Asian travel demand will close 5% down for 2009 in part due to sharp declines in travellers from South Korea. Longhaul destinations such as Europe are being hit hardest as Japanese, Chinese, Indians and Thais also choose to stay home or travel within Asia.

Travel demand for 2010 is likely to pick up, but spending is likely to lag at around 2005-2006 levels. Prospects for 2010 will be greatly determined by any return of consumer confidence in Japan and China.

These are just some of the key trends highlighted in the latest ITB World Travel Trends Report, commissioned by Messe Berlin, the organisers of ITB Berlin, and compiled by IPK International.

The ITB World Travel Trends Report findings show that Asian travel demand averaged a more than a 10% decline January-June. However, some market recovery has been recorded since July 2009, indicating that the Asian travel industry is over the worst. IPK forecasts of a total-year decline of 5%.

While intra-Asian trip volume fell by only 5% from January through August 2009, travel to Europe (14% of total trips) was down 10%. Asian travel to the Americas (9% of all Asian trips) slumped by a more hurtful 15%.

The report notes that Chinese travellers may be more recession-proof than the Japanese, but they don’t spend as much. In Europe, for example, the total spend by Chinese tourists on transport, accommodation, food and beverages and incidentals (i.e. excluding shopping) was €240 per night, as against €320 for Japanese, €185 for Koreans and €180 for Taiwanese.

In 2009, destinations dependent on Chinese travellers were also disappointed for different reasons. The Chinese government issued an edict earlier in the year stating that no Chinese government employee could travel abroad in 2009.

The biggest decline so far in 2009, in terms of outbound travel, has come from South Korea, down more than 10% over the same period in 2008 - a decline due in large part to exchange rates. In the six months from September 2008, the won went through a period of great volatility, involving massive depreciations. The report notes that South Korea was already weak as an outbound travel market in 2008 following several years of consistently strong growth.

Even within Asia, the once high-flying low cost airline sector suffered in 2009. Despite rock-bottom airfares, the sector has experienced capacity cuts, which resulted in lower seat availability and, inevitably, rising airfares.

According to Dr Martin Buck, Vice President CompetenceCenter Travel & Logistics, at Messe Berlin, the big question now is, how sustainable are the first signs of recovery in Asia; “Analysts are divided,” he said. “Some see a 2nd dip into recession. Others think government stimulus packages have got us through the worst of it. The price of oil and the threat of H1N1 are unknown factors.”

He added: “The report predicts a modest increase in outbound trip volume for Asia, but expenditure and yield levels will still be at pre-2008 levels. Within Asia we can still expect to see shorter, cheaper trips, closer to home and at off-peak times.”

The report also predicts that, globally, business travel will stay flat, with many companies saying they had introduced stricter travel policies. One consequence is likely to be a rise in the price of economy tickets as airlines losing money at the front end of the plane raise economy class tickets to compensate.

The findings in the ITB World Travel Trends Report were based on the assessments of 60 tourism experts from 30 countries, on a special IPK International trend analysis undertaken in leading source markets, and on core data supplied by the World Travel Monitor®, recognised as the largest ongoing survey of global travel trends in some 60 source countries.

The report concludes: “There are currently too many uncertainties to be able to predict with any real confidence the likely trends in terms of travel and tourism demand from the world's leading source regions. For the time being, pending developments over the next few months, the best 'guesstimates' suggest that neither Europe nor North America will do better than achieve a flat year in terms of growth, unless the economic recovery is much stronger in the USA than currently expected. But Asia Pacific should see at least a modest increase in outbound trip volume – mainly for intra-regional destinations – a trend also forecast for South America and the Middle East.”