Asia-Pacific Travel Set for Strong Growth in 2005

(SINGAPORE) Asia-Pacific travel grew at a record pace last year and looks set to continue galloping ahead at full speed this year, according to ticketing and distribution giant Abacus.

Abacus' president and chief executive Don Birch noted that 2004 was the best year for Asia-Pacific in a decade. 'The year started out strong and kept getting stronger as it moved from a period of recovery to one of rapid growth,' he said in a news release yesterday. 'Economies of the region are on a roll, and growing prosperity in markets such as China, India, South Korea, Taiwan and Vietnam has translated very quickly into demand for travel.'

According to World Tourism Organisation, the travel industry in the Asia-Pacific grew 40 per cent last year, the fastest of any region in the world. This was despite higher aviation fuel prices, lingering bird flu concerns and the Indian Ocean tsunami on Dec 26.

One area of particularly strong growth was intra-Asian travel, which accounted for 81.3 per cent of the bookings in Abacus' system last year.

2004 was also a boom year for e-ticketing or electronic ticketing, with the number of e-tickets issued via Abacus leaping 195 per cent to 2.86 million last year, from 973,000 in 2003.

The appetite for travel last year was also whetted by the emergence of more low-cost carriers (LCCs) across the region last year, said Mr Birch.

'The emergence of the LCC sector has gone hand-in-hand with the quickening pace of aviation deregulation in key markets and greater moves towards trade and tourism integration,' Mr Birch observed.

Going forward, 2005 is expected to be an even better year for Asia-Pacific travel and tourism.

'Regional economies are on track for 4-6 per cent GDP growth in 2005, which I believe will translate into a travel growth rate of 6-8 per cent across the region,' Mr Birch said. Generally, a one per cent increase in GDP is estimated to boost travel by 1.5 per cent.

Mr Birch does not expect the effects of the Boxing Day tsunami to have a major economic impact.

'Travel resorts represents only a small percentage of the 120 million international journeys forecast for this year in Asia-Pacific,' he said, adding that many of the effected markets were already seeing a recovery.

But 2005 will not be without its crises, although they are not expected to be on the scale of the tsunami or Sars. Mr Birch said that the trials of the past few years had taught the industry to better manage crises.

2005 is also expected to see strong growth in the LCC industry, thanks to continuing aviation regulatory liberalisation and the development of new markets. 'This is an exciting time for LCCs in Asia,' Mr Birch observed. 'The doors to new markets have opened, and LCCs have flown in. Those who can identify and secure their market niche, manage costs by concentrating on their core capabilities and put in place an effective distribution network will have a terrific year.'

Mr Birch predicted that more LCCs will adopt Global Distribution Systems or GDS distribution, particularly in markets where direct distribution is limited by the availability of the Internet.

'The majority of Asia-Pacific travellers are also more comfortable with the one-stop shopping experience offered by brick-and-mortar travel agent,' Mr Birch said. Currently, Abacus handles the GDS bookings for Singapore-based discount carrier Valuair.

Mr Birch sees China, with its population of 1.3 billion and 20 million outbound passengers a year, as emerging the major driver for Asian travel this year.

He noted that although the majority of Chinese travellers currently head for familiar destinations such as Hong Kong and Macau, greater numbers would travel to other markets like Thailand, Malaysia, Singapore and South Korea as they gain access to more information via the Internet. But the sheer geographic, economic, technological and cultural diversity of China would present challenges to travel suppliers, he warned.

'Companies that are successful in attracting visitors from China will be those that understand what motivates the Chinese traveller, adopt technologies that allow them to be responsive to their changing needs and seek partners for growth,' Mr Birch said.