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Business as usual after Chinese New Year bookings blip

Asia-Pacific travel continues on growth trail

After an expected post-Chinese New Year bookings dip, the Asia-Pacific travel and tourism sector shifted back into a familiar growth pattern in March…

After an expected post-Chinese New Year bookings dip, the Asia-Pacific travel and tourism sector shifted back into a familiar growth pattern in March, according to the latest figures from the region`s leading travel facilitator, Abacus International.



In March, reservations made on the Abacus travel booking system rose 12 per cent over the previous month. More than 80 per cent of travel bookings recorded were for Intra-Asia travel.


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FIT bookings bounced back strongly after declining 14 per cent in February, again due to a seasonal lull in travel bookings in the week following Chinese New Year.



The latest figures show that Asia-Pacific travel is still on the growth trail that began in 2003, said Don Birch, President and CEO of Abacus International. Overall, we saw solid growth in March in line with the continued economic prosperity the region is experiencing. Also, a number of individual countries performed beyond our expectations, highlighting consumer demand for travel products and services is fast becoming truly pan-Asian.



Indeed, March 2005 FIT bookings for Taiwan posted year-on-year growth of 27 per cent and the South Asia markets of India and Bangladesh grew by 19 and 29 per cent respectively.



Tsunami update



The recovery of the tourist industries in areas affected by the December 26 tsunami has been set back by a series of aftershocks. Resorts in Indonesia, Malaysia and Thailand were not badly damaged by the aftershocks, although there were reports of some visitors cutting short their holidays. While we can`t guard against such acts of nature, getting travellers to return to these tourism-dependant economies is absolutely essential to their long-term survival, said Mr Birch.



We would never encourage travellers to put themselves at risk, but the travel industry as a whole can help by providing the public with accurate and up-to-date information on the affected areas. This will enable consumers to make informed decisions about how, when and where they can travel. The recent tsunami drill in Phuket is an example of how governments can ensure that visitors are properly prepared for possibilities no matter how unlikely.



Time and again, Asia-Pacific travel has proved itself to be amazingly resilient. However, it seems that recovery of the tsunami-affected areas is taking longer than originally expected and reinforces the importance of the travel community not forgetting these places and remembering that the economic damage is often worse than the natural disaster, said Mr Birch.



E-ticketing



Between January 2004 and March 2005, the proportion of electronic tickets (e-tickets) grew from 10.4 per cent to almost 22 per cent of all Abacus tickets issued. In the first three months of 2005, e-ticketing averaged 111% growth over the same period in 2004.


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There has also been rapid e-ticketing adoption in several countries. In Thailand, e-ticketing grew 865 per cent in March over the same period a year earlier, while Hong Kong posted growth of 93 per cent. Indonesia`s e-ticketing grew by 174 per cent and the Philippines a phenomenal 7,415 per cent – albeit from a low starting point.



Given the rise in this sector, the industry looks on track to achieve the IATA industry goal of full e-ticketing by 2007.



Non-air content takes off



In the face of increasingly demanding consumers, multi-channel competition and squeezed booking commissions, Asia-Pacific travel agencies are fast following the lead of their US and European counterparts by providing customers with travel products and services in addition to the traditional air ticket, according to information issued by Abacus International. Non-air bookings such as hotels, cars and tours are Abacus` fastest-growing business segments. In three to five years, the company estimates that this non-air business is set to contribute more than 10 per cent of total revenues. The company seems likely to meet or exceed its targets if figures for the first three months of 2005 are an indicator of future performance. Between January and March, total non-air bookings on the Abacus system by travel agents grew in excess of 35% over the same period in 2004.



Regionally, North Asia performed strongly on the largest base whilst the fastest growth rate came from South Asia.



These figures are very encouraging and suggest that our vision of the Asia-Pacific travel agencies becoming full service travel consultancies is fast becoming a reality, said Abacus President and CEO, Don Birch.



Whether the demand is for hotels, airline/hotel packages, tour products, cruise, ferry, rail, car rental or insurance, we are committed to populating Abacus systems with relevant, high-quality, and competitive content as well as the technology to help our travel agencies to manage and deliver to their customers.



China, which Abacus predicts will be the primary driver of Asia-Pacific travel and tourism, saw the strongest growth in the hotel sector with month-on-month and YTD hikes of 200 and 188 per cent, respectively. It was closely followed by India, which saw hotel bookings rise 146 and 120 per cent.



The growth of travel and tourism has a direct correlation with economic prosperity. China and more recently India have become economic powerhouses with growing middle classes to whom travel is increasingly important part of their lives, said Mr Birch.



The figures are certainly compelling. Between 1996 and 2004, China`s travel and tourism grew on average by 12.5 per cent – outpacing even the country`s wildfire economic expansion.



The upswing is unlikely to slow anytime soon. By 2020 China is expected to be the world`s number one destination with an estimated 100 million tourists visiting each year, according to China Travel Service. On the outbound side, it estimates that this year China will record 40 million journeys, up from 29 million in 2004. Moreover, tourism revenue last year rose to US$82 million, up more than 40 per cent over 2003.



However, Toby March, Abacus Vice-President for Non-Air Content Associates, believes with the rise in regional average per capita incomes driving new market segments, the potential for growth in demand for all types of travel and leisure services and products will not be limited to China but will be a pan-regional phenomenon. He added that Asia-Pacific travel agencies are currently only capturing perhaps 10 to 20 per cent of the potential economics in the non-air market.



Mr March points to other strong performing markets such as Indonesia, which posted month-on-month and year-on-year rises in non-travel bookings of 38 and 30 per cent respectively, as well as Malaysia, which posted rises of 79 per cent and 35 per cent.



Mr March explains that regional hotel business alone is a US$60 billion business with destination revenues set to post high single digit annual growth.



There are currently more than 60,000 hotel properties, over 50 car hire companies, 10 cruise and ferry operators, multiple insurance companies and thousands of tour products available to travel agencies and their customers via the Abacus system. The GDS system is proving to be the perfect vehicle for travel suppliers to market themselves to a global audience.



Hotel bookings are increasingly proving a successful and lucrative revenue generator for travel agencies. In fact, bookings already represent around 10% to 15% per cent of Abacus-connected travel agencies` revenues. This is expected to grow in excess of 20% per cent within the next five years.



The increased availability of a broad range of competitive travel products and services via GDS` systems is excellent news for all those who see the revenue opportunity, and who believe in driving productivity, said Mr March. The internet is flooded with information and a smorgasbord of prices, so the travel agent will play an important role in guiding the consumer to the best value for their requirements.



To capture these opportunities, Abacus has introduced a range of Internet-based and desktop solutions that enable travel consultants better access to high-quality quality travel content as well as enabling travel suppliers such as hotels and tour operators to better market their services.



He cited the 193% year-on-year growth of the Abacus HotelSmart solution targeted at the small to mid sized leisure agency segment providing hoteliers the opportunity to distribute distressed inventory to Abacus` network of 11,000 travel agencies, and Abacus` latest product – Abacus TravelNetwork, which is a web-based solution that enables wholesalers and other travel suppliers a delivery mechanism to creatively merchandise complex tour management products to travel retailers. Travel consultants have real time access to high-quality leisure travel content, with accurate pricing. Importantly, travel agencies are able to quickly and easily shop for and secure static flight-hotel packages or construct dynamic travel packages that include a range of travel products and services.



Abacus has already signed several content providers to the new service, including leading online travel agency, ZUJI, Royal Brunei Airlines and Philippine Airlines.



The industry has been talking for some time about how travel agencies need to look beyond being air ticketing brokers and embrace the full travel landscape. While it`s still early days, the growth of automated non-air bookings suggests that the planets are aligning for our customers said Mr March.



Mr March`s opinion is supported by one of Singapore`s leading travel agency, Commonwealth Travel Service Corporation.



Our customers no longer want just simple booking services from travel agents. With so much information available to the traveller on the Internet, we need to go beyond traditional service, and offer a value added solution that contains both travel and leisure content, says Commonwealth Travel Service Corporation`s Managing Director, Ms Wee Hee Ling.



Our agency is now full-service and provides travellers with the latest pricing structures on everything from visiting a zoo to dining at a local restaurant. We`ve moved away from our ticketing comfort zone and are now doing what we thought once was impossible.

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