Phocuswright White Paper

ASIA-PACIFIC TOURISM 2019: MARKET TRENDS,

OPPORTUNITIES AND THE CHALLENGES FACING
TOURISM ORGANIZATIONS
March 2019

In cooperation with

Written and researched by

Martin Kelly and Cathy Walsh
Asia Pacific Tourism 2019 / March 2019

At TripAdvisor, we understand that the rapid rise of travel into destinations can
present both opportunity and challenges for the tourism organizations tasked
with growth.

Almost half a billion travelers use TripAdvisor every month to shape their travel
plans, together viewing billions of pages of ideas to help them shape their perfect
trip, and because of this we at TripAdvisor take very seriously take the enormity
of our role and the power of our platform. Identifying the market trends for
these destinations is therefore vital, hence the premise behind the Asia Pacific
Destination Leadership Summit we held in Sydney in December 2018 – the first of
many more to come.

In partnership with the World Tourism Organization (UNWTO) and the Pacific Asia
Travel Association (PATA), we sought to answer some questions: How is travel in
the region growing? Where is this growth coming from and what digital habits are
driving this development? What do destinations need to meet the needs of the
21st Century traveller? Are destinations prepared to handle the influx of visitors
and how do they need to prepare to foster sustainable growth for the long term?

Along with market sizing and consumer research by Phocuswright, this white
paper delves into the key topics that surfaced in these discussions with tourism
organization leaders across the Asia Pacific region. We hope these insights are
useful as more destinations around the world rise in popularity and have today
the opportunity to anticipate these challenges and begin to get ahead of the
immense competition.

Thank you,

Gary Fritz
Chief Growth Officer and President of Asia Pacific

©2019 Phocuswright Inc. All Rights Reserved. 2

Asia Pacific Tourism 2019 / March 2019

About
Phocuswright is the travel industry research authority on how travelers,
suppliers and intermediaries connect. Independent, rigorous and unbiased,
Phocuswright fosters smart strategic planning, tactical decision-making and
organizational effectiveness.

Phocuswright delivers qualitative and quantitative research on the evolving

dynamics that influence travel, tourism and hospitality distribution. Our
marketplace intelligence is the industry standard for segmentation, sizing,
forecasting, trends, analysis and consumer travel planning behavior. Every
day around the world, senior executives, marketers, strategists and research
professionals from all segments of the industry value chain use Phocuswright
research for competitive advantage.

To complement its primary research in North and Latin America, Europe and Asia,
Phocuswright produces several high-profile conferences in the United States
and Europe, and partners with conferences in China, Singapore and the United
Arab Emirates. Industry leaders and company analysts bring this intelligence to
life by debating issues, sharing ideas and defining the ever-evolving reality of
travel commerce.

Phocuswright also operates PhocusWire, a media service that covers the world
of digital travel 365 days a year with a range of news, analysis, commentary and
opinion from across the travel, tourism and hospitality sector.

The company is headquartered in the United States with Asia Pacific operations
based in India and local analysts on five continents.

Phocuswright is a wholly owned subsidiary of Northstar Travel Media, LLC.

©2019 Phocuswright Inc. All Rights Reserved. 3

Asia Pacific Tourism 2019 / March 2019
Contents
Table of Contents
Introduction 5
Methodology 6
APAC on the World Stage 6
Consumer Behavior: Mobile,
Social Media and Personalization 7
Mobile 9
 onsumer Behavior: Travel Sharing
C Figure 4 9
and Research 9
Tourism Organization Impacts
and Response 13
Overtourism and Strategic Growth 13
 ispersing Tourism Beyond the
D Figure 7 12
Rockstar Destinations 14
Marketing to the 21st-Century Traveler 14
Navigating Bureaucracy 16
 estination Management for
D
the Long Term 16
Growing Importance of Collaboration 17
Looking Ahead 17
©2019 Phocuswright Inc. All Rights Reserved.
Table of Charts
Figure 1 7
Global Online and Total Travel Market (US$B)
and CAGR, 2016-2021
Figure 2 8
APAC Gross Domestic Product and Total Travel Market,
Annual Change (%, Local Currencies) by Market, 2018
Figure 3 8
TripAdvisor Sessions for APAC Destinations,
APAC Inbound and Inter-APAC Travelers
Mobile Bookings as a Share of Online Bookings
in Leading Markets (%), 2017 and 2019
Figure 5 10
2019 Mobile Share of Online Travel, Global Top 5
Figure 6 11
Methods for Sharing Trip Experiences (U.S. Travelers)
Websites/Apps Used to Research Travel
(Indian Travelers)
Figure 8 12
Preference for Personalized Recommendations
& Offers
Figure 9 15
Indonesia: Non-Bali Accommodation Reviews
Increase and Average Review Score Improves
4
Asia Pacific Tourism 2019 / March 2019

Asia-Pacific Tourism 2019: Market Trends,

Opportunities and the Challenges Facing
Tourism Organizations

Introduction
Already the world’s largest regional travel market, Asia Pacific (APAC) continues to
develop at a rapid pace. Tourism infrastructure improvements, high mobile adoption,
expanding access to digital payments and rising disposable incomes are fueling
increased tourism and online growth. Many of APAC’s diverse travel markets are
achieving strong gains, but the rapid changes have also brought fresh challenges to the
region’s tourism organizations.

Dramatic shifts in traveler behavior call for innovative approaches from travel mar-
keters, as consumer demand for mobile, social media and personalization grow. At the
same time, popular tourist destinations in some markets are struggling to respond to
the surge in visitation, and destination marketers increasingly wrestle with big-picture
issues, including climate change, natural disasters, security and sustainability.

In December 2018, the inaugural Asia Pacific Destination Leadership Summit, held in
Sydney, Australia, brought together high-ranking leaders from tourism organizations
and ministries from across the region. Organized by TripAdvisor, the World Tourism
Organization (UNWTO) and the Pacific Asia Travel Association (PATA), the Summit
addressed key challenges facing the tourism government sector, highlighting success-
ful tactics and long-term strategic solutions. During the conference, interviews with
destination marketing leaders in the region provided additional insights, many of which
are featured here.

Based on interviews with six tourism organization leaders who attended the summit
as well as Phocuswright market sizing and consumer research, this paper surveys key
global and APAC travel trends and examines their impact on the region’s tourism organ-
izations. The paper explores the issues facing APAC destinations in the 21st century,
identifying destination management approaches with the potential to foster beneficial
results and sustainable growth for the long term.

©2019 Phocuswright Inc. All Rights Reserved. 5

Asia Pacific Tourism 2019 / March 2019

Methodology
This paper, commissioned by TripAdvisor, features the results of extensive interviews
with high-ranking leaders representing tourism organizations in the APAC region.
Phocuswright conducted these interviews from December 4-6, 2018, during the Asia
Pacific Destination Leadership Summit. To provide context, the trends and challenges
identified in these interviews are presented alongside Phocuswright consumer and
market sizing data. Consumer survey results are drawn from Phocuswright research,
including U.S. Traveler Technology Survey Eighth Edition, Indian Consumer Travel
Report 2017 and Digital Traveler publications focused on Australia, Japan and South
Korea. Phocuswright’s proprietary global market sizing is based on interviews across
markets, public filings and other third-party data sources.

APAC on the World Stage

Home to over half the world’s population, the Asia Pacific region has undergone
dramatic changes over the past decade, with economic, infrastructure and technology
development fueling rapid travel market growth. An expanding middle class and rising
disposable income in APAC markets including China, India, Indonesia and Malaysia are
driving increased travel demand. In addition to rising domestic travel, a growing share
of travelers is venturing abroad, many for the first time, with China’s large and growing
outbound travel population fueling visitation growth throughout the region.

From 2008-1H15, APAC travel startups received a larger share of global funding than
any other region, and technology adoption among APAC travelers has altered the way
travelers research, book and share travel experiences. These tech-driven changes in
consumer behavior and increased global and regional tourism have created fresh op-
portunities and challenges for APAC tourism organizations. This section tracks APAC
travel trends in the context of the global travel market.

Over the past several years, the global tourism industry enjoyed a period of overall
health following the financial crisis of the previous decade. The global travel market
reached $1.4 trillion in 2018, and gross bookings are projected to rise to $1.6 billion by
2021 (see Figure 1). Even accounting for potentially slowing growth over the next two
years, Phocuswright projects a travel market combined annual growth rate (CAGR)
from 2016-2021 of 6%.

With the shift to digital channels continuing worldwide, online travel grew nearly twice
as fast as the overall market, with online CAGR at 11% over the same time period.
Online gross bookings will rise from $642 billion in 2018 to $838 billion by 2021, amid a
rapid rise in mobile transactions.

In APAC, as in many travel markets worldwide, total travel market growth is outpacing
overall economic gains. With the exception of South Korea and Hong Kong, APAC travel
markets are expanding faster than GDP on a local currency basis. In Malaysia, for exam-
ple, travel gross bookings rose a projected 9.7% in 2018, compared to GDP growth of

©2019 Phocuswright Inc. All Rights Reserved. 6

Asia Pacific Tourism 2019 / March 2019

Figure 1:
Global Online and Total Travel Market (US$B) and CAGR, 2016-2021

1,562 1,637
1,400 1,478
1,303
CAGR: 2016-2021 1,226

Online Market 11%

774 838
707
Total Market 6% 642
565
499

2016 2017 2018 2019 2020 2021

Source: Phocuswright’s Phocal Point: Global Market Sizing

©2019 Phocuswright Inc. All Rights Reserved.

4.7%. In China, the region’s largest individual travel market by a wide margin, travel gross
bookings jumped 9.7%, versus GDP gains of 6.6% (see Figure 2).

The worldwide traveler population is expanding as economic development spurs

growth in emerging economies, and upwardly mobile travelers experience international
travel for the first time. In APAC, many markets feature a growing middle class, with
rising disposable income, eager to explore. As markets in the region continue to devel-
op their tourism infrastructure, APAC is an increasingly popular tourist destination for
both intraregional and inbound travelers (see Figure 3). According to TripAdvisor data,
travelers are increasingly likely to research APAC destinations. Between October 2015
and October 2018, TripAdvisor sessions focused on travel destinations in the region in-
creased 23% for inter-APAC travel (i.e., users located within APAC) and 6% for inbound
travel (users located outside of APAC).

Consumer Behavior: Mobile, Social Media

and Personalization
Travel behavior has undergone dramatic shifts worldwide over the past decade. In the
U.S. and Western Europe, travelers are spending more of their screen time on mobile
devices – and less on desktop/laptop computers. In China and other later-maturing
markets, many travelers are booking online for the first time via a mobile device. At the
same time, travelers are learning and sharing in new ways, with social networks, chat
and traveler reviews replacing offline information sources.

©2019 Phocuswright Inc. All Rights Reserved. 7

Asia Pacific Tourism 2019 / March 2019

Figure 2:
APAC Gross Domestic Product and Total Travel Market, Annual Change (%, Local Currencies) by Market, 2018*

9.7% 10.1%
8.7% Total Travel Market

7.6% 7.7%
7.3% 7.0% Gross Domestic Product

6.6%
6.3%
5.1%
4.7% 4.6% 4.7%
4.6% 4.1%
3.8%
3.2%
2.9% 2.9%
2.7% 2.7%
1..5% 1.5% 1.1%

India China Macau Indonesia Malaysia Thailand Hong Kong ANZ** Singapore Taiwan South Korea Japan

*GDP and travel market growth projected.

**ANZ shows travel market growth for Australia-New Zealand and GDP for Australia only.
Source: International Monetary Fund; Asia Pacific Online Travel Overview 2019

©2019 Phocuswright Inc. All Rights Reserved.

Figure 3:
TripAdvisor Sessions for APAC Destinations, APAC Inbound and Inter-APAC Travelers

Inter-APAC +23%

Inbound +6%
Aug-16

Aug-18
Dec-16
Feb-16

Feb-18
Dec-15

Apr-16

Apr-18
Oct-16

Oct-18
Aug-17

Dec-17
Oct-15

Feb-17

Apr-17
Jun-16

Oct-17

Jun-18
Jun-17

Source: TripAdvisor; Phocuswright Inc.

©2019 Phocuswright Inc. All Rights Reserved.

©2019 Phocuswright Inc. All Rights Reserved. 8

Asia Pacific Tourism 2019 / March 2019

Mobile
Worldwide, rapid adoption of mobile devices has changed the way travelers research,
shop and book travel and profoundly altered how travelers access information while in
destination. Nowhere is this shift more evident than in Asia Pacific. In 2019, a projected
55% of online travel bookings in the APAC region will be made via a mobile device (see
Figure 4). By comparison, Phocuswright projects mobile share of the online market will
be just 25% in the U.S. and 30% in Europe.

China is the key driver of APAC’s mobile dominance, with mobile in 2019 to account for
nearly 80% of China’s online travel gross bookings (see Figure 5). Smartphone prolif-
eration and the rise of digital payments enabled mobile to become the e-commerce
device of choice in China before desktop bookings gained significant traction. As a re-
sult, China is an outlier among travel markets, and its mobile travel penetration dwarfs
all other markets. However, Chinese travelers are not alone in their hunger for mobile
booking. APAC boasts three of the top five mobile travel markets worldwide: India and
Japan will each have projected mobile travel penetration of 37% in 2019, roughly even
with the U.K.

Consumer Behavior: Travel Sharing and Research

Travelers have always learned about new destinations from other travelers, but there
are now more ways than ever for visitors to share their travel experiences. A person-
al conversation (in person or on the phone) is still a popular way to share trip details,
but travelers worldwide are now also sharing via a range of digital channels, both
public and private.

Figure 4:
Mobile Bookings as a Share of Online Bookings in Leading Markets (%), 2017 and 2019

2017 2019 55%

U.S. 44%

Europe
30%
25% 25%
APAC
19%

Note: 2019 projected.

Source: U.S. Online Travel Overview 2018; Europe Online Travel Overview 2018; Asia Pacific Online Travel Overview 2019

©2019 Phocuswright Inc. All Rights Reserved.

©2019 Phocuswright Inc. All Rights Reserved. 9

Asia Pacific Tourism 2019 / March 2019

Figure 5:
2019 Mobile Share of Online Travel, Global Top 5

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%
China U.K. India Japan Germany

Note: 2019 projected.

Source: U.S. Online Travel Overview 2018; Europe Online Travel Overview 2018; Asia Pacific Online Travel Overview 2019

©2019 Phocuswright Inc. All Rights Reserved.

Traveler review websites like TripAdvisor remain a key source of travel sharing and re-
search, but travelers are also sharing experiences via social networks and messenging
platforms. While traveler preferences vary by market, global social networks, including
Facebook, Twitter and Instagram, are popular in APAC, as well as APAC-grown players
like Weibo (China) and Line (Japan). Top messenging platforms include Facebook Mes-
senger, WhatsApp and China’s super app WeChat.

In the U.S., a key inbound market for the APAC region, travelers were most likely to
share via social networks and messenging apps due to the overall popularity of com-
municating with friends/family via social media and chat. Nearly half of U.S. travelers
in the past 12 months shared via text messaging, roughly four in 10 posted visuals on
social media sites and nearly one quarter used a messaging app to share (see Figure 6).
Nearly two in 10 took the time to share their experience with other travelers by writing
a review on a travel review website. Beyond having their choice of multiple platforms, it
is now easy for travelers to share rich media – including photos, videos and live streams
– while in-destination.

In addition to using search engines and travel websites, many travelers rely on infor-
mation posted on social networks and online traveler reviews when researching trips.
Across markets, it is typical for a larger share of travelers to consume user-generated
content like travel reviews than to create it. As a result, the impact of a single review or
social media post is amplified. In India, nearly half of online leisure travelers researched

©2019 Phocuswright Inc. All Rights Reserved. 10

Asia Pacific Tourism 2019 / March 2019

Figure 6:
Methods for Sharing Trip Experiences (U.S. Travelers)

Conversations (in person or via phone) 52%

Text messaging 48%

Posting visuals on social media sites such as Facebook or Twitter 41%

Posting on social media sites such as Facebook or Twitter 34%

Posting visuals on photo sharing sites such as Instagram and Snapchat 27%

Messaging apps 24%

Writing a review on travel review website 18%

Question: During or after your leisure trips taken in the past 12 months, how have you shared or discussed your travel experiences with others? Select
all that apply.
Base: U.S. online travelers (N=2,102)
Source: U.S. Traveler Technology Survey Eighth Edition

©2019 Phocuswright Inc. All Rights Reserved.

via traveler review websites/apps and social networking websites/apps (see Figure
7). By comparison, roughly four in 10 used a destination website/app. With travelers
routinely sharing trip experiences and researching travel online, destination marketers
must both work to promote positive traveler experiences and be aware of what, where
and how travelers are interacting.

For destination marketers, there are now more devices, more information sources
and more social platforms to contend with, and tourism organizations cite this
fragmentation as a key challenge. Traveler preferences for individual social net-
works or devices are often not the same from one market or age group to the next,
adding to the complexizty.

In fact, preferences are distinct for each individual traveler, and there is a growing
demand for personalization. Interest in receiving personalized recommendations and
offers varies across markets, but many travelers are embracing customized content.
Two thirds of South Korean travelers would be interested in receiving personalized
hotel recommendations, and interest is also high for personalized recommenda-
tions/offers for in-destination activities (60%) and destinations to visit (54%) (see
Figure 8). Half of Japanese travelers and 45% of Australian travelers are interested
in personalized destination suggestions. While privacy concerns are important, the
trend toward personalized online travel shopping experiences is expected to accel-
erate as artificial intelligence, voice interfaces and digital assistants play a growing
role in online travel worldwide.

©2019 Phocuswright Inc. All Rights Reserved. 11

Asia Pacific Tourism 2019 / March 2019

Figure 7:
Websites/Apps Used to Research Travel (Indian Travelers)

Online travel agency websites/apps 70%

General search engines 65%

Traveler review websites/apps 49%

Travel search engine websites/apps 48%

Social networking websites/apps 47%

Travel provider websites/apps 46%

Destination websites/apps 41%

Base: Indian online leisure traveler who researched via online channels (N=2,493)
Source: Indian Consumer Travel Report 2017

©2019 Phocuswright Inc. All Rights Reserved.

Figure 8:
Preference for Personalized Recommendations & Offers

67% South Korea

Hotel or lodging recommendations 54%
48%
Japan
58%
Flights or transportation recommendations 32% Australia
47%

54%
Destinations to visit 50%
45%

60%
In-destination activities 42%
34%

15%
Dining, spa or other amenities 30%
16%

8%
Nightlife and entertainment 5%
9%

2%
None of the above 10%
18%

Question: Which of the following personalized recommendations and offers would you be most interested in receiving?
Base: Leisure travelers: Australia (N=786); Japan (N=811); South Korea (N=753)
Source: Phocuswright’s The Australian Digital Traveler; Phocuswright’s The Japanese Digital Traveler; Phocuswright’s The South Korean Digital Traveler

©2019 Phocuswright Inc. All Rights Reserved.

©2019 Phocuswright Inc. All Rights Reserved. 12

Asia Pacific Tourism 2019 / March 2019

Tourism Organization Impacts and Response

The continued evolution of online, mobile and social technology; ongoing changes in
consumer behavior; and the broader implications of globalization are creating new
opportunities and challenges for destinations across the APAC region. Tourism organ-
izations today face concerns that go far beyond driving visitation. Destination market-
ing has expanded to become destination management, with complex issues including
overtourism, sustainability, destination planning and climate change demanding new
metrics and collaborative approaches. Instead of focusing solely on marketing, tourism
organizations must wrestle with these broader issues, all of which have the potential to
significantly impact tourism in the years to come.

This section highlights some of the key challenges facing APAC tourism organizations
and outlines strategic approaches to destination management that can foster sustain-
able growth for the long term.

Overtourism and Strategic Growth

Tourism destinations traditionally have focused largely on driving visitation. But with
the worldwide traveler population continuing to rise, many destinations are now faced
with a new challenge. Overtourism, particularly to the most popular tourist locales, is
a growing problem across APAC. The sheer scale of inbound tourists, particularly from
China, is straining infrastructure, such as roads, bus parking, hotels and airports, and
creating difficulties for local communities. The influx of visitors can easily overwhelm
unprepared and underfunded destinations.

Traditional key performance indicators (KPIs) like visitor numbers are no longer
sufficient. According to Mario Hardy, CEO of PATA, most destinations in Asia and the
Pacific are experiencing tremendous growth. “It’s not about what visitors you can get
– they are coming anyways – but how can you increase the yield from your visitors?”
Destinations increasingly understand that revenue, the economic impact of tourism, is
the true metric of success, not simply visitor numbers. However, it has been difficult to
convince stakeholders in government and business that are structured around volume
rather than yield.

Some tourism organizations have had success in shifting to a more revenue-focused

approach. In Thailand, where tourism receipts contribute nearly 20% of national GDP,
the Tourism Authority of Thailand has worked to shift the industry’s KPI from arrival
numbers to tourism revenue. “I think we are starting to change this dialogue compared
to where it was four or five years ago,” said Siripakorn Cheawsamoot, deputy governor,
policy and planning for the Tourism Authority of Thailand. “But it’s very hard for us to
convince the government because they all love the good news about the tourism num-
bers, which they can get faster than [details of] the tourism revenue.” However, Thai-
land’s efforts are paying off, with revenue now growing faster than visitation. In 2017,
visitor numbers increased nearly 9%, compared to revenue growth approaching 12%.

©2019 Phocuswright Inc. All Rights Reserved. 13

Asia Pacific Tourism 2019 / March 2019

Dispersing Tourism Beyond the Rockstar Destinations

While the surge in visitation is happening across APAC travel markets, travelers are not
being dispersed evenly among individual destinations and tourist attractions. Instead,
tourism demand is largely concentrated in the famous destinations, while the less-
er-known destinations are not getting the economic benefits of tourism.

Dispersing travel demand beyond the hotspot destinations is a challenge, but tourism
organizations are seeing some success through training programs and product devel-
opment. In Japan, for example, hordes of travelers visit the country to experience the
cherry blossom (Sakura) festivals. Tourists almost universally head for Tokyo. “Actually,
Sakura is everywhere in Japan from Hokkaido to Okinawa,” said Tetsuya Kitajima, di-
rector, regional development division, marketing and promotion headquarters, for the
Japan Travel and Tourism Association. Kitajima has focused on educating destination
marketers across all of Japan’s prefectures to help them understand how to isolate and
promote the key selling points of their destinations.

Industry partnerships can also provide training opportunities. TripAdvisor, for example,
undertook a training program in Indonesia to help tourism businesses understand their
online reputation, including the most effective ways to respond to a travel review. The
effort included not only the top cities, but also destinations further afield.

Over the same time period, TripAdvisor business listings and user-generated content
increased, and a broader range of destinations within Indonesia gained traction on
the site. In 2012, 63% of reviews for Indonesia destinations were for Bali (see Figure
9). By 2018, that share dropped to just 53% as new destinations grew their presence.
As business owners outside Bali gained experience with customer service and online
reputation management, review scores for non-Bali destinations improved. Online vis-
ibility and a strong reputation have the potential to create a virtuous cycle, as positive
reviews from satisfied travelers encourage new travelers to visit the destination.

In addition to education, tourism organizations are focused on increasing repeat visita-

tion as a dispersal strategy. Satisfied travelers are naturally more likely to want to visit
a country or region more than once. While first-time visitors often hit the main tourist
spots, repeat visitors are more likely to go off the beaten path. As a result, repeat
visitation is a key strategy for dispersing tourists – and helping travelers discover a
destination’s “hidden gems.”

Marketing to the 21st-Century Traveler

The digital age has given travelers more options for researching, planning and shar-
ing about travel than ever before. New platforms, new apps and new social networks
continue to gain traction, and travelers are now accustomed to on-demand service with
the tap of a button. Destination marketers are struggling to adapt to the fast pace and
shifting parameters of modern consumer marketing. For many tourism organizations,
understanding – and responding to – consumer preferences across a range of source
markets is a major challenge.

©2019 Phocuswright Inc. All Rights Reserved. 14

Asia Pacific Tourism 2019 / March 2019

Figure 9:
Indonesia: Non-Bali Accommodation Reviews Increase and Average Review Score Improves

Bali Share Bali Non-Bali

5
100%
4.36 4.37 4.5
4.28 4.3 4.3 4.31 4.32
90%
4
80% 4.28
4.17
3.9 3.93 3.92 3.95 4.03
3.5
70%

Average score
% of reviews

63% 63% 59%

3
60% 55% 53% 53% 53%
2.5
50%

40% 2

30% 1.5

20% 1

10% 0.5

0% 0
2012 2013 2014 2015 2016 2017 2018

Source: TripAdvisor; Phocuswright Inc.

©2019 Phocuswright Inc. All Rights Reserved.

In order to be noticed among all the competing content and messaging in the digital
environment, destination marketers have no choice but to take a more individualized
approach. To capture attention, marketing communications need to resonate with
travelers based on their interests and preferences. As a result, marketing has become
much more complex and fragmented.

According to Damian Cook, CEO of E-Tourism Frontiers, one of the key challenges for
destination marketers is “reflecting diversity of product and getting away from the sin-
gle big idea and replacing it with multiple brands to multiple segments.” Segmentation
may be based on geography, demographics or social behaviors, as well as traveler per-
sonas. But beyond these strategies, there is increasing demand for one-to-one person-
alization, with interactions tailored to the individual traveler. The increasing marketing
demands can challenge tourism organizations and strain limited marketing budgets.

Making the effort to foster a more targeted approach can help destinations to commu-
nicate with travelers more effectively. Tourism Australia, for example, has used target-
ed messaging to address the challenge of shortening trip lengths. “What we’re seeing
around the world is the number of nights visitors are spending at their destination is
contracting because they want to get back to their routines,” said John O’Sullivan, Tour-
ism Australia’s managing director. “We’re working with operators to develop experienc-
es that might make [guests] stay an extra night or two.” Tourism Australia’s collections
of signature experiences are organized around themes such as “Great Walks of Austral-
ia,” “Ultimate Winery Experiences” and “Great Fishing Adventures.”

©2019 Phocuswright Inc. All Rights Reserved. 15

Asia Pacific Tourism 2019 / March 2019

Navigating Bureaucracy
In many cases, the traditional structure and marketing practices of tourism organi-
zations are no longer a good fit for the demands of modern destination marketing.
Nearly all APAC tourism organizations are government funded, with a ministry heavily
involved. The often-sluggish pace of decision-making and procurement within gov-
ernment is better suited to a static, one-size-fits-all approach to marketing. However,
in today’s environment, generic marketing approaches are no longer effective. Rapid
change and the evolving role of new technology require a nimble response, which can
be hampered by bureaucracy.

The bureaucratic process often requires several quotes for even small expenses,
and expenditures may be subject to multiple levels of review. Tourism organizations
sometimes lose opportunities because they are not able to respond quickly enough.
“Again and again I see destinations come up against that. Great creative idea, an
opportunity in front of them, and then government process kills it,” said Cook of
E-Tourism Frontiers.

Destinations would benefit from bureaucratic changes that enable more nimble
decision-making and, in some cases, increased autonomy. “Industry stakeholders
constantly meddle in the often research-based careful decisions that [tourism organi-
zations] have made and then somebody gets a hunch or a whim, a minister coughs and
the whole strategy changes,” said Greg Klassen, CEO and founder, Twenty31. Tourism
organizations would welcome greater independence in decision-making, while being
held accountable using common measures.

Destination Management for the Long Term

Beyond the day-to-day concerns of driving visitation and increasing revenue, tourism
organizations increasingly view big-picture issues such as climate change, safety/secu-
rity, infrastructure development and immigration as essential to long-term growth. For
some destinations, natural disasters or tragedies like the tourist boat that capsized in
July off of the island of Phuket in Thailand have raised immediate issues of safety and
security. But destinations also face longer-term challenges that they are not equipped
to address on their own.

“[W]e already look after the demand side and create awareness with the tourists, but I
think what we need in Thailand is to upgrade and develop the supply side – safety and
security,” said Thailand’s Cheawsamoot. In relation to the Phuket incident, that could
mean working with the relevant government departments to improve transport safety
checks to avoid future tragedies.

Broadly, destinations seek to address problems and remove barriers likely to discour-
age tourism. Beyond safety concerns, there is a strong interest in securing visa policies
that are favorable to tourism. The relative ease or difficulty involved in obtaining a
travel visa has the potential to influence traveler destination decisions.

©2019 Phocuswright Inc. All Rights Reserved. 16

Asia Pacific Tourism 2019 / March 2019

Many countries in APAC have undertaken rapid travel infrastructure development over
the past decade to drive and meet tourism demand. More work remains to be done
to support the resulting increased tourism. In addition to high-profile projects like
airports and high-speed rail, destinations must wrangle with less glamorous issues like
managing electricity, waste and water consumption.

“We’re making it onto the front pages of the business press talking about tourism in
the same vein as we talk about open pit mining and dirty oil and other extractive style
industries,” said Twenty31’s Klassen. “I think it’s really up to the destination industry to
reframe that conversation to being much more culturally [and] environmentally sustain-
able as an industry.”

For some APAC countries, a reputation for pollution, poor sanitation and environmental
degradation poses a direct threat to future tourism. Further, the impacts of climate
change are expected to be severe in Asia, where heavily populated coastal cities are at
particular risk. Tourism organizations have a vested and humanitarian interest in protect-
ing both their local populations and their destinations’ future tourism opportunities.

Growing Importance of Collaboration

Tourism organizations recognize the need to work with government and ministries
to tackle a broad range of destination management issues. Many of these challenges
can only be addressed by fostering intra-government cooperation. The challenges of
managing bureaucracy and fostering collaboration are not new, but a collaborative
approach is increasingly important to long-term tourism sustainability. Tourism organi-
zations offer unique insight into the potential tourism impact of climate change, safety
regulations and prospective infrastructure changes. To successfully address these
issues, destinations must have the opportunity to voice their perspectives and to work
closely with other government departments.

Looking Ahead
The Asia Pacific travel market has undergone a period of rapid infrastructure devel-
opment and tourism growth. As the travel opportunity continues to expand, tourism
organizations must be supported in fostering sustainable tourism for the long term.
The region’s tourism boards face numerous challenges, but do not lack ideas for solving
them. To maximize the benefits of increased tourism, a shift in focus from visitation
to revenue is needed, along with increased training to encourage tourism dispersal.
Bureaucratic processes and metrics should serve to empower destinations to meet
the demands of modern consumer marketing in a more nimble, autonomous fashion.
Finally, issues like climate change, safety and environmental concerns are essential
to the long-term health of APAC’s tourism industry, and these challenges will only be
solved through collaboration.

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