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The Global Travel Boom

The number of people taking international trips globally is soaring. So what does this mean to the state of travel?

Wednesday, August 06, 2014
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International travel is not just expanding, it’s booming. No matter what area on earth you look – OK, maybe not Antarctica -- tourism between countries is on the rise. And it’s climbing so much it looks to be at record levels.

But the real incredible news is not that more people are traveling to foreign countries than ever before, but this trend is expected to continue for decades. That’s right, decades. According to the UNWTO World Tourism Barometer, global tourism will increase at an annual percentage rate of at least 3.8 percent through 2030. Wow! For the complete year, UNWTO reported international tourist arrivals grew by 5 percent in 2013, reaching a record 1.087 billion arrivals, according to the latest UNWTO World Tourism Barometer. Despite global economic challenges, international tourism results were well above expectations, with an additional 52 million international tourists travelling the world in 2013. For 2014, UNWTO forecasts 4 percent to 4.5 percent growth - again, above the long term projections.

This year alone tourism is surging to incredible new levels as that new rising middle class we speak about frequently here at Hotel Interactive® is actively exploring the world around them and visiting new countries. In all, International tourist arrivals (that’s a fancy way for saying people visiting other countries) increased by 5 percent during the first half of 2013 compared to the same period of 2012. In all, nearly 500 million folks traveled to a country other than their own during the first half of this year, according to the UNWTO.

In fact, this group of 25 million new international travelers is being powered by countries with emerging economies, which saw a year over year increase of six percent compared to those with advanced economies. Those rose a steady and predictable four percent signaling plenty of opportunities for hoteliers looking to find customers in areas that had previously been fodder for potential hotel guests.

“2013 was an excellent year for international tourism” said UNWTO Secretary-General, Taleb Rifai. “The tourism sector has shown a remarkable capacity to adjust to the changing market conditions, fuelling growth and job creation around the world, despite the lingering economic and geopolitical challenges. Indeed, tourism has been among the few sectors generating positive news for many economies.”

He’s right. Just look at how the numbers play out for regions with established international travel patterns compared to emerging ones. Europe saw and additional jump of 29 million tourists, or 5 percent, but was propelled by Central and Eastern Europe, which saw a 7 percent jump while Southern and Mediterranean Europe rose 6 percent. Asia and the Pacific climbed six percent overall but was driven by South-East Asia which was up 10 percent while South Asia climbed seven percent. Mature markets such as the Americas (4 percent), South America and the Caribbean were at the end of the list, but all saw substantial growth. Which makes perfect sense since these markets already have robust travel.

Emerging economy outbound markets continue to drive growth both to emerging and advanced economy destinations; especially Russia which is up 22 percent.

But the real excitement is all about China, which is becoming a tourism colossus as the country’s economy and loosening of travel restrictions has made it possible for more Chinese nationals to travel.

If you can believe it, Chinese citizens are now the world’s biggest spenders on travel, with Chinese travelers spending $102 billion on international travel in 2012, an increase of over 40 percent from 2011, according to Hotels.com. But in the first three quarters of 2013 saw an increase in expenditure of 28% from 2012.

That is bigger than both the United States and Germany.

According to the second annual Chinese International Travel Monitor (CITM) from Hotels.com, 75 percent of global hoteliers say Chinese travelers now account for up to five percent of their business. Nearly half (45 percent) say they have experienced an increase in Chinese guests over the last year, with the greatest increases coming in APAC (61 percent). Hoteliers see China as a positive growth market over the next three years with one in 10 expecting to see an increase of more than 50 percent and almost half (47 percent) anticipating an 11-50 percent rise.

According to the Hotels.com report, the majority of overseas Chinese travel (96 percent) has been for leisure purposes, while just over half (52 percent) have also visited other countries for business or education.
In a growing trend, nearly two thirds (62 percent) of Chinese travelers say they prefer to travel independently and not as part of a group. This development was confirmed by the hoteliers surveyed, who say 70 percent of Chinese guests now travel independently, compared with a much more even split in 2012.

“The 2013 Chinese International Travel Monitor shows that the move to independent travel identified in the last year’s report is now preferred by the majority of Chinese travelers,” said Johan Svanstrom, Managing Director of Hotels.com Asia Pacific. “While in-roads have been made in this area, governments will have to take this into account when organising their visa application infrastructure and processes.”

Americans too plan to spend more than ever when traveling internationally according to the Global Travel Intentions Study 2013 by Visa Inc. (NYSE: V), U.S. travelers crave culture, are tech savvy and plan to significantly increase their travel budget on their next international trip. Findings revealed that travelers plan to spend 40 percent more on their next international trip compared to their last trip, opposed to travelers outside the U.S. who plan to increase travel spend by just 4.6 percent. More than half of U.S. travelers surveyed plan and book their trips using online review and booking sites and 38 percent choose destinations rich in cultural experiences

“Americans have a zest for travel and exploration and these survey results hint at a growing appetite to increase travel budgets,” said Nick Talwar, head of North American Credit at Visa Inc.

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