Regional Markets Provide Tourism Lifeline

Talk to any hotel manager in Phuket and one of the most common crises management actions has been transporting their annual sales and marketing plans for 2009 straight into the garbage bin. The gloves are off and everyone is trying to find those accidental tourists, which drive their economic engines. Looking around the region at markets where tourism numbers have retained some resemblance of a heart beat; and the common thread is a shift from long haul business to regional and domestic markets.
In Hong Kong despite significant lower room rates, arrival figures remain at reasonable levels with a shift to greater numbers of Mainland Chinese visitors. Korea who experienced a depreciation of their currency tapped into Japan where the yen has strengthened; opening a floodgate of shoppers attracted by the double whammy.
With airlift being a critical benchmark for tourism, capacity from both the US and Europe have continued to erode while for many Asian destinations the LCC's (low cost carriers) are seeing increases. Pick up any Asian daily and glance at those bright red ads of AirAsia or yellow and black Tiger Airways with the fact remaining that its never been this cheap to travel, with numbers in this segment are on the rise.
The next 12-24 months are going to see regional and domestic travel dominating the visitor mix and like it or note the profile of the guests will be changing with room rates hit hard and average spends decreasing. For those who can adapt their business models it may very well be the difference between merely scraping by or actually doing business. At the end of the day while the marketing plans and budgets all weigh heavily on percentages and margins; at the end of the day cash flow and being able to show up with cash at the bank looks to be the highway most traveled.