Regional economic growth boosts travel industry
Regional economic growth boosts travel industry
SINGAPORE (JP): The Asia-Pacific region's strong economic growth is bound to result in increased demand for both business and leisure travel, both inside and outside the region, an economist predicts.
Tapan Datta, an executive of the American Express Bank, describes travel as a "classic income-elastic" service: The faster the income of a country grows, the greater proportion of spending is used on travel.
Datta told The Jakarta Post yesterday that when per-capita income reached a range of US$1,500-$2,000, people began spending money on commodities and services not tied directly to their basic needs, such as leisure travel.
"Up to then, the tendency is to spend money on operating your basic lifestyle: shelter, medical treatment and other essentials of life," he said.
Speaking on the second day of a media conference on Asian business travel trends, Datta said that the trend in business travel, more than leisure travel, depends on the rate of growth of a country's economy.
"Faster growth equates to stronger corporate activity and corporate activity is all about business travel," he said.
The World Travel and Tourism Council predicts that world travel and tourism will double by the year 2005.
According to data from American Express' Travel Management Services, the Asia-Pacific region currently accounts for between 20 percent and 25 percent, or between $80 billion and $100 billion, of the world's total business travel spending.
Infrastructure
Datta said governments in the region should not overlook the need to improve infrastructure in their respective countries, since these are an important part of the business travel industry, as well as affecting overall economic growth.
Easing visa procedures, shortening processing time at airports and improving transportation systems and hotel quality and prices were among the things that should be done to attract and keep business travelers to a country, he said.
"The traffic congestion in Jakarta matters a lot to business travelers," said Datta, who visits the city three to four times a year.
"If those aspects of infrastructure could be eased, you would find the country's growth even faster, as businessmen would be more willing to come," he added.
Datta predicted that the region's rapid economic growth and the high level of trade within Asia will be reflected in an increase in intra-Asian travel.
He said easier exchange control regimes and the level of exchange rates would also be factors enabling travel and affecting the distribution of travel demand. (pwn)