The dynamics in the world’s air travel sector is evolving. The distinction between low-cost and full-service carriers is diminishing with time. Both low cost airlines and full service airlines are being measured on similar set of parameters such as on time performance, baggage limits, on board meals, in-flight entertainment, point-to-point and hub connectivity, and, most importantly, airfares being visible on the same global distribution systems. Today, they both run the same race.
Whether it is business travel or personal travel, each airline is trying to serve its customers with the right product. Passengers seated on the same flight are targeted with different prices and complex pricing mechanisms. Despite all such complex algorithms, airlines are either leaving too much money on the table or are pricing their services at a premium which ends up flying with low load factors. In such a dynamic air travel market it is important to understand the travel and tourism dynamics of the region and the emerging profiles of the travellers.
The focus is on international tourism
The sum total of all international arrivals globally were 983.0 million in 2011 with an increase from previous 940.0 million of 2010. By 2020, we expect to see 1.36 billion international arrivals to reach a summit of 1.8 billion by 2030. If one were to make a reasonable comparison then this means witnessing 1.36 billion international arrivals from a global population of 7.7 billion in 2020; one in every five humans cross international boundaries at least once. The international tourism receipts for 2011 surpassed US$ 1 trillion globally which translates to US$ 3.4 billion per day.
International arrivals are an important determinant and indicate the flow of tourists into the region. This is all the more important in the Asia Pacific region because of the fragmented land masses in South East Asia and North Asia. Asia Pacific accounted for 181.0 million international arrivals for 2009, 204.0 million in 2010 and 504.0 million in 2011.
The gap between advanced and emerging economies is narrowing down with 523.0 million and 460.0 million tourist arrivals recorded for 2011
Asia Pacific air traffic has a unique pattern as compared to the advanced economies and does not show huge variations at any point throughout the year. This is representative of the way Asians travel. Air travel in the Asia Pacific is directly related to the discretionary spending, and hence related to the economic prosperity of the region.
Long-term prospects in Asia Pacific are extremely good for airlines, since this region provides a very smooth traffic flow throughout the year, which is indispensable for capacity planning and sustainability of airline business in the Asia Pacific region.
Where do people spend in Asia Pacific?
Two countries in the Asia Pacific region are mentionable in the context of global international tourist arrival rankings – China and Malaysia.
If one were to take a closer look individually at tourism receipts versus arrivals few more inferences could be drawn at a local level.
International tourism will continue to grow between 4-5% annually in the coming decade and will positively impact the growth of Asian economies. With the balance tipping towards emerging economies, individual countries are more geared up to yank an increased share of wallet of international tourist. Regional economies are continuously revamping infrastructure and product / service portfolio to attract the intended genre of tourist and move to a higher band in terms of average spent of tourism receipts per traveler.
The views expressed here are the personal opinion of the columnist.
Photo credit: Flickr user Stuck in Customs