This summer, reports indicate a significant revival in travel to secondary cities in the Asia-Pacific region, as travelers opt for destinations closer to home due to concerns over geopolitical tensions and rising travel costs. According to the Global Travel Confidence Index from Allianz Partners, around 50% of travelers worldwide are reducing their travel plans, with many preferring domestic trips.
A survey conducted with approximately 11,000 participants, published in May, revealed that about 60% of respondents from China and India plan to travel within their countries. This trend is expected to lead to increased visits to secondary and tertiary destinations like Goa and Xiamen, which are popular among local travelers but still less known among international visitors.
Event Details
While some travelers maintain their international holiday plans, they are choosing destinations within Asia, as reported by Rajeev Menon, President of Marriott International for the Asia-Pacific region, during an interview on the program "Squawk Box Asia" on May 21. He explained that "people have changed their plans to stay within Asia," boosting interest in new places like Phu Quoc in Vietnam.
Several years ago, the most popular destinations included Phuket, Bali, and Langkawi, but now many destinations in Vietnam are gaining increasing popularity. The outbound market from China is also shifting towards Southeast Asia, with Menon noting that "travelers may not go to the Middle East or Europe, but the numbers coming to Vietnam and Malaysia are very strong, and there is even a recovery in Thailand from Chinese travelers."
Background & Context
Historically, the Asia-Pacific region has seen significant changes in travel patterns, with traditional destinations like Tokyo, Seoul, and Beijing being the most attractive. However, as geopolitical tensions rise, travelers are beginning to seek safer options closer to home. This shift also reflects changes in the global economy and its impact on travel decisions.
Japan is one of the destinations experiencing increased demand for secondary cities, as Marriott International operates hotels in 30 out of 47 prefectures in Japan. Data from the search engine Agoda has shown that growth in bookings outside of Tokyo, Kyoto, and Osaka has significantly increased, with the fastest growth recorded in Takamatsu at 63%, followed by Matsuyama at 44%, and then Sendai, Okinawa, and Sapporo.
Impact & Consequences
The rising demand for secondary cities is diminishing one of the key attractions of these destinations, which is low pricing. The growth in revenue per available room in secondary markets is outpacing some major cities, indicating that demand is growing faster than supply. This situation encourages investors to consider opportunities in well-connected secondary cities in the Asia-Pacific region.
Japan and India are among the leading markets witnessing this trend, as prime assets in cities like Tokyo and Mumbai have become increasingly difficult to acquire. Cities like Fukuoka, Sapporo, and Nagoya are gaining increasing interest from investors.
Regional Significance
This travel trend shows potential impacts on tourism in the Arab region, as Arab travelers may lean towards closer and safer destinations instead of traveling to areas that may be unstable. Additionally, the increased interest in domestic tourism could boost local economies in Arab countries.
In conclusion, this shift in travel patterns reflects global geopolitical and economic changes, prompting Arab countries to consider how to enhance domestic tourism and develop infrastructure to attract more visitors.