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PATA releases growth scenarios forecast for Asia Pacific destinations

PATA releases growth scenarios forecast for Asia Pacific destinations
March 28, 2021

In response to the continuing COVID-19 pandemic, the Pacific Asia Travel Association (PATA) has released the latest in its series of destination-specific reports for the period 2021-2023.

Sponsored by Visa, each report delves into the changing dynamics of tourism across the Asia Pacific region at the single destination level.

Noting extremely volatile global conditions, the forecast present three potential scenarios for each destination, against the backdrop that the Asia Pacific region lost more than 760 million air seats into and across the region between 2019 and 2020 and, while the resumption of capacity growth to 2023 can be expected, it will most likely be erratic and certainly not uniform across all the source and destination markets.

The forecast will also link with PATA webinars specifically designed to provide a more detailed interpretation of what these changes may mean for the destinations and for the Asia Pacific region.

Covering destinations in the Asia Pacific, the forecasts provide:

• Annual forecasts of visitor arrival numbers into each destination, by scenario and source region;
• Quarterly forecasts of visitor arrival numbers into each destination, by scenario and source region;
• Recovery rates for international visitor arrival (IVA) growth back to the 2019 benchmark;
• Annual changes in relative visitor share by source region, year and scenario; and
• Quarterly changes in forward scheduled international inbound air seat capacity.

These scenarios, when combined with other relevant metrics, provide hard data on how travel demand preferences could play out in these destinations and how they might recover under various conditions. Scheduled international inbound air seat capacity, for example, shifts relatively quickly according to demand. In other words, understanding the likelihood of when and where capacity increases become a useful barometer of potential demand that can translate into increased arrivals.

The recovery rates included in these reports present a proportion of international visitor arrivals (IVAs) in a given year, relative to the number of IVAs in 2019, expressed as a percentage. These illustrate progress by source region and scenario, into specific destinations for each year between 2021 and 2023, flagging of areas of both opportunity and continued risk, for appropriate action.

In 2021 for example, the top destinations within each of the three major regions of Asia Pacific, by individual recovery rate and under each of the mild, medium and severe scenarios, show that the best performances are likely to come from Mexico, Chinese Taipei and Fiji. Nevertheless, even those destinations at that time are still projected to have IVAs well under the levels they each received in 2019. Furthermore, as the scenarios deteriorate into medium and severe conditions, those recovery rates reduce dramatically for each of the destinations.

By 2022, while the recovery rates generally improve, even the best performing destinations under the mild scenario are still expected to recover back to less than 80% of the 2019 number of IVAs into each respective destination.

However, by 2023, the mild scenario proposes that 22 of the 39 destinations covered in the forecast (56.4%), will have returned to the pre-pandemic levels of foreign arrivals, led in recovery rate terms within each destination region, by Mexico, Bhutan and Vanuatu. Under the medium scenario, while parity with the respective 2019 volumes of foreign arrivals is still not complete, it is expected to be getting closer to that benchmark.

The severe scenario in 2023, however, suggests that the destinations covered will still have some recovery ahead of them, with the top three performing destinations still falling short of the 2019 number of respective IVAs by more than 30% apiece.

Similar scenario outlooks are made for the source regions into each destination as well, with for example, the non-descript 'Others’ category building in 2023 to exceed what it generated in terms of IVAs into Asia Pacific in 2019, under the mild scenario, along with arrivals out of Africa. Every other source region is projected to remain under the 2019 volume of IVAs generated into Asia Pacific for each year between 2021 and 2023.

These recovery rates of course, differ widely by individual destinations and the three scenarios.

While the recovery rates highlight the speed with which the 2019 levels of foreign arrivals from each source market into Asia Pacific are reached or exceeded, it must be remembered that there are significant differences in what they mean for increases in the absolute numbers of foreign arrivals.

According to PATA Chief Executive, Dr Mario Hardy “this quantitative approach to modelling recovery rates, supported with expert judgments, provides us with a strong focus on hard data that can offer a significant advantage to those destinations that best identify and cater to those source markets that first begin to grow again, once this current pandemic is brought under control.

“In addition, with tighter marketing budgets expected in the near-term, any information that highlights source markets with strong growth potential will be essential for improving the efficiency of the limited marketing spend."

“This series of scenario-based reports from the PATA Strategic Intelligence Centre is designed to present actionable insights at the individual destination level. We remain convinced that there will be a recovery in international travel over the next few years, although possibly not to the same levels as those of the pre-pandemic period. This suggests that the time may be ripe for developing a stronger focus on other metrics of both potential and success, including for example, time in destination, distribution across the destination and impacts on local communities, in addition to mere headcounts of inbound border crossings.”.

The Asia Pacific Destination Forecasts 2021-2023 are now available on the PATA website at www.PATA.org/catalog.

Images: Table from the Forecasts (top) and PATA Chief Executive, Dr Mario Hardy (below). Credit: Pacific Asia Travel Association (PATA).

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