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Five macro trends shaping the future of travel

December 2, 2013

The phrase “future of travel” is thrown around liberally in this industry, often as part of the dialogue around launching innovative products or disruptive startups.

tourists

Siew Hoon Yeoh of WebinTravel gave a keynote address at the CAPA Summit in Amsterdam this week, outlining five macro level trends which are impacting the travel industry in Asia.

Here are the five trends and some commentary on each:

1. Urbanisation

Cities are growing at rapid rates, especially in China, with large swathes of a population moving from rural and sometimes basic dwellings to hi-tech urban areas.

As a result, some are experiencing the web for the very first time or are now using sites more frequently to buy products and stay connected with friends, family and colleagues.

2. Growth of middle class

The increased level of urbanisation has also created new industries and, in turn, pushed the average income in some countries to previously unseen levels.

This emerging middle class has money to spend, not only on homes and household goods but on travel products such as personal leisure trips to domestic and international destinations.

Many of these people are also finding themselves on business trips for the first time as home-grown industries expand overseas and into new markets or global businesses set up operations in countries around the Asia-Pacific region.

3. Low-cost carriers

No-frills airlines didn’t really exist in Asia until around ten years ago, with local legacy or western airlines accounting for almost all air travel into and around the region.

The number of air seats on low cost carriers sold in South East Asia alone now accounts for some 58% of the total.

Carriers such as Air Asia, Tiger Airways, Jetstar and, more recently, Scoot have opened up previously hard-to-reach destinations for domestic and international passengers.

And with the model following that of its European and North American counterparts closely, cheap fares have levelled the playing field to the extent that large numbers of people are flying for the first time or are travelling more often to destinations previously beyond their imagination and pocket.

4. Leapfrogging technology

Much of the western world was there at the very beginning of the internet, experiencing the painful days of 56k dial-up connections and through the early days of broadband and wifi.

They carried out their web activity mostly on desktop computers, then laptops and now on mobile phones and tablets.

Many of this new breed of consumer in emerging markets have no sense of how it used to be done and have simply entered the world of the information superhighway on their mobile devices.

Many countries, such as South Korea, have more mobile web users than desktop or laptop connections. They are inherently on-the-go all the time and, importantly, expect the experience to be seamless.

5. Political awakening

With access to the web has come a new-found liberalisation of ideas in many countries, as many users are exposed to western trends as well as products.

Whilst countries such as China have, to some extent, attempted to put a lid on much of this eagerness to explore new possibilities and thinking, others have not and are seeing their cultures slowly evolve as a result.

Whether this will extend to wholesale political change (beyond its existing overtures to capitalism) in a country such as China is another matter entirely, but as events during the Arab Spring in recent years have shown, populations armed with knowledge and the ability to organise and communicate easily can be a powerful force.

Perhaps revolutions will be a bit far-fetched in Asia, but pressure on governments to liberalise anything from human rights to visa restrictions on overseas travel.

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