00:00:16: Welcome to ITB Berlin's Travel Hero podcast, where we explore the stories and strategies shaping global tourism.

00:00:24: I'm your host Charlotte Labdavies with Management Consultancy A Bright Approach, and today we're joined by Michael Shuri, who's Head of Tourism Analysis, Asia-Pacific at Tourism Economics.

00:00:37: Michael, a very warm welcome to you.

00:00:39: Thanks Charlotte, pleasure to be here.

00:00:40: Today's topic is titled, Why APAC?

00:00:43: is set to see stronger international tourism growth than most other regions.

00:00:48: And we only have three hundred seconds to address this big topic.

00:00:52: So really briefly, Michael, do tell us a little bit more about your role at Tourism Economics.

00:00:58: Yes, certainly.

00:00:59: So my role is to focus on the analysis of current and expected trends for tourism in the Asia Pacific region.

00:01:06: So I present our forecasts and outlook to DMOs, to hotels, airlines, and of course, at tourism conferences, as ITB.

00:01:14: Well we're very much looking forward to have you on stage with us at ITB Asia and it's fantastic.

00:01:19: you are clearly the man for the job here.

00:01:21: so let's go back.

00:01:22: according to your research analysis Asia Pacific is set to see stronger growth for international tourism than many other regions if we accept the Middle East.

00:01:35: I would love for you to share some details with us please.

00:01:38: Yeah sure.

00:01:39: so behind this there's a few different factors at play.

00:01:43: So in the near term, so the coming few years, APAC is still catching up to the recovery of many other regions.

00:01:50: So the initial rebound from the pandemic for international travel was fairly slow for APAC destinations.

00:01:56: So the strong growth taking place this year and next year represents a bit of a return to normality.

00:02:02: So a key part of this is the delay in recovery for travel from China.

00:02:07: In other words, outbound travel.

00:02:09: So China is an important source market globally.

00:02:12: but it's particularly vital for APAC destination.

00:02:15: So the lower volumes of Chinese visitors in recent years have left quite a large hole for many destinations in the region.

00:02:22: But that's only part of the story.

00:02:25: So over the longer term, APAC gains represent the continuation of a trend we saw in the two thousands and the twenty tens.

00:02:33: So APAC as a date destination region for visitors growing more quickly than most other regions and gaining share of global travel.

00:02:41: So that's expected to continue through to the twenty thirties and beyond with the pandemic representing a mere blip in this long-term trend.

00:02:50: That's very,

00:02:50: very interesting.

00:02:51: I wonder if you can tell us a little bit more about what's behind this, should we say, long run trend?

00:02:58: So essentially

00:02:59: it's a combination of economic and demographic factors as well as travel patterns.

00:03:05: So firstly, I should note that the vast majority of travelers from APAC countries travel to destinations elsewhere in the region.

00:03:13: So any increase in outbound travellers in the region will largely benefit international destinations within APAC as well.

00:03:21: As countries become more developed, what we typically see is their propensity to engage in travel increases.

00:03:27: This usually starts with domestic travel and then moves on to international or outbound travel.

00:03:33: So

00:03:33: in Asia

00:03:34: Pacific, household incomes and GDP per capita are projected to rise in several large economies in coming years.

00:03:41: As that happens, and as households in these countries become wealthier, they're going to engage in more international travel.

00:03:48: Now, the other thing to note with these countries is the populations in many of these are very large, so most notably China, India, Indonesia, and some others.

00:03:58: So the potential number of travellers from these markets is tremendous.

00:04:02: So any small increase in the propensity to engage in travel, outbound travel specifically, will lead to a large volume of international travelers from these countries to destinations in the region.

00:04:14: And there's one final factor I want to mention that contributes to this.

00:04:17: And that's the ease of access to destinations in the region.

00:04:21: So when I say that, I mean in terms of improved flight connections and the easing of visa restrictions.

00:04:28: So these are basically progressing to make it simpler and cheaper to travel to many APAC countries than was the case previously.

00:04:35: So that's

00:04:35: supporting this trend as well.

00:04:38: Yeah, absolutely.

00:04:38: And we have in previous podcasts this year talked exactly about that, the infrastructure, which is so very, very advanced by now.

00:04:46: I'm thinking that in order for us to get the full picture, might you be able to share with us some of, shall we say, the potential risks and challenges to this trend?

00:04:57: Asia ultimately is still less developed than regions such as say Europe and North America in terms of transport connections between and within countries and also tourism infrastructure more generally.

00:05:10: So these connections and infrastructure will need to continue to improve to keep up with the visitor demand.

00:05:15: So essentially we need supply to keep up with demand.

00:05:18: Another factor is that Chinese outbound travel is recovering more slowly than we initially hoped.

00:05:24: So I touched on this a little bit earlier.

00:05:26: So that slower than expected recovery has slowed down growth in international visits to destinations in the region.

00:05:32: Because as I've already said, China is by far the largest source of tourists for many APAC destinations.

00:05:38: So this outbound travel from China will recover, but it's taking longer than previously expected.

00:05:43: So this is a risk around that trend that I've mentioned.

00:05:47: And finally, something that should always be mentioned when we're talking about tourism and the global economy is uncertainty, specifically economic uncertainty.

00:05:54: So that very much poses a downside risk.

00:05:57: So when people are unsure of their future income, they're less likely to spend on things such as travelling internationally.

00:06:03: So if economic growth weakens, or is weaker than we expect, it will lower travel demand from and to countries in APAC.

00:06:11: Yeah, our three hundred seconds are pretty much up.

00:06:15: And that's a shame.

00:06:16: I would have loved a little bit more time

00:06:17: with you, but I

00:06:19: urge for sure our lovely listeners to connect with you, especially if they are attending ITB Asia.

00:06:25: Thanks, Michael, for the insight.

00:06:27: There's much, much more from tourism economics, I know, so anybody interested should have a closer look.

00:06:34: And thank you again.

00:06:35: You've been a true travel hero.

00:06:37: Thank you, Charlotte.

00:06:38: You're very welcome.

00:06:38: And I hope to see some of you at ITB Asia in a couple of weeks.

00:06:42: Absolutely.

00:06:42: We're looking forward to it.

00:06:44: And I, for one, promise to keep a close eye on developments in Asia Pacific as well.

00:06:49: Very fascinating what's going on.

00:06:51: To our listeners, we hope that this quick overview and future gazing into Asia Pacific has been of interest, and we wish you all a very successful ITV Asia.

00:07:03: We'll soon be back with more voices and visions shaping the future of travel, only here at ITV Berlin Travel Hero podcast.

00:07:11: Thanks for listening and safe travels.