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 per cent by 2023, a new report on global travel trends reveals.
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 two per cent; growing 5.4 per cent per annum. Global travel is now set to grow at a significantly faster rate than during the financial crisis, where growth was just 4.1 per cent per annum.
At the same time, China’s growth in outbound travel, which as 2005 stood at just one per cent, 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.
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 also average more than five per cent annual growth over the next 10 years. This will be driven largely by rising wealth and changing consumer habits.
Written by Oxford Economics, the study draws on detailed macro-economic modeling 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.
Holger Taubmann, SVP distribution, Amadeus, said, “Forecasts predict a new golden era for travel, which will be welcome news for many segments of the industry that are just beginning to emerge from recession. 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.”
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 per cent, nearly double the prior ten-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 per cent over the next ten years. By 2023, Asia Pacific outbound travel spend will reach US$ 752.8billion, making up 40 per cent 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 per cent of global business travel growth in the next ten years. North East Asia alone will account for 42 per cent of the growth in global outbound business travel expenditure over the next decade, with South East Asia accounting for a further 13 per cent.
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. At the same time, overnight visitor flows for Asia are set to grow nearly four times faster than Europe over the next ten years – but Europe still remains dominant.
Angel Gallego, president, Amadeus Asia Pacific, said, “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,”
Ankur Bhatia, director, Amadeus India, said, “As per our report, Asia alone will account for close to 55 per cent of growth in global outbound business travel expenditure over the next decade. Factors leading to this enormous growth will be driven by rising wealth, changing consumer habits, expansion of international air traffic flow as well as outbound travel expenditure.”