International passenger traffic, measured in revenue passenger kilometre (RPK) terms, grew 3.5%. With available seat capacity having been cut by 3.1%, the average AAPA international passenger load factor for the month reached 76.3%, 4.9 percentage points up on the same month last year. AAPA international air cargo demand, measured in freight tonne kilometre terms (FTK), registered growth of 12% compared to the depressed levels of a year ago, and marking a continuation of the slow but steady recovery witnessed in 2009. The AAPA average international air cargo load factor was 8.2 percentage points higher at 71.1% for the month.

Commenting on the results, AAPA Director General Mr. Andrew Herdman, notes that’s given the difficult year in which AAPA international passenger traffic fell 8%, and international air cargo traffic registering a 14% decline, the November traffic figures are mildly encouraging, in line with the broader economic recovery underway being led by the Asia Pacific region. In absolute terms however, demand remains well below pre-recession levels. In addition, the aviation industry is still wrestling with the problem of low yields and continuing oil price volatility, so a recovery in airline profitability is still some way off making the overall, market conditions remain extremely challenging.

The majority of respondents from Hong Kong and the Philippines felt that the competition from online travel agents was the most pressing issue, while respondents from Japan see the general downturn in travel as their key challenge. Travel agents from Hong Kong and the Philippines had different views from Japanese travel agents on the strategies that would be most effective to overcome these challenges in their respective markets. The majority of respondents from Hong Kong and the Philippines indicated that widening their target groups to generate business and adopting new technology would be critical in revenue and profit generation. Whereas most travel agents in Japan are exploring ways to implement cost cutting measures such as streamlining resources, work processes and operational expenses to best maximize profits.

The two tactics cited by travel agents in Japan in comparison scored lowly amongst agents in Hong Kong and the Philippines. According to the Vice President of the Business Solutions Group, Amadeus Asia Pacific, Peter Smith, the survey highlights how different markets have their own unique challenges for their customers and equally so their responses and strategies to counter such challenges. The survey in addition identified customer loyalty as a critical factor in reviving business in the travel industry. In this regard, the industry players have been advised to harness the power of technology to differentiate themselves from competitors and keep a high level of customer satisfaction and loyalty given the challenges confronting the travel industry.

The AAPA has in effect said that treating each of the six million passengers who fly daily as potential terrorists and subjecting them to virtual strip searches and pat-downs, borders on the absurd particularly when compared to the approach the Association has adopted to ensure public security in other aspects of people’s daily lives. The regional association acknowledges that whilst new screening technologies are constantly under evaluation, including full body scanners and automatic explosive detection systems, there is however insufficient evidence regarding their effectiveness to justify their immediate deployment, not to mention unresolved health and privacy issues.

This limitation in the use of technology further exacerbated by ongoing debate on the merits or otherwise of passenger profiling raises a number of other important issues of fairness and preservation of human dignity, given the fact that 99.99% of passengers, even from supposedly higher risk categories, are entirely innocent. The AAPA on its part contends that rather than laying much focus on more intrusive passenger screening, the key lesson from the recent and all previous terrorist threats and or incidents, is the critical importance of effective intelligence gathering and analysis suggesting for reinforcement of both inter-agency and inter-governmental cooperation.

Commenting on the current state of affairs, the Director General of the AAPA, Andrew Herdman, asserts that despite recent events over terrorist threats in the air, public confidence in the safety of air travel remains high. The Director however cautioned over the undermining of traveler confidence by ill-judged reactionary measures being taken by those entrusted with maintaining public safety noting that the sudden introduction by national governments of uncoordinated new security requirements, without prior consultation, makes practical implementation difficult. Far from reassuring passengers, such unprecedented counter measures are likely to result in further confusion and unnecessary inconvenience.

Within Asia, Southeast Asia recorded a strong gain, standing at 7% growth in international visitor arrivals, boosted by another impressive month for Malaysia (+14%) coupled by better outcomes from Indonesia (+3%) and for Thailand (+11%). In Northeast Asia, arrivals to Chinese Taipei (+13%) and Korea (ROK) (+13%) maintained stable growth momentum, while arrivals to Hong Kong SAR (+9%) and Macau SAR (+5%) continued to improve. However, weak arrivals were reported for China (PRC) (+1%) and sharp declines experienced by Japan (–11%); factors that limited the overall growth rate for the sub-region to 3%. In South Asia, Maldives (+11%), Nepal (+11%) and Sri Lanka (+7%) reported robust growth in visitor numbers for the month of October but where India’s tourist numbers were down by 1%.

As a result, the overall growth for the sub-region was reportedly a modest 2%, reflecting the dominance of the India’s inbound travel market in the region. The Pacific, on their part, recorded a 3% growth, with Australia (+6%) and New Zealand (+8%) leading the rebound. However, trends in visitor arrivals remained depressed for Guam (–9%) and Hawaii (–0.3%). According to the Associate Director of PATA’s Strategic Intelligence Centre (SIC), Kris Lim, the month of October marked the third straight month of above the line gains for international visitor arrivals to the Asia Pacific region. The growth rate of 2.2% achieved in October was acknowledged as being by far the best year-on-year improvement in a very depressed year.

Despite these intermittent growth recorded for the region, the first 10 months of the year was however 4% off the pace in terms of arrivals growth compared to 2008 levels, and about 3% off vis-à-vis 2007 levels. PATA however expressed its confidence for stronger gains expected for the remaining two months of the year, given that preliminary estimates for November from a number of destinations support those expectations given that growth in arrivals is in the double-digit range for Chinese Taipei, Korea (ROK), Malaysia, Thailand and Vietnam in November.

Indeed the full-year contraction in arrival numbers is estimated to be as much as 5%, meaning that the region ended up with close to 17 million fewer visitors as compared to the 377 million recorded in 2008. According to the associate director of PATA’s Strategic Intelligence Centre (SIC), Kris Lim, the dismal performance is equivalent to a loss of two years in growth. Figures released by PATA show that the numbers of international visitors to the Asia Pacific region grew by 0.7% year-on-year in September 2009. However, growth in arrivals for the region is still down by 5% year-on-year for the first nine months of 2009. Prospects for 2010 however look promising given that the global economy is expected to expand by 3% in this New Year, with the Asia Pacific region expected to grow at double the global estimate.

This growth, PATA’s associate director warns requires all stakeholders continuing to work together to lead the industry out of its current stalemate. PATA acknowledges the single bright spot case example of Sri Lanka’s tourism sector where visitor numbers continue to improve, recording a 29% increase in arrivals for September 2009.

The ITB World Travel Trends Report findings show that Asian travel demand averaged a more than a 10% decline January-June, but where on the other hand, some market recovery has been recorded since July 2009, indicating that the Asian travel industry is over the worst. While intra-Asian trip volume fell by only 5% from January through August 2009, travel to Europe (14% of total trips) was down 10%. Asian travel to the Americas (9% of all Asian trips) slumped by a more damaging 15%. The report notes that Chinese travelers may be more recession-proof than the Japanese, but they don’t spend as much. In Europe, for example, the total spend by Chinese tourists on transport, accommodation, food and beverages and incidentals (i.e. excluding shopping) was €240 per night, as against €320 for Japanese, €185 for Koreans and €180 for Taiwanese.

In 2009, the report notes, destinations dependent on Chinese travelers were also disappointed for different reasons. The Chinese government for instance issued an edict earlier in the year stating that no Chinese government employee could travel abroad in 2009. The biggest decline so far in 2009, in terms of outbound travel, has come from South Korea, down more than 10% over the same period in 2008 – a decline due in large part to exchange rates. In the six months from September 2008, the won went through a period of great volatility, involving massive depreciations. The report notes that South Korea was already weak as an outbound travel market in 2008 following several years of consistently strong growth. Even within Asia, the once high-flying low cost airline sector suffered in 2009.

Despite rock-bottom airfares, the sector has experienced capacity cuts, which resulted in lower seat availability and, inevitably, rising airfares. Analysts remain divided on signs of full recovery in Asia with some seeing a second dip into recession while others suggest that government stimulus packages have got anyone through the worst of it. The price of oil and the threat of H1N1 remain the unknown factors. According to the Vice President CompetenceCenter Travel & Logistics, at Messe Berlin,Dr Martin Buck, the ITB report predicts a modest increase in outbound trip volume for Asia, but expenditure and yield levels will still be at pre-2008 levels. Within Asia one can still expect to see shorter, cheaper trips, closer to home and at off-peak times.

The report concludes that there are currently too many uncertainties to be able to make certain predictions in terms of travel and tourism demand from the world’s leading source regions. The best guess suggest that neither Europe nor North America will do better than achieve a flat year in terms of growth, unless the economic recovery is much stronger in the USA than currently expected. But Asia Pacific should see at least a modest increase in outbound trip volume – mainly for intra-regional destinations – a trend also forecast for South America and the Middle East.

The boost in arrivals for Southeast Asia comes against the strong 25% growth in arrivals to Malaysia and the rebound in arrivals to Thailand (from a low base in September 2008). Arrivals to most destinations in the Pacific also increased compared to September 2008. Notable gains were equally recorded for Australia (+9%), New Zealand (+9%) and Hawaii (+8%) which all showed positive trends. In comparison, international visitor arrivals to Northeast Asia, the largest sub-region by number of arrivals, were down by 2% in September 2009 and, together with the Americas (–3%) and South Asia (–1%), offset the positive growth seen in Southeast Asia and the Pacific. Falling foreign inbound numbers for China (PRC) (–4%) and Japan (–16%) depressed growth in the Northeast Asia region in spite of positive results from Hong Kong SAR (+3%), Macau SAR (+4%), Chinese Taipei (+11%) and Korea (ROK) (+16%).

The 1% decline in arrivals to South Asia was largely driven by the 4% fall in international arrivals into India. Tourism demand in Sri Lanka, on the other hand, continued to improve, recording a 29% increase in arrivals for September 2009. With these forecast findings, PATA finds that while figures are becoming healthier, with September actually showing growth of 0.7%, strong contractions earlier in the year is likely to cause a full year decline in tourist numbers. According to PATA’s Strategic Intelligence Centre Associate Director, Kris Lim, the year is shaping up to be one of the worst for many years for international arrivals into Asia Pacific destinations where the full-year contraction in arrival numbers could be as much as 5%, equating to a growth in loss of two years. PATA is however optimistic that the prospects for 2010 appear promising.

The star performers in terms of monthly RevPAR growth across the region are Australia, Guam, Indonesia, Malaysia, New Zealand and South Korea, which benefited partly due to a weak U.S. Dollar exchange rate. Among the key markets in the region, New Delhi, India, reported the largest occupancy increase, up 14.7% to 77.5%, followed by Kuala Lumpur, Malaysia (+12.4% to 74.1%), and Sydney, Australia (+11.9% to 88%). Two markets posted double-digit occupancy decreases those in Manila, Philippines (-11.3% to 63.4%), and Bali, Indonesia (-10.8% to 77.1%).

Melbourne, Australia (+28.5% to US$160.78), and Sydney (+28.5% to US$161.24) reported the largest ADR increases. Two other markets also reported ADR increases of more than 20% namely Brisbane, Australia (+23.2% to USD 153.32), and Seoul, South Korea (+22.7% to USD 170.59). On the other hand, largest ADR decreases were reported for Phuket, Thailand (-22.8% to USD 72.72), Shanghai, China (-22.2% to USD 117.22), and Beijing, China (-22.1% to USD 95.68). Sydney, Australia experienced the largest RevPAR increase, jumping 43.8% to USD 141.84. Three markets reported RevPAR decreases of more than 20% those of Phuket (-28.2% to USD 42.47); Shanghai (-25.2% to USD 66.82); and Beijing (-20.5% to USD 60.56).

According to the managing director of STR Global, Elizabeth Randall, all sub-regions across Asia/Pacific saw occupancy stabilizing in the month of October, helping to soften RevPAR decline by only 3.1% overall and where monthly improvements saw hotels across the region losing just USD 22.04 in RevPAR value year-to-date compared to year-to-October 2008.