Jeff Clarke, President & CEO, Travelport, Tom Klein, Group President, Sabre Travel Network, Zhang Nanyan, CEO, 7 Days Group Holdings Ltd.

Gordon Wilson and I just arrived in Beijing for the Global Travel & Tourism Summit, and the World Travel & Tourism Council (WTTC) couldn’t have chosen a more appropriate location for its annual conference.  After a global travel downturn that lasted more than a year, China is one of the nations that are leading the recovery, and this means more opportunity for travelers and the travel industry. Consider a few key statistics:

• According to WTTC forecasts, travel and tourism in China will grow by an average of 9% annually   during the next 10 years, increasing its T&T GDP from $500 billion this year to nearly $2 trillion in 2020 - second only to the U.S.
• China’s capital investment in travel and tourism will more than triple during the same time period, the WTTC predicts, passing the U.S. to become No. 1 in this category.
• According to the UN World Tourism Organization (WTO), China will be the fourth largest source of outbound tourism by 2020 with an expected 100 million travelers per year.  It is also an increasingly popular destination for international travelers.  The China National Tourism Office says that nearly 22 million foreigners visited the country in 2009.
• China’s rapid growth has helped make Asia Pacific the world’s largest aviation market.  The IATA reports the number of travelers within Asia Pacific in 2009 (647 million) exceeded those in North America (638 million) for the first time.

IATA also gives China credit for substantial progress in strengthening its airline industry, from improved safety and 100% e-ticketing to policies that have allowed airline consolidations and created stronger carriers.

To learn more about what these trends means for the travel industry - both domestic and international - Travelport recently worked with an independent research firm to survey business and leisure travelers in 12 countries, including China.

Among other things, China scored highest in using social networking sites to research business travel online.  China ranked third in the use of social networking sites to research leisure trips.  These results show there are significant opportunities for travel agencies and providers who can incorporate social networking sites and products into their business model.

Nearly half of consumers in China (46%) pay cash when purchasing leisure travel, second only to consumers in Russia (72%).  About one-third use credit cards, and only 1% use debit cards.  Agencies who can accept electronic payments - whether credit cards, debit cards, PayPal or other systems - will be able to grow market share.  As Chinese consumers pay more electronically, there will also be more opportunities for online travel agencies to reach new customers.

You can find out more about our survey by clicking here.

The survey results confirm the attractiveness of the China market, and the significant room for growth in demand and in new travel products and services.

Travelport has been working in China since 1984 through our group tour business, GTA.  In 2004, Gullivers Travel Associates (China) Ltd. became the first European travel company to be granted a license by the China National Tourism Administration to operate within mainland China.  The company has 100 employees serving China’s inbound market and domestic travel business with a comprehensive database and supplier network.

In the GDS business, Travelport works with TravelSky, China’s leading provider of information technology for the country’s air and travel industry.  TravelSky uses our Travelport E-Ticket Interchange system and interline e-ticketing capabilities.

As the Chinese economy continues to grow and create more wealth for its citizens, the number of business and leisure travelers in China will expand rapidly, as the WTTC and WTO data show.  Although doing business in China is often a challenge, the size of the market and the prospects for growth during the next decade make it the biggest growth opportunity for the travel and tourism industry.

Jeff

The travel industry argued at the time that business travel is an important stimulus of economic activity that should be encouraged, not discouraged. (See my earlier blog on the subject here.) Now, a new report sponsored by the U.S. Travel Association (USTA) and the Destination & Travel Foundation shows just how important business travel is to growth and productivity.

The study, conducted by the global research firm Oxford Economics, determined that every dollar invested in business travel results, on average, in $12.50 of increased revenue and $3.80 of new profits. This is in addition to the $246 billion in spending and 2.3 million jobs generated annually by business travel in the U.S., according to the USTA.

Researchers found that a 10% increase in business travel spending would increase productivity, driving higher sales and profitability and lead to an increase in U.S. GDP of 1.5-2.8%. Studies in the EU countries and the UK have also found a strong relationship between business travel, productivity and economic activity.

The study reinforced something I think virtually all business and sales executives would agree on - that meeting personally with customers and potential customers makes a big difference in our business success. Executives and business travelers surveyed by Oxford Economics estimated that they have an average 40% conversion rate when they meet in person with prospective customers but only a 16% conversion rate without such a meeting. They also estimated 28% of their current business would be lost without in-person meetings. There’s just no substitute for face-to-face contact.

But business travel has a positive impact beyond keeping customers and converting prospects. It also helps companies build business/vendors relationships (trade shows and conferences, to name a couple of examples). And it’s a way to invest in employees through internal meetings, incentive events and conferences.

The USTA study makes clear that business travel is not just an expense - it’s an important investment in the business and in the relationships we build with our customer, partners and suppliers. Not to mention the economic benefits it has for airlines, hotels, restaurants, rental car companies, taxi drivers and many other businesses - and their employees - who depend on travel and tourism.

I encourage you to read the study, which you can find by clicking here.

The fact is that more people are traveling to more destinations around the world than ever before. While the global economic recession has taken a toll on travel and tourism, the long term growth trends haven’t changed. Tens of millions of new tourists (think China, India, Brazil and Russia) will mean even more pressure on travel destinations - particularly historic sites and those with sensitive ecologies.

Growth is good for the travel and tourism industry, but it comes with a responsibility not only to provide the best travel experiences today but to preserve those experiences for future generations of travelers. That’s why GTA North America/Travel Bound has formed a strategic global partnership with Tourism Cares, a US-based, non-profit organization dedicated to responsible and sustainable tourism.

Tourism Cares is helping preserve the travel experience by “awarding grants to natural, cultural and historic sites around the world; presenting academic and service-focused scholarships to hospitality and tourism students; and organizing volunteer efforts to restore tourism-related sites in need of care and rejuvenation.” It does this by mobilizing the travel and tourism industry and travelers. (You can find out more at www.tourismcares.org.)

In past years, Tourism Cares volunteers started the restoration of the Louis Armstrong Park in New Orleans, Louisiana, which had been virtually closed since Hurricane Katrina, and helped clean up the historic Ellis Island in New York harbor, where millions of immigrants first set foot on American soil.

On Sept. 11, a group of 65 GTA employees in the U.S. traveled to Washington, D.C. to join other volunteers from the industry for the Tourism Cares for America Volunteer Day - a clean-up project at the National Mall and Memorial Park in Washington, D.C. The weather, unfortunately, did not cooperate and the event was cancelled, but the rain did not dampen the GTA team’s commitment to Tourism Cares and future volunteer events.

Tourism Cares is also helping in other ways. Since 2003, it has awarded nearly $2 million in grants for conservation, preservation and restoration of natural, cultural and historic sites in 25 countries around the world, including the ancient rock city of Petra in Jordan, Sagarmatha National Park in Nepal and Bartolomeo Island in the Galapagos.

As a strategic partner with Tourism Cares, GTA is encouraging our employees and partners to support the Tourism Caretaker program, which enables all of us in the industry to make a small financial contribution to support the organization’s initiatives.

The activities supported by Tourism Cares send an important message about the commitment of the travel and tourism industry to preserve travel experiences for generations to come. They also show that it takes more than money to promote responsible and sustainable tourism; it takes volunteers who are willing to invest personal time to serve a good cause.

GTA is proud to partner with Tourism Cares. The way we see it, it’s good for travelers (today and in the future), good for our customers and good for the long-term health of the travel and tourism business.