THE world is rising from the slump brought about by the economic crisis experienced not only in Western countries, but most especially in Southeast Asia and East Asian countries.
The resurgent tourism industry within Asia is fostering this rise through the power of regional consumers in their patronage of the regional markets and tourism within the area.
Tourism generally represents a relatively small share of a country’s economic output, but the influx of tourists in a certain area or region signals the willingness of consumers to spend. This willingness is brought about by the governments’ stimulus spending as well as subsidies.
These incentives from the government encourage consumers to not only purchase cars and appliances, but the shift of interest and spending on travel is seen as perhaps the next stage for recovery.
Yuwa Hedrick Wong, Chief Economist for Master Card, explained that many Asian consumers, not burdened too much by debt compared with their Western counterparts, put away money during the economic downturn and are now spending some of those savings on travel.
Tourism is a spending multiplier. It puts money in the hands of a diverse set of people in the economy from the airline pilots to taxi drivers and hotel staff. It is a growth stimulus in itself, for the economy of destination countries as purported by Yuwa Hedrick-Wong.
The increase in intra-Asian tourism may pave the way for the realisation of one of the long term goals sought by many policy makers around the world: a rebalancing of the global economy in which consumer spending becomes a bigger driver of Asia’s growth.
High-spending Americans and Germans, for example, are critical sources of demand in places like Thailand and Indonesia. Malaysia attracted 22 million tourists in 2009, a 7 percent increase from the year before. Tourism spending helped boost the country’s fourth quarter growth rate to 4.5 percent. Overall Southeast Asia experienced a 2 percent increase in international visitors in 2009. Taiwan credited unexpected growth to an outpouring of tourists.
Tourism spending made up 13.6 percent of Cambodia’s gross domestic product, 9.5 percent in Malaysia and 8.4 percent in Thailand.
Visitors from South Korea, China and Taiwan have begun to stream in again after the slump in 2009. Small businesses like travel agencies, transportation agencies and people like tour guides, motor taxi drivers, and owners of small to medium scale businesses are getting busy again because of a tourist influx.
Korean-owned hotels and Korean barbecue restaurants are the main attractions in Siem Reap. Three new golf courses are also attracting visitors, especially Koreans, like a magnet.
This recovery in travel spending is a great indication of better things to come for the growth of the Asian markets.