Global trends in tourism — Breaking the billion barrier

Vanitha Srinivasan

Threats of terrorism, pandemic outbreaks, natural calamities and, finally, pesky security checks
notwithstanding, the international tourism industry is booming. Tourism has become a key economic
driver globally, and is one of the main sources of income for many developing countries today.
International tourism receipts totalled $682 billion in 2005 while arrivals, at 842 million in 2006,
registered a five-fold growth over the last three decades. The United Nations World Tourism
Organisation (UNWTO) estimates that international tourist arrivals will touch the one-billion mark by
2010 and the centre of activity will be the Asia-Pacific region.
The World Tourism Conference in Kuala Lumpur early this month acquired significance given the recent
resurgence in the global tourism industry following several shocks starting from 9/11, continuing
through the Bali bombings in 2002, the SARS epidemic, the avian flu and the Asian tsunami. The
conference discussed several important issues that the global tourism industry is faced and the
changes happening worldwide. The impact of technology and the changing demographics on tourism
were among the interesting trends discussed.
COMING OF AGE

The tourism industry has matured significantly in recent years and is displaying a new willingness to
share information and co-operate. The result: A different type of growth, one that is more moderate,
more solid and more responsible.
More moderate because it is not likely to produce the spectacular double-digit growth rates of 2000
and 2004. The industry can, however, look forward to about 4 per cent growth in 2007.
More solid because enterprises, consumers and institutions are able to anticipate shocks and respond
effectively to crises. The market shows increased resilience and travellers are better informed; for
instance, they now include security concerns as just another consideration while selecting their
destination. "Following each crisis, the ability to respond has improved and the return to normalcy
happens more rapidly," as Mr Geoffrey Lipman, Assistant Secretary-General of the UNWTO, pointed
out, while delivering the keynote address at the conference.
More responsible because greater attention is now being paid to the congestion that tourism
generates and its ill-effects as also its relationship to climate change. According to the World Economic
Forum Competitiveness survey, small countries are often better at planning tourism development than
the big ones. There cannot, of course, be a better example for this than the city-island state of
Singapore which was a pioneer in developing its tourism industry in its part of the world.
For the smaller countries tourism accounts for 20-30 per cent of GDP. "For those economies, tourism is
not the icing, it is the cake," said Mr Christopher Rodrigues, Chairman, Visit Britain.
The `greying' population of several developed countries is proving to be a plus for global tourism. The
rising average age means a growing market of people with more discretionary income and time to
travel. Rapid economic growth has also created more affluent populations willing to splurge on travel.
"Tourists over 55 years of age travel farther away from home, include two or more destinations in a
trip, engage in more activities, travel with one or another household member and spend more per trip
than tourists, on an average," observed Mr Lipman. This is unlike the average tourist in the working
age who may be weighed down by his back-pack as well as work pressure and other compulsions to
take no more than a short holiday. Retired tourists have no such compulsions even as they spend
liberally from their retirement savings to see the world in a `now or never' spirit.
What may ultimately determine a travel decision is the desire to learn, discover new experiences and
add meaning to people's lives. Cross-border family travel is becoming frequent and these trends are
apparent in the growth of niche products developed by destinations, hotels and resorts.
This demographic shift is breeding as a corollary a new set known as `Short Holiday Break' travellers
among younger folks in double-income families. The concept of a shorter main holiday plus a series of
breaks is not only born out of necessity but the norm.
CLIMATE CHANGE

Tourism is intimately linked to two issues of global concern: Climate change and poverty. And,
sustainability is at the start of this equation. Aviation is blamed for contributing about 2 per cent of
greenhouse gases but it is unfair to demonise the sector. One must weigh the benefits against the
odds and take a balanced view. The point is that while there are alternatives for other modes of
transport, there are none for aviation.
"We cannot plan for an invention that cannot be invented. Nevertheless, we cannot be complacent.
Countries must reduce emissions on account of air travel to zero by 2050. We should do something to
tackle this problem, before it destroys us," said Mr Lipman, speaking to this writer at the sidelines of
the conference.
Towards this end, airlines have achieved a 70 per cent improvement in fuel efficiency over the last four
decades. Moreover, billions of dollars being invested in new aircraft will drive a further 25 per cent
improvement in global efficiency by 2020. "Every minute that we can shorten a single flight saves 62
litres of fuel and 160 kg of carbon emissions. New flight paths are being tested and efforts are on to
shorten distances and hence flying time," pointed out Mr Peter De Jong, President and CEO, Pacific-
Asia Travel Association.
Sir Richard Branson, CEO of Virgin Atlantic, does not believe that curtailment of travel will be
necessary to address global warming. He thinks we have the technology, ingenuity and resources to
produce technical solutions. However he does warn that we need to address the sustainability issues,
both those created by travel and those generated at both destinations themselves, "before others do it
for us".
JOB CREATION

Tourism has become an important instrument to fight poverty by employment generation. In 2005, it
contributed $205 billion in foreign-currency income to the developing and emerging countries and has
created many jobs.
The industry created about 140 million jobs in the Asia-Pacific region in 2006. In this context, the
UNWTO has established the ST-EP (Sustainable Tourism-Eliminating Poverty) Foundation to encourage
sustainable tourism aimed at eliminating poverty in the developing countries. Forty-six ST-EP projects
are currently underway in Africa, Asia and Latin America.
LOW-COST CARRIER REVOLUTION

While the overall trends in the tourism industry are in favour of continued growth, this is likely to
intensify competition and consolidation in the sector. The emergence of low-cost carriers (LCCs) is
making significant inroads into the scheduled carriers' business and is transforming many sub-sectors
of the tourism industry.
"Our strategy is to lower fares because we want more people to fly. We want to reach out to every
destination, explore new routes and work with new people. Our focus is on South-East Asia,
particularly India and China," said Mr Tony Fernandes, CEO, Air Asia, while speaking on the role of
LCCs in transforming international travel.
LCCs have nevertheless opened up avenues for those lesser known regions that otherwise would not
be visited by tourists.
What is wanting is provision for accommodation, secondary airports, other tourist facilities and
services catering to this segment.
INFLUENCE OF THE NET

The penetration and popularity of the Internet worldwide are shifting power from the industry to the
traveller.
The travel industry is becoming market-driven as consumer price expectations and the Internet
expand travel planning and booking capabilities.
This trend towards direct booking, already squeezing the travel agents, is now growing, with the help
of the Internet. Budget airlines are helping to fuel this trend. For instance, 85 per cent of Ryanair's
seats are sold on the Web.
Other industry suppliers are following fast; Iberia and Hyatt, for example, have developed their own
Web sites that offer lower Internet-only rates. We have only seen the proverbial tip of the iceberg
when it comes to the Net and the way it is transforming the tourism industry.
OPTIMISM IN THE AIR

The optimism in the minds of the who's who of the global travel trade at the Kuala Lumpur conference
was unmistakable.
Having weathered successive crises over the last decade successfully the confidence exuded by the
participants was understandable. The focus on the twin issues of climate change and poverty and the
question of how should the tourism industry respond to it was well-timed.
There is a lot to be done in developing tourism potential in such exotic parts of the world as Africa,
Latin America and, of course, Asian countries such as India. Even as the global tourism industry races
towards the 1 billion arrivals mark, these are the regions that will take it forward to the next level