Tourism Indicators: The 2017 Outlook

Overview

As global travel continuously grows in spite of the various challenges, UNWTO predicts a 3 to 4% growth in international tourist arrival for the year 2017 according to the survey of UNWTO Panel of Experts. Meanwhile, the year began with promising figures for the Maldives tourism industry as the month of January recorded a strong double digit growth rate of 15.6%. Tourism being the largest contributor to the GDP of the country, the sector has performed well over the past several years and has proven to be resilient to various challenges faced over the years. The Compound average Growth Rate (CAGR) for tourist arrival growth during the past five years stood at 6.1% indicating that the hospitality and tourism sector of the Maldives is still strong. Also, even with some possible fluctuations on the arrival numbers, overall growth rate is perceived to be optimistic for the year 2017 with a similar growth rate as registered for 2016 (+4.2%).Outlook from key source markets

According to ITB world Travel Trends Report 2016/2017, the IPK international forecasts that outbound travelers from European region in 2017 will increase by 4% compared to the year 2016. Strong growth rates are estimated from key European source markets to the Maldives such as UK, France, Germany and Russia.

Furthermore, according to the report, as Asia Pacific region being the main driver of global outbound travel market with a huge boom in the number of outbound visitors from China, the IPK International predicts a 6% rise in outbound travelers from the region in 2017 as per its Travel Confidence Index. The report also states that there will be an expected increment of 18% in outbound travelers from China, while very strong growth is expected from South Korea as well, both of which performed well in the year 2016 too.The report also looked into the visitor preferences and perceptions regarding various destinations and presumed that Europeans are likely to prefer destinations which they perceive to be safe and are closer to home. On the contrary, Asian tourists tend to choose more sun & beach destinations over sightseeing and city trips.

Reviewing the information on recent performance of the key source markets to the Maldives indicates that inbound tourists from Europe has started to increase. Positive strong arrival growth rates were seen from UK (+9.8%), Italy (+8.5%), Russia (+5%), and Germany (+1.2%) in 2016. Hence, with the continued improvement in the Eurozone economies, it is anticipated that there will be a stable raise in the influx of tourists from the region to the Maldives. Likewise, even though, the arrival growth of inbound tourists from China shows a recent decline to the Maldives, this trend is not likely to be long-term as tourists from China have been driving the global travel industry at the moment with a forecasted arrival increment of 18% for this year.

Travel trends for 2017

As per Forbes.com, some of the top travel trends predicted by industry experts for the year 2017 includes Business and Leisure or bleisure, local travel by millennials, tourists becoming their own travel agents, solo travel and ecotourism. Millennials, female solo travel, business and leisure and responsible or sustainable tourism are also some of the trends expected in 2017 as per the TrekkSoft- an online booking and Payment Company in the travel industry. Moreover, the year 2017 is declared as “the International Year of Sustainable Tourism for Development” by the United Nations. Other key trends for 2017 as highlighted by TrekkSoft includes Active and Adventure Trips, Food tourism and mobile photography.Travel behaviors of millennials or generation Y between ages of 20 to 35 can have huge implications on the global travel industry. Millennials are adapted to internet and social networking and are tech-savvy. They also seek knowledge, wants to learn new things and have new adventures.Hence, this increasing number of international tourists who are millennials have led to the emergence of some other current trends such as the experience or adventure travel, and documenting of the trips via mobile photography and social media, etc.

These implies that hoteliers and other industry operators need to focus on millennials and their buying behaviors when designing the services as they are currently transforming the travel industry by setting other mega trends in the global travel market.

Additionally, some other demand side trends to be watched for this year as suggested by the Forbes Travel Guide includes group plus wellness travel where tourists prefer socializing at spas, freshly pressed juices, and raising the bar with many complimentary offerings.The above trends as predicted by experts and the forecasts on the arrival growth for the year will be useful insights for the hoteliers and other players in the tourism sector when strategising their businesses. The Government and private sector have made continuous effort to promote the industry and develop the infrastructure to maintain the popularity of the destination among international tourists.The integrated marketing campaign for the sector for 2017/2018, “Story of Maldives” by the Government is focused on many of these emerging trends such as experiential travel, food and cultural tourism and ecotourism. Also a huge component of the campaign is set to utilize the internet and social media which would give a higher exposure to the trending millennials.

Looking ahead, the year 2017 is poised to achieve moderate tourist arrival growth rates, reflecting a similar percentage as the previous year. Yet, with the increasing competition from other destinations and various other challenges, this prediction should be considered with caution.