Excerpt from WIT

“Stability has returned and seasonality is back,” says Google’s Hermione Joye

While the travel industry flourished in 2019, it came to an abrupt halt in 2020 for obvious reasons. Over the past two years, the sector witnessed a series of closures, reopenings, the emergence of vaccinated travel lanes, and eventually, the rise of “revenge travel.” These tectonic shifts in the industry have resulted in some pretty interesting trends, with Asia Pacific emerging as not just a bright spot, but a trailblazer when it comes to certain recovery channels.

At WiT Singapore 2023, Hermione Joye, Google’s Sector Lead for APAC Travel, shared insights based on new IPSOS research during a session called ‘Travellers Are Only Human. Here’s What They Want.’ These findings, coupled with insights from Phocuswright among other data, outline growing consumer trends in the region and what travel professionals can look out for in the coming months.

APAC’s travel resurgence is a bright spot on the map

According to Hermione, recent search interest in the region is not only above 2019 levels but shows consistent growth in both international and domestic travel. Stability has returned, and seasonality is back, allowing for long-term forecasting. It’s a testament to how “normal” aspects of travel are now appreciated. Travel enthusiasts can once again plan their journeys well in advance.

Search interest in travel demand surpassed other regions, with APAC leading the way. As of July 2023, demand for international travel in APAC skyrocketed to 85% above 2019 levels, while domestic travel demand surged by 52%. According to Euromonitor estimates, APAC is poised to overtake the United States as the region with the highest online travel Gross Merchandise Value (GMV) by 2025.

Google’s research points out that this travel renaissance in APAC is not a fluke but the result of multiple factors contributing to the region’s growth:

  • Digital Adoption: APAC leads in digital usage, with daily internet usage surpassing Western countries. Some APAC countries, like the Philippines, boast daily internet usage of up to 9 hours. 
  • Rising Middle Class: The burgeoning middle class in APAC can now afford discretionary spending, particularly on leisure and international travel. With households having disposable incomes exceeding $55,000 annually, this segment has been growing steadily, notably in China and India. 
  • Demographic Strength: APAC boasts the world’s largest Generation Z population, coupled with the fastest growing GDP in the world (+5.3% Asia’s GDP growth in 2023 vs. 2.7% RoW), highest mobile app penetration in the world (72% APAC vs. 57% RoW) and highest inter-region travel in the world, with 56% of travelers exploring beyond borders. 
  • Demand Surges from India, Japan, and China: India and Japan feature prominently among the top five countries globally for travel demand. APAC accounts for a quarter of demand in the top 20 countries, with India experiencing a 70% surge in search interest for international travel. Not only is India the third largest market globally, search interest in international travel in 2023 is more than 70% higher compared to 2019.

    Meanwhile, Japan dominates in domestic tourism, with an 80% increase in interest. It may be the fifth largest travel market globally, but it is the third largest domestic market in 2023. This year, interest grew almost 80% versus 2019 and 30% year-on-year. Google believes this interest in domestic travel will continue to thrive, especially as Japanese travellers look inward due to the weakening yen. 
  • China’s International Reopening: China, a major source of outbound tourism, witnessed 155 million Chinese citizens travelling abroad in 2019, according to the UN World Tourism Organization. They also accounted for $277B of tourism spending in 2019, which was one-fifth of total global spending.

    According to the OAG, China’s international flight capacity is projected to increase to 55% from a mere 13% in January. This trajectory should take the market close to a full recovery by the end of 2024.

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