Freer travel equals jobs, pros­per­ity

As the changes in visa poli­cies be­tween China and the US shows, pol­i­cy­mak­ers can help turn on tourism’s eco­nomicben­e­fits by mak­ing it eas­ier to travel, Al­fred Romann re­ports.

China Daily (Canada) - - ANALYSIS -

slower eco­nomic ex­pan­sion around the word, travel and tourism are that much more im­por­tant.

“The cy­cle of growth will trump the eco­nomic down­turn over the next few years,” said Ng. “China may face some eco­nomic (dif­fi­cul­ties) but we be­lieve tourism will con­tinue to grow.”

Out­bound tourism from China has ex­panded al­most ex­po­nen­tially over the past cou­ple of decades on the back of ris­ing in­comes.

Ng pointed out that when an­nual in­comes hit the $20,000 mark, peo­ple start trav­el­ing. At $35,000, peo­ple start trav­el­ing in­ter­na­tion­ally. The num­ber of peo­ple hit­ting th­ese mark­ers is grow­ing by tens of mil­lions ev­ery year in China.

Still, much po­ten­tial for growth re­mains in this par­tic­u­lar mar­ket. Thus, as China grows, so does the global travel and tourism industry.

“The num­ber of out­bound tourists is huge but it will only get big­ger,” said Ng. “Al­though the growth of Chi­nese out­bound tourism has been strong, the pen­e­tra­tion is still weak, only 7 per­cent.”

In more de­vel­oped mar­kets, travel and tourism is a more pop­u­lar ac­tiv­ity. In the US, the pen­e­tra­tion rate of the sec­tor is around 20 per­cent. In South Korea or Ja­pan, it is closer to 30 per­cent.

Greater pen­e­tra­tion into China would trans­late into much larger num­bers of trav­el­ers and, in turn, dou­ble-digit growth for the travel and tourism industry — a scale big enough to power the growth of the global industry.

This is a re­al­ity that has not es­caped the no­tice of industry stake­hold­ers, who not only ex­pect big things from Chi­nese tourists but from the global industry as a whole.

For many, the travel and tourism industry has the po­ten­tial to pro­pel global eco­nomic growth.

Mov­ing to­ward the year 2030, there is a clear trend in fa­vor of more travel and tourism and, at the same time, greater spend­ing.

Chi­nese tourists have emerged as a ma­jor force. While trav­el­ers from other coun­tries in the re­gion are also spend­ing, Chi­nese tourists are the big­gest spenders by far, with al­most 117 mil­lion in­ter­na­tional trips and spend­ing of $165 bil­lion last year.

While con­sumers with more dis­pos­able in­come are ea­ger to travel, it is up to pol­i­cy­mak­ers to make it easy for them to do that.

“We need to shape poli­cies and pro­ce­dures for this growth to ma­te­ri­al­ize,” said John Kester, di­rec­tor of the tourism mar­ket trends pro­gram at the UNWTO.

“Whether as a des­ti­na­tion you are able to re­ceive those vis­i­tors or whether they will go to your neigh­bor de­pends on your poli­cies,” he added.

“We are now en­ter­ing the next phase of tourism … we are now get­ting a more ex­pe­ri­enced and de­mand­ing cus­tomer.”

Bet­ter in­fras­truc­ture and well-ex­e­cuted plans to fa­cil­i­tate travel are both key. Visafree ac­cess, in par­tic­u­lar, is an ex­am­ple of the type of pol­icy that can oil the en­gine of travel and tourism.

South Korea’s Bu­san is a prime ex­am­ple of a city that has ben­e­fited from wellimple­mented visa-free poli­cies.

The city cred­its the im­ple­men­ta­tion of a 72-hour visafree pol­icy with driv­ing its growth and al­low­ing the city to recre­ate it­self.

It is also the type of pol­icy that coun­try group­ings else­where look for to drive their own tourism in­dus­tries and as­so­ci­ated sec­tors. The cre­ation of a sin­gle zone in the Euro­pean mar­ket helped spur tourism there.

Coun­tries in Latin Amer­ica are also work­ing to fa­cil­i­tate travel within coun­tries in the re­gion and for for­eign trav­el­ers, the Chi­nese in par­tic­u­lar.

The huge lev­els of ex­pen­di­ture that trav­el­ers from China rep­re­sent has not gone un­no­ticed among the fur­thest des­ti­na­tions either, such as Mex­ico, Colom­bia, Peru and Chile, which make up the Pa­cific Al­liance.

“Visa fa­cil­i­ta­tion is very im­por­tant and our pres­i­dent is work­ing on this al­ready,” said San­dra Howard Tay­lor, vice-min­is­ter of com­merce, industry and tourism in Colom­bia.

Well-de­signed poli­cies can both at­tract con­sump­tion and drive in­vest­ment. A case in point is China’s Belt and Road Ini­tia­tive, said Liu Yang, chair­man of At­lantis In­vest­ment Man­age­ment, a vet­eran fund man­ager.

Pro­posed by Pres­i­dent Xi Jin­ping in 2013, the de­vel­op­ment strat­egy seeks to con­nect coun­tries in Asia, Europe and Africa that strad­dle the an­cient land and mar­itime Silk Road.

China’s plan could power in­vest­ment in in­fras­truc­ture and, in turn, fa­cil­i­tate the growth of travel and tourism.

Liu be­lieves ser­vice in­dus­tries, in par­tic­u­lar the ones re­lated to travel and tourism, will drive eco­nomic growth in China.

“This sec­tor should con­trib­ute 20 to 30 per­cent of GDP growth in the near fu­ture, in­clud­ing In­ter­net, health­care, and hos­pi­tal­ity ser­vices,” she said.

In the past three years Chi­nese salaries have in­creased 12 per­cent and that is a big driver of growth in travel and tourism.

The chal­lenge go­ing for­ward may not be to drive the growth of travel and tourism but rather to grab more mar­ket share, sug­gested Pe­ter Meier, CEO of the Kuoni Group, a Swiss provider of ser­vices to the travel industry and gov­ern­ments with its fo­cus on Asia.

Tourist ar­rivals to Asia Pa­cific rose 23 per­cent in 2014 to around 260 mil­lion.

Half of them went to North­east Asia. The re­gion al­ready re­ceives more than 30 per­cent of in­ter­na­tional tourist re­ceipts.

“When it comes to travel, we re­ally don’t have to worry about de­mand,” said Meier. “It is more a ques­tion of how we grab this de­mand.”

Chi­na­may­face someeco­nomic (dif­fi­cul­ties) butwe be­lieve­tourismwill con­tin­ueto grow.” and head ofAsia man­ag­ing di­rec­tor for and leisure seg­ments gam­ing, lodg­ing of prac­tice at Bank the global re­search

Lynch Amer­ica Mer­rill

Luo Wangshu and Su Zhou con­trib­uted to this story.

DUAN CHANGZHENG / FOR CHINA DAILY

A grow­ing num­ber of Chi­nese tourists visit for­eign coun­tries, and among their fa­vorites is the United States.

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