Look South

look south

The number of people on the move today is unprecedented, with international arrivals increasing from just 25 million in the 1950s to 1.2 billion in 2016. While, historically, the majority of travel was North to North, this reality is changing. Outbound travel from Asia-Pacific, Africa and the Middle East is expected to grow exponentially in the coming decade. If you want to see the future of travel all you have to do is look South.

In fact, since the global financial crisis, tourist expenditures from developing nations have grown faster than that of expenditures from advanced economies- a trend on track to continue in the coming years. Developing and emerging markets are not only becoming larger source markets, but they are also improving their competitiveness in order to position themselves as more attractive destinations for developing the travel and tourism sector.

World Travel and Tourism Council (WTTC) research forecasts that between 2016 and 2026, the 10 fastest growing destinations for leisure-travel spending will be India, Angola, Uganda, Brunei, Thailand, China, Myanmar, Oman, Mozambique and Vietnam.5

These shifts suggest that developing and emerging countries are catching up, providing better conditions to develop their industry competitiveness and, therefore, becoming better prepared to attract and welcome the millions of new tourists who will travel for the first time in the coming decade.

This growth in demand is here to stay. South-South tourism is on the rise, and will increasingly do so as these countries improve their competitiveness and develop their travel & tourism sectors.

But Asia is special

Asia-Pacific consists of some of the economies that have flourished most in recent years, thanks to the expansion of the middle class and an increasing affordability and willingness to travel, particularly intra-regionally. The region’s economic development, which started decades ago, continues to positively impact the travel & tourism sector. According to the WTTC this sector will double in the coming decade, reaching almost $1.2 trillion USD in 2026 from its current $650 billion.

For the most part, the region can rely on outstanding natural resources, a highly-qualified labor force and governments that understand the potential and support the sector. Yet, environmental sustainability which is paramount to the continued growth of the industry remains a concern across the region.

East Asia, the most developed part of Asia and Australia share several strengths and have historically been the best performers in the region. The nations in this sub-region boast strong safety and health conditions, have world-class infrastructure and are among the most technology-ready globally, especially Hong Kong and South Korea. They are able to attract tourists by balancing offers on the basis of their natural and cultural resources. Yet, these nations are some of the most expensive destinations in the region.

Conversely, countries in South-East Asia (ASEAN) offer competitive prices and take advantage of their natural resources to attract tourists. While cultural resources are available, to date they have been less valued than natural assets. ASEAN nations are also particularly inclined to prioritize tourism in their development agenda as most of them are ranked above the 50th position in this specific pillar. Still, a large infrastructure (air, road and tourism service infrastructure) and technology gap remains between the most advanced in the sub-region, especially Singapore, and to a less extent Malaysia and Thailand, versus the rest. In addition, a handful of countries in the area continue to have declining security perceptions resulting from political developments in recent years, leaving tourists with a sense of unpredictability.

The price competitiveness that favors South-East Asia also benefits countries in South Asia. Yet, South Asia remains less developed on almost all other fronts, in particular on infrastructure, technology and health and hygiene conditions.

And the South is Rising

Check out this graph and you can see that the Southern Hemisphere is rapidly becoming a source of travelers and not just a destination for them. It’s apparent as regions in Asia, Africa and the Middle East grow their middle class and expand economically their outbound travel market will grow as well. Additionally there will be a large net benefit at home as their domestic travel will also receive a bump. It’s a tried and true trend that as a country’s citizens become wealthy and can afford to travel they generally explore locally first before taking an international trip. 

For all of these reasons and more the countries of the Global South should be particularly well suited going forward. And if you want to understand how travel will change in the years ahead, all you have to do is look South.

7 Traditional Things To Do In Japan

Traveling to Japan on business can be a very exciting proposition. This is an incredibly fast-paced country with a very sophisticated business climate, However Japan ...