The ever-rocky travel industry rollercoaster rumbles on into 2023. Next stop? Asia-Pacific (APAC). As Covid travel restrictions in the region continue to ease, consumer confidence is rising. China is the latest country to relax its strict rules, with the changes now in effect.
But with a new surge in Covid cases in the region, and the rising cost of living eating into disposable income, it’s getting even harder to predict how people in APAC will think, feel, and behave when it comes to booking trips. Why do consumers in APAC want to travel? What’s putting them off? And what are the top destinations on their bucket lists?
The only way to get a true view of travel in APAC is to dive headfirst into the latest consumer trends – and there’s some pretty surprising stuff worth unpacking.
1. Staycations are on the rise for APAC travelers
With relaxed rules on international travel, you might assume APAC consumers would jump at the chance to go abroad. But actually, they’re just as happy close to home.
94% of consumers in India and 93% in China intend to take a staycation in the next 12 months.
Singapore and Japan aren’t far behind either, at 72% and 59% respectively. Our data also reveals that in ASEAN countries (6 countries across southeast Asia), domestic travel has seen a 27% increase in growth year-on-year.
Great news for local tourism boards and businesses with a global recession looming.
2. People in Australia and Singapore want to travel abroad
APAC is experiencing year-on-year growth in purchases of international vacations. Since Q3 2021, we’ve seen a 32% increase in consumers (outside China) buying a vacation abroad or travel tickets in the last 3-6 months. This figure jumps to 43% in Australia, which has seen some of the highest growth year-on-year.
Consumers in the APAC region are clearly a prime audience for international travel brands, but there are some exceptions worth noting.
Just 19% of consumers in Japan intend to take an international vacation in the next 12 months.
The reality of that figure sinks in when you compare it to the whopping 82% of Singaporean travelers who plan to go abroad. But the fact that more Singapore consumers want to travel internationally isn’t really that surprising when you consider the country’s smaller size. It’s just 50 km wide, and residents can travel anywhere on the island in less than an hour.
It’s likely domestic vacations feel very different for consumers in Singapore than those of consumers living in larger APAC countries, which may explain the higher figure here.
3. Top destinations are (mainly) in Asia-Pacific
If the earlier stats on staycations didn’t give you a hint, holidays within APAC are a big deal – so much so that 69% of international vacation planners in APAC intend to take a vacation there, making it the most popular destination for consumers.
That makes a lot of sense when we look at the most popular international destinations for the next 12 months:
- Consumers in China plan to visit Singapore, Japan, and Australia
- Consumers in India plan to visit Singapore, the United States, and Australia
- Consumers in Singapore plan to visit Malaysia, Japan, and Thailand
- Consumers in Japan plan to visit the United States, Australia, and South Korea
Nature-based vacations are top of mind for 36% of holiday travelers in China and 39% in India, while 41% in Singapore and 34% in Japan are interested in booking a sightseeing trip. (Perhaps Tourism Australia’s Ruby the Roo campaign is encouraging people to take a trip down under?)
A close second motivation to travel, 25% of travelers in China are planning a trip for a special occasion, and 29% in India intend to visit family and friends abroad. 33% of Singapore travelers want a city break, while 26% in Japan are interested in a resort holiday.
4. Booking incentives and flexibility are key
Free cancellation is a top factor for vacationers in Singapore, India, and Japan when booking a trip. It’s especially crucial in Singapore where 60% of vacationers say this, versus 38% of ROW travelers. Easy cancellation also ranks highly among travelers in India. This may be due to Covid concerns.
In fact, vacationers in Singapore are 46% more likely than ROW to say Covid entry requirements are an important booking factor.
It’s the ongoing uncertainty around the travel experience that people want to tackle – they want to know they’re in safe hands, should Covid restrictions change or in the event they’re not fit to travel.
In particular, many consumers in China are still concerned about Covid implications, and value travel precautions like mask wearing and social distancing when booking trips. They’ll also be keeping a close eye on Covid entry requirements, hygiene standards, and Covid case numbers, as their safety is top priority.
5. Sustainable travel is taking a backseat (for now)
A complex travel trend to unpack here. Consumers in APAC are more optimistic about the future of the environment – 54% think it will improve in the next 6 months, compared to 27% of consumers in the rest of the world (ROW). But just because people are hoping for the best, that doesn’t mean APAC travelers are actively taking steps to reduce their carbon footprint.
At least, not right now. Fewer people in APAC (42%) say helping the environment is important to them than those in ROW (47%), and it’s possible this is impacting sustainable travel choices. The number of APAC consumers who think brands should be eco-friendly is down 4% since Q3 2021, and more so in ROW (-8%).
That said, brand eco-friendliness is still the top factor that matters to APAC consumers from a list of 12 options, suggesting the declining figures are a sign of fatigue. It’s not that people in APAC don’t care about environmental issues – they’re just tired of hearing about them.
Sustainability concerns are taking a backseat in light of wider global issues like the impending economic crisis.
Basically, it’s a prioritization problem. Looking further afield, 2 in 5 vacationers in 10 markets say they’re more likely to pick a travel provider with a good sustainability policy – so while climate fatigue may be setting in for many as other issues weigh heavily on their minds, this doesn’t mean brands can ignore it altogether.
So with that in mind, what else can travel companies do to support consumers and help them make more sustainable travel choices?
Recent industry examples focus on offsetting carbon emissions; airlines are exploring alternative fuels, operators are minimizing single-use plastic, and in Shanghai, people are being rewarded with “green credits” for taking public transport. Other organizations are working to make good on their carbon-neutral pledges – but it’ll take more than words to win over climate-fatigued, cost-conscious consumers.
Knowing value for money and booking incentives are a key attraction for many travelers, eco-friendly loyalty rewards or travel perks like Shanghai’s green credit scheme just might be a worthwhile solution for travel brands.
6. Most APAC consumers want to unwind
Considering everything on consumers’ minds right now, it’s no wonder the top reason for planning a staycation in the next 12 months is for enjoyment and relaxation, with 55% of consumers in APAC saying this. It’s the same story for international vacation planners, with 46% wanting to kick back and relax.
Leisure travel is very much in, and luxury travel brands should take note too.
These findings strike a chord with our Zeitgeist study from July 2022, where 53% of consumers in APAC said traveling or taking vacations would bring them more joy in the future – just behind spending time with family. For these consumers, feeding their wanderlust was more important than spending time with friends, eating out, exercise/sports, hobbies, and going “out out”.
It’s a lesson in the importance of wellbeing. Post-pandemic, people across the globe are more conscious of work-life balance and finding time to recharge, and travel brands are taking notice too.
7. Stress-free experiences build consumer travel confidence
Relieving stress goes a long way with today’s overwhelmed consumers, which most likely explains why ease of traveling is the top booking factor for many in APAC.
This includes the ability to book direct journeys and travel without visa or vaccination requirements.
We’ve seen a 20% increase in APAC consumers saying this, and it’s more than doubled across the rest of the world since Q3 2021.
Another thing worth travel marketers knowing? Consumers in APAC with a pessimistic economic outlook are 51% less likely than the average consumer to be impacted by advertising when deciding where to travel. They’re also 42% less likely to be impacted by holiday brochures. The cost of living is likely an influential factor here, but what does this mean for travel brand marketing?
It may seem obvious that travel companies are better off targeting APAC consumers who are financially optimistic and more likely to be receptive to their advertising – but there are a couple of things even those with a gloomy financial outlook can’t resist when it comes to travel:
They’re 33% more likely than the average consumer to be impacted by value for money, and 15% more likely to be influenced by a relaxing experience.
This links back to what we covered earlier about the need for wellbeing and consumers seeking a spot of rejuvenation on vacations. Essentially, if marketers can offer these reluctant leisure travelers a laid-back trip on a budget with a big focus on wellness benefits, travel demand will grow.
8. Travel spending goes on food and drink
Don’t be surprised if you dream about “value for money” tonight, we’ve repeated it so many times – and for good reason. When thinking about travel services, it’s the number one factor that matters to consumers in Singapore (66%), India (49%), and Japan (48%). Ease of use and good customer service are also important drivers in these markets worth remembering.
Value for money also has a significant impact on APAC travelers’ choice of holiday location, up 8% in importance since Q3 2021.
In China, the most important factors when it comes to travel services are brand trust, familiarity (they’ve used the brand/service before), the ability to book all travel options together (flight, hotel etc), and good customer service.
We know customer pursestrings are tighter than ever right now, so what would convince them to part with their hard-earned cash when it comes to travel spending? 50% of consumers in APAC say they’d spend more on meals/drinks, while 41% would splash out on shopping at the destination, and 39% on leisure activities.
Cost of living crisis or not, our research shows people are still finding the travel budget for much-needed vacations and affordable treats. While navigating ongoing issues will continue to challenge brands and customers alike, it seems travel is very much back on the menu for APAC.