While the travel industry was thriving in 2019, it came to a screeching halt in 2020 for obvious reasons. Over the past two years, the sector has seen a series of closures, reopenings, the emergence of vaccinated travel lanes and, ultimately, the rise of “revenge travel.” These tectonic shifts in the industry have given rise to some interesting trends, with Asia Pacific emerging as not only a bright spot, but also a frontrunner when it comes to certain recovery channels.
At WiT Singapore 2023, Hermione Joye, Google Business Lead for APAC Travel, shared insights based on new IPSOS research. These findings, combined with insights from Phocuswright and other data, outline growing consumer trends in the region and what travel professionals can expect in the months to come.
APAC is a bright spot on the map
According to Hermione, recent search interest in the region is not only higher than 2019 levels, but shows steady growth in international and domestic travel. Stability has returned and seasonality has returned, enabling long-term forecasting. This is a testament to how the “normal” aspects of travel are now appreciated. Travel enthusiasts can once again plan their trip well in advance.
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“Stability has returned and seasonality is back,” Joye said.
Search interest in travel demand has surpassed that of other regions, with Asia Pacific leading the way. In July 2023, international travel demand in the APAC region soared 85% above 2019 levels, while domestic travel demand jumped 52%. APAC is poised to overtake the US as the region with the highest online travel gross merchandise value (GMV) by 2025, according to Euromonitor estimates.
Google research highlights that this travel renaissance in APAC is no accident but the result of multiple factors contributing to the region’s growth:
Digital Adoption: APAC leads in digital usage, with daily internet usage outpacing Western countries. Some APAC countries, like the Philippines, can boast up to nine hours of daily internet usage.
Rising middle class: The growing middle class in APAC can now afford discretionary spending, including on leisure and international travel. With households whose disposable income exceeds $55,000 per year, this segment is experiencing constant growth, particularly in China and India.
Demographic strength: APAC has the world’s largest Gen Z population, coupled with the world’s fastest GDP growth, the world’s highest mobile app penetration, and the world’s highest inter-regional travel, with 56% of travelers exploring beyond borders.
Demand is increasing in India, Japan and China: India and Japan feature prominently among the top five countries in the world in terms of travel demand. APAC accounts for a quarter of demand across the top 20 countries, with India seeing a 70% increase in interest in international travel. Not only is India the third largest market in the world, but search interest in international travel in 2023 is more than 70% higher than in 2019.
Meanwhile, Japan dominates domestic tourism, with an 80% increase in interest. It may be the fifth largest travel market in the world, but it will be the third largest domestic market in 2023. This year, interest is up almost 80% from 2019 and 30% over a year. Google believes this interest in domestic travel will continue to grow, especially as Japanese travelers turn inward due to the weakening yen.
International reopening of China: China, a major source of outbound tourism, saw 155 million Chinese citizens travel abroad in 2019, according to the United Nations World Tourism Organization. They also accounted for $277 billion in tourism spending in 2019, a fifth of total global spending.
According to the OAG, China’s international flight capacity is expected to increase by 13% in January to 55%. This trajectory should bring the market closer to a full recovery by the end of 2024.
What motivates the new APAC traveler?
While stress reduction and well-being have been the main motivators during the pandemic, the stabilization of the travel industry has given rise to various motivations. Travelers now seek adventure, personal growth and transformative experiences that go beyond tourism. Although stress relief remains the top motivator in South Korea, travel as a life accomplishment or status symbol is a top motivator for nearly one in four travelers in China, India and in Indonesia.
Thus, according to the study conducted by IPSOS, traveling is no longer just a luxury; it is considered the ultimate product. Travelers are willing to make sacrifices in other areas, like gym memberships or dining out, to experience adventure and create lasting memories. Additionally, those who have traveled recently have a stronger desire to travel more.
However, the travel landscape has become more complex, with travelers facing uncertainty and information overload. A lack of trust exists as travelers grapple with the authenticity of information and the difficulty of decision-making. For example, more than three-quarters of Chinese travelers require a high level of trust before confirming their booking. In India, almost 70% of travelers feel overwhelmed by the vast amount of information available, and almost 70% of Indonesian travelers check the information they find online when researching their trips.
The booking process is also complex, but travelers are spoiled for choice when it comes to sticking to their budget. Fifty-two percent of APAC travelers surveyed chose a different destination, airline or accommodation when planning their trip. Cost was the number one reason for changing flights, number two for changing location, and number three for changing accommodation.
How brands can help simplify the travel process
To help travelers with their planning and decision-making, brands need to be present where travelers spend a significant portion of their time: online. APAC residents spend an average of 7-9 hours online per day, providing a vast digital landscape. Travelers rely on approximately 140 touchpoints when researching brands they have never used before, representing a significant opportunity for brands to adapt their digital strategies.
Key touchpoints include Google Search, YouTube, Maps, accommodation sites, airline sites, and travel experience websites.
Hermione highlighted that video is an essential format that must feature in all parts of the brand-to-consumer communications strategy, as content allows travelers to create a connection with the brand, destination or community. Google research with IPSOS shows that YouTube is the leading source of travel inspiration, and is a high-trust and high-value platform, in line with Maps and Instagram.
According to Hermione, what sets YouTube apart is that it’s one of the only platforms where users easily switch between formats, from short to long, from mobile to TV and from voice to video. Today, brands should also capitalize on the fact that a single piece of video content can transcend all mediums and platforms, making it extremely scalable.
Google data also highlights that brands must meet consumer expectations. Travelers spent a lot of time researching, saving money, and giving up things to go on a trip. If brands have collected data from consumers, it is better to know how to use it to design a truly personalized trip.
Seventy-three percent (73%) of travelers are willing to pay extra for accommodation platforms that have demonstrated positive results. Meanwhile, 80% are willing to pay extra for aerial platforms that have shown positive results.
AI can fill the trust gap in travel marketing
Artificial intelligence plays a central role in effectively reaching travelers, as it allows brands to appear at the right time, in the right place, with the right message and in the right format. Generative AI also accelerates creative strategies and campaign deployment.
On stage, Hermione revealed that Google has invested significantly in AI-powered advertising solutions such as Pmax, Hotel Ads, bookable ads on YouTube, and a scalable search experience. The recently launched Bard extensions offer another solution to simplify travel planning, using relevant information from Google’s suite of tools and apps.
Google’s new insights make one thing clear: to make the most of this opportunity, businesses need to be where travelers are, speak their language through video and personalization, and embrace innovation to conquer this booming market. The APAC region is promising and brands that adapt to its unique dynamics are poised to thrive in this rapidly evolving tourism landscape.