Asian travellers’ appetite for regional travel continues to grow, fuelled by new routes and growing affluence. This comes with great benefits to the Tax Free ShoppingA number of countries offer VAT/GST refunds to international... More (TFS) industry, as more than 90% of the TFS business in the APAC region is driven by APAC nationalities.

Research by Visa finds that outbound tourism in Asia-Pacific is outpacing income growth in the region, with Asia-Pacific households accounting for a third of globe travellers, up from a quarter of travelling households in 2006.

The UNTWO reports that 80% of travel in Asia-Pacific is now intra-regional, driven by the growing numbers of Chinese travellers, and their enthusiastic foreign spending. In total, 247m regional travellers explored Asia-Pacific destinations in 2017, with trips to regional destinations increasing +7% between 2005 and 2016 per year, compared to a +5% increase in trips outside Asia-Pacific.

The Pacific Asia Travel Association visitor forecast for 2022 suggests that intra-regional travel will continue to dominate Asia-Pacific arrivals, with growth led by Chinese and Hong Kong outbound trips. China is forecast to generate an additional 64.5m travellers from 2017 to 2022, followed by Hong Kong with 13m more outbound tourists, South Korea with 8m, Thailand with 4.3m and India with 3.2m.

Fourteen of the world’s 20 busiest routes serve Asia-Pacific’s regional travellers, according to air travel analysts OAG. The busiest route, Kuala Lumpur-Singapore, saw 30,537 flights in the 12 months to February 2018. Other top routes include Hong Kong Taipei, Jakarta-Singapore and Hong Kong-Shanghai, all operating over 20,000 flights a year. Seoul, Osaka, Bangkok and Tokyo anchor other key regional routes. Research by Expedia and ARC indicates that the popularity of arrival airports varies according to travellers’ spending levels. For economy passengers, Seoul and Taiwan are among the leading travel hubs, while premium passengers favour destinations such as Singapore, Shanghai and Tokyo.

The increasingly adventurous Asia-Pacific traveller and the growing number of travel routes are likely to draw Asia Pacific tourists to secondary spots – merchants should prepare for their arrival now

Who? Where? Why?

Western brands and retailers may look forward to Golden Week travellers arriving in Europe and the Americas, but Chinese travellers are increasingly favouring Asia Pacific regional destinations for their holidays. According to Hotelbeds Group, six out of the top 10 destinations for Chinese travellers were within the Asia-Pacific region: Thailand continues to be most popular, followed by Japan, Singapore, Indonesia, Malaysia, and South Korea.

While low-cost travel routes are increasing tourism across the region, the growth of intra-regional travel faces some challenges. Overtourism is a particular concern, with picturesque destinations such as the Great Wall of China, Bali and Kyoto overflowing with tourists, who often outnumber locals and cause significant transport and environmental problems. In response to protests from locals, tour operators are beginning to draw travellers to less populated sites, such as visiting local charities and more remote sights. National and regional tourism boards are making efforts to spread the number of tourists across their landscape to spread the benefits (and challenges) of mass tourism. For example, the Tourism Authority of Thailand is promoting “hidden gems” to attract tourists to less well-known parts of the country and alleviate the pressure on Bali. Japanese regional governments and social media influencers are promoting undiscovered attractions such as firework festivals, regional liquor specialities and natural beauty spots.

While the benefits and sometimes challenges of regional travel growth have largely been felt in major destinations to date, the increasingly adventurous Asia-Pacific traveller and the growing number of travel routes are likely to draw Asia Pacific tourists to secondary spots – merchants should prepare for their arrival now.