GLOBAL REPORT--Online travel and hotel bookings increased in the Asia Pacific region in 2010, despite the lagging global economy, according to a new report.
Japan’s projected growth, meanwhile, continues to lag because of economic problems in the country, along with the tsunami and earthquakes that affected the country in March 2011, according to PhoCusWright’s new report, “Asia Pacific Online Travel Overview: Fourth Edition–Hotels.” (http://www.phocuswright.com/store/1633).
The Asia Pacific region was the fastest growing travel market worldwide in 2010, according to the report. Gross travel bookings increased 17% to US$255.8 billion in 2010, compared to 2009, and far surpassed 2008 growth. Several factors contributed to the growth, including an increase in disposable incomes, infrastructure development (including airports and hotels), growing demand for travel services, and access to the internet for online bookings.
Hotel room revenues in the Asia Pacific region recovered in 2010 after dropping 5% in 2009. In 2010, hotel bookings soared by 17% to reach US$84.1 billion, “due to market rebound and local currency gains against the U.S. dollar,” according to the report. By 2012, the region will reach more than US$94 billion in hotel booking revenue.
China and India led the region’s growth in the overall travel market as well as in hotel bookings. “They can’t build properties fast enough or grow fast enough. The hotel markets in China and India had been largely constrained, so there has been an extraordinary amount of investments in those markets,” said Douglas Quinby, senior director of research for PhoCusWright.
China’s total travel bookings increased 10% in 2010 to reach US$63.28 million. China’s travel market is projected to grow 9% in 2011 and 7% in 2012, according to PhoCusWright. India’s travel bookings spiked by 17% in 2010 to reach US$18.56 million, and they are projected to increase by 13% in 2011 and 14% in 2012.
Hotel bookings lag in Japan
Although the research was conducted before Japan’s devastating earthquakes and tsunami, Japan’s hotel and overall travel growth had declined. Japan has the largest booking volume in the Asia Pacific market, but its hotel bookings plunged 12% in 2009 and increased 15% in 2010 to reach US$32.5 billion. “Japan’s room revenues fell by 20% on a yen basis in 2009, but a near 10% appreciation of the Japanese yen against the U.S. dollar muted the full extent of the decline,” according to the report.
“Even before March 11, Japan has been kind of a stagnant story in terms of the travel market–that is consistent across all sectors of the Japanese economy, which they have been struggling with for years. Now, Japan’s total travel market for the year (2011) will drop pretty significantly,” Quinby said.
Although there is a lot of uncertainty about Japan’s future, travel growth remains. Quinby has seen some positive signs that will help Japan’s travel economy.
“Some major airlines are making plans to eliminate their reduction in services [to impacted areas] and some destinations, such as Singapore, have lifted their travel advisories,” Quinby said.
Australia and New Zealand’s hotel room revenues will grow at a slower rate in 2011 and 2012, because of “fluctuations in the U.S. dollar versus local currencies,” according to Quinby. The Australia-New Zealand area’s hotel bookings jumped 35% in 2010 to reach US$10.1 billion, but are projected to grow by only 6% in 2011 and 5% in 2012.
“Australia’s big decline in 2009 and big growth (in 2010) was really because of exchange rates with the U.S. dollar. There was an overreaction to the recession in the corporate and leisure travel market as well,” Quinby said.
Meanwhile, the Asia Pacific region’s online hotel booking revenues jumped by 33% in 2010, and will grow by 18% in 2011 and by 14% in 2012.
“Online channels will grow dramatically through 2012 to reach US$19.7 billion by 2012,” according to the PhoCusWright report. “In a slow economy, when suppliers and hoteliers are struggling to fill rooms, they will work more aggressively with intermediaries like OTAs to drive demand. As a result, over the course of 2009 and 2010, we saw some amazing performances by intermediaries globally,” Quinby said.
Hotel website gross bookings in the Asia Pacific region will grow slower than OTAs, reaching US$4.7 billion by 2012.
“Hotel branded website sales will lose share due to this slower pace of growth and will account for 24% of the online hotel market in 2012, down from 25% in 2009,” the report stated.