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)