MAJOR ISSUES IN TOURISM DEVELOPMENT IN THE ASIAN AND PACIFIC REGION

MAJOR ISSUES IN TOURISM DEVELOPMENT IN THE ASIAN AND PACIFIC REGION

Introduction
1. Tourism is one of the most important economic activities in the world today, because it directly generates services, products, foreign currency, employment and investments. In countries where tourism has become a flourishing service industry, it has a far-reaching economic and social impact on national development. International tourism also has complex linkages to other industries and to government development strategies and plans, which means that it affects the structure and diversity of other economic activities at the national and regional levels.

2. In 2003, international tourism receipts represented approximately 6 per cent of worldwide exports of goods and services; the share of tourism as part of service exports increased to nearly 30 per cent. In terms of growth, the tourism industry worldwide had been stagnant since 2000, but made a strong recovery throughout 2004. At the end of 2004 and in early 2005, the devastation caused by the Indian Ocean earthquake and tsunami had a significant impact on several important Asian tourism destinations.

3. A number of international and regional forces beyond direct government or private sector control, as well as extraordinary disruptions and crises, have produced a fast-changing variety of complex patterns for international tourism in the region. This document considers major issues and challenges in the tourism sector in terms of sustainable development over the long term, and in terms
of crisis and risk management for the Asian and Pacific tourism industry.

I. OVERVIEW OF TOURISM IN THE ASIAN AND PACIFIC REGION
A. Overview of the current situation
4. A variety of patterns have characterized recent international tourism trends for Asia and the Pacific in terms of receipts and the number of tourist arrivals. According to the World Tourism Organization, the value of worldwide tourism receipts was US$ 622 billion in 2004. Asia and the Pacific earned 20 per cent of that amount, or about US$ 124 billion. Tourism industry receipts in Asia and the Pacific showed an impressive yearly growth rate of 24 per cent as compared with the world growth rate of 10 per cent. However, this represented recovery for the region from a decline in 2003(-9.4 per cent) owing to the effects of SARS.

5. In 2004, the total number of international tourists worldwide grew by 10.7 per cent to a total of 763 million arrivals. The annual growth rate for arrivals in Asia and the Pacific was 27.8 per cent, numbering 152.9 million international tourists, or about 20 per cent of the world total. North-East Asia recorded 29.5 per cent growth in international tourist arrivals and South-East Asia 30.6 per cent
growth in 2004 after a decrease of 13.7 per cent in 2003. Arrivals in South Asia grew by 16.5 per cent in 2004 and by 12.4 per cent in Oceania.

6. While tourism demand in Asia and the Pacific recovered in 2004, receipts grew somewhat more slowly than the volume of arrivals. This is related to the changing patterns of travel, which have shown a trend towards higher frequency shorter-stay trips with reduced spending by tourists, as a result of increased intraregional tourism. This trend was compounded by more competitive prices due to the entry of new low-cost airlines offering additional domestic and subregional routes. In terms of arrivals in 2004, China ranked fourth among the top 10 tourism destinations worldwide and Hong Kong, China, seventh.

At the same time, in terms of international tourism receipts, China ranked
seventh and Turkey eighth among the top 10 countries. Independent travel has been developing faster than conventional package tours, although many destinations, especially in South-East Asia, expect to benefit from the fast growth of the outbound Chinese tourism market.
7. The World Travel and Tourism Council (WTTC) has estimated the contribution of tourism to socio-economic development using the tourism satellite account methodology. In 2004, travel and tourism worldwide was expected to generate total demand of US$ 5,490 billion with a direct impact that included 73.7 million jobs (2.8 per cent of total employment) and a contribution to gross domestic
product (GDP) of US$ 1,542 billion (3.8 per cent of aggregate world GDP).

8. The travel and tourism industry also has an indirect effect on all other sectors of the economy.
In 2004, travel and tourism worldwide accounted for US$ 1,289.8 billion (12.2 per cent) of all service and merchandise exports, US$ 802.3 billion (9.4 per cent) of global capital investment and US$ 265.3 billion (3.9 per cent) of government expenditure worldwide.
9. In 2004, the forecast for real growth in the industry worldwide was 5.9 per cent for total demand, 5.2 per cent for direct growth in GDP and 4.6 per cent for direct growth in employment. In terms of the regional distribution of total worldwide demand, North-East Asia, South-East Asia and South Asia ranked third, fourth and seventh respectively among the top nine regions in 2004. Compared with the world average for real growth of total demand in 2004 (5.9 per cent), all three main regions of Asia showed higher than average growth of demand: 10.4 per cent for South-East Asia, 9.9 per cent for South Asia and 6.6 per cent for North-East Asia.

10. The values for travel and tourism GDP showed a similar pattern. North-East Asia, South-East Asia and South Asia ranked third, fourth and seventh respectively in 2004. In terms of the GDP share, tourism in North-East Asia ranked fifth out of nine regions at 9.3 per cent, South-East Asia seventh at 7.4 per cent and South Asia ninth at 5.0 per cent. The GDP shares for the three regions were below the
world average of 10.4 per cent.

11. WTTC has reported on total (direct and indirect) travel and tourism employment in terms of number of jobs for the top nine regions of the world. Tourism worldwide was expected to create almost 215 million jobs in 2004, with North-East Asia accounting for the biggest share worldwide, at almost 72 million jobs; South Asia ranked second, with about 30 million jobs, and South-East Asia fifth, with about 20 million. In terms of the share of tourism in total employment for 2004, the global average was 8.1 per cent. In terms of the share of tourism in total employment for Asia, North-East Asia recorded 8.5 per cent, South-East Asia 8.1 per cent and South Asia 5.2 per cent.

http://www.unescap.org/ttdw/common/Meetings/STD/STD_2E.pdf