In the new normal, the Asia Pacific (APAC) region reigns as the prime travel destination for people worldwide.
According to data from the International Air Transport Association (IATA), significant growth by 45 percent in average international demand in the APAC region was recorded for the first quarter of 2024, surpassing the 16 percent increase in the average international demand growth in the market in the same period.
Global travel firm Trip.com cited data from Mastercard, Aviationweek, and NikkeiAsia that determined the inclusion of five Asian markets within the top 10 travel ranking. The current international capacity of 50 percent from and within Asia, and the four percent annual average depreciation rate of major Asian currencies like Japan, South Korea, and Thailand were noted as main drivers of the travel growth in APAC.
Trip.com said considerable growth can be seen in the Southeast Asian (SEA) region, in particular, with Thailand, Singapore, and Malaysia ranked within the top 10 flight search destinations in the Trip.com app for the second half of 2024.
Thailand, Malaysia, Singapore, Indonesia, and Vietnam are also in the top 10 accomodation destinations for Trip.com users in the same period.
"People are very interested in events such as music festivals, concerts, sporting events. Second, the Philippines, Thailand, Indonesia, Malaysia offer beautiful resorts for wellness products, that's very well received. Third, they prefer to travel in much smaller groups," said Trip.com Group Chief Executive Officer (CEO) Jane Sun in a press conference after the Envision 2024 Conference in Shanghai, China on May 30.
Moving forward, Sun remarked that young people are also focusing on seasonal nature-based products like swimming, diving, and hiking, which are all activities that are available in SEA nations.
Visa-free perks
Aside from the optimal offerings of the region, what has prompted this travel surge in SEA? Trip.com Chief Operating Officer (COO) Schubert Lou shared that visa free incentives has helped trigger this tremendous growth, especially for China outbound travel.
"You may have heard 'visa free' is all marketing, but what we're seeing since December last year -- the Malaysia announcement -- then Singapore in February, and March announcement of Thailand. More and more countries are getting into that phase. These lines being drawn are the visa free policies that are being established in the last six months. That has triggered a tremendous growth," said Lou.
Calling it as the "just pack your bag and go era" of China outbound, Lou noted that China outbound travelers have attributed to 60 percent of flight booking orders to SEA.
PH: hotel bookings up, flight capacity down
Although the Philippines is not included in Trip.com's current top 10 rankings, the firm remains optimistic about the growth of travel to the Philippines.
As per Trip.com's data, hotel accomodation bookings to the Philippines rose by 54 percent in the first quarter of 2024. For the month of April, hotel bookings soared by 121 percent compared to April last year, while searches for hotels also grew by 188 percent in the same period.
What are hampering further growth in the tourism sector of the country are visa restrictions, particularly for tourists from the Chinese mainland, along with limited flight capacity.
Trip.com Philippines Senior Market Director Fiona Pan said that Chinese inbound travel to the Philippines is still "very low" due to "stricter than before" visa policies and more expensive visa fees.
Prior to the pandemic, 1.6 million Chinese visitors traveled to the Philippines in an 11-month period in 2019, according to Leechiu Property Consultants' 2024 report.
Meanwhile, Trip.com Group Assistant Vice President of International Markets (Asia and the Pacific) Yi Ru said the Philippines needs more flight recovery.
"We honestly have the demand, and we are able to bring travelers from all major countries to the Philippines, but flight recovery is our bottleneck. If we don't recover first, then the hotel [sector] won't be able to recover," said Ru.
"As long as there are lesser flights, there would be a problem. If there's lesser capacity, it means the price is usually higher. In the whole customer booking journey, they will always look at the flight first. How much is the cost? Once they book the flights, they think about the hotels and other expenses," she added.
Ru said they are in communication with local airlines and the government to set policies to address these issues.
Moreover, Ru emphasized that there is competition within the SEA region that affects the attractiveness of nearby countries as desirable tourist destinations. This competition can be seen in the form of granting visa-free policies, for instance.
The country's local airlines have been registering improved passenger revenues in the first quarter of 2024, with Cebu Pacific (CEB) recording P18 billion (up 25 percent year-on-year [yoy]), and Philippine Airlines (PAL) logging $720.9 million (up five percent yoy).
CEB and PAL have previously announced efforts to increase their overall fleet capacity and augment the services affected by the grounding of some of their planes this year due to Pratt & Whitney repairs.
Due to lingering supply chain issues, PAL, for example, has opted to lease aircraft from partner airlines to sustain flights to certain routes.