The 12th World Travel and Tourism Council (WTTC) Global Summit held in Sendai-Tokyo recently set many new milestones as global leaders from 53 nations focused on Japan’s recovery and the way ahead for the world travel industry that despite the great opportunities, is facing challenging times. By Sudipta Dev
The 12th WTTC Global Summit held in Japan recently created many milestones – it was for the very first time that it was held in two locations – Sendai and Tokyo, reaffirming the solidarity of the global travel and tourism community with the country that is in the process of recovering from last year’s catastrophe that hit its tourism sector hard. The summit saw the convergence of global leaders from the industry and delegates from 53 countries discuss and deliberate on ‘Leading a dynamic industry through turbulent times’. The congress that was attended by more than 1,200 delegates also showcased a unique amalgam of culture and technology as it was a paperless event, again for the very first time in the history of the summit.
Salute to Sendai
The first part of the WTTC Global Summit was held in Sendai, the centre point of the devastating earthquake that had hit the Tohoku region in March 2011. Before the start of the sessions delegates from across the world got an opportunity to witness the reconstruction work that has been going on in the region. Foreign tourist arrivals in Tohoku has decreased by 60 per cent and recovery has been slow. The focus of the session on disaster recovery was what Tohoku region went through and the future plans. Hiroaki Takahashi, chairman of Tohoku Tourism said, “Our main attractions are natural beauty, cuisine and hot springs. The damage was so intense that reconstruction of tourism has not been easy. Travel to Tohoku is a way of showing support.”
Countering the popular belief that is most affecting tourism inflow – fear of radiation, Norifumi Idee, commissioner, Japan Tourism Agency asserted that levels of airborne radiation is well within safe levels. In fact most areas in Fukushima Prefecture except near the nuclear plant are safe for business. Highlighting the recovery process, Idee mentioned that from April 2011 the first stage for the promotion of tourism to Japan started – targeted at foreign governments, international agencies, media and travel agents. After six months full fledged promotion for general consumers was initiated. The challenges ranged from providing multilingual information after the earthquake to information from affected areas in the media and no focus on unaffected areas. The lessons that were learnt from the disaster have been primarily being ready with emergency procedures, immediate media action plan, and providing accurate facts to the media.
Speaking about railway safety Masaki Ogata, vice chairman, East Japan Railway Company pointed out that no passenger was killed during the disaster. “In the history of railways we have learnt from past experiences to establish safety systems and reduce risks,” he stated. Countermeasures against earthquakes include installation of more seismometers along the Shankinsen bullet train lines and further reinforcement of railway structure.
A panel discussion brought forth the poignant stories of those individuals who had made a great difference in times of disaster, both natural and man-made. Noriko Abe, Okami, Minami-Sanriku Hotel Kanyo gave an account of the work that she has done to help people who lost their homes, while Raymond Bickson, managing director and CEO, The Indian Hotels Company spoke about the communication strategy of his company during the terrorist attack in Mumbai in 2008. “We use the net for business, we should use it in the time of crisis also,” he said. Bickson felt that the best way to address a crisis is getting all the associations and institutions together. He also asserted that taking care of the affected employees and their families is the most important aspect of business and the Tata Group has ensured that.
Arrival of tourists to a destination that has been impacted by a calamity is the biggest help that the affected people can get. “Solidarity is very human, you have to express it,” stated Dirk Glaesser, coordinator, Risk and Crisis Management, United Nations World Tourism Organisation (UNWTO).
Asia’s dynamic travel and tourism sector is undergoing a transformation and setting interesting trends. Martin Craigs, CEO, PATA believed that the big macro picture is healthy. “Our forecast shows very high growth in south east Asia and declining influence of European travellers. As we get more sophisticated globally we have to get beyond visitor arrivals. The typical traveller to Asia does not want mass produce products, they want special experiences. We have to understand how we can measure success,” he added. A W Kah Peng, chief executive, Singapore Tourism Board however felt that visitor arrivals is still important as hotels need to fill up the rooms and airlines need to occupy seats. “We have been tracking the receipts for many years and also do a lot of consumer need research – on why they are spending on what they are spending. This is more important than tracking receipts,” she stated.
The travel industry in China is reaching a turning point with its large outbound travel segment. According to Chen Rong, CEO, China International Travel Service, these travellers are looking beyond sightseeing; they are visiting many countries and staying for longer durations. “The development of IT will be a key factor for the Chinese travel industry,” said Rong. He also pointed out that in the future travel agents in China cannot cover all travel needs of their populace so M&As are needed. Adding to this is the factor that the Chinese domestic traveller is rapidly increasing, by almost 21.8 per cent.
APAC region generates its own travel arrivals and 86 per cent of people in APAC think of travel within the region. A significant trend in Asia for the travel industry is the usage of mobile phones, for example, in a country like India where the mobile penetration is much deeper than that of the internet this will be the most effective platform. “In Asia the mobile phone is more important than social media. Usage of smart phones is also increasing,” stated Makoto Arima, representative director, Google Japan. Responding to the question on how can travel agents respond to progress in IT, Tatsuro Nakamura, senior executive director of the board, Japan Association of Travel Agents said that consumers who use the internet are very price sensitive, but above a certain price point they want a conversation. Not surprisingly, 90 per cent of people go to the internet before they travel.
The two-day summit at the Pamir Convention Centre in Tokyo saw 64 speakers discuss key issues affecting the industry globally. One of the most important being visa problems. For an industry that accounts for nine per cent of the global GDP and employs more than 255 million people across the world, visa restrictions imposed by many countries has serious repercussions on the sector and impacts employment generation. To convince the governments in different countries, WTTC and UNWTO have done a study on how visa facilitation can lead to job creation. The study, which is specific to each country, will be presented to the tourism ministers of G20 countries meeting in May in Merida, Mexico and will provide valuable information for the G20 global leaders meet the following month. “Our relationship with the UNWTO continues to evolve, we have realised that when the private and public sector speaks together it has a very strong impact. It starts with research,” said David Scowsill, president and CEO, WTTC.
Taleb Rifai, Secretary General, UNWTO said, “We are focusing on the issue of visa and how many governments have restrictions. We are encouraging governments to develop policies that will make it easier for people to travel.” He mentioned that illegal immigration is not connected with visa as the highest number of illegal immigrants come without visa.
Scowsill also informed that WTTC and UNWTO has presented the ‘Golden Book’ to many heads of state. The policies for growth also include campaign against punitive taxation on the industry. “WTTC is seen around the world as the voice of the private sector. We have formed a coalition in which we more equipped to take the voice to the world,” added Scowsill.
WTTC has also taken the initiative in driving no-carbon tourism. Twenty leading hotel groups are involved in no-carbon measurement initiative that will revolutionise the hospitality sector. “What the global lodging chains agree, the independents will adopt as a standard. WTTC will continue to communicate best practice within the industry of leadership in sustainable practices,” said Scowsill.
Dr Michael Frenzel, chairman of the executive board, TUI AG said, “Our industry will outgrow the crisis of last year. We have learnt to manage crisis. Every crisis has a chance, we have to be prepared.” TUI sees three mega trends effecting the industry – global shift, digital shift and the relevance of real experience. “The global shift is already having an impact on the business. It means that our future customers will more likely come from Russia, China or India than from Germany and other traditional sources. The focus of the travel and tourism industry will therefore be shifting from mature markets like Europe to these markets. But we should be aware that these markets have their own characteristics, travel patterns and behaviour that we must respect,” he said.
Speaking about the future of business, Parag Khanna, director, Hybrid Reality Institute stated that the IT industry might not necessarily share the interests of the travel industry. “Globalisation has changed the mindset very quickly. Every region matters. Resources are capital,” he added, pointing out that the new silk routes for the world are the four ways of connectivity – land, air, sea and cyberspace.
Another interesting development has been the slow growing tropical countries are now growing faster. Infrastructure investment delivers higher growth rates and a large percentage of GDP goes into it. Places like Brazil and India where tourists are concentrated in certain areas, infrastructure development needs to be widespread for the growth of the sector. Many countries are also investing in smart cities and retrofit existing cities.
For a sector that is always facing challenges in different parts of the world, the session on ‘Airlines – their role and ever changing nature’ focused on how a global industry like aviation requires global solutions. In his keynote address, Willie Walsh, CEO, International Airlines Group, reminded that it has been forecast that by 2020 aviation will contribute one trillion million dollars in the world’s economic infrastructure. In a panel discussion Walsh asserted that the need for regulation for airlines is outdated and there is massive potential in liberalisation. Further, governments should stand back and let the industry grow. He however felt that there should not be a status where weak carriers are subsidised by national economies. John Slosar, chief executive, Cathay Pacific Airways voiced that open bilaterals is an achievable aspect. James Hogan, president and CEO, Etihad Airways acknowledged that the Gulf carriers have taken advantage as hubs and markets opening up. He cited the example of India and China where the airline sees huge opportunities. Abu Dhabi in fact is all set to host the WTTC Global Summit in 2013.
The winners of the ‘Tourism for Tomorrow Awards’ this year were Community Benefit Award – Saunders Hotel Group, USA; Conservation Award – Inkaterra, Peru; Destination Stewardship Award – Destination Røros, Norway; and Global Tourism Business Award – Banyan Tree Hotels & Resorts, headquartered in Singapore.