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CHINESE TRAVELERS LEAD THE WAY AS TOURISM IN ASIA BECOMES A CRUCIAL CATALYST FOR GLOBAL ECONOMIC EXPANSION
A CHINESE TOURIST WALKS ACROSS A GLASS-BOTTOMED SUSPENSION BRIDGE IN THE SHINIUZHAI MOUNTAINS IN PINGJIANG COUNTY, HUNAN PROVINCE SOME 150 KILOMETERS FROM CHANGSHA ON OCTOBER 8, 2015. THE BRIDGE, ORIGINALLY A WOODEN WALKWAY SPANNING SOME 300 METERS ACROSS THE 180-METER DEEP VALLEY, REOPENED TWO WEEKS AGO FOLLOWING RENOVATIONS AS A GLASS-BOTTOMED TOURIST ATTRACTION. AFP PHOTO / JOHANNES EISELE

By ALFRED ROMANN in Macao.

About two-thirds of the people in the world cannot travel internationally without getting a visa stamp on a passport, an archaic system that may be holding back growth in the travel and tourism industry. This is not to say that the industry is not growing, quite to the contrary.

However, for the hundreds of industry and government officials who gathered in Macao for the Global Tourism Economy Forum from Oct 12 to 14, the issue of visa-free travel is a particularly significant one because it has the potential to stop international tourism in its tracks.

For Taleb Rifai, secretary-general of the United Nations World Tourism Organization (UNWTO), making it easier for people to move across borders is key for the continuous growth in travel and tourism. He said that about 63 percent of the world population needed to apply for a visa before they could travel from one country to another. A decade ago it was 74 percent.

[visit the interactive passport index]

The reality is that developing travel and tourism is an important catalyst for global economic development and deeper cultural links. There is still not enough understanding of the value and virtue of travel and tourism,” said Rifai. “There is a challenge making people understand how important the human activity called travel and tourism is.”

Developing travel and tourism is an important catalyst for global economic development and deeper cultural links.

Rifai was speaking at the Macao forum on Oct 13. The annual event brings together government officials, private sector executives and industry stakeholders. The focus of this year’s event was cultural tourism and the importance of connectivity in driving the tourism economy. The location of the event was perhaps appropriate.

Macao may be best known as a gaming destination but it is also a powerful tourism destination. Its historic city center has been designated by UNESCO as a World Heritage Site and the city boasts world-class shows, entertainment, restaurants and shopping facilities.

Many of the leaps the city has made in driving its tourism industry have been directly related to policies that facilitate both tourism and connectivity.

Tourism got a boost in 1995 when Macao opened its airport, and again in 1999 when the city became a special administrative region of China.

This opened the door to hundreds of millions of new potential visitors, and again in 2003 with the launch of an Individual Visit Scheme which allowed Chinese mainland visitors into the city on an individual basis.

These initiatives that make it easier to travel across borders are key to the growth of this large sector of the global economy.

Hence, this industry has emerged as an important driver of economic growth and development, thanks in large part to the many spin-offs that travel and tourism generates.

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.

Billy Ng, managing director and head of Asia gaming, lodging and leisure segments for the global research practice at Bank of America Merrill Lynch, said at a time of 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.

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“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 other 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.

The prospects for the tourism industry in Asia remain undiminished, said John Kester, director of the tourism market trends program at the UNWTO which recently released a report on travel and tourism trends. 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.  In the Asia-Pacific region, the second biggest spenders were the Australians, with 9 million trips and $26 billion. They were closely followed by Singaporeans — almost 9 million trips and $24 billion spent. South Korean travelers spent $23.5 billion and travelers from Hong Kong $22 billion.

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 Kester. “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. Visa-free access, in particular, is an example of the type of policy that can oil the engine of travel and tourism.

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Busan, South Korea's second largest city, has benefited from well-implemented visa-free policies. The Busan International Film Festival (BIFF) has also added to its popularity. Stars from Asia and beyond gathered for the launch of the 20th Busan International Film Festival on October 1, 2015. AFPPHOTO / JUNG YEON-JE

South Korea’s Busan is a prime example of a city that has benefited from well-implemented visa-free policies. The city credits the implementation of a 72-hour visa-free 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 the four countries of Mexico, Colombia, Peru and Chile that 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.”

City breaks offer potential BRIGHT PROSPECTS FOR TOURISM AS ASIA’S IMPROVED TRANSPORT NETWORKS HELP MIDDLE CLASS ENJOY URBAN VACATIONS

TOURISTS WALK ALONG KHAO SAN ROAD, POPULAR WITH MANY FOREIGN VISITORS, IN BANGKOK ON AUG 21. METROPOLITAN TOURISM IS GROWING RAPIDLY AND THE THAI CAPITAL IS ONE OF THE MOST VISITED CITIES IN THE WORLD. AFP PHOTO

By ALFRED ROMANN in Macao for China Daily Asia Weekly.

Economic growth across Asia Pacific is slowing down but the prospects and the potential for the travel and tourism sector in the region remain huge, suggests a new report. The potential is most visible across the 100-plus cities in Asia Pacific that are now linked to regional or international flight routes and are powering the growth of city tourism, which has emerged as a powerful catalyst for the industry. The growth and potential of the travel and tourism industry in the region are both visible and significant.

Last year, the Asia-Pacific region attracted 264 million visitors, almost a quarter of the world total, according to the latest edition of Asian Tourism Trends, a joint report by the United Nations World Tourism Organization (UNWTO) and the Global Tourism Economy Research Centre released during the Global Tourism Economy Forum in Macao, which ran from Oct 12 to 14.

And the expectations for greater travel and tourism spending out of Asia Pacific remain huge. There are some 4 billion people living in the region, around 56 percent of all the people in the world, and the combined GDP is $24 trillion.

Despite slowdowns in economic growth, Asia Pacific still grew by 5 percent in 2014, faster than just about any other region in the world.

The middle class, which drives much of the tourism spend, continues to expand rapidly and travel more. Tourism receipts in 2014 hit $377 billion, roughly 30 percent of the world total.

The biggest earners are in North Asia, with the Chinese mainland and Macao leading the way. The Chinese mainland is now the fourth largest tourism earner in the world followed by gambling powerhouse Macao in fifth place.

All this potential has not been lost on industry executives from around the world that gathered in Macao for the Global Tourism Economy Forum and hailed from locales as diverse as Beijing and Bogota, Colombia’s capital, and other places in between. For all of them, Asia represents a massive boon. In the last year, even in the face of global economic uncertainty, the travel and tourism industry continued to grow. Some sectors, like gaming, struggled, but the overall numbers were generally positive, according to the report.

ASIA DOMINATES

“Asia performed, once again, quite well. If Asia performed well, with two-thirds of the world’s population, then the world performed pretty well,” said Xu Jing, executive secretary of the general assembly of UNWTO. “China continued to dominate the world in terms of departures and expenditures,” added Xu, who is also the UNWTO’s regional director for Asia and the Pacific. Casino revenues in places like Macao have been dropping for more than a year, but the industry as a whole has reason to be optimistic and expects big things out of Asia Pacific.

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With casino revenues in Macau plummeting thanks to Beijing's anti-corruption crackdown and a slowdown in the Chinese economy, the gambling hub is seeking to reinvent itself as a family-friendly mass market destination as the high rollers stay away. AFP PHOTO / Philippe LOPEZ

Kevin Murphy, chairman of the Pacific Asia Travel Association, said: “Travel and tourism is something that more and more people want to do and we have to help them do it.” The potential for growth lies in large part in new and emerging destinations. To date, most tourists in the region tend to congregate in a small number of places, with the Chinese mainland, Hong Kong and Macao accounting for more than a third. Malaysia, Thailand, Singapore and Indonesia attract two-thirds of all visitors to Southeast Asia. New destinations open the door for greater spending.

Interestingly, the growth of travel and tourism in the region can create a virtuous cycle. Almost two-thirds of tourists in Asia travel within the region, spend within the region, and in doing so, support growth within the region. And many of the new travelers are from Asia itself. Intraregional tourism is growing slightly faster than arrivals from elsewhere, expanding by 6 percent compared to 4 percent.

While Asia Pacific is a magnet for tourists from around the world, it is also a rapidly growing supplier of global tourists.

Last year, Asia Pacific supplied 269 million tourists. A little more than three-quarters of them traveled within the region but a quarter went further afield. Demand for travel to Europe is particularly strong, accounting for 12 percent of all trips abroad and 55 percent of interregional travel, up 7 percent year-on-year.

The greatest opportunities may be found in cities. “In the last 30 years, the report concludes, the fastest growing sector of all sectors of tourism is city tourism or urban tourism or metropolitan tourism,” said Xu of the UNWTO. City tourism has been growing fast for the past four decades. This particular subsector got a shot in the arm in the 1980s when the US deregulated air transport and again in 1993 with the formal establishment of a single European market.

In Asia, short city trips of one to three days are increasingly popular and easy thanks to the relatively short distances and the emergence of more low-cost carriers at the turn of this century. One-third of the most visited cities in the world are in Asia, according to the Asian Tourism Trends report, citing data from Euromonitor International’s 2015 Top 100 Tourism Cities ranking. Within the top 10, six are in Asia, including Hong Kong, Singapore and Bangkok.

TRANSPORT HUBS

This is in large part because cities are popular among Chinese travelers but also because they are important regional or international airline hubs.

At the same time, seven of the top 50 most popular cities are in China. Besides Hong Kong, Macao is ranked sixth and Shenzhen in South China is in eighth place. While specific data on city tourism is lacking – few agencies track tourism spending at such a detailed level – there are a number of features that differentiate some destinations.

Osaka, in Japan, is an important regional hub with rail, land, air and sea routes that link it to the rest of the region and the world. Shenzhen and Guangzhou in the Chinese mainland are both important trade hubs with very close links with Hong Kong and Macao and plenty of daily cross-border traffic. The city of Busan and Jeju Island in South Korea have leveraged tourism to revitalize and recreate themselves. A 72-hour visa-free policy that they implemented was a powerful driver. National capitals like Beijing, Tokyo, Seoul, Kuala Lumpur and Jakarta attract business and political elites and are more likely to have better cultural facilities and greater levels of investment. Macao and Singapore have also used gaming to drive tourism.

Travel and tourism is about improving lives, providing employment and bringing some people out of poverty.

The benefits of city tourism are myriad, the report says. This particular type of tourism can generate long-lasting economic and social impact and create synergies within the industry and between industries. It can also drive policies that improve the quality of life in cities that attracts tourists, adds the report. At the same time, city tourism can drive investments in transport infrastructure and ancillary facilities that benefit both tourism and the economy of the city as a whole. “Travel and tourism is about improving lives, providing employment and bringing some people out of poverty,” said David Scowsill, president and CEO of the World Travel & Tourism Council.

Promoting the ‘country of culture’ FORUM HEARS HOW BETTER SERVICES, FACILITIES AND INVESTMENT CAN SEE RISE IN VISITORS TO CHINA

DELEGATES SHARE THEIR VIEWS WITH GUESTS AT THE GLOBAL TOURISM ECONOMY FORUM IN MACAO ON OCT 13. THE FORUM DISCUSSED HOW CHINA HAS HUGE POTENTIAL TO DEVELOP ITS TRAVEL AND TOURISM INDUSTRY, BUT REQUIRES INNOVATIVE SOLUTIONS TO IMPROVE ITS RESOURCES. (FROM LEFT) PETER WONG MAN-KONG, PROF. BAI CHANGHONG, MR. ALEXANDER WAN, MS. WANG PING, MS. WU ZHAOLAN, MR. JI XIAODONG, MR. DING ZUOHONG AND MR. JOHNSON JIA YUNFENG. PHOTO: ROY LIU / CHINA DAILY

By ALFRED ROMANN in Macao.

China’s Belt and Road Initiative could drive the development of the tourism industry as long as stakeholders step up facilities, expertise and investment. The initiative aims to revive ancient trade routes between China and the West with the creation of the land-based Silk Road Economic Belt and oceanic 21st Century Maritime Silk Road.

Industry stakeholders in Macao for the Global Tourism Economy Forum (GTEF), which ran from Oct 12 to 14, considered the importance of cultural tourism at a roundtable session on Oct 13 presented by China Daily and the China Chamber of Tourism (CCT).

The chamber, launched in 2002, is one of the cofounders of the GTEF. “In China, we always call ourselves a country of culture,” said Peter Wong, chairman of MK Corporation. “But conservation of our cultural relics was not done properly”.

In China we call ourselves a country of culture but conservation of our cultural relics was not done properly.

Two decades ago, Wong traveled the Silk Road and found virtually no facilities for high-end travelers, despite the importance of the route. This represented an opportunity. “As a businessman, I smelled an opportunity … (so) I started investing in tourism along the Silk Road,” said Wong.

Throughout China’s travel and tourism industry, there is a need for much more investment in facilities and people. Such investment will make it possible for China to continue to emerge as one of the most important travel and tourism markets. “We believe that China is going to become one of the largest tourism markets in the world and it is important for the Chinese (people) to participate in this transformation,” said Wang Ping, chairman of the CCT.

China’s market of 1.4 billion people is a huge opportunity for the sector. The chamber, representing the private sector, decided to work with different counties on their tourism industries.

A case in point is Shangri-La, a county-level city in Southwest China’s Yunnan province, near the border with Myanmar, which is responsible for about a third of the employment in the entire province.

“The main message was for county-level officials to change the tourism environment,” Wang said. “The initiative was very successful.” While China has a lot of potential to develop its tourism industry, it lacks resources like top-rated facilities and enough trained professionals. It is important to “change this status quo”, Wang said. One way to do this might be to leverage technology and find innovative approaches to drive tourism.

The Internet has emerged as a powerful driver of tourism, said Wu Zhaolan, vice-president of the Suning Universal Group. Online bookings for travel and transportation have emerged as a powerful driver of tourism, and complement traditional tourism activities. “With smartphones and PCs, people are used to living with the Internet and booking products online,” said Wu.

Tourism must work with the Internet. Online platforms should exist to help tourists find packages for the right price and guarantee those prices. Wu’s company, Suning, has had a developed online platform for a decade. Suning’s platform expands beyond e-commerce and into finance, which allows for easier payments. The ability to book a trip or a hotel is only the beginning of the tourist experience. Destinations have to provide the services needed to keep tourists coming back. Marketing and promises are all well and good, but they only work when backed by a substantive industry.

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Mr. Johnson Jia Yunfeng, Chief Executive Officer, D&J Global Communications speaks during the dialogue with Travel & Tourism Leaders (co-presented by China Chamber of Tourism and China Daily) of the 4th Global Tourism Economy Forum at the Venetian, Macau, October 13, 2015. PHOTO: Roy Liu / China Daily.

“Tourism is not really about traveling. It is about self-discovery,” said Johnson Jia Yunfeng, CEO of marketing consultancy D&J Global Communications. Tourism is a way to get away from day-to-day life. The decision to make is where to go and what to see. According to Jia, marketing is important to keep the most interesting destinations constantly in the minds of travelers.

The travel and tourism industry is no different from other industries. To attract more customers, it is important to understand what they want and to provide it, he said.

“What is marketing, after all?” asked Jia, adding: “It is to differentiate your products and services and create an emotional response in the minds of your customers.” This is what the eastern Shandong province is doing, for example, as it sets out to invest more in travel and tourism to attract more visitors. Other provinces and counties throughout China should endeavor to follow suit.

Infrastructure is an important factor. Information can be often hard to find, particularly for tourists. Services can also be spotty, and this is key because tourists that do not receive good service are not likely to come back. “You need to have your high-end positioning. It is not just about a slogan, you need to have your products,” said Jia. “You need to have your whole industry.” Without adequate infrastructure, products and an industry, marketing will not be useful. The impact of culture stretches into the details of the needs of the travel and tourism industry, down to the chairs for people to sit and the beds in which they sleep.

Furniture, said Ding Zuohong, a member of the standing committee of the All-China Federation of Industry and Commerce, is at the heart of everything. “Many of our businesses cover hotels,” said Ding, who is also the chairman of Yuexing Group, a large furniture maker. “Good taste is reflected in our furniture.”

Ji Xiaodong, vice-president and secretary general of the CCT, said: “There is a saying that one should read 10,000 books and travel 10,000 miles. Tourism is about traveling those 10,000 miles.”

They say one should read 10,000 books and travel 10,000 miles. Tourism is about traveling those 10,000 miles.

Tourism is important on a “spiritual level”, Ji added. “In this industry in China, there is a lack of qualified professionals. The threshold of entrance into the industry is not as high as, say, the finance industry,” said Ji. “There is a lot we can do to bring in more qualified professionals to the industry.”

Literature and films have a great impact on the tourism industry, particularly from a cultural level. At the same time, a new generation of travelers has different tastes and requirements that should be taken into account when developing a tourism industry.

Tourism does pose risks to culture and heritage, said Bai Changhong, dean and professor at the College of Tourism and Service Management at Tianjin city’s Nankai University. There are examples of tourism having a negative impact on heritage sites or even local culture. In Beijing, for example, there is a cultural museum that can help protect culture while attracting more tourism. But the opposite is also true, as more tourism makes it possible for people around the world to get greater exposure to a greater variety of cultures. The right policies make it possible to expand the tourism industry and protect local cultures, said Bai.

“We want to see whether culture can promote the economy,” he noted. “Can we consume culture? And if we consume culture, will the economy destroy culture? “Some cultures cannot be approached but there are some cultures that allow limited consumption.”

Bai said that much can be learned from Europe, because countries there are experienced at protecting their cultural heritage. Professional management is also needed to “leverage cultural tourism and turn cultural tourism into something useful for the preservation of culture and the development of the economy”, said Bai.

Ji of the CCT said that driving cultural tourism requires the preservation of cultural sites and facilities. Rebuilding a culture can be difficult and, perhaps, not a good idea. “Culture must provide something that people can relate to,” said Ji. “We need to have things to represent culture.”

Ultimately, said Wang of the CCT, “we should consider all the people around the world when developing tourism products… we need to think about how to reduce products when we develop tourism products.”

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