Aspects of International Tourism Growth

So what are some important aspects of international growth? Well firstly one of the words we use today in relation to anything is sustainability. Is our industrial development sustainable? Is our educational policy sustainable? Is our tourism policy sustainable? And if you look at these figures I’ve shown you then, there’s no doubt that tourism as an international and I’ll show you later as a domestic activity is sustainable. This does not mean that every country has experienced the same growth rates. No. If you look at the continent of Africa, for example, you find out that the growth rate has been about 4% over the last certainly 20 years. But if you look at the Asia, it’s been more like 15%.

And there are reasons for this. I don’t have time to talk to you about (that). So we know that tourists arrivals are growing about 4% per year, which is higher than the growth of international trade. There is growing significance attached to the economic impact of tourism. If you think about it, the essentials of a travel experience is, one, we need transport, we spend money on transport. Two, we need someone to stay we need accommodation. Thirdly, at our destination we need food and services. Fourthly, we need amenities and but fifthly as international tourists. When I come to China, I change pound sterling or other currencies into RMB. When you travel to UK, you travel and change it to pound sterling.

What does this imply? It means that with international tourism’s growth, it helps to redistribute income from the very rich countries to the poorer countries, which is an exceptionally important aspect of tourism. The fourth point I want to make is what I’ve called the grey market. Now I’m a representative of the grey market. The grey market then is sometimes called a senior market. And what this means is that there is a growing number of people in undeveloped countries who when they retire still want to travel, still want leisure activities. And these people then usually benefit from continuous health care and retirement pensions, and often government’s support to senior travel.

And senior travel has then one big advantage over normal travellers and the senior travellers can travel at any time, because they’re not working. And therefore this is a market, which is often used to supplement tourism in destinations in low season. So this grey market then is expanding its travel horizons. It’s a very important part of the international travel area. Now the other thing which we’re all conscious of particularly is the development of ITC and also internet development. And what’s this has done is change. I spoke to you earlier about the democratization of travel as more travel people are traveling. But now what ITC has done is to empowered individuals to make their own holiday arrangements and their own holiday plans.

And if you think of your own experience, if you’re going to make a journey usually the first thing you do is go to the Internet. Look at the location, look at the travel options, look at the accommodation options and look at prices. So what we found then is that because of the ITC developments which are continuing and which are becoming much more sophisticated, what we find then that individuals are being much more involved in making their own travel decision. There’s another thing about it as well. At one time traditionally we planned our holiday, took the holiday, came back, and told people how we got on. Now it’s a continuous process.

We take photographs, we send messages to friends before we go on holiday, on the flight at the destination, and we give more information when we come back. Think of the role of an organization like TripAdvisor, which many of us consult to say, people have done in their trip what has been your experience. ITC then is a huge area of impact for tourism and it’s going to become more important in the future, and certainly it’s having much more of an impact which is affecting the individual. Emergence of budget airlines boosting travel numbers. Well again, this is another form of development. If I ask you the question, which are the two biggest airlines in Europe?

In passenger numbers, you couldn’t give me the answer. I’ll tell you what they are, One is Ryanair the Irish carrier and the other one is EasyJet. These are budget carriers offering point to point flight and very low fares. And in Asia probably the best example I think is AirAsia. Because of the cheap fares, it’s allowed more and more people to become tourists, and as the network developed to go to many places, this is a very important part of the development of tourism growth. Another aspect here if you looked at 1950, 80% of all tourist arrivals internationally took place in western Europe and in the United States and Canada.

Now we estimate probably just about 45% of international tourist arrivals take place in the developing countries or the emerging economies, as they are sometimes described. And maybe the last two points, I’d like to make you one from an economist’s viewpoint. When I studied the economics, we all was made it a distinction between essential and non-essential goods. So essential goods we need food to live, we need water or liquids to sustain us, we might certainly need health care at some time in our lives. OK, but holidays were all but were regarded as luxuries. Now I’m going to suggest to you that over this period of time that this distinction has changed.

Many people now regard the holiday as part of their life-style. And if when incomes decrease, for example, as the result of the 2009 global financial crisis did people stop taking holidays? Some did. So it was a slowing down growth of the rate of international tourist arrivals and not an absolute decline. How did people react? People decided to not take an expensive holiday but find a cheaper destination or they decided instead of traveling internationally, they stay at home (domestic holiday). So I think holidays now are not a luxury for many people. They are part of the life-style.

And the last point I want to make is that one of the things which has been important since 1978, when I think chairman Deng decided to open up the Chinese economy. Tourism has had a remarkable impact on China and China has had a remarkable impact on the world in terms of the number of tourists. It generates and also the number of tourists it receives. So that’s the first part of my presentation. And the second part then is where I want to look at the role of government in tourism development.