes to Athens with Scoot, Gatwick with Norwegian Air and Munich with Lufthansa, while Qantas will re-route its Sydney-London flights, currently via Dubai, via Singapore again from March. The destination’s famous Raffles hotel will close for major restoration from December with a grand reopening planned for autumn 2018.
Malaysia (AS700) has been collaborating with Dutch carrier KLM and with Singapore Airlines to promote the destination in Europe, the US, Australia and New Zealand. Cruise is also a booming sector for the country.
Arrivals to Taiwan (AS750) have topped 10 million for two years in a row and the country is keen to embrace sustainable development.
It has introduced several ecotourism activities this year including watching fireflies, dolphins, whales and migratory birds. Airport transfers are now easier thanks to this year’s opening of an MRT line connecting to Taipei city centre in 35 minutes. New flights include a China Airlines non-stop London service from December.
New Zealand and the Philippines are showing positive revival after natural disasters in recent years. Around 8,000 rooms are due to be added by 2020 in New Zealand, many in Christchurch as it continues rebuilding after the 2011 earthquake. In the meantime, a hotel availability squeeze is affecting travel habits. “There’s significant inflation, especially in high season, January to March, so we’re expecting more shoulder season and off-season departures,” says Kuoni’s UK senior product and category executive for Discover, Tom Waite. He notes the situation has also boosted motorhome hire.
Air New Zealand has helped ease the squeeze on key tourist centres by increasing capacity on its domestic network. The airline also added a Haneda, Tokyo and seasonal Osaka services and is significantly increasing capacity on services to Vancouver, Bali and Honolulu.
The Philippines (AS800) is flying high with total tourist arrivals up 12.7% for the first half of 2017. Philippine Airlines is introducing a direct thrice-weekly Manila-Auckland flight in December, shaving more than two hours off its previous service via Cairns and providing another stopover option for Europeans visiting New Zealand. It’s also upping capacity to London.
So as long as political tensions with North Korea do not escalate further, Asia Pacific tourism looks on track for a positive 2018.
Malaysia (AS700) is reaping the benefits of making cruise tourism one of its key economic growth areas. Between January and May 2017, a total of 253 international cruise ships called at the country’s 11 ports – an increase of nearly 9.5% compared with the same period in 2016. For the same period, passengers increased 18.5% to 405,554. Cunard, Costa Cruises, Princess Cruises and Hapag-Lloyd Cruises were among callers.
Cruise terminals Langkawi, Penang, Port Klang and Malacca are located close to attractions on the mainland, while Kota Kinabalu port in Borneo enables access to the rainforest and orangutan viewing opportunities.
Cruise is a noted growth area for south-east Asia as a whole. At the Asean Tourism Forum in Singapore this year, ministers agreed to develop the sector through a joint declaration on cruise tourism that will set out principles to spur port and destination development.
The Philippines (AS800) is showing good signs of tourism recovery four years on from Super Typhoon Yolanda, with tourist arrivals up 12.7% to 3,357,591 for the first half of 2017 compared with last year.
China, the destination’s third-largest source market after South Korea and the US, posted a notable increase of over 33% to 45,500 visitors for January to June, while rising stars were India (its 12th-largest market) and Canada (its seventh largest) with 23.4% and 18.4% increases respectively. In the top 20, only Hong Kong and Singapore showed a decrease. Asia makes up nearly 60.8% of the Philippines’ source markets, the Americas 18.8% and Europe 10.9%.