In its latest market report, global travel marketing research firm Phocuswright declares that online is the way to success for Northeast Asia’s travel sector.
According to the firm’s Northeast Asia Travel Market Report 2023-2027, the region will break through another barrier in online travel bookings by 2026, reaching $30 billion.
For this to occur, there are several forces already at play, namely new demand, demographics, as well as strategic dynamics.
These elements are expected to further reshape travel across the decade as the slump-to-recovery period will transform into stepped growth of overall gross bookings through 2027.
Phocuswright noted that the powerful upturn in travel activity across Northeast Asia saw gross bookings surge by 116 percent to reach $44.6 billion.
Gross travel bookings are forecast to record a healthy growth of 15 percent in 2024, to reach $51.3 billion while annual expansion will moderate to reach $60.3 billion in 2027.
A palpable shift to online transactions
The report finds that the mindset shift towards e-commerce and app-enabled travel and lifestyle services is irreversible and is being reinforced by new smart-tech and AI travel booking tools.
Online gross bookings quickly regained momentum once borders reopened to ease past the 2019 level of $15.6 billion in 2023 with $21.3 billion and are projected to smash through the $30 billion barrier in 2026, when online penetration will reach 57 percent of all bookings.
However, the report states: “This may prove an under-estimation should the AI revolution have a dramatic impact on travel booking in a region renowned for its swift adoption of life-enhancing consumer technology.”
Yeoh Siew Hoon, founder of Web in Travel (WiT) explained further: “Northeast Asia, as a region, remains the powerhouse of travel in Asia Pacific and last year, after a tepid couple of years, the region asserted itself and we’ve seen all kinds of dramatic activity happening – from airlines launching of new routes to hotel development across the region. Underpinning all this is the fast pace of technology that is upending traditional models, and everyone has to keep up and stay on top of traveller trends and technology innovation.”
Strong contributors
The Phocuswright report further points out that North Asian markets, particularly South Korea, Taiwan, and China, remain the strongest contributors to sectoral growth.
Korean outbound travel was the story of 2024, as South Korean travellers now average 0.56 outbound trips per year, reportedly the highest among all Asian countries, and over 30 percent of these travellers choose Japan as their primary destination.
According to the Korea Tourism Organisation, Korean outbound in 2024 reached 99.4 percent of 2019 levels to touch 28,696,435.
In 2019, the total was 28,714,247. In destinations such as Vietnam, Korea surpassed China to become the number one market in 2024.
Taiwanese travellers make an average of 0.51 trips per year, closely mirroring South Korea’s travel frequency; and approximately 26 percent of Taiwanese outbound travellers visit Japan.
The Phocuswright report also pointed to the stimulative force of Northeast Asia’s primary travel influencer, China, reasserting itself after a tepid 12 months since its borders reopened in 2023.
Per the report: “This boosted the visitor economies in South Korea, Hong Kong and Macau, but the impact was sub-par in Taiwan. In September, China, South Korea and Japan set a mutual target to share 40 million inbound arrivals by 2030. In November, China simplified ‘cross-boundary’ travel measures to expedite border clearance between the mainland, Hong Kong and Macau.”
Also, airlines reactivated more dormant routes and launched new destination pairs regionally. Hotels fared better than in any year since 2019, but downward pressure on rates remains.
Rail and car rental bookings, on the other hand, benefited from broadening patterns of experiential travel among inbound and domestic trip-takers.
