2 May, 2012

Domestic Tourism a “Shock Absorber” To Cushion Against “External Shocks” – UNWTO Report

Imtiaz Muqbil

CHIANG MAI, Thailand (2 May 2012) – If foreign tourism has been hit by repeated “external shocks” over the last decade, domestic tourism has become a “shock absorber” to help cushion the impact, according to a landmark study to be released this week.

The Study on Domestic Tourism Across the Asia-Pacific is to be one of the highlights of a UN World Tourism Organisation caucus for East Asia, South Asia and Pacific to be held in Chiang Mai, May 3-5. The study is to be finalised later this year but preliminary findings will be unveiled at the event.

The report covers the domestic tourism sector in Australia, Bhutan, China, India, Indonesia, Iran, Japan, Korea, Malaysia, Mongolia, New Zealand, Pakistan, Philippines, Sri Lanka, Thailand, and Vietnam.

The study estimates that domestic tourism contributions, in comparison with international visitor contributions, are as high as 60% of the total tourism income. It steers clear from providing more detailed numbers due to disparities in methodology and accounting systems and calculations which “make it very difficult to give exact figures that are reliable and comparable.”

It adds, “Suffice to say, the value and contribution of domestic tourism to the various economies studied is much higher than what was known before the studies were commissioned.”

The report notes that Asian tourism has survived economic difficulties as well as natural and man-made calamities such as Severe Acute Respiratory Syndrome (SARS), Avian and Human Influenza Outbreaks (AHI), the Tsunami of 2004, and terrorism.

During such times, the study says, “tourism in general and domestic tourism in particular has acted as a ‘shock absorber,’ cushioning the negative impacts of the above crises.

“Domestic tourism has been the reserve on which Asian destinations such as Indonesia and Sri Lanka have relied to protect their product, especially accommodation, from disuse and deterioration. At the same time, domestic tourism helps to maintain and provide employment to the people whose livelihoods depend on the industry.”

“In terms of volume, domestic tourism is estimated to be around 200 m in India alone, while in Indonesia and Sri Lanka, the domestic tourism markets have sustained the tourism industry during a period of stagnation of international visitors.”

The study cites the example of China where direct and indirect employment generated by tourism is 7.7% of the entire workforce, representing 60 million persons, of which domestic tourism accounts for 40 million.

It notes how China decided on a policy of boosting consumption to ward off the impact of the recent global economic downturn. That, in turn, “gave impetus to domestic tourism by providing various incentives and placing it on a priority list in policy and planning. The aim was not solely economic but social as well, since the rural urban balance was being threatened with sluggish growth.”

Noting that domestic tourism is of major benefit for SME and budget hotels, road and rail transport, the study says domestic tourism will boom thanks to economic growth and entrepreneurship, a rising middle-class, a dynamic private sector and strong airline and hotel promotions.

“The rising middle-class will continue to grow in the future. Their demands in terms of goods and services are comparable to those of international visitors and they have more money to spare than the average international budget traveler.

“The public sector at a national, regional and local level has been the backbone of the (domestic tourism) industry in many developing Asian destinations. This has been in the form of State and local government subsidies, investment, promotion and maintenance of institutions (tourism offices) and support for the informal accommodation units registered by municipalities, for domestic tourism to thrive.”

The study also notes that domestic tourism in Asia-Pacific is basically family oriented, which is reflected both in the purpose of visits as well as the places of stay.

“It is unlikely that there will be a radical change in the future, despite growing wealth and the aspiring middle-class. Leisure and pleasure are still secondary to tradition and family values that govern Asian society.

Future issues that will have to be dealt with include congestion and concentration during peak seasons especially at pilgrimage sites, safety and security, and health standards.

Incentives and promotional campaigns have been undertaken to encourage domestic tourism, such as Indonesia’s successful domestic tourism slogan “pariwisata nusantara” (discover your own country), and Australia’s efforts to woo its population, particularly its public servants, to take their accumulated leave in Australia.

Recommendations made by the authors to give domestic tourism its rightful place range from administrative and policy reforms, private sector participation, investment in infrastructure, promotional efforts including the publication of an accommodation guide for domestic tourism, and a call for information technologies (such as multilingual websites) to be put at the disposal of domestic tourists.

Although these measures exist in the various Asia and Pacific countries in varying degrees the ultimate contribution of the study is for the destinations to learn from each other’s experiences.