By Darren Edmonstone
(Dr. Richard Kelley is traveling. His column will return on August 29.)
Darren Edmonstone Outrigger Enterprises Group’s Senior Vice President, Asia
Asia is a remarkable place. On 17 August, some notably good news emerged out of Japan. The Bank of Japan announced that the country had followed Germany, France and Hong Kong out of recession by recording positive growth in the second quarter of this year at a rate that is forecast to end the year equal to 3.7 percent.
While this is promising news, of course there are other considerations to take into account before we are all sighing with relief. It will probably still be some time before Japanese exports rise, unemployment falls and people there fully embrace overseas holidays again. But the country is reported to be well on the way to recovery.
The biggest Asian players, China and India, are still growing and have not really slowed with any significance. Even at the height of the global recession, growth in both these countries has not dipped below 5 percent. Significant urbanization is underway in both these countries, and this will continue in the near future, leading to considerable growth.
Throughout Greater Asia, emerging economies, including China and India, are forecast to grow by about 5 percent in 2009. Last week, Economist magazine summed it up best by calling the economic rebound in Asia “astonishing.”
Hong Kong is another key market for travel demand. On 14 August, Hong Kong announced its results for the second quarter of this year. Spurred by demand from mainland China, its economy grew 3.3 percent, ending a year-long recession.
Asia as a destination is unique. It is made up of many diverse cultures, economic structures and political systems, including democratic, socialist, communist and even dictatorships, but in the end, all the countries that make up Asia are able to feed off each other in times of distress.
Asia has certainly not been without its fair share of natural and man-made disasters over the years, including the Asian financial crisis of 1997, SARS, bird flu, tsunamis, earthquakes, terrorist attacks, military and political coups, human rights violations, etc. However, despite all this, Asia as a whole has an innate resilience to these relatively short-term disasters and has been able to bounce back bigger and stronger each time.
This was very evident after the second bombing in Bali a few years ago when, after a short disruption to tourism, Bali saw visitor arrivals exceed all records; it is still enjoying this level of tourism. Similarly, after the Indian Ocean tsunami in 2004, tourist numbers in Phuket, Thailand, bounced back relatively quickly. By the end of 2005, visitor arrivals were back to pre-tsunami levels, and by the end of 2006, they were again breaking records.
Quick recoveries like these are attributable to numerous factors, but the driving force is people. The fact that Asia has the highest population in the world – more than half the people on the planet live there – cannot be ignored. Asia includes the two most populous countries in the world; China, with approximately 1.4 billion people, and India, with approximately 1.1 billion.
Asia also enjoys the highest growth rate of emerging middle- to high-income people in the world. This results in more being able to and wanting to travel, and, with the introduction of so many low-cost air carriers there, intra-Asia travel has become a breeze. To typify this, Air Asia, a Malaysian low-cost carrier, reported an operating profit of US$36 million for the second quarter of this year, more than four times its profit for the same period in 2008.
In all, there is an increasing number of good-news stories emerging across Asia. My strong belief is that warm climate resort areas, such as Thailand, Malaysia, Vietnam, Maldives, parts of China, the Philippines, India and Bali in Indonesia, will experience a strong tourism rebound this November and December, barring any additional crises. This is traditionally the peak-demand period, as tourists from colder climates in Europe, Japan, Korea, China, and North America flock to Southeast Asia for some much-needed winter sun.
Closer to home for Outrigger, our properties in Phuket and Bali have responded to market conditions admirably over the last six to eight months; they are nimble in their business approach and are able to take advantage of an expected upswing in visitors later this year.
The Outrigger Laguna Resort & Villas will open in Phuket in the fourth quarter of this year
In Phuket, we will open the Outrigger Laguna Resort & Villas in the fourth quarter of this year, and while the Thai economy hasn’t yet rebounded as well as Hong Kong or Japan, there is new stability in the country, and the mood is certainly positive.
A clear sign of the resurging confidence in the Thai travel and tourism industry includes a number of high-level ASEAN (Association of South East Asian Nations) conferences and events that were successfully held in Phuket and Pattaya in Thailand in July and August, with more scheduled, including the ASEAN summit this October, in Hua Hin, Thailand.
The ASEAN Inter Parliamentary Assembly (AIPA) meeting in Pattaya took place without a hitch 2-8 August, 2009, as did the highly publicized 42nd Foreign Ministers’ meeting, Post Ministerial Conferences (PMC) and 16th ASEAN Regional Forum (ARF) in Phuket, 17-23 July, 2009, which U.S. Secretary of State Hillary Clinton attended. In general, across Asia, optimism is returning, and the power of the people is having its effect.
Outrigger is more excited than ever by the prospects for growth across the continent, as more and more interest and opportunities build for our brand. The Outrigger team in Asia looks forward to making more announcements about our continuing planned, strategic expansion throughout Asia in the very near future.
