 
Q: What does PATA believe will occur in Asia in terms of meetings and incentive travel to 2010 and beyond?
A: We are seeing significant investment in this area, particularly in Asian hotel stock coming online. In Singapore we see integrated resorts, with China and India now able to provide competitive product at competitive rates.
Air liberalisation and intra-regional access is set to play a major part in the MICE market. Growing access to low fares via low cost carriers (LCC’s) with rapidly growing route networks plus surface access via road and improved rail services all provide stimulus for growth.
Q: What are some of the hot spots right now in terms of travel and conference and incentive travel.
A: Hong Kong finished strong in 2007 with Macau growing at an unprecedented rate. The amount of investment in new resort and hotel build in Macau is set to drive MICE in the region. In general SE Asia and the Mekong out-performed other Asian regions. Singapore finished 07 with approx 25 per cent growth, Malaysia 19 per cent, Laos grew by 37 per cent, Cambodia 17.7 per cent and Vietnam 16 per cent.
South Korea continues to invest significantly in the MICE area with the objective to become the number one MICE destination in Asia.
Q: PATA did a report on Indonesia as being underestimated and a force to be reckoned with (in comparison to China and India). Can you give readers a little explanation here? What can we expect?
A: Indonesia has a large population base with a strong middle-class that generally travel by air. We see increasing investment and activity in the aviation arena which in turn is stimulating new growth and providing new opportunity for an increasing amount of the population to take advantage of competitive air fares. As a result we expect to see Indonesia develop quickly to become a strong source market in coming years.
Q: What are some of the stumbling blocks Australia is going to overcome if it wants to remain competitive in the international association congress and incentive travel markets?
A: Capacity. We see little if any investment in new hotel build. As airlines plan for the retirement of the 747 the majority of replacement aircraft will have less seat capacity. Limited slots at Sydney Airport in particular may begin to affect any potential growth as we see a natural decline or shrinkage in passenger numbers due to the reduction in air seat capacity.
[The other major factors are] price and distance. There is a relative price issue as Australia is considerably further away than the majority of MICE destinations. Can we continue to rely on the strong branding and positioning of Australia or will price begin to affect the decision-making process as airlines and transport providers struggle to manage the ever-increasing prices of oil and government continue to tax tourism like cigarettes and alcohol.
Australia by any means [of getting here] is a big investment in both time and money. We are seeing a trend for companies and associations to reduce the time needed to be spent at their conference. As executive time becomes a critical factor in the decision-making process, the additional time required to attend a forum in Australia may become a significant impediment to growth.
Service [is also a concern]. As individual hotel offerings and benefits become blurred levels of ‘service’ will increasingly become a major factor. The investment required to host a successful event in Australia demands us to re-think the way we deliver our service standards. Consistency, value for money and reputation will increasingly drive our ability to compete and reputation especially with some Asian destinations who also have the added advantage of lower employment costs.
Q: There is a lot of talk about yield and not volume in tourism and business tourism. Can you explain this and give us some insight into which countries are doing this well?
A: Yield focus is a multi way argument. We hear destinations focusing on yield but airlines require volume to make their services sustainable. Of course an aircraft cabin is yield managed but for destinations [it] is about maximising the potential of the visitor experience. This way you get visitors to increase their length of stay and as a result spend more.
Destinations must focus on dispersion. EG: getting people to go beyond the gateway city. In this regard, an attractive program of pre/post touring options is essential. Packaging of product which allows a visitor to experience a well though out and reasonably priced authentic itinerary will increasingly become a vital part of the yield equation.
Q: In your opinion how is Australia travelling in terms of visitor numbers?
A: We expect to see Australia compete reasonably well. 2007 realised a small increase in overall visitation but it is on the right side of the ledger. The strong Australian dollar will continue to affect inbound performance but it appears to be stimulating outbound demand. This, coupled with the ability to take advantage of new LCC’s entering the outbound arena has meant that outbound numbers now almost mirror that of inbound visitation (see chart).
Australia 2007 2006 2005
Arrival 5644 5532 5497
Departure 5463 4941 4756
Index 0.968 0.893 0.87
Q: Airlines – cheap flights and access particularly – play an important role in the success of business tourism activity. What airlines are doing well? What about our own national carrier and Jetstar? Do you have any predictions for the future?
A: The majority of Asian airlines appear to be performing well with those who were struggling to make profit such as Malaysian Airlines and Thai managing to turn things around. In the low cost environment Air Asia is a major force and has recently entered the long haul market with Air Asia X.
In our backyard Qantas and Jetstar are performing admirably and continue to deliver profits. All carriers however, are feeling the effects of higher fuel and increased refining prices. Although some of the cost has been passed on to the consumer the airlines continue to bare the brunt of the cost.
The big issues in Asia Pacific aviation is air liberalisation or deregulation of air space. In Asia we are seeing continued air access to key markets which will inevitably drive demand and forge increases in services and competition. Here however, things remain less fluid as we still continue to trade on bilateral agreements. The next significant development will be ‘will the Pacific open up?’ There is growing expectation this will happen and soon, which will mean Qantas may begin to feel the pinch.
Q: PATA is very strongly focused on green issues. Are Asian countries in general focused on this? Who is doing it well at present? Can we expect to see more initiatives in this respect?
A: Some destinations are but some are not. All are aware and therefore we will see an increase in activity in this critical area. It’s a hot political topic in Asia and governments are aware of the growing sentiment for change. One of the stand-out destinations who has embraced the climate issue significantly is Sri Lanka.
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