A new report on global travel trends reveals that the global travel industry is poised for a period of sustained growth over the next decade, driven in part by China’s share of global outbound travel reaching as much as 20% by 2023. Shaping the Future of Travel: Macro trends driving industry growth over the next decade predicts an optimistic macro-economic outlook for global travel over the next 10 years, with the industry projected to outstrip global GDP by some 2%; growing 5.4% per annum.
Moreover, global travel is now set to grow at a significantly faster rate than during the financial crisis, where growth was just 4.1% per annum. At the same time, China’s growth in outbound travel, which as recently as 2005 stood at just 1%, will enable it to overtake the US to become the world’s largest outbound travel market this year, with the number of Chinese households able to afford overseas travel set to more than double in the next 10 years. China will also become the biggest domestic travel market by 2017, driven largely by rapidly increasing GDP, rising employment levels and higher consumer spending. However, the report indicates that growth will not be exclusive to China, with forecasts showing that other large emerging markets such as Russia, Brazil, India, Indonesia and Turkey will each also average more than 5% annual growth over the next 10 years. This will be driven largely by rising wealth and changing consumer habits.
Written by Oxford Economics, a leader in global forecasting and quantitative analysis for business and government, the study draws on detailed macro-economic modelling as well as qualitative interviews with industry experts, to forecast a wide range of future trends, including pockets of growth and opportunity that will shape the next decade of travel.
“Forecasts predict a new golden era for travel, which will be welcome news for many segments of the industry that are only just beginning to emerge from recession,” said Holger Taubmann, SVP Distribution, Amadeus. “However, as the complexities in the business travel market clearly demonstrate, growth will be far from evenly distributed and there are likely to be both winners and losers.” Some of the report’s key findings include: Asia Pacific will be the fastest growing region over the next decade, with visitor flows for Asia forecast to grow at an annual average rate of 15.1%, nearly double the prior 10-year period (2002 – 2012).
Asia Pacific will also overtake Europe to dominate global outbound travel spend by 2023, with travel spend in the region forecast to increase at an annual rate of 18% over the next 10 years.
“nAsia Pacific will be the fastest growing region over the next decade, with visitor flows for Asia forecast to grow at an annual average rate of 15.1%, nearly double the prior 10-year period (2002 – 2012). nAsia Pacific will also overtake Europe to dominate global outbound travel spend by 2023, with travel spend in the region forecast to increase at an annual rate of 18% over the next 10 years. nBy 2023, Asia Pacific outbound travel spend will reach $ 752.8 b, making up 40% of the world’s total.”
By 2023, Asia Pacific outbound travel spend will reach $ 752.8 billion, making up 40% of the world’s total. Business travel will bounce back as links between East and West stimulate new demand, but western short-haul business travel will not reach pre-2008 levels until 2018. Asia will account for 55% of global business travel growth in the next ten years. North East Asia alone will account for 42% of the growth in global outbound business travel expenditure over the next decade, with South East Asia accounting for a further 13%. Air travel growth will be led by emerging economies such as India, Indonesia and Russia, as non-OECD air travel is set to overtake that of OECD members for the first time, to become largest source of global air traffic by 2023. Demand for international hotel stays has outpaced demand for domestic stays since the recession, suggesting reduced domestic hotel spending is the new normal. At the same time, overnight visitor flows for Asia are set to grow nearly four times faster than Europe’s over the next 10 years – but Europe will remain dominant.
“The findings underscore what most of us already intuitively know – that we have now truly arrived in the Asian Century. No matter where we look, Asian travellers have and will continue to change the landscape of travel, and businesses must adapt to them or risk falling behind. Our role is to help travel players stay one step ahead of the game. But our bigger mission is to help the Asia Pacific industry prepare itself to manage the next billion travellers,” said Angel Gallego, President, Amadeus Asia Pacific. Andrew Tessler, Associate Director, Oxford Economics and the report’s author, said, “The global travel industry is gaining strength and changing as it emerges from the recent recession in developed countries. China’s development is an important driver but there are actually many more subtle factors also at play. Shifting competitive dynamics and the persistence of new behaviours that emerged during the recession are both impacting key indicators in the sector.”
Source : http://www.ft.lk/2014/04/11/new-study-forecasts-travel-to-grow-by-5-4-annually-next-decade/
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