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Leveraging Asia’s strengths

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The third edition of TravelRave organised by the Singapore Tourism Board (STB) reaffirmed it as Asia’s most vibrant platform for a host of important travel and tourism industry events – ITB Asia, Aviation Outlook Asia, Asia Pacific Tourism Destination Investment Conference, Web in Travel Conference, Asia Travel Leaders Summit and Singapore Experience Awards. This year saw the inclusion of two new events, namely Hotel Technology 2012 and the World Travel Awards. TravelRave acquires special significance with tourism in Asia predicted to grow at a rate that is much higher than the global average, and the region being the hub of most tourism related development that is happening around the world, ranging from hotel investments to growth of the aviation sector in emerging markets.

STB promotes TravelRave as Asia’s ‘most influential’ travel industry event. Speaking at the opening press conference, Neeta Lachmandas, assistant chief executive, Singapore Tourism Board (STB) said, “We are in the third year of TravelRave. The platform has grown tremendously from strength to strength. Collocating the event adds a lot of value. The important thing to bring events that complement each other. ” Pointing out that according to the Boston Consulting Group, Asia accounts for 40 per cent of global tourism spend, and considering that PATA expects the sector to grow by seven per cent, she stated, “We see very aggressive numbers and it is important for us to create a platform in travel and tourism space and gathering of tourism leaders. Opportunities are there but there are also challenges, for instance we need to understand the Asian consumers who are so different from each other.” TravelRave brings industry leaders together to collaborate on how to address these challenges and work for the growth of the industry.

This year ITB Asia celebrated its fifth anniversary, and 2012 marked the biggest edition till date. “We have the largest conference programme and numerous new partners who deliver the content and reveal the data with focus on Asia,” said Nino Gruettke, executive director, ITB Asia. Marilyn McHugh, vice president – Global Events, Questex mentioned, “This is our first year at TravelRave and we are pleased to be in partnership with STB. The focus is not just B2B, these conferences set the stage for navigating the future.”

Investment in tourism

Addressing the inauguration of the Asia Pacific Tourism Destination Investment Conference, S Iswaran, minister in the Prime Minister’s Office, Singapore said, “It is well established that Asia’s growth is significant in global tourism. International arrivals in Asia continue to be stable and in particular South East Asia continues to be the strongest growth sub region. Singapore has been built on these foundations to keep making investment in tourism infrastructure, experiences and products.” He said that about SGD 900 million will be used in tourism promotions of which a large amount will be used for development of the MICE segment. Iswaran mentioned that Singapore’s tourism goes beyond the country, it involves its ASEAN neighbours, with particular focus on the cruise industry. “At government level we are continuously working with our ASEAN neighbours. Asia Pacific Tourism Destination Investment Conference will be a platform for exploring new collaborations and creating new ideas,” added Iswaran.

The Greater Asia-Oceania region has a number of destinations that have tremendous opportunities for growth and game changing opportunities. According to Dr Richard Helfer, chairman , RCH International, investment in tourism infrastructure across the region looks very positive and is delivering strong bottom lines to investors. “I call this process Total Environment Tourism, combining the natural attractions with man-made efforts to portray lifestyle, heritage and culture.”

Travel and tourism is the world’s third largest industry. World Travel and Tourism Council (WTTC) takes on very specific battles with the government, in particular issues like visas and taxation. “If the taxation regime is not right then investors are not willing to make investment decisions. Growth will come from Asia that has out performed in recent times and will continue in the future,” said David Scowsill, president and CEO, WTTC. He added that in 2012 though the euro zone has slowed down Asia and Latin America continue to grow their GDP. For every dollar spent on travel and tourism three dollars is added to the economy. Increase in investment gives a fillip to tourist arrivals while insufficient investment acts as a bottleneck for growth. It is also important to maintain the current capacity. Some of the leading countries in APAC in terms of investment are – China, Japan, India, Indonesia, Australia and Singapore. “Developing markets are growing more faster than developed markets. Superior economic growth is driving consumer demand for travel,” added Scowsill.

Asian growth story

Speaking at the ITB Asia opening press conference Scowsill remarked, “Next month one billion people will cross international borders, which is a huge landmark. This year the picture has not been so good – Europe has been growing backwards faster and affecting to some extent China and India. But overall picture in short term is strong and in the long term it is stronger. As far as visas is concerned in the last 12 months we have made huge progress.”

ITB Asia 2012 saw double digit growth from last year, with 865 exhibitors from 72 countries participating in the event. There were 15 per cent more exhibitors partnering and 17 per cent more exhibition space. There was also a significant increase in terms of content, almost 24 per cent over last year, that is 3720 minutes. “This shows the potential of the market here in Asia and the dynamics of the market is very extensive. We see a very strong growing demand from emerging markets, in particular new ones like Jordon, Columbia, Venezuela, South Africa, Pakistan, etc. Now travellers want to explore new destinations,” said Dr Martin Buck, vice president, Messe Berlin (Singapore), organiser of ITB Asia. ITB Asia 2012 also had a new cruise segment that included MSC Cruises, Costa Cruises, Royal Caribbean, etc. This year also saw for the very first time the inclusion of the Pink Corner, catering to the LGBT (lesbian, gay, bisexual, and transgender) community.

The PhoCusWright-ITB Asia study states that APAC will remain the world’s fastest growing travel region in 2013, worth US$ 357 billion. “In some countries people are bypassing the computer for mobile that will have a strong impact on the travel industry. Total travel gross booking is the highest in Asia in 2012, online bookings are the highest in the US and Europe but it has been growing by double digits in APAC. As online travel will grow faster it will continue to steal the share from offline players,” said Chetan Kapoor, research analyst, Asia Pacific, PhoCusWright.

Changing face of luxury

In his keynote address in ITB Asia, Horst Schulze, chairman and CEO of Capella Hotel Group (and the man who built Ritz Carlton) spoke about how the concept of luxury has changed over the last two decades. “Luxury hotel that is known today will become affordable luxury, what is emerging is ultra luxury,” he stated, adding that over the next 10 years international mergers and partnerships will quadruple which means more business travel as face to face meetings will be needed. “Emerging markets will travel outside their country led by the affordable and ultra luxury segments. The secondary segment will follow the ultra luxury. We have to understand in our business that timeliness is most important and in the future it will become more significant,” stated Schulze. He asserted that what the guest will increasingly seek more caring service and their expectation is individual service. “That is a problem for the industry as we have made a commodity to ‘sleep in’ but travellers are looking for ‘meaningful experiences’. So are we creating a ‘meaningful moment’ or a ‘moment’ or ‘selling a room’? Those customers coming from emerging markets will want it more as they are insecure travelling. So ‘service’ and ‘caring’ become more and more important in the future. What was luxury 30 years ago is not luxury anymore,” reminded Schulze.

Travel leaders speak

In its third edition, Asia Travel Leaders Summit, a thought leadership event gives an opportunity to the leading personalities from the industry to interact and hold discussions on critical issues. The fact that the market in the region is dynamic but not homogenous makes such knowledge exchange all the more important. “Further, different markets are at different stages of development so there are more opportunities to learn. This year saw the presence of 35 leaders from across the continent. We have gathered here to talk about the opportunities ahead of us and hope that the platform works out to be one of collaboration and sharing of ideas,” said Lachmandas.

Deepak Ohri, CEO, Lebua Hotels and Resorts stated, “The mass affluent segment is growing exponentially but we have to understand them. As an organisation we spend a huge amount of time on research, we cater our product according to the consumer.” The mass affluent consumers spend almost double what other segments do and it is important to understand each market, whether India or China or Indonesia. “The middle class today is driving tourism, particularly in countries like India and China which have huge domestic tourism,” added Ohri. Pak Budi Tirtawisata, CEO, Panorama Group, also spoke about the importance of giving a good product in the market, particularly for the middle class that his group focuses on.

One of the top three concern areas for the industry leaders was not surprisingly – talent shortage. “We identified that there are different levels, in Asia we need to develop the mid management,” mentioned Lachmandas.

While specific projects are currently not decided upon in terms of collaboration between travel industry leaders in the region, it is hoped that in the future the summit will lead to such initiatives which will go a long way in developing the sector.