Key Outbound Tourism Markets in SE Asia

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Dinh Ngoc Duc (805-20-761)
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Key Outbound Tourism Markets

in South-East Asia
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Indonesia, Malaysia, Singapore, Thailand and Vietnam
Copyright 2013, World Tourism Organization (UNWTO) and Tourism Australia
Key Outbound Tourism Markets in South-East Asia Indonesia, Malaysia, Singapore, Thailand and Vietnam
ISBN printed version: 978-92-844-1506-9
ISBN electronic version: 978-92-844-1507-6
Published by the World Tourism Organization (UNWTO) and Tourism Australia, Madrid, Spain
First printing: 2013
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Printed in Spain.
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World Tourism Organization and Tourism Australia (2013), Key Outbound Tourism Markets in South-East Asia Indonesia,
Malaysia, Singapore, Thailand and Vietnam, UNWTO, Madrid.
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Table of Contents
Chapter 1
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Chapter 2
Chapter 3
Chapter 4
Acknowledgements
iii
Foreword
Executive Summary
vii
Introduction
xiii
Objectives and Scope of the Study

Data Sources and Methodology
xiii
xiv
South-East Asia in Context
Asia Pacific Tourism Trends

Recent Trends in Air Travel
Factors Affecting South-East Asian Outbound Travel
Outlook for South-East Asian Outbound Travel
1
3
5
7
Comparative Analysis of the Five Markets
Demographics
Economic Environment
Spending Power
Outbound Travel
Travel Expenditure
Travel Intensity
Top Destinations
Purpose of Trip
Payment Methods
Online Travel
Air Transport
Prospects for Growth
9
10
11
13
14
16
17
19
20
20
21
22
Indonesia
25
Country Profile
Demographics
Tourism Policy
Travel Market Profile
Leading Destinations
Profile of Travellers and Trips
Travel Information, Planning and Booking
Transport Infrastructure
Air Transport
The Travel Trade
Key Trends and Prospects
Useful Contacts and References
25
25
28
32
33
35
38
40
42
45
48
49
51
Malaysia
53
Country Profile
Demographics
Tourism Policy
53
54
57
61
63
ii
Table of Contents
Chapter 5
Air Transport
The Travel Trade
67
70
75
78
82
85
87
89
Singapore
91
Country Profile
Demographics
Tourism Policy
Air Transport
The Travel Trade
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Chapter 6
Thailand
Country Profile
Demographics
Tourism Policy
Air Transport
The Travel Trade
Chapter 7
Vietnam
Country Profile
Demographics
Tourism Policy
Air Transport
The Travel Trade
91
91
93
96
97
100
102
105
108
109
114
114
116
119
119
120
123
126
127
129
131
136
138
140
144
145
147
149
149
149
153
156
158
161
163
165
166
169
173
174
176
List of Acronyms
177
Bibliography
179
iii
Acknowledgements
This report is the result of a collaborative research project between Tourism
Australia (TA) and the World Tourism Organization (UNWTO).
The work was carried out under the supervision of Ms Sharon Foo on behalf of
Tourism Australia and Ms Young-Hee Kim from UNWTOs Tourism Trends and
Marketing Strategies Programme in collaboration with UNWTOs Regional
Programme for Asia and the Pacific. The report was prepared by consultant
Ms Nancy Cockerell and a team of researchers from The Travel Business
Partnership (TBP) and supported by TBPs network of researchers and
business journalists in South-East Asia.
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Other representatives of Tourism Australia and the World Tourism

Organization who contributed to this report were: Ms Nell Anderson and Ms
Maggie White (Tourism Australia), Mr Fernando Alonso, Mr Xu Jing, Mr Michel
Julian, Mr John Kester, Ms Lina Preuss and Mr Javier Ruescas (UNWTO).
Tourism Australia (TA), the World Tourism Organization (UNWTO) and the
authors would like to express their sincere gratitude to all who have
participated in the production of this report for their valuable cooperation, in
particular to the organisations and individuals involved from the different
countries and territories: National Tourism Administrations (NTAs), National
Tourism Organisations (NTOs), statistical offices, national central banks and
international organisations.
We would also like to acknowledge and express our appreciation to the
Ministry of Culture, Sports and Tourism of the Republic of Korea for funding
this important research.
Sunday, May 18, 2014 9:53:17 PM
iv
Acknowledgements
Foreword
The remarkable growth of international tourism reached new heights in 2012
with over one billion people crossing international borders. The Asia Pacific
region has seen rapid economic development and dynamic change in the last
decade, and is a source of much of this growth. Today, with over 230 million
international tourist arrivals, it is the second most visited region in the world
and the fastest growing.
Asia and the Pacific is not only a major tourism destination region but also an
increasingly important tourism outbound market. Asia and the Pacific accounts
for 14 of the worlds top 50 markets in terms of international expenditure,
including established source countries such as Japan and Australia but also,
increasingly, emerging markets notably China and some of its neighbours in
North-East Asia as well as their South-East Asian counterparts. With this rise
in regional outbound tourism, most of which currently benefits Asia and the
Pacific, there is a growing need to better understand, communicate with, and
serve these emerging outbound markets.
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This study, developed as a collaborative project between Tourism Australia

(TA) and the World Tourism Organization (UNWTO), aims to provide an up-todate perspective of the major tourism trends and developments in five key
South-East Asian outbound markets: Indonesia, Malaysia, Singapore, Thailand
and Vietnam.
These countries, already strong players in tourism worldwide, are expected to
continue to grow as source markets both for intra-regional and for interregional tourism in the coming years. The crucial factor behind the growth of
travel out of the Asian markets from South-East Asia as much as from China
is the increasing middle class population of those source countries due to
their growing economic prosperity.
These five markets undoubtedly present significant opportunities for both
Australia and UNWTOs global membership. This study provides detailed
profiles of each of these markets based on extensive research, including
expert analysis of the potential of these markets, and establishes a sound base
for future research.
We hope that this publication will serve as a useful resource for destination
planners, strategists, marketers and researchers as well as for all UNWTO
Member States wishing to better understand five of the Asia Pacific regions
most promising outbound tourism markets.
Taleb Rifai
Secretary-General
World Tourism Organization (UNWTO)
Andrew McEvoy
Managing Director
Tourism Australia
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vi
Foreword
Key Outbound Tourism Markets in South-East Asia
vii
Executive Summary
General trends in
Asia and the Pacific
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Asia and the Pacific has been one of the most dynamic tourism markets
over the past decade and has become the worlds second most important
region in terms of international arrivals. In 2011 the region attracted 218
million arrivals, compared with 518 million in Europe and 156 million in the
Americas. In 2005-2011, it recorded 6% annual growth in international
tourist arrivals comparable to the growth rate in the smaller UNWTO
regions of the Middle East and Africa, but more than twice as high as in
Europe and the Americas.
A significant share of this growth was due to buoyant intra-regional travel,
notably by two of the BRIC markets, China and India, which are among the
fastest growing tourism source markets in the world. UNWTO puts the
intra-regional share of arrivals in destinations in Asia and the Pacific at
79%.
The South-East Asian sub-region fared even better than the region as a
whole in terms of inbound tourism, recording an 8% average annual
growth in 2005-2011. This included increases of 12% in 2010 and 10% in
2011 to 77 million, or 35% of total arrivals in Asia and the Pacific.
Even though data on departures is subject to more limitations than data on
arrivals, it is estimated that South-East Asia generates 11% of total arrivals
in Asia and the Pacific, including 5% of arrivals in North-East Asia, 4% in
South Asia, 5% in Oceania and 47% of arrivals in South-East Asia itself.
While none of the three giant source markets of Asia and the Pacific
China (in 3rd place worldwide in terms of expenditure in 2011), Japan (9th)
and Australia (10th) are located in South-East Asia, several of the
worlds top 50 are. They include Singapore (13th), Malaysia (25th),
Indonesia (34th), Thailand (35th) and the Philippines (45th).
This study aims to provide an up-to-date perspective of the major tourism
trends and developments in five key South-East Asian outbound markets:
Indonesia, Malaysia, Singapore, Thailand and Vietnam. Of the five
markets under survey, only Vietnam lies outside the top 50 world tourism
spenders.
Intra-regional travel from the five South-East Asian markets surveyed
continues to expand rapidly over land, water and, most importantly, by air,
as international tourism has become accessible for a much larger share of
the population.
Asia and the Pacific and South-East Asia in particular are experiencing
a boom in air travel. This boom is being driven largely by the emergence
and expansion of low-cost carriers (LCCs), which are allowing much larger
numbers of people to travel abroad from countries with relatively modest
levels of income per capita including four of the five markets under
review.
viii
Executive Summary
Outlook
for South-East Asia
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The five markets
This boom is both feeding off and encouraging the demand for intraregional (short-haul) tourism, and is supporting the growth of secondary
tourism destinations.
Long-haul air travel to and from South-East Asia has also been performing
well. The apparent decline in traffic to and from Europe is illusory: many
passengers are now travelling via the Middle East.
Most people in South-East Asia able to afford travel abroad have ready
access to the Internet. Mobile phones are already almost ubiquitous, and
evidence suggests that the five markets generally are taking very
enthusiastically to social media. This implies that the Internet and social
media are transforming the way people research and book their travel, with
profound implications for the structure and operational methods of the
travel trade.
The crucial factor in the growth of travel out of Asian markets from
South-East Asia as much as from China is the increasing numbers of
people in the prospering middle classes. By one estimate, of the worlds
2.1 billion middle-class population, about 750 million, or 30%, are now
from the region. This is expected to increase by almost 400% over the next
20 years to 3.4 billion 60% of the worlds total.
Becoming a member of the middle classes, however, does not necessarily
mean becoming affluent. A common theme in reports from South-East
Asia is the increasing price sensitivity of travel demand, and statistical
evidence of declines in spending per trip. This may be at least partly
explained by the increasing numbers of people on modest incomes who
are travelling abroad.
Demand and capacity are expected to continue to grow, albeit at a slower
rate than in previous years partly because of the increase in the base
numbers, and partly because of the expected slowdown in world economic
growth. The formation of the ASEAN Economic Community (AEC) by the
end of 2015 should, however, support the growth in intra-regional travel
within at least four of the five markets.
Indonesia has the worlds fourth largest population, roughly three times
that of Vietnam or Thailand, eight times that of Malaysia and 50 times that
of Singapore. This alone means that, in the medium to longer term,
Indonesia will almost certainly be a dominant player in South-East Asias
outbound travel industry.
Economically, South-East Asia is prospering, and all five countries are
sharing in this prosperity. However, their economic circumstances differ:
Singapore is a very wealthy city-state with a GDP disproportionate to

its small size and population.
Malaysia is now regarded as a middle-income, newly industrialised

country, but has never quite achieved the growth rates of the first
rank of Asian Tigers.
Thailand has often achieved faster growth, but its progress has often
been interrupted by natural disasters and political conflicts.
Sunday, May 18, 2014 9:53:17 PM
ix
Although Indonesia is a much bigger country, its prosperity has come

more recently, with the transition to democracy. Indonesia had never
wholeheartedly embraced communism (like China and Vietnam), nor
market capitalism (like Singapore, Thailand and Malaysia); the
legacy is some serious institutional problems, without any
revolutionary zeal for reform a combination which some think
threatens its prosperity. But for the moment, among the five
economies, growth seems strongest in Indonesia.
Vietnam has, over the last 50 years, suffered the extremes of

prosperity and disaster, and remains more susceptible to boom and
bust. It is the smallest and poorest of the five economies, but in its
boom periods has shown a dynamism and reformist zeal similar to
Chinas.
There is a huge variation in spending power in the five countries.

Singapores GDP per capita (US$ 49,300 in 2011) is comparable with that
of the United States of America and Japan. Thailands (US$ 5,400) is
closely comparable with that of China. Malaysias (US$ 10,100) is roughly
double, but Indonesias (US$ 3,500) is only two thirds that of China. In the
case of Vietnam (US$ 1,400) it is only two fifths that of Indonesia. Except
in Singapore, GDP per capita remains well below the US$ 15,000
threshold which, the Boston Consulting Group suggests, allows mass
demand for long-haul leisure tourism.
The outbound travel markets of Indonesia and Thailand are less than half
the size of Singapores and Malaysias, while Vietnams is less than one
third the size of Indonesias and Thailands. However, in recent years
Vietnam has been the fastest growing market, increasing by 22% a year in
2005-2011, compared with 11% a year in the case of Thailand and 6-8% a
year in Indonesia, Malaysia and Singapore.
In value terms, however, the Singapore travel market is twice the size of
Malaysias. With much higher average incomes, Singaporeans are able to
travel further and to spend more on their trips.
On average, every Singaporean takes 1.4 overnight trips abroad a year,
whereas only one in 15 Thais takes a trip abroad each year; about one in
25 Malaysians (according to best estimates), one in 42 Indonesians, and
one in 59 Vietnamese.
The analysis of outbound travel by destination confirms the overwhelming
importance of intra-regional tourism travellers flood to their closest
neighbouring country. However, there are very important differences in the
choice of both long-haul and short-haul destinations, sometimes for
cultural, commercial or historical reasons, and sometimes as a result of
temporary fashions. The Hajj, for instance, makes Saudi Arabia an
important destination from Indonesia and Malaysia, but not from the other
three markets.
Comparable data on purpose of trip is limited, but the share of business
trips (as opposed to leisure or other reasons) ranges from about 13% of
the total in Singapore to 39% in Vietnam.
Executive Summary
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Prospects
for the five markets
The use of payment cards for retail spending abroad has become well
established in Singapore, Malaysia, Thailand and Vietnam, but not yet in
Indonesia. It has naturally developed more in Singapore.
It may be assumed that most people affluent enough to travel abroad have
access to the Internet. However, only in Singapore is there a substantial
proportion of broadband Internet connections, which limits the practicality
of Internet-based travel research and booking in the other markets, and
perhaps helps explain the reported importance of mobile phones for
access to travel sites.
International air traffic in South-East Asia has been growing rapidly in all
five markets, even though it has often been constrained by airport
capacity. The annual figures for the five markets show great variations, but
Singapore has established itself as an important hub for long-haul flights
and their regional interconnections. Malaysia (primarily Kuala Lumpur) is
important for intra-regional LCC flights, especially for services to
secondary destinations in Indonesia. Services to and from Thailand are
more oriented towards the inbound leisure tourism market, despite the
expansion of the local market, while Vietnam is still restrictive in terms of
aviation freedoms and airline competition.
The Pacific Asia Travel Associations (PATA) Asia Pacific Tourism

Forecasts 2012-2014, published in 2012, suggests that trips to its member
countries in 2010-2014 will increase by 17% a year from Vietnam, 10% a
year from Singapore, 7% a year from Indonesia and Malaysia, and 6% a
year from Thailand.
Tourism Economics forecasts for 2011-2018, prepared in 2010, are less
bullish, suggesting that arrivals worldwide will increase by 9% a year from
Singapore, 5.5% a year from Malaysia, 4.5% a year from Vietnam, 3% a
year from Indonesia and 1.5% a year from Thailand. However, the
forecasts for Indonesia, Malaysia and Vietnam are very modest compared
with trade expectations, and have proved, in 2011-2012, to be pessimistic.
Indonesia stands out from the others as larger in its potential scale,
because of the size of the country and its population. It has a long way to
go to realise that potential, of course, but is making rapid progress.
Singapore stands out because of its wealth. It is by far the largest of the
five markets in value terms. And it is the only one in which outbound travel
long-haul and short-haul is already a reality for the majority of the
people. As a city-state, the nature of its tourism market is distinctive in
many senses.
Malaysia is nominally roughly as important as Singapore as an outbound
market in terms of trip volume but trips are predominantly short-haul and
the figures often quoted include same-day trips. Spending power is not as
high as in Singapore, but it is higher than in Thailand, Indonesia and
Vietnam.
Thailand is, in terms of GDP per capita, a little less wealthy than Malaysia,
but appears to have a higher propensity for outbound travel, perhaps
because of the influence of inbound tourists. It clearly has great potential
xi
for economic and outbound tourism growth, but the underlying trends have
been disrupted by environmental and political troubles in recent years.
Sunday, May 18, 2014 9:53:17 PM
Vietnam has a relatively large population (second only to Indonesias), but

average incomes are still very low. It is by far the smallest of the five
markets but also the fastest growing. This growth tends to be erratic. But
if the potential growth is highest in Indonesia in terms of absolute volumes,
it is highest in Vietnam in terms of percentage increases.
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xii
Executive Summary
xiii
Introduction
Objectives and scope
of the study
In July 2012, the World Tourism Organization (UNWTO) commissioned a joint

research project with Tourism Australia on key South-East Asian (SEA)
outbound markets, with particular reference to five selected source countries:
Indonesia, Malaysia, Singapore, Thailand and Vietnam.
A combination of newly industrialised economies and emerging markets, these
secondary sources of tourism demand have been playing an increasingly
significant role in the growth of both intra-regional and inter-regional tourism in
Asia. To be able to develop the right marketing messages for stakeholders, this
project aims to provide a broad overview of outbound tourism trends and
developments in these markets from different sources, involving robust
analysis of secondary data available and, where possible, primary research.
Sunday, May 18, 2014 9:53:17 PM
The purpose of the study was to obtain relevant information on these key
South-East Asian outbound markets to support the marketing activities of
UNWTOs member countries and Tourism Australia. Although these secondary
markets are increasingly important, they are not yet as widely researched and
publicised as other higher-profile travel markets such as China, India and the
Republic of Korea.
The main aim is to provide a comparative analysis and assessment of the
current status and growth potential of these five selected secondary markets,
identifying those offering the best potential return on investment, and the
reasons for this. It also seeks to serve as useful groundwork for future primary
research.
This kind of information is critical to help national tourism organisations (NTOs)
and administrations (NTAs), as well as airlines and other commercial
operators, plan ahead with greater foresight, as it provides guidance on both
short-term opportunities and the longer-term potential for investment in these
increasingly dynamic sources of both business and leisure tourism.
Chapter 1 looks at South-East Asia in the context of the region as a whole, and
of the world. It presents regional growth trends in outbound trip volume and
spending, and airline performance, both within the region and from
intercontinental sources.
Chapter 2 summarises the key characteristics of the five South-East Asian
markets which are the subject of this study. It provides a brief comparative
analysis of key demographic and economic trends, as well as highlighting
comparative trends in travel demand and the markets' relative prospects for
outbound travel growth over the short to medium term.
Chapters 3 to 7 focus on the five individual outbound travel markets,
comprising a detailed profile of each.
xiv
Introduction
Data sources and

methodology
Several statistical sources were used in the compilation of this report, all of
which are cited where relevant, as well as at the end of each market profile.
Among the most widely used sources for the desk research phase of the study
were different agencies and departments of the United Nations, in particular
the Population Division of the UN Department of Economic and Social Affairs
(UN DESA), the International Monetary Fund (IMF), national statistics offices,
aviation authorities and tourism administrations, as well as various online
databases and information services.
The World Tourism Organizations (UNWTOs) statistical database was also a
very valuable source for this report, as were reports and forecasts from
UNWTO and the Pacific Asia Travel Association (PATA).
Caution must be exercised when interpreting the statistics provided, as these
are compiled using different definitions and methodologies across different
countries. Tourist arrivals in particular are prone to these variations as they are
reported by destination countries using different measures. Data on outbound
tourism reported by the source country is often scarce. This makes it
necessary to rely on arrivals reported by the destination countries, or other
sources of information.
Sunday, May 18, 2014 9:53:17 PM
For complementary information much use was made of online and published
information, which is not always precisely defined. In principle, official data was
preferred, but in practice data was often only available from commercial and
business sources, which proved valuable in filling some information gaps.
A final caveat while care was taken to use the most reliable sources and
verify information, it is not possible to guarantee the accuracy of every item of
data.
Chapter 1
South-East Asia in Context

Asia Pacific Tourism Trends
South-East Asia in the
context of regional
tourism trends
In order to understand the relative importance of the five South-East Asian

outbound travel markets that are the subject of this study, not to mention their
impact on regional tourism flows generally, it is important to look at trends from
South-East Asia in a broader context of Asia Pacific tourism and of world
tourism trends generally.
According to the latest World Tourism Barometer from the World Tourism
Organization (UNWTO), released in November 2012, Asia Pacific was the
worlds second most important region in terms of international arrivals in 2011,
attracting 218 million behind Europe with 509 million and ahead of the
Americas with 156 million. This means its share of international tourist arrivals
worldwide was 22% as against Europes 51% a gap that has generally been
shrinking over the past decade and more. In terms of outbound trips
(measured as total arrivals from countries in the region to all other destinations
worldwide), Asia Pacifics share is roughly the same as for arrivals (22%),
compared with Europes 53%.
Sunday, May 18, 2014 9:53:17 PM
South-East Asia accounted for a 35% share of total arrivals in the Asia Pacific
region, or just over 77 million, second in importance to North-East Asia with
157 million (53%). No similar breakdown is available for outbound tourism, but
individual market trends suggest that South-East Asia also ranks in second
place in terms of both outbound trip volume and spending on international
tourism.
North-East Asia includes some of the worlds largest and fastest growing
outbound travel markets such as China, the Republic of Korea, Taiwan
(Province of China) and (at least, in the past) Japan but South-East Asia
counts a number of important emerging markets and newly industrialised
economies which, although much smaller, offer some of the best growth
potential for the future. And demand for outbound travel from the sub-region is
already growing rapidly, albeit from a relatively low base.
A fast growing region

both in volume
The Asia Pacific region generally has been one of the most dynamic tourism
markets over the past five to ten years. It recorded 6% annual growth in
international tourist arrivals from 2005 to 2011 a growth rate that is
comparable to that in the smaller UNWTO regions of the Middle East and
Africa, but a rate more than twice as high as that in Europe and the Americas.
The South-East Asian sub-region fared even better, with an 8% average
annual growth for the period, as well as a 12% increase for 2010 and 11% for
2011. By comparison, growth was comparatively lower in North-East Asia
(+4%), owing to the drop in arrivals in Japan (-28%) and the temporary
disruption of Japanese outbound travel due to the 2011 Thoku earthquake
and tsunami. Other key sub-regional markets also performed worse than in
recent years.
Chapter 1 South-East Asia in Context
Significantly, most of the growth in Asia Pacific and not least in its star
performing sub-region, South-East Asia was driven by intraregional demand.
A large number of destinations reported double-digit arrivals, with Myanmar,
Cambodia, Thailand and Vietnam heading the growth ranking with strong
double-digit increases, much of which was due to demand from neighbouring
source countries.
Between January and August 2012, Asia Pacific was the leading world region
in terms of arrivals growth (+7% over the same period the previous year), with
South-East Asia up 8%, fuelled again by the performance of intra-regional
flows to countries such as Thailand, Cambodia, Vietnam and the Philippines.
As many as 79% of the regions international tourist arrivals, according to
statistics gathered by UNWTO, are now from intra-regional sources (2010
data). This compares with 69% in 1980 and 78% in 1995. And the share is
forecast to rise to 81% by 2020 and to 83% by 2030, thanks to more rapid
growth in demand from the region itself.
Table 1.1
International tourist arrivals in Asia Pacific by origin, 1980-2030

(% share of arrivals)
Year
Sunday, May 18, 2014 9:53:17 PM
1980
1995
2010
2020 (forecast)
2030 (forecast)
Intra-regional
Inter-regional
69
78
79
81
83
31
22
21
19
17
Source: UNWTO, Tourism Towards 2030.
Even though data on departures is subject to more limitations than data on

arrivals, it is estimated that South-East Asian source markets generate 11% of
international arrivals in destinations in Asia and the Pacific. Broken down by
Asia and the Pacific sub-regions, South-East Asian source markets generate
5% of international arrivals in North-East Asia, 4% in South Asia, 5% in
Oceania and 47% of arrivals in South-East Asia itself.
and value
In terms of international tourism receipts, growth in the Asia Pacific region

slowed in 2011, largely because of the impact of the Tohoku earthquake and
tsunami in Japan, which affected both inbound and outbound tourism to/from
the country. But Asia Pacific still earned US$ 293 billion in tourism receipts, up
US$ 37 billion over 2010, or a 4% increase in real terms. South-East Asias
share was US$ 84 billion, second only to that of North-East Asia.
Asia Pacific counts three source markets in the UNWTOs worldwide Top-10
ranking for spending on international tourism: China (in 3rd place), Japan (9th)
and Australia (10th). In 2011, China recorded the highest increase in spending
of all markets, with a 32% increase, or an additional US$ 18 billion. This helped
it to strengthen its third place behind the United States of America.
In addition to the top three, however, the region counts a further ten countries
in the top 50 world spenders ranking: Singapore (13th), Republic of Korea
(15th), Hong Kong (China) (16th), India (23rd), Malaysia (25th), Taiwan
(Province of China) (27th), Indonesia (34th), Thailand (35th), Philippines (45th)

and New Zealand (47th). Of the five markets under survey, only Vietnam lies
outside the top 50.
Recent Trends in Air Travel

A boom in progress
Asia Pacific and South-East Asia in particular are experiencing a boom in

air travel. This boom is being largely driven by the emergence of low-cost
carriers (LCCs), which are widely held to be a principal factor in allowing much
larger numbers of people to travel abroad from countries that still have
relatively modest levels of income per capita which is the case in four of the
five markets under review.
Sunday, May 18, 2014 9:53:17 PM
In a recently published report, Asia Pacific Online Travel Overview, Fifth

Edition, PhoCusWright outlines how the regions airline market is the fastest
growing in the world, with LCC traffic increasing nearly three times faster than
that of traditional airlines in 2012. This growth, it says, comes despite a
background of political and economic instability, natural calamities, rising oil
prices and foreign exchange volatility. The report predicts a growth of 23% for
LCCs and 8% for traditional airlines in 2012. It also predicts that by 2013 LCC
gross online bookings will reach US$ 13.3 billion, up 55% over 2011.
principally on
short haul routes
Short-haul routes are taking the lions share of this boom, in terms of both
traffic and passenger numbers. Demand for intra-regional travel and LCCs are
boosting each others growth.
but longer-haul routes

are also performing well
However, long-haul services out of the five markets under survey have also
performed well above the world average, according to the Sydney-based
Centre for Aviation (CAPA). Three factors have underpinned this trend:
The most important is the arrival of low-cost, long-haul carriers such as

AirAsia X and hybrid business models offering a mix of low-cost and
premium services, such as Jetstar, Virgin Australia and now Scoot
(Singapore).
A second factor deriving largely from the first has been the emergence
of routes to/from secondary destinations. For instance, flights serving
Phuket and Bali out of Australia cater mainly for Australian holidaymakers,
but also facilitate outbound travel. Many of the larger Indonesian cities,
including Bandung, Surabaya and Medan, need intra-regional and in some
cases even inter-continental connections. With rising purchasing power
and the establishment of large expatriate communities in secondary cities,
there is potential for services to more secondary destination points.
Alliances are influential in reshaping intercontinental links by use of
traditional hub and spoke systems. The integration of Vietnam Airlines into
SkyTeam in 2010 sped up the development of new routes to Europe and
the United States of America out of Vietnam. Malaysia Airlines is joining
OneWorld in 2013 and Garuda is joining SkyTeam in 2014.
Table 1.2
Airline servicesa from the five marketsb to destinations outside Asia, July 2012
(weekly capacity)
Airline
Departure
airportsc
Destinations
outside Asia
Air New Zealand

Garuda
Malaysia Airlines
Qantas
Singapore Airlines
Thai Airways Intl
Vietnam Airlines
AirAsia Groupd
Jetstar
Lion Air
Scoot
Tiger Airways
Virgin Australia
DPS
CGK, DPS
KUL
BKK, CGK, SIN
SIN
BKK, HKT
HAN, SGN
DPS, KUL
BKK, CGK, DPS, HKT, SIN
CGK, MES
SIN
SIN
DPS, HKT
1
6
12
7
31
22
6
5
6
1
2
1
5
Non-stop or direct services by network and low-cost airlines.
Indonesia, Malaysia, Singapore, Thailand and Vietnam.
DPS = Denpasar, Bali;

CGK = Jakarta;
KUL = Kuala Lumpur;
BKK = Bangkok;
SIN = Singapore;
HKT = Phuket;
HAN = Hanoi;
SGN = Ho Chi Minh City;
MES = Medan.
Number of
flights
Number of
seats
9
338
433
351
1,347
643
244
230
477
31
62
31
182
2,106
81,551
136,090
132,522
438,727
224,827
75,029
68,225
110,271
12,183
15,252
5,580
32,760
Sunday, May 18, 2014 9:53:17 PM
Air Asia X and Indonesia AirAsia.

Source: International Air Transport Association, SRS Analyser.
Europe is a possible
exception
Since 2008 many direct services between Europe and South-East Asia have
been reduced or even eliminated. To a large extent this has been compensated for by an increase in services via the Middle East (especially via Dubai,
Abu Dhabi and Doha). However, in view of the lack of economic growth in
Europe, the intense competition and rising fuel prices, there is still pressure on
services to Europe.
Among eight airports in South-East Asia with connections to Europe, five will
suffer a drop in seat capacity this winter (2012/13):
Seat capacity originating in Jakarta is down 16%, since Garuda has

sharply reduced its services to Amsterdam.
Capacity from Bangkok is down 8%: it has lost services from two airlines,
Qantas and Air Berlin, in 2012, while flights to Athens, Berlin and
Dsseldorf have also been suspended, and Air Frances capacity has
been reduced.
Services from Phnom Penh, Saigon and Ho Chi Minh City have also been
reduced.
Singapores Changi Airport, on the other hand, is seeing an expansion of
seat capacity to Europe of 4%, (although the number of destinations
served directly is down to 14 from 16 in November 2011).
Surprisingly, the biggest increase in seat capacity will be out of Manila

airport. KLM has enjoyed a monopoly on the route to Europe since
Philippine Airlines withdrew from this market a decade ago. This winter
KLM will offer 9,810 seats a month between Amsterdam and Manila, up
20%.
Compared with the winter 2011/2012 airline schedule, there are no longer any
services linking South-East Asia with Athens, Berlin, Dsseldorf, Manchester
and Warsaw, while London Gatwick, Paris Orly and Rome have been dropped
from services out of Kuala Lumpur.
Table 1.3
Airline seat capacity to Europe from major airports in South-East Asia, 2012a
Airport
Bangkok
Singapore
Kuala Lumpur
Ho Chi Minh City
Jakarta
Hanoi
Manila
Phnom Penh
Number of
airlines
Number of
destinations
Available
seats
Flights
per month
16
8
3
5
4
2
1
1
21
14
5
6
3
5
1
1
278,257
275,425
72,019
39,157
26,961
26,282
9,810
3,168
862
764
214
134
98
85
30
12
Sunday, May 18, 2014 9:53:17 PM
Total as at October 2012, including forecast capacity through the remainder of the year.
although recent news

has been more positive
Garudas upcoming membership of SkyTeam is being accompanied by the reopening of routes to Europe and the United States of America, while Malaysia
Airlines integration into OneWorld may lead to the return of British Airways and
Qantas to Kuala Lumpur. The specialist press has been full of hints about
possible new services, or increased frequencies, to Europe.
Factors Affecting South-East Asian Outbound Travel

Impact of the internet and
social media
The Internet is not yet readily available to the majority of people in South-East
Asia. At the country level, only in Singapore (77%) and Malaysia (62%) is it
accessible to a majority. However, it is presumably available to most people
who can afford travel abroad. On the other hand, mobile phones are already
almost ubiquitous in South-East Asia, and survey and anecdotal evidence
suggest that the five markets generally are taking very enthusiastically to social
media.
This implies that the Internet and social media are transforming the way people
research and book their travel, with profound implications for the structure and
operational methods of the travel trade.
A reported 42% of South-East Asian travellers use mobile devices to research
travel options. Almost half use online travel sites, with women accounting for a
higher 57%, according to a poll commissioned by leading Asia Pacific travel
metasearch engine, Wego. The study revealed that traditional group travel is in
decline and that Singaporean, Indonesian, Malaysian, Thai, Vietnamese and
Filipino travellers have a growing preference for travelling independently,

organising their own itineraries.
When planning a holiday, says Wego, South-East Asian travellers get
inspiration from:
Sunday, May 18, 2014 9:53:17 PM
Growing middle classes

will drive longer-term
growth
Family and friends (61%)

Travel websites (49%)
Newspapers and magazines (37%)
Search engines (36%)
TV (27%)
Travel blogs (25%)
Travel agencies (25%)
Facebook (20%)
Tourism boards (16%)
Twitter (5%).
IPK Internationals latest World Travel Monitor is re-emphasising a point which

has often been made in the past. The crucial factor in the growth of travel out
of Asian markets from South-East Asia as much as from China is the
increasing numbers of people in the prospering middle classes, making travel
affordable to a higher portion of the populations. This will lead not only to more
budget travellers seeking regional destinations, but also to more long-haul
travellers, helping offset the weaker demand in Europe.
Asia Pacific has become a much larger consumer market. Of the worlds
estimated middle class population of 2.1 billion, about 750 million, or 30%, are
now from the region. But Asias middle class is expected to grow by almost
400% over the next 20 years to 3.4 billion, gaining share on other regions. By
2021 Asia Pacific is expected to account for about 60% of the worlds middleclass population. This will undoubtedly prove one of the main drivers of future
growth in consumer spending, including travel.
Table 1.4
Year
2011
2021
2031
Forecast middle-class population in the Asia Pacific region, 2011-2031

Population (million)
Asia Pacific
World
746
1,889
3,377
2,101
3,413
5,048
Asia Pacific as
share of world (%)
36
55
67
Source: Airbus Industries forecasts, 2011.
Becoming a member of the middle classes, however, does not necessarily

mean becoming affluent. A common theme in reports from South-East Asia is
the increasing price sensitivity of travel demand, allied with statistical evidence
of declines in spending per trip. This may be at least partly explained by the
increasing numbers of people on modest incomes who are travelling abroad.
Outlook for South-East Asian Outbound Travel

Intra-regional demand
offsetting weakening of
long-haul markets
In line with forecast trends throughout the Asia Pacific region, intra-regional
travel from the five secondary South-East Asian markets surveyed continues to
expand rapidly, in parallel with the air services offered within the region. In
addition, road corridors are improving and new sea routes are being
developed. Just as importantly, access is easing to destinations that were
formerly difficult to visit, such as Myanmar.
Overall, the increase in demand from Asian travellers appears to be more than
offsetting any weakening of traffic from the Americas and Europe.
Demand and capacity are expected to continue to grow, albeit at a slower rate
than has been the case in previous years. This is partly due to the fact that the
numeric base is increasing, but also because the world economy is negatively
affecting some markets. Some sovereignty disputes in a number of countries in
northern Asia Pacific are not helping either, especially between China and
Japan.
Airline capacity
remains a key factor
The Association of Asia Pacific Airlines (AAPA) remains fairly optimistic about
2013 despite the recent slowdown in traffic growth, the challenging conditions
in the cargo sector, high oil prices and continued economic weakness in
Europe.
Sunday, May 18, 2014 9:53:17 PM
The main concern for airlines is the way high oil prices continue to eat into
profits. Oil now accounts for about 38% of total costs, up from 32% in 2011,
and explains why airlines are anxious to incorporate new (more fuel-efficient)
aircraft, and yet are reluctant to order new aircraft, which might be difficult to
operate profitably.
The cargo market, which Asian carriers rely on more than airlines from Europe
or North America, also remains challenging, and it is unclear when conditions
will improve. Finally, the sluggish economy in Europe and, to a lesser extent in
North America, is also affecting demand on some long-haul passenger routes.
Those Asian carriers with large European networks have been particularly
affected. But within Asia demand remains strong.
Consumers are confident

enough to travel
In spite of the continuing uncertainties about the world economy, consumer

confidence in South-East Asia appears to be strong, keeping travel demand
buoyant.
According to the latest survey wave of South-East Asian travel markets by
IPK Internationals World Travel Monitor, towards the end of 2012, only onethird of respondents said the global financial crisis would affect their travel
plans, while two-thirds said it would have no impact at all.
At the end of 2011, 36% of those questioned said the recession would
influence their travel plans in 2012. In 2012 that figure was down by four
percentage points to 32%. Some 29% of South-East Asian respondents
intended to travel more in 2013, while only 16% aimed to travel less. And a
little over 50% said they would make the same number of trips.
Boost expected from

launch of AEC
Not surprisingly, tourism within member states of the Association of South East
Asian Nations (ASEAN) is perceived to have greater than average potential. By
the end of 2015 the latest date for the launch of the ASEAN Economic
Community (AEC) ASEAN member states aim to have achieved a number of
specific goals, namely to:
Sunday, May 18, 2014 9:53:17 PM
establish a free-trade area that will abolish most tariffs for goods and
services;
finalise a visa-exemption agreement between all ASEAN member countries;
ensure full liberalisation of passenger air services and the creation of an
ASEAN Single Aviation Market;
stimulate further expansion of low-cost airline services, as well as the
opening up of two-way travel with ASEAN partner countries such as
Japan, Australia and even the Gulf Cooperation Council (GCC) member
states.
Chapter 2
Comparative Analysis
of the Five Markets
This chapter summarises the key characteristics of the five South-East Asian
markets which are the subject of this study Indonesia, Malaysia, Singapore,
Thailand and Vietnam detailed profiles of which are included in subsequent
chapters. It provides a brief comparative analysis of key demographic and
economic trends, as well as highlighting trends in travel demand and the
markets relative prospects for outbound travel growth over the short to
medium term.
Demographics
Sunday, May 18, 2014 9:53:17 PM
Indonesia dominates in
terms of people power
Indonesia has the worlds fourth largest population and is by far the most
populous country among the five markets covered by this survey, with roughly
three times the population of Vietnam or Thailand, eight times that of Malaysia
and 50 times that of Singapore. This means that, in the medium to longer term,
if not before, Indonesia will almost certainly be a dominant player in South-East
Asias outbound travel market, contributing significantly to the regions overall
tourism development.
Table 2.1
Indonesia
Malaysia
Singapore
Thailand
Vietnam
Total population, 2006-2012

(million)
2006
2007
2008
2009
2010
2011
2012
229.9
26.6
4.4
67.3
84.1
232.5
27.1
4.6
67.8
85.0
235.0
27.5
4.8
68.3
86.0
237.4
27.9
4.9
68.7
86.9
239.9
28.4
5.1
69.1
87.8
242.3
28.9
5.2
69.5
88.8
244.8
29.3
5.3
69.9
89.7
Source: Population Division of the UN Department of Economic and Social Affairs (UN DESA).
Although population growth has slowed in all the surveyed countries, it is still
substantial in all five. In Singapore, it surged from just 1.7% a year in 20002005 to 3.5% a year in 2005-2010, due largely to immigration, but this surge is
not expected to last. Worldwide, slowing population growth is associated with a
rapid ageing of the population, which among the five countries has been most
significant in Singapore.
The following table highlights some of the key demographic features of each of
the five nations, which all contribute in one way or another to their potential
growth in travel demand. Singapores population is growing the fastest, partly
because of immigration and, more importantly, longer relative life expectancy
among Singaporeans which also makes the city states inhabitants older on
average than the populations in the other countries. Malaysia has the highest
10
Chapter 2 Comparative Analysis of the Five Markets
proportion of children and young people (aged 0-24) in the overall population
count, followed by Indonesia and Vietnam.
Table 2.2
Indonesia
Malaysia
Singapore
Thailand
Vietnam
Key demographic facts and figures, 2011

Population
World
ranking
Population
Growth
(%)
Life
expectancy
(age)
Median
age
Share
aged 0-24
(% of total)
4
44
117
20
13
1.1
1.7
3.5
0.7
1.1
70.0
74.6
81.3
74.4
75.5
28
26
38
34
28
45
48
31
36
44
Sources: Population Division of the UN Department of Economic and Social Affairs (UN DESA); National Statistics
Offices; respective National Census data and household socio-economic surveys. (See individual market
profiles for further details.)
All prosperous
but very different
South-East Asia is prospering, and all five countries are sharing in this
prosperity. However, their economic circumstances are quite different:
Sunday, May 18, 2014 9:53:17 PM
Singapore is a very wealthy city-state with a GDP disproportionate to its

small size and population. Analysts including the International Monetary
Fund (IMF) have often wondered where future growth is going to come
from, but so far Singapore has not disappointed.
Malaysia found a role for itself in the world economy relatively early and is
now regarded as a middle-income, newly industrialised country, but it has
never quite achieved the high rates of growth of the first rank of Asian
Tigers.
Thailand has depended on a narrower and more fragile range of promising
growth sectors than Malaysia, and its progress has tended to be
interrupted by natural disaster and political turmoil.
Indonesia is a much bigger country with a much larger population as
close in scale to China and India as it is to Malaysia and Thailand.
Prosperity has come relatively recently, with the transition to democracy.
Previously, Indonesia had never wholeheartedly embraced communism
(like China and Vietnam), nor market capitalism (like Singapore, Thailand
and Malaysia). The legacy is some serious institutional problems, without
any revolutionary zeal for reform a combination which some think
threatens prosperity. But for the moment, among the five economies,
growth seems strongest in Indonesia.
Vietnam has, over the last 50 years, experienced the extremes of
prosperity and adversity, and remains more susceptible to boom and
bust. It is the smallest and least prosperous of the five economies, but in
its boom periods has shown a dynamism and reformist zeal similar to
Chinas.
Table 2.3
11
Gross Domestic Product, 2006-2011

(US$ billion)
Indonesia
Malaysia
Singapore
Thailand
Vietnam
2006
2007
2008
2009
2010
2011
364
163
146
207
61
432
194
178
247
71
510
231
190
273
90
539
202
186
264
93
708
247
227
319
104
846
288
260
346
123
Source: International Monetary Fund, World Economic Outlook, October 2012.
All four of the bigger countries (i.e. excluding Singapore) are characterised by
large and prosperous industrialised urban areas and traditional rural
hinterlands. The urban areas have wealthy elites, substantial middle classes
and large working classes struggling on low incomes. In the rural hinterlands,
cash incomes are very much lower in places even minimal but absolute
poverty is being rapidly reduced.
Sunday, May 18, 2014 9:53:17 PM
Table 2.4
Key economic trends, 2005-2011, forecasts 2012-2017
Economy
World ranking
by GDP
Indonesia
Malaysia
Singapore
Thailand
Vietnam
16
36
38
30
58
Real GDP growth (% per year)

2005-2011
2012-2017
5.9
4.5
6.2
3.0
6.8
6.6
4.9
3.6
5.0
6.7
Inflation
2011 (%)
5.4
3.2
5.2
3.8
8.1
Source: International Monetary Fund, World Economic Outlook, October 2012. (See individual market profiles for
further details.)
Spending Power
Huge range in GDP per
capita
Analysis of the five economies shows that there are big differences in the
respective GDP per capita figures. Singapores (US$ 49,271 in 2011) is
comparable with that of the United States of America (US$ 48,300) and
Japans (US$ 45,900) but not as high as that of some of the worlds richest
cities. Thailands (US$ 5,395) is closely comparable to that of China
(US$ 5,400), and Malaysias (US$ 10,085) is roughly double that but still only
a fifth of Singapores GDP per capita. In Indonesia (US$ 3,512) it is only two
thirds of that in Thailand, and in Vietnam (US$ 1,374) it is only two fifths of that
in Indonesia and only one thirty-sixth of that in Singapore.
These figures are shown in current US dollar terms. At purchasing power
parities (PPPs), GDP per capita is rather higher, reflecting lower prices than
those found in the United States of America. When travelling to OECD
countries, tourists from these five countries are likely to encounter prices
similar to those in the United States of America, but when travelling within Asia,
prices (aside from airfares, which tend to be similar worldwide) may be lower
making a compromise between GDP in US dollar terms and at PPPs more
relevant. More generally, lower domestic prices make travel abroad a more
expensive option.
12
Table 2.5
GDP per capita, 2006-2011

2006
2007
2008
2009
2010
2011
US$
Indonesia
Malaysia
Singapore
Thailand
Vietnam
1,623
6,066
31,763
3,296
724
1,897
7,122
36,695
3,918
835
2,209
8,390
38,087
4,300
1,048
2,299
7,252
36,567
4,151
1,068
2,981
8,737
43,865
4,992
1,174
3,512
10,085
49,271
5,395
1,374
US$ at PPPs a
Indonesia
Malaysia
Singapore
Thailand
Vietnam
3,420
12,735
47,361
7,691
2,364
3,690
13,748
50,302
8,286
2,607
3,942
14,542
50,738
8,639
2,800
4,102
14,263
49,880
8,507
2,945
4,353
15,293
56,708
9,222
3,143
4,666
16,240
59,711
9,398
3,359
purchasing power parities.

Sunday, May 18, 2014 9:53:17 PM
but travel abroad is still

not for the masses
Except in Singapore, GDP per capita remains well below the US$ 15,000
threshold which, the Boston Consulting Group suggests, allows mass demand
for long-haul leisure tourism. Attempts to define the proportion of the
population who can afford to travel abroad regularly usually founder on the
arbitrary nature of any thresholds set and the large numbers of people who, for
many different reasons, do not fit the norm.
Comparisons between different countries are even more fraught with
difficulties. What can be said is that the combination of growing affluence, lowcost flights and globalisation is allowing surprising numbers of people to travel
abroad at least occasionally.
Table 2.6
Indonesia
Malaysia
Singapore
Thailand
Vietnam
GDP per capita and spending power, 2011

World
ranking
Real
growtha
PPP
ratiob
HNWIs
(1000)c
110
64
12
91
142
4.4
3.2
3.1
2.5
5.5
1.33
1.61
1.21
1.74
2.44
24
39
99
58
3
a
b
% per annum 2005-2011.

Ratio of GDP per capita at PPPs to GDP per capita in US$ an indication of the price penalty paid when
travelling abroad (see text).
c High Net Worth Individuals rough figures from various sources.
Sources: International Monetary Fund, World Economic Outlook, October 2012; respective National Statistics
Offices; Merrill Lynch and Capgemini World Wealth Report, 2012. (See individual market
profiles for further details.)
13
Outbound Travel
Singapore and Malaysia
are the largest markets
In terms of numbers of overnight outbound trips, Singapore and Malaysia are

the largest of the five markets, although the different ways in which they
measure arrivals does make them difficult to compare. To illustrate the point,
Malaysia reports 13 million tourist arrivals a year from Singapore, which
suggests that the figures for Singapore could be seriously understated in the
table below. In contrast, the figures for Malaysia appear to be seriously
overstated (see the country profile). The difference lies in whether or not land
border crossings are included in their arrivals counts.
Same-day arrivals for each of the two countries are of course very important,
but these are not in principle included. In many neighbouring markets,
including China, Malaysia is the more important market (in terms of trip
volumes), simply because of the size of its population, but worldwide,
Singapore punches above its weight.
The outbound travel markets of Indonesia and Thailand are less than half the
size of Singapores and Malaysias, and Vietnams is less than one third the
size of Indonesias and Thailands markets. However, in recent years Vietnam
has been much the fastest growing market, increasing by 22% a year in 20052011, compared with 11% a year in Thailand and 6-8% a year in Indonesia,
Malaysia and Singapore.
Sunday, May 18, 2014 9:53:17 PM
Table 2.7
Overnight outbound trips, 2006-2011
Total trips (1000)

Indonesia
Malaysiaa
Singaporeb
Thailand
Vietnamc
Length of stay (days)
Indonesia
Malaysia
Singapore
Thailand
Vietnam
Nights (1000)
Indonesia
Malaysia
Singapore
Thailand
Vietnam
a
2006
2007
2008
2009
2010
2011
4,967
11,103
5,533
3,382
798
5,158
12,262
6,024
4,018
1,192
5,486
13,025
6,828
3,908
1,497
5,053
13,179
6,961
4,653
1,558
6,235
14,185
7,342
5,451
1,851
6,750
14,871
7,753
5,379
1,843
7.7
na
na
6.8
na
9.2
na
na
5.8
na
10.6
na
na
5.6
na
8.8
na
na
5.0
na
8.2
na
na
5.1
na
7.7
na
na
5.0
na
38,296
na
na
22,896
na
47,660
na
na
23,425
na
58,261
na
na
21,768
na
44,517
na
na
23,172
na
51,127
na
na
27,582
na
51,773
na
na
27,093
na
Euromonitor International estimates. These are out of line with trade estimates, which suggest around
7.5 million trips in 2010 for strict comparison with Singapores count.
b Excludes trips by road and rail to Malaysia.
c Data quoted by Tourism Australia.
Source: UNWTO from official sources, except where stated.
14
Data for length of stay and overnight volume is available only for Indonesia and
Thailand. The available figures suggest that average length of stay has been
declining in Indonesia since 2008 (from an unusually high level) and in
Thailand for much longer. It is likely that, with the possible exception of
Singapore, length of stay has been declining in all five markets. Accordingly,
nights spent abroad have been increasing less rapidly than the number of trips.
Table 2.8
International overnight trips, 2005-2011

(% average annual growth rate)
Market
Trips
Nights
Indonesia
Malaysia
Singapore
Thailand
Vietnam
7.6
6.0a
7.1
11.2
21.8 b
7.5
na
na
4.5a
na
a
b
2006-2011.
As quoted by Tourism Australia
Sources: UNWTO from official sources in each market; Euromonitor International; Business Monitor International;
Immigration & Checkpoints Authority, Singapore. (See individual market profiles for further details.)
Travel Expenditure
Sunday, May 18, 2014 9:53:17 PM
Singapore well out

in front
With their much higher average incomes, Singaporeans are able to travel
further afield and to spend more freely on their trips. In fact, Singapore is the
only travel market in Asia whose outbound trip volume is split pretty well evenly
between the three continents of Asia Pacific, Europe and the Americas.
Accordingly, in value terms, the Singapore travel market is twice as large as
that of Malaysia.
The Indonesian and Thai travel markets (US$ 7.3 billion and US$ 5.7 billion
respectively) each represent above half the value of the Malaysian market
(US$ 10.7 billion) in terms of expenditure, while the Vietnamese market
(US$ 1.7) is only one sixth the value of the Malaysian market, and one third
that of the Indonesian and Thai markets.
Total spending, and spending per trip, are shown in the table below, in current
US dollar terms. However, the purchasing power of the US dollar has fallen in
most Asian countries (as well as in Australasia and Latin America) over this
period. In real local currency terms, growth would be more modest and any
declines more dramatic.
Spending per trip, in current US dollar terms, has risen by a little over a third in
Singapore over the past six years. As explained above, part of this increase
can be attributed to relative prices and exchange rates. In contrast, spending
per trip has fallen by a third in Thailand and Vietnam and is approximately
unchanged in Indonesia, having risen in 2006-2009 and fallen back again in
2010-2011. These trends are all the more remarkable in view of the declining
value of the US dollar.
Table 2.9
15
International travel expenditure, 2006-2011

2006
2007
2008
2009
2010
2011
Total (US$ million)a

Indonesia
4,030
Malaysia
4,257
Singapore
11,269
Thailand
4,598
Vietnam
1,050
4,904
5,601
13,410
5,143
1,220
5,554
6,709
16,366
5,003
1,300
5,316
6,508
15,849
4,433
1,100
6,395
7,943
18,630
5,623
1,470
7,279
10,753
21,103
5,716
1,710
811
383
2,037
1,360
1,316
951
457
2,226
1,280
1,023
1,012
515
2,397
1,280
868
1,052
494
2,277
953
706
1,026
560
2,537
1,032
798
1,078
723
2,722
1,059
928
105
na
na
201
na
103
na
na
220
na
95
na
na
230
na
119
na
na
191
na
125
na
na
204
na
141
na
na
211
va
Spend per trip (US$)

Indonesia
Malaysiab
Singaporec
Thailand
Vietnam
Spend per night (US$)
Indonesia
Malaysia
Singapore
Thailand
Vietnam
a
b
c
Sunday, May 18, 2014 9:53:17 PM
Excluding transport
Based on trip volume estimates from Euromonitor International (see text for further comment)
Figures are heavily distorted (i.e. are too high) by absence of road and rail trips to Malaysia in trip data
Source: UNWTO from official sources, except where stated.
Average spend per trip for Malaysia is based on Euromonitor estimates for trip
volume. However, both the estimates for absolute volume and the progression
over time should be interpreted with caution. A trip volume of 7.5 million in
2010 in line with trade estimates and those of Tourism Economics (not
Euromonitor) would give a spend per trip of US$ 1,375 more in line with
what might be expected given Malaysias GDP per capita. Because of these
uncertainties surrounding the source data, it is difficult to draw any reliable
conclusions for the Malaysian market.
Table 2.10 Growth in international travel expenditure, 2005-2011

(average annual % change in current US$ )
Indonesia
Malaysia
Singapore
Thailand
Vietnam
10.0
19.0
13.5
7.8
11.8
Source: UNWTO; National Central Banks.
16
Travel Intensity
Huge variation in
propensity to travel
abroad
The following table attempts to show the intensity of outbound travel from the
five markets by various criteria. Given the variations and uncertainties involved
in the base data, the results should be interpreted with caution.
Column A shows the number of overnight trips abroad taken per 1000
inhabitants. It shows the huge variation in the intensity of travel across the
five markets. On average, every person in Singapore took 1.4 trips abroad
each year in 2006-2011. By comparison, the figures show that only about
1 in 2 people in Malaysia did so each year. And the respective figures
were only 1 in 15 people in Thailand, 1 in 42 in Indonesia and 1 in 59 in
Vietnam.
However, there are two serious distortions in this column: the figure for
Singapore excludes the very large numbers of trips by road and rail into
Malaysia, and the figure for Malaysia is based on the questionable data
from Euromonitor International on trip numbers. Correcting for these, the
figure for Singapore should be much higher and the figure for Malaysia
much lower (around 1 in 25 if the trade estimates of around 7.5 million
trips in 2010 are taken).
Sunday, May 18, 2014 9:53:17 PM
Column C shows travel intensity in terms of travel spending per person.

These figures are based on the national accounts, theoretically drawn up
using internationally standardised methods, but in practice subject to the
difficulties of collecting and analysing data in each country. Nevertheless, it
produces results very closely comparable with the figures in Column A in
which we have more confidence (Indonesia, Thailand and Vietnam) and
consistent with our assumptions about the distortions in the data for
Singapore and Malaysia.
This column suggests that, on average, each person in Singapore spent
US$ 3,283 a year on travel abroad in 2006-2011 and this figure excludes
spending on transport to the destination (airfares etc.). By comparison,
annual spending on travel abroad was only US$ 248 per person in
Malaysia, US$ 74 in Thailand, US$ 23 in Indonesia and US$ 15 in Vietnam.
In contrast, Column B shows a very different concept of travel intensity: the

volume of trips relative to GDP. US$ 1 million of GDP generated 59 trips
abroad in Malaysia, 34 in Singapore, 16 in Thailand and Vietnam and 10 in
Indonesia. This is partly related to the size of the countries. Indonesia, as a
very large country, offers more scope for satisfying business and leisure
travel requirements within the country. Singapore, as a small city state, is
necessarily much more open in terms of trade (and therefore business
travel) and in terms of satisfying leisure inclinations. But the figures for
Singapore and Malaysia are subject to the same distortions as in Column
A. Column D, which is expressed on a comparable scale, may therefore be
preferred.
Column D shows the share of GDP devoted to travel spending abroad
(dividing by 10 results in the percentage of GDP spent abroad).
Singapore has the largest relative spending with 8% of their GDP spent
on international travel. This share is 2.6 times larger than that of
Malaysians, 4.4 times that of Thais, 5.5 times that of Vietnamese and 8.5
17
times that of Indonesians the market with the least propensity to spend
income on travel abroad.
Table 2.11 International travel intensity, 2006-2011 (averages for the six years)
Overnight trips
Indonesia
Malaysia
Singapore
Thailand
Vietnam
Travel spending
per 1000 of
population
A
per US$ million

of GDP
B
per person of
population
C
per US$ 1,000

of GDP
D
24
473
1,395
66
17
9.9
59.3
34.1
16.4
16.1
23
248
3,283
74
15
9.5
31.2
80.2
18.4
14.5
Source: The Travel Business Partnership, from data in previous tables.
Top Destinations
Neighbouring countries
predominate
The top destinations for all five source markets are overwhelmingly
neighbouring countries: destinations in South-East Asia and East Asia account
for 42 of the 50 top ten places in the five markets. Indeed the five countries
almost always appear in each others lists of top ten destinations and usually
in the top five. The only ones not present in the list are Indonesia (in Vietnam)
and Vietnam (in Indonesia).
Sunday, May 18, 2014 9:53:17 PM
Table 2.12 Top ten destinations, 2010

Indonesia
Malaysia
Singapore
Thailand
Vietnam
1. Malaysia
2. Singapore
3. China
4. Hong Kong
5. Thailand
6. Saudi Arabia
7. Macao
8. Australia
9. Taiwan
10. Korea
1. Thailand
2. Indonesia
3. China
4. Singapore
5. Hong Kong
6. Taiwan
7. Australia
8. Vietnam
9. India
10. Saudi Arabia
1. Malaysia
2. Indonesia
3. China
4. Thailand
5. Hong Kong
6. Australia
7. Taiwan
8. Japan
9. Vietnam
10. USA
1. Lao PDR
2. Malaysia
3. China
4. Singapore
5. Hong Kong
6. Korea
7. Vietnam
8. Japan
9. Indonesia
10. Macao
1. China
2. Cambodia
3. Lao PDR
4. Thailand
5. Singapore
6. Malaysia
7. Hong Kong
8. Korea
9. Russian Fed.
10. Macao
Notes: The full names for countries/states listed above: Hong Kong (China), Republic of Korea, Macao (China),
and Taiwan (Province of China).
It is unlikely that a destination is missing from these lists because the destination does not report arrivals
from one or more of these five markets (with the exception of France for Vietnam). However, because of
the various definitions and methodologies used by individual destinations, it is quite probable that one or
two destinations are wrongly placed by one or two positions.
Source: UNWTO, from official destination sources.
18
As for countries outside this group of five, Australia appears three times, Saudi
Arabia twice, and the United States of America, the Russian Federation and
India once each. The United States of America and United Kingdom often fall
just outside the top ten, while France and sometimes Germany and
Switzerland may be assumed to follow close behind. France, not surprisingly,
is the number one destination in Europe for Vietnamese.
Since 2006, the United Kingdom, Japan, Singapore, Saudi Arabia and
Australia have slipped a single place in one or two markets. China,
interestingly, slipped a place in Malaysia. The United States of America fell two
places in Singapore. Cambodia moved up four places in Thailand, while
Cambodia, Macao (China) and Indonesia moved up a place or two in individual
markets. A few other shifts reflect small changes in the absolute numbers from
year to year.
but the preferences of

each market vary
The following table shows arrivals in selected destinations in 2010, by various

definitions. It must not be assumed that, because the same countries dominate
the top 10 list in all five markets, the destinations of preference in the five
markets are the same. In fact, they vary widely.
Sunday, May 18, 2014 9:53:17 PM
Table 2.13 Arrivals in selected destinations, 2010 ( 1000)

From
Indonesia
Malaysia
TFr
TFr
VFr
TFr
VFr
2,507
2,306
286
52
1,277
1,037
2,047
211
1,373
13,042
654
171
124
1,459
430
223
28
159
323
397
China
Hong Kong (China)
Macao (China)
Japan
Korea (Rep. of)
Taiwan (Pr. of China)
India
Cambodia
Lao PDR
VFn
TFr
VFr
VFn
VFn
VFr
TFn
TFr
VFn
573
340
208
81
95
123
26
13
2
1,245
424
114
115
114
285
179
90
15
1,004
528
116
181
113
241
107
45
6
636
356
107
215
261
92
77
96
1,517
920
102
48
42
90
na
7
467
431
Australia
New Zealand
United States of America
United Kingdom
Canada
Russian Fed.
Saudi Arabia
VFr
VFr
TFr
VFr
TFr
VFr
TFn
124
10
55
na
12
14
236
237
22
54
133
11
17
152
308
30
139
123
25
12
6
84
21
74
67
13
15
3
37
3
46
na
7
51
3
Destination
Seriesa
Indonesia
Malaysia
Singapore
Thailand
Vietnam
Singapore Thailand
Vietnam
These figures represent arrivals as reported by the destinations according to standard UNWTO definitions
TF = tourists at frontiers
VF = visitors at frontiers
TCE = international tourists at all forms of commercial accommodation
THS = international tourists at hotels and similar establishments
n = by nationality
r = by country of residence
Source: UNWTO.
19
It is not just that travellers flood to neighbouring countries Singaporeans into

Malaysia, Indonesians into Malaysia and Singapore, Malaysians into Thailand
and (as day visitors, into Singapore), Thais into Malaysia and Lao PDR, and
Vietnamese into China, Cambodia and Lao PDR. There are other strong
preferences sometimes for historical and cultural reasons, and sometimes as
a result of temporary fashions. Note the importance of the United States of
America, Australia and the Russian Federation to the Vietnamese, of Australia
and the United Kingdom to Singaporeans and Malaysians, and of Japan and
the Republic of Korea to the Thais. The Hajj makes Saudi Arabia an important
destination from Indonesia and Malaysia, but not from the other three markets.
It is important to note that information about travel flows is available from two
major data sources: departures to a certain destination B as reported by
source country A, and arrivals in that destination B, as reported by the
destination country itself (B). Both sources represent the same travel flows but
in a different way, and therefore discrepancies can exist. Still, they do provide
an interesting insight into major trends.
Purpose of Trip
Sunday, May 18, 2014 9:53:17 PM
A dearth of reliable
statistics
Due to the lack of official data on purpose of trip, Euromonitor International has
been used as a source for most markets being surveyed. However, experience
shows that the breakdown varies widely for individual destinations from
individual markets, making accurate estimates difficult to achieve without
extensive and accurately structured sample surveys. Even then, comparisons
between markets are problematic: survey respondents tend to answer this
question differently in different markets for cultural and institutional reasons.
Table 2.14 Purpose of trip, 2010

% share of total trips
Business
Leisure
Total
Indonesia
Malaysia
Singapore
Thailand
Vietnam
17
28
13
21
39
83
72
87
79
61
100
100
100
100
100
% share of business trips

MICE
Other
Total
14
11
16
23
na
86
89
84
77
na
100
100
100
100
100
Source: Euromonitor International.
In Singapore, the great majority of the population are affluent enough to travel
for leisure, or (in the case of migrant workers) have families in neighbouring
countries to visit. Moreover, there is an incentive for people to escape the
confines of a city-state: the figures are in this sense not comparable with those
of the other four markets. In Vietnam, with much lower GDP per capita, it more
commonly takes someone with business interests, and a business persons
income, to be able to travel abroad. Euromonitor reckons that MICE (meetings,
incentives, conferences and exhibitions) travel is more common for Thai
business travellers, and less common for Malaysians.
20
Payment Methods
Credit cards gaining
ground, but not in all
markets
The use of payment cards for retail spending abroad has become well
established in Singapore, Malaysia, Thailand and Vietnam, but not yet in
Indonesia. It has naturally gone farthest in Singapore, but is, in relation to GDP
per capita, also high in Vietnam, reflecting perhaps the commercial
sophistication of the Vietnamese middle classes.
Table 2.15 Breakdown of payment methods for tourism spending overseas, 2010
(% of total value)
Indonesia
Malaysia
Singapore
Thailand
Vietnam
87.6
9.5
2.9
-
47.9
3.4
47.0
0.6
1.1
34.2
2.3
53.5
7.0
2.1
0.9
66.5
7.8
22.4
0.5
1.1
1.7
58.5
38.9
1.8
0.5
100.0
100.0
100.0
100.0
100.0
Cash
Charge card
Credit card
Debit card
Prepaid cards
Travellers cheques
Total
Online Travel
Sunday, May 18, 2014 9:53:17 PM
Use of new media
Only in Singapore and Malaysia has the Internet reached the majority of the
population, but it may be assumed that most people able to afford travel
abroad for leisure (other than VFR) and business purposes have access to the
Internet and are regular users. Note, however, the low proportion of wired
broadband subscriptions everywhere except Singapore, which also helps to
explain the surge in Internet access through mobile telephones and other
hand-held devices.
Table 2.16 Use of personal communications devices, 2011

(per 100 inhabitants)
Indonesia
Malaysia
Singapore
Thailand
Vietnam
Internet
users
Telephone line
subscriptions
Mobile phone
subscriptions
Wired broadband
subscriptions
22.4
61.7
77.2
27.4
33.7
15.9
14.7
38.9
9.7
11.5
97.5
127.0
149.5
113.2
143.4
1.1
7.4
25.5
5.4
4.3
Sources: International Telecommunications Union; Internet World Stats.
Social media takes off
Mobile phones are already almost ubiquitous in South-East Asia, although little
more than half of all Indonesians actually own one. All the evidence
anecdotal as well as surveys suggests that all five markets are taking very
enthusiastically to social media.
21
Air Transport
Rapid rise in demand
In line with the growth in international arrivals and tourism receipts in recent
years, airline passenger traffic through Asia Pacific, and not least from SouthEast Asia, has shown a substantial increase in demand, even though it has
often been constrained by airport capacity.
As the following table shows, international traffic to/from Indonesia by far the
most important of the five markets in terms of volume increased by 27% in
2010 and by 7% in 2011. In Malaysia, it rose by an average of 11% over the
four years to 2011. In Singapore it was up an average of 6% a year in 20062011, including a 11% increase in 2011. In Thailand it was up 19% in 2010.
And in Vietnam, annual growth is estimated at 7% over four years over the
period 2007-2011.
Table 2.17 Airline passenger traffic, 2011

( 1000 passengers)
Indonesia
Malaysia
Singapore
Thailanda
Vietnamb
Domestic
International
Transit
Total
115,483
34,239
23,627
11,000
21,267
30,462
46,544
35,190
23,700
84
na
1,115
1,567
na
136,750
64,701
46,544
60,834
34,700
a
b
Sunday, May 18, 2014 9:53:17 PM
2010.
Estimated.
Sources: National aviation authorities and airport operators.
especially for low-cost

airline travel
Much of this growth has of course been due to the expansion of low-cost
carriers (LCCs), opening up new, affordable routes to/from secondary airports.
Indeed, the LCCs share of capacity out of the principal international airport in
each country has risen to 38.6% in Indonesia, 46.9% in Malaysia, 25.1% in
Singapore and 15.4% in Thailand (as at mid-2012).
Airlines are playing distinctive roles, in each of the five markets, in the
generation of the regions tourism demand:
Because of the size of the country, its population and its island geography,
Indonesia has a much larger domestic market for air travel, creating great
opportunities for LCCs on both domestic and intra-regional feeder routes.
Singapore has established itself as an important hub for long-haul flights,
and therefore plays an important role in developing relatively high-value
tourism, inbound and outbound from South-East Asia.
More recently, Malaysia (specifically Kuala Lumpur) has established itself
as the most important regional hub for low-cost flights, which can be said
to be one of the major drivers of the tourism boom in South-East Asia.
Thailand long ago established itself as an important destination for longhaul holidaymakers. With the weakening of the prospects for further
growth from Europe and North America, its established resorts are looking
for growth from within Asia and thereby boosting the regional demand for
22
holiday travel. At the same time, the extensive network of services catering
for inbound tourists facilitates outbound travel from the region.
With a more restrictive attitude to aviation freedom and airline competition

at least until now Vietnam has to an extent been limiting the potential
of both inbound and outbound tourism to and from Vietnam. But there are
signs that this could change.
Prospects for Growth

Published forecasts
(as always) differ
Two sets of forecasts have been quoted in this report the Pacific Asia Travel
Associations (PATA) Asia Pacific Tourism Forecasts 2012-2014, published in
2012, and Tourism Economics forecasts for 2011-2018. The PATA forecasts
are naturally related to the associations region (one which differs from the
UNWTOs Asia Pacific region in that it includes North America and much of
Latin America, as well as Central Asia).
Sunday, May 18, 2014 9:53:17 PM
Table 2.18 PATAs forecasts for outbound travel, 2010-2014

(% growth of arrivals)
Indonesia
Malaysia
Singapore
Thailand
Vietnam
To:
PATA regiona
China
Australia
USA
Japan
7.1
6.5
10.0
5.7
17.4
3.1
2.5
3.3
1.2
na
10.3
2.7
3.7
2.7
-10.6
13.6
4.4
4.7
1.1
na
2.0
0.4
2.5
-0.5
4.0
Based on the figures available in the published report destinations that already measure arrivals from these
markets which are not comprehensive, especially for Vietnam (which is missing, among other important
destinations, China and the United States of America).
Source: Pacific Asia Travel Association (2012), Asia Pacific Tourism Forecasts 2012-2014.
but agree that growth

will focus on
intra-regional travel
The above table highlights PATAs forecast trends to some key destinations
outside the immediate sub-region of South-East Asia, as well as for the PATA
region itself. As can be seen, despite very bullish predictions for the five
markets to the PATA region overall in terms of annual percentage growth over
the period 2010-2014 especially from Vietnam and Singapore the forecasts
for the individual destinations quoted are not so impressive. This suggests that
most of the growth over the next few years from these markets is expected to
be for neighbouring short-haul destinations, notably those within ASEAN.
While Tourism Economics forecasts (shown below) are widely respected, this
set was prepared in 2010 and is now a clearly out of date. Except in relation to
Singapore and possibly Malaysia, they are also modest by comparison with
trade expectations, and have proved, in 2011-2012, to be very pessimistic.
PATAs forecasts for Indonesia, Malaysia and Vietnam are very much higher
than Tourism Economics.
The huge number for Malaysia (45,000), compared with Euromonitors 15,000
and trade estimates of 7,500, can be explained by the fact that Tourism
Economics counts all cumulative visitor arrivals from a market in destinations
23
around the world, including same-day visitors, many of whom make frequent
trips across the Johor-Singapore causeway for shopping, etc. In the opposite
direction, Tourism Economics figures for Singapore (based on the official
counts) do not appear to include same day visitors to Malaysia, or even for that
matter overnight visitors travelling by road and rail into Malaysia (Malaysia
reports over 13 million visitors a year from Singapore).
Table 2.19 Tourism Economics forecasts for outbound trips, 2011-2018

Trips ( 1000)
2011
Indonesia
Malaysia
Singapore
Thailand
Vietnam
6,450
45,220
8,105
5,323
1,445
Growth (%)
2011 2012
3
13
10
-2
6
1
3
12
-1
2
2013
2014
2015
2016
2017
2018
2
6
12
6
3
2
6
9
3
4
3
5
9
2
5
3
5
8
2
5
4
3
6
1
5
5
3
6
1
5
Source: Tourism Economics.
Indonesia may become

the largest market,
and Vietnam
the fastest growing
Looking at the prospects for the individual markets:
Sunday, May 18, 2014 9:53:17 PM
Indonesia stands out from the others as altogether larger in its potential
scale, because of the size of the country and its population. It has a long
way to go to realise that potential, but is making rapid progress.
Singapore stands out because of its wealth. It is by far the largest of the
five markets in value terms, and is the only one in which the outbound
travel market is not dominated by short-haul destinations. It is the only one
in which outbound travel is already a reality for the majority of the people.
As a city-state, the nature of its tourism market is distinctive in many
senses.
Malaysia is roughly as important as Singapore as an outbound market in
terms of trip volumes but these trips are predominantly short-haul (and
the figures often quoted include same-day trips). Spending power is not
nearly as high as in Singapore, but it is higher than in Thailand, Indonesia
and Vietnam.
Thailand is, in terms of GDP per capita, a little less wealthy than Malaysia,
but appears to have a higher propensity for outbound travel, perhaps
because of the influence of inbound tourists. It clearly has great potential
for economic growth and growth in outbound tourism, but the underlying
trends have been obscured by environmental catastrophes and political
tensions in recent years.
Vietnam has a relatively large population (second only to Indonesias), but
average incomes are still very low. It is by far the smallest of the five
markets but also the fastest growing. Its difficulty is in sustaining rapid
growth it tends to ride a roller-coaster. But if the potential growth is
highest in Indonesia in terms of absolute volumes, it is surely highest in
Vietnam in terms of percentage increases.
24
On average, Singaporeans take 1.4 overnight trips a year abroad. Each year,
one in 15 Thais takes a trip abroad, about one in 25 Malaysians (according to
best estimates), one in 42 Indonesians, and one in 59 Vietnamese do so.
Over the six years 2005-2011, overnight outbound trips increased by an
average of 22% a year from Vietnam, 11% a year from Thailand and 6-8% a
year from Indonesia, Malaysia and Singapore.
Sunday, May 18, 2014 9:53:17 PM
It is tempting to conclude that, because of its size, the Indonesian market has
the greatest potential for growth in absolute terms and, because of its low
starting point, the Vietnamese the greatest potential in percentage terms. But it
is important to stress that all five travel markets have been exceptionally
prosperous in recent years, and that barring environmental, economic or
political challenges this is likely to continue, auguring well for Asia Pacifics
and indeed the global tourism industry.
25
Chapter 3
Indonesia
Country Profile
Geography
Indonesia is an archipelago of some 17,500 islands, of which the main ones

are Java, Sumatra, Kalimantan (the island of Borneo, which is shared with
Malaysia and Brunei Darussalam), Sulawesi (the Celebes), the Moluccas
group, the Nusa Tenggara group (Lesser Sunda Islands, including the western
half of Timor and Bali) and Papua (formerly known as Irian Jaya, on the island
of New Guinea, which is shared with Papua New Guinea).
Its total land area of 1.9 million km makes Indonesia the worlds 15th largest
country, stretching some 5,440 km from mainland South-East Asia eastwards
to the Philippines and Australia, and bordered by three main bodies of water
the Indian and Pacific Oceans and the South China Sea. Lying on a tectonic
fault line, Indonesia is subject to earthquakes and volcanic eruptions, as well
as to droughts and tropical storms.
Sunday, May 18, 2014 9:53:17 PM
Historical and political

background
A republic with an elected legislature and president, Indonesia gained

independence from the Netherlands after the Second World War. From 1949 to
1998 the country was ruled successively by two prolonged presidential
dictatorships, led by generals Sukarno (1945-1966) and Suharto (1967-1998).
In 2004, General Susilo Bambang Yudhoyono came to power after the
countrys first direct presidential elections in what was hailed as the first
peaceful transition of power in Indonesias history. He was re-elected in 2009.
Administratively, Indonesia consists of 33 provinces, each of which has its own
legislature and governor. The provinces are subdivided into regencies
(kabupaten) and municipalities (kota), and these in turn into districts
(kecamatan) consisting of villages (desa and kelurahan). Following reforms in
2001, the regencies and cities have become the key administrative units,
responsible for providing most government services. Many new regencies have
been established. The elected village chiefs are very important in a citizens
daily life and in representing the villages.
The legal system is based on the Roman-Dutch model, influenced by
customary law.
Demographics
Population
The population of Indonesia in 2012 is estimated at 245 million the worlds

fourth largest with a split of 122 million males (49.8%) and 123 million
females (50.2%). Note that these figures come from the UN Department of
Social Affairs world population forecasts, 2010 Revision, medium variant, and
differ slightly from the Census of 2010 (which gives a total of 237.6 million in
2010) and the figures used by the International Monetary Funds (IMF) World
Economic Outlook.
26
Chapter 3 Indonesia
Table 3.1
Total
Male
Female
Indonesia: Total population, 2006-2012

( 1000)
2006
2007
2008
2009
2010
2011
2012
229,919
114,793
115,125
232,462
116,028
116,433
234,951
117,235
117,717
237,414
118,429
118,986
239,871
119,622
120,248
242,326
120,819
121,507
244,769
122,013
122,756
The total population grew by 1.3% a year in 2000-2005 and by 1.1% a year in
2005-2010 i.e. some 2.5 million a year. This growth is forecast to slow to
1.0% per annum in 2010-2015 and to 0.8% in 2015-2020.
Other key indicators of Indonesias demographics include:
Sunday, May 18, 2014 9:53:17 PM
Regions and cities
There were 61.1 million households in 2011, with an average of 3.9

persons per household.
The median age in 2010 was 27.8 years; it is forecast to rise to 29.6 years
in 2015 and 31.4 in 2020.
Life expectancy in 2010-2015 is 70.0 years (68.3 years for males and 71.8
years for females), and is expected to rise to 71.7 years in 2015-2020.
The birth rate is 17.4 live births per 1,000 population, and the death rate
6.8 per 1,000.
Total fertility (the number of children expected to be born to each woman)
is 2.1.
Net emigration is estimated at slightly over 200,000 a year.
Badan Pusat Statistik (BPS Statistics Indonesia) gives the working-age
population (over 15) as 172 million in August 2011. Of these, 117 million
(68%) were active, 110 million (64%) in employment and 7.7 million (4.5%)
unemployed. Some 54 million people were not economically active.
Of the working population, 72 million were working full time, 21 million part
time and 13.5 million were under-employed. 21% had no schooling, 29%
had finished primary education, 42% secondary education and 8% some
further education.
The literacy rate is 93% and is significantly lower only in Papua (68%).
Java and Sumatra are, in terms of population and wealth, by far the most
important regions of Indonesia, with 58% and 23% of the total population
respectively. Kalimantan (Indonesian Borneo) has 9%, Sulawesi (the Celebes)
5%, Indonesian Papua 2.5% and the Moluccas less than 0.5%. A table
showing the provinces of Indonesia and their populations is provided below
under spending power.
The urban population in Indonesia is growing rapidly from an estimated 45%
of the total in 2005 to 47% in 2010 and 49% (forecast) in 2015. Some 50% of
27
young people live in urban areas and more than 52% of those aged 20-54
years old.
Jakarta, Indonesias capital, is the largest urban agglomeration in the
Association of South East Asian (ASEAN) member countries, with an overall
population of over 20 million 9.6 million of whom live in the city itself. Other
major cities are Surabaya (2.8 million), Bandung (2.4 million), Medan
(2.1 million), Bekasi (2.0 million), Depok (1.8 million), Tangerang (1.5 million),
Palembang (1.4 million), Semarang (1.4 million) and Makassar (1.3 million).
Some cities with fewer than 1 million inhabitants are important economic
centres with growing influence. Yogyakarta is a major centre for education and
tourism it is regarded as Javas cultural cradle. Pekanbaru (in Riau Province,
Sumatra) is a centre of the gas industry and growing rapidly. Balikpapan (in
East Kalimantan) is a centre for the offshore gas and oil industries. A recent
study by McKinsey Global Institute highlighted the rapid growth in such cities
an idea which tallies with reports from the tourism industry of burgeoning
demand from smaller cities across Indonesia.
Age distribution
According to the UN, 45% of Indonesias population were 0-24 years old in
2010, 47% were 25-59 years old and 8% were over 60. The numbers of young
people (0-24 years old) are declining and are expected to decline by a further
3% by 2020. The numbers aged 25 to 34 are stabilising, while the numbers
over 35 years old are continuing to grow.
Sunday, May 18, 2014 9:53:17 PM
Table 3.2
Indonesia: Distribution of the total population by age, 2010 and 2020
Age
% share
2010
2020
0-4
5-14
15-24
25-34
35-44
45-54
55-64
65-74
75-84
85
Total
9.0
18.0
18.0
17.4
14.8
10.9
6.2
3.8
1.5
0.2
100.0
7.5
16.0
16.2
15.9
15.4
12.9
9.0
4.6
2.0
0.4
100.0
% increase in 2020
over total in 2010
-9
-3
-1
0
14
29
59
31
46
101
9
Source: UN DESA.
Ancestry and migration
Across the vast archipelago, Indonesia has hundreds of distinct native groups,
among whom the most numerous (and politically dominant) are the Javanese.
In the 2000 Census, 41% of the population were found to be Javanese, 15%
Sundanese, 3% Madurese and 41% others and unspecified.
Colonial control mainly Portuguese and Dutch did not extend far beyond
the coastal strongholds until the 20th century, and immigration was limited. A
small Chinese minority is powerful in business and an important segment in
terms of outbound travel.
28
Chapter 3 Indonesia
There are believed to be over 5 million Indonesians living abroad, including

2.5 million in Malaysia, 1.7 million in Saudi Arabia and the Gulf states, 400,000
in the Netherlands, 200,000 in Singapore and 100,000 or more in Taiwan
(Province of China), Hong Kong (China), Suriname, Australia and the United
States of America. Most of those in Arabia, Malaysia, Singapore and
elsewhere in South-East Asia are domestic servants and construction workers;
most of those in the United States of America and Australia are professionals
and students. Those in Surinam were shipped there as indentured plantation
workers in colonial times, but most of those in the Netherlands fled there in the
troubled years after independence.
Language
The official language is Indonesian (Bahasa Indonesia), which is closely

related to Malay, but there are over 300 local languages and dialects in the
country, of which the most important is Javanese. English and Pidgin English
are widely spoken in cities, but the influence of Dutch is waning rapidly.
Religion
The 2000 Census suggested the following breakdown of the population:

Muslims 86%, Protestants 6%, Roman Catholics 3%, Hindus 2% and others or
unspecified 3%.
Sunday, May 18, 2014 9:53:17 PM
Most Indonesians practise a relaxed form of Islam, but there are social
tensions between Christians and Muslims in some parts of the country and a
marginal but persistent strand of militant Islamism that manifests itself in
occasional acts of terrorism.
Economic growth
Indonesia has been one of the more dynamic world economies in recent years,
even by Asian standards, and is now the worlds 16th largest. It is a founding
member of ASEAN and a member of the G20 conference of major economies.
It was very badly affected by the Asian financial crisis in 1997, but weathered
the 2008-2009 world economic crisis relatively easily: it was one of the few
G20 member countries to achieve positive economic growth in 2009. Growth
has been spread across a wide range of sectors and has been fuelled both by
exports and domestic demand. Government policy has been prudent, so the
fiscal deficit and national debt are modest and inflation low by the countrys
historical standards.
Real GDP increased by an average of 5.0% in the six years 2005-2011. The
International Monetary Fund (IMF) expects it to increase by 6.0% in 2012 and
by 6.3%, 6.7%, 6.5% and 6.7% in the following four years.
The latest data suggests that, in the first quarter of 2012, real GDP growth
eased slightly, to 6.4% (over the same period in 2011) a very respectable
performance in the current world economic climate. In October 2012 The IMF
trimmed a few tenths of a percentage point off its GDP forecasts for Indonesia
in 2012-16, but it still ranks Indonesia as the fastest growing economy among
the ASEAN-5.
29
Fitch and Moody upgraded Indonesias credit rating to investment grade in

December 2011. However, there is still a great deal of poverty and
underemployment. The country still suffers from bureaucratic weaknesses and
regional inequalities are enormous.
Despite the positive growth prospects, many observers believe the economy
will be held back in the short term by infrastructure deficiencies, tight labour
laws and insufficient investment. The unpredictable business-operating
environment is a cause for concern among many potential investors.
Table 3.3
Indonesia: Key economic data, 2006-2011

2006
2007
2008
2009
2010
2011
GDP (Rp trillion)

GDP (US$ billion)
Real GDP growth (%)
3,339
364
5.5
3,951
432
6.3
4,949
510
6.0
5,606
539
4.6
6,436
708
6.2
7,427
846
6.5
Inflation (%, average)

Unemployment (%)
13.1
10.3
6.7
9.1
9.8
8.4
4.8
7.9
5.1
7.1
5.4
6.6
Sunday, May 18, 2014 9:53:17 PM
Exchange rates
The Indonesian rupiah was, for many years, a currency that tended to
depreciate steadily (but rarely dramatically after the 1960s), because of the
inter-related effects of high inflation and economic weakness.
Table 3.4
Indonesia: Key exchange rates, 2006-2011

(Indonesian rupiah per listed currency)
AUD (Australian dollar)

CAD (Canadian dollar)
CNY (Chinese renminbi)
EUR (Euro)
HKD (Hong Kong dollar)
JYP (Japanese yen)
KRW (Korean won)
MRM (Malaysian ringgit)
PHP (Philippine peso)
RUB (Russian ruble)
SGD (Singapore dollar)
TWD(Taiwan new dollar)
THB (Thai baht)
GBP (British pound)
USD (US dollar)
VND (Vietnamese dong)
2006
2007
2008
2009
2010
2011
6,890
8,065
1,147
11,481
1,177
79
9.58
2,494
178
337
5,757
281
241
16,843
9,146
0.57
7,612
8,475
1,197
12,450
1,165
77
9.80
2,648
197
356
6,039
277
282
18,209
9,108
0.57
8,110
9,009
1,384
14,057
1,234
93
8.82
2,878
216
386
6,779
304
291
17,673
9,604
0.59
8,154
9,091
1,520
14,414
1,339
111
8.14
2,942
218
327
7,129
314
302
16,185
10,382
0.58
8,381
8,850
1,346
12,089
1,173
104
7.88
2,833
202
300
6,690
289
288
14,086
9,115
0.48
9,032
8,850
1,355
12,183
1,124
110
7.90
2,862
202
298
6,963
298
287
14,036
8,753
0.42
Source: The Travel Business Partnerships database, based on Bank of Canada data.
This trend changed with the recent world economic crisis. In 2009 the rupiah,
in common with most currencies, fell against the US dollar and yen as the
crisis unfolded. It then appreciated in 2010, typically by 10-20%, against the
US dollar, euro, sterling and the many currencies that are more or less rigidly
tied to the US dollar. It even rose a little against the Japanese yen. It held its
30
Chapter 3 Indonesia
value well in 2009-11, partly because inflation had moderated from, roughly,
10% a year to 5% a year. This was still, by current world standards, relatively
high, gradually undermining the competitiveness of Indonesian exports (including
tourism), and the rupiah has slipped a little against many currencies in the first
three quarters of 2012. It has continued to rise against the euro, however.
Spending power
Indonesia is now classified as a lower- to middle-income economy. GDP per

capita has increased by 29% in real terms since 2005 but, at US$ 3,512, it
remains below that in, for instance, China (US$ 5,400) and Malaysia (US$ 9,700)
and a very far cry from that in the United States of America (US$ 48,000) and
Japan (US$ 46,000).
Table 3.5
Indonesia: GDP per capita, 2006-2011
Rp ( 1000)
Real increase (%)
US$
at PPPsa (US$)
2006
2007
2008
2009
2010
2011
14,870
4.0
1,623
3,420
17,347
4.8
1,897
3,690
21,422
4.5
2,209
3,942
23,927
3.2
2,299
4,102
27,084
4.7
2,981
4,353
30,814
5.0
3,512
4,666
Sunday, May 18, 2014 9:53:17 PM
Purchasing power parities.

The official monthly minimum wage averaged Rp 988,800 (US$ 113) in 2011,
ranging from Rp 1,290,000 (US$ 147) in Jakarta to about half that in some of
the poorest provinces. Some 9.2% of the urban population and 15.7% of the
rural population live below the official poverty line (US$ 29 in urban areas and
US$ 24 in rural areas).
Nevertheless, within a labour force of 117 million, the number of middle- and
upper-class Indonesians is growing rapidly and consumption is increasing at a
similar pace. Bank of Indonesia (the central bank), in its recently published
2011 Economic Report on Indonesia, argues that 61% of Indonesians can now
be regarded as middle class, and 17% have high incomes of more than
Rp 65.6 million (US$ 6,953), while only 22% have net incomes of less than
Rp 20.4 million (US$ 2,162) a year.
At the top end of the scale, Cap Gemini and Merrill Lynch reckon that, in 2010,
there were 24,000 high net worth individuals (HNWIs) in Indonesia. (HNWIs
are defined as persons having investable assets of US$ 1 million or more,
excluding their primary residence, collectibles and consumer goods.) They
represented only 0.9% of the total in Asia Pacific and 0.2% of the total
worldwide. But Indonesia, along with Hong Kong (China), Vietnam, Sri Lanka,
Singapore and India, has one of the worlds 20 fastest growing HNWI
populations. The number of Indonesian HNWIs increased by 24% in 2010,
surpassing their previous peak in 2007. An alternative estimate is provided by
Bank Julius Baer, which estimates the number of HNWIs in Indonesia in 2010
at 33,000 and forecasts that there will be 99,000 by 2015.
The following table shows Indonesias different regions and provinces, with
indicators of their relative importance as markets population, gross regional
product (GRP), and its growth in recent years, and GRP per capita.
Table 3.6
Indonesia: Population and Gross Regional Product (GRP) by region and province,
2010
Population
( 1000)
GRP
(billion)
AAGRa
(%)
GRP/capita
(thousand)
237,641
5,284,854
5.6
22,239
50,631
4,494
12,982
4,847
5,538
3,092
7,450
1,716
7,608
1,223
1,679
1,217,342
77,506
275,700
87,221
342,691
53,817
157,772
18,037
107,277
25,706
71,615
4.8
-1.8
6.2
5.9
4.3
6.7
5.1
6.0
5.4
4.5
6.2
24,043
17,245
21,237
17,995
61,876
17,404
21,176
10,514
14,100
21,013
42,649
136,611
9,608
43,054
32,383
3,457
37,477
10,632
3,071,789
862,159
770,660
444,396
45,592
778,456
170,525
6.0
6.0
5.8
5.5
4.5
6.0
9.0
22,486
89,735
17,900
13,723
13,186
20,772
16,039
Bali
3,891
66,691
6.5
17,141
Nusa Tenggara
Nusa Tenggara Barat (West N. T.)
Nusa Tenggara Timur (East N. T.)
9,184
4,500
4,684
77,073
49,363
27,710
5.5
5.8
4.9
8,392
10,969
5,916
Kalimantan
Kalimantan Barat (West Kalimantan)
Kalimantan Tengah (Central Kalimantan)
Kalimantan Selatan (South Kalimantan)
Kalimantan Timur (East Kalimantan)
13,788
4,396
2,212
3,627
3,553
482,675
60,475
42,567
58,542
321,091
4.2
5.2
6.0
5.7
3.3
35,007
13,757
19,243
16,142
90,368
Sulawesi (Celebes)
Sulawesi Utara (North Celebes)
Sulawesi Tengah (Central Celebes)
Sulawesi Selatan (South Celebes)
Sulawesi Tenggara (South-East Celebes)
Gorontalo
Sulawesi Barat (East Celebes)
17,372
2,271
2,635
8,035
2,233
1,040
1,159
243,834
36,835
36,856
117,830
33,269
8,057
10,987
7.6
7.6
8.2
7.1
8.8
7.6
8.9
14,036
16,223
13,987
14,665
14,902
7,745
9,482
Moluccas
Maluku (South Moluccas)
Maluku Utara (North Moluccas)
2,572
1,534
1,038
13,472
8,085
5,387
5.8
5.5
6.3
5,239
5,272
5,190
Irian Jaya (Indonesian Papua)

Papua Barat West Papua
Papua Papua
3,594
760
2,833
111,979
22,527
89,451
3.1
10.6
1.2
31,159
29,625
31,570
Province/Region (English names)

Indonesia
Sumatra
Aceh
Sumatera Utara (North Sumatra)
Sumatera Barat (West Sumatra)
Riau
Jambi
Sumatera Selatan (South Sumatra)
Bengkulu
Lampung
K. Bangka Belitung (Bangka Belitung Is.)
Kepulauan Riau (Riau Is.)
Java
DKIb Jakarta
Jawa Barat (West Java)
Jawa Tengah (Central Java)
DIc Yogyakarta
Jawa Timur (East Java)
Banten
Sunday, May 18, 2014 9:53:17 PM
31
a
b
c
Average annual growth rate, 2006-2010.

Special Capital Region.
Special Region.
Source: The Travel Business Partnership, from Statistics Indonesia data.
32
Chapter 3 Indonesia
The Central Bank of Indonesia introduced new regulations during April 2012
aimed at curbing excessive consumer borrowing. According to Euromonitor
International data, the annual value of consumer lending in Indonesia almost
trebled between 2006 and 2011, from US$ 33 billion to US$ 92 billion. Under
the new regulations, housing loans are now capped at 70% of a propertys
value, while the minimum down payment for private car loans has been raised
to 30%. Until now, new automobile sales have usually been completely
financed by loans, with many consumers taking more than a decade to repay
the debt.
Tourism Policy
Sunday, May 18, 2014 9:53:17 PM
Competitiveness
The appointment in late 2011 of former high-profile, dynamic Trade Minister,

Dr. Mari Elka Pangestu, to lead the newly restructured Ministry for Tourism
since then combined with the Creative Economy highlights the importance
attributed by the government to the role of tourism in the Indonesian economy.
The 2011 World Economic Forums (WEF) Travel and Tourism
Competitiveness Report ranked Indonesia 13th in the Asia Pacific region and
74th overall up seven places since the 2009 edition. With regard to indicators
affecting outbound travel, Indonesia ranked 4th overall on price
competitiveness in the travel and tourism industry, due in part to low ticket
taxes and airport charges (16th position), 17th on the extent and effect of
taxation generally, and favourable fuel price levels (19th). In addition, it ranked
15th for its national prioritisation of Travel and Tourism, 32nd for the openness
of its bilateral air services agreements, and 37th for its international air
transport network.
However, these strengths are held back, the WEF report suggests, by
underdeveloped infrastructure in the country, including ICT infrastructure (96th)
and concerns related to safety and security, particularly a lack of trust in police
services and the business costs of potential terrorism.
Taxes
Following years of public protests, the Indonesian Government finally

abolished the prohibitive exit tax on Indonesians in January 2011. Costing
Rp 2.5 million (US$ 265) for departures by air and Rp 1 million (US$ 105) for
sea travel, the tax had been in force for decades and was payable by virtually
all Indonesians (with the exception of those able to produce some kind of
special personal tax identification).
Passports
E-passports (paper/electronic passports containing biometric identification

data) were first issued in January 2011 and, by the end of the year, 12,000
Indonesians possessed one. Traditional passports will no longer be valid from
2015.
Visas
A number of countries offer Indonesians visa-free access or visas on arrival (all

ASEAN countries typically for up to 30 days as well as India and much of
Africa, for example). In addition, special exemptions are made e.g. in the
case of Taiwan (Province of China), the Republic of Korea and Mexico when
Indonesian outbound travellers already have visas for other bona fide countries
33
such as the United States of America, Europes Schengen area, Japan,

Australia and New Zealand.
Holiday entitlement
Official holiday entitlement in Indonesia is 12 days.

There are 14 official, nationwide public holidays scattered through the year,
and the government usually declares additional Libur Bersama or Cuti
Bersama holidays nine were declared for 2012. In addition, there are many
religious, traditional and political celebrations, local and national, but these are
rarely observed by businesses as holidays.
In 2012, Indonesian Independence Day (which actually falls on 17 August) and
Idul Fitri are being observed from 19-22 August. All offices, as well as banks,
are closed for at least six days and therefore most residents have a long period
of leisure time. However, the most popular holiday option for non-Muslim
Indonesians is Bali. They usually spend their vacation on the island while their
Muslim brethren go to their hometowns to celebrate Idul Fitri, the Muslim
holiday marking the end of Ramadan.
Sunday, May 18, 2014 9:53:17 PM
Overview
Indonesia accounts for a relatively modest share of the Asian outbound travel
market, yet it is one of the fastest growing in terms of volume and value.
Although industry estimates as to the actual percentage increases in trip
volume and spending vary significantly, the general consensus seems to be
that growth in both measures has been in double digits over the past few years
boosted in 2011 by the abolition of the exit tax. And this trend looks set to
continue.
By way of example, PhoCusWright estimates that, even during the 2009
recession, the value of gross bookings rose by 4%. The respective growth in
2010 was 46%, taking the total to US$ 6.4 billion boosted in part by the weak
US dollar to rupiah exchange rate and bookings increased by a further 35%
in 2011, to US$ 8.6 billion.
Domestic travel
Statistics Indonesia puts the total number of domestic travellers in the country
at over 124 million in 2011, and these reportedly generated some 239 million
domestic trips (1.9 trips each), involving an expenditure of Rp 662,800
(US$ 77) per traveller. The number of domestic travellers grew by an average
6% per annum from 2007 to 2010, with trip volume increasing by 5% a year.
Forecasts for 2012, meanwhile, point to a 3-4% increase in the total number of
trips, although spending should show much higher growth.
34
Chapter 3 Indonesia
Table 3.7
Indonesia: Domestic passengers by mode of transport, 2009-2011

( 1000)
Railway
Sea
Air
2009
2010
2011
207,014
5,947
35,661
203,401
7,073
43,777
199,337
7,559
51,517
Source: Badan Pusat Statiskic, National Socio-Economic Survey, 2012.
According to the World Travel and Tourism Council (WTTC), domestic travel
generated 79% of total Travel and Tourism GDP in 2011, or Rp 295,911 billion
(US$ 31 billion) as against 21% for foreign visitor spending (visitor exports). It
is forecast to growth by 8.7% in 2012 (real growth, taking inflation into account)
and by 7.3% per annum in 2012-2022.
Outbound travel
The removal last year of the unpopular exit tax and the availability of more
affordable airfares from the growing number of low-cost carriers have been the
main drivers in the recent reported surge in demand for outbound travel among
Indonesians. While even official statistics vary from one source to another, the
total number of outbound trips of at least one night abroad was between
6.5 million and 7.0 million in 2011 the figures quoted by UNWTO in the table
below are towards the bottom end of the range of estimates available.
Sunday, May 18, 2014 9:53:17 PM
Table 3.8
Indonesia: Outbound overnight trips, 2006-2011
Total trips ( 1000)a

% change
Nights ( 1000)
% change
2006
2007
2008
2009
2010
2011
4,967
21.0
5,158
3.8
5,486
6.4
5,053
-7.9
6,235
23.4
6,750
8.3
7.7
9.2
10.6
8.8
8.2
7.7
38,296
14.4
47,660
24.5
58,261
22.2
44,517
-23.6
51,127
14.8
50,774
-0.6
Overnight visits.
Source: UNWTO from official sources.
Outbound trips from Indonesia have increased by 11.4% a year since 1990.
Growth slackened after 2004, averaging close to 9% in 2005-2011, but an
excellent 2010 almost brought the total back to this trend-line after the decline
in 2009, and the strong growth in demand has been sustained through 2011
and, according to anecdotal evidence, the first half of 2012.
The average length of stay has fluctuated over the years, with peaks of 14.0
days in 2001 and 10.6 in 2008. The number of nights spent abroad has
therefore also fluctuated. It increased by an average of 8.8% a year in 20002005 and 8.7% a year in 2005-2010.
Travel expenditure
35
International travel expenditure (excluding transport) reached US$ 7.3 billion in

2011, according to the Bank of Indonesia. It increased by an average of just
2.3% a year in 2000-2005, but growth picked up to 12.3% a year in 2005-2010.
This acceleration was only partly attributable to the strength of the rupiah in
2009-2010: in rupiah terms, spending increased by about 11% a year in 20052010.
Table 3.9
Indonesia: International travel expenditure, 2006-2011

2006
2007
2008
2009
2010
2011
4,030
12.4
4,904
21.7
5,554
13.3
5,316
-4.3
6,395
20.3
7,279
13.8
Spend per trip (US$)b

% change
811
-7.0
951
17.2
1,012
6.5
1,052
3.9
1,026
-2.5
1,078
5.1
Spend per night (US$)b
105
103
95
119
125
143
Total (US$ million)a

% change
a
b
Excluding transport
Calculated spending per overnight trip. International travel expenditure includes spending on day trips but
spending per trip conventionally accepts this discrepancy.
Source: UNWTO from official sources.
Bank of Indonesias figure for spending in 2011 of US$ 7,279 million suggests
an increase of 13.8% over the previous year, after the big increase in 2010.
The first half of 2012 has seen a further increase of 10%.
Sunday, May 18, 2014 9:53:17 PM
Average spending per overnight trip increased by an average of 3.3% in 20052010 in US dollar terms, to US$ 1,026. In 2011 it increased 5% to US$ 1,078.
Spending per night averaged US$ 90 in 2001-2005 and US$ 110 in 20062010.
WTTC forecasts a 7.7% increase in domestic tourism spending in 2012 (real
growth) and 6.9% per annum in 2012-2022. Official statistics, meanwhile, point
to a 12.2% increase in 2012 Q1.
Destination regions
Business Monitor International shows the following breakdown of resident

departures from Indonesia in 2011 by destination: Asia Pacific 88.6%; the
Middle East 7.7%; Africa 1.5%; Europe 1.3%; and the Americas 0.9%. This
highlights the dominance of intra-regional travel (as in almost all outbound
markets worldwide).
Intra-regional destinations
In 2008 Malaysia overtook Singapore to become the leading destination for

Indonesian outbound travellers, and remained so until 2010. However, in 2011
the ranking was again reversed due to a 12% increase of Indonesian arrivals in
Singapore (from 2.3 to 2.6 million) as against a drop of 15% in Malaysia (from
to 2.5 to 2.1 million). The top two destinations account for a large majority of
total Indonesian visits, with intra-regional travel overall estimated at 85-90%.
36
Chapter 3 Indonesia
It is hardly surprising that intra-ASEAN travel should be so important, given the

efforts made over the past decade or more to facilitate travel flows by reducing
barriers such as visas. By 2015, of course, ASEAN is due to be a fully-fledged
economic community with all visa requirements and border controls abolished
between member states.
In addition, Singapore and Malaysia are attractive due to their proximity,
abundant air seat capacity, and their shopping appeal. And Singapore, which is
seen as a high-quality destination, has also made big efforts to woo medical
tourists from Indonesia.
Thailands appeal is in large part due to its attractive pricing, catering to all
segments of the Indonesian market, including first-time budget travellers. A
four-day Bangkok-Pattaya package including accommodation is currently being
marketed from as low as US$ 140 per person.
Long-haul destinations
Saudi Arabia is the main long-haul destination for Indonesians. Arrivals grew
10% from 2005 to 2011, and an outstanding 72% in 2011 alone. The number
of Indonesian pilgrims heading to Mecca for the Hajj reached a total of 221,000
in November 2011.
Sunday, May 18, 2014 9:53:17 PM
In 2006-2010, strong growth was also recorded by Australia (+10% a year),

New Zealand (+9%) and, in Europe, Switzerland (+16%) and the Russian
Federation (+15%).
The following table shows arrivals from Indonesia by various measures, as
reported by destinations around the world to UNWTO. Note that many leading
destinations in Europe (including France, Germany, the United Kingdom,
Spain, Portugal and Greece) and the Americas (such as Mexico, Brazil and
Argentina) do not report Indonesian arrivals separately. Where several
measures are available, the preferred measure indicated is TFr (overnight
tourists by country of residence), or the measure likely to be closest to this.
Recent improvements in visa processing times for non-Europeans entering
Europes Schengen countries from around two weeks to three days on
average have made Europe more attractive to Indonesians, although it
remains an aspirational destination for less experienced travellers.
According to leading tour operators, the more affluent socio-economic groups
of Indonesians, which are also growing in number and tend to travel several
times a year with or without their families, spend between US$ 5,000 and
US$ 8,000 per person on an outbound trip, and stay abroad for upwards of ten
days.
37
Table 3.10 Indonesian arrivals in selected destinations, 2000-2011

( 1000)
Sunday, May 18, 2014 9:53:17 PM
Destination
Within Asia and the Pacific
Singapore
Malaysia
China
Hong Kong (China)
Thailand
Macao (China)
Taiwan (Province of China)
Australia
Republic of Korea
Japan
Vietnam
Philippines
India
Brunei Darussalam
Cambodia
New Zealand
Timor-Leste
Lao PDR
Pakistan
Iran
To other regions
Saudi Arabia
Jordan
Turkey
Egypt
Switzerland
Kuwait
Bahrain
Netherlands
Israel
Canada
Russian Federation
Italy
Syrian Arab Republic
Lebanon
Yemen
Nigeria
Poland
South Africa
Morocco
Belgium
Poland
a
Seriesa
VFr
TFr
VFn
TFr
TFr
VFr
VFr
VFr
VFn
VFn
VFr
TFr
TFn
TFn
TFr
VFr
TFr
VFn
TFn
VFn
TFn
TFr
TFn
TFn
VFn
THSr
VFn
VFn
THSr
TFr
TFr
VFn
TFn
TCEn
TFn
TFn
VFn
VFn
TFr
TFn
TCEr
TCEr
2000
2005
2006
2007
2008
2009
2010
2011
1,313 1,814 1,922 1,962 1,765 1,745 2,306 2,592

545
963 1,217 1,805 2,429 2,405 2,507 2,134
221
378
433
477
426
469
573
609
206
207
255
277
262
264
340
380
145
187
218
234
259
227
286
371
17
46
68
133
180
191
208
220
107
88
91
96
110
107
124
156
98
83
84
89
94
109
124
140
59
62
63
67
81
81
95
124
54
59
60
64
67
64
81
62
7
23
21
23
25
27
52
55
16
20
23
26
28
29
32
35
9
13
17
18
20
20
26
33
..
..
..
11
..
9
16
20
2
6
7
9
9
10
13
16
9
7
7
8
8
10
10
11
..
..
2
3
4
5
7
11
2
3
2
2
2
3
2
3
3
2
3
3
2
3
..
..
..
..
..
..
..
2
2
3
391
71
8
..
19
13
31
15
20
10
12
2
10
7
3
..
9
1
5
1
2
0
226
52
18
8
28
9
47
30
16
8
11
7
19
17
5
3
17
1
3
1
2
0
373
53
26
8
29
11
54
43
12
7
12
8
13
15
5
4
19
1
3
2
2
1
296
54
38
11
37
11
59
34
11
11
11
22
13
17
6
5
32
1
5
2
2
1
502
49
42
14
33
11
65
..
11
14
11
31
7
19
7
5
36
..
4
2
2
1
205
50
39
17
35
16
63
..
14
10
11
25
12
19
11
7
37
..
3
3
2
1
236
55
32
21
45
20
36
..
21
18
12
14
15
18
11
7
37
..
5
4
3
1
These figures represent arrivals as reported by the destinations according to standard UNWTO definitions:
n = by nationality; r = by country of residence
b Average annual growth rate.
Source: UNWTO.
405
66
40
32
31
31
26
26
24
22
15
..
10
9
8
..
6
5
4
4
3
3
change (%)
AAGR (%)b
'10/'09 '11/'10
2005-2011
32.1
4.2
22.3
28.9
26.1
8.9
16.2
13.9
17.6
26.7
88.6
9.6
30.4
90.6
31.8
3.0
23.9
-28.9
..
26.9
12.4
-14.8
6.2
11.7
29.8
5.7
26.2
13.3
30.7
-23.2
7.6
8.0
24.3
24.5
25.2
17.0
65.8
48.7
..
42.2
6.1
14.2
8.3
10.7
12.1
29.8
9.9
9.0
12.2
0.8
15.7
9.5
17.1
..
18.9
8.0
..
3.1
..
..
14.7
8.6
-17.6
23.0
26.8
23.4
-43.8
..
53.6
85.1
11.8
-41.8
19.8
-4.3
-0.4
0.5
0.1
..
53.5
40.2
17.9
-16.2
71.8
21.1
22.5
48.6
-30.3
56.1
-27.7
..
11.3
23.7
21.8
..
-35.9
-53.1
-19.8
..
-82.7
..
-17.0
10.2
19.3
163.1
10.2
4.2
13.9
26.0
2.1
22.1
-9.5
-2.4
7.1
17.3
4.9
17.2
-10.5
-10.9
7.7
19.7
-15.0
28.1
3.6
20.9
13.9
39.4
38
Chapter 3 Indonesia

Purpose of travel
UNWTO provides a breakdown of figures for international travel spending

which suggests that, in 2011, US$ 5,003 million was spent on personal travel
abroad, and US$ 2,276 million on business and professional travel. Personal
travel therefore accounted for 69% of the total, and business and professional
travel for 31%. This proportion has not changed much in recent years, but it is
believed that in the 1990s and early 2000s the importance of business and
professional travel was rather greater.
Table 3.11 Indonesia: International travel expenditurea by purpose of trip, 2006-2011
2006
2007
2008
2009
2010
2011
US$ million
Personal
Business and professional
Total
2,783
1,247
4,030
3,368
1,536
4,904
3,791
1,763
5,554
3,762
1,554
5,316
4,395
2,000
6,395
5,003
2,276
7,279
Breakdown (%)
Personal
Business and professional
Total
69
31
100
69
31
100
68
32
100
71
29
100
69
31
100
69
31
100
Sunday, May 18, 2014 9:53:17 PM
Excluding transport.
Source: UNWTO from official statistics.
Euromonitor, by contrast, provides a breakdown of outbound departures,

showing a total of 6.8 million trips in 2011, of which 1.1 million (17%) were for
business and 6.8 million (83%) were for leisure. Within the 1.1 million business
trips were 161,000 trips to MICE (meetings, incentives, conventions,
exhibitions) events representing a modest 14% share of total business trips.
Euromonitors figures for total departures do not match the official figures
quoted by UNWTO (see above under Outbound travel). In particular, they
show a much lower rate of growth and a remarkably even year-on-year
progression, given the economic disruptions in 2008-2009. Anecdotal reports
suggest that Euromonitor (and other market analysts) has under-estimated the
growth of the Indonesian market in recent years.
However, the two sets of figures do broadly confirm the argument that leisure
trips account for a much higher proportion of outbound trips (about 83%) than
of expenditure (about 70%), since spending per trip is higher for business
travel than for leisure trips. Euromonitors figures also tally with anecdotal
reports that the leisure market has been growing much faster than the
business market.
39
Table 3.12 Indonesia: Outbound departures by purpose of trip, 2006-2011
Departures ( 1000)
Business
Leisure
Total
Breakdown (%)
Business
Leisure
Total
2006
2007
2008
2009
2010
2011
1,124
4,778
5,901
1,073
5,140
6,213
1,064
5,104
6,168
1,089
5,187
6,275
1,123
5,412
6,535
1,147
5,671
6,817
19
81
100
17
83
100
17
83
100
17
83
100
17
83
100
17
83
100
Sunday, May 18, 2014 9:53:17 PM
Clearly, purpose of trip varies significantly according to destination but, by way

of example, Tourism Australia breaks down Indonesian arrivals by purpose as
follows: holidays 46% (but only 23% of spending); VFR 16%; business 12%;
working holiday 7%; education/study 10%; other 9%.
Mode of transport
Some 68% of all outbound trips are by air, according to Euromonitor data
(reportedly based on official statistics), with 17% of travellers opting for sea
transport (either cruises or travel mainly to Singapore and/or Malaysia) and
15% land travel. (This figure seems surprisingly high as it can only relate to
travel within Borneo, to Brunei and the East Malaysian states of Sabah and
Sarawak.)
Nature and age of

travellers
The age breakdown of Indonesian outbound travellers overall is reported to be:

under 15 years old 10%; 15-19 years 25%; 20-44 years 27%; 45-59 years
28%; and 60+ years 10%. But again, this breakdown clearly differs from one
destination to another.
Travel companions
Official data from Statistics Indonesia puts the share of trips involving group
tours at 38.5%, although tour operators say this is declining year by year as
Indonesians become more travel-savvy. Independent trips currently account for
a 25.5% share split 10.5% single travellers, 5.5% couples and 9.5% families
with a high 36% undefined.
Activities/spending on
leisure trips
The best available indication of how Indonesians spend their holidays abroad
can be seen in the breakdown of their spending on leisure trips (Euromonitor
data compiled from official sources and their own estimates). Accommodation
accounts for a relatively modest 17.5% and food for just 13%, while
entertainment takes 5.0%, excursions 4%, local travel 7%, shopping a
whopping 41% and other 13%.
Shopping is by far the dominant activity, whatever the destination, although
sightseeing is popular among all age groups, as is gambling, and younger
people are increasingly choosing backpacking tours.
40
Chapter 3 Indonesia
According to figures published by Euromonitor, cash is the predominant

method of payment for their spending abroad. Payment by credit card is
gaining ground and some use is made of debit cards.
Table 3.13 Indonesia: Breakdown of payment methods for tourism spending overseas,
2007-2011 (% of total value)
Cash
Charge card
Credit card
Debit card
Prepaid cards
Travellers cheques
Total
2007
2008
2009
2010
2011
88.0
9.0
3.0
-
88.4
9.0
2.6
-
88.0
9.2
2.8
-
87.6
9.5
2.9
-
87.1
9.8
3.1
-
100.0
100.0
100.0
100.0
100.0
Sunday, May 18, 2014 9:53:17 PM
Length of stay
Length of stay varies according to destination. Australia, for instance, reports

an average stay of as many as 38 nights in 2011, but the typical lengths of stay
are estimated at 2-4 nights for short-haul trips, 7-10 nights for medium-haul
trips and 10-21 nights for trips to long-haul destinations.
Travel frequency
Short-haul trips to neighbouring destinations, such as Singapore and Malaysia,

are taken throughout the year often mounting up to several trips per annum
but, except in the case of the most affluent Indonesians, 1-2 longer-haul trips
are most common.
Seasonality
There are three main peaks in terms of leisure travel for Indonesians. The
longest is during Hari Raya the end of the Muslim fasting month (which falls
ten days earlier each year) when many Indonesians go on holiday for up to
two weeks. The other two fall in June-July the main school holiday period
and Christmas-New Year.
Catering for
Indonesian travellers
Indonesians are generally more easy-going than their Malaysian counterparts

when travelling abroad, especially because of their more relaxed interpretation
of Islam (although pork should not be offered to Muslims of any nationality).
They also generally show more interest in history and culture than their Thai
and Malay counterparts and so generally need some culture built into their tour
programmes.

Information sources
Indonesians remain fairly traditional when it comes to sourcing information

about their potential travel, depending heavily on face-to-face contact with
travel agencies. However, a study for the online booking agency
Flamingo.co.id estimates that 62% of the 55 million Internet users (Internet
41
World Stats estimate) look online for information on entertainment and leisure
activities (see below for further information on the Internet and online travel).
Travel decisions and

booking
While the Internet is growing more popular as a source of information on travel

options, booking is still largely made by visits to traditional travel agencies.
Traditional media
Television and radio are almost universal in Indonesia, with extensive use of
satellite and cable systems. There is a national public TV service, Televisi
Republik Indonesia (TVRI), several provincial public services and about ten
private networks, including Surya Citra Televisi (SCTV), Rajawali Citra TV
(RCTI), Indostar and MNCTV. There is a multi-channel national radio service,
Radio Republik Indonesia (RRI), as well as many hundreds of local publicservice and private radio stations.
Leading daily newspapers include Kompas, Pos Kota, Indo Pos, Suara Kary,
Republika, Sinar Harapan, Bisnis Indonesia, Media Indonesia and the Englishlanguage Jakarta Post and Jakarta Globe. Tempo is a multi-lingual weekly.
Antara is a government-owned news agency. Press freedom is limited by legal
and regulatory restrictions and a lingering authoritarian attitude.
Sunday, May 18, 2014 9:53:17 PM
There are many travel publications in Indonesia, with most large magazines
also having a travel section. In most consumer lifestyle magazines, features
are primarily focused on promoting domestic and regional tourism. However,
specialised travel publications, as well as complimentary magazines on airlines
or at airports, focus more on foreign destinations.
Statistics Indonesia figures show a rapid decline in the numbers of people
listening to the radio (from 50.3% of those aged over 10 in 2003 to just 23.5%
in 2009) and a less dramatic decline in the numbers reading newspapers or
magazines (from 23.7% to 18.9%). The numbers watching television rose from
89.4% in 2003 to 90.3% in 2009.
New media
According to Internet World Stats, there were 55 million Internet users in

Indonesia in December 2011, representing 22.4% of the population (compared
with an Asian average of 26.2% and a world average of 32.7%). By
comparison, comScore in its latest survey (August 2012) put the total at
47 million, only 19% of the population but making Indonesia the 7th largest
market in the world for Internet usage. It also says that Indonesia is the second
fastest growing (+29% a year) after India.
Table 3.14 Indonesia: Ownership of personal communications devices, 2008-2010

(% of households)
Landline telephone
Cell-phone
Desktop computer
Laptop/notebook computer
2008
2009
2010
11.7
52.0
7.3
3.4
10.4
61.8
8.4
5.3
9.5
72.0
7.5
6.4
Source: Badan Pusat Statiskic, National Socio-Economic Survey, 2012.
42
Chapter 3 Indonesia
The International Telecommunications Union reports that, in 2011, Indonesia

had 38.6 million fixed telephone line subscriptions (15.9 per 100 inhabitants)
and 236.8 million mobile telephone subscriptions (97.5 per 100 inhabitants).
There were 2.7 million wired broadband subscriptions, 1.1 per 100 inhabitants.
Frost & Sullivan predicts that the Internet user base in Indonesia will grow by
30% a year through 2015, when the local digital population will top 145 million.
Nielsen is less bullish, predicting that it will increase by 20% a year to 2015,
when there will be about 100 million users (40% of Indonesians).
Two defining characteristics of the Indonesian digital population are a fondness
for social media 1 in 3 Indonesians use social networks as compared with the
average of 1 in 5 worldwide and a heavy reliance on mobile telephones.
Mobile penetration is growing rapidly: more than 54% of Indonesians own a
mobile phone, up from 46% in 2010 (Pew Research Centre), and more than
one in five use one to access the Internet. Internet World Stats reports the
number of Facebook users at the end of 2011 as 43.5 million an
astonishingly high proportion of Internet users (79%) with the majority from
younger age groups.
Sunday, May 18, 2014 9:53:17 PM
Seaports
Indonesia has 23 international ports equipped with immigration facilities (14 in

Sumatra, 3 in Java, 3 in Sulawesi, 2 in Bali and 1 in the Moluccas. The most
important are located in Bali, Batam, Bintan, Jakarta and Medan. There is
much international passenger traffic between Indonesia and Singapore and
Malaysia through Batam, Bintan and Medan (all in Sumatra).
Ports with facilities to handle cruise ships include Benoa Harbour in Bali,
Tanjung Priok in Jakarta, Tanjung Mas in Semarang and Tanjung Perak in
Surabaya. All these ports have been upgraded to cater for large cruise ships
and, with the government targeting cruise tourism, more ports are expected to
be upgraded with international status. In 2011, 112,882 cruise ship visitors
were recorded.
Highways
Land border crossings are of course of marginal importance, except for very
local travel in Borneo.
International airports
As an archipelago it is not surprising that Indonesia has hundreds of airports

and airfields. The CIA Factbook indicates that it has a total of 676, of which:
185 with paved runways; 4 of over 3,047 m in length; 22 with runways of 2,438
to 3,047 m; 51 of 1,524 to 2,437 m; 71 of 914 to 1,523 m and 37 with runways
of less than 914 m long.
The great majority of passengers through Indonesian airports are domestic
(84% in 2011). In 2011 there were 21.3 million international passengers
(arriving, departing and in transit) 7% more than in 2010 and 36% more than
in 2009.
43
Table 3.15 Indonesia: Total air passenger traffic, 2009-2011

( 1000)
2009
2010
2011
Domestic
Departures
Arrivals
Transit
Total
33,848
33,228
3,588
70,664
43,277
42,192
4,152
89,621
56,724
52,149
6,610
115,483
International
Departures
Arrivals
Transit
Total
6,763
6,688
171
13,622
9,734
9,744
234
19,712
10,600
10,583
84
21,267
Total
Departures
Arrivals
Transit
Total
40,611
39,916
3,759
84,286
53,011
51,936
4,386
109,333
67,324
62,732
6,694
136,750
Source: Directorate General of Civil Aviation (DG Civil Aviation).
The principal international airports are:
Sunday, May 18, 2014 9:53:17 PM
Jakartas Soekarno-Hatta International Airport (CGK), which handled 50

million passengers in 2011, far beyond its nominal capacity of 25 million.
Current plans are to raise capacity to 62 million in 2014. In 2011,
international passengers were reported to represent 23% of the total
passenger count (i.e. roughly 11.0 million).
Ngurah Rai International Airport (DPS) in Bali (also known as Denpasar
International Airport) handled 12.8 million passengers in 2011, of whom
6.2 million were international passengers (mainly inbound). Again, the
airport is operating far beyond its nominal capacity. There is much
controversy over various plans to expand capacity on the island of Bali.
Juanda International Airport (SUB) in Surabaya (eastern Java) handled
13.8 million passengers in 2011, of whom just 1.4 million were
international. International services are mainly to Singapore, Malaysia,
Hong Kong (China) and China, but it also handles Hajj traffic to Saudi
Arabia.
Sultan Hassanudin International Airport (UPG) near Makassar (Sulawesi)
handled 7.5 million passengers in 2011. Internationally, it currently handles
only a few flights to Malaysia and Singapore.
Polonia International Airport (MES) in Medan (Sumatra) handled
7.2 million passengers in 2011. These were mainly domestic, but there are
also some flights to Singapore, Malaysia and Thailand.
Although passenger traffic at Bandung (BDO) and Yogyakarta (JOG) is far
below that at Makassar International airport, both handle significant
numbers of international passengers. In 2011, Bandung airport accommodated 457,000 international passengers and Yogyakarta 209,000.
44
Chapter 3 Indonesia
Table 3.16 Indonesia: Air passenger traffic through the principal airports a, 2006-2011
( 1000)
2006
2007
2008
2009
2010
2011
Total passenger traffic

Jakarta Soekarno Hatta
30,864
Surabaya Juanda
8,987
Bali Ngurah Rai
6,296
Makassar Sultan Hassanudin 4,010
Medan Polonia
4,466a
32,459
8,823
7,602
4,469
4,859a
32,172
9,122
8,471
5,084
4,664a
37,144
10,563
9,622
5,064
5,478
43,704
12,072
11,120
6,547
6,165
47,647
13,778
12,781
7,456
7,170
of which, international
Jakarta Soekarno Hatta
6,063
Surabaya Juanda
827
Bali Ngurah Rai
2,752
Makassar Sultan Hassanudin
37
Medan Polonia
867
6,715
938
3,614
31
896
7,033
1,004
4,205
47
933
7,594
1,062
4,940
69
933
9,550
1,216
5,653
87
1,131
10,627
1,414
6,139
111
1,426
Excludes transfer traffic.

Sources: Angkasa Pura I; Angkasa Pura II; DG Civil Aviation; Ministry of Transport.
Sunday, May 18, 2014 9:53:17 PM
Most Indonesian airports are heavily congested due to under-investment in

airports and aviation infrastructure over the last decade. However, the
government is now making efforts to improve the situation. The Ministry of
Transport intends to build 14 new airports by 2030 and a budget has reportedly
been established for the construction or renovation of 118 existing airports.
Some progress is already visible. Lombok inaugurated a new airport last year
for 3.5 million passengers, while new terminals were recently opened in
Makassar and Pekanbaru. However, Jakarta CGK and Bali DPS remain
extremely congested. The state-owned airport operator, Angkasa Pura,
recently began a programme to raise capacity at Jakarta from 38 million to 65
and then 80 million passengers with the construction of two new terminals. Bali
Denpasar will see the completion of a new international air terminal designated
to accommodate over 12 million passengers a year. Finally, a brand new
airport is due to open in Medan at Kuala Namu. It will have a capacity to
handle 8.5 to 10 million passengers a year and is due to be completed by 2013
or early 2014.
Expansion is also underway at Kertajati International Airport, near Bandung in
West Java, while the international airports of Balikpapan (Kalimantan),
Semarang and Yogyakarta (Java) are being enlarged and modernised. A multiairport structure is under consideration for Jakarta and Bali. But while
construction of a second airport in Cikaran to serve Jakarta seems certain to
go ahead, the proposed second airport in Bali looks less likely, given the
controversy surrounding the project and the current US$ 211 million expansion
of Ngurah Rai airport in Denpasar.
45
Air Transport
Access and connectivity
For a nation of islands, air travel is not just a popular travel option, but also an
essential service. Indonesia is the 12th largest domestic aviation market in the
world, with domestic passenger departures growing by about 70% from 2006
to 2011, to 56.7 million. Over the same period, international departures rose
about 80%, albeit from a low base, reaching 10.6 million in 2011.
PT Angkasa Pura, the state-owned airport operator, predicts passenger growth
of 10% per annum through 2014 and 8% between 2015 and 2020.
Indonesian airlines
Lion Air is the leading carrier on the domestic market, followed by Garuda
Indonesia (the largely state-owned national carrier), Sriwijaya Air and Batavia
Air. Smaller carriers include Merpati Nusantara Airlines (which is also stateowned), Indonesia AirAsia and Mandala Airlines. The leading Indonesian
outbound carrier is AirAsia, followed by Garuda.
Sunday, May 18, 2014 9:53:17 PM
In July 2012 it was announced that Batavia Air was being acquired by the Air
Asia Group of Malaysia, which of course also owns Indonesia AirAsia. But the
planned tie-up has since been abandoned in favour of a multilateral, multiphase collaboration agreement encompassing ground-handling, distribution
and inventory systems. Mandala Airlines was grounded for financial reasons
between May 2011 and June 2012, but has resumed operations following a
takeover by Tiger Airways of Singapore and the Indonesian investment group,
Saratoga Investama. Lion Air and Sriwijaya Air remain privately owned.
Table 3.17 Passengers carried on Indonesian airlines, 2011

(million passengers, % growth 2011/2010)
Domestic
pax (million)
% growth
International
pax (million)
% growth
Lion Air
Garuda Indonesia
Sriwijaya Air
Batavia Air
Merpati Nusantara
Wings Air
Indonesia AirAsia
Others
25.0
18.7
7.4
6.8
2.2
2.0
1.3
2.8
41.6
22.8
12.3
11.3
3.6
3.3
2.2
na
1.0
3.1
0.2
0.3
0.1
0.1
3.4
0.0
11.9
38.0
2.2
3.6
1.1
1.8
41.6
-
Total
66.0
na
8.2
31.9
Airline
Source: Ministry of Transport, Indonesia.
The leading outbound operators, including non-Indonesian airlines, are the Air
Asia Group, Garuda and Singapore Airlines (with its affiliates Tiger Airways
and Silk Air).
Garuda went through a very difficult time in recent years but, after much
restructuring, it is now in a recovery phase. In August 2012 it had a fleet of 78
aircraft (including 10 scheduled to be phased out, and 54 aircraft on order. It
hopes to join SkyTeam in 2014.
46
Chapter 3 Indonesia
In July 2009, the European Union lifted its ban on some Indonesian airlines
that had been in place since June 2007. Garuda and Mandala Airlines, and the
charter airlines Airfast and Premiair, have since been allowed back into
European airspace, with the EU satisfied that significant improvements have
been made to safety within the industry.
The lifting of the ban cleared the way for the resumption of services between
Jakarta and the EU, with Garuda relaunching its Jakarta-Amsterdam service in
June 2010. However, the ban remains in force (as of July 2012) on some other
Indonesian airlines, including Lion Air.
Following the memorandum of understanding signed between Auckland Airport
and Garuda in April 2012, Garuda intends to resume flights to New Zealand
after a six-year absence, while Air New Zealand will begin seasonal flights to
Bali in June.
Sunday, May 18, 2014 9:53:17 PM
Flight capacity
out of Jakarta
Statistically, Jakarta dominates outbound traffic from Indonesia: not only does
the capital and neighbouring areas of Java constitute the largest outbound
market in Indonesia, but it is also well served by feeder flights from the rest of
Indonesia. However, Indonesia is also a very important gateway to and from
Singapore. Singapore has flights to 14 Indonesian cities with a total seat
capacity of 382,394 in June 2012 and 402,824 in October 2012.
The market share of low-cost airlines in airline traffic out of Indonesia has risen
dramatically in recent years, due principally to the role of Air Asia and its
subsidiaries. The share of LCCs in international seat capacity out of Jakarta
rose from 25.1% in June 2008 to 35.9% in June 2011 and 38.6% in June 2012,
or 1.1 million seats per month. However, the low-cost flights out of Jakarta are
almost all to Asian destinations the only long-haul destination is a Jetstar
flight to Perth. Some industry experts believe there is good potential for lowcost services on some long-haul routes out of Jakarta and perhaps out of
Surabaya.
47
Table 3.18 International seat capacity out of Jakarta CGK and Bali DPS, by destination region,
2008-2012 (seats, one-way)
AAGRa
2012 2008-2012
2008
2009
2010
2011
1,717,939
80,853
21,176
23,922
392,414
41,475
1,801,655
91,517
22,188
29,233
443,316
79,346
2,161,118
116,021
35,488
43,947
468,420
105,321
2,463,365
127,719
35,863
52,730
586,476
129,045
2,732,746
123,061
27,208
55,713
619,972
130,243
12.3
11.1
6.5
23.5
12.1
33.1
In October of each year

Jakarta Asia
1,788,058
Jakarta Middle East
83,309
Jakarta Europe
21,354
Jakarta Australasia
20,907
Bali Asia
441,839
Bali-Australasia
54,602
2,021,474
84,341
29,474
44,507
495,587
94,974
2,376,998
91,994
36,521
47,473
510,702
117,196
2,536,805
112,977
36,948
53,789
591,127
135,249
2,855,210
125,014
26,96
59,024
650,536
134,170
12.4
10.7
16.0
29.6
10.2
25.2
In June of each year

Jakarta Asia
Jakarta Middle East
Jakarta Europe
Jakarta Australasia
Bali Asia
Bali Australasia
Average annual growth rate

Sunday, May 18, 2014 9:53:17 PM
In June 2012, Jakartas top air link (the destination with the largest seat
capacity) was Singapore (one-way data) with 215,617. It is followed by Kuala
Lumpur with 122,204 seats. However, a high proportion of capacity to Kuala
Lumpur consists of LCC flights, which are less favourable for long-haul transfer
traffic despite the presence of AirAsia X for routes to Australia.
Table 3.19 International seat capacity out of Jakarta CGK, by destination, June 2012
Singapore
Kuala Lumpur
Hong Kong (China)
Taipei
Dubai
Bangkok
Tokyo Narita
215,610
122,201
52,214
33,022
29,951
24,438
21,810
There are very few direct flights to Europe out of Jakarta and Lufthansa will
withdraw from Jakarta by the beginning of 2013. However, the 50% growth in
Middle East carriers capacity out of Jakarta over the last five years is evidence
that traffic to and from Europe and North America remains important, but
increasingly involves transfers via Abu Dhabi, Doha, Dubai or even Istanbul.
When Garuda joins SkyTeam now delayed from the end of 2012 to 2014 it
is likely that more direct flights will be offered out of Jakarta. Garuda has
announced that it intends to fly soon to Frankfurt, London, Paris and Rome (It
is currently flying only to Amsterdam via Dubai). Denpasar will remain the main
gateway with regard to Australasia due to the strong inbound market from
Australia to Bali and the fact that Bali is closer to Australia than Jakarta. But in
terms of inbound traffic to Australia from Indonesia, Jakarta is by far the most
important origin airport.
48
Chapter 3 Indonesia
To complement Bali Denpasar and Jakarta, Surabaya and Medan probably

have the best potential for further growth, as well as becoming in turn
interesting secondary destinations for long-haul traffic. Qatar Airways is
studying the possibility of serving Surabaya. When the new airport in Medan
opens in 2013/14, flights towards the West (e.g. to India and the Middle East)
may well be introduced.
The Travel Trade

Structure of the
travel trade
The traditional travel agency network in Indonesia is significant in both size and
market share, and has been slow to accept the Internet as a distribution
channel. The Association of Indonesia Tour and Travel Agencies (ASITA) has
approximately 900 agency members with many more outlets, not to mention
the hundreds of smaller, non-member agencies.
The largest retail and tour operating groups, including the Panorama Group,
Dwidaya, Smailing Tours and the KAHA Group, have begun to move online
and are backing some of the newer online operators.
However, while the online market is expected to gain importance, traditional
agency players will continue to be influential in the medium to long term.
Sunday, May 18, 2014 9:53:17 PM
Online travel agencies
Several global online travel agencies (OTAs) have entered the market with
local language offerings, including Expedia (through its joint venture with
AirAsia), Hotels.com, Priceline (via Agoda and Booking.com), Google and
AsiaRooms (a subsidiary of TUI Travel). Wego and Skyscanner are two metasearch engines in the market, with the former showing a strong strategic
interest in Indonesia, according to PhoCusWright.
Local players include GoIndonesia (www.goindonesia.com), TravelIndo
(TravelIndo.com) and RajKamar (www.rajkamar.com) owned by a consortium of companies including Dwidaya, Panorama and Smailing Tours.
GoIndonesia is owned by the KAHA Group. However, these OTAs are
primarily focused on hotel distribution. Dwidaya Travel has also launched
EzyTravel (www.ezytravel.co.id), which offers a full-service package, as does
Yuktravel (http://www.yuktravel.com).
A problem for the travel trade, however, is that 64% of Internet users in
Indonesia are aged 15-19 teenagers with little money to spend on travel. This
largely explains why online travel has been so slow to pick up. An additional
challenge is that only 4.5% of the population has a credit/charge card (Nielsen
statistics). But things are improving and according to PhoCusWright BNI,
one of the countrys three leading banks, is targeting double-digit growth in its
credit card client base, projecting 3 million new customers in 2012. Online
retailers are also responding to the payment challenge by offering alternative
payment methods, including offline options.
Despite the obvious potential for online travel distribution, travel suppliers and
OTAs are not prioritising aggressive social media marketing and
PhoCusWright says that few have active plans to do so. Online travel accounts
for a maximum of 20% of total foreign trip volume, and the vast majority of
49
these trips are for neighbouring countries using low-cost carriers, or for
domestic travel.

Economic outlook
Indonesias economic situation is expected to continue improving over the next

five years but more gradually perhaps than had been hoped for before the
recent slowdown in world economic growth. This improvement is driving
demand for foreign travel among the countrys middle-income population. This
is being fuelled by Indonesias airlines, many of which have opened up new
routes linking secondary cities with popular overseas destinations. And lowcost carriers (LCCs) are promoting attractive, affordable airfares. Travel is also
a high priority as it represents a major status symbol for Indonesias middle
classes.
Outlook for tourism
The removal of the unpopular exit tax in early 2011 and the abundance of
affordable airfares from low-cost carriers have led to a sharp rise in the number
of Indonesian outbound travellers and their travel frequency, as well as
whetting the appetites of those who have not yet travelled abroad. The
Association of Indonesian Travel Agencies expects outbound trip volumes to
rapidly overtake inbound numbers, perhaps as early as this year.
Sunday, May 18, 2014 9:53:17 PM
Indonesia, with its 245 million population, is the third giant of Asia, after China
and India, but its travel market could well develop very differently from other
markets in South-East Asia. In particular, its size and cultural diversity offers
great scope for domestic leisure tourism.
Indonesians enthusiastic adoption of the internet, mobile telephony and social
media has huge implications for commerce, and this is already reflected in the
travel trade, with new developments popping up almost daily. Although the
share of the population on the Internet is only 19%, this translates as 47 million
unique Internet users (excluding mobile), the 9th biggest market in the world,
behind Germany and ahead of Brazil.
And while Indonesians are online less frequently and for shorter periods of
time, they spend more time on social networking 1 in 3 of them are social
media enthusiasts, compared with a global average of 1 in 5. Admittedly, the
market is largely driven by youths (15-34 years old), but many of these young
people will soon have the disposable incomes to be able to travel abroad, as
well as knowing how to access attractive deals.
Until then, demand from the older middle and upper socio-economic groups
can be expected to fill the gap, stimulating increased interest in long- as well as
short-haul trips.
Forecasts
The Pacific Asia Travel Associations (PATA) Asia Pacific Tourism Forecasts
2012-2014 are very bullish about the Indonesian outbound market, at least to
other Asia Pacific destinations. (Understandably, they do not cover
destinations outside the region.) The following table summarises the absolute
volumes projected for each year from 2012 to 2014, highlighting the average
annual growth over the period.
50
Chapter 3 Indonesia
Table 3.20 Indonesia: Outbound tourism forecastsa, 2012-2014

(arrivals in selected destinations)
Actual
2010
Forecasts
2012
2013
2014
AAGRb (%)
2010-2014
Singapore
2,305,149
Malaysia
2,506,509
China
573,400
Hong Kong (China) 453,235
Thailand
286,072
Macao (China)
208,440
Taiwan (Pr. of China) 123,834
Australia
123,898
Korea (Rep. of)
95,239
USA
54,530
Japan
80,632
Philippines
31,997
India
25,828
Cambodia
12,636
Canada
12,428
New Zealand
9,787
Lao PDR
2,245
Sri Lanka
1,343
Maldives
818
Tahiti
98
2,781,855
2,748,411
606,712
565,274
446,266
235,069
163,163
152,118
130,202
973,202
74,274
38,147
32,115
17,855
17,448
11,593
3,823
2,221
1,412
99
2,948,087
2,835,853
628,248
598,729
509,895
247,153
178,154
169,935
143,399
82,264
80,839
40,807
35,615
19,565
18,513
12,570
4,650
2,611
1,841
122
3,124,790
2,940,940
648,054
639,074
554,510
258,077
191,852
183,227
154,537
90,759
87,093
43,589
39,070
21,710
19,364
13,630
5,380
2,918
2,184
146
7.9
4.1
3.1
9.0
18.0
5.5
11.6
10.3
12.9
13.6
2.0
8.0
10.9
14.5
11.7
8.6
24.4
21.4
27.8
10.5
Destination
a
b
These figures are not strictly comparable with those of UNWTO or any other source.
Average annual growth rate.
Source: Pacific Asia Travel Association, Asia Pacific Tourism Forecasts, 2012-2014
Sunday, May 18, 2014 9:53:17 PM
Tourism Economics forecasts for outbound travel from Indonesia, which

provide absolute volumes and annual growth per annum from 2011 to 2018,
show a rather less optimistic scenario, although they do point to accelerated
growth from 2015. But given the weight of anecdotal evidence from industry
sources with regard to the 2012-2014 period, it is tempting to conclude that
they dramatically understate the short-term potential of the market.
Table 3.21 Forecast outbound visits from Indonesiaa, 2011-2018
2011
2012
2013
2014
2015
2016
2017
2018
Total visits ( 1000) 6,450

% change
3
6,494
1
6,591
2
6,755
2
6,947
3
7,185
3
7,451
4
7,813
5
Forecast cumulative arrivals worldwide from Indonesia.

Source: Tourism Economics
Impact of the ASEAN

Economic Community
As is the case for all the markets under survey, with the exception of Vietnam,
the launch of the ASEAN Economic Community in 2015 the date set for the
regional integration of the member countries of the Association of South-East
Asian Nations should stimulate demand for travel since more airlines plan
more flights between ASEAN countries, and are predicted to open up new
regional air routes, such as Medan-Phuket.
51
Land borders are also expected to be opened up the frontier posts between
Indonesia and Malaysia, with which it shares land borders, are currently closed
at midnight, so these may be opened 24 hours a day from 2015.
Visa-free travel is already available between all ASEAN member countries
except Vietnam, so visas are not an issue.

Official organisations
Industry associations
Sunday, May 18, 2014 9:53:17 PM
Destination NTOs
Ministry of Tourism and Creative Economy
www.budpar.go.id
National Statistics Office (Badan Pusat Statiskic)
www.bps.go.id
Directorate General of Civil Aviation
www.hubud.dephub.go.id
Ministry of Transportation
(Kementerian Perhubungan Republik) Indonesia
www.dephub.go.id/
Association of the Indonesia

Tour and Travel Agencies (ASITA)
www.asita.org
A number of NTOs are already established in Indonesia either with their own
office or some kind of representation including those from Singapore,
Malaysia, Thailand and the Republic of Korea. Japan is planning on
establishing a presence in the country in 2013 and other NTOs are also
thinking about doing so.
NTO budget cuts over the past few years, especially since the global economic
crisis, have however resulted in some NTOs, like VisitBritain, withdrawing from
Indonesia. It now handles the Indonesia market out of Singapore.
Trade and consumer fairs
Astindo International Travel Fair (AITF)

(One of the biggest annual tourism fairs in
Indonesia, open to the travel trade and
consumers and focusing on inbound,
domestic and outbound travel)
http://astindotravelfair.com/
Garuda Indonesia Travel Fair

(Takes place every November in Jakarta)
Others include:
TTC Travel Marts (twice yearly B2B fairs)
and the Indonesia Travel and Holiday Fair
(the largest B2C event)
http://www.gatf.travel
Sunday, May 18, 2014 9:53:17 PM
52
Chapter 3 Indonesia
53
Chapter 4
Malaysia
Country Profile
History and geography
Malaya became independent in 1957 and was joined in 1963 by Singapore,

Sarawak and Sabah to form the Federation of Malaysia. However, Singapore
withdrew in 1965, forming an independent republic.
Malaysia consists of two distinct parts: the Malay Peninsula and, 1,000 km
away across the South China Sea, the northern part of the island of Borneo.
On the Malay Peninsula are the states of (roughly North to South) Perlis,
Kedah, Penang, Kelantan, Perak, Terengganu, Selangor, Pahang, Negeri
Sembilan, Malacca and Johor; East Malaysia on Borneo comprises the states
of Sarawak and Sabah. There are also three federal territories: Kuala Lumpur
(the national capital), Putrajaya (the seat of the federal government, although
Parliament sits in Kuala Lumpur) and Labuan (an island off Borneo which is an
offshore financial centre and free trade zone). The country is multi-ethnic (but
predominantly Malay) and multi-religious (but predominantly Muslim).
Sunday, May 18, 2014 9:53:17 PM
The country has a land area of 329,847 km, sharing land borders with
Thailand in the far North of the Malay Peninsula and with Indonesia and Brunei
Darussalam on Borneo. Singapore is adjacent to the southern tip of the
peninsula.
Political background
Formally, nine of the thirteen states are kingdoms ruled by sultans, one of
whom is chosen every five years to be Malaysias head of state. The present
paramount ruler is Tuanku Abdul Halim, the Sultan of Kedah. However,
Malaysia is a parliamentary democracy in which power has been held since
independence by a coalition, the National Front (BM), led by the United Malays
National Organisation (UMNO). Each state has its own parliament and
government, with widely varying powers and traditions.
The defining events in Malaysias political history include the Confrontation
with Indonesia in Borneo in 1962-1966 (effectively a war waged by Indonesia
in opposition to the creation of Malaysia), the anti-Chinese riots in 1969 (which
led the government to introduce positive discrimination in favour of the
Bumiputera, or sons of the soil, in business, education and the civil service
under the New Economic Policy in 1971), the Asian financial crisis of 1997,
and the 2008 elections, when the National Front lost its two-thirds
parliamentary majority and control of five state assemblies (leading the new
Prime Minister, Mr. Najib Abdul Razak, to promise a more inclusive direction
of policies).
There are two legal systems, civil and sharia (Muslim). The civil law is based
on English Common Law. The jurisdiction of sharia courts is limited to certain
religious, social and family matters and is not supposed to extend to nonMuslims, but there are inevitably difficulties when the interests of Muslims and
non-Muslims overlap.
54
Chapter 4 Malaysia
Demographics
Population
The population of Malaysia in 2012 is estimated at 29.3 million. Of these,

14.9 million (50.7%) are males and 14.5 million (49.5%) females. These figures
come from the UN Department of Social Affairs world population forecasts,
2010 Revision, medium variant, and differ slightly from those in the 2010
Census (28,334,000 in 2010) and the figures used by the International
Monetary Funds (IMF) World Economic Outlook.
Table 4.1
Total
Male
Female
Malaysia: Total population, 2006-2012

( 1000)
2006
2007
2008
2009
2010
2011
2012
26,586
13,511
13,076
27,051
13,741
13,310
27,502
13,964
13,538
27,949
14,185
13,765
28,401
14,407
13,994
28,859
14,634
14,225
29,322
14,863
14,459
The total population was growing by 2.2% a year in 2000-2005 and 1.7% a
year in 2005-2010. It is forecast to grow by 1.6% a year in 2010-2015 and
1.4% annually in 2015-2020. By population, Malaysia ranks 44th among the
196 countries in UN DESAs database.
Sunday, May 18, 2014 9:53:17 PM
Other key indicators in Malaysias demographics include:
There were 6.2 million households in 2010, with an average of 4.6 persons
per household.
The median age in 2010 was 26 years in 2010, and is forecast to rise to
27.5 years in 2015 and to 28.9 years in 2020.
Life expectancy in 2010-2015 is 74.6 years (72.5 years for males and
76.9 years for females), rising to 77.5 years in 2015-2020.
The birth rate is 19.8 live births per 1,000 population, the death rate
4.7 per 1,000.
Total fertility (the number of children expected to be born to each female)
is 2.6.
Net immigration is estimated at 17,000 a year, but this figure may exclude
illegal immigrants.
There are 86 people per km2 in Malaysia. Some 71% of the population was
defined as urban in 2010 (up from 62% in 2000), making Malaysia one of
the more highly urbanised countries (apart from the city states) in Asia.
The Department of Statistics gives the working age population as
19.9 million in May 2012. Of these, 12.9 million (65%) are active and
6.9 million inactive. Of the 12.9 million labour force, 12.6 million are in
employment and 380,200 (3.0%) unemployed.
Regions and cities
55
Of the 11.1 million in employment in 2010, 0.4 million were employers,

8.3 million employees, 1.9 million self-employed and 0.5 million unpaid
family workers. 4% had no formal education, 17% had primary education,
56% secondary education and 24% some further education.
The adult literacy rate is 93%.
Because of the nature of modern urbanised societies, with their overlapping

jurisdictions and boundaries, various figures for Malaysias largest cities are
provided by the Department of Statistics (www.citypopulations.de), Wikipedia,
Demographia and World Gazetteer. The populations of the capital cities shown
in the table below refer to the city or municipal government administrative
areas, rather than to the traditional city boundaries or greater conurbations.
The population of the metropolitan area of Kuala Lumpur, including the cities
and municipalities of Klang, Kajang, Ampang Jaya, Subang Jaya, Petaling
Jaya and the capital of Selangor, Shah Alam, is 6.1 million, according to the
Department of Statistics. Other conurbations with populations exceeding
1.0 million are Pinang (1.5 million) and Johor Bahru (1.3 million).
Sunday, May 18, 2014 9:53:17 PM
Table 4.2
Malaysia: States and their capital cities, 2010
State
Code
Area
(km)
Population
( 1000)
Johor
Kedah
Kelantan
Melaka
Negeri Sembilan
Pahang
Perak
Perlis
Penangb
Selangor
Terengganu
WPc Kuala Lumpur
WPc Putrajaya
Sabah
WPc Labuan
Sarawak
JOH
KED
KEL
MEL
NEG
PAH
PER
PES
PIN
SEL
TER
KLP
PUT
SAB
LAB
SAR
19,210
9,500
15,099
1,664
6,686
36,137
21,035
821
1,048
8,108
13,035
243
46
73,631
91
124,450
3,348
1,948
1,540
821
1,021
1,501
2,353
232
1,561
5,462
1,036
1,675
72
3,207
87
2,471
Malaysia
MYS
330,803
28,334
a
b
c
Capital
Population
( 1000)
Johor Bahru
497
Alor Setar
406
Kota Bharu
315
Melaka
485
Seremban
315
Kuantan
428
Ipoh
658
Kangar
226
George Town/Pinang 708
Shah Alam
541
Kuala Terengganu
338
Kuala Lumpur
1,589
Putrajaya
12a
Kota Kinabalu
452
Labuan Victoria
55a
Kuching
325
Kuala Lumpur
2000.
Also known as Pulau Pinang.
Federal Territory.
Source: Data compiled by The Travel Business Partnership, from the Census 2010 and other sources.
1,589
56
Chapter 4 Malaysia
Age distribution
According to the UN, 48% of Malaysias population were 0-24 years old in
people (0-24 years old) are tending to stabilise. The numbers of middle-aged
Malaysians (24-55) are still growing, but the numbers of those aged 55 and
over are growing much more rapidly.
Table 4.3
Malaysia: Distribution of the total population by age, 2010 and 2020
Age
% share
2010
2020
0-4
5-14
15-24
25-34
35-44
45-54
55-64
65-74
75-84
85
Total
10.0
20.4
18.0
15.7
13.1
11.2
7.0
3.4
1.2
0.1
100.0
9.0
17.3
17.6
15.5
13.4
11.1
9.1
5.1
1.8
0.2
100.0
% increase in 2020
over total in 2010
4
-1
14
15
19
15
50
75
67
83
16
Source: UN DESA.
Sunday, May 18, 2014 9:53:17 PM
According to the 2010 Census, 91.8% of the resident population are

Malaysians and 8.2% non-citizens. Of the Malaysians, 54.5% are Malays,
12.8% other Bumiputera (other indigenous peoples, including Thais, Khmers,
Chams, the natives of Sabah and Sarawak and peninsular aboriginals known
as the Orang Asli), 24.6% of Chinese origin, 7.3% of Indian origin (mainly
Tamils) and 0.7% others. In Peninsular Malaysia 63% of the population is
Malay; in Sarawak 30% is Iban, and in Sabah 25% is Kadazan/Dusun. These
communities generally co-exist quite harmoniously, but separately: the Malays
tend to hold the political power and the Chinese the economic power. The
Chinese tend to be the wealthiest and the Indians the poorest.
Many Vietnamese refugees were allowed into the country between 1978 and
1989.
The prosperity of Malaysia and the growth of the middle classes have created
a shortage of manual labourers and domestic servants. There are estimated to
be about 4 million migrant workers in Malaysia (half of them Indonesians), but
hundreds of thousands of illegal migrants (most of them Indonesians) were
expelled in 2005. Recent immigration includes Burmese and Nepalese.
Many better-educated Malaysians (especially Chinese) who feel disadvantaged by the prevailing system favouring the Bumiputera have emigrated, and
this brain drain is considered in some quarters to be a serious problem. In
2011 the World Bank estimated the Malaysian Diaspora at 1.0 million and
emigration at 40,000 a year. There are over 400,000 in Singapore, 100,000 in
Australia and over 60,000 in the United States of America, United Kingdom
and Brunei. The 400,000 in Singapore include only those with resident status:
depending on the number lacking residency, the total Diaspora might be as
high as 1.4 million.
57
Dual citizenship is not permitted a policy which discourages the retention of

allegiances of long-term immigrants and emigrants to their ancestral homes.
Language
The Malay language has an official, standardised form, Bahasa Malaysia, and
numerous dialects and related indigenous languages. Iban is the main native
language in Sarawak and Dusun in Sabah.
English is effectively a national second language: Malaysian Standard English
is a recognised form widely used in business, and Manglish is a colloquial
form with strong Malay, Chinese, and Tamil influences. Chinese Malaysians
may speak Cantonese, Mandarin, Hokkien, Hakka, Hainanese or Fuzhou.
Indian Malayans speak mainly Tamil and Malayalam and other immigrant
communities retain their native languages. A small number of Malaysians with
European ancestry speak creole languages, including the Portuguese-based
Malaccan Creole and the Spanish-based Chavacano.
Religion
The 2010 Census found that 61% of the population are Muslims, 20%
Buddhists, 9% Christians and 6% Hindus; 1% practice Confucianism, Taoism
or other Chinese religions.
Sunday, May 18, 2014 9:53:17 PM
The Malaysian constitution declares Islam to be the state religion, but protects
freedom of religion. It also defines Malays as Muslims, which causes some
practical and philosophical problems. The non-Malay Bumiputera are mainly
Christian or Muslim and the Tamils are Hindus.
Economic growth
Malaysia has enjoyed great prosperity since the Second World War and is now
regarded as a middle-income newly industrialised country. It ranks as the
worlds 36th largest economy in terms of nominal GDP.
It has a relatively open market economy in which the state plays a significant
role through its National Development Plans and direct ownership of major
companies. The country is a major producer of palm oil, rubber, timber, oil and
gas, and electrical and electronic goods (notably computer disk drives). It has
substantial financial and knowledge-based service sectors and a growing
competence in sciences. The countrys enthusiasm for modernity is symbolised
by the Petronas Towers in Kuala Lumpur. However, although Malaysia is the
third largest and third richest economy in ASEAN, many parts of the country
remain poor.
Prosperity was briefly interrupted by the 1997 Asian financial crisis and by the
2008 world financial crisis. The latter confirmed what everybody knew: that
because of the importance of foreign trade in Malaysias economy, it is
vulnerable to a world economic downturn. However, healthy financial and
corporate balance sheets, ample foreign exchange reserves and a healthy
currency allowed Malaysia to weather the storm relatively easily and GDP
recovered well in 2010-2011. The electrical and electronics industrys
performance has been poor, but overall commodity and industrial exports have
performed well. Private demand has generally remained strong.
58
Chapter 4 Malaysia
The IMF nevertheless expects growth to moderate in the next few years.
Malaysias competitiveness in export manufacturing has waned a little in recent
years and the prospects for the commodities exports, which have underpinned
recent growth, are not as bright as they were. Real GDP increased by an
average of 4.5% in the six years 2005-2011. The IMF expects it to increase by
4.4% in 2012, 4.7% in 2013 and 5.0% a year in 2014-2017.
Table 4.4
Malaysia: Key economic data, 2006-2011

2006
2007
2008
2009
2010
2011
GDP (RM billion)

GDP (US$ billion)
Real GDP growth (%)
596.8
162.7
5.6
665.3
193.6
6.3
770.0
231.1
4.8
712.9
202.3
-1.5
795.0
246.8
7.2
881.1
287.9
5.1

Employment ( 1000)a
Unemployment (%)
3.6
10,275
3.3
2.0
10,538
3.2
5.4
10,660
3.3
0.6
10,897
3.7
1.7
11,129
3.3
3.2
na
3.1
Sunday, May 18, 2014 9:53:17 PM
From Department of Statistics online database, Social and Demographic data.

There is a strand of thought among economists that Malaysia is at risk of being

caught in a middle-income trap. As incomes rise it becomes increasingly
difficult to remain competitive as a high-volume, low-cost producer, but
breaking into the markets for knowledge- and innovation-based products and
services which support higher incomes requires a higher order of educational
and institutional standards and the abandonment of policies which allowed,
and still support, success as a low-cost producer. The governments stated
ambition is to turn Malaysia into a high-income economy by 2020, but it also
acknowledges the great difficulties involved. With real GDP growth at 5% a
year and a population growing by 1.5% a year, it would take 30 years, not ten,
to transform Malaysia into a high-income economy.
Exchange rates
Malaysia took effective measures to strengthen its financial sector after the
Asian financial crisis of 1997 and to insulate it as much as possible from the
vagaries of world finance. In 2010-2011 it tightened monetary policy and
mortgage and credit card conditions to contain consumer debt (which was
becoming a little alarming). Although inflation increased in 2011, the IMF
expects it to settle back to around 2.5% a year (and, indeed, in August 2012 it
has already fallen well below that level).
The Malaysian ringgit (RM) has tended to track the Singapore dollar quite
closely, but to slip very gradually against it. In 2009-2011 it strengthened
against the US dollar and even the Chinese renminbi, which is more tightly
bound to the US dollar. However, it has fluctuated quite strongly in the first
three quarters of 2012, rising as high as RM 3.00 to US$ 1.00 in FebruaryMarch and falling to RM 3.20 to US$ 1.00 in June-July.
Table 4.5
59
Malaysia: Key exchange rates, 2006-2011

(Malaysian ringgit per listed currency)

EUR (Euro)
IDR (Indonesian rupiah)a
JYP (Japanese yen)
KRW (Korean won)
RUB (Russian ruble)
TAIW (Taiwan new dollar)
THB (Thai baht)
GBP (British pound)
USD (US dollar)
VND (Vietnamese dong)a
2006
2007
2008
2009
2010
2011
2.7629
3.2342
0.4599
4.6045
0.4722
0.4010
0.0315
0.0038
0.0715
0.1350
2.3089
0.1128
0.0968
6.7548
3.6678
0.2296
2.8742
3.2000
0.4518
4.7011
0.4398
0.3776
0.0292
0.0037
0.0745
0.1343
2.2803
0.1047
0.1063
6.8757
3.4393
0.2144
2.8175
3.1299
0.4808
4.8836
0.4286
0.3474
0.0325
0.0031
0.0751
0.1341
2.3552
0.1057
0.1011
6.1398
3.3365
0.2034
2.7716
3.0902
0.5167
4.8996
0.4553
0.3399
0.0377
0.0028
0.0742
0.1111
2.4234
0.1067
0.1027
5.5017
3.5290
0.1978
2.9585
3.1240
0.4752
4.2677
0.4142
0.3530
0.0367
0.0028
0.0714
0.1060
2.3618
0.1021
0.1015
4.9727
3.2176
0.1687
3.1558
3.0921
0.4734
4.2570
0.3929
0.3494
0.0384
0.0028
0.0707
0.1042
2.4329
0.1040
0.1003
4.9044
3.0583
0.1484
1000.
Source: The Travel Business Partnership, based on Bank of Canada data.
Sunday, May 18, 2014 9:53:17 PM
Spending power
Malaysia, as suggested above, has successfully made the transition to a

middle-income economy: GDP per capita has increased by 21% in real terms
since 2005 to US$ 10,100 substantially higher than that in China (US$ 5,400)
and Indonesia (US$ 3,500), but well short of some other Asian tigers e.g. the
Republic of Korea (US$ 22,800) and Singapore (US$ 49,300).
Great progress has been made in eliminating poverty throughout Malaysia: in
2009, only 3.8% of households fell below the poverty line (RM 800 per month,
with regional and circumstantial variations). Only in Sabah is the incidence of
poverty significantly higher (see the table below). However, Malaysia is a
country of rich and poor, with higher indices of inequality than in, for example,
Indonesia, Thailand and the Philippines. In 2009, the top 20% of households
accounted for 50% of total income, and the bottom 40% accounted for 14%.
The top 10% took 33% of total income, and the bottom 10% just 2%.
Table 4.6
Malaysia: GDP per capita, 2006-2011
RM
Real increase (%)
US$
at PPPsa (US$)
2006
2007
2008
2009
2010
2011b
22,242
4.2
6,066
12,735
24,474
4.9
7,122
13,748
27,957
3.5
8,390
14,542
25,555
-2.8
7,252
14,263
28,142
5.8
8,737
15,293
30,858
4.0
10,085
16,240
a
b
purchasing power parities

Estimates.
The average monthly household income in Malaysia was RM 4,025

(US$ 1,223) in 2009. The top 20% of households earned an average of
RM 10,208 (US$ 3,102) a month, the middle 40% earned RM 3,770
(US$ 1,146) and the bottom 40% earned RM 1,529 (US$ 465). On average,
Chinese households had incomes 38% higher than Bumiputera households
60
Chapter 4 Malaysia
and Indian households 10% higher. The incomes of other ethnic groups were,
overall, closely comparable with those of the Bumiputera. The incidence of
poverty was 5.3% among the Bumiputera, 0.6% among the Chinese, 2.5%
among the Indians and 6.7% among other ethnic groups.
The Department of Statistics Household Income/Basic Amenities Survey 2009
found that 98.3% of households had a television, 75.6% a radio, 39.2% a fixed
telephone, 93.9% a mobile phone, 42.5% a personal computer and 27.5% a
broadband Internet subscription. The Economic Census 2011 found that there
were 36.7 million cell phone subscriptions and 5.6 million broadband Internet
subscriptions.
Crdit Suisse estimates the number of high net worth individuals (HNWIs) in
Malaysia at 39,000. HNWIs are generally defined as persons having investable
assets of US$ 1 million or more, excluding primary residence, collectibles and
consumer goods. Cap Gemini and Merrill Lynch, in their Asia Pacific Wealth
Report 2011, do not provide separate figures for Malaysia in the version of
their report published online, but Bank Julius Baer suggests a total number of
HNWIs of 32,000 in 2010, with assets of US$ 140 billion. Bank Julius Baers
figure for Malaysia is very similar to its figure for Indonesia (33,000), although
Indonesia has a population over eight times larger and GDP three times larger.
However, it believes that the number in Indonesia will treble by 2015, to
99,000, while the number in Malaysia will do little more than double, to 68,000.
Sunday, May 18, 2014 9:53:17 PM
The following table lists the states of Malaysia, with indicators of their relative
importance as markets population, average household incomes (and their
growth in recent years), and the incidence of poverty. Note the wealth of Kuala
Lumpur and Selangor.
Table 4.7
61
Malaysia: Population, average household incomes and incidence of poverty

by state, 2009
State
Populationa
( 1000)
Malaysia
Johor
Kedah
Kelantan
Melaka
Negeri Sembilan
Pahang
Perak
Perlis
Penang
Selangor
Terengganu
WPd Kuala Lumpur
WPd Putrajaya
Sabah
WPd Labuan
Sarawak
28,334
3,348
1,948
1,540
821
1,021
1,501
2,353
232
1,561
5,462
1,036
1,675
72
3,207
87
2,471
Household incomes
(RM/month)
4,025
3,835
2,667
2,536
4,184
3,540
3,279
2,809
2,617
4,407
5,962
3,017
5,488
6,747
3,102
4,407
3,581
(AAGR)b
Poverty
(%)c
4.5
5.3
5.2
8.8
10.6
3.0
4.6
5.1
1.5
4.9
3.4
10.7
1.5
12.9
4.6
8.8
3.4
3.8
1.3
5.3
4.8
0.5
0.7
2.1
3.5
6.0
1.2
0.7
4.0
0.7
19.7
4.3
5.3
a
b
c
d
Sunday, May 18, 2014 9:53:17 PM
Population figures for 2010.

Average annual growth rate, 2007-2009.
Incidence of poverty (% of households with incomes below the governments poverty line).
Federal Territory.
Source: The Travel Business Partnership, from Department of Statistics data.
Tourism Policy
Competitiveness
Malaysia was ranked 7th regionally and 35th overall (down three positions
since 2009), in the World Economic Forums (WEF) 2011 Travel and Tourism
Competitiveness rankings. Important indicators, as far as outbound travel is
concerned, include its 3rd position for price competitiveness in the travel and
tourism industry, with low comparative fuel prices (14th position), low ticket
taxes and airport charges (ranked 15th) and a favourable tax regime (28th).
The policy environment is assessed as conducive to the development of the
sector (ranked 21st), and the country is characterised by a strong affinity for
travel and tourism generally (17th). The WEF report also ranks Malaysia 1st in
terms of visa requirements for incoming visitors, which no doubt also helps
Malaysians travelling abroad to countries which demand reciprocity (e.g. Chile).
Passports
Malaysia was the first country in the world to issue biometric passports, in
March 1998, after a local company IRIS Corporation developed the technology.
In December 2002, thumbprint data was added to the biometric data on the
passport chip. Similar technology is used in the Malaysian identity card, MyKad.
The 75th nation in the world to adopt the e-passport standard established by
the International Civil Aviation Organization (ICAO), Malaysia started issuing
the ICAO-compliant e-passport, valid for five years or two years, in February
2010, replacing the current one.
62
Chapter 4 Malaysia
Visas
Holders of Malaysian passports enjoy visa-free travel to many countries around

the world. According to a 2010 study conducted by Henley & Partners (a
company specialising in immigration and citizenship matters), Malaysia ranked
13th in the world in its global index ranking of countries according to the visafree privileges enjoyed by their citizens, with a score of 151 ahead of places
like Hong Kong (China), the Russian Federation and Thailand, but still lagging
the United Kingdom, the top-ranked country with a score of 166.
Insurance
Since the beginning of March 2012, travel insurance has been compulsory for
all outbound tour packages sold by members of the Malaysian Association of
Tour and Travel Agents (MATTA). Legislation was introduced because of the
many cases of travel companies becoming insolvent or absconding with
consumers money. The new ruling followed the launch of MATTAs outbound
travel insurance coverage scheme, as well as the appointment of six insurance
firms as official service providers.
The scheme also covers claims for medical treatment, hospitalisation and
associated expenses, emergency medical evacuation and repatriation, and
reimbursement of deposits/full payment of airline tickets and tour packages.
Also covered under the scheme are claims for repatriation of mortal remains,
compassionate visitation benefits, accidental death and permanent disability.
Sunday, May 18, 2014 9:53:17 PM
Holiday entitlement
Malaysia has one of the highest numbers of public holidays in the world
16, in addition to 16 days annual leave. Some are federally gazetted public
holidays and some are public holidays observed by individual states. Other
festivals are observed by particular ethnic or religious groups, but are not
official public holidays. The main holy days of each major religion are public
holidays, taking place on either the western calendar or religious ones.
Major national public holidays include Hari Kebangsaan (National Day),
otherwise known as Hari Merdeka (Independence Day) (31 August), Labour
Day (1 May), the Kings birthday (first Saturday of June) and some other
festivals. Federal Territory day is celebrated in the three federal territories.
Malaysia Day, held on 16 September to commemorate the formation of
Malaysia, became a nationwide holiday in 2010.
Muslim holidays are prominent. The most important of these is Hari Raya
Puasa (also called Hari Raya Aidilfitri), which is the Malay translation of Eid
al-Fitr, marking the end of Ramadan.
Malaysian Chinese typically hold the same festivals observed by Chinese
around the world. Chinese New Year is the most prominent, lasting for 15 days
and ending with Chap Goh Mei.
Hindus celebrate Diwali/Deepavali, the festival of light, while Thaipusam is a
celebration in which pilgrims from all over the country meet at the Batu Caves.
The most important Sikh festival is the Sikh New Year or Vaisakhi.
Wesak (Malay for Vesak), the Buddhist festival commemorating Buddhas
birth, is a public holiday. Malaysias Christian community observes most of the
holidays observed by Christians elsewhere, most notably Christmas and
Easter. New Years Day, Chinese New Year, and the start of the Islamic
calendar are all public holidays.
63

Overview
The last decade has seen impressive growth in demand for international travel
among Malaysians from a low base driven by the rapid expansion of lowcost airline services, especially since the emergence of Malaysias first lowcost carrier (LCC), AirAsia. Although air travel still represents a tiny share of
domestic travel, it is important to look at the growth in this sector to understand
overall trends.
Domestic travel
The annual Domestic Tourism Survey suggests that 131 million residents (52%
of the population aged 15 and over) made at least one domestic trip in 2011
138% more than in 2008, taking a total of 163 million trips (an average of just
over 1.2 per traveller), up 157% over the three years. Around two thirds (68%)
of them were same-day trips and one third (32%) overnight trips.
In 2011, 97.5% of domestic trips used some kind of land transport (of which
89.8% private vehicles, 7.6% bus or coach, 2.2% taxi and 0.4% rail). The share
of air travel for domestic trips was a modest 1.2% nevertheless, close to
2 million with a similar 1.3% involving sea transport. The principal domestic
airline destinations are Sabah and Sarawak, Penang and Langkawi.
Sunday, May 18, 2014 9:53:17 PM
Domestic travel in Malaysia is strongly associated with balik kampung the

tradition of visiting ones home town during seasonal or religious holidays,
primarily to visit family. This is reflected in the high (84%) share of overnight
domestic travellers staying in non-commercial accommodation, with family or
friends.
Table 4.8
Malaysia: Domestic tourism, 2008-2011

2008
2009
2010
2011
Number of travellers ( 1000)

Excursionists (same-day)a
Tourists (overnight)
55,100
na
na
74,700
na
na
115,456
75,917
39,538
131,002
85,271
45,731
Number of trips ( 1000)

Same-daya
Overnight
63,283
na
na
90,506
na
na
137,853
94,035
43,818
162,835
111,292
51,543
Total expenditure (RM million)

on same-day trips
on overnight trips
21,110
na
na
25,975
na
na
34,679
10,995
23,684
42,346
15,337
27,009
334
na
na
287
na
na
252
117
541
260
138
524
Average spending per trips (RM)

on same-day trips
on overnight trips
a
Defined as trips of over 25 km each way lasting over 4 hours.

Source: Department of Statistics, Domestic Tourism Survey, 2008-2011.
Domestic travel
spending
Average spending on an overnight trip was RM 524 (US$ 171), while average
spend on a same-day trip was just RM 138 (US$ 45). The decline in the overall
average from RM 334 in 2008 to RM 260 in 2011 can be explained by the
fact that more Malaysians can now afford to travel, but those from lower socio-
64
Chapter 4 Malaysia
economic groups tend to spend much less per trip, and therefore bring the
average spend down.
The breakdown of spending on domestic trips in 2011 was as follows:
shopping 31%, transport 24%, food and drink 23%, accommodation 12%,
bookings, packages, entry fees and tickets 2%, and other 8%.
According to the World Travel & Tourism Council (WTTC), domestic travel
generated 42% of Malaysias total Travel and Tourism GDP in 2011, or
RM 41.9 billion (US$ 13.78 billion) compared with 58% for foreign visitor
spending (visitor exports). The contribution is forecast to grow by 4.1% in 2012
(real growth, taking inflation into account) and by the same percentage
annually in 2012-2022.
Outbound travel
Growth trends for the Malaysian outbound travel market are difficult to assess
since official data (which has not been published since 2004) includes all
surface travel from Malaysia to neighbouring countries, much of which is for
same-day travel. This clearly distorts absolute volumes of real tourists and
tourist trips, as well as growth trends.
The official figure was 34 million outbound trips in 2004, up from 30.5 million in
2000. But if all same-day and surface travel are excluded from the count,
industry estimates put the total at no more than 7-8 million trips abroad at
least 90% of which are to other Asian destinations.
Sunday, May 18, 2014 9:53:17 PM
The Pacific Asia Travel Association (PATA) ranks the market as the second
most important within ASEAN but, as with the governments count, PATA
measures cumulative arrivals of Malaysians (by residence and/or nationality)
by destination.
For want of an official outbound count for recent years, the following table
shows outbound trip volume from Malaysia as defined by Euromonitor
International. This does include estimates for land trips to neighbouring
countries (notably Singapore and Thailand), but only overnight trips, i.e. it
excludes same-day cross-border travel. Although the statistics need to be
interpreted with caution, they do shed some light on general growth patterns in
outbound travel demand.
Table 4.9
Malaysia: Outbound overnight trips, 2006-2011
Total trips ( 1000)

% change
2006
2007
2008
2009
2010
2011
11,103
na
12,262
10.4
13,025
6.2
13,179
1.2
14,185
7.6
14,871
4.8
Destination regions
While only 2011 data is available, Business Monitor Internationals estimate of

7.7 million overnight outbound trips for 2011 is more in line with industry
estimates and with those of IPK Internationals World Travel Monitor (only
5 million). The following table showing outbound trips by destination region
highlights the dominance of Asia in terms of destinations visited by Malaysians.
65
Europe is the second most important region, but it attracts less than a 3%
share of all outbound trips from Malaysia.
Table 4.10 Outbound travel from Malaysia by region, 2011

Number of trips
( 1000)
% annual
change
Asia Pacific
Europe
Middle East
North America
Africa
Latin America
7,241
207
82
79
71
2
8
7
-4
0
7
28
Estimated total
7,682
Source: Business Monitor International, Malaysia Tourism, update, Q2 2012.
Sunday, May 18, 2014 9:53:17 PM
Travel expenditure
Malaysias international travel expenditure (excluding transport) reached

US$ 10.8 billion in 2011, according to official statistics. It increased by an
average of 12.3% a year in 2000-2005 and 16.4% a year in 2005-2010,
followed by a further 35% rise in 2011. This acceleration is of course partly
attributable to the strength of the ringgit in 2009-2011; in ringgit terms,
spending increased by about 13% a year in 2005-2010 and by 29% in 2011.
Preliminary estimates put the growth in spending (in US dollar terms) at 17.8%
in the first semester of 2012.
Table 4.11 Malaysia: International travel expenditure, 2006-2011
Total (US$ million)

% change
2006
2007
2008
2009
2010
2011
4,257
14.7
5,601
31.6
6,709
19.8
6,508
-3.0
7,943
22.0
10,753
35.4
Sources: UNWTO; Central Bank of Malaysia.
The following table shows total consumer spending on outbound travel with a
breakdown by category/item. It should be noted that it does not correspond to
the usual definition of international travel expenditure and expenditure on
international transport (before departure), and bears no relation to the UNWTO
data provided in the previous table, which (allowing for passenger transport) is
roughly twice as large.
66
Chapter 4 Malaysia
Table 4.12 Malaysia: Outbound travel expenditure by product, 2006-2010
Total (RM million)

Total (US$ million)
Breakdown (%):
Accommodation
Food and drink
Passenger transport
Travel agents and reservations
Culture, sports and recreation
Tourist goodsa
Tourist servicesb
Total
2006
2007
2008
2009
2010
9,118
2,486
10,852
3,155
12,574
3,769
12,073
3,421
14,287
4,440
18.0
9.1
49.3
2.4
1.6
16.9
2.8
17.4
9.4
50.9
2.7
1.6
15.1
2.9
17.7
9.2
50.1
2.6
1.6
16.0
2.8
17.6
9.3
50.5
2.7
1.6
15.6
2.8
17.1
9.1
51.8
2.4
1.5
15.0
3.0
100.0
100.0
100.0
100.0
100.0
a
b
Country-specific tourism-characteristic goods.

Country-specific tourism-characteristic services.
Source: National consumer spending survey, Ministry of Tourism.
WTTC expects Malaysias outbound travel spending to increase (in real terms)
to RM 26.3 billion in 2012 (up 6.2% from RM 24.7 billion in 2011) and to grow
by 6.2% annually in the ten years from 2012 to RM 47.9 billion in 2022.
Sunday, May 18, 2014 9:53:17 PM
Methods of payment
Cash and credit card are the preferred methods of payment by Malaysians
when travelling abroad, each accounting for about a 48% share of retail sales
in 2011. However, the use of cash is reportedly declining in favour of credit
cards among Malaysian tourists travelling abroad. Credit cards have become
an increasingly popular method of payment as they offer convenience and
security compared to carrying cash around.
Debit cards have also grown in popularity, with retail value sales rising by an
estimated 7% in 2011, according to Euromonitor International. However, it
should be noted that this growth was largely due to the rising debt incurred on
credit cards in Malaysia. Thus, the government is encouraging people to switch
to debit cards to better manage their finances.
Table 4.13 Malaysia: Methods of payment for spending abroad by Malaysians, 2006-2011
2006
Cash
Charge card
Credit card
Debit card
Travellers cheques
Total
2007
2008
2009
2010
2011
50.9
3.1
44.0
0.5
1.5
49.8
3.2
45.0
0.6
1.4
48.7
3.3
46.0
0.6
1.4
48.2
3.4
46.5
0.6
1.3
47.9
3.4
47.0
0.6
1.1
47.5
3.4
47.6
0.6
0.9
100.0
100.0
100.0
100.0
100.0
100.0
67
Destination regions
Despite the global economic slowdown, Malaysian outbound travel remained

buoyant in 2011, although short-haul destinations continued to dominate
demand, driven by cheap flight deals from AirAsia and other low-cost carriers
(LCCs), as well as consolidators/intermediaries such as Groupon. However,
lower consumer confidence resulted in slower overall growth in the number of
departures than in 2010 estimated at +5%.
In 2011 the strongest growth destination was, nevertheless, outside the region.
New Zealand recorded 60% growth in Malaysian arrivals thanks to AirAsias
four times weekly Christchurch flights, which made travel to New Zealand
instantly more affordable and more popular. Sadly, the service was suspended
in May 2012 in line with its change of strategy to get out of the longer-haul
market (with flights to London and Paris also canned).
Sunday, May 18, 2014 9:53:17 PM
Among the bigger destinations, the Republic of Korea (+38%), and Thailand
(+22%) also performed well above average in 2011. In the longer run (20052011), the highest growth was seen in Macao (China) (+22%); as well as
Vietnam, Taiwan (Province of China) and Cambodia, all recording a 19%
increase in Malaysian arrivals.
The following table shows arrivals as reported by different destinations around
the world to UNWTO, by various measures. Note that many of the leading
destinations in Europe (including France, Germany, the Netherlands, Spain,
Portugal and Greece) and the Americas (including Mexico, Brazil and
Argentina) do not report arrivals from Malaysia. Where several measures are
available, the preferred measure quoted is TFr (overnight tourists by country of
residence), or the measure likely to be closest to that.
68
Chapter 4 Malaysia
Table 4.14 Malaysia: Arrivals in selected destinations, 2000-2011

( 1000)
Sunday, May 18, 2014 9:53:17 PM
Destination
Thailand
Indonesia
China
Singapore
Hong Kong (China)
Macao (China)
Australia
Vietnam
India
Republic of Korea
Cambodia
Philippines
Japan
Brunei Darussalam
New Zealand
Myanmar
Lao PDR
Sri Lanka
Nepal
Papua New Guinea
Maldives
To other regions
United Kingdom
Saudi Arabia
Turkey
Egypt
Switzerland
Italy
Bahrain
Nigeria
Jordan
Russian Federation
Canada
South Africa
Poland
Belgium
Lebanon
Kuwait
Belgium
a
Seriesa
TFr
TFr
VFn
VFr
TFr
VFr
VFr
VFr
VFr
TFn
VFn
TFr
TFr
VFn
TFn
VFr
TFn
VFn
TFr
TFr
TFr
TFn
VFr
TFn
TFr
TFn
VFn
THSr
TFn
VFn
VFn
TFn
VFn
TFr
TFr
VFn
TCEr
TFn
VFn
THSr
2000
2005
2006
2007
2008
1,054 1,342 1,579 1,552 1,828

476
591
770
891 1,117
441
900
910 1,062 1,040
565
578
634
646
647
255
285
327
370
372
26
98
203
402
429
58
108
115
141
156
152
166
150
159
171
20
81
106
154
175
61
96
107
113
116
60
97
90
83
84
15
37
77
84
81
42
43
53
66
70
62
78
86
101
106
..
39
40
45
..
21
24
20
20
20
10
10
10
9
8
4
7
7
8
16
5
12
10
7
5
3
5
4
5
5
0
2
3
4
5
2
2
3
3
3
92
109
75
9
10
20
9
1
9
4
2
17
10
1
3
1
1
2
86
101
51
19
16
15
7
9
18
3
7
10
10
3
3
1
2
3
85
74
51
18
16
15
10
13
19
4
10
11
9
3
4
2
2
3
87
61
56
23
26
17
20
20
35
6
11
11
10
5
4
2
3
4
76
142
54
25
27
16
15
..
37
7
13
13
9
..
3
3
4
3
2009
2010
2011
change (%)
AAGR(%)b
'10/'09
'11/'10
2005-2011
1,748
1,179
1,059
764
326
333
167
212
166
135
80
78
69
90
38
20
10
14
7
5
5
3
2,047
1,277
1,245
1,037
424
338
286
237
211
179
114
90
80
115
54
22
16
15
13
6
6
4
2,492
1,302
1,245
1,141
452
325
308
241
233
208
156
103
92
82
61
35
23
18
16
7
7
6
17.1
8.3
17.6
35.7
30.1
1.7
71.1
12.0
27.6
32.3
41.9
15.7
16.0
27.9
41.7
10.9
67.4
11.7
95.1
23.6
17.9
24.1
21.7
1.9
0.0
10.0
6.5
-4.0
7.8
1.8
10.3
16.3
37.5
14.4
15.1
-28.8
13.6
60.3
43.9
14.7
20.4
11.8
11.0
55.5
10.9
14.1
5.6
12.0
8.0
22.0
19.2
6.4
19.4
13.7
8.4
18.7
13.4
0.7
7.8
6.7
15.4
17.8
5.6
4.8
17.9
17.0
121
63
43
29
30
15
17
..
38
7
12
9
7
..
3
4
3
3
133
152
54
31
33
22
26
..
38
12
17
11
9
..
4
5
4
3
130
110
60
34
26
26
22
20
17
16
15
12
10
5
5
5
4
4
9.9
142.9
24.9
9.4
10.0
40.1
56.3
..
0.2
71.8
39.4
28.6
30.6
..
24.5
36.6
17.5
26.0
-2.3
-27.7
10.7
8.5
-21.1
18.2
-16.2
..
-54.3
31.1
-9.2
5.4
12.7
..
27.5
-6.5
5.2
32.7
7.1
1.4
2.6
10.4
8.1
9.3
20.6
14.2
0.0
33.2
13.2
2.8
0.7
8.0
6.2
21.6
16.5
5.5
Source: UNWTO.
69
For geographical reasons, Singapore recorded an impressive 7.6 million

Malaysian visitors in 2011, though most of these were same-day trips by
land/surface transport. Tourist arrivals (overnight trips) to this destination
amounted to 1.1 million in 2011, a 10% increase over 2010. Singapores
newest attractions, Resorts World Sentosa and Marina Bay Sands, are still big
draws, although the growth in number of Malaysian visitors has slowed since
2010, when these major tourist attractions were opened.
The main intra-regional destinations for Malaysians were Thailand, with
2.5 million visitors in 2011 (a 22% increase from 2010), followed by Indonesia
(1.3 million) and China (1.2 million). This is mainly due to the culture and
heritage of these three destinations. Beautiful beaches in Bali, Phuket and
Krabi Island are big attractions. In addition, the local cuisines of Indonesia and
Thailand are affordable and big favourites among Malaysians who like to try
high-quality food from around the world.
Hong Kong (China) with close to half a million visitors is also very popular,
attracting 7% more arrivals from Malaysia last year, following a 30% increase
in 2010. The country has positioned itself as Asias World City by offering
multiple attractions on a single trip. Moreover, it is a hotspot for food lovers,
with many Malaysians seeking gourmet opportunities when travelling. Most
Chinese people in Malaysia speak Cantonese, which also helps to explain the
destinations appeal.
Sunday, May 18, 2014 9:53:17 PM
Medium- to long-haul
destinations
Australia is a popular destination for Malaysians, attracting some 241,000

tourist arrivals in 2011. It has also gained visitors at the expense of Europe and
North America over the past ten years since the tragic events of
11 September 2001.
New Zealand is currently the fastest growing destination, admittedly from a
much lower base, recording a 60% increase in Malaysian visits in 2011, to
35,000. The availability of direct flights to Christchurch from AirAsia has
significantly boosted demand for the destination.
The United Kingdom, the most important European destination for Malaysians,
saw 130,000 arrivals in 2011 (a slight drop of 2%), while the United States of
America generated 60,000 arrivals (+11%), though well below Australias
share. Turkey recorded 34,000 Malaysian arrivals, while Egypt saw 26,000.
Aside from the United Kingdom, other important European destinations were
Switzerland (26,000), Italy (22,000) and the Russian Federation (15,000).
Other preferred medium to long-haul destinations not surprisingly, given the
population mix in Malaysia are India and Saudi Arabia, with 208,000 and
110,000 Malaysian arrivals in 2011. In January 2011 the Indian Government
stepped up visa restrictions in a bid to counter terrorist threats. Tourists can
only make two visits to India even while on a six-month multiple-entry visa and
must wait 60 days before making the second visit.
Malaysia represents one of the largest Indian Diasporas in the world. With
many cultural and historical roots in India, Malaysians travel there frequently,
so the visa ruling has disrupted their travel patterns, especially for those on
group tours.
70
Chapter 4 Malaysia
Spending by destination
Singapore accounted for the largest share of Malaysians retail spending

abroad in 2011, 43% of the total or RM 4.7 billion, according to Euromonitor.
There was a marked increase in spending per Malaysian visitor in this
destination in 2011. China followed, attracting spending of RM 2.0 billion from
Malaysian visitors.
Indonesia, meanwhile, recorded the strongest current value growth (10%). A
destination offering popular cultural and heritage attractions and worldrenowned beaches like Bali, Indonesia is attracting an increasing number of
young Malaysians on honeymoon.
Table 4.15 Malaysia: Retail spending abroad in selected destinations, 2011

Destination
Singapore
China
Australia
Thailand
Saudi Arabia
Hong Kong (China)
Indonesia
United Kingdom
New Zealand
Spending
(RM million)
% change
4,724
2,009
1,004
663
508
415
411
366
241
107
6.9
6.4
8.9
4.9
9.4
8.4
9.9
5.4
-0.1
7.8
Sunday, May 18, 2014 9:53:17 PM

Purpose of travel
Leisure accounted for an estimated 72% of Malaysian outbound trips in 2011,

compared with business travels 28% share three percentage points up from
its 69% share five years earlier.
No detailed information on Malaysian student travel is available, but there are
known to be around 13,000 Malaysian full-time overseas students second
only to the number of Chinese students studying abroad. The United Kingdom
accounts for at least 50% of these but stricter immigration laws and the
growing popularity of other destinations for tertiary education, notably Australia,
have reduced the United Kingdoms share.
71
Table 4.16 Malaysia: Outbound travel by purpose of trip, 2006-2011

Purpose
2006
2007
2008
2009
2010
2011
Business
Leisure
Total
3,400
7,703
11,103
3,659
8,602
12,263
3,769
9,256
13,025
3,789
9,389
13,179
3,983
10,211
14,194
4,118
10,758
14,875
31
69
100
30
70
100
29
71
100
29
71
100
28
72
100
28
72
100
Breakdown (%)
Business
Leisure
Total
Business departures, up 3.4% over 2010, remain quite small in volume terms,
but accounted for a 25% share of outgoing tourism expenditure. However,
business departures reportedly recorded a strong 7% increase in retail
spending abroad in 2011 as more Malaysians travelled abroad to the Middle
East and China for business.
Meetings, incentive travel, conferences and exhibitions (MICE) generated an
11% share of business departures. The share has been steady over the past
few years but has nevertheless increased from just 8% in 2006. With the large
number of multinational companies located in Malaysia, the need for Malaysian
employees to travel abroad to attend MICE events is increasing.
Sunday, May 18, 2014 9:53:17 PM
Table 4.17 Malaysia: Breakdown of business travel by type of trip, 2006-2011

Purpose
2006
2007
2008
2009
2010
2011
MICE
Other
Total
212
3,188
3,400
310
3,349
3,659
416
3,353
3,769
420
3,369
3,789
446
3,537
3,983
465
3,652
4,118
6
94
100
8
92
100
11
89
100
11
89
100
11
89
100
11
89
100
Breakdown (%)
MICE
Other
Total
Among the main trends in 2011 and 2012, Malaysian outbound MICE players
report that groups scheduled for Japan have been switching destinations, since
many continue to fear the risk of radiation contamination due to the nuclear
crisis in March last year following the earthquake and tsunami.
Mode of transport
Some 38% of all outbound trips involve air travel, according to Euromonitor
data (reportedly based on official statistics), and only 5% of trips use rail or sea
transport (including meetings aboard cruise ships). But land travel continues to
dominate the market, accounting for 57% of trips in 2011 and down just three
percentage points in five years. This reflects the high share of travel to
neighbouring Singapore and Thailand.
72
Chapter 4 Malaysia
Table 4.18 Malaysia: Outbound departures by mode of transport, 2006-2011

Transport
Air
Land
Rail
Sea
Total
Breakdown (%)
Air
Land
Rail
Sea
Total
2006
2007
2008
2009
2010
2011
4,100
6,639
51
314
11,103
4,423
7,302
51
486
12,262
4,688
7,719
52
567
13,025
4,743
7,732
51
652
13,179
5,306
8,121
56
712
14,185
5,638
8,420
57
760
14,875
37
60
3
100
36
60
4
100
36
59
5
100
36
59
5
100
37
57
6
100
38
57
5
100
Note:
= less than 1%
Type of trip
When travelling abroad, Malaysians are very keen on trying different foods,
although they primarily focus on local cuisines (South-East Asian, different
Chinese and Indian). Since Muslim Malays are extremely sensitive regarding
any issues related to Islam the younger generations even more so than their
older counterparts they are very likely to request Halal food and even hotels
catering to Muslims.
Sunday, May 18, 2014 9:53:17 PM
Shopping is also very popular, especially among the Chinese and Indian Malay
communities, and nature-based tourism is attracting increasing demand.
Although Malaysians are not especially keen on culture and history, since
school syllabuses do not focus very much on these topics, it is clear that there
are big differences according to socio-economic groups and educational levels.
VisitBritain, for example, says that Malaysian visitors to the United Kingdom
like visiting iconic landmarks and heritage sites, such as castles, as well as
enjoying music and other forms of pop culture.
Malaysians are keen on active holidays and frequently participate in major
sporting events e.g. marathons, Formula 1 races, football matches, etc.
Sports sponsorship and the organisation of big sporting events in Malaysia
over the last decade have helped raise awareness among travellers for sports
of different types and encouraged increased active participation at home and
abroad.
Nature and age of

travellers
Data on the profile of outbound travellers from Malaysia all destinations

included is not readily available, but IPK Internationals World Travel Monitor
suggests that the Malaysian outbound travel market (trips of 1+ nights abroad)
has the highest ratio of female to male travellers of all Asian markets (52:48).
Recent figures on the gender and age of Malaysian visitors to selected shortand longer-haul destinations over the last five years show a relatively even
distribution by age. Young adults aged between 25 years and 34 show the
highest propensity for foreign travel (in part reflecting the importance of study
and business travel). Indeed, IPK says that the mean age of Malaysian
travellers (34 years old) is the lowest in Asia. But there is a very low proportion
of children in the overall breakdown.
73
Travel, especially long-haul travel, is seen as a status symbol among upwardly

mobile Malaysians, the majority of whom speak good or even excellent
English. They like to share their stories with family and friends and, with the
growth of social media, this has become the new platform for them to boast
about their travels.
Malaysians are constantly seeking value-for-money travel experiences and
they are enticed by attractive travel deals and packages. Younger Malaysians
are also very price-sensitive and respond to good offers, especially from lowcost carriers.
VFR travel is very popular, as many Malaysians have family members who
have migrated abroad. Parents will visit children who are studying abroad and
will endeavour to attend graduation ceremonies.
Malaysian travellers consider safety as their number one priority, both in terms
of their trip and the security of the destination. They are quick to change their
minds about travelling to a particular destination if they foresee the possibility
of any risks to their safety and health e.g. as in the case of Japan after the
March 2011 earthquake and tsunami. Secondary factors are price, climate,
sightseeing opportunities, transportation and food.
Sunday, May 18, 2014 9:53:17 PM
Travel companions
Singles (e.g. backpackers) recorded a 3% increase in outbound trips in 2011 to

account for an 8% share of leisure departures. Malaysians are less likely to
travel individually as they prefer to travel in a group. Group travel accounted for
a 31% share of outbound leisure trips, a 6% increase on 2010. There is a
strong culture of collectivism in Malaysia, and group travel allows more
opportunities for sharing with and helping others during a trip. Many travel
retailers in Malaysia set a minimum number of tourists for each group, which
encourages and facilitates organised travel abroad in groups.
Families accounted for the second-highest share of 25% in terms of leisure
departures in 2011. Educational levels among Malaysian families are gradually
improving and they are placing more emphasis on family-orientated travel.
Trips to New Zealand and Australia, for example, are seen as good
opportunities to broaden the experiences of children, including improving their
English language skills.
74
Chapter 4 Malaysia
Figure 4.1 Malaysia: Breakdown of outbound trips by type of travel/travel companions, 2011
Singles
8.4%
Other
19.0%
Couples
16.7%
Group
31.2%
Families
24.7%
Spending on leisure travel
The best available indication of how Malaysians spend their holidays abroad
can be seen in the breakdown of their spending on leisure trips (Euromonitor
data compiled from official sources and their own estimates, and therefore not
strictly comparable with other data).
Sunday, May 18, 2014 9:53:17 PM
Accommodation accounts for a relatively modest 31% and food for 19%, while
entertainment takes just 8%, excursions 4%, local travel 13%, and shopping
21%.
Table 4.19 Malaysia: Outgoing leisure tourism expenditure by category, 2006-2011

2006
2007
2008
2009
2010
2011
Spending (RM billion)

Accommodation
Entertainment
Excursions
Food
Shopping
Travel within country
Other outgoing spend
Total
2,647
737
371
1,591
1,773
1,077
263
8,458
2,891
760
405
1,739
1,936
1,177
333
9,240
3,031
792
425
1,824
2,029
1,234
357
9,692
2,943
772
425
1,853
2,027
1,255
376
9,651
3,173
826
455
1,996
2,177
1,344
406
10,375
3,395
880
487
2,145
2,307
1,451
430
11,095
Breakdown (%)
Accommodation
Entertainment
Excursions
Food
Shopping
Travel within country
Other outgoing spend
Total
31.3
8.7
4.4
18.8
21.0
12.7
3.1
100.0
31.3
8.2
4.4
18.8
21.0
12.7
3.6
100.0
31.3
8.2
4.4
18.8
20.9
12.7
3.7
100.0
30.5
8.0
4.4
19.2
21.0
13.0
3.9
100.0
30.6
8.0
4.4
19.2
21.0
13.0
3.9
100.0
30.6
7.9
4.4
19.3
20.8
13.1
3.9
100.0
Note:
Entertainment all on leisure trips includes attractions, theatre, guided city tours, etc;
food includes restaurants;
other outgoing tourism expenditure includes travel agent services.
Length of stay
Catering for Malaysian

travellers
75
Length of stay varies sharply according to destination visited. Trips to SouthEast and North-East Asia generally last from 3-4 days as they rarely involve
multi-city itineraries. For a trip to Europe, however, the average would be
9-10 days. The official figure for Malaysian travellers in Australia is 31 nights,
but this includes students who stay up to 12 months.
Bumiputeras take their religion very seriously and are extremely sensitive
about issues concerning Islam, such as diet and cultural behaviour. Halal food
in particular is increasingly seen as essential, even among individual travellers.
Longer-haul travellers tend to be from higher socio-economic groups, and are
generally educated to a high level or they are students themselves. They are
usually fluent in English and interested in trying different foods and learning
about different lifestyles and cultures, but it is still important for inbound tour
operators and destination marketers to ensure that local and Halal food in
general are available for tour groups.
Sunday, May 18, 2014 9:53:17 PM
Traditional media
Malaysia boasts a national, state-owned broadcasting organisation, Radio

Television Malaysia (RTM), which operates two TV networks (TV1 and TV2)
and a range of radio services, including the external Voice of Malaysia. There
are also commercial free-to-air, subscriber and pay-to-view TV services
broadcasting in Malay, Tamil, Chinese and English. Commercial terrestrial TV
services include TV3, NTV7, 8TV, TV9 and Astro; leading radio networks
include Era FM, Fly FM, Hot FM, One FM, Sinar FM and THR FM.
Daily newspaper circulation is about 2.5 million in peninsular Malaysia,
250,000 in Sarawak and 150,000 in Sabah. Leading weekday daily
newspapers are listed below (many have their Sunday counterparts):
In English, the New Straits Times (the leading quality paper), The Star,
The Sun (free circulation, and the leader in terms of circulation), The Malay
Mail, The Borneo Post, The New Sabah Post, The New Sarawak Tribune
and the (Sabah) Daily Express. For the business market there is the daily
Business Times and the weekly The Edge. The New Straits Times is the
only English language paper to have a dedicated travel section every
Thursday.
Those published in Malay include Berita Harian, Berita Petang Sarawak,
Harakah, Harian Ekspres (in Sarawak), Harian Metro, Kosmo!, Sinar
Harian (with regional editions), Utusan Malaysia, Utusan Borneo, Utusan
Sarawak and others.
Chinese-language newspapers include China Press, Guang Ming and its
sister Sin Chew Daily, which is also published in neighbouring countries,
Kwong Wah Yit Poh, Nanyang Siang Pau or Nanyang Business Daily,
Oriental Daily News, Overseas Chinese Daily News in Sabah, and the See
Hua Daily News and United Daily News in Brunei, Sabah and Sarawak
(The last of these is said to be unrelated to the Taiwanese newspaper of
the same name).
76
Chapter 4 Malaysia
The three Tamil newspapers are Makkal Osai (The Peoples Voice), the
Malaysia Nanban and the Tamil Nesan.
Maleisi Nieuws is a Dutch newspaper.
Bernama is a state-run news agency. Free Malaysia Today, Malaysiakini and

The Malaysian Insider are English-language online newspapers.
The government imposes a very strict censorship system on broadcasters and
publishers on both moral and political grounds. Newspapers must renew their
licences annually, and the government can suspend or revoke these licences.
Moreover, many of the leading broadcasters and newspapers are owned by
political parties in the ruling coalition. In particular, Media Prima Berhad, owned
by UMNO, is an integrated media investment group which owns four of the five
commercial TV stations listed above, three of the six radio networks and
extensive interests in publishing, advertising, promotion and new media.
Magazines are made up of a mix of genres covering entertainment, fashion,
special interests/hobbies. Womens magazines enjoy the highest circulation
figures and these include both local titles and local editions of international
titles such as Cosmopolitan, Womens Weekly and Cleo.
Sunday, May 18, 2014 9:53:17 PM
Mingguan Wanita (in Malay): womens fashion, lifestyle circulation

135,000
Keluarga (in Malay) family, lifestyle circulation 69,000
Mangga (in Malay) entertainment circulation 67,000
Rasa (in Malay) food circulation 59,000
Cleo (in English) lifestyle, youth circulation 56,000
Anjung Seri (in Malay) home dcor circulation 48,000
Malaysian Womens Weekly (in English) womens lifestyle, fashion

circulation 30,000.
There are three leading English-language luxury publications, Harpers Bazaar,

Malaysia Tatler and Prestige, and one Malay luxury magazine, Glam.
Mens magazines tend to be local versions of international titles such as FHM,
Mens Health and M2.
New media
The mainstream media landscape in Malaysia is heavily regulated, with the

ruling party the National Front directly owning or controlling all major
newspapers, radio and television stations. There has therefore been a shift to
online media for news and information as there is little or no Internet
censorship in Malaysia. Online news portals are among the most visited sites
with www.malaysiakini.com being the 15th most visited site in Malaysia.
According to Internet World Stats, there were 17.7 million Internet users in
Malaysia in December 2011, representing 61.7% of the population (compared
with an Asian average of 26.2% and a world average of 32.7%).
77
Internet World Stats estimated the number of Facebook users at the end of
2011 as 12.4 million (70% of Internet users).
The International Telecommunications Union reports that in 2011 Malaysia had
4.2 million fixed telephone line subscriptions (14.7 per 100 inhabitants) and
36.7 million mobile telephone subscriptions (127.0 per 100 inhabitants). There
were 2.1 million wired broadband subscriptions, representing 7.4% of
inhabitants.
Table 4.20 Malaysia: Ownership of personal communications devices, 2006-2011

(per 100 population)
Landline telephone
Cellphone subscription
Broadband subscription
2006
2007
2008
2009
2010
2011
16.1
72.3
na
15.8
85.1
na
15.3
98.9
na
15.1
106.2
na
na
111.6
16.0
na
127.7
19.5
Source: Department of Statistics, Economic Census, 2011.
Sunday, May 18, 2014 9:53:17 PM
Travel information
sources
Malaysian consumers are increasingly using the Internet as a source of

destination information, as it offers a range of choices. It has given more
Malaysian travellers the confidence to travel independently.
Apart from the Internet, peer reviews and word of mouth are among the most
important sources of information for Malaysian travellers. Sites such as Lonely
Planet and TripAdvisor are popular. Malaysians also look at what is posted on
social media about the places friends and family have visited. This is catalysed
by the close networks that bind a great proportion of the population and the
growing importance of travel as a status symbol. And Malaysians are
reportedly one of the most engaged nations in the world with regard to social
media. Social media enthusiasts spend an average of 19.8 hours weekly on
this activity, according to a comScore survey in August 2012, and 19% access
social media through smart phones, with 13 million also on Facebook.
Popular television serials can also drive Malaysian tourists to the destination
featured. A good example is the increase in the number of Malaysian travellers
to the Republic of Korea after Korean dramas became extremely popular
among television audiences in Malaysia.
Booking lead times have changed dramatically over the past couple of years.
This has largely been driven by the low-cost carriers and last-minute deals
offered by the airlines and accommodation providers.
A report by comScore (October 2011) showed that, based on an analysis of
selected online sites, visitor trends varied considerably by region. In August
2010, online users in the Sabah region were 28% more likely to visit a travel
site than an average Malaysian Internet user, while visitors in the Sarawak
region were 48% more likely to frequent a gambling site. Online users from the
East Coast region were most likely to visit the newspapers category, while
southern region visitors were 12% more likely to frequent online personals
sites. Social networking and retail demonstrated more balanced visits with an
index near 100 across all regions.
78
Chapter 4 Malaysia

booking
Malaysians are cautious travellers. They will consider the amount of time they
have for the holiday (availability of leave and public holidays), the security of
the destination chosen and how affordable it is. Parents tend to decide three to
four months before the long school holiday periods (May, November,
December) in order to look out for the best value offers. Consumer travel fairs
are also important as these are seen to offer attractive deals on holidays.
Being a price-sensitive market, Malaysians are also driven to travel in
response to sale tickets and promotions offered by airlines and hospitality
establishments.
Despite the increasing influence of the Internet, the travel distribution system in
Malaysia remains largely traditional, with most consumers still preferring to
book through a travel agency. Group travel remains a significant part of the
market, although independent (FIT) travel is steadily increasing. Last-minute
travel purchasing remains entrenched among Malaysian travellers.
Seaports
Malaysia is a fast-growing cruise destination, offering many different seaports

and port facilities for cruise liners. In part because of its reputation as a cruise
destination, local companies (both Malaysian and foreign) have taken quickly
to the concept of cruises for incentive travel, and this segment, although still
relatively small, is also growing rapidly.
Sunday, May 18, 2014 9:53:17 PM
The worlds third largest cruise operator has its origins in Malaysia. Star
Cruises was formed in 1993 as a component of the Genting Group and later
acquired Sun Cruises and Norwegian Cruise Line (NCL); it is credited with
being the leading force in the development of ocean cruising in the Asia Pacific
region and is the principal operator in that market. Worldwide, it has a fleet of
18 ships cruising to over 200 destinations, offering approximately 35,000
berths. The company is now called Genting Hong Kong Ltd., is headquartered
in Hong Kong (China) and is listed on the Hong Kong and Singapore stock
exchanges.
The most important seaports in Malaysia are: Bintulu, Johor Bahru, George
Town (Penang), Port Kelang (Port Klang, closest to the capital Kuala Lumpur),
and Tanjung Pelepas.
Highways and railways
Surface travel accounted for a 57% share of outbound departures in 2011. This
high volume share was largely driven by the large number of Malaysian tourists
using the road network to travel to Singapore and Thailand a significant
percentage of whom were on same-day trips.
Malaysia has a total of 1,849 km of railways, but the railways are not an
important mode of transport for domestic travellers. (They are best known
among upmarket foreign tourists thanks to the Orient Express railway route
from Singapore to Bangkok.)
The road network totals 98,721 km, of which 80,280 km are paved, including
1,821 km of expressways.
79
The CIA Factbook indicates that, in 2012, Malaysia has a total of 112 airports,
of which 39 have paved runways 8 with runways of over 3,047 m in length;
9 with runways of 2,438 to 3,047 m; 6 with 1,524 to 2,437 m; 8 with 914 to
1,523 m and 8 with runways of less than 914 m long.
The Ministry of Transport lists six international airports (including one each in
Sabah and Sarawak), 19 domestic airports (eight in peninsular Malaysia, four
in Sabah and seven in Sarawak) and 41 airstrips. The international airports
are:
Kuala Lumpur International Airport (KUL), usually known as KLIA, is

Malaysias principal international airport. Inaugurated in 1998 with a
capacity to handle 25 million passengers a year, it now has a capacity for
35 million. KLIA Main Terminal, with a capacity for 5 million passengers a
year, handles mainly domestic and regional international services; satellite
Terminal A, with a capacity for 20 million passengers, handles mainly
international services, and the LCCT (low-cost carrier terminal),
inaugurated in 2008, can handle 15 million passengers a year.
KLIA2, a second low-cost carrier terminal, with a capacity for 45 million
passengers, is due to open in 2013. Together with its satellite terminal
(linked by a skybridge), it will be the worlds largest terminal specifically
designed for low-cost flights.
KLIA ranks as the worlds 14th largest airport by international passenger
numbers, and 5th in Asia.
Sunday, May 18, 2014 9:53:17 PM
Kota Kinabalu (BKI), in Sabah, was recently expanded to handle 12 million

passengers a year 9 million through Terminal 1 and 3 million through
Terminal 2 (the original terminal, which now caters mainly for charter and
low-cost flights). It can accommodate wide-body, narrow-body and
turboprop aircraft.
Kuching (KCH) in Sarawak can handle 5 million passengers a year. It has
nine bays with aero-bridges (including three for wide-body aircraft like the
Boeing 747 and Airbus A380) and four remote bays for turbo-prop aircraft.
Kota Kinabalu and Kuching are important hubs for regional international
flights making connections to domestic flights.
Penang (PEN) is the principal airport in northern Malaysia and has

extensive connections to destinations in South-East Asia, including
Guangzhou, Hong Kong (China) and Taiwan (Province of China). It
handled 4.6 million passengers in 2011. As a component of the Northern
Corridor Economic Region (NCER) programme, its terminal facilities are
being expanded at a cost of US$ 80 million.
Langkawi (LGK) is located on the duty-free island of that name in Kedah
and caters mainly for inbound business and tourist traffic. It handled
1.5 million passengers in 2011.
Senai (JHB), also known as Sultan Ismail Airport, Johor Bharu, and, from
2012, Senai International Airport. Opened in 1974 with the intention of
preventing the loss of international traffic to neighbouring Singapore, it was
largely unsuccessful in this role. At one time it was a regional hub for the
80
Chapter 4 Malaysia
international services of Malaysia Airlines and Air Asia, but in recent years
it has been almost entirely used for domestic services. However, with the
creation of the Iskandar Johor Special Economic Development Zone in
2006, there are renewed plans to turn the airport into a significant
international airport. In 2003 Senai became the first privately operated
airport in Malaysia. It currently handles about 1.3 million passengers a
year.
Table 4.21 Malaysia: Total air passenger traffic through the principal airports, 2006-2011
( 1000)
KLIA
Kota Kinabalu
Penang
Kuching
Miri
Langkawi
Kuala Lumpur Subang
Johor Bahru (Senai)
Sibu
Kota Bharu
a
2006
2007
2008
2009
2010
2011
24,130
4,015
3,104
3,196
1,559
934
84
1,308
899
678
26,453
4,400
3,173
2,236
1,454
1,123
96
1,325
810
759
27,529
4,689
3,406
3,239
1,538
1,197
308
1,389
832
836
29,398
4,766
3,322
3,520
1,615
1,359
820
1,315
927
1,003
33,719
5,116
4,143
3,649
1,676
1,373
1,118
1,235
994
1,048
37,313
5,772
4,562
4,248
1,843
1,503
1,320
1,338
1,119
1,132
Sunday, May 18, 2014 9:53:17 PM
Domestic and international, excluding transit passengers.

Sources: Ministry of Transport, from Malaysia Airports Holdings Berhad (MAHB); Senai Airport Terminal Services
Sdn Bhd (Senai ATS) data.
81
Table 4.22 Malaysia: Breakdown of air passenger traffic by airport, 2011

( 1000)
Sunday, May 18, 2014 9:53:17 PM
Airport
Domestic
International
Transit
Total
KLIA
Pulau Pinang (Penang)
Kota Kinabalu
Kuching
Langkawi
Johor Bharu (Senai)
Kota Bharu
Ipoh
Kuala Terengganu
Alor Setar
Melaka
Subang
Kuantan
Tioman
Pangkor
Redang
Labuan
Lahad Datu
Sandakan
Tawau
Bintulu
Miri
Sibu
Mulu
Limbang
STOL Sabah
STOL Sarawak
11,398
2,373
4,515
3,866
1,361
1,317
1,132
1
494
408
1
989
223
41
1
32
521
131
756
922
568
1,783
1,119
63
56
4
166
25,916
2,189
1,258
382
142
21
70
9
21
332
26
21
14
1
60
-
391
38
37
39
1
46
32
23
14
14
4
1
7
37,705
4,600
5,809
4,287
1,505
1,338
1,132
71
503
408
21
1,320
249
62
1
46
568
131
789
922
590
1,857
1,133
67
56
5
173
Totals:
Peninsular Malaysia
Sabah
Sarawak
Total Malaysia
19,768
6,850
7,621
34,239
28,761
1,259
442
30,462
431
115
100
646
48,960
8,224
8,163
65,347
Source: Ministry of Transport, from MAHB and Senai ATS data.
Some of the domestic airports also handle some international flights. Among
the most important domestic airports are:
Kuala Lumpur Subang (SZB), also known as Sultan Abdulaziz Shah

Airport, was Kuala Lumpurs main airport until KLIA opened, but has since
become a specialist airport for local flights, mostly using turbo-prop
aircraft, and general aviation. The redevelopment and expansion of
Terminal 2 is due to start in 2012.
Miri (MYY), in Sabah, is in an oil-producing area and close to the border
with Brunei Darussalam, making it one of the busiest domestic airports.
Sibu (SBW), in Sarawak, currently has a capacity for 1.4 million
passengers a year, handling narrow-body domestic flights, but the terminal
facilities are being expanded to handle up to 2 million passengers a year,
with completion due in September 2012.
82
Chapter 4 Malaysia
Ipoh (IPH), in Perak, is being upgraded to accommodate aircraft such as

the Boeing 737-800 and Airbus A320, with an extended runway and
modernised terminal. For the moment, Singapore is the only destination
served.
Khota Bharu (KBR), also known as Sultan Ismail Petra Airport, close to the
Thai border in North-east Malaysia, also has a capacity for 1.4 million
passengers a year and caters for narrow-body domestic flights.
Air Transport
Total passenger traffic through Malaysian airports reached 64.7 million in 2011,
of which 53% was domestic traffic and 47% international. Over the last four
years, international traffic has risen by an average of about 11.5% a year, and
domestic traffic by about 6.9% a year (the figures may not be precise because
the 2011 data comes from a different source and there is usually a small
discrepancy between the two sources).
Sunday, May 18, 2014 9:53:17 PM
Table 4.23 Malaysia: Total air passenger traffic, 2007-2011

( 1000)
2007
2008
2009
2010
2011a
Domestic
Departures
Arrivals
Total
13,183
13,080
26,263
13,773
13,793
27,566
14,723
14,723
29,445
15,397
15,397
30,794
17,126
17,113
34,239
International
Departures
Arrivals
Total
9,786
9,951
19,738
10,462
10,463
20,925
11,559
11,559
23,118
13,784
13,784
27,568
15,160
15,302
30,462
Total
Departures
Arrivals
Total
22,969
23,032
46,001
24,235
24,256
48,491
26,281
26,281
52,563
29,181
29,181
58,362
32,286
32,415
64,701
Ministry of Transport data, which may not correspond precisely to MAHB data for 2007-2011
Sources: MAHB; Ministry of Transport.
In 2011, the 39 airports in Malaysia managed by MAHB recorded a 10.7%

increase in total passenger numbers (domestic plus international), to
64.0 million. Total passenger movements in KLIA increased by 10.6%,
including a 7.6% increase in the main terminal and 14.3% in the LCCT. All
other airports recorded an aggregate growth in total passenger movements of
10.8%. (These figures, as reported by MAHB, differ slightly from those
recorded in the tables above.)
Airlines and flight

capacity
83
Over the last 15 years, Kuala Lumpur International Airport (KLIA) has been a
major instrument in the growth in travel in and out of Malaysia. The
governments vision of establishing Kuala Lumpur as a major hub to compete
with Singapore and Bangkok was at first a failure, in spite of the large number
of international destinations served by the national carrier, Malaysia Airlines.
However, KLIA has more recently become firmly established as the largest hub
for low-cost flights in South-East Asia, and even in Asia, largely because of the
success of the AirAsia Group, which is based in Kuala Lumpur. The group
includes four carriers currently serving KLIA, AirAsia, AirAsia X, Indonesia
AirAsia, and Thai AirAsia, and they will soon be joined by AirAsia Philippines.
Together, the AirAsia Group airlines offer a network of 69 destinations out of
KLIA, including the 14 long-haul destinations served by AirAsia X.
Apart from the AirAsia Group, five other low-cost carriers fly to/from KLIA:
Cebu Pacific (Philippines), Jetstar Asia and Tiger Airways (both Singapore
based), Lion Air and Mandala Air (Indonesia). Other smaller airlines worth
mentioning are Firefly, the low-cost subsidiary of Malaysian Airlines, and
Berjaya Air.
With over 17 million passengers a year, the AirAsia Group had a market share
of 45.5% at KLIA in 2011, while Malaysia Airlines had a market share of
34.7%. The total LCC market share is approaching 50%:
Sunday, May 18, 2014 9:53:17 PM
Table 4.24 Market share of low-cost carriers at KLIA, 2008-2012

(monthly seat capacity in June of each year)
LCC seat capacity

% of total seats
2008
2009
2010
2011
2012
598,233
33.1
782,471
41.6
888,838
44.0
992,139
44.3
1,096,721
46.9
Source: MAHB.
There are 53 international airlines serving KLIA. Malaysia Airlines (MAS), as

the national carrier, is the most important, offering 59 destinations in June 2012
a smaller number than a few years ago: prior to the crisis in 2008, Malaysia
Airlines had a network serving 72 destinations around the world.
However, the integration of Malaysia Airlines into OneWorld, which is due by
the end of 2012, is likely to boost connectivity out of KLIA by attracting other
OneWorld members. Only three OneWorld carriers currently fly to KLIA
(Cathay Pacific, Japan Airlines and Royal Jordanian). Sri Lankan, which
already has code-share arrangements with Malaysia Airlines for flights from
Kuala Lumpur to Colombo and Singapore, is also due to join OneWorld in
2013. Finnair and British Airways are the most likely airlines to add Kuala
Lumpur to their networks (both used to fly into Kuala Lumpur in the 1990s).
KLIA is linked to 21 intercontinental destinations, including nine destinations in
the Middle East (excluding Istanbul) and seven in Australasia. Only one North
American city (Los Angeles) is served out of KLIA, as Malaysia Airlines pulled
out of New York a few years ago. No North American carrier currently flies to
Malaysia.
84
Chapter 4 Malaysia
Only five European cities currently have direct services to KLIA (Amsterdam,
Frankfurt, Istanbul, London LHR and Paris CDG). Over the last five years,
Malaysia Airlines (MAS) has pulled out of Madrid, Rome, Stockholm and
Zurich. Capacity on direct flights between KLIA and Europe has shrunk in
recent years: comparing June 2012 to June 2008, total seat capacity is down
by 12.5%; comparing June 2012 with June 2011, it is down as much as 22.4%.
MAS reduced its seat capacity to Europe by 15.3% between June 2008 and
June 2012, and AirAsia X is pulling out of both London and Paris.
However, the reduction in direct or non-stop flights between Kuala Lumpur and
Europe is balanced by the rapid growth in available seats to the Middle East.
Between June 2008 and June 2012, total seat capacity has increased by 78%,
and since October 2008 it has grown 85%. In addition, MAS plans to add a
second daily Kuala Lumpur-Heathrow A380 frequency and a daily Kuala
Lumpur-Paris flight now it has taken delivery of its second Airbus A380.
Sunday, May 18, 2014 9:53:17 PM
In August 2011, Malaysian Airlines entered a five-year comprehensive

collaborative framework with Air Asia, (in their own words) encouraging the two
airlines to complement each others operations so as to leverage on their
respective core competencies and optimise efficiency for the benefit of
consumers. They also entered into a share swap deal whereby Tune Air, the
parent company of AirAsia, will exchange 10% of AirAsia shares for 20.5% of
Malaysia Airlines. The national carriers parent company, state-run Khazanah
Nasional, plans to acquire a 10% stake in AirAsias long-haul carrier AirAsiaX
in the future.
Table 4.25 International seat capacity out of Kuala Lumpur, Penang, Kota Kinabalu and
Kuching, by destination region, 2008-2012
AAGRa (%)
2012 2008-2012
2008
2009
2010
2011

Kuala Lumpur Asia
1,461,824
Kuala Lumpur M. East
68,276
Kuala Lumpur Europe
74,252
Kuala Lumpur Australasia 81,518
Penang Asia
219,277
Kota Kinabalu Asia
313,983
Kuching Asia
199,615
1,526,246
80,912
75,604
90,165
205,896
319,819
227,694
1,622,700
95,248
77,824
117,804
251,533
348,170
232,296
1,843,381
118,140
83,760
121,625
259,390
365,784
299,847
1 ,965,643
121,429
64,969
125,859
267,617
332,099
242,251
7.7
15.5
-3.3
11.5
5.1
1.4
5.0

Kuala Lumpur Asia
1,523,863
Kuala Lumpur M. East
62,499
Kuala Lumpur Europe
73,865
Kuala Lumpur Australasia 69,617
Penang Asia
223,398
Kota Kinabalu Asia
295,931
Kuching Asia
212,898
610,251
75,126
79,702
96,155
230,318
335,770
234,503
1,714,971
98,498
83,343
124,072
248,324
353,827
235,374
1,912,401
113,411
85,311
120,055
266,313
357,061
282,771
2,065,636
115,527
70,899
138,802
282,278
345,115
251,062
7.9
16.6
-1.0
18.8
6.0
3.9
4.2

MAHB reports the following breakdown of international passenger movements

in 2011, by flight destination: South-East Asia 45.7%, North-East Asia 21.0%,
South Asia 10.2%, South-west Pacific 8.5%, Middle East 7.8%, Europe 5.9%,
Africa 0.5%, Central Asia 0.2%, North America and South America 0.1% each.
85
Table 4.26 International seat capacity out of Kuala Lumpur KLIA, by destination, June 2012
Singapore
Jakarta CGK
Bangkok
Hong Kong (China)
Ho Chi Minh City
Denpasar
Melbourne
Phuket
Taipei
Guangzhou
250,836
122,201
111,517
69,553
47,750
43,828
41,070
40,388
34,305
32,160
Prospects for
secondary airports
Penang has high potential for intercontinental flights because of the strong
economic position of the island and the presence there of many affluent
Chinese and Indians. It is probably the only destination outside Kuala Lumpur
that could support regular scheduled flights to the Middle East and to Australia.
Although Kota Kinabalu is Malaysias second largest airport with close to
6 million passengers a year, its potential is largely focused on the inbound
market, as regional purchasing power remains relatively low.
Sunday, May 18, 2014 9:53:17 PM
Kuching and Miri (centre of the oil industry in Malaysia, near to the border to
Brunei) probably have better potential for outbound travel. Kuching, as
Sarawaks capital, has a larger population than Miri. However, the proximity of
Brunei to Miri provides more purchasing power in the airports catchment area,
while the costs of living and travel are lower in Malaysia than in the
neighbouring sultanate.
Consumers living in Johor Bharu can easily travel out of Singapore, while
Johors own airport in Senai offers fluctuating international connections.
Over the last three years, the establishment of Malaysia Airlines low-cost
subsidiary Firefly has helped to open new Malaysian destinations to
international passengers, with new scheduled flights linking Singapore to Kota
Bharu, Ipoh and Kuantan, while Air Asia serves Miri out of Singapore.
The Travel Trade

Structure of the
travel trade
There are approximately 1,200 retail travel agencies in Malaysia. The majority
are small to medium independently owned enterprises. With the FIT segment
growing, more travel agencies are organising their own tour packages and
incentive tour programmes to meet customer demand rather than relying solely
on packages developed by larger agencies and international tour operators.
The Malaysian Association of Tour and Travel Agents (MATTA) has a
membership of over 2,800, comprising local tour and travel organisations and
branches, as well as numerous overseas affiliations. MATTAs main objective
is to promote the interests of the travel and tour industry in Malaysia. MATTA
helps to organise fairs, seminars, conventions and workshops, both to create
public awareness of the tourism industry and to benefit its members. It also
86
Chapter 4 Malaysia
organises an annual travel fair in Kuala Lumpur in September which attracts

some 1,000 exhibitors and 80,000 visitors.
Nine travel agencies in Kuala Lumpur have evolved to act as wholesalers in
Malaysia. A few large travel agencies with their own retail networks produce
tour programmes, usually developed in conjunction with an inbound tour
operator. These agencies take reservations from consumers and from a
network of smaller travel agents, who are given a preferred commission
structure.
The large group operators in the market include Forever Travel, Golden Deluxe
Travel, Golden Tourworld Travel, Malaysian Harmony Travel and Reliance
Travel. Retail commissions average between 5% and 10%.
Tour operators remain a key link in the distribution of product in the Malaysian
marketplace. However, there is a noticeable trend for direct deals with hoteliers
and operators, in particular for accommodation and day tours.
The split between group tours and independent travel is approximately 60:40.
Not surprisingly, older travellers tend to gravitate towards group travel as they
find it very convenient. Group travel is also very popular for destinations that
people are less familiar with. Independent travel is popular among younger
travellers who are seeking their own unique experiences as well as
experienced travellers.
Sunday, May 18, 2014 9:53:17 PM
Malaysians are increasingly travelling in independent groups, whereby they

purchase individual components of a holiday separately from a travel agent.
This gives them more choice in terms of airline, accommodation, sightseeing
options and local transportation.
The primary business events segment in Malaysia is the incentive market. The
leading business event specialist operators are BMC Travel, Corporate
Information Travel, Corporate Incentive Travel Planners, Harpers Travel,
Holiday Tours, Mitra Travel, Prime HTT, Sedunia Travel, Sunway Travel,
Tetsin Travel and TravelBiz.
Traditional leisure agents are now competing with incentive agent specialists
for business in the incentive segment. Existing leisure travel agents with
incentive departments are Airlink Travel, Chans World, Leisurelink Travel,
Malaysian Harmony Travel and Parlo Tours.
The number of retail agencies setting up websites for online business is

growing rapidly, driven by the expansion of low-cost carriers (LCCs) and the
opportunity for creating packages to simplify the less mature travellers search
for accommodation and other linked services. The market continues to be
dominated by the big players, however, such as AirAsiaGo the joint venture
between Expedia Inc and AirAsia.
87

Economic outlook
As discussed, Malaysia has successfully made the transition to a middleincome economy: GDP per capita has increased significantly in real terms
since 2005, to US$ 10,100, and is now substantially higher than that in China
(US$ 5,400) and Indonesia (US$ 3,500). However, it remains well short of the
level in neighbouring Singapore (US$ 49,300).
The economic situation should continue to improve steadily, with inflation
stabilising at around 2.5% a year (it is already less than 2% in 2012) and the
Malaysian ringgit likely to remain fairly strong against the US dollar, to which
most Asian currencies are still linked, though more loosely than in the past.
The weaker euro has made most of Europe more attractive over the past
couple of years. However, the ringgit has fallen significantly against the
Australian dollar, making Australia, the leading non-Asian destination, more
expensive.
Sunday, May 18, 2014 9:53:17 PM
Outlook for tourism
The outbound travel market from Malaysia has shown good growth over the
past few years and looks set to expand in the foreseeable future. Although the
rate of growth slowed in 2011 in line with lower consumer confidence,
anecdotal evidence suggests that stronger growth has resumed in 2012.
Given the markets low level of maturity, intra-regional travel will continue to
predominate, driven by the increased capacity of low-cost airline seats
between regional as well as the main hub airports. Demand will be boosted by
active promotions and greater connectivity through LCCs. And Malaysians are
more likely to travel short-haul when it coincides with a public holiday, thereby
increasing their number of holidays.
However, Malaysians also appear to be eager to travel further afield, especially
as it is seen as such a status symbol. According to research conducted by
VisitBritain, the top ten destination wish list for Malaysians is (in order of
ranking): Switzerland, Japan, New Zealand, Italy, United Kingdom, France,
Sweden, Australia, Canada and Germany.
Travel for educational reasons will remain buoyant unless, as is threatened in
the United Kingdom, increased visa restrictions are introduced.
As far as the leisure travel segment is concerned, one important factor is that
Malaysia has an ageing population and the number of people over 60 is
expected to nearly double from 2010 to 2020 up 83% to a 0.2% share of the
total population. This will directly affect the travel landscape as it adapts to
meet the needs of older consumers.
In terms of booking, Malaysians are becoming more astute, increasingly
favouring last-minute purchasing patterns delaying bookings in anticipation of
better deals closer to actual travel dates.
While Malaysians like new experiences when travelling, and are enticed by
attractive travel deals and packages, they still require a level of familiarity and
security when they travel, especially in terms of languages and safety.
Australia is considered as a free and easy, relaxing destination, offering
something for everyone. It is seen as full of sightseeing opportunities, scenery
88
Chapter 4 Malaysia
and coastline, wildlife, farm-stays, wineries, food and shopping, which are also
perceived to be the main draw-cards. Familiarity, ease of getting around (self
drive) and value for money provide the impetus for repeat travel and Australia
seems to appeal to singles, couples and families.
Forecasts
The Pacific Asia Travel Associations (PATA) Asia Pacific Tourism Forecasts
2010-2014 are very bullish about the Malaysian outbound market, at least to
other Asia Pacific destinations. (Understandably, they do not cover
destinations outside the region.) The following table summarises the absolute
volumes projected for each year from 2012 to 2014, highlighting the average
annual growth over the period.
Table 4.27 Malaysia: Outbound tourism forecastsa, 2012-2014
Sunday, May 18, 2014 9:53:17 PM
Destination
Thailand
Indonesia
China
Singapore
Hong Kong (China)
Macao (China)
Vietnam
Australia
Korea (Rep. of)
India
Cambodia
Philippines
Japan
USA
New Zealand
Myanmar
Lao PDR
Sri Lanka
Canada
Actual
2010
Forecasts
2012
2013
2014
AAGRb(%)
2010-2014
2,058,956
1,277,476
1,245,200
1,036,918
578,877
338,058
285,734
211,337
236,996
113,675
159,629
89,952
79,694
114,519
54,080
21,843
16,186
15,427
13,367
11,255
2,512,791
1,475,732
1,275,359
1,230,093
684,732
334,487
313,145
253,921
250,734
182,972
192,562
122,600
101,139
92,392
59,582
38,941
25,498
18,925
17,186
12,469
2,684,032
1,544,807
1,325,365
1,295,450
740,151
340,737
325,411
270,615
257,269
215,836
210,928
139,887
110,324
104,397
61,595
42,861
28,579
20,567
18,551
12,986
2,834,812
1,593,904
1,374,902
1,342,359
795,023
345,666
335,457
286,301
263,624
234,050
228,323
155,323
118,526
116,329
64,343
45,465
31,848
22,868
20,025
13,520
8.3
5.7
2.5
6.7
8.3
0.6
4.1
7.9
2.7
19.8
9.4
14.6
10.5
0.4
4.4
20.1
18.4
10.3
10.6
4.7
a
b
Source: Pacific Asia Travel Association (2012), Asia Pacific Tourism Forecasts 2012-2014.
Tourism Economics forecasts for outbound travel from Malaysia, which

provide absolute volumes and annual growth per annum from 2011 to 2018,
show a less bullish, but still optimistic, scenario.
Table 4.28 Malaysia: Forecast outbound visits, 2011-2018

2011
2012
2013
2014
2015
2016
2017
2018
Total trips ( 1000)a 45,220

% change
13
46,755
3
49,406
6
52,347
6
55,115
5
57,657
5
59,629
3
61,598
3
Estimated/forecast cumulative arrivals worldwide from Malaysia.

89
Finally, according to Euromonitor International, the number of outbound trips

will grow by a 5% compound annual growth rate (CAGR) over the next four
years.
Climatic conditions pose a potential threat to forecast growth, Euromonitor
believes. More natural disasters, such as floods and earthquakes, are
occurring around the world, including popular outbound destinations like
Indonesia and Thailand. So, natural disasters can be expected to continue to
affect the travel decisions of Malaysians.
Discounting and price competition by airlines, travel agents and hotels will
continue to play a vital role in boosting tourism flows outbound over the
forecast period. Airlines such as AirAsia, Firefly, and Malaysian Airlines will
offer even more promotions in order to increase their market shares, and many
airlines are partnering travel agents and hotels to provide more economic
packages, tailored to all types of budgets.
MATTA travel fairs promote outbound tourism. The travel fairs offer visitors the
opportunity to purchase certain tour packages at discounted prices as well as
introducing them to new destinations. Moreover, national tourism offices
organise marketing and promotional campaigns to attract Malaysian tourists.
Sunday, May 18, 2014 9:53:17 PM
Impact of the ASEAN

Economic Community
regional air routes, such as Johor Bahru Senai-Jakarta, Penang-Hat Yai,
Penang-Palembang, Penang-Manila, Kuching and Kota Kinabalu to
Balikpapan, Banjarmasin (Borneo) or Makassar (Sulawesi). In recent months,
new regional routes have been launched from Surabaya to Johor Bahru and
Kota Bharu to Singapore.
Land borders are also expected to be opened up the frontier posts between
Indonesia and Malaysia are currently closed at midnight, so these may be
opened 24 hours a day from 2015.
except Vietnam, so visas are not an issue.

Official and trade
organisations
Department of Statistics, Malaysia
www.statistics.gov.my
Ministry of Tourism
www.motour.gov.my
Ministry of Transport
www.mot.gov.my
Malaysia Airports Holdings Berhad
www.malaysiaairports.com.my
Malaysian Association of Travel Agents
www.matta.org.my
Islamic Tourism Centre
www.itc.gov.my
90
Chapter 4 Malaysia
Destination NTOs
Sunday, May 18, 2014 9:53:17 PM
The following countries are represented through their national tourism

organisations (NTOs) in Kuala Lumpur: Australia, India, Indonesia, Japan, the
Republic of Korea, Macao (China), Singapore, Taiwan (Province of China),
Thailand and Turkey. Indonesias West Java also has an office.
The main travel trade and consumer shows and fairs are:
MATTA Fair
www.mattafair.org.my
World Islamic Tourism Mart

(Held for the first time in 2012)
www.witm.matta.org.my
Malaysia International Travel Mart

(Organised by the Malaysian
Chinese Tourism Association
in Kuala Lumpur and Penang)
www.mcta.com.my/mitm-travel-fair
91
Chapter 5
Singapore
Sunday, May 18, 2014 9:53:17 PM
Country Profile
Geography
Singapore is an island city-state adjacent to the southern tip of the Malay

Peninsula. More exactly, it is a heavily urbanised archipelago of 63 islands, of
which Singapore Island itself is much the most important. Land reclamation
schemes have raised the total area from 581 km in the 1960s to 704 km in
2012, and may add a further 100 km by 2030.

background
Singapore was developed by the British as a trading station and naval base
from 1819. It became self-governing in 1959 and joined the Federation of
Malaysia in 1963, but separated from it in 1965. It is a parliamentary
democracy. A single party the Peoples Action Party (PAP) has held power
since independence, under just three Prime Ministers: Singapores founding
father, Lee Kuan Yew (1959-1990), Goh Chok Tong (1990-2004), and Lee
Kuan Yews son, Lee Hsien Loong (2004-present). The head of state is a
president (presently Tony Tan) who, constitutionally, is required to be nonpartisan.
Transparency International consistently rates Singapore as one of the worlds
least corrupt countries and business organisations rate it as one of the best
environments in which to do business.
The legal system is based on English common law, with much modification.
Demographics
Population
The population of Singapore in 2012 is estimated at just over 5.3 million, of

whom 2.65 million (50.5%) are males and 2.60 million (49.5%) are females.
Note that these figures come from the UN Department of Social Affairs
(UN DESA) world population forecasts, 2010 Revision, medium variant, and
differ slightly from those used by the International Monetary Funds (IMF)
World Economic Outlook.
Table 5.1
Total
Male
Female
Singapore: Total population, 2006-2012

( 1000)
2006
2007
2008
2009
2010
2011
2012
4,410
2,221
2,189
4,585
2,311
2,274
4,772
2,406
2,366
4,946
2,494
2,452
5,086
2,564
2,522
5,188
2,615
2,573
5,256
2,649
2,607
Source: Population Division of the UN Department of Economic and Social Affairs (UN DESA)
92
Chapter 5 Singapore
They also differ slightly from the official figures published by Statistics
Singapore, which shows 5.2 million in 2011. This total consists of 3.3 million
Singapore citizens (62.8% of the total), 0.5 million (foreign) permanent
residents (10.3%) and 1.3 million non-residents i.e. mainly migrant workers,
many of whom are in practice long-term residents in Singapore, and who make
up 26.9% of the total population. The Singapore Governments definition of the
resident population (3.8 million 73.1% of the total population) therefore
differs from the normal definition. And many official statistics relate only to this
resident population.
According to UN DESA, the total population grew by 1.7% a year in 2000-2005
and, with a surge in immigration, by 3.5% a year in 2005-2010. This growth is
forecast to slow to 1.1% per annum in 2010-2015 and to 0.8% in 2015-2020.
Other key indicators of Singapores demographics include:
Sunday, May 18, 2014 9:53:17 PM
Age distribution
There were 1.1 million households among the resident population in

2010, with an average size of 3.5 persons.
The median age in 2010 was 37.6 years (significantly higher than in the
other four markets under study); it is forecast to rise to 40.3 years in 2015
and 42.7 in 2020.
81.9 years for females), and is expected to rise to 81.9 years in 20152020. Again, this is significantly higher than in Indonesia, Malaysia,
Thailand and Vietnam.
The birth rate in 2010-2015 is estimated at 9.5 live births per 1,000
population, and the death rate 5.1 per 1,000. Infant mortality is low at
1.9%.
is 1.4. This is well below the nominal replacement rate, but it has been
rising very slightly in recent years.
Net immigration was estimated at 46,000 a year in 2000-2005, but it rose
sharply, to 144,000 a year, in 2005-2010. UN DESA nevertheless expects
it to fall back again in 2010-2020.
Statistics Singapore gives the total labour force in mid-2011 as 3.2 million,
of whom 3.1 million were in employment. The resident labour force was
2.1 million (giving a participation rate of 66.1%), of whom 2.0 million were
in employment. Note that the IMFs figures, given in the table below, use
different definitions.
According to the UN, 31% of Singapores population were 0-24 years old in
2010, 55% were 25-59 years old and 14% were over 60. The numbers of
young people (0-24 years old) are declining in 2010-2020, but UN DESA
expects the numbers of children born in Singapore to continue rising and, if this
is the case, these numbers will stabilise in the longer term. The number of
people aged 25 to 55 has stabilised, while the number of those over 55 years
old is continuing to grow rapidly.
Table 5.2
93
Singapore: Distribution of the total population by age, 2010 and 2020
Age
% share
2010
2020
0-4
5-14
15-24
25-34
35-44
45-54
55-64
65-74
75-84
85
Total
4.5
12.9
13.5
15.1
16.7
16.6
11.7
5.6
2.8
0.7
100.0
4.8
9.0
12.4
12.9
14.3
15.9
15.4
10.1
4.0
1.3
100.0
% increase in 2020
over total in 2010
16
-23
1
-6
-6
5
45
99
57
109
10
Source: UN DESA
The population is predominantly of Chinese origin. The advance release of

2010 Census data shows that 74% of residents were Chinese, 13% Malays,
9% Indians and 3% others. Non-residents (i.e. immigrant and migrant workers
without permanent residence status), who make up 27% of the population, are
believed to be predominantly Malays, Indonesians and Indians.
An estimated 150,000 Singaporeans live abroad.
Sunday, May 18, 2014 9:53:17 PM
Language
There are four official languages: Mandarin, English, Malay and Tamil. The
2000 Census found that 35% of the population speak Mandarin, 23% English,
14% Malay, 11% Hokkien, 6% Cantonese, 5% Teochew, 3% Tamil, 2% other
Chinese dialects and 1% other languages. A recent media report based on the
Advanced Release of the 2010 (the latest) Census suggests that the use of
English is increasing but the detailed findings of this Census have not yet been
released.
The government encourages citizens to speak good English (instead of the
local patois known as singlish).
Religion
The 2010 Census found the following breakdown of the population: Buddhists
33%, Christians 18% (among whom about one third are Roman Catholics),
Muslims 15%, Taoist 11%, Hindus 5%, others 1% and no religion 17%. In
recent years the numbers of Buddhists have been declining.
Economic growth
Singapore is a wealthy city-state one of Asias newly industrialised

economies to quote the International Monetary Fund (IMF) whose citizens
enjoy some of the highest standards of living in the world. The high-tech
economy is based on the role of the port as an international entrept and
shipping centre, as well as on financial services, tourism and electronics,
chemicals and pharmaceuticals manufacturing. Singapore ranks 117th in the
world by population, but 38th by nominal GDP.
94
Chapter 5 Singapore
Real GDP increased by an average of 6.2% in the six years 2005-2011, but the
IMF expects more modest growth over the short to medium term, no doubt
because, being an economy heavily dependent on world trade, it is not
expected to do well while world trade languishes. Nevertheless, its forecast for
2012 was upgraded in October to 2.1% (from just 0.9% predicted in April),
despite a reported 1.5% decline in Q3, according to figures from Singapores
Ministry of Trade and Industry. The IMF also expects growth in real GDP to
accelerate to 2.9% in 2013, 3.6% in 2014 and 3.7% in 2015.
This upgrading brings the IMF forecasts more in line with other more bullish
forecasts for the Singapore economy, largely in view of its efficient and
competitive business environment. The government hopes to restore a higher
rate of growth by concentrating on Singapores role as a financial,
technological and logistics hub for South-East Asia and as a gateway into
China.
The information available for the first three quarters of 2012 is somewhat
contradictory. Real GDP growth was better than expected in Q2, but was
negative in Q3, mainly due to contraction in the manufacturing sector. Inflation,
at 3.9% in August, is falling, but is still higher than Singapore is used to. It is
forecast at 4.5% for 2012 overall and 4.3% for 2013.
Sunday, May 18, 2014 9:53:17 PM
Table 5.3
Singapore: Key economic data, 2006-2011

2006
2007
2008
2009
2010
2011
231.6
145.7
8.8
267.6
177.6
8.9
268.8
190.0
1.7
270.0
185.6
-1.0
310.0
227.4
14.8
326.8
259.8
4.9

1.0
Employment ( 1000)a 2,354
Unemployment (%)
2.7
2.1
2,473
2.1
6.6
2,680
2.2
0.6
2,738
3.0
2.8
2,796
2.2
5.2
2,836
2.0
GDP (S$ billion)

GDP (US$ billion)
Real GDP growth (%)
Including non-residents (i.e. immigrant labourers), but using a different definition to that used by the
Government of Singapore.
Exchange rates
The Singapore dollar (S$) has been run by the Monetary Authority of
Singapore as a managed float since 1985. It has been rising steadily in recent
years, with a brief reversal during the 2008-2009 financial crisis, from S$ 1.80
per US$ in 2002 to S$ 1.55 in March 2009 and S$ 1.20 in August 2011.
However, it fell back a little in the second half of 2011 and has since fluctuated
at around S$ 1.30-1.22 per US$ in the first three quarters of 2012. The
Singapore dollar is still generally regarded as somewhat undervalued.
In 2009-2012 it has risen a little against other Asian currencies that are more
strictly pegged to the US dollar, including the Chinese renminbi, but it has
remained remarkably stable (apart from short-term fluctuations) against the
buoyant Japanese yen.
Table 5.4
95
Singapore: Key exchange rates, 2006-2011

(Singapore dollar per listed currency)

EUR (Euro)
JYP (Japanese yen)
KRW (Korean won)
RUB (Russian ruble)
TWD (Taiwan new dollar)
THB (Thai baht)
GBP (British pound)
USD (US dollar)
2006
2007
2008
2009
2010
2011
1.197
1.401
0.199
1.994
0.204
0.174
0.014
0.002
0.433
0.031
0.058
0.049
0.042
2.926
1.589
0.099
1.260
1.403
0.198
2.062
0.193
0.166
0.013
0.002
0.439
0.033
0.059
0.046
0.047
3.015
1.508
0.094
1.196
1.329
0.204
2.073
0.182
0.148
0.014
0.001
0.425
0.032
0.057
0.045
0.043
2.607
1.417
0.086
1.144
1.275
0.213
2.022
0.188
0.140
0.016
0.001
0.413
0.031
0.046
0.044
0.042
2.270
1.456
0.082
1.253
1.323
0.201
1.807
0.175
0.149
0.016
0.001
0.423
0.030
0.045
0.043
0.043
2.106
1.362
0.071
1.297
1.271
0.195
1.750
0.161
0.144
0.016
0.001
0.411
0.029
0.043
0.043
0.041
2.016
1.257
0.061
1000.
Sunday, May 18, 2014 9:53:17 PM
Spending power
Singapores GDP per capita, at over US$ 49,000 in 2011, is closely

comparable with that in the United States of America (US$ 48,387) and Japan
(US$ 45,920), and is substantially exceeded only in a handful of countries
Luxembourg, Qatar, Norway, Switzerland, the United Arab Emirates and
Australia. It is 5-15 times higher than in the other South-East Asian countries
covered in this report.
This apparent affluence is partly inherent in the nature of Singapore as a citystate. It may be compared with GDP per capita in Hong Kong (China), of
US$ 34,000 in 2011, and with estimates quoted by Wikipedia from the
US Department of Commerce for New York of US$ 75,000 (in 2010) and from
PriceWaterhouseCoopers for London of US$ 75,000, Rome US$ 55,000 and
Shanghai US$ 14,000 (all 2008).
Table 5.5
Singapore: GDP per capita, 2006-2011
S$
Real increase (%)
US$
at PPPsa (US$)
2006
2007
2008
2009
2010
2011
50,469
4.3
31,763
47,361
55,302
3.2
36,695
50,302
53,888
-1.3
38,087
50,738
53,187
-2.7
36,567
49,880
59,810
12.4
43,865
56,708
61,972
3.1
49,271
59,711

The tax burden in Singapore 15.6% of GDP (2011 estimate) is low, and the
cost of living not high by the standards of major cities in the developed world.
The great majority of Singaporeans live in subsidised, high-rise, public housing
apartments provided by the Housing and Development Board (HDB).
96
Chapter 5 Singapore
However, income inequalities are rather high, meaning that there are both
relatively large numbers of rich people and relatively large numbers of people
on ordinary incomes struggling with the pressures on incomes caused by the
growing numbers of non-resident immigrant workers and with rising housing
and utilities costs.
In a paper published in 2009, Statistics Singapore reported that the median
monthly income for resident households in 2008 was S$ 7,050 (US$ 5,010)
or, for resident employed households, S$ 7,750 (US$ 5,510). One third of
households in employment earned more than S$ 7,000 (US$ 4,974) per
month. The average income for the top decile was S$ 23,020 (US$ 16,350)
and for the bottom decile S$ 1,310 (US$ 930). There is no official minimum
wage in Singapore.
Cap Gemini and RBC Wealth Management reported in June 2012 that there
are now more high net worth individuals (HNWIs) in Singapore than in Hong
Kong (China). HNWIs (who are defined as persons having investable assets of
US$ 1 million or more, excluding primary residence, collectibles and consumer
goods) numbered 98,900 in 2010 and (with the decline in world trade and
jittery stock markets) 91,200 in 2011. In 2009, the Boston Consulting Group
found that 8.5% of households (i.e. about 95,000) in Singapore were US dollar
millionaires, compared with 6.6% in Switzerland, 4.5% in Kuwait and 3.5% in
the United States of America.
Sunday, May 18, 2014 9:53:17 PM
Tourism Policy
Competitiveness
Singapore was ranked 1st regionally and 10th overall (unchanged from 2009),
in the World Economic Forums (WEF) 2011 Travel and Tourism
concerned, include its excellent transport infrastructure rating, with ground
transport infrastructure and air transport infrastructure ranked 2nd and 14th,
respectively. And Singapore is ranked 2nd for the quality of its human
resources available to work in the country.
With the countrys famously well-functioning public institutions, it is perhaps not
surprising that it ranks 1st out of all countries for its policy environment, with
rules and regulations that are extremely conducive to the development of its
travel and tourism industries policies facilitating foreign ownership and
foreign direct investment (FDI) and few visa restrictions.
Furthermore, Singapore is ranked 2nd for the overall prioritisation of travel and
tourism. One example of how this helps support the local industry outbound
as well as inbound is that the government, through the Singapore Tourism
Board, makes significant efforts to collect essential data measuring tourismsector activity on a timely basis. Price competitiveness also remains an area of
strength compared with many other countries at the same advanced stage of
development.
Passports
The Singaporean passport is valid for a period of five years for passports
issued since 1 April 2005 and ten years for passports issued before 1 April
2005. Since 15 August 2006, all newly issued Singaporean passports contain
biometric features (BioPass). A major reason for this addition was to comply
97
with the requirements for the US Visa Waiver Program. The features also help
to prevent forgery and minimise the abuse of Singaporean passports.
Exit permits are required for all overseas trips by Singaporeans that last longer
than three months. However, a former exit control requirement, introduced in
order to deter conscription evasion (limiting the passport validity to two years
for boys aged from 11 years old up to their obligatory enlistment in National
Service, with a nine-month extension possible), has been lifted.
Visas
According to the Henley Visa Restrictions Index 2012, holders of a Singapore

passport can visit 161 countries visa-free or with access to a visa on arrival,
and Singapore is currently ranked 8th in terms of travel freedom, the second
highest ranking in Asia Pacific behind Australia (6th placing out of 163
countries).
Insurance
The National Association of Travel Agents of Singapore (NATAS) recommends

travel insurance for Singaporeans going abroad but it is not compulsory for any
destination in South-East Asia, or for a majority of destinations worldwide.
Holiday entitlement
14 days annual leave plus 11 public holidays, as follows (2012):
Sunday, May 18, 2014 9:53:17 PM
1 January (New Years Day); 23-24 January (Chinese New Year); 6 April
(Good Friday); 1 May (Labour Day); 5 May (Vesak Day, a Buddhist holy day);
9 August (National Day); 19 August (Hari Raya Puasa); 26 October (Hari Raya
Haji); 13 November (Deepavali) and 25 December (Christmas Day).

Outbound travel
In the last five years, the Singapore outbound travel market has shown strong
growth of 7.0% per annum, rising from 5.5 million trips in 2006 to 7.8 million in
2011. Despite a slowdown in growth in 2009, this was a far better performance
than in the first half of the decade.
Outbound travel in the years after 2001 was restrained by an economic
recession (bankruptcies in Singapore soared to a 17-year high in 2002) and by
Singaporeans fears about the effects of the recession on their disposable
incomes. The events of 9/11 also had a big impact, as did the outbreak of
SARS in 2003.
Singaporeans confidence returned as the world economy soared towards its
peak in 2008 a boom in which they were participating fully. There was of
course a setback in 2009, but confidence has since been returning.
Well-travelled Singaporeans like to take several trips abroad every year, of
which at least one is likely to be to a long-haul destination. The most recent
data available suggests that some 70% of the population of Singapore make at
least one trip abroad of one night or longer every year, 20% make two trips
each and 18% five trips.
98
Chapter 5 Singapore
Table 5.6
Singapore: Outbound departures, 2006-2011

2006
2007
2008
2009
2010
2011
Total trips ( 1000)a

% change
of which, by:
Air
Sea
5,533
7.2
6,024
8.9
6,828
13.3
6,961
1.9
7,342
5.5
7,753
5.6
3,740
1,794
4,151
1,873
4,855
1,974
4,960
2,001
5,617
1,725
na
na
Trips outside regionb

% change
2,450
8.1
2,718
10.9
2,851
4.9
2,774
-2.7
3,312
19.4
3,407
2.9
a
b
Departures of citizens and permanent residents, excluding road/rail traffic to Malaysia.

Outside South-East and South Asia.
Source: Immigration and Checkpoints Authority.
Recent trends
In the first half of 2012, according to Singapore Tourism Board (STB) statistics
filed with the Pacific Asia Travel Association (PATA), departures were up 4%
on the same period in 2011.
Sunday, May 18, 2014 9:53:17 PM
Some local travel agents/tour operators believe the growth in trips and sales
volume will be even higher by the end of the year. Chan Brothers Travel, for
example, is projecting a 10% increase over the S$ 9 million (US$ 7.2 million) it
recorded last year, a similar growth rate as in 2011. Demand for long-haul
destinations has been particularly good due to favourable currency exchange
rates. And, at the same time, demand for Japan has made an excellent
recovery.
CTC Travel, meanwhile, is expecting a 15-20% increase in sales for eastern
Europe with, nearer to home, China and Taiwan (Province of China) continuing
to do well and Japan showing signs of revival.
Travel expenditure
International travel expenditure by Singaporeans (excluding transport) reached

US$ 21.1 billion in 2011, reflecting an average growth of 13% a year in the five
years 2006-2011, and pushing Singapore up the ranking of world spenders on
international tourism to 13th position from 15th in 2010.
Table 5.7
Singapore: International travel expenditure, 2006-2011
Total (US$ million)

% changea
Spend per trip (US$ )
% changea
2006
2007
2008
2009
2010
2011
11,269
10.6
13,410
18.3
16,366
15.3
15,849
-0.4
18,630
10.2
21,103
4.5
2,037
3.2
2,226
8.7
2,397
1.7
2,277
2.0
2,537
11.6
2,722
8.4
% overall change in local currency; spending per trip % change in US$.

Sources: UNWTO from Statistics Singapore.
Average spending per overnight trip increased in US dollar terms by averages

of 6.4% a year in 2006-2011, to US$ 2,722, followed by a 6.7% rise in the first
three quarters of 2012. There are no official figures for spending per trip or per
night, but IPK Internationals World Travel Monitor says that Singaporeans and
99
Malaysians have the lowest spend per night among Asian markets, (no doubt
due to the frequent cross-border trips between the two countries).
According to the World Travel & Tourism Council (WTTC), domestic trips
(almost exclusively day trips) generated a surprisingly high 24.6% of
Singapores total travel and tourism GDP in 2011, compared with 75.4% for
foreign visitor spending (visitor exports). The contribution is forecast to grow by
4.3% in 2012 (real growth, taking inflation into account) to S$ 7.6 billion, and by
4.9% annually in 2012-2022 to S$ 12.4 billion.
WTTC expects Singapores outbound travel spending to increase (in real
terms) to S$ 24.9 billion in 2012 (up 5.3% from S$ 23.7 billion in 2011) and to
grow by 5.8% annually in the ten years from 2012 to S$ 44.0 billion in 2022.
Leisure travel spending
Malaysia attracted the highest leisure spending by Singaporeans, of an

estimated S$ 3 billion in 2010, followed by China, which also generated the
highest growth in retail sales. It is a bargain travel destination for Singaporeans,
and spending is largely on gifts and souvenirs for family and friends.
Thailand is the third-ranked destination in terms of outgoing tourism
expenditure. The country is renowned for its attractive shopping opportunities
in terms of fashion and other products. Spa services are also known to be
cheap in Thailand, spurring Singaporeans to use these services when on
holiday there.
Sunday, May 18, 2014 9:53:17 PM
Table 5.8
Singapore: Outbound leisure tourism spending by category, 2005-2010

(S$ million)
2005
2006
2007
2008
2009
2010
Accommodation
Entertainment
Excursions
Food
Shopping
Local travel
Other
1,195
299
597
896
1,494
1,195
299
1,284
321
642
963
1,605
1,284
324
1,407
349
672
1,017
1,739
1,381
356
1,425
356
677
1,026
1,758
1,395
342
1,386
343
652
995
1,722
1,358
405
1,490
367
690
1,072
1,850
1,446
426
Total
5,974
6,424
6,920
6,979
6,860
7,340
Note:
Other includes travel agent services;

Entertainment includes attractions, theatres, guided city tours, etc;
Food includes restaurants.
Methods of payment
Credit cards were the preferred mode of payment, accounting for a 54% share
in 2010, due to the convenience of credit card payments. Nevertheless, cash
registered the strongest growth in retail sales. The economic recovery made
consumers less conscious of saving cash and using financial cards as short- or
medium-term means of credit. So more consumers resumed using cash for
payments.
100
Chapter 5 Singapore
Table 5.9
Singapore: Method of payments for leisure tourism abroad, 2006-2010

(% breakdown of retail sales)
Method
2006
2007
2008
2009
2010
Cash
Charge card
Credit card
Debit card
Prepaid card
Travellers cheque
Total
35.6
1.9
52.5
6.8
1.7
1.5
100.0
35.0
2.0
53.0
7.0
2.0
1.0
100.0
34.6
2.0
53.1
7.1
2.2
1.0
100.0
34.0
2.3
53.3
7.2
2.2
1.0
100.0
34.2
2.3
53.5
7.0
2.1
0.9
100.0
Note:
Direct purchases only.
Sunday, May 18, 2014 9:53:17 PM
Destination regions
Even if day-trippers are excluded from the overall count, Malaysia is by far the
most popular tourism destination for Singaporeans, for geographical reasons (it
is the only country which can be reached by land). Other top destinations are
Indonesia, China, Thailand and Hong Kong (China). These top five generate
the bulk of arrivals of Singaporeans around the world (whether by nationality or
residence).
Also important within the Asia Pacific region are Australia (in 6th place in the
ranking), Taiwan (Province of China), Macao (China) and Vietnam. The
Philippines, the Republic of Korea and India rank 11th, 13th and 14th
respectively. A number of destinations outside Asia also feature among the
leaders, led by the United States of America in 10th place and the United
Kingdom in 12th. The top 20 (countries counting arrivals from Singapore) also
include Japan, Switzerland, Cambodia New Zealand, Canada and Italy.
The following table shows arrivals from Singapore as reported by destinations
around the world to UNWTO, by various measures. It is important to note that
many of the leading destinations in Europe (including France, Germany, the
Netherlands, Spain, Portugal and Greece) and the Americas (including Mexico,
Brazil and Argentina) do not report arrivals from Singapore. For those that do,
where several measures were available, the preferred measure was TFr
(overnight tourists by country of residence), or the measure likely to be closest
to this.
101
Table 5.10 Singapore: Arrivals in selected destinations, 2000-2011

( 1000)
Destination
Seriesa
2000
2005
2006
2007
2008
2009
2010
2011
change (%)
AAGR
(%)b
Sunday, May 18, 2014 9:53:17 PM
'10/'09 '11/'10 2005-11

Malaysia
Indonesia
China
Thailand
Hong Kong (China)
Australia
Macao (China)
Vietnam
Philippines
Republic of Korea
India
Japan
Cambodia
New Zealand
Brunei Darussalam
Sri Lanka
Myanmar
Nepal
Maldives
Lao PDR
To other regions
United Kingdom
Switzerland
Canada
Italy
Turkey
Russian Federation
Nigeria
Saudi Arabia
Israel
South Africa
Poland
Belgium
Jordan
Finland
Egypt
Bahrain
Zimbabwe
a
TFr
TFr
VFn
TFr
TFr
VFr
VFr
VFr
VFr
TFr
VFn
TFn
VFn
TFr
VFr
TFn
TFr
TFn
TFr
TFn
VFn
5,420
1,428
399
656
377
286
95
26
29
50
83
47
74
11
36
..
5
12
7
3
3
9,635
1,418
756
795
428
266
166
82
82
69
82
69
94
19
30
8
11
10
3
3
4
TFr
VFr
THSr
TFr
TFn
TFn
VFn
VFn
TFn
TFr
TFr
TCEr
TCEr
TFn
TCEr
VFn
VFn
VFr
136
123
23
27
..
6
5
6
17
4
7
0
3
0
3
4
1
..
116
85
21
25
13
13
4
12
15
6
6
1
4
1
2
6
3
1
9,656 10,493 11,003 12,733 13,042 13,373

1,402 1,352 1,397 1,273 1,373 1,506
828
922
876
890 1,004 1,063
818
799
652
651
654
789
444
479
480
457
528
586
253
264
271
285
308
319
184
204
205
195
241
300
126
190
264
257
257
281
105
138
159
138
171
173
81
94
100
98
121
138
88
94
96
97
113
125
83
93
98
95
107
119
116
152
168
145
181
111
31
36
41
41
45
48
28
27
29
30
30
39
12
14
..
14
16
16
7
6
6
8
12
16
11
9
9
11
12
15
3
5
5
7
10
9
4
4
5
5
5
8
5
5
5
5
6
7
123
99
23
23
23
11
7
13
7
5
6
1
4
1
3
5
4
1
135
98
27
24
24
16
6
20
12
7
8
1
5
3
4
8
4
1
141
118
42
25
31
18
12
25
5
9
7
2
5
4
3
7
..
1
107
111
52
21
29
19
10
26
5
6
7
2
4
2
2
7
..
2
Source: UNWTO.
139
123
51
25
20
18
12
26
6
9
7
4
5
5
2
9
..
2
159
134
55
29
29
19
..
11
9
8
8
6
5
5
5
4
4
4
2.4
7.9
12.8
0.4
15.5
7.9
24.1
0.3
23.3
23.2
16.8
12.8
24.6
9.2
2.4
12.3
52.1
13.1
48.3
2.3
15.2
2.5
9.6
5.9
20.6
11.0
3.4
24.1
9.1
1.1
13.8
10.4
10.7
-38.5
5.6
27.7
1.6
34.3
27.1
-16.4
49.8
17.1
5.6
1.0
5.8
-0.1
5.4
3.0
10.3
22.7
13.1
12.1
7.3
9.6
2.8
16.6
4.5
12.2
6.1
8.0
17.8
16.1
10.7
29.7
10.7
-1.4
17.7
-29.9
-8.2
20.1
0.4
21.7
33.9
0.0
97.7
22.9
91.5
-2.9
32.5
..
27.5
14.3
8.9
7.5
18.1
42.1
8.5
..
-58.6
58.0
-4.5
18.2
42.0
13.8
19.1
122.6
-52.9
..
79.5
5.4
7.9
17.4
3.0
13.4
6.9
24.0
-1.6
-7.9
6.2
5.4
36.1
4.2
33.2
14.2
-4.5
5.0
27.8
102
Chapter 5 Singapore
Medium- to long-haul
destinations
As already indicated, medium and long-haul travel from Singapore accounts for
a much higher share of outbound trip volume than for most Asian markets, with
the notable exception of Japan.
In 2011 Australia was the 6th most important destination for Singaporean
tourists and number one outside Asia, with 319,000 trips. Singapore is also
Australias 6th largest source of tourist arrivals, generating 5.8 million
overnights in 2011 (an average of 18 nights per trip), of which 1.2 million
outside the gateway cities, and A$ 1.3 billion (US$ 1.4 billion) in spending.
Some 60% of arrivals from Singapore are on leisure trips and 83% are repeat
visitors.
New Zealand (18th position in the ranking) also counts Singapore as an
important source. Its 30,000 arrivals in 2010 contributed NZ$ 70 million
(US$ 58 million), or an average spend of NZ$ 2,500 (US$ 2,067) over an
average stay of 9 days.
China (in 3rd place) and India (14th) can be considered competitors of
Australia and New Zealand in terms of travel distance and time.
Sunday, May 18, 2014 9:53:17 PM
Europe and North America are largely visa-free for Singaporeans, and this
enhances their appeal and is a main factor contributing to growth in recent
years. The United Kingdom (134,000 visitors), Switzerland (55,000) and Italy
(29,000), as well as France and Germany (arrivals from Singapore not
recorded) are the most popular destinations in Europe.

Purpose of travel
Official data on purpose of trip is not available for 2011, but IPK Internationals
World Travel Monitor suggests that 79% of all trips were for leisure the
highest share across Asia. Business travel, in turn, accounted for the lowest
share of 13%.
Research by Euromonitor International, meanwhile, puts the leisure share of
Singaporean departures in 2010 at 87%, or 12.3 million (+6%). Extended
weekends (an increased number of public holidays fell on Friday and/or
Monday during 2010) encouraged more Singaporeans to take a holiday
overseas. In addition, the growth of budget airfares provided greater
opportunities to take short breaks from their busy schedules.
Organised tour groups accounted for 38% of departures in 2010 a significant
decline in share since 2005. Although travel agencies continue to offer
attractively priced packages, Singaporeans are increasingly choosing to plan
their own holidays due to the convenience of booking air tickets and hotels
online. Moreover, with Singaporeans taking more short breaks to Thailand and
Malaysia, the need for organised tour groups has been reduced, as these
destinations are easy to travel around.
Business departures grew by 5% in 2010, a much stronger rate than in 2009.
This was attributed to an improvement in the economic situation, re-instilling
business confidence.
103
Table 5.11 Singapore: Outbound departures by purpose of trip, 2005-2010
Departures ( 1000)
Business
Leisure
Total
Breakdown (%)
Business
Leisure
Total
2005
2006
2007
2008
2009
2010
1,692
8,762
10,454
1,702
9,418
11,121
1,737
10,315
12,052
1,774
10,687
12,461
1,786
11,606
13,392
1,869
12,261
14,130
16.2
83.8
100.0
15.3
84.7
100.0
14.4
85.6
100.0
14.2
85.8
100.0
13.3
86.7
100.0
13.2
86.8
100.0
Euromonitor estimates that MICE departures increased by 5% in 2010,

following a 36% decline in 2009, due in part to Hong Kong (China), China and
Thailand attracting strong increases in conventions. Coupled with the
economic recovery, this provided a boost to MICE demand in Singapore.
Sunday, May 18, 2014 9:53:17 PM
Table 5.12 Singapore: Purpose of business travel, 2005-2010

Purpose
2005
2006
2007
2008
2009
2010
Departures ( 1000)
MICE a
Other
Total
310
1,382
1,692
369
1,333
1,702
416
1,321
1,737
439
1,335
1,774
279
1,507
1,786
294
1,576
1,869
Breakdown (%)
MICE a
Other
Total
18.3
81.7
100.0
21.7
78.3
100.0
24.0
76.0
100.0
24.8
75.2
100.0
15.6
84.4
100.0
15.7
84.3
100.0
Meetings, incentives, conventions, exhibitions.

Mode of transport
Land, by far the most frequent mode of transport for outbound trips, recorded a
6% increase in departures in 2010. However, growth was much slower than
the 15% increase registered in 2009. This was largely because outbound
tourists regained confidence in the economy, so they were more likely to
choose air travel, especially as budget airlines lowered prices.
Budget airlines such as AirAsia and Jetstar Asia Airways launched several
promotions in 2010, offering tickets as low as S$ 1.00 to attract consumers to
air travel. As a result, air travel, the second most important mode of transport,
recorded the highest growth (8%) in terms of departures.
Nature and age of

travellers
It is not possible to give the age breakdown of SIngaporean outbound

travellers, but propensity to travel abroad declines with age, especially after
60 years of age. The most well-travelled are Singaporeans with higher
education levels and socio-economic backgrounds and those aged 30-49
years old although the highest travel intensity is currently found among the
25-29 year-old age group, with a higher proportion of males to females due to
104
Chapter 5 Singapore
the end of their military service. But the overall breakdown clearly differs from
one destination to another.
Travel companions and

type of trip
A recent survey by hotels.com shows that Singapore travellers prefer to flock

with the same-feathered birds 61% indicated that having similar lifestyle
values is the most important characteristic they look for in a travel companion.
And they care less about trustworthiness than a fun-loving personality and a
caring nature. Only 39% of respondents indicated that trustworthiness was an
important characteristic in a travel companion, coming in 4th place behind a
fun personality (55%) and a caring nature (45%).
Most Singaporean travellers also prefer not to share a room with a smoker or
someone with a selfish nature, with about one-third of respondents indicating
that both these characteristics are unacceptable in a travel companion.
Table 5.13 Singapore: Leisure departures by travel companions/type of trip, 2005-2010

(% share)
Singles
Backpackers
Couples
Families
Friends
Tour groups
Sunday, May 18, 2014 9:53:17 PM
Total
2005
2006
2007
2008
2009
2010
10.1
0.6
11.2
22.4
11.2
44.7
10.7
0.6
12.0
23.9
12.0
40.9
10.9
0.6
12.2
24.1
12.2
40.0
11.0
0.7
12.6
24.2
12.4
39.2
11.5
0.8
12.9
24.6
12.5
37.8
11.4
0.8
13.0
24.6
12.5
37.8
100.0
100.0
100.0
100.0
100.0
100.0
Activities
Like all Asians, Singaporeans are great shoppers, with more than 90% looking
to shop in their destinations. However, their interests are by no means confined
to retail outlets. Wining and dining in different types of restaurants is very
popular, mentioned by 90% in a survey by Euromonitor. 50% mentioned
sightseeing, 39% visiting historical places, 35% visiting amusement/theme
parks, 23% national parks, 21% like going to art galleries and museums, and
20% enjoy touring the countryside.
Length of stay
Although length of stay clearly varies according to destination, the average is

the lowest among all Asian markets, at 5 nights.
Travel frequency
Although details are unavailable, and trip frequency varies considerably from
one destination to another, Singaporeans generally take more trips per person
than the other markets surveyed. The majority are clearly short breaks.
Seasonality
The following table shows the monthly shares of total departures from
Singapore over the five-year period 2006-2011. The most popular periods for
travel appear to be October-December and May-June.
105
Table 5.14 Singapore: Outbound tripsa by month, 2006-2011

(%)
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
6.8
6.8
8.2
7.6
8.5
9.5
7.5
7.4
7.8
8.2
9.9
11.8
Departures of citizens and permanent residents, excluding road/rail traffic to Malaysia.

Source: The Travel Business Partnership, from PATA data.
Catering for Singaporean

travellers
Singaporeans are much more experienced, and therefore easier to handle,

than many of their South-East Asian neighbours. And, with the possible
exception of older Singaporeans, they are less prone to cultural and religious
sensitivities.
Sunday, May 18, 2014 9:53:17 PM
Information sources
Nearly 1.2 million people in Singapore (or more than 40% of the countrys
online population) visited a travel site in January 2010, according to a
comScore study. This marked an all-time high at the time (no doubt since
exceeded) and represented a 44% increase over the previous year.
A demographic analysis of visitors to travel sites has since revealed that
25-44 year olds account for 53.5% of visitors to these sites, with visitors aged
45-54 composing 19.5% and 15-24 year olds 17.5%. This demographic
breakdown suggests, perhaps unsurprisingly, that many visitors to travel sites
are working professionals who use these sites for business travel, on a global,
regional and local basis. Females accounted for a slightly larger proportion of
visitors to travel sites, representing 51.9% of visitors compared to 48.1%
males.
The demographic composition of visitors to travel sites in Singapore in January
2010 (total aged 15+ at home and/or at work) was as follows: 15-24 years old
17.5%; 25-34 years 25.7%; 35-44 years 27.8%; 45-54 years 19.5%; 55 years
9.6%. The ratio of males to females was 48.1%:51.9%. This excludes visitation
from public computers such as Internet cafs or access from mobile phones or
personal digital assistants (PDAs).
comScores research shows that, in January 2011, three out of five travel
category visitors browsed two or more sites in the category, which suggests
that SIngaporeans are being very diligent in comparing prices prior to
purchase. Consumers are increasingly cost-conscious, which is creating a
more competitive environment among online travel agents and suppliers as
they vie for consumer loyalty and share of wallet.
The research also shows that each of the top 10 most-visited travel
destinations posted double or triple-digit gains. Online mapping and travel
guide site Streetdirectory was the most visited travel destination with 475,000
unique visitors (up 33% from the previous year). Nearly half of the top 10
positions were occupied by regional and local airline brands, including Tiger
Airways with 197,000 visitors in January (+99%), Qantas Airlines with 166,000
visitors (+122%), Singapore Airlines with 145,000 visitors (+29%) and
AirAsia.com with 137,000 visitors (+132%).
106
Chapter 5 Singapore

booking
The most popular travel websites, according to Experian Hitwise, are Yahoo!
Singapore Travel, Zuji and Asiatravel.com. The top destination and
accommodation websites by numbers of visits are TripAdvisor, Agoda.com and
Booking.com. The top airline websites in Singapore are Tiger Airways,
Singapore Airlines and Jetstar.
While the Internet is growing more popular as a source of information on travel
options, online booking is still largely for short-haul trips. Most long-haul trips
are made through face-to-face contact with traditional travel agencies.
However, the first four months of 2012 threw up several interesting outbound
travel trends in Singapore, with Zuji Singapore registering a significant increase
in flight and hotel bookings to destinations that were further afield. Koh Samui
saw a 25% year-on-year increase in demand, while Hokkaido (+40%) and the
Maldives (+60%) also proved popular. European destinations were especially
hot, with Paris (+30%), London (+40%) and Barcelona (+200%) receiving the
bulk of the heightened interest.
According to Zuji, outbound travellers were picking Koh Samui for short
getaways in place of their usual destinations such as Bali, Phuket and
Langkawi. Travellers were also switching their choice of destination to regions
where they enjoy a significant advantage in terms of currency exchange.
Europe is seeing a surge in demand due to ongoing instability in financial
markets and its weakening currency.
Sunday, May 18, 2014 9:53:17 PM
In terms of forward bookings, Zuji Singapore reported that travel sentiment for
Europe was high over the 2012 summer season, while bookings to Hokkaido
over the winter season 2012/13 were already pouring in.
Traditional media
Singapore has a national, state-owned broadcasting organisation, MediaCorp,

which operates the English-language Channel 5, Channel 8 and Channel U
in Mandarin, Channel Suria in Malay, Vasantham for the Indian community and
the news channel NewsAsia, as well as an extensive range of radio channels.
Malaysian and Indonesian TV and radio services are also available.
Singapore Press Holdings Ltd. (SPH), which is essentially controlled by the
government, holds a virtual monopoly in the newspaper industry in Singapore.
It publishes 18 newspapers in four languages (including The Straits Times, The
Business Times, The New Paper, and Lianhe Zaobao) and more than a
hundred periodicals. SPH claims that 74% of Singaporeans over 15 read one
of its newspapers, and that their Internet versions attract 18 million unique
visitors a month.
Singapores media is strictly controlled by the government. Internet access is
regulated and private ownership of satellite dishes is not allowed. Freedom
House reports that the government vigorously punishes the press for perceived
personal attacks on officials, and that as a result print and broadcast journalists
practice self-censorship.
New media
Singapore in December 2011, representing 77.2% of the population (compared
107
The International Telecommunications Union reports that, in 2011, Singapore

and 7.8 million mobile telephone subscriptions (149.5 per 100 inhabitants).
There were 1.3 million wired broadband subscriptions, representing 25.5 per
100 inhabitants. The telephone system is rated as excellent. About 75% of
mobile phone subscriptions are 3G.
Infocomm, a government agency responsible for promoting the use of IT in
Singapore, reports that, by 2010, 84% of resident households had a personal
computer at home and 82% had broadband access. 93% of residents aged
15 or over had access to the Internet at home or elsewhere and 70% used a
computer daily. About 54% used a lap-top, 52% a feature phone, 34% a
smart phone, 5% a games machine and 3% a tablet. 12% used none of these.
About 30% had shopped online in the past year, and of these 41% had bought
a travel product.
Table 5.15 Singapore: Access to personal communications devices at home, 2006-2010

(% of resident households)
Personal computer
Internet
Broadband
2006
2007
2008
2009
2010
78
71
61
79
74
71
80
76
75
83
81
80
84
83
82
Sunday, May 18, 2014 9:53:17 PM
Source: Infocomm Info-communications Development Authority of Singapore.
Experian Hitwises analysis of web searches by Singapore Internet users in

2011 highlights a strong increase in the use of social media such as Facebook,
Twitter and Google+ in Singapore. Key social insights from Experians
inaugural one-year online analysis are as follows:
Singaporeans are notoriously frequent users of social media sites,

emerging as the top Facebook users in the world in terms of time spent
per session, according to an Experian Hitwise report last year.
In 2011, Singaporeans spent time on various social media platforms to
connect with friends and keep updated on topical news such as the
Singapore General Elections. Facebook continues to be popular in social
networking with website traffic share of almost 32%.
YouTube peaked at second place with nearly 21% of visits, followed by the
increasing popular Google+ at almost 16%, up from 1.2% in August 2011,
a month after its beta site was launched.
Microblogging and community forums such as Twitter and Singapore
HardwareZone Community are also gaining ground in the category with a
combined website traffic share of 6.7%.
Singaporeans have increasingly taken an interest in photography, either as
leisure or professional users. It is no surprise that Instagram, a photo
sharing application (available on Apples AppStore) is also listed as one of
the most popular social networking apps used by Singaporeans.
108
Chapter 5 Singapore
Seaports
Singapore is ideally placed in the Straits of Malacca to cater to the cruise

market, which is booming in Asia. A new, S$ 500 million International Cruise
Terminal (ICT), able to berth the worlds largest cruise ships, has opened in
2012 at Marina Bay. It complements the existing Singapore Cruise Centre
(SCC) at Harbour Front, which itself completed a S$ 12 million refurbishment in
2012, raising capacity by 25%. SCC received over 1 million cruise passengers
a year in 2010 and 2011, in addition to 5 million ferry passengers.
The number of cruise passengers (embarking, disembarking or simply visiting
Singapore) fell quite heavily in the early 2000s, but then increased from
514,000 in 2003 to 1.1 million in 2009. A renewed decline in 2011 is attributed
mainly to the withdrawal of gaming ships.
Table 5.16 Singapore: Cruise passenger traffic, 2006-2011
Cruise ships
Cruise ship calls
Passengers ( 1000)
2006
2007
2008
2009
2010
2011
77
787
857
83
717
943
81
1,022
920
94
928
1,139
na
355
na
na
394
942
Source: Singapore Tourism Board (STB).
Sunday, May 18, 2014 9:53:17 PM
Rail and road
Singapore is linked by a causeway (road, rail and pedestrian) and a bridge

(road) to Malaysia. Rail services are now limited (and the main railway station,
Tanjong Pagar, was closed in July 2011 services now terminate at the
Woodlands Train Checkpoint.
Proposals for a high-speed railway linking Singapore to Penang via Kuala
Lumpur were shelved in the mid-2000s and again in 2010, but are once again
under examination. Travel time by bus between Singapore and Kuala Lumpur
is four to five hours; the train takes about seven hours. A high-speed train
running at up to 250 km per hour would take only 90 minutes.
The CIA Factbook indicates that Singapore a tiny island-state has 9

airports, of which 2 have runways of over 3,047 m in length; there are 2 with
runways of 2,438 to 3,047 m, 3 of 1,524 to 2,437 m and 2 of 914 to 1,523 m.
However, Singapore has only two commercial airports:
Seletar (XSP), Singapores first international airport, was opened in 1928

but is now used for local charter flights, general aviation and flying schools.
A proposal to extend its runway from 1,800 to 2,000 m to allow the airport
to handle Boeing 737s has not materialised.
Changi (SIN) was opened to replace Paya Lebar Airport in 1981 and now
has a capacity for 66 million passengers a year but is being continually
expanded. It has three terminals (opened in 1981, 1990 and 2008); a
fourth Budget Terminal, opened in 2006, was closed in 2012 to allow
construction of a new Terminal 4, due to be completed in 2017.
109
The constraints on capacity have led to proposals for co-operation between

Singapore and Malaysia and Indonesia, in particular to integrate operations at
Changi with those at Batam International Airport in the Riau Archipelago and
Johor Bahru Senai Airport. Batam is roughly an hour away by sea and road,
while Senai is 45 minutes by road from the border. The two airports handled
3.3 million and 1.3 million passengers respectively in 2011.
The Singapore Government has placed the development of Changi Airport as
a hub for Asia and Australasia at the heart of its economic development
strategy since the early 1980s. In 1981 Changi recorded 8.1 million
passengers, with some 1,200 flights a week connecting Singapore to 67 cities
in 43 countries. In 2011, Changi was served by more than 100 international
airlines flying to some 220 cities in 60 countries worldwide and handled more
than 46 million passengers. It is the third largest airport in South-East Asia
(after Jakarta and Bangkok), but the largest in number of international
passengers.
In pursuit of this strategy, the government has adopted one of the most liberal
aviation policies in Asia, signing open skies agreements with many countries.
It has provided generous support to the industry. In the aftermath of
11 September 2001 and the SARS epidemic of 2003, the Civil Aviation
Authority of Singapore (CAAS) announced a three-year, S$ 210 million, Air
Hub Development Fund to help the industry weather the storm. More recently,
the focus has shifted to attracting low-cost carriers (LCCs): Changi is now the
home base for three LCCs Jetstar Asia, Tiger Airways and Scoot while
25% of all passengers fly on budget carriers.
Sunday, May 18, 2014 9:53:17 PM
A Budget Terminal dedicated to LCCs was opened in 2006, but closed in

September 2012 to make way for a new, hybrid Terminal 4, catering both to
full-service and low-cost carriers. Until Terminal 4 comes into service in 2017,
total capacity will shrink from 73 million passengers a year to 66 million. When
the new terminal is opened, total capacity will increase to 82 million
passengers. A third runway is likely also to be built over the medium term to
cope with the growth in airline movements. In 2012, the airport is expected to
exceed the 50-million passenger mark for the first time ever.
Air Transport
Singapore has been able to position itself as a major point of entry for longhaul travel into South-East Asia. Locally it has created a catchment area which
includes not only Singapore itself but also the neighbouring states of Johor
Bahru and Malacca in Malaysia and the islands of Bintan and Batam in the
Riau Archipelago in Indonesia. Singapore is becoming the main international
point of entry for the whole of Indonesia, with its excellent and growing network
of connections to Jakarta and regional points.
This pivotal role as an airline gateway for the whole of South-East Asia is likely
to strengthen further after the implementation of ASEAN economic union in
2015. By way of interest, there is also a project to create a more integrated
conurbation with Johor Bahru, across the border. A project for the construction
of a mass transit railway line (MRT) is in the pipeline but would not achieved
before 2018.
110
Chapter 5 Singapore
Table 5.17 Singapore: Total air traffic, 2006-2011

2006
2007
2008
2009
2010
2011
Aircraft movements
Arrivals
107,092
Departures
107,132
Total
214,224
110,352
110,394
220,746
115,930
115,996
231,926
120,184
120,176
240,360
131,769
131,824
263,593
150,827
150,884
301,711
Passengers ( 1000)
Arrivals
16,678
Departures
16,690
Transit
1,665
Total
35,033
17,640
17,582
1,480
36,702
18,185
18,103
1,407
37,695
18,026
18,063
1,115
37,204
20,486
20,437
1,115
42,038
22,778
22,651
1,115
46,544
Source: Civil Aviation Authority of Singapore (CAAS).
In spite of the lack of growth in 2009, passenger movements increased by an

average of 5.8% a year in 2006-2011. They increased by 10.7% in 2011, and
are reported to have increased by 11.5% in the first half of 2012.
Sunday, May 18, 2014 9:53:17 PM
Singapores airlines
Changi is the home base of Singapore national carrier Singapore Airlines (SIA)
and of its affiliates Silk Air, Tiger Airways and Scoot. The airport also serves as
the base for Qantass low cost subsidiary, Jetstar Asia.
SIA is Singapores national carrier and has a leading market share out of
Singapore. Although SIA itself has been losing market share in terms of
passenger numbers over the last decade, the parent companys predominance
has been reinforced by the development of its subsidiaries: Silk Air as a
premium brand targeting regional traffic, Tiger Airways as a low-cost regional
carrier and Scoot as a low-cost long-haul carrier. SIA also formed a strategic
partnership with Virgin Australia in 2011, offering code-share flights from June
2012.
The national carrier has focused on profitability in the last few years, cutting
routes and frequencies up to 2011, when the airline announced its intention to
regain market share. From FY2000/01 to FY2010/11, SIAs share of passenger
traffic out of Changi fell from around 50% to 35%, with total passengers
declining from 19.1 million in FY2007/08 to 16.6 million in FY2010/11. There
was a slight improvement in FY2011/12, when the airline carried 17.2 million
passengers, representing a market share of 35.7% at Changi Airport. Including
SIAs airline subsidiaries, the groups share of passengers at Changi reached
24 million (50.4%) in FY2011/12.
SIA currently flies to 63 destinations and will add new flights to Saudi Arabia
this winter. The airlines fleet reached 100 aircraft in FY2011/12 (including
16 Airbus A380). Two more aircraft are due for delivery in FY2012/13, and SIA
has announced new orders for 15 Airbus A330-300s (on operating leases) and
8 Boeing 777-300ER aircraft (for purchase). With the 20 Airbus A350-900s and
20 Boeing 787-9s also on order, SIA had firm orders for 66 aircraft, as at 31
March 2012.
Silk Air is SIAs premium subsidiary for regional routes. It has a fleet of
20 Airbus A320 and A321 and transported over 3 million passengers to some
40 destinations around Asia in FY2011/12. Silk Airs most extensive network is
111
to Indonesia (9 destinations), followed by China (7 destinations), India

(6 destinations) and Malaysia (5 destinations). It has 70 aircraft on order,
including Boeing 737-800 and MAX8.
Tiger Airways, in which SIA holds a 33% share, was established as an LCC in
2004, but has been struggling to achieve a profit and regain the confidence of
passengers following disastrous operations in Australia. It has a fleet of
19 Airbus A321 and serves 30 destinations (including 6 in India, 4 in Thailand
and 3 each in China, Malaysia and the Philippines). It intends to add at least
2 new destinations every year. It recently became the main shareholder in
Mandala Air (Indonesia) and SEAir (Philippines) and also has a large operation
in Australia. In FY2011/12, the group transported 5.5 million passengers,
including 4.0 million to and from Singapore.
Scoot is SIAs newest subsidiary. The low-cost long-/medium-haul carrier
started operations in June 2012, with an initial fleet of four Boeing 777, flying to
Australia (Gold Coast and Sydney), Bangkok, Tianjin and Taipei. Other
destinations are expected to be announced shortly.
Jetstar Asia is the subsidiary of budget carrier Jetstar, itself a subsidiary of the
Australian national carrier, Qantas. Created in 2004, Jetstar Asia flies out of
Singapore to 21 destinations with a fleet of 18 Airbus A320-200. In the year to
June 2011, Jetstar Asia carried 2.7 million passengers, up by 18% over the
previous year. With Jetstar (Australia), the airline links 38 destinations in Asia
and Australia to Singapore. The airline recently launched new services from
Singapore to Ningbo and Guangzhou in China as well as to Hanoi.
Sunday, May 18, 2014 9:53:17 PM
Table 5.18 Passenger seat capacity out of Singapore by airline, 2012

( 1000 seats)
Seat capacity
% share
Singapore Airlines
Silk Air
Tiger Airways
AirAsia Group
Jetstar Group
Qantas
Cathay Pacific
Emirates
Others
11,872
2,008
2,406
2,371
2,028
1,371
1,175
907
10,508
34.3
5.8
6.9
6.8
5.9
4.0
3.4
2.6
30.3
Total
34,647
100.0
Flight capacity
out of Singapore
The market share of LCCs in flights out of Singapore has, of course, been
rising, reaching 25.1% in June 2012. It is likely to top 30% within the next two
to three years with the arrival of new carriers, notably Scoot.
112
Chapter 5 Singapore
Table 5.19 Total passenger arrivals at Singapore Changi Airport, by region, 2007-2011
2007
2008
2009
2010
2011
17,640
18,185
18,026
20,486
22,778
South-East Asia
Indonesia
Malaysia
Philippines
Thailand
Vietnam
6,520
1,900
1,235
663
1,895
511
6,792
2,046
1,347
743
1,683
610
7,456
2,213
1,920
806
1,529
618
8,812
2,761
2,212
967
1,727
725
10,037
3,154
2,412
1,191
2,038
797
North-East Asia
China
Hong Kong (China)
Japan
4,670
1,628
1,180
914
4,561
1,545
1,188
892
4,189
1,445
1,156
786
4,962
1,679
1,435
889
5,631
1,855
1,701
914
South Asia
1,585
1,684
1,509
1,711
1,858
Middle East
293
340
405
420
461
Oceania
2,216
2,304
2,214
2,287
2,411
Europe
France
Germany
United Kingdom
1,788
200
348
692
1,998
233
366
738
1,853
228
357
688
1,866
236
394
654
1,961
231
408
692
North America
403
342
258
295
308
Other regions
165
164
142
134
111
Sunday, May 18, 2014 9:53:17 PM
Total
Source: Changi Airport Group Pte. Ltd.
Table 5.20 International seat capacity out of Changi SIN by destination region, 2008-2012
(one-way seats)
AAGRa (%)
2012 2008-2012
2008
2009
2010
2011

Singapore Asia
1,612,970
Singapore Middle East
88,350
Singapore Europe
244,233
Singapore Australasia
306,734
1,581,242
98,022
232,384
275,929
1,785,698
92,378
240,091
287,702
2,065,943
94,335
258,453
313,390
2,220,988
98,191
273,428
336,187
37.7
11.1
11.9
9.6

Singapore Asia
1,647,317
Singapore Middle East
85,579
Singapore Europe
258,093
Singapore Australasia
316,931
1,725,610
94,705
239,900
308,529
1,875,506
96,132
256,026
295,322
2,184,133
101,959
269,282
319,370
2,315,061
103,706
282,379
368,352
40.6
17.9
9.4
16.2

113
Table 5.21 Market share of low-cost carriers through Singapore, 2008-2012

2008
2009
2010
2011
2012

LCC seat capacity
% of total seats
270,336
12.0
417,629
19.1
518,078
21.5
650,561
23.8
759,466
25.9

LCC seat capacity
% of total seats
290,453
12.6
492,543
20.8
554,036
22.0
703,577
24.5
810,230
26.4
In June 2012, Singapores top five air links were all located in Asia, with
Jakarta and Kuala Lumpur offering the largest number of available seats per
month with 220,000 and 202,000 seats respectively (one-way data). It was
closely followed by Hong Kong (China), with 190,317 seats. There are only
three medium- to long-haul destinations among the top 12: Sydney, London
and Melbourne (The top 15 include three more: Seoul Incheon, Beijing and
Dubai, all offering between 59,000 and 63,000 seats per month).
Table 5.22 International seat capacity out of Singapore by destination, June 2012
Sunday, May 18, 2014 9:53:17 PM
Jakarta CJK
Kuala Lumpur KUL
Hong Kong HKG
Bangkok BKK
Manila MNL
Sydney SYD
Tokyo HND + NRT
London LHR
Bali DPS
Melbourne MEL
Shanghai PVG
Saigon SGN
220,265
201,962
190,317
176,909
108,202
92,277
91,420
88,110
74,251
73,788
67,848
65,310
Prospects for traffic out

of Singapore
Further potential for the development of Singapores traffic as a major hub will
above all come from neighbouring ASEAN countries combining high economic
growth with infrastructure constraints. Indonesia remains a primary target,
since many cities in Indonesia lack sufficient international connections,
including Balikpapan and Banjarmasin in Kalimantan, Palembang, Padang or
Banda Aceh in Sumatra and Semarang in Java. The Philippines and Myanmar
are in similar positions.
Myanmar could become a middle-income country by 2030, according to the
latest forecasts from the Asian Development Bank (ADB), generating a good
deal of demand for air travel. Singapore will continue to act as a major gateway
for South Asia especially India and also for traffic flows between China and
South-East Asia. Singapores multicultural identity, with large Chinese, Indian
and Malay communities, makes Singapore a very attractive place to transit but
also to settle down and find a job.
114
Chapter 5 Singapore
Finally Singapore will continue to be a major air gateway to Australia from the
rest of the world and South-East Asia.
The Travel Trade

Structure of the
travel trade
Singapores travel trade is regulated by The Singapore Tourism Board (STB),

which currently counts 900 registered travel agents in the city-state. Close to
200 of these are also IATA-affiliated agents. The majority are members of the
National Association of Travel Agencies of Singapore (NATAS). There is also
an Association of Muslim Travel Agents of Singapore (AMTAS), which
comprises 29 members accredited by Singapores Islamic Religious Council to
offer hajj tourism packages.
The top five corporate travel agencies are: American Express, Carlson
Wagonlit, Corporate Travel, Hogg Robinson Singapore and Safe2Travel. The
top five leisure travel agencies are: Chan Brothers Pte. Ltd., Commonwealth
Travel Corporation, SA Tours Pte. Ltd., Dynasty Travel and Tradewinds.
Sunday, May 18, 2014 9:53:17 PM
The shares of bookings through the global distribution system (GDS) players
are, approximately: Abacus (50%), Amadeus (25%) and Galileo (25%). The
majority of travel bookings in Singapore are made through the travel trade, with
independent travel (FIT) growing at the expense of group travel. Singaporeans
like last-minute deals and are often seen to take travel decisions based on
special airline promotions.
The traditional travel wholesale model does not exist in Singapore. Large retail
travel agents develop their own tour programmes and market them through
inbound tour operators in the different destinations. The main operators are
Chan Brothers, Sino-America Tours, Dynasty Travel, Air Sino-Euro Associates
(ASA Holidays), Qantas Holidays and Commercial Travel. They also sell
through small travel agencies.
The school excursions market is heavily regulated with 13 governmentapproved agencies licensed to operate.
The number of online travel agencies (OTAs) is growing in line with the
increasing demand for dynamic online tour packages. Leading OTAs are Zuji,
Expedia, MISA Travel, Chan Brothers, Asiatravel.com and Agoda.

Economic outlook
As an economy heavily dependent on world trade, Singapore is clearly not

expected to do well while world trade languishes. Nevertheless, its real growth
forecast for 2012 has been upgraded by the IMF to 2.1% (from just 0.9%
predicted in April 2012), rising to 2.9% in 2013, largely due to its efficient and
competitive business environment. The government hopes to restore a higher
rate of growth by concentrating on Singapores role as a financial,
technological and logistics hub for South-East Asia and as a gateway into
China.
Outlook for tourism
115
Anecdotal trends suggest that demand for leisure travel at least has picked up
strongly in 2012 and that online travel is growing even more rapidly. And,
despite rising hotel room rates in the region, there is good news for
Singaporeans looking to take a year-end vacation. Several popular Asian cities
have seen significant falls in rates, stimulating demand. This has been boosted
by the continued expansion of low-cost carriers offering more attractive flight
options. Singaporeans are thus extremely well-placed to find a good travel
bargain just in time for their year-end getaway.
Apart from Asian destinations, Singaporean travellers are also enjoying lower
prices in 11 of the 15 European destinations surveyed by NATAS. These
include Milan, Madrid and London.
Air travel is expected to perform particularly well, with intense competition
among airlines benefiting consumers through price discounts. The opening up
of new routes will allow consumers a wider choice of destinations and enhance
convenience, as well as lowering average seat price.
Sunday, May 18, 2014 9:53:17 PM
Forecasts
The Pacific Asia Travel Associations (PATAs) Asia Pacific Tourism Forecasts,
2012-2014 are generally less bullish about the Singapore outbound market
than some of its neighbours, at least to other Asia Pacific destinations.
(Understandably, they do not cover destinations outside the region.) Sri Lanka,
the Maldives and Myanmar are exceptions, although growth to these
destinations will be from a low base.
Table 5.23 Singapore: Outbound tourism forecastsa, 2012-2014
Destination
Actual
2010
Malaysia
13,042,004
Indonesia
1,373,126
China
1,003,700
Hong Kong (China)
709,777
Thailand
603,538
Australia
308,030
Taiwan (Pr. of China) 241,334
Macao (China)
257,196
Japan
180,960
Philippines
121,083
USA
139,319
Korea (Rep. of)
112,855
India
97,431
Cambodia
45,079
New Zealand
30,300
Canada
24,770
Sri Lanka
11,875
Maldives
5,332
Myanmar
12,114
Lao PDR
6,087
a
b
Forecasts
2012
16,270,510
1,556,451
1,068,620
835,960
735,366
329,450
298,592
278,449
152,871
149,644
157,568
125,764
111,373
48,531
41,281
31,772
19,034
8,912
15,334
7,594
2013
18,226,541
1,584,332
1,103,634
876,893
784,794
342,222
314,237
289,601
175,789
163,204
163,302
131,273
116,786
50,122
45,080
34,233
23,363
9,719
16,664
8,136
2014
20,383,822
1,616,265
1,143,460
905,310
822,914
355,490
330,456
299,880
199,824
174,237
167,101
136,367
121,376
52,511
48,714
37,602
26,809
10,609
17,846
8,636
Source: Pacific Asia Travel Association, Asia Pacific Forecasts, 2012-2014.
AAGR b (%)
2010-2014
11.8
4.2
3.3
6.3
8.1
3.7
8.2
3.9
2.5
9.5
4.7
4.8
5.7
3.9
12.6
11.0
22.6
18.8
10.2
9.1
116
Chapter 5 Singapore
Outside the Asian region, New Zealand and Canada are expected to show the
best average annual increases over the four-year period.
The PATA forecasts are much less bullish than those from Tourism Economics
for Singapore, which point to double-digit growth over the next two to three
years, slowing slightly from 2014.
Table 5.24 Singapore: Forecast outbound visits, 2011-2018

2011
2012
2013
2014
2015
2016
2017
2018
Total visits ( 1000)a 8,105

% change
10
9,057
12
10,137
12
11,091
9
12,079
9
13,009
8
13,832
6
14,663
6
Forecast cumulative arrivals worldwide from Singapore.

Impact of the ASEAN

Economic Community
The launch of the ASEAN Economic Community in 2015 is less likely to have a
major impact on Singapore, in terms of improving travel facilitation, since most
countries around the world do not require visas for Singapore citizens. The
only important development might be better connectivity to ASEAN with
additional airline services and frequencies to secondary destinations within the
zone.
Sunday, May 18, 2014 9:53:17 PM

Official organisations
Industry associations
Destination NTOs
Government of Singapore
Portal:
Travel information:
www.gov.sg
http://app.www.sg
www.yoursingapore.com
Singapore Tourism Board (STB)
www.stb.gov.sg
Department of Statistics
www.singstat.gov.sg
Civil Aviation Authority of Singapore (CAAS)
www.caas.gov.sg
National Association of
Travel Agents of Singapore (NATAS)
www.natas.org.sg
Association of
Muslim Travel Agents of Singapore (AMTAS)
www.amtas.sg
The following countries are represented in Singapore through their national

tourism organisations: Australia, China, Hong Kong (China), India, Indonesia,
Japan, Macao (China), Malaysia, New Zealand, Philippines, Republic of Korea,
Taiwan (Province of China), Thailand, France, Spain and Turkey. Note that
some of the NTO offices have purely administrative functions and are not open
to the public.
In addition, the following Australian states are represented: New South Wales,
Queensland, Victoria and western Australia.
Sunday, May 18, 2014 9:53:17 PM
117
The main trade and consumer travel shows are:

NATAS Travel Fair
www.natastravelfair.travel
ADEX ASIA DIVE EXPO 2013
www.diveasianow.com
ITB Asia
www.itb-asia.com
Sunday, May 18, 2014 9:53:17 PM
118
Chapter 5 Singapore
119
Chapter 6
Thailand
Country Profile
Geography
Thailand is located in the centre of Indochina, with long coastlines (the Gulf of
Siam in the East and the Andaman Sea in the West) and long borders (with
Myanmar, Lao PDR, Cambodia and Malaysia). Its total land area of
513,120 km makes it the 51st largest country in the world.
The country is sometimes divided into four regions, sometimes into six or eight,
including:
Sunday, May 18, 2014 9:53:17 PM

background
The North, or Northern Highlands, a mountainous tropical savannah with

forested (or once forested) slopes and wet rice in the valleys, with its
Highland People minorities (Karen, Lahu, Lisu, etc) and its history as part
of the opium-producing Golden Triangle.
The North-east, Isan, which consists of the geographically isolated Khorat
Plateau whose people are largely of Laotian (in the North) or Khmer (in the
South) origin. It is largely dry, infertile grassland, floodable in a short
monsoon, and yet is still primarily agricultural.
The Central Plains of the Chao Phraya is the heavily populated rice bowl
of Asia. The northern provinces of this region are sometimes included in
the North. The mountainous western provinces along the border with
Myanmar are often distinguished as a separate region, and have much in
common with the North, including large Karen minorities. In the South, the
more developed areas around Bangkok (in the Chao Phraya Delta) and
the Eastern Seaboard may also be defined as separate (and variable)
regions.
The South, comprising the Thai parts of the narrow Kra Isthmus and Malay
Peninsula, is a hilly country culturally and economically distinct from the
other parts of Thailand.
The Kingdom of Thailand (formerly also known as Siam) is a constitutional

monarchy with a bicameral parliament (Senate and House of Representatives).
King Bhumibol Adulyadej (Rama IX), who acceded to the throne in 1946, is the
worlds longest-serving head of state.
Thailand suffered from a long succession of military and military-civilian coups
after the revolution of 1932 (which ended the absolute monarchy), with
frequent revisions to the constitution. Democratic civilian rule became more
firmly established from 1985, but the armed forces remain a powerful element
in politics. The unrest in recent years may be described as a conflict between
traditionalists backed by the armed forces (and represented on the streets by
the yellow shirts) and populists (represented on the streets by the red shirts).
The populists (i.e. Thaksin Shinawatra and his party, Thai Rak Thai, Peoples
Power Party and Pheu Thai in successive incarnations) have repeatedly won
elections and then been delegitimised by the courts. The present Prime
120
Chapter 6 Thailand
Minister is Yingluck Shinawatra (Thaksin Shinawatras sister) of the PT, which

won the elections in July 2011 with a landslide.
Administratively, Thailand is divided into 76 provinces (changwats). The
capital, Bangkok (Krung Thep Maha Nakhon), and the city of Pattaya
(Phatthaya) are special districts not belonging to a province. The provinces
and Bangkok are divided into districts (in total, 877 and 50, respectively),
which in turn are divided into sub-districts (tambons). Greater Bangkok
consists of the 50 districts of Bangkok itself and some districts in neighbouring
provinces, including parts (or sometimes all) of Nonthaburi, Pathum Thani,
Samut Prakan, Nakhon Pathom and Samut Sakhon. The provinces
(changwats) and their capitals (mueangs) usually have the same names
e.g. the capital of Chiang Mai province, Changwat Chiang Mai, is Mueang
Chiang Mai.
The legal system is based on the Roman-Dutch model, influenced by
customary law a civil law system with common law influences.
Demographics
Population
The population of Thailand in 2012 is estimated at 69.9 million, or whom

34.3 million (49.1%) are males and 35.6 million (50.9%) are females.
Sunday, May 18, 2014 9:53:17 PM
Table 6.1
Total
Male
Female
Thailand: Total population, 2006-2012

( 1000)
2006
2007
2008
2009
2010
2011
2012
67,276
33,098
34,178
67,796
33,349
34,447
68,268
33,572
34,696
68,706
33,778
34,929
69,122
33,972
35,150
69,519
34,157
35,361
69,892
34,331
35,562
The total population grew by 1.1% a year in 2000-2005 and by 0.7% a year in
2005-2010. This growth is forecast to slow to 0.5% per annum in 2010-2015
and to 0.3% in 2015-2020.
Other key indicators of Thailands demographics include:
There were 20.3 million households in 2010, with an average of

3.2 persons per household.
The median age in 2010 was 34.2 years; it is forecast to rise quite
rapidly to 36.2 years in 2015 and 38.2 in 2020.
77.8 years for females), and is expected to rise to 75.2 years in 2015-2020
in parallel with the ageing of the population.
The birth rate is 11.5 live births per 1,000 population, and the death rate
7.6 per 1,000.
121

is 1.6.
Net immigration is estimated at around 60,000 a year.
Note that the census of 2010 found an official population of 65.5 million. There
has been a surge in legal and illegal immigration in recent years, and there are
now about 2.0 million registered foreigners in Thailand and probably twice as
many illegal immigrants (see below, under migration). Estimates from the
Population Division of the UN Department of Economic and Social Affairs
(UN DESA) clearly take account of these immigrants, but much official data is
based on the registered population i.e. 65.5 million in 2010. Note also that
both the UN DESA and the 2010 Census figures differ from those used by the
International Monetary Funds (IMF) World Economic Outlook.
The labour force in 2011 was 38.8 million, of whom 38.3 million were in
employment (37.5% in formal employment and 62.5% in the informal economy).
Some 15.1 million people over 15 were not in the labour force, as well as
14.0 million people under 15 years old.
Of the working population in 2011, 30% had had no schooling or only some
primary education, 23% had finished primary education, 30% secondary
education and 17% had had some further education. UNDP put the adult
literacy rate at 94.1% in 2009.
Sunday, May 18, 2014 9:53:17 PM
Thailand is still largely a rural society. Only about 33% of the population is
reckoned to be urban. Of the total labour force, estimated at 39.6 million in
2011, 41% work in agriculture, 13% in industry and 46% in services.
One interesting demographic is that the number of single ladies is increasing in
Thailand, even among the young. As many as 5% of females are living single
lives something that bears no stigma, but which allows greater flexibility and
higher purchasing power.
Principal cities
The capital of Thailand is Bangkok (Krung Thep), which in 2010 had a city
population of 6.4 million and a metropolitan area population of 12.0 million. It is
surrounded by a cluster of satellite cities, including Samut Prakan, Nonthanburi
(Pak Kret), Chon Buri and Nakhon Pathom, which typically have city
populations of a quarter of a million people but may have area populations of
over a million.
Otherwise, Thailand has few large cities. The largest include, in the Northwest, Chiang Mai (with a city population of 174,000 in 2000); in the North-east,
Udon Thani (222,000) and Khon Kaen (141,000); on the eastern seaboard,
Chon Buri (183,000, and a metropolitan area, including Pattaya, of 1.2 million);
and in the South Hat Yai (Songkhla, 188,000, and a metropolitan area of
900,000), Nakhon Si Thammarat (119,000) and Surat Thani (111,000).
122
Chapter 6 Thailand
Age distribution
According to the UN DESA, 36% of Thailands population were aged 0-24

years old in 2010, 51% were 25-59 years old and 13% were over 60. The
numbers of young people (0-24 years old) are declining and are expected to
decline by a further 10% by 2020. The numbers aged 25 to 44 are already
beginning to decline, while those aged 55 years old and more are growing
quite rapidly by around 3.5% a year.
Table 6.2
Thailand: Distribution of the total population by age, 2010 and 2020
Age
% share
2010
2020
0-4
5-14
15-24
25-34
35-44
45-54
55-64
65-74
75-84
85
Total
6.3
14.2
15.1
15.7
16.0
14.3
9.5
5.5
2.8
0.6
100.0
5.2
12.0
13.6
14.5
14.9
14.8
12.7
7.8
3.5
1.0
100.0
% increase in 2020
over total in 2010
-14
-12
-7
-3
-3
8
39
49
32
64
4
Source: UN DESA.
Sunday, May 18, 2014 9:53:17 PM
About 75% of the population are reckoned to be Thais, including the people of
Khmer and Laotian origin in Isan, who regard themselves (and are regarded by
other Thais) as Thai distinctive, but Thai. About 14% belong to a wellintegrated and wealthy Chinese minority, and 11% to other minorities mainly
Khmer, Lao, Mon, Burmese, Karen and others living in historically ill-defined
border regions. The most notable of these are the Muslim Malays in the three
southernmost provinces and the highland peoples of the North who do not
formally have Thai nationality.
Thailand also receives large numbers of transient migrants. In 2004 there
were estimated to be roughly 1.5 million migrant workers (mainly from
Myanmar, Lao PDR and Cambodia), 500,000 people overstaying their visas,
140,000 displaced persons (mainly from Myanmar), 20,000 students and
200,000 registered professional expatriates and dependents nearly
2.4 million people in all. Among the expatriates, 18% came from Japan, around
6% each from China, India, Myanmar and the United States of America, and
smaller numbers from many other countries. Since then there has been a
surge in immigration (mostly illegal), and reliable numbers are hard to come by
(see above, under Population).
Conversely, about 150,000 Thais go abroad each year as manual labourers. In
the 1970s, many went to the United States of America, and have left behind
more permanent communities there. From the 1980s, many went to the
Arabian Gulf states, Israel and Palestine. In the 1990s and more recently, most
have gone to East and South-East Asia mainly Taiwan (Province of China),
Singapore, Brunei, Hong Kong (China) and Japan. Smaller numbers of
professional expatriates work in many countries. There are estimated to be a
few tens of thousands of Thais living more permanently in Japan, the United
States of America, Canada, Australia and New Zealand.
Language
123
The national, official language is Standard or Central Thai. It is spoken or

understood by most Thais, but is native only to about a third of the population.
There are a dozen or more other Thai dialects, including Isan (North-eastern
Thai), Lanna (Northern Thai) and Pak Dtai (Southern Thai), and the hill
tribes and border minorities speak their own languages. About 14% of the
population speak (Mandarin) Chinese.
Standard Thai has several forms or registers for different social contexts,
including Street Thai (used among family and friends), Elegant Thai (used
among strangers, in official and business contexts, in all correspondence, and
in simplified form in newspapers), Rhetorical Thai (used for public speaking),
Religious Thai (used when discussing Buddhism or addressing monks) and
Royal Thai (used in addressing or referring to members of the royal family).
Thai has its own alphabet and script; transliteration is not standardised and
causes much confusion.
English is taught at school, but few speak it fluently. However, many
businesses in Bangkok operate in English and some wealthier Thais speak it
among themselves
Sunday, May 18, 2014 9:53:17 PM
Religion
According to the 2000 Census, 94.4% of the population were Buddhists

Theravada Buddhism is the established religion in Thailand, followed by the
vast majority of Thais. An estimated 4.6% were Muslims, 0.8% Christians
(mainly Roman Catholic) and 0.3% of other religions. (The details of the 2010
Census have not yet been published.) The Muslims are mainly found among
the Malays of the South (there is a separatist, Muslim insurgency in the far
South). Although small in numbers, the Sikhs, Hindus and Jews are influential.
Economic growth
Thailand has achieved rapid growth since 1985, interrupted by the financial
crises of 1997-1998 and 2008-2009. The prosperity has generally been based
on strong exports, which include rice, rubber, fishery products, textiles and
footwear, jewellery, motor vehicles and electrical and electronic components.
However, Thailand has been unable to sustain the higher rates of growth that
have transformed, for example, the Republic of Korea and Taiwan (Province of
China) into high-income societies.
Although Thailand is now classified as a newly industrialised economy and
has become a major exporter, industrialisation has been concentrated around
Bangkok and the Eastern Seaboard. In much of the rest of the country, most
of the population are still dependent on agriculture and incomes remain low.
Thailand ranks 20th in the world by population and 30th by nominal GDP.
Thailand was very badly affected by the Asian financial crisis in 1997-1998 and
has since been afflicted by a succession of political and natural disasters,
including the Indian Ocean seaquake and tsunami of 2004, the civil unrest in
the second half of 2008 and first half of 2010, and serious floods in the second
half of 2011.
Real GDP increased by an average of 3.0% a year in the six years 2005-2011.
The IMF reckons that the floods in 2011 took two percentage points off GDP,
124
Chapter 6 Thailand
but that the fiscal package and monetary easing adopted by the government to
encourage and facilitate reconstruction will boost GDP in 2012 and 2013: in its
World Economic Outlook, October 2012, it says it expects it to increase by
5.6% in 2012, by 6.0% in 2013, and by an average of 5.0% over the following
three years.
Table 6.3
Thailand: Key economic data, 2006-2011

2006
2007
2008
2009
2010
2011
GDP (Bt billion)

GDP (US$ billion)
Real GDP growth (%)
7,845
207
5.1
8,525
247
5.0
9,080
273
2.6
9,042
264
-2.3
10,105
319
7.8
10,540
346
0.1

Employment (million)a
Unemployment (%)
4.6
35.7
1.5
2.2
36.2
1.4
5.5
37.0
1.4
-0.8
37.7
1.5
3.3
38.0
1.0
3.8
38.3
0.7
Thailand National Statistics Office, Labour Force Survey data.

Sunday, May 18, 2014 9:53:17 PM
Exchange rates
The Thai baht (Bt) was pegged to the US dollar until the financial crisis of
1997-1998, when the value of the baht fell sharply. More recently it has tended
to track the Singapore dollar closely, but it slipped against it slightly in 2011
and the first half of 2012. Nevertheless, in 2009-2012 it has strengthened
against the euro, the US dollar and even the Chinese renminbi, which is more
tightly bound to the US dollar. By June 2012 it was trading at around Bt 31.6 to
US$ 1.00. The IMF says that the baht is undervalued in relation to mediumterm fundamentals.
Table 6.4
Thailand: Key exchange rates, 2006-2011

(Thai baht per listed currency)

EUR (Euro)
JYP (Japanese yen)
KRW (Korean won)
RUB (Russian ruble)
GBP (British pound)
USD (US dollar)
a
2006
2007
2008
2009
28.543
33.411
4.751
47.568
4.878
4.143
0.326
0.040
10.331
0.739
1.394
23.852
1.165
69.782
37.892
2.372
27.030
30.093
4.249
44.210
4.136
3.551
0.274
0.035
9.404
0.701
1.263
21.444
0.984
64.660
32.344
2.016
27.879
30.969
4.757
48.321
4.241
3.438
0.321
0.030
9.895
0.743
1.327
23.304
1.046
60.752
33.014
2.013
26.999
30.102
5.033
47.727
4.435
3.311
0.367
0.027
9.741
0.723
1.082
23.606
1.039
53.593
34.376
1.927
1000.
2010
29.138
30.769
4.680
42.034
4.079
3.477
0.362
0.027
9.849
0.703
1.044
23.262
1.006
48.978
31.690
1.662
2011
31.461
30.826
4.719
42.438
3.917
3.483
0.383
0.028
9.969
0.704
1.039
24.254
1.037
48.892
30.489
1.480
125
The country runs a surplus on its current account balance of payments and the
public sector deficit is modest. Inflation has not been significantly higher than in
other countries of South-East Asia. It is forecast to be 3.8% in 2012, falling to
3.2% in 2013.
Spending power
The UN Development Programme (UNDP) notes that Thailand is now a

middle-income country that has seen remarkable progress in human
development in the last 30 years and is on course to achieve most, if not all, of
the global Millennium Development Goals well in advance of 2015. It has
reduced poverty from 27% in 1990 to 8% in 2009.
However, with all its recent troubles, Thailands GDP per capita has increased
by only 16% in real terms since 2005 rather less than in the other countries
covered by this report. At US$ 5,400 in 2011, it is higher than in Indonesia
(US$ 3,500) and Vietnam (US$ 1,400), but lower than in Malaysia (US$ 9,700)
and, of course, Singapore (US$ 49,200). It is, incidentally, closely comparable
to that of China (US$ 5,400).
Table 6.5
Thailand: GDP per capita, 2006-2011
Sunday, May 18, 2014 9:53:17 PM
Bt
Real increase (%)
US$
at PPPsa (US$)
2006
2007
2008
2009
2010
2011
124,862
4.5
3,296
7,691
135,238
4.7
3,918
8,286
143,248
2.0
4,300
8,639
142,330
-2.6
4,151
8,507
158,189
7.2
4,992
9,222
164,494
-0.3
5,395
9,398

Average household income in 2009 was Bt 20,903 (US$ 608). It was half that
in rural areas and double that in Greater Bangkok Bt 37,732 (US$ 1,098). 3%
of households had monthly incomes of less than Bt 3,000 (US$ 87), 34% had
incomes of Bt 3,000-10,000, 46% had incomes of Bt 10,000-30,000, 11% had
incomes of Bt 30,000-50,000, 5.5% incomes of Bt 50,000-100,000 and 1.6%
had incomes of over Bt 100,000 (US$ 2,909).
At the top end of the scale, Cap Gemini and Merrill Lynch reckon that, in 2010,
there were 58,000 high net worth individuals (HNWIs) in Thailand, compared
with 44,000 in 2007. (HNWIs are defined as persons having investable assets
of US$ 1 million or more, excluding primary residence, collectibles and
consumer goods.) They represented only 1.7% of the total in Asia Pacific and
0.4% of the total worldwide. The majority of wealthy Thai families live in or
around Bangkok.
126
Chapter 6 Thailand
Table 6.6
Thailand: Population, households and average household incomes by region,

2010
Population
( 1000)
Households
( 1000)
Incomesa
(Bt/month)
All Thailand
65,478
20,328
20,903
Greater Bangkokb
Central Region
Northern Region
Northeastern Region
Southern Region
12,737
13,660
11,432
18,808
8,841
4,476
4,341
3,687
5,325
2,499
37,732
20,952
15,727
15,358
22,926
a
b
2009.
Including all of Nonthaburi, Pathum Thani and Samut Prakan.
Source: Thai NSO, Census 2010 and Household Socio-Economic Survey 2009.
Tourism Policy
Sunday, May 18, 2014 9:53:17 PM
Competitiveness
Thailand was ranked 10th regionally and 41st overall (down two places from
2009), in the World Economic Forums (WEF) 2011 Travel and Tourism
concerned, include its strong affinity for Travel and Tourism (24th), buttressed
by the governments prioritisation of the sector (ranked 16th) and good
transport infrastructure rating (26th), particularly for air transport (23rd).
The principal weaknesses relate to aspects of the regulatory environment, the
main impacts of which are on inbound tourism such as stringent foreign
ownership restrictions, visa restrictions for many travellers, and the long time
required for starting a business in the country.
Passports
E-passports/biometric passports have been issued in Thailand since August

2005.
Visas
Some 88 countries and territories around the world offer Thai citizens visa-free
access or visas on arrival for short-term visits. In addition, special exemptions
are made in most parts of Asia, many Latin American countries and other
destinations for Thais who already have visas for other bona fide countries
such as the United States of America, Canada, the United Kingdom, Europes
Schengen area, Japan, Australia and New Zealand.
Holiday entitlement
6 days annual leave the lowest statutory entitlement in Asia after the
Philippines with 5 plus the following public holidays:
1 January, 3 February (Magha Puja Buddhist holiday), 6 April (Memorial
Day), 13-15 April (Songkran (Traditional Thai New Year), 5 May (Coronation of
King Bhumibol 1950), May (date varied Royal Ploughing Ceremony and
Farmers Day), May (Vesak Buddhist holiday), July (Asalha Puja Buddhist
holiday), August (Vassa Puja Buddhist holiday), 12 August (HM Queens
birthday), 23 October (Chulalongkorn Day), 5 December (HM Kings birthday),
127
10 December (Constitution Day), 31 December (New Years Eve). The Muslim

holidays of Eid ul-Fitr and Eid al-Adha are also celebrated in certain provinces.
There are two main school holiday periods: March to mid-May and October to
mid-November. Universities close from mid-March to end-May and from
October to mid-November.

Overview
With modest overall levels of GDP per person and half of the population still
engaged in agriculture, the potential for mass outbound leisure travel is still
very limited. Outbound travel intensity among Thais (the percentage of the
population that takes at least one trip abroad a year) is only about 5%.
Nevertheless, outbound travel from Thailand grew strongly in the 1990s from a
low base until the collapse of the Thai baht in 1997. This, together with the
ensuing economic crisis, had a major impact on demand for outbound travel
and especially for long-haul destinations. The market rebounded in the late1990s. It was basically unaffected by the events of 11 September 2001, and
outbound trip volume picked up steadily through the first half of the 2000s,
declining only in 2003 as a result of SARS.
Sunday, May 18, 2014 9:53:17 PM
In the five-year period 2005-2010, annual growth averaged a very impressive

12.3%. Except in 2008, when demand was affected by the economic crisis,
annual growth was always in double digits at least until 2011 when,
according to provisional estimates, it fell to around 5%.
Domestic travel
Official data on domestic tourism is not freely available. However, according to

the World Travel & Tourism Council (WTTC), domestic travel generated 31.1%
of Thailands total Travel and Tourism GDP in 2011, compared with 68.9% for
foreign visitor spending (visitor exports). The contribution is forecast to grow by
5.5% in 2012 to Bt 451.8 billion (real growth, taking inflation into account) and
by 6.3% annually in 2012-2022 to Bt 831.8 billion.
Outbound travel
Key factors stimulating growth have been the expansion of low-cost carriers
(LCCs) and the appreciation in value of the Thai baht against key currencies
such as the US dollar and the euro. Thais now say it is less costly to travel
abroad than within their own country.
Outbound travel from Thailand was surprisingly unaffected by the Pandemic
(H1N1) 2009. But widespread civil and political unrest in the country, and
especially in Bangkok, in 2010, pushed many Thais to travel abroad in order to
escape from the effects of the political protests and avoid depressing news of
the deteriorating political situation. Demand plummeted in September 2011
not surprisingly due to the temporary suspension of flights as a result of the
airports closure but afterwards rebounded rapidly.
The Association of Thai Travel Agents (ATTA) estimates that more than
6 million Thai tourists will travel abroad this year. According to figures from the
Thai Immigration Bureau, at least 85% of trips will be for short-haul
destinations, primarily within South-East Asia and travelling on LCCs.
128
Chapter 6 Thailand
Table 6.7
Thailand: Outbound overnight trips, 2006-2011
Total trips ( 1000)

% change
Nights ( 1000)
% change
2006
2007
2008
2009
2010
2011
3,382
11.0
4,018
18.8
3,908
-2.7
4,653
19.1
5,451
17.2
5,397
-1.0
6.8
5.8
5.6
5.0
5.1
5.0
22,896
na
23,425
2.3
21,768
-7.1
23,172
6.5
27,582
19.0
27,093
-1.8
Source: UNWTO from official Thai Government statistics.
Length of stay, at some 5 days, is 3 days shorter than for Indonesia (8 nights),
the only other market under survey for which overnight volumes are available.
Travel expenditure
International travel expenditure (excluding transport) reached US$ 5.6 billion in

2010 and US$ 5.7 billion in 2011, boosted by the rise in value of the baht. It
increased by an average of 6.5% a year in 2000-2005 and 8.1% a year in
2005-2010. Thailand ranks 35th in UNWTOs ranking of international
expenditure on tourism worldwide.
Sunday, May 18, 2014 9:53:17 PM
Table 6.8
Thailand: International travel expenditure, 2006-2011

2006
2007
2008
2009
2010
2011
4,598
21.0
5,143
11.9
5,003
-2.7
4,433
-11.4
5,623
26.8
5,716
1.7
Spend per trip (US$ )b 1,360

9.0
% changea
1,280
-5.9
1,280
0.0
953
-25.6
1,032
8.3
1,059
2.7
220
9.3
230
4.7
191
-16.8
204
6.6
211
3.5
Total (US$ million)

% changea
Spend per night (US$)b

% changea
201
na
a
b
% annual change expressed in local currencies.

Calculated spending per overnight trip. International travel expenditure includes spending on day trips, but
conventionally spending per trip accepts this discrepancy.
Source: UNWTO from official Thai Government statistics (except where stated).
Average spending per overnight trip declined over a period of at least ten
years, stabilising in 2010-2011. It fell by averages of 3.0% a year in 2000-2005
and 4.1% a year in 2005-2010 in US dollar terms, to US$1,032. Spending per
night averaged US$ 208 in 2005-2010. The trend is not surprising given that,
thanks to LCCs, the opportunity to travel abroad has opened up to a broader
segment of the population, who spend less per trip than their better-travelled,
affluent compatriots.
The Tourism Authority of Thailand (TAT) shows the following breakdown of
outbound travellers spending abroad in 2010: shopping 29%, accommodation
33%, food and drink 18%, entertainment 6%, local transport 8%, sightseeing
3% and miscellaneous 3%.
129
WTTC expects Thailands outbound travel spending to increase by 9.5% (in

real terms) to Bt 198.6 billion in 2012, and to grow by 6.8% annually in the ten
years from 2012 to Bt 383.9 billion in 2022.
Destination regions
Official outbound statistics by destination are difficult to come by, especially for
recent years, since 2007. The following table shows arrivals as reported by
destinations around the world to UNWTO, by various measures. Where several
measures were available, the preferred measure was TFr (overnight tourists by
country of residence), or the measure likely to be closest to that measure. Note
that many of the leading destinations in Europe (including France, Germany,
the Netherlands, Spain, Portugal and Greece) and the Americas (including
Mexico, Brazil and Argentina) do not report arrivals from Thailand.
Sunday, May 18, 2014 9:53:17 PM
The table highlights the predominance of neighbouring destinations such as

Lao PDR and Malaysia. Australia ranked only 13th. Nevertheless, although
annual data fluctuates quite sharply from one year to another, the general
trend over the last five years according to anecdotal evidence from the travel
trade suggests that demand for long-haul destinations is also growing
steadily.
130
Table 6.9
Chapter 6 Thailand
Thailand: Arrivals in selected destinations, 2006-2011

( 1000)
Sunday, May 18, 2014 9:53:17 PM
Destination

Lao PDR
Malaysia
China
Singapore
Hong Kong (China)
Republic of Korea
Macao (China)
Vietnam
Japan
Indonesia
Cambodia
India
Australia
Myanmar
Philippines
Nepal
New Zealand
Maldives
Sri Lanka
Brunei Darussalam
To other regions
United Kingdom
Switzerland
Canada
Nigeria
Italy
Russian Federation
Egypt
Turkey
Saudi Arabia
Finland
South Africa
Belgium
Bahrain
Kuwait
Oman
Poland
Jordan
Israel
Latvia
a
Seriesa
VFn
TFr
VFn
VFr
TFr
VFn
VFr
VFr
VFn
TFr
TFr
VFr
TFn
VFr
TFn
TFr
TFr
VFr
TFn
TFr
TFn
TFr
VFr
THSr
TFr
VFn
TFn
VFn
VFn
TFn
TFn
TCEr
TFr
TCEr
VFn
VFn
THSn
VFn
TFn
TFr
VFr
2000
2005
2006
2007
2008
2009
2010
2011
443
603
676
949
891 1,274 1,517 1,580
940 1,901 1,892 1,626 1,494 1,449 1,459 1,442
241
586
592
612
554
542
636
608
247
379
356
353
334
318
430
473
185
277
296
291
299
303
356
381
88
113
129
147
161
191
261
309
24
58
89
141
252
243
212
196
26
87
124
167
182
160
223
182
65
120
126
167
192
178
215
145
48
45
42
68
77
110
124
142
17
64
77
102
109
102
149
117
133
94
96
90
85
78
93
103
19
42
47
50
58
67
77
92
73
77
74
83
80
82
84
85
19
27
30
35
27
43
60
62
16
27
26
30
31
34
37
38
10
14
14
21
20
29
22
35
27
19
18
20
18
20
21
18
1
1
2
4
4
4
5
6
3
5
5
2
4
3
4
6
..
..
..
5
..
3
5
5
87
44
26
12
4
17
3
4
..
10
2
6
3
2
4
..
1
1
2
0
67
52
39
13
9
30
9
9
6
8
4
5
3
24
4
..
2
2
1
0
69
58
36
13
9
23
15
13
7
14
4
7
3
29
8
..
2
1
2
1
77
69
36
13
16
23
16
18
9
4
5
9
4
12
9
..
2
2
3
..
77
50
45
13
18
14
16
18
10
51
5
7
4
..
9
..
..
2
3
..
69
69
45
11
19
51
15
19
10
5
4
5
4
..
8
13
..
3
3
2
74
67
52
13
19
33
15
20
8
3
6
7
5
..
8
6
..
4
3
1
Source: UNWTO.
73
65
57
21
..
18
17
14
10
8
8
7
7
7
7
..
5
5
3
3
change (%)
AAGR (%)b
'10/'09
'11/'10
2005-2011
19.1
0.6
17.3
35.3
17.4
36.5
-12.4
39.6
21.0
13.0
46.2
18.5
13.8
2.9
38.0
7.3
-24.1
8.6
41.5
14.8
35.4
4.1
-1.1
-4.3
9.9
6.9
18.6
-7.6
-18.4
-32.5
14.5
-21.7
10.7
20.6
1.5
3.4
3.1
55.0
-18.2
15.1
59.6
4.8
17.4
-4.5
0.6
3.7
5.5
18.3
22.6
13.1
3.2
21.1
10.6
1.6
14.1
1.8
14.6
5.8
16.8
-1.4
33.2
1.4
..
7.4
-3.2
16.2
15.6
0.4
-35.1
4.3
8.1
-12.0
-34.3
56.7
35.4
25.4
..
0.9
-53.6
..
45.6
-12.9
-65.7
-1.3
-3.0
9.7
62.5
..
-44.5
12.1
-30.3
23.1
136.7
24.8
4.1
32.4
..
-12.6
..
..
28.9
9.1
324.4
1.6
3.8
6.5
8.6
16.9
-7.9
12.0
7.1
10.3
-0.3
11.0
7.6
16.4
-17.8
9.3
..
15.8
15.7
13.9
81.6
131
Up until 2009 Malaysia was the main destination for Thai travellers, followed by
Lao PDR. However, in 2010 Lao PDR took the first place (in terms of visitor
arrivals) and has since been the main destination for Thais. The country
received 1.6 million Thai visitors in 2011, and Malaysia recorded 1.4 million.
These destinations are followed by China (608,000 visitors), Singapore
(473,000) and Hong Kong (China) (381,000). Singapores new tourist
attractions, such as Universal Studios and the two resorts with casinos,
Resorts World Sentosa and Marina Bay Sands, have been major draws.
With 309,000 visitors in 2011, the Republic of Korea is one of the fastest
growing destinations for tourists from Thailand. Between 2005 and 2011 it
recorded an average annual growth of 18%. Macao (China) (196,000 arrivals)
recorded a 23% increase in Thai tourists during that time period, though it saw
a 12% drop in 2011. Another fast growing destination is Indonesia, with
142,000 Thai visitors in 2011 and an average growth of 21% in the last six
years.
Sunday, May 18, 2014 9:53:17 PM
Outside the Asia Pacific region, the United States of America is the preferred
destination for Thais, with 73,000 tourists in 2011. In Europe, popular
destinations include the United Kingdom, Switzerland, Italy and Scandinavia,
although the lack of detailed data from some European countries makes it
difficult to rank them. Europes main attractions are its scenery and climate,
which are quite exotic for Thais, as well as the wide variety of national cultures.
While most Thai travel to Europe and North America is still through package
tours, Australia and New Zealand are increasingly visited by Thais on
independent trips. Incentive travel is also growing. But the strong Australian
and New Zealand dollars have dampened demand to some degree in recent
years, with Europe and North America benefiting from the trend.

Purpose of travel
Leisure travel fluctuates at between 78% and 80% of total trip volume and,
according to research by Euromonitor International, the total volume of leisure
trips grew by nearly 10% in 2010. This compared with a 7.5% rise in business
trips (down from 21% in 2009).
Organised tour groups accounted for the highest share of leisure departures.
However, the proportion of leisure departures in organised tour groups and
family groups slipped in 2010, while the proportions of leisure departures in
friends, couples and singles all increased. Key factors in this shift included the
fact that Thai women are becoming more independent, and Thais are now
staying single for longer, which is leading to an increase in the number of
childless couples in Thailand. The Thai travel trade maintains that the
behavioural patterns of outbound Thai tourists are changing. There is now
reportedly higher demand for customised tour groups.
132
Chapter 6 Thailand
Table 6.10 Thailand: Outbound departures by purpose of trip, 2005-2010

2005
2006
2007
2008
2009
2010
Departures ( 1000)
Business
Leisure
Total
631
2,529
3,160
690
2,692
3,382
842
3,175
4,018
843
3,231
4,074
1,020
3,688
4,708
1,096
4,043
5,139
Breakdown (%)
Business
Leisure
Total
20.0
80.0
100.0
20.4
79.6
100.0
21.0
79.0
100.0
20.7
79.3
100.0
21.7
78.3
100.0
21.3
78.7
100.0
The slowdown in business travel growth in 2010 was due to the negative
impact of the political turmoil and civil unrest which hit Thailand during April
and May 2010. The uncertainty caused by the turbulent political situation
caused many companies located in the vicinity of the major public protests to
close for the duration of the protests, while some small companies were forced
to close permanently. Thus outbound business travel and, consequently,
outgoing tourist receipts, were rather limited in 2010 in comparison to 2009.
Sunday, May 18, 2014 9:53:17 PM
MICE travel
Outbound departures for meetings, incentive trips, conferences and exhibitions

(MICE travel) continue to represent less than one quarter of business
departures (22.5%), increasing only marginally in 2010.
Table 6.11 Thailand: Purpose of business travel, 2005-2010

Purpose
Departures ( 1000)
MICE a
Other
Total
Breakdown (%)
MICE a
Other
Total
2005
2006
2007
2008
2009
2010
124
507
631
145
545
670
164
678
842
185
658
8435
225
796
1,020
247
850
1,096
19.7
80.3
100.0
21.0
79.0
100.0
19.5
80.5
100.0
21.9
78.1
100.0
22.0
78.0
100.0
22.5
77.5
100.0
Meetings, incentives, conventions, exhibitions.

Clearly, these averages mask wide differences in the breakdown of purpose of

trip from one destination to another. Official statistics suggest that 50% of trips
to Europe are for holidays, 19% for conferences/exhibitions and 12% for
traditional business travel. Examples from individual destinations NTOs show:
Arrivals from Thailand in Singapore in 2008 were split 50% holiday, 10%
VFR and 40% business and other.
The shares for arrivals in the United Kingdom in 2005-2010 were 40%
VFR, 29% business, 22% holiday, 2% study and 8% miscellaneous other
133
reasons. The high share of VFR is very largely due to the sizeable number
of British expatriates making home visits (roughly 37% of arrivals from
Thailand are British).
Mode of transport
The purpose of trip for Thai arrivals in Australia in 2011 was: 38%
holidays, 17% VFR, 19% business, 4% employment, 12% study and 11%
other.
Air transport is the most popular mode of transport for outbound Thai tourists
(78% in 2010, according to Euromonitor), while land transport remains in a
distant second position. The wide choices of low-cost carriers such as Thai
AirAsia, Nok Air, Orient Thai Airlines and One-Two-Go Airlines have facilitated
outbound travel for Thais over the last few years, while outbound travel by land
is limited to those crossing the border into neighbouring Lao PDR, Cambodia,
Malaysia and Vietnam. Both sea transport and rail are marginal modes of
transport for outbound Thais.
A survey in 2010 suggested the following breakdown for Thai outbound
travellers in terms of background/work status: professionals 6%, administrative
and managerial 4%, clerical, sales and commercial 22%, labourers, production
and service workers 37%, housewives and unpaid help 8%, students and
children 11%, other 12%.
Sunday, May 18, 2014 9:53:17 PM
Nature and age of

travellers
The male to female ratio of outbound travellers is pretty even (51% to 49%) but
the share of females is higher for destinations which offer good shopping and
sightseeing, e.g. Europe (59%) and Hong Kong (China). Meanwhile,
destinations seen as posing higher than average security risks, such as the
Middle East, attract far more males than females.
By age, the breakdown in 2010 was: 0-24 years 14%, 25-34 years 27%, 35-44
years 27%, 45-54 years 19%, and 55+ years 13%.
Thai travellers to Europe are typically well educated, wealthy, Englishspeaking, with limited holiday entitlement (or are retired), and have often made
several trips to Europe before. First-time travellers are likely to come from a
broader stratum of Thai society, with a greater spread of ages, incomes and
educational attainment, and are rather less likely to speak English. This can be
a problem, as all groups need to be accompanied by a Thai translator to
accommodate non-English speakers, which adds to the cost of trips.
Travel companions
For short-haul trips, Thais tend to travel with friends, in couples or alone.
Fewer younger Thais travel long haul and, among older travellers, it is not
common practice to take children along.
Thais rarely take their children to Europe, partly because the school holidays
fall outside the European peak season. However, the Thai school holidays in
March-May and October offer an opportunity for the European travel trade and
suppliers to offer attractive rates to Thais outside the peak European tourism
season.
There is a high propensity among first-time travellers to travel on group tours,
because of their unfamiliarity with long-haul destinations and/or the
134
Chapter 6 Thailand
convenience of an all-inclusive package. However, according to NTO research

from VisitBritain and the Scandinavian Tourist Board, there seems to be an
emerging trend to travel more independently as group travel is seen as too
restrictive.
VisitBritain reported that in 2006, 55% of arrivals in the United Kingdom from
Thailand (including the many who are British expatriates living in Thailand)
were travelling alone a higher proportion than from most other markets. 21%
were travelling as a couple, 16% with family, 3% with friends, 3% with business
colleagues, and only 3% in a tour group or other. There is little reason to
assume this breakdown has changed significantly.
Tourism Australia says that, in 2011, of visitors from Thailand aged over 15,
69% were travelling alone, 7% as a couple, 9% as families, 9% with friends,
6% with business colleagues and fewer than 1% with school groups. In recent
years, the proportions travelling alone to Australia have been rising, and those
travelling in families falling.
Sunday, May 18, 2014 9:53:17 PM
leisure trips
Sightseeing (51%) and shopping (49%) are cited by Thais as their favourite
activities on holiday trips abroad and shopping generates 30% of spending
abroad, according to the Tourism Authority of Thailand (TAT) although the
activity breakdown seems to vary sharply from one destination to another. The
results of a recent survey by MasterCard also suggest that changes of scenery
and weather and visiting new places are other important criteria for Thais
choosing a holiday destination.
A good indication of how Thais spend their holidays abroad can be seen in the
breakdown of their spending on leisure trips. Euromonitor suggests that 32%
goes on local transport, 31% on accommodation, 7% on entertainment, 6% on
food and drink, 15% on shopping (less than the TATs estimate), and 7% on
other (including travel agency services).
On holiday, Thais seem to lean towards scenery, nature, tranquillity, rest and
relaxation rather than intensive exposure to foreign culture and heritage. The
secret for operators seems to be to combine visits to many attractions but for
only short periods of time with plenty of time for relaxation and enjoyment
and for meals.
The following shows different methods of payment for tourism spending
abroad:
135
Table 6.12 Thailand: Breakdown of payment methods for tourism spending abroad,
2006-2010
(% of total value)
Cash
Charge card
Credit card
Debit card
Prepaid cards
Travellers cheques
Total
2006
2007
2008
2009
2010
66.5
5.5
24.0
0.5
1.1
2.4
67.0
5.6
23.5
0.5
1.1
2.3
67.1
6.2
23.0
0.5
1.1
2.1
66.7
7.0
22.8
0.5
1.1
1.9
66.5
7.8
22.4
0.5
1.1
1.7
100.0
100.0
100.0
100.0
100.0
Sunday, May 18, 2014 9:53:17 PM
Length of stay
and travel frequency
The TAT reported that, in 2006, average length of all outbound trips by Thai
nationals was 11.8 days, but trip length clearly varies according to destination.
Thais who travel tend to take two trips a year to regional destinations, or one
regional and one long-haul. In addition, they tend to make frequent trips within
Thailand.
Seasonality
The following table shows the monthly shares of total departures from Thailand
in 2006-2007. Although details are not forthcoming, there has reportedly been
no change in seasonality in recent years. The most popular periods for travel
are March-May and October-December.
Table 6.13 Thailand: Outbound trips by month, 2006-2007

(%)
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
7.3
6.4
9.3
11.1
8.6
7.2
7.8
7.8
7.3
9.7
8.2
9.3
Source: The Travel Business Partnership, from PATA data.
Catering for Thai

travellers
Language is a major problem, with few Thais of middle age and older speaking
a foreign language. Traditional Thai values, which are very important to Thais
and influence their behaviour, stress the avoidance of unnecessary friction with
others, close family relationships, a strong sense of hospitality and generosity,
and respect for old people and ancestors. Seniority is also an important
concept in Thai culture. The elders always rule in family decisions or
ceremonies.
The Thai are dedicated royalists and the relevance of this to the tourism
industry is illustrated by the popularity among Thai tourists of countries with
monarchies and especially countries popular with the Thai Royal family, such
as Switzerland, where King Bhumibol went to school.
136
Chapter 6 Thailand

Information sources
As travel information sources, the internet, word-of-mouth and travel agents

are important and roughly evenly balanced. Tour operators, airlines,
publications, advertising and broadcast media are more marginal. However,
from the travel trades point of view, the most important means of promotion
are advertisements in the printed media (notably newspapers, travel
magazines and business magazines). Many send out direct mail to previous
customers. Some, for high-volume, aggressively priced products, go for TV
commercials and events in shopping malls. Movies and soap operas are also
said to have a powerful influence on young people.
Internet users are predominantly young: Thais between 15 and 24 represent
more than half of all internet users in the country. People aged over 50, on the
other hand, make up just 3%.
Sunday, May 18, 2014 9:53:17 PM
Travel decisions
and booking
Although Thai travellers are becoming more and more independent, group
travel is still preferred for long-haul trips. And most trips even by welltravelled, affluent, English-speaking Thais are booked through a member of
the Association of Thai Travel Agents (ATTA), of which there are over 1,000.
Travel agents organise their own consumer travel fairs at which they promote
their tour programmes.
Thais tend to book at the last minute. Long-haul trips tend to be planned well in
advance, although actual bookings tend to be made much later often only
two to three weeks before travel. This may be a problem if visas and other
practical arrangements have not been tackled beforehand. And, if possible,
people confirm their bookings at the eleventh hour.
There is reportedly very little travel agency loyalty, with price dictating most
peoples choices.
Traditional media
Television and radio are of course almost universal in Thailand, with extensive
use of satellite and (in Greater Bangkok) cable systems. The television
networks are all controlled by the government (Thai TV3 and Channel 9, and
the Thai Public Broadcasting Service, created in 2008) or the army (TV5 and
BBTV Channel 7).
There is one Cable TV company: True Visions (formally known as UBC), which
has a monopoly. Provincial cable operators have been gaining popularity
outside Bangkok. According to research by the Thailand Research and
Development Institute in 2008, there are 78 cable providers and hundreds
have been waiting for approval.
The national radio services are also run by the government or the army, but
there are also large numbers of low-powered local community radio stations.
There are reported to be 35 FM and 46 AM radio stations based in Bangkok,
plus 243 FM and 159 AM radio stations based up-country.
The print media are largely privately run, with a handful of Thai-language
dailies accounting for most newspaper sales.
137
In common with most countries in the region, there is some censorship on

social and political grounds, and all media tend to exercise some selfcensorship when covering the military, the monarchy, the judiciary and other
sensitive issues. In particular, lse majest laws can be strictly or arbitrarily
enforced.
With regard to offline content, Thais prefer to watch TV over reading content in
printed media. This idea is supported by the low level of newspaper
consumption (roughly 3-4% of the total population) and the small percentage of
advertisements in printed media (Euromonitor Consumer Lifestyles, Thailand
2010). Thailands most popular newspapers are the Thai Rath, Daily News and
Khom Chad Luek, respectively. All of these are Thai-language newspapers.
There are two main English-language newspapers: The Bangkok Post and The
Nation. One report suggests there are 32 Thai, 3 English, 3 Chinese and
3 Japanese daily, weekly and three times weekly newspapers.
Thais buy a wide variety of magazines (there are hundreds to choose from).
There are many different womens magazines (such as Praew Weekend and
Di-Chan), which are popular among office workers. Males favour FHM, car and
gadget magazines. Travel magazines attract both genders.
Sunday, May 18, 2014 9:53:17 PM
Thais like reading How to pocket books on subjects such as how to live your
life peacefully, how to deal with your boss, how to deal with colleagues. Many
also read Buddhas teachings as written by respected Buddhist monks and
Buddhism practitioners in Thailand.
There are three travel trade magazines, dominated by TTR Weekly that
publishes Thailand travel trade content and is distributed free on a weekly
basis to the travel trade. TTG and Travel Daily Asia (online publications) are
regional magazines that are also widely read by the travel trade.
New media
The impressive growth rate of 600% in the Thai Internet penetration rates over
the past decade has made the Internet a social phenomenon. Online
newspapers are a growing trend. Manager, a leading newspaper, reported an
average daily readership of over 240,000 and is the only online newspaper to
make it on the top 10 most visited websites (Source: truehits.net).
Print media will see tougher competition as the Internet is now playing a much
bigger role in the media sphere. Many print magazines have moved their
content online in order to maintain their market share. Womens magazines are
losing ground, but health, home decoration and travel magazines remain
healthy.
According to Internet World Stats, there were 18.3 million internet users in
Thailand in December 2011, representing 27.4% of the population (compared
The International Telecommunications Union reports that, in 2011, Thailand
had 6.7 million fixed telephone line subscriptions (9.7 per 100 inhabitants) and
78.7 million mobile telephone subscriptions (113.2 per 100 inhabitants). There
were 3.7 million wired broadband subscriptions, representing 5.4 per 100
inhabitants. The quality of the fixed-line and mobile telephone systems is highly
rated, especially in the Bangkok area.
138
Chapter 6 Thailand
Internet World Stats reports the number of Facebook users at the end of March
2012 as 14.2 million 77.7% of Internet users, with the majority from younger
age groups.
Sunday, May 18, 2014 9:53:17 PM
Seaports
Thailand has 15 ports, but few are equipped to receive large passenger ships.
Those able to handle cruise ships include Laem Chabang and Klong Toey in
Bangkok and Koh Kood; Koh Samui, Phuket, Krabi and Songkhla. Of these,
only Laem Chabang and Phuket receive large ocean cruise ships.
Railways
Thailand has 4,071 km of railways, almost all of metre gauge. A line from Nong
Khai in Isan to the Laotian border opened in 2009, but it is unclear when, or
even whether, this will be extended the 20 km to Vientiane, the capital of Lao
PDR A railway line into Cambodia is being rebuilt, and there is a line into
Malaysia.
Highways
There are numerous road and ferry crossings into Lao PDR, Cambodia,
Myanmar and Malaysia, but as yet none form part of high-speed trunk road
systems.
Land border crossings are growing in importance as the country is centrally
located in ASEAN between countries of the Greater Mekong Sub-region and
the Malay world Malaysia and Singapore. New highways and railroads
passing through Thailand are planned, including links between Singapore and
China and between India and ASEAN. Many new cross-border checkpoints
have been set up over the last ten years between Thailand and its Mekong
neighbours (Cambodia and especially Lao PDR). And following Myanmars
political and economical opening, new border crossings into Myanmar have
recently been announced. Thailand currently has 48 checkpoints, including
airports and seaports.
The CIA Factbook reports that Thailand has a total of 103 airports, of which:
63 have paved runways (8 with runways of over 3,047 m in length; 12 with
2,438 to 3,047 m runways; 23 with 1,524 to 2,437 m runways; 15 with 914 to
1,523 m runways and 5 with shorter runways.
Thailand has 49 commercial airports, of which 35 receive scheduled flights and
8 international scheduled flights.
The five main international airports are:
Bangkok Suvarnabhumi International Airport (BKK): this controversial new

airport opened, late and over-budget, in September 2006, with a capacity
of 76 flights/hour and 45 million passengers/year, and was soon operating
close to capacity. It has two runways and 120 parking bays (51 with air
bridges and 69 remote gates). Phase 2 would eventually add two more
runways and raise capacity to 150 million passengers/year. The first part
of this expansion, adding a new domestic terminal with a capacity of
139
20 million passengers/year, began in 2012 and is due for completion in

2016.
Sunday, May 18, 2014 9:53:17 PM
Bangkok International Don Muang (DMK) closed in September 2006, but

re-opened one of its three terminals for domestic traffic in March 2007 to
relieve pressure on the new airport. The government was at first reluctant
to allow international flights, but eventually relented and in March 2012
asked for all low-cost, charter and non-connecting flights to be moved to
Don Muang (now officially Don Muaeng). Prior to closure, it had a capacity
of 60 flights/hour and 25 million passengers/year (although in 2005 it
handled 38 million passengers). In August 2012 Terminal 3 (the old
domestic terminal) closed and the refurbished Terminal 1 re-opened,
effectively doubling capacity to 10 million passengers/year. The Air Asia
group (including Air Asia, Thai AirAsia and Indonesia AirAsia), which alone
generates 8 million passengers a year, moved to Don Muang in October
2012.
Phuket International Airport (HKT), with a theoretical capacity of 10
flights/hour and 6 million passengers/year, is mainly used for flights
serving inbound tourists headed for the southern holiday resorts. There are
services (among other destinations) to Hong Kong (China), Kuala Lumpur,
Singapore and Seoul, to Doha and Dubai, and (in winter) to the Russian
Federation, Germany, Scandinavia and other European countries. The
runway is being extended by 700 m to be able to handle any type of
aircraft, including the Airbus A380, and a new international terminal will
raise capacity to 12.5 million passengers a year in 2015.
Hat Yai International Airport (CNX), in Songkhla, with a capacity of 30
flights/hour and handling 2 million passengers/year, is the principal hub in
southern Thailand for domestic and regional flights. It is also particularly
associated with flights serving the annual Hajj.
Chiang Mai International Airport (CNX), with a capacity of 24 flights/hour
and handling 3 million passengers/year, serves the Northern Region. It is
Thailands third busiest airport (after BKK and HKT) and has a good, and
growing, network of international services to regional destinations.
Other airports have limited or seasonal international services to neighbouring

countries. They include Koh Samui, Krabi and Surat Thani in the South
(catering mainly for inbound leisure passengers) and Udon Thani in Isan
(North-east Thailand). There are proposals to introduce low-cost flights serving
Kuala Lumpur and Singapore from Krabi and Hat Yai, and Hat Yai which has
a significant Chinese population may be provided with flights to Hong Kong
or southern China.
Airports of Thailand (AOT) a listed public company is Thailands most
important airport operator. It operates six airports: Bangkok Suvarnabhumi and
Don Muang, Phuket, Chiang Mai, Hat Yai and Chiang Rai. There is a proposal
that AOT should take over Krabi airport, which is presently managed by
Thailands Department of Civil Aviation (DCA). All other airports are run by the
DCA except Koh Samui (owned by the regional Thai carrier Bangkok Airways)
and U-Tapao Pattaya International Airport (which is run by the Royal Thai
Navy).
140
Chapter 6 Thailand
Table 6.14 Thailand: Air passenger traffic through the principal airports, 2007-2011
( 1000)
2007
2008
2009
2010
2011
Total passenger traffic

Bangkok Suvarnabhumi
Bangkok Don Muang
Phuket
Chiang Mai
Hat Yai
Koh Samui
Udon Thani
41,210
4,806
5,704
3,291
1,390
1,302
694
38,603
5,043
5,731
3,063
1,285
1,365
660
40,500
2,467
5,780
3,082
1,390
1,412
722
42,785
3,000
7,044
3,179
1,506
1,414
816
47,911
3,425
8,468
3,880
1,869
1,483
1,012
of which: International
Bangkok Suvarnabhumi
Phuket
Chiang Mai
Koh Samui
Hat Yai
33,300
2,190
358
na
80
31,608
2,409
324
na
20
30,280
2,290
216
85
20
32,942
3,342
264
104
124
36,597
4,371
385
na
213
Sources: Department Civil Aviation (DCA); Airports of Thailand (AOT).
Sunday, May 18, 2014 9:53:17 PM
Thailands airports are increasingly congested due to slow decision-making

and under-investment. The decision to reactivate Bangkok Don Muang for
international traffic will ease some of the pressure at Suvarnabhumi, but the
additional capacity offered by the current construction programmes at
Suvarnabhumi and Phuket may be exhausted as early as 2018. Koh Samui is
also suffering from congestion, but plans for a new airport on the Island are
unlikely to materialise because of environmental concerns.
Air Transport
Until the early 2000s, air travel was generally limited to foreign tourists, wealthy
Thais and, on domestic routes, public servants. However, the arrival of lowcost carriers, such as OneTwoGo (Orient Thai) and Thai AirAsia in 2003-2004
opened air transport to new categories of travellers. Thailands air transport
industry now caters for a market of over 70 million passengers a year. Traffic is
expected to grow rapidly over the next few years, given political stability in
Thailand.
Thailands top nine airports received 60.4 million passengers in 2010, 10.3%
more than in 2009. Of these, 58.3% were international passengers, up from
53.8% in 2009. The share of international passengers is growing more rapidly
than domestic traffic because of the multiplication of low-cost regional flights.
Traffic through all Thai airports in 2012 is estimated at 73 to 74 million and
could reach 80 million in 2013.
141
Table 6.15 Thailand: Total air passenger traffic for nine leading airportsa, 2009-2010
( 1000)
2009
Total
Domestic
International
Transit
54,751
23,806
29,463
1,482
2010
60,384
23,627
35,190
1,567
Figures for total passenger traffic through Thailands airports are not available. The figures in this table relate
to the six airports operated by AOT, plus Krabi, Koh Samui and Udon Thani and figures for 2011 for these
are also not yet available. They represent all the airports receiving more than 600,000 passengers/year.
Source: DCA.
Sunday, May 18, 2014 9:53:17 PM
Thai airlines
Thai Airways is the national flag carrier and Thailands leading airline, but it
has been losing market share on domestic and regional routes due to
increased competition from low-cost carriers (LCCs), especially the AirAsia
Group. Nevertheless, it continues to hold the largest market shares in both
domestic and international traffic out of Bangkok Suvarnabhumi, with shares of
53.0% and 37.7% respectively in 2010 41.2% in total. Its network was
restructured in 2011-2012: it now flies to 71 destinations in 35 countries from
its hub in Suvarnabhumi, using a fleet of 91 aircraft. It has abandoned non-stop
flights to the United States of America by closing its New York route and
introducing a stop in Seoul for its flight to Los Angeles. Thai Airways has Asias
densest route network to Europe with 13 destinations. It also serves
Johannesburg in South Africa and five cities in Australasia.
In November 2012, Australia and Thailand signed a new Memorandum of
Understanding (MOU) on air services, allowing for more flights between the
two countries. The new MOU will allow Australian and Thai airlines to each
operate up to 20,000 weekly seats to and from Australias four major gateways
of Brisbane, Sydney, Melbourne and Perth.
Australias regional airports, including Cairns, Darwin and Broome, also stand
to benefit with the inclusion of a Regional Package that provides Thai airlines
with open access to all other international airports in Australia.
Thai currently only operates the Airbus A380 from Bangkok to Hong Kong
(China) and Singapore, but it intends to begin long-haul operations with the
worlds largest aircraft: Paris has been earmarked as its first long-haul A380
destination when the carrier receives its fourth A380 in March 2013. It also
plans to begin Bangkok-Tokyo Narita A380 service in January 2013, after
taking possession of its third A380. Tokyo and possibly Hong Kong (China)
A380 services will continue after the service to Paris commences, but the A380
flight to Singapore will not remain in Thais schedule.
Thai AirAsia is now the second largest carrier, with a market share of 11.2% in
passenger traffic out of Suvarnabhumi in 2010. Including all its affiliates, the Air
Asia Groups share was 12.2%. Thai AirAsia has a network of 30 destinations
served by 25 Airbus A321 and recently moved all its operations to Don Muang
airport, where it has become the largest carrier in passengers transported and
in destinations served.
The regional carrier Bangkok Airways is also based at Suvarnabhumi Airport. It
has signed a large number of code-sharing agreements with major
142
Chapter 6 Thailand
international carriers, including Etihad Airways, Air France, Cathay Pacific,

Thai Airways and Air Berlin. In 2010, Bangkok Airways carried 2.3 million
passengers, including 559,000 on international flights. It holds a monopoly on
the Bangkok-Siem Reap route and has flights to Cambodia, Lao PDR,
Myanmar, Hong Kong (China) and increasingly to South Asia (India and
Bangladesh): in all it operates to 22 destinations, served by 18 aircraft.
All of Orient Thais international services (with 219,000 passengers in 2010) fly
out of Suvarnabhumi; all its domestic services (with 865,000 passengers) fly
out of Don Muang. At Don Muang, the largest carrier has been Thai Airways
low-cost affiliate Nok Air, which carried 2.1 million passengers in 2010,
representing 69.2% of all passenger traffic at Don Muang. It is expected to
introduce some international flights in 2013 as Thai Airways tries to regain
market share in the regional low-cost market. (An unsuccessful attempt was
made in 2008 to introduce flights to Hanoi and Bangalore.)
At Suvarnabhumi, Thai Airways new affiliate Thai Smile will complement the
network by offering a hybrid product under the Thai Airways code (TG). It has
already started flights to Macao (China) and domestic destinations and plans
new routes to China, Indonesia and Indochina for next year.
Smaller regional carriers include Happy Air (operating out of Phuket), Kan Air
(Chiang Mai), SGA Airlines and Solar AIr (Don Muang),
Sunday, May 18, 2014 9:53:17 PM
Table 6.16 Passengers carried on Thai airlines out of Bangkok

(Don Muang and Suvarnab- humi), 2010
(million passengers, % growth 2010/2009)
Airline
Thai Airways
Thai AirAsia
Bangkok Airways
Nok Air
Orient Thai
Domestic
pax (million)
% growth
International
pax (million)
% growth
5.2
2.9
1.8
2.1
0.9
-9.7
3.2
6.3
78.4
89.3
12.4
1.9
0.5
0.2
9.7
6.8
-13.2
5.3
Source: DCA.
Foreign carriers
Among the international airlines carrying over 1 million passengers a year (in
2010) in and out of Suvarnabhumi are Cathay Pacific and Emirates. Airlines
with over 500,000 passengers a year are China Airlines, Singapore Airlines,
Korean Air and Eva Air. The OneWorld alliance has a strong position thanks to
the presence of British Airways, Qantas, Cathay Pacific, JAL and soon
Malaysia Airlines, while Thai Airways attracts its partners in Star Alliance.
At Phuket, the largest international carrier, AirAsia Group (TAA and AirAsia),
carried over 250,000 passengers in 2010. Thai Airways, Jetstar Asia, Tiger
Airways and Silk Air carried between 150,000 and 200,000 passengers.
Flight capacity out of

Bangkok and Phuket
Bangkok dominates outbound traffic from Thailand, because of its centrality in

the most prosperous part of the country and its role as a gateway to SouthEast Asia and in particular to the Greater Mekong region.
143
The market share of LCCs in flights out of Thailand has been rising over the last
decade. The share of LCCs in total passenger traffic at Bangkok Suvarnabhumi
reached 15.4% in the financial year 2010/11 11.4% for international flights.
Measured in monthly seat capacity, LCCs represented 17.7% of total capacity
at Suvarnabhumi in June 2012, up from 13.4% in June 2008. However, this
share would be higher if seat capacity out of Don Muang were included.
In Bangkok, two segments are registering a strong decline in total available
seats: Australasia and Europe. While Australia was affected by the bankruptcy
of Air Australia in early 2012, Europes recession has meant a sharp reduction in
capacities offered, down by 15.9% in October 2012 compared to October 2011.
Sunday, May 18, 2014 9:53:17 PM
Table 6.17 International seat capacity out of Bangkok BKK and Phuket HKT,
by destination region, 2008-2012
AAGRa(%)
2012 2008-2012
2008
2009
2010
2011

Bangkok Asia
2,076,412
Bangkok Middle East 147,720
Bangkok Europe
268,328
Bangkok Australasia 132,074
Phuket Asia
255,134
Phuket Europe
4,599
Phuket Australasia
3,939
1,871,738
147,988
246,989
127,852
250,953
4,806
3,939
1,840,602
159,170
252,239
125,309
296,398
5,853
9,891
2,195,693
166,305
270,870
119,551
362,684
9,765
17,206
2,421,092
172,337
228,541
103,549
390,370
10,640
8,195
16.6
16.7
-14.8
-21.6
53.0
131.4
108.0

Jakarta Asia
2,040,975
Bangkok Middle East 154,601
Bangkok Europe
288,923
Bangkok Australasia 137,650
Phuket Asia
260,180
Phuket Europe
6,557
Phuket Australasia
4,242
2,034,226
153,730
279,588
131,966
281,020
9,425
3,939
2,093,218
154,236
279,947
114,110
349,574
11,265
11,513
2,477,456
176,956
300,045
118,965
414,837
11,847
17,083
2,659,739
182,234
252,278
101,493
423,948
11,752
11,806
30.3
17.9
-12.7
-26.3
62.9
79.2
178.3

In June 2012, Bangkoks top air link (the destination with the largest seat
capacity) was Hong Kong (China) (one-way data) with 181,000 seats, closely
followed by Singapore with 178,000 seats. Dubai is the only long-haul
destination to be among the top eight in terms of seat capacity.
Table 6.18 International seat capacity out of Bangkok BKK, by destination, June 2012
Hong Kong
Singapore
Seoul Incheon
Kuala Lumpur
181,192
178,365
112,066
111,870
Tokyo Narita
Ho Chi Minh City
Dubai
Taipei
80,486
65,362
60,583
58,405
144
Chapter 6 Thailand
Prospects for new

services out of Bangkok
There is further potential for growth to regional destinations, especially to

Myanmar and Indochina, as most large cities in this area lack connections to
Bangkok. Further developments are to be expected to and from Indonesia and
the Philippines, two countries with a lot of potential for inbound and outbound
traffic.
There is little interest for now in developing long-haul, low-cost air services,
due to the excellent coverage of Bangkok and now Phuket by carriers from
the Middle-East, which offer notably competitive fares. There is, however,
some potential for more flights to North America, especially if these involved a
second gateway on the West Coast, as well as one into Canada.
The Travel Trade

Structure of the
travel trade
In 1992, the Thai Government introduced compulsory registration for travel

agents/tour operators under separate categories of domestic, inbound and
outbound. However, the classification is not totally clear as many registered
under more than one category.
Sunday, May 18, 2014 9:53:17 PM
The total number of travel agencies is around 2,000, with no more than
350-400 involved in outbound business. The retail travel trade in Thailand is
very fragmented, consisting mainly of small independent companies focused
primarily on serving the demand for domestic travel. Travel agents handling
outbound as well as domestic travel tend to be larger, and in practice most
outbound group travel is handled by a small number of large agencies. These
include Takerng Tour, Roongsarp Express, MD Tours, Siam Express, Diethelm
Travel, Asian Trails and GM Travels (although some of these focus more on
inbound than outbound travel).
There are few conventional wholesalers. Instead, large retailers are linked to
large numbers of small agencies, which act as their sales representatives.
Some organise their own, small-scale trade fairs at which consumers are also
welcome.
The travel trade is heavily concentrated in Bangkok, with smaller numbers in
Chiang Mai, Hat Yai, Pattaya and Phuket, and individual agents scattered
elsewhere. There seem to be no companies specialising in handling incentive
business. Instead, it is integrated into the product portfolios of most Thai travel
agents. Only the largest companies are in a position to cater for the business
of the big multinationals and government departments.
According to VisitBritain and the Scandinavian Tourist Board, few inbound
European inbound operators have any significant business in Thailand. They
include Miki, Kuoni, and Gulliver and, for Scandinavia, RTS.
The Association of Thai Travel Agents (ATTA) was set up in 1968 and
currently has some 800 active members. Only about 20 travel agencies are
significant in terms of long-haul travel. These include: Avenue Inter Travel
Group, Beeline Tours & Travel Co. Ltd., Holiday Tour & Travel Co. Ltd.,
Central Holiday, Chai Tour Co. Ltd., G.M. Tour & Travel Co. Ltd., Fly Us Travel
Center Co. Ltd., M.D. Tours & Travel Co. Ltd., Siam Express Co. Ltd., Unity
2000 Tour Co. Ltd., and Vacation Travel Group Corporation.
145
The travel websites most often mentioned are: Sanook.com (the Thai equivalent
to Google or Yahoo), Thai Airways.com, Travelbyyou.com, Asiatravel.com,
Tourbyyou.com, Lastminute.com, Pantip.com and Vacationzone.co.th.
Sunday, May 18, 2014 9:53:17 PM

Economic outlook
Forecasts from the IMF for Thailands economic growth over the next few
years are generally very positive barring unforeseen natural disasters or
political unrest. In 2009-2012 the baht has also strengthened against the euro,
the US dollar and even the Chinese renminbi, which is more tightly bound to
the US dollar, leading to a perception that outbound travel is becoming more
affordable. The only qualification, from the travel trades point of view, is that
per capita incomes are still too modest to generate mass outbound travel to
long-haul destinations, and have not been rising very rapidly (by recent Asian
standards).
Outlook for tourism
Traditionally, Thais have not been known as great travellers: they are thought
of as self-sufficient and (at home) somewhat suspicious of foreigners.
However, the affluence of a growing part of the population, coupled with the
growth of low-cost carriers offering increasingly attractive airfares to an everexpanding range of destinations, has brought a desire for holidays and
increased travel experiences abroad.
The Thai Travel Agents Association (ATTA) estimates that more than 6 million
Thai tourists will travel abroad this year, up from 5.7 million in 2011 (+5%), with
outbound tourism expenditure forecast to rise even more sharply (8%) to over
Bt 300 billion. The growth forecast, which was contingent on domestic political
stability and a lack of natural disasters, is expected to be achieved.
In an effort to boost demand further, tour operators have adapted their
marketing strategy to reduce risk by concentrating more on visa-free
destinations, as well as countries that have co-operated well with Thailand in
the past, such as Japan, China and Taiwan (Province of China).
Asian countries are expected to remain the top destinations for outbound Thai
travellers over the foreseeable future indeed, indefinitely. Thai travellers
benefit from the absence of visa requirements to enter various Asian countries
such as Malaysia, Singapore, Hong Kong (China), Macao (China) and the
Republic of Korea for short stays.
Disneyland Hong Kong, Universal Studios in Singapore and The Venetian
resort and casino in Macao (China) have become must-see tourist attractions
in these popular destinations. The Republic of Korea is expected to record
growth in inbound travellers from Asian countries during the forecast period
owing to the persistence of the so-called Korean fever brought about by the
popularity in Asia of aspects of Korean popular culture, particularly television
drama series and pop singers.
Despite Asias continued predominance, the departure growth rate from
Thailand over the period 2012-2014 is expected to be highest to the Americas,
followed by the Pacific and then Asia, according to the Pacific Asia Travel
Association (PATA). The vast majority of long-haul travellers come from
146
Chapter 6 Thailand
Greater Bangkok and the surrounding areas. The people of the northern and
north-eastern regions are more traditional and less affluent, predominantly
living off agriculture and cottage industries. The southern peninsula contains
many of the kingdoms principal tourism destinations and, though not wealthy,
is more outward-looking.
Forecasts
PATAs Asia Pacific Tourism Forecasts, 2012-14 are pretty bullish about the
Thailand outbound market, at least to other Asia Pacific destinations.
(Understandably, they do not cover destinations outside the region.) The
following table summarises the absolute volumes projected for each year from
2012 to 2014, highlighting the average annual growth over the period.
The top five destinations are Lao PDR., Malaysia, China, Hong Kong (China)
and Singapore (in order of importance). The highest growth in departures
relative to size is for Lao PDR, although growth is also strong for the Republic
of Korea. Japan, New Zealand and Pakistan are expected to show negative
growth rates.
Table 6.19 Thailand: Outbound tourism forecastsa, 2012-2014
Actual
2010
Forecasts
2012
2013
2014
AAGR b(%)
2010-2014
Lao PDR
1,517,064
Malaysia
1,458,678
China
635,500
Hong Kong (China)
449,812
Singapore
430,022
Korea (Rep. of)
260,718
Vietnam
222,839
Macao (China)
212,442
Japan
214,881
Indonesia
123,825
Cambodia
96,277
92,949
India
76,546
Australia
84,153
Myanmar
59,692
74,293
Philippines
36,713
Canada
13,197
New Zealand
21,434
Sri Lanka
3,684
Nepal
5,581
Maldives
5,397
Pakistan
2,170
Bhutan
875
Tahiti
81
1,879,762
1,480,914
643,081
529,442
514,882
355,667
244,592
211,910
143,513
167,362
125,507
105,852
97,365
89,932
68,957
75,218
39,158
26,974
20,299
7,656
7,952
6,239
2,224
1,385
175
1,992,678
1,502,969
655,798
568,925
551,064
402,423
262,613
218,329
179,565
174,358
142,128
112,772
105,098
91,265
74,413
76,375
42,095
31,521
20,599
8,936
8,973
7,097
2,129
1,478
211
2,113,403
1,520,889
666,833
608,814
582,343
439,542
279,235
223,597
210,357
181,562
158,987
120,970
111,854
93,618
80,919
77,532
45,344
35,172
20,903
10,203
9,993
7,599
2,036
1,596
244
8.6
1.1
1.2
7.9
7.9
14.0
5.8
1.3
-0.5
10.0
13.4
6.8
10.0
2.7
7.9
1.1
5.4
27.8
-0.6
29.0
15.7
8.9
-1.6
16.2
3.0
Sunday, May 18, 2014 9:53:17 PM
Destination
a
b
Source: Pacific Asia Travel Association, Asia Pacific Forecasts, 2012-2014.
Tourism Economics forecasts for outbound travel from Thailand, developed in

2010 and which provide absolute volumes and annual growth per annum from
2011 to 2018, show a rather less optimistic scenario, and are certainly
147
incorrect as far as 2011 and 2012 are concerned. Given the weight of
anecdotal evidence from industry sources with regard to the 2012-2014 period,
it is tempting to conclude that they also dramatically understate the short- to
medium-term potential of the market.
Table 6.20 Thailand: Forecast outbound visits, 2011-2018

2011
2012
2013
2014
2015
2016
2017
2018

% change
-2
5,280
-1
5,591
6
5,748
3
5,866
2
5,978
2
6,037
1
6,077
1
Forecast cumulative arrivals worldwide from Thailand.

Impact of the ASEAN

Economic Community
regional air routes, such as Johor Bahru Senai-Jakarta, Penang-Hat Yai,
Chiang Mai-Yangon or Pattaya-U Tapao/ Kuala Lumpur. In recent months, new
regional routes have been launched, for example from Bangkok to Cebu or
from Koh Samui to Kuala Lumpur.
Sunday, May 18, 2014 9:53:17 PM

except Vietnam, so visas are not an issue for the majority of Thai outbound
travellers.

Official and trade
organisations
Ministry of Tourism and Sports
www.mots.go.th
Airports of Thailand (AOT)
www.airporthai.co.th
Thailand Convention and Exhibition Bureau www.tceb.or.th

Bangkok Metropolitan Administration
(Tourism Division)
www.bangkoktourist.com
Tourism Authority of Thailand (TAT)
www.tat.or.th or
www.tourismthailand.org
Tourism Council of Thailand (TCT)
www.thailandtourismcouncil.org
Thai Hotels Association (THA)
www.thaihotels.org
Thailand Incentive and Convention

Association (TICA)
www.tica.or.th
Association of Thai Travel Agents (ATTA)
www.atta.or.th
148
Chapter 6 Thailand
Destination NTOs
The national tourism organisations (NTOs) of the following countries have offices
in Thailand: Japan, the Republic of Korea, Malaysia, Singapore and Hong Kong
(China).
The Thai International Travel Fair (TITF), which focuses on domestic as well as
international travel destinations and holiday options, is organised by the
Association of Thai Travel Agents in February each year.
Tel: +66 2214 6175-8 ext 10, or visit www.atta.or.th
Sunday, May 18, 2014 9:53:17 PM
There are a number of other travel fairs and events held annually in Thailand
but most of them are focused on inbound travel. But there are also fairs and
other such events organised regularly by foreign NTOs as a marketing tool.
Switzerland, the Republic of Korea and Japan recently held different events in
shopping centres in Bangkok.
149
Chapter 7
Vietnam
Country Profile
Geography
Vietnam stretches down the east side of the peninsula of Indochina, with Lao
PDR and Cambodia to the West and the Gulf of Tonkin and the South China
Sea to the east. It also shares a border with China in the North. It is largely a
hilly, forested country, with two great river deltas the Red River in the North
and the Mekong in the South. With a land area of 331,210 km, Vietnam is a
medium-sized country, ranking 66th in the world.

background
The First Indo-China War effectively a war for independence from France
ended in 1954 with the partition of Vietnam into North and South. The Vietnam
War as much as anything else a proxy war between the United States of
America and the USSR and China ended in 1975 with the reunification of
Vietnam.
Sunday, May 18, 2014 9:53:17 PM
The Socialist Republic of Vietnam is now a single-party state, in which the

1992 constitution asserts the central role of the Communist Party of Vietnam in
all organs of government, politics and society. Formally, the elected
498-member National Assembly is the highest organ of state power. The
President is head of state and the Prime Minister is head of the government,
but the General Secretary of the Communist Party, through the Politburo,
controls party and state appointments and sets national policy.
All ministers are members of the National Assembly and the judiciary is
responsible to the National Assembly. All candidates for the National Assembly
must belong to the Communist Party or its affiliates. The system effectively
requires government by consensus within the confines of the Communist
Party.
Demographics
Population
The population of Vietnam in 2012 is estimated at 89.7 million, of whom

44.4 million (49.5%) are males and 45.3 million (50.5%) females. Note that
these figures come from the UN Department of Social Affairs world population
forecasts, 2010 Revision, medium variant, and differ slightly from those
quoted by the General Statistics Office of Vietnam (GSO) 87.8 million in 2011
and by the International Monetary Funds (IMF) World Economic Outlook.
150
Chapter 7 Vietnam
Table 7.1
Total
Male
Female
Vietnam: Total population, 2006-2012

( 1000)
2006
2007
2008
2009
2010
2011
2012
84,076
41,445
42,630
85,007
41,933
43,074
85,952
42,429
43,523
86,901
42,925
43,976
87,848
43,418
44,431
88,792
43,906
44,886
89,730
44,388
45,343
Source: Population Division of the UN Department of Economic and Social Affairs (UN DESA)
The total population grew by 1.1% a year in 2000-2010 and is forecast to grow
by 1.0% per annum in 2010-2015 and by 0.8% per annum in 2015-2020.
Other key indicators of Vietnams demographics include:
Sunday, May 18, 2014 9:53:17 PM
There were 24.4 million households in 2010, with an average of

3.6 persons per household.
The median age in 2010 was 28.2 years; it is forecast to rise to 30.5 years
in 2015 and 33.1 in 2020.
77.4 years for females), and is expected to rise to 76.5 years in 20152020.
The birth rate is 15.9 live births per 1,000 population, and the death rate is
5.2 per 1,000.
Total fertility (the number of children expected to be born to each female)
is 1.75, falling gradually.
Immigration and emigration are roughly balanced, with a modest net
outflow of 42,000 a year.
Vietnam is still a predominantly rural society. The 2009 Census defines
29.6% of the population as urban and 70.4% as rural.
GSO gives the working-age population (over 15) as 67.1 million in 2011.
Of these, 51.4 million (77%) were active, 50.4 million in employment and
1.0 million unemployed (1.9% of the active population), with a further 3.0%
under-employed.
The literacy rate is 93%. In 2010, 6% of the population over 15 had had no
schooling, while 37% had received at least some primary education, 41%
had completed secondary education and 16% had completed some
tertiary education (vocational, professional or college/university).
Vietnam is a very densely populated country: it ranks 66th among the worlds
countries by geographical size, but 13th by population, and much of the
population is concentrated in the Red River and Mekong River Deltas and on
the coastal plains. The government has sporadically tried to enforce a twochild policy for many years.
Regions and cities
151
Administratively, Vietnam is divided into 58 provinces and five municipalities

Hanoi, Ho Chi Minh City (Saigon), Haiphong, Da Nang and Can Tho, which are
effectively equivalent to provinces. For statistical purposes, these are grouped
into regions: roughly from North to South, North-east, North-west, Red River
Delta (including Hanoi), North-central Coast, Central Highlands, South-central
Coast, South-east (including Ho Chi Minh City) and Mekong River Delta. The
composition of these regions is shown in the table below.
Table 7.2
Vietnam: Regions and their provinces and municipalities, 2011
Regions
Provinces and Municipalities
Red River Delta
Hanoia, Vinh Phuc, Bac Ninh, Hai Durong, Haiphonga, Hung Yen,
Thai Binh, Ha Nam, Nan Dinh, Ninh Binh.
Quang Ninh, Ha Giang, Cao Bang, Bac Kan, Tuyen Quang, Lao Cai,
Yen Bai, Thai Nguyen, Lang Son, Bac Giang, Phu Tho.
Dien Bien, Lai Chau, Son La, Hoa Binh.
Thanh Hoa, Nghe An, Ha Tinh, Quang Binh, Quang Tri, Thua Thien Hue.
Da Nanga, Quang Nam, Quang Ngai, Binh Dinh, Phu Yen, Khanh Hoa,
Ninh Thuan, Binh Thuan.
Kon Tum, Gia Lai, Dak Lak, Dak Nong. Lam Dong.
Binh Phuoc, Tay Ninh, Binh Duong, Dong Nai, Ba Rja - Vung Tau,
Ho Chi Minha.
Long An, Tien Giang, Ben Tre, Tra Vinh, Vinh Long, Dong Thap, An Giang,
Kien Giang, Can Tho, Hau Giang, Can Thoa, Hau Giang, Soc Trang,
Bac Lieu, Ca Mau.
North-eastb
North-westb
North-central Coastc
South-central Coastc
Central Highlands
South-east
Mekong River Delta
a
b
Sunday, May 18, 2014 9:53:17 PM
Municipalities
The North-east and North-west are often combined as a single region, Northern Midlands and Mountains,
which also includes Quang Ninh from the Red River Delta.
c The North and South-central Coast are also often combined as a single region.
Source: General Statistics Office of Vietnam.
As always, the populations of the major cities can be defined in various ways.
According to the 2009 Census, the total populations of the great citymunicipalities were: Ho Chi Minh City 7.2 million, Hanoi 6.5 million, Haiphong
1.9 million, Can Tho 1.2 million and Da Nang 0.9 million. Their urban
populations (corresponding roughly to their more strictly defined city populations)
were 6.0, 2.6, 0.8, 0.8 and 0.8 million respectively. Bien Hoa, a big outlying
suburb of Ho Chi Minh City, has a population of 0.7 million. Buon Ma Thuot,
Hue and Thai Nguyen all have populations of about a third of a million.
Age distribution
According to the UN, 44% of Vietnams population were 0-24 years old in
people (0-24 years old) are declining and are expected to fall by a further 12%
by 2020. The numbers aged 25 to 54 are still growing quite rapidly (unlike in
Indonesia, Thailand and Singapore, for instance).
152
Chapter 7 Vietnam
Table 7.3
Vietnam: Distribution of the total population by age, 2010 and 2020
Age
% share
2010
2020
0-4
5-14
15-24
25-34
35-44
45-54
55-64
65-74
75-84
85
Total
8.2
15.4
20.4
17.5
14.5
11.5
6.5
3.4
2.1
0.5
100.0
6.8
14.6
13.9
18.2
15.6
12.9
9.9
5.2
2.1
0.7
100.0
% increase in 2020
over total in 2010
-9
4
-25
15
18
23
68
65
12
64
10
Source: UN DESA.
Vietnams population is still skewed by the effects of the Vietnam War, which
cost something between 1 and 4 million lives, and the post-war hardships,
when millions of boat people fled from Vietnam.
Sunday, May 18, 2014 9:53:17 PM
The 2009 Census found that, among the population of 85.8 million, 73.6 million
(85.8%) were Kinh (Viet), who live mainly in the great river deltas and coastal
plains. The remaining 12.2 million (14.2%) include the immigrant communities
and many indigenous minorities, including Hmong, Dao, Tay, Thai, and Nung,
many of whom live in the highlands and are collectively known as the
Montagnards.
There are believed to be over 4 million Vietnamese living abroad. About
3 million left in the aftermath of the Vietnam War, but many also emigrated in
colonial times and more recently, including many migrant labourers and
agency brides. About 450,000 Hoa (ethnic Chinese) left Vietnam when SinoVietnamese relations soured in 1978-1979. In addition, there are many people
of distant Vietnamese origin in neighbouring countries who no longer consider
themselves to be Vietnamese.
Among the 4 million overseas Vietnamese, about 1.8 million live in the United
States of America, 250,000 in France, 175,000 in Australia, 175,000 in
Canada, 150,000 in the Russian Federation and at least as many in
central/eastern Europe, and 140,000 in Germany. There are believed to be
about 600,000 in Cambodia, 150,000 in Lao PDR, 120,000 in Taiwan
(Province of China) and 120,000 in the Republic of Korea.
Language
The official national language, spoken by most of the population, is

Vietnamese, one of the Khmer group of languages. The indigenous minorities
speak their own distinct languages.
French is still spoken by some older Vietnamese as a second language, while
some middle-aged people can speak Russian or other eastern European
languages as a result of contacts with the former USSR. More recently English
has become the predominant second language, especially as it is now
compulsory in most schools.
Religion
153
The governments official position on religion is that all citizens are free in their
religious beliefs and that all religions are equal before the law. However, only
government-controlled religious organisations are allowed and the Roman
Catholic Church and Unified Buddhist Church of Vietnam, for instance, are
banned.
Official statistics tend to downplay the importance of religion in Vietnam.
According to the 2009 Census, 6.8 million (7.9% of the total population) are
practising Buddhists, 6.4 million (7.5%) are Christians (including 5.7 million
Catholics and 0.7 million Protestants), 1.4 million (1.7%) Hoa Hao and
0.8 million (0.9%) Cao Dai (Hoa Hao is a local form of Buddhism, and Cao Dai
a local, syncretistic religion teaching that all faiths are manifestations of the
same truth).
However, other surveys suggest that 85% of Vietnamese identify with
Buddhism, and that the great majority practise ancestor worship in some form
or that 80% of Vietnamese people do not believe in God.
Sunday, May 18, 2014 9:53:17 PM
Economic growth
The Vietnam War left the country very largely devastated and the attempt, after
the war, to impose Marxist Communism on the South, including the
collectivisation of farms and factories, was catastrophic, leading to social and
economic disruption, great hardships and extremely high inflation. In
December 1986 reformists took control of the government and began a
thoroughgoing reversal of policy, encouraging private enterprise and foreign
investment while retaining party control of politics and major enterprises.
Vietnam joined the Association of South-East Asian Nations (ASEAN) in 1995
and the World Trade Organization in 2007 and is increasingly integrated into
the globalised world economy.
This transformation is strongly reminiscent of the changes in China (in 2008
The Economist described both as led by ardently capitalist communists), and
has resulted in similarly high rates of economic growth. However, in Vietnam
the growth has sometimes strayed too far into unsustainable territory, leading
to high rates of inflation and sudden reversals in the economic climate.
Table 7.4
Vietnam: Key economic data, 2006-2011
GDP (VND trillion)

GDP (US$ billion)
Real GDP growth (%)
Employment ( 1000)a
Unemployment (%)
a
2006
2007
2008
2009
2010
2011
974
61
8.2
1,144
71
8.5
1,485
90
6.3
1,658
93
5.3
1,981
104
6.8
2,535
123
5.9
7.5
43,980
4.8
8.3
45,208
4.6
23.1
46,461
4.7
6.7
47,744
4.6
9.2
49,049
4.3
18.7
50,352
4.5
Data: General Statistics Office of Vietnam (2011 provisional).

154
Chapter 7 Vietnam
With inflation and debts among state-owned enterprises rising rapidly and
putting severe pressure on the banking system, the government changed
course in February 2011, tightening fiscal and monetary policies in order to
restrain growth and restore stability to the financial system. Later in the year it
announced a three-pillar reform programme tackling public investment, stateowned enterprises and the banking sector.
The reaction of the economy to the austerity policies was swift, and there was
a surge in private-sector bankruptcies in the first quarter of 2012. In the first
half of the year both economic growth and inflation moderated quickly: in the
first quarter, GDP increased by 4.0% (its lowest rate in three years), and by
June inflation had fallen to 6.9% (from a peak of 23% in August 2011). In
recent months the government has been cutting interest rates in order to
stimulate growth. However, the banking sector is still regarded as distressed.
In October 2012 the IMF forecast that inflation would average 8.1% in 2012
and fall further towards 5.0% over the next three years. It predicts an increase
in real GDP of 5.1% in 2012 and of 5.9%, 6.4% and 6.8% in 2013, 2014 and
2015.
In spite of the rapid growth achieved in recent years, Vietnam remains the
smallest and poorest economy among the five markets covered by this report
(although it has the second largest population: it ranks 13th in the world by
population and 58th by nominal GDP). In 2011, 48% of the workforce were still
employed in agriculture (22% were employed in industry and 30% in services).
Sunday, May 18, 2014 9:53:17 PM
Exchange rates
The Vietnamese Dong (VND), like many currencies in South-East Asia, has a
managed exchange rate: in recent years the State Bank of Vietnam has
generally tried to sustain a crawling peg against the US dollar and
neighbouring currencies, allowing for frequent small devaluations to
compensate for the higher inflation rate in Vietnam. However, since the
inflation rate fluctuated quite strongly, the real exchange rate also fluctuated.
This policy changed in August 2010: since then the State Bank has tried to
sustain a stable rate of exchange against the US dollar. There was a single
large devaluation in February 2011, when the dong fell from VND 19.51 to
VND 20.88 per US$. In September 2012 the dong was still trading at around
VND 20.83 per US$. However, markets report that the dong has come under
strong downwards pressure in 2009-2012, because a large current-account
deficit arose with the crisis in world trade in 2008-2009 and, more recently,
because investors have become wary of the quality of Vietnamese corporate
and bank debt.
Table 7.5
155
Vietnam: Key exchange rates, 2006-2011

(Vietnamese dong per listed currency)

EUR (Euro)
IDR (Indonesian rupiah)
JYP (Japanese yen)
KRW (Korean won)
RUB (Russian ruble)
THB (Thai baht)
GBP (British pound)
USD (US dollar)
2006
2007
2008
2009
2010
2011
12,032
14,085
2,003
20,052
2,056
1.75
137
16.73
4,355
311
588
10,055
491
422
29,417
15,973
13,406
14,925
2,107
21,927
2,051
1.76
136
17.25
4,664
347
627
10,636
488
496
32,069
16,042
13,849
15,385
2,363
24,005
2,107
1.71
160
15.06
4,915
369
659
11,577
520
497
30,180
16,400
14,014
15,625
2,613
24,773
2,302
1.72
191
13.98
5,056
375
562
12,253
540
519
27,818
17,843
17,537
18,519
2,817
25,298
2,455
2.09
218
16.50
5,928
423
628
14,000
605
602
29,477
19,073
21,263
20,833
3,190
28,681
2,647
2.35
259
18.60
6,738
476
702
16,392
701
676
33,043
20,606
Source: The Travel Business Partnership, based on Bank of Canada data
Sunday, May 18, 2014 9:53:17 PM
Spending power
Vietnams GDP per capita has increased by 38% in real terms since 2005 but,
at US$ 1,374 in 2011, it remains far below that in the other countries covered
in this report (US$ 49,300 in Singapore, US$ 10,100 in Malaysia, US$ 5,400 in
Thailand and US$ 3,500 in Indonesia) and, for instance, China (US$ 5,400).
Table 7.6
Vietnam: GDP per capita, 2006-2011
Dong ( 1000)
Real increase (%)
US$
at PPPsa (US$)
2006
2007
2008
2009
2010
2011
11,577
6.9
724
2,364
13,431
7.2
835
2,607
17,232
5.1
1,048
2,800
19,016
4.1
1,068
2,945
22,445
5.5
1,174
3,143
28,382
4.6
1,374
3,359

The incidence of poverty (using the national poverty line, a very modest
definition per capita monthly income in the household below 480,000 dongs
(US$ 23) in rural areas and 600,000 dongs (US$ 29) in urban areas in 2011)
has fallen sharply in recent years, from 37.4% in 1998 to 15.5% in 2006 and
12.6% in 2011.
Conventional measures of income distribution show relatively high levels of
income inequality in Vietnam. The CIA Factbook, for instance, ranks Vietnam,
with a Gini coefficient of 37.6 in 2007, 74th in the world, with little improvement
over the previous ten years. However, as a country with many elements of
communist policy still in place, conventional measures of inequality may
require qualification.
The GSOs Household Living Standards Survey 2010 found that 1.3% of
households had a car, 75.4% a motorcycle, 41.5% a refrigerator, 76.3% a
156
Chapter 7 Vietnam
telephone and 87.8% a computer. 97.2% of households were connected to the

electricity grid.
At the top end of the scale are the high net worth individuals (HNWIs)
persons owning investable assets of US$ 1 million or more, excluding their
primary residence, collectibles and consumer goods. The usual source on
these is the annual Cap Gemini/Merrill Lynch Asia Pacific Wealth Reports, but
these do not quote, in their publicly available versions, figures for Vietnam.
However, they regularly cite Vietnam as having one of the worlds fastest
growing populations of HNWIs. They ascribe about 0.1% of Asia Pacifics
HNWI wealth to Vietnam, suggesting an HNWI population in the order of 3,000
a small number by comparison with the other markets covered by this report.
The following table shows population, average monthly incomes and incidence
of poverty in rural and urban areas, and by region, in Vietnam, as indicators of
their relative importance as markets. Note the relative affluence of the Southeast region, which includes Ho Chi Minh City (HCMC).
Sunday, May 18, 2014 9:53:17 PM
Table 7.7
Vietnam: Population, incomes and poverty by residence and region, 2010/11

Population
( 1000)
2011
Incomesa
(VND 1000)
2010
(US$)
2010
AAGRb (%)
1999-2010
Povertyc
(%)
2011
Vietnam
87,840
1,387
73
7.8
12.6
By residence
Urban
Rural
25,437
60,410
2,130
1,071
112
56
6.5
7.9
5.1
15.9
By region
Red River Delta
19,999
11,291
North-east and North-westd
North and South Central Coasts 19,047
Central Highlands
5,282
South-east
14,891
Mekong River Delta
17,331
1,581
905
1,018
1,088
2,304
1,247
83
47
53
57
121
65
9.5
7.5
7.3
4.0
6.3
5.3
7.1
26.7
18.5
20.3
1.7
11.6
a
b
c
Average monthly per capita income in the household.

Average annual growth rate 1999-2010, adjusted by the national average consumer prices inflation.
% of households with average monthly per capital incomes below the national poverty line
(VND 480,000 for rural areas and VND 600,000 for urban areas in 2011).
d Including Quang Ninh. See above under Regions and cities for the composition of the regions.
Source: Travel Business Partnership, from data from General Statistics Office of Vietnam.
Tourism Policy
Competitiveness
Vietnam is probably the least competitive nation in terms of travel and tourism
of all the ASEAN member countries. It ranked 14th regionally and 80th
worldwide (up, nevertheless, nine positions since 2009), in the World
Economic Forums (WEF) 2011 Travel and Tourism Competitiveness rankings.
Important indicators, as far as outbound travel is concerned, include its lowly
85th position for air transport infrastructure, and 107th place in terms of the
governments prioritisation of travel and tourism.
157
The policy environment policy rules and regulations is assessed as only

relatively conducive to the development of the sector (ranked 67th).
The Vietnam National Administration of Tourism (VNAT) is the government
agency responsible for managing and controlling tourism operations and
activities throughout Vietnam. It has full control in terms of business
development, planning, public relations, personnel training, conducting
research, instructing and inspecting the implementation of policies and other
regulations in the tourism sector outbound as well as inbound and domestic.
Taxes and regulations
Airport departure tax in Vietnam is US$ 2 for domestic flights and US$ 14 for
international flights, but it has been included in the price of the airfare since
2007.
According to the Vietnam Tourism Association, the national Tourism Law has
concentrated on the management of inbound tours, while maintaining only
loose control over outbound tours the channel through which, it is believed,
foreign currency has been flowing out of Vietnam. The trade is now lobbying
for outbound tourism to be considered as an important segment of the tourism
industry not only to bring more benefits to tourists, but also ensure fairness
for firms.
Sunday, May 18, 2014 9:53:17 PM
By way of example, tour operator package tours are required to have at least
three guides. However, these guides generally do not have long-term
employment contracts and are not vetted sufficiently, raising questions about
their professionalism.
In 2009, in line with World Trade Organization legislation, VNAT decided to
allow joint ventures between local and foreign investors to offer outbound tour
services. Until then, foreign travel firms could only bring foreign tourists to
Vietnam, while outbound tourism services were restricted to Vietnamese tour
operators.
Passports
E-passports have been issued in Vietnam since 2011. For the initial 24
months, from January 2011 to December 2012, e-passports are being issued
only inside Vietnam. In the second phase, from January 2013 to December
2014, Vietnams representative agencies abroad will also be able to issue
e-passports and checkpoints will be set up at border gates to inspect
e-passports.
Visas
Vietnamese passport holders have limited visa-free travel to western and other
countries. They enjoy 30 days visa-free entry to other ASEAN member
countries (Singapore, Thailand, Malaysia, Cambodia, Lao PDR, Indonesia and
the Philippines). They can enter Taiwan (Province of China) and a number of
other countries in Asia Pacific and further afield visa free for 30 days if holding
a valid visa for Australia, Canada, Japan, New Zealand, the Schengen
countries, the United Kingdom or United States of America.
Insurance
There is currently some concern about the fact that when some tour operators
take out insurance policies for outbound travellers, they try to cut costs by
purchasing only minimal services, which offer very low compensation rates in
158
Chapter 7 Vietnam
the case of accident and, since there is no enforcement, they rarely quote
actual compensation levels.
Holiday entitlement
14 days annual leave plus the following public holidays in 2012:

1-2 January, 22-26 January (Chinese New Year), 3 February (Foundation
Day), 6 February (Lantern Festival), 2 April (Hung Kings Commemoration),
28 April (Buddhas Anniversary), 30 April (Reunification Day), 1 May (Labour
Day), 7 May (Victory Day), 27 July (Remembrance Day), 19 August
(Revolution), 30 August (Ghost Festival), 3 September (National Day),
3 October (mid-Autumn Festival), 10 October (Capital Liberation Day),
20 October (Womens Day), 20 November (Teacher Day), 22 December
(Defenders Day), 25 December (Christmas).
Sunday, May 18, 2014 9:53:17 PM
Overview
Although official statistics are not available, anecdotal evidence suggests that
demand for travel among Vietnamese has risen very sharply in the last
decade, driven largely by increasingly attractive package tour prices in
neighbouring South-East Asian destinations. The share of domestic trips has
also been declining in favour of outbound travel due to the higher cost of a
holiday in their own country.
Tour operators nevertheless claim that it is getting harder to sell package tours
and long-haul tours due to the tough economy. Tourists are showing a
preference for independently organised short-haul tours rather than using the
services of a travel agent.
Domestic travel
VNAT has set a 2015 target of 36-37 million domestic tourists, generating
US$ 10-11 billion, and creating as many as 2.2 million jobs. By 2020, the total
could reach 47-48 million, VNAT says, representing an average yearly growth
rate of 11-12% over the five-year period.
Based on a survey of results for 20 leading tour operators in Ho Chi Minh City
(HCMC), the domestic travel segment was reported to be up 10% year on year
in the first four months of 2012 i.e. by Reunification Day and International
Labour Day while the bookings for outbound tours were said to have
increased by 30% over the same period in 2011. However, some domestic
destinations have suffered a decline in demand. As an example, the number of
bookings of air packages from HCMC to the central and northern regions of the
country, such as Hoi An, Da Nang and Hanoi, has fallen by as much as 40%
from their peak.
In an effort to woo back domestic tourists, domestic package tour prices have
been reduced to make them more competitive with outbound tours.
Outbound travel
Estimates from different semi-official sources suggest that outbound trip

volume has risen more than tenfold in the last decade (+20.5% per annum)
from a mere 271,000 in 2001 to around 1.7 million in 2011. Thanks to higher
standards of living, increasing disposable incomes, easier access to air travel
159
and low-cost airlines (LCCs) not to mention growing consumer confidence

Vietnamese are taking to outbound tourism like ducks to water.
Table 7.8
Vietnam: Outbound overnight trips, 2006-2011

2006
2007
2008
2009
2010
2011
Total tripsa ( 1000)

% change
798
29.1
1,192
49.4
1,497
25.6
1,558
4.1
1,851
18.8
1,843
-0.4
Out-of-region tripsb
% change
281
10.6
303
7.8
420
38.6
369
-12.1
430
16.5
384
-10.7
a
b
Cumulative arrivals around the world from Vietnam.

Arrivals in destinations outside South and South-East Asia.
Not surprisingly, the annual growth in outbound trips has slipped in the past five
years, but is still estimated at over 16% per annum. This average nevertheless
masks quite sharp fluctuations from one year to another, falling to 6.4% in
2008 and down again in 2009 to 4.3%. But the impact of the global economic
crisis seems to be over, with strong double-digit growth resuming in 2010.
Sunday, May 18, 2014 9:53:17 PM
One of the main drivers of outbound tourism demand in 2011 was the fall in
prices for international flights to some destinations in Asia by LCCs. It enabled
tour operators to package foreign tours more cheaply than domestic holidays.
Travel expenditure
According to the World Travel & Tourism Councils (WTTC) 2012 research,
domestic travel and tourism generated 51.9% of direct travel and tourism GDP
in 2011, as against 48.1% for visitor exports (outbound tourism expenditure). It
is expected to rise by 5.7% in 2012 to VND 103,277 billion (US$ 5 billion) and
by 6.2% per annum from 2012 to 2022, to VND 188,633 billion
(US$ 9.15 billion) in 2011 nominal prices).
Official statistics from the GSO point to a daily spend of VND 978,800
(US$ 47.46) on domestic tourism. Accommodation, food and transport account
for the highest shares of expenditure each between 22% and 23% of the
total.
160
Chapter 7 Vietnam
Table 7.9
Vietnam: Expenditure of domestic visitors, 2003-2011

( 1000 dong)
2005
2007
2009
2011a
Average expenditure per day per visitor

Accommodation
104.2
110.3
Food
68.5
88.6
Transport
125.0
162.0
Sightseeing
20.7
19.7
Shopping
66.6
75.7
Health
2.4
4.6
Others
52.1
45.3
Total
439.5
506.2
137.7
97.8
175.1
20.0
71.0
3.7
45.5
550.8
171.0
166.0
171.9
38.6
97.4
6.0
52.5
703.4
227.6
231.1
216.3
52.0
133.1
15.5
103.2
978.8
Breakdown (%)
Accommodation
Food
Transport
Sightseeing
Shopping
Health
Others
Total
25.0
17.8
31.7
3.6
12.9
0.7
8.3
100.0
24.3
23.6
24.4
5.5
13.8
0.9
7.5
100.0
23.3
23.6
22.1
5.3
13.6
1.6
10.5
100.0
2003
23.7
15.6
28.4
4.7
15.2
0.5
11.9
100.0
21.8
17.5
32.0
3.9
15.0
0.9
8.9
100.0
Sunday, May 18, 2014 9:53:17 PM
Provisional.
GSO statistics suggest that international travel expenditure by Vietnamese

reached US$ 1.7 billion in 2011. It increased by an average of 7% a year in
2006-2011, falling only in 2009. Average spending per trip has fluctuated
sharply over the period but the general trend has been downwards as more
Vietnamese from less socially and economically advantaged families start to
travel abroad. In 2011, the average spend was an estimated US$ 928, down
from its peak of US$ 1,315 in 2007.
By way of comparison, WTTC research puts the total spending abroad on
international travel and tourism at almost double the official count
US$ 3.3 billion in 2011 (VND 67,910 billion). Its forecast is for this to rise
(in real terms) by 8.8% in 2012 and by 6.4% per annum from 2012 to 2022.
Table 7.10 Vietnam: International travel expenditure, 2006-2011

2006
2007
2008
2009
2010
2011
Total (US$ million)

% change
1,050
16.7
1,220
16.2
1,300
6.6
1,100
-15.4
1,470
33.6
1,710
16.3
Spend per trip (US$)

% change
1,315
na
1,023
-22.2
868
-15.2
706
-18.7
798
13.0
928
16.3
Sources: UNWTO and General Statistics Office of Vietnam.
161
Destination regions
Around one quarter of all trips (384,000, or 22%, in 2011, as against 27%, or
430,000, in 2010) are for destinations outside the South-East and South Asian
regions, but no breakdown by continent is available. Tourism Australia says
that Australia accounts for less than 2% of trip volume, although its share of
spending is likely to be much higher given the Vietnamese high average length
of stay in the country.
China is Vietnams most popular tourism destination, attracting some 1 million

Vietnamese arrivals in 2011 and almost half of all Vietnamese visitors
spending abroad. In second place is neighbouring Cambodia (614,000
visitors), which has grown an impressive 50% per year between 2005 and
2011, and undertakes aggressive promotional activities to stimulate demand,
as well as organising joint cultural events. Bus tours to Cambodia take only
three hours and can cost as little as VND 200,000 (US$ 27). This is attractive
to many Vietnamese who go to Cambodia for gambling in one of the several
casinos near the border between the two countries.
Sunday, May 18, 2014 9:53:17 PM
Lao PDR (562,000 visitors), Thailand (515,000), and Singapore (332,000) take
3rd to 5th positions in the overall destination ranking. All of them work closely
with outbound tour operators, providing support for their promotions. Large
numbers of Vietnamese also travel to Singapore for medical treatment or
study.
The surge in the number of Vietnamese taking outbound trips to Hong Kong
(China) over the past few years has also prompted the Hong Kong Tourism
Board to step up promotions in Vietnam, with plans to open representation in
the country at the end of 2012. The situation is similar with the Republic of
Korea.
Relatively few countries outside Asia and Oceania report arrivals from Vietnam
and almost none of the major destinations in Europe. The following table
shows arrivals as reported to UNWTO, by various measures. Where several
measures were available, the preferred measure quoted is TFr (overnight
tourists by country of residence), or the measure likely to be closest to that.
The Russian Federation is the most visited destination outside Asia Pacific
(50,000), although most Vietnamese travel to the country is to the Far Eastern
and Central regions of Russian Federation. The United States of America
ranks in 2nd place with 46,000 arrivals from Vietnam in 2010.
A recent report from the Munich Tourist Office suggests that Vietnamese travel
to Europe is growing strongly from a low base. Munich reportedly saw a
double-digit rise in demand from Vietnam (direct air access is believed to have
been a significant factor) and is stepping up promotions in the country as a
result.
162
Chapter 7 Vietnam
Table 7.11 Vietnam: Arrivals in selected destinations, 2000-2011

( 1000)
Destination
Seriesa
2000
2005
2006
2007
2008
2009
2010
2011
change (%)
Sunday, May 18, 2014 9:53:17 PM
'10/'09
China
Cambodia
Lao PDR
Thailand
Singapore
Malaysia
Republic of Korea
Hong Kong (China)
Japan
Indonesia
Australia
Philippines
Macao (China)
India
Myanmar
Brunei Darussalam
New Zealand
To other regions
Russian Federation
Canada
Angola
Ukraine
South Africa
Belgium
Bulgaria
Egypt
Poland
Israel
a
VFn
TFr
VFn
TFr
VFr
TFr
VFn
VFr
VFn
TFr
VFr
TFr
VFr
TFn
TFn
TFn
VFr
82
8
69
57
32
8
21
20
10
..
9
4
5
1
..
..
1
201
50
165
195
151
53
45
23
22
10
14
10
12
3
..
..
2
334
78
190
252
165
64
46
44
26
9
19
10
23
3
..
..
2
654
125
291
254
203
120
60
58
32
10
27
11
47
4
1
1
2
744
210
351
356
239
123
76
69
35
12
33
14
52
5
1
..
2
829
316
297
382
265
150
76
77
34
14
35
13
62
6
2
0
2
VFn
TFr
TFr
TFr
TFr
TFr
TCEr
VFr
VFn
TCEr
TFr
15
9
3
0
6
..
1
3
..
1
0
37
19
4
1
3
..
2
2
1
1
0
37
24
4
1
4
..
2
2
..
2
0
38
37
5
1
4
..
1
2
2
1
1
60
44
5
3
5
..
1
3
2
1
1
41
40
6
2
4
1
2
3
2
2
1
920 1,006
514
614
431
562
397
515
323
332
159
174
90
106
102
80
42
41
28
37
37
34
17
18
48
11
7
10
6
..
3
3
3
3
51
46
7
4
4
3
2
2
2
2
1
Source: UNWTO.
..
47
7
5
4
4
2
2
2
2
2
AAGR
(%)b
'11/'10 2005-2011
11.0
62.6
45.2
4.1
21.7
6.4
18.7
33.1
22.3
95.0
6.6
29.3
-22.4
33.7
200.9
3784
16.9
9.4
19.4
30.3
29.5
2.9
9.1
17.0
-21.6
-1.9
30.9
-8.9
2.7
-76.5
31.5
..
-8.6
5.3
30.8
52.1
22.6
17.5
14.1
22.1
15.1
23.4
10.8
24.9
15.2
10.3
-1.0
19.4
..
..
10.6
24.5
13.6
16.0
111.0
17.8
159.2
27.5
-4.6
26.9
-2.7
24.8
..
2.0
11.0
25.2
2.2
16.0
5.9
-9.8
-13.0
-6.1
21.9
6.3
16.0
12.2
26.6
9.6
..
6.4
-1.6
13.1
4.0
38.0
163

Purpose of travel
Over the past five years, leisure travel has grown much faster than business
travel, resulting in an increase in the ratio of leisure to business trips from
53:47 in 2006 to 60:40 in 2011. Organised tour groups accounted for the
highest proportion of these departures.
Visits to friends and relatives (VFR travel) are clearly a very important motive
for travel to many destinations, including the United States of America and
several European countries, which count large numbers of immigrant overseas
Vietnamese. However, the exact VFR share is not identifiable from official
source data.
Table 7.12 Vietnam: Outbound departuresa by purpose of trip, 2006-2011
Departures ( 1000)
Business
Leisure
Total
Breakdown (%)
Business
Leisure
Total
2006
2007
2008
2009
2010
2011
476
536
1,012
482
732
1,214
505
787
1,292
527
820
1,347
610
959
1,569
677
1,068
1,745
47
53
100
40
60
100
39
61
100
39
61
100
39
61
100
39
61
100
Sunday, May 18, 2014 9:53:17 PM
The totals are not the official figures for outbound trip volume.
Mode of transport
Air travel continues to be the favourite mode of transport for Vietnamese to

travel abroad, accounting for an estimated 79% of all trips in 2011, according
to Euromonitor research, as against 18% for land travel, 1% for rail and 2% for
sea transport. The popularity of air travel is partly due to the growth of more
affordable flights from LCCs, but also to the expensive prices of sea trips. In
addition, there are no direct rail connections between Vietnam and other
South-East Asian countries. Air travel is also favoured by Vietnamese because
it can save a lot of time compared with the other modes of transport.
The exception in mode of transport concerns departures to Cambodia. Most
tourists, especially those residing in the southern part of Vietnam, prefer to
travel to Cambodia by bus rather than by air because of the cheaper prices. In
2011, more travel agencies organised bus tours to Cambodia in response to
rising demand from Vietnamese.
Nature and age of

travellers
Organised tour groups account for 80% of leisure departures which, in turn,
account for 61% of total outbound trip volume. Vietnamese like tour operators
to take care of everything on their trips, even procedures to get a visa. The
majority also have limited communication skills in English, and so it is difficult
for them to go on backpacking tours. However, the proportion of individual
travellers in organised leisure tour groups slipped in 2011, while the share of
families and couples increased. This was due to the rising number of young
Vietnamese travellers, who can generally speak better English, which allows
them more freedom in choosing independent travel.
164
Chapter 7 Vietnam
Only 3% of outbound business travellers were involved in MICE travel events.

It should be noted that the costs and fees for conferences or conferences in
other countries are much higher than those in Vietnam.
Vietnamese people often take advantage of time on business trips for leisure
side trips, normally from two to three days. They spend time buying gifts for
family and friends and visiting attractions in the destination. The majority of
single outbound business tourists set up their trip schedules by themselves or
through their companies, without involving tour agencies. They often choose
low-cost airlines to travel to nearby destinations such as Singapore, Thailand
or Malaysia. On the other hand, business-class flights are preferred for longhaul trips to Europe or the United States of America due to their high service
quality and safety.
Travel companions
Vietnamese do not seem to have a particular preference for travelling as singles,

in couples, with families or friends. However, long-haul travel is much more
likely to involve couples or family groups, especially for those on VFR trips.
leisure trips
Vietnamese travel abroad to experience new landscapes, cultures and

cuisines. Ease of access to other ASEAN member countries, especially the
lack of visa restrictions, explains the rapid growth in demand for these
destinations. But more affluent socio-economic groups also aspire to visit
Europe and other long-haul destinations for cultural and educational reasons.
Sunday, May 18, 2014 9:53:17 PM
Cash remains the most popular method of payment while abroad, accounting
for 59% of total tourist expenditure outside Vietnam in 2011, followed by credit
cards with a 39% share. The popularity of cash is due to the Vietnamese habit
of using cash in their daily lives, according to Euromonitor. But, thanks to the
development of the financial system in the country, credit cards are seen as
much more convenient.
Table 7.13 Vietnam: Breakdown of payment methods for tourism spending abroad, 2007-2011
(% of total value)
Cash
Charge card
Credit card
Debit card
Prepaid cards
Travellers cheques
Total
2007
2008
2009
2010
2011
65.0
32.0
1.0
2.0
62.1
33.8
1.7
2.3
60.1
36.1
1.5
2.3
58.8
38.9
1.8
0.5
58.5
39.1
1.9
0.5
100.0
100.0
100.0
100.0
100.0
Length of stay
Length of stay varies according to destination. The average length of stay for
short-stay tours is around 4 nights. But longer-haul premium destination
packages tend to range from a minimum 7 nights up to 12 nights or even
longer.
165
Travel frequency
Travel frequency is still fairly low the majority of Vietnamese who travel would
not be able to consider more than one main trip a year for leisure purposes
although short breaks by LCCs are becoming increasingly attractive and
frequent due to their attractive cost.
Seasonality
The most popular times for travel are during the summer season, most
prominently over the government holidays especially over the Reunification
and Labour Days in April/May, which in 2012 showed a 30% increase in
outbound trips and a 10% increase in domestic trips.
Catering for Vietnamese

travellers
Two important characteristics of Vietnamese culture are humanity (nhn ngha)

and harmony (ha) and, in line with these, Vietnamese strongly respect, and
try to adhere to, family and community values. The cultural life of Vietnam has
been deeply influenced by government-controlled media and cultural
programmes. For many decades, foreign cultural influences were shunned,
and emphasis was placed on appreciating and sharing the culture of
communist nations such as the Soviet Union, China, and Cuba. However,
since the 1990s, Vietnamese people have been much more exposed to SouthEast Asian, European and American culture and media. As a result they are a
lot less susceptible to what might appear to be sensitive issues than many of
their neighbours.
Sunday, May 18, 2014 9:53:17 PM

Information sources
As might be expected, Vietnamese remain fairly traditional when it comes to

sourcing information about travel possibilities, depending heavily on face-toface contact with travel agencies. But world of mouth from family and friends
and the Internet are increasingly important.

booking
While the Internet is growing as a tool for research into travel options i.e. for
looking booking is still largely made through face-to-face contact with
traditional travel agencies.
Traditional media
Vietnam Television (VTV) operates nine channels through a network of

provincial and municipal TV stations (plus cable and satellite services), while
the national radio broadcaster, Voice of Vietnam, broadcasts on 6 channels
and is repeated on AM, FM and shortwave stations throughout Vietnam. The
government controls broadcast services through the Ministry of Information
and Communication (MIC). Access to satellite TV is limited by law, but in
practice many households can access foreign programmes via home satellite
equipment.
The best-selling daily newspapers are reported to be Tuoi Tre and Thanh Nien,
which are run by Communist Party youth organisations. Others include Nhan
Dan (the Communist Party daily) Sai Gon Giai Phong (Liberated Saigon, the
Communist Party daily in Ho Chi Minh City), Nguoi Lao Dong (The Working
Man), Tien Phong (Vanguard), Ha noi moi (New Hanoi), Vietnam Economic
Times (with English-language pages), Saigon Eco and Le Courrier du Vietnam
(in French) and Vietnam News (in English). The Saigon Times is a business
166
Chapter 7 Vietnam
weekly. Many newspapers and magazines have English and/or French pages
and websites. There are also many provincial newspapers.
The Vietnam News Agency and VietNamNet are news services run by the
Ministry of Information.
Hundreds of magazines are published in Vietnam, including local editions of
many leading international titles. These include womens fashion- and gossipfocused publications such as Elle (the equivalent of Vogue in Vietnam).
New media and

communications
Vietnam in December 2011, representing 33.7% of the population (compared
Table 7.14 Vietnam: Telephone subscriptions, 2006-2011

( 1000)
Fixed
Mobile
Total
2006
2007
2008
2009
2010
2011a
8,769
19,748
28,517
11,308
40,410
51,718
14,108
67,231
81,339
15,664
109,947
125,611
15,483
112,690
128,173
15,325
117,640
132,965
Sunday, May 18, 2014 9:53:17 PM
Provisional.
The International Telecommunications Union reports that, in 2011, Vietnam

and 127.3 million mobile telephone subscriptions (143.4% per 100 inhabitants
a very high number in relation to per capita GDP). There were 3.8 million
wired broadband subscriptions, representing 4.3 per 100 inhabitants.
The Internet search engines and social media commonly used in the West
are blocked or discouraged in Vietnam. Nevertheless, Internet World Stats
reports the number of Facebook users at the end of March 2012 at 3.2 million
(though this is just 10.3% of Internet users). Local social websites include
Zing Me (www.me-zing.vn), www.Go.vn, www.phuot.vn, www.ttvnol.com and
www.dulichbui.org.
The World Bank notes that 9-10% of Vietnams GDP has been invested in
transport, telecommunications, energy, water and sanitation over the last
15 years a very high level of infrastructure investment by international
standards making a significant contribution to the countrys economic
success in recent years. However, the standards of infrastructure still fall short
of what might be desired by domestic and international travellers.
167
Table 7.15 Vietnam: Domestic passenger traffic by mode of transport, 2006-2011

2006
2007
2008
2009
2010
2011
1,494
12
1,332
143
7
1,638
12
1,473
145
9
1,794
11
1,629
143
10
1,934
11
1,761
151
11
2,194
11
2,011
158
14
2,527
12
2,327
173
16
Passenger traffic (million passenger-km)

Total
63,909
71,865
Rail
4,334
4,660
Road
43,569
49,372
Inland waterway
3,189
3,151
12,817
14,682
Airb
78,180
4,560
54,221
3,246
16,152
85,203
4,138
61,509
3,048
16,508
97,932
4,378
69,197
3,195
21,162
110,392
4,569
78,747
3,600
23,476
Passengers (million)
Total
Rail
Road
Inland waterway
Airb
a
b
Sunday, May 18, 2014 9:53:17 PM
Provisional.
On Vietnam-registered airlines only.
Seaports
Vietnam has at least a dozen seaports that cruise ships can use as a port of
call. From the North to the South of the country, ports open to international
cruise ships are Cai Lan Port in Ha Long Bay (in Hong Gai or Haiphong), Vinh,
Hue, Da Nang, Quy Nhon, Nha Trang, Cam Ranh, Ho Chi Minh City, Can Tho
and Long Xuyen. Ho Chi Minh City (HCMC) is the busiest international cruise
port; Cai Lan Port was the first to open a dedicated cruise terminal, in 2009.
Highways and waterways
Vietnam reports that, in 2009, it had over 180,000 km of roads (of which
88,000 km were paved). The government plans to complete 6,000 km of
motorway by 2020.
The country also had 17,700 km of waterways in 2011, of which 5,000 km are
navigable by vessels with draughts of up to 1.8 m. They are extensively used
by ferries, barges and water taxis.
Railways
The CIA Factbook reports that, in 2008, Vietnam had 2,632 km of railways
(four-fifths of metre gauge and one-fifth standard gauge). The principal crosscountry line is the Reunification Express, which runs 2,000 km from HCMC to
Hanoi. There are also lines from Hanoi, running East (to Ha Long Bay), Northwest (to Lao Cai) and North (to Thai Nguyen).
Plans to build a new high-speed line from Hanoi to HCMC, with 24
intermediate stations and extensions northwards to Lao Cai and Lang Song,
seem to have been put on hold because of their high cost. China has also
been talking about a high-speed line linking Guanxi province with Hanoi and,
eventually, Singapore, running via Nanning, Pingxiang and Lang Song.
The CIA Factbook indicates that Vietnam has a total of 44 airports, of which:
37 have paved runways (9 with runways of over 3,047 m in length, 6 with
runways of 2,438-3,047 m, 13 of 1,524-2,437 m and 9 of 914-1,523 m.
168
Chapter 7 Vietnam
According to various reports, Vietnam operates between 17 and 23 civil

airports, including three international gateways: Than Son Nhat (Saigon) in
HCMC, Noi Bai in Hanoi and Da Nang. A government-approved plan indicates
that Vietnam will have 10 international airports by 2015 the three mentioned
above, plus Lien Khuong, Phu Bai, Cam Ranh, Phu Quoc, Cat Bi, Can Tho and
Long Thanh (the new airport for HCMC).
The principal international airports are:
Sunday, May 18, 2014 9:53:17 PM
Than Son Nhat Airport (SGN) in HCMC was modernised and expanded in
2008. The airport has a total capacity for 15-17 million passengers. This
capacity will be reached this year and services will be constrained until the
new airport for HCMC in Long Thanh (50 km North-east of the city) is
opened. The new airport will be built from 2015 to 2035: the first phase will
cost US$ 6.74 billion and is due for completion in 2020 with a capacity of
25 million passengers. In the long term, the new airport will be able to
handle up to 100 million passengers a year. The intention is that Than Son
Nhat will be retained as a domestic airport.
Noi Bai Airport (HAN) in Hanoi has a capacity for 6 million passengers. It is
already seriously overcrowded, handling over 10 million passengers a
year. A second terminal is being built, but progress has been slow: it is
reported that it is unlikely to be completed before 2017. The airport will
then see its capacity increase to 20-25 million passengers a year. In the
long term, the airport is intended to handle up to 45 million passengers.
Da Nang International (DAD), Vietnams third largest airport, has limited
international services to Kuala Lumpur, Singapore, China, Macao (China)
and Seoul. Services to Lao PDR have been announced and there are
plans to revive direct services to Bangkok and Hong Kong (China). A new
terminal was opened at the end of 2011 with a capacity of 4.5 million
passengers a year. Da Nang handled 3.0 million passengers in 2011 and
expects 3.5 million in 2012. The second phase for the new terminal will
raise capacity to 6.5 million passengers.
New terminals were opened in Nha Trang and Dalat in 2009, raising capacity
to 1.5-2.0 million passengers a year. Phu Quoc Island international airport is
scheduled to be put into operation by the end of 2012. It will be able to handle
about 2.5 million passengers per annum, but the maximum capacity is
expected to be as high as 7 million passengers a year.
Table 7.16 Vietnam: Air passenger traffic through the principal airports
( 1000)
Airport
Ho Chi Minh City
Hanoi
Da Nang
Cam Ranh/Nha Trang
Hue-Phu Bai
Haiphong
Vinh
Phu Quoc
Passengers
16,668
9,500
3,000
800
500
374
255
200
Reference year
2011
2010
2011
2010
2010
2009
2009
2009
Sources: Vietnams Civil Aviation Authority (CAAV); Southern Airports Corporation; individual airports.
169
In February 2012, the Minister of Transport signed a decree establishing the

Airports Corporation of Vietnam (ACV), merging the Northern, Middle and
Southern Airports Corporations. ACV will operate as a state-owned limitedliability company.
Air Transport
Air transport is important to Vietnam because of the poor conditions for road
and rail. The elongated shape of the country and the extensive mountainous
areas make air transport the fastest mode of transport and the most efficient
way to travel around the country, and rising standards of living are making this
a viable proposition. Aviation is one of the governments top development
priorities.
There is some doubt as to the numbers of airline passengers in Vietnam:
various statistics and estimates are available. According to the General
Statistics Office of Vietnam (see table 7.15), the total reached 15.6 million in
2011, up by 10% over 2010 and by an average of 12% a year over the 2.4
million in 1995. These figures seem to include only the passengers of airlines
registered in Vietnam.
Sunday, May 18, 2014 9:53:17 PM
However, a study from the International Air Transport Association (IATA) on

the impact of liberalisation on Vietnamese air transport indicates that, in 2007,
total air passenger traffic in Vietnam was approximately 12.5 million
passengers, of which 8.2 million (66%) was international traffic. (These figures
were attributed to IATAs PaxIS Passenger Traffic Data.) For the same year,
the GSO gives a figure of only 8.9 million. A study from the United Kingdom
Trade and Investment Board on Vietnams airports, meanwhile, mentions that
the country recorded 21 million international inbound passengers and 10.7
million outbound in 2010. The study predicted that total passengers through
Vietnamese airports would reach or slightly surpass 40 million by 2014.
The latest data available data from the Vietnamese e-news agency
VietNamNet, published in January 2011 and quoting the Vietnamese Civil
Aviation Authority (CAAV), stated that over 50 Vietnamese and foreign airlines
transported 23.7 million passengers on their flights to, from and within Vietnam
last year, an increase of 12.3% over the year before. Passengers on
Vietnamese carriers reached 16.6 million, but no official breakdown is available
with regard international versus domestic routes.
Table 7.17 Vietnam: Total air passenger traffic, 2005-2011
Passengers ( 1000)
% growth
2005
2006
2007
2008
2009
2010
2011
14,600
na
16,300
11.6
17,000
4.3
18,000
5.9
19,000
5.6
21,000
10.5
23,700
12.9
Sources: VietNamNet (VNA), from Vietnamese Civil Aviation Authority (CAAV).
Vietnamese airlines
Vietnam Airlines, the state-owned national airline, has a share of over 70% of
the domestic market and (based on the monthly seat capacities reported by
SRS Analyser for June and October 2012) 40% for international services. It
170
Chapter 7 Vietnam
serves 47 international and 38 domestic destinations and became a member of

SkyTeam in 2010.
Early in 2012, the airline asked the Ministry of Transportation for an additional
64 aircraft to be added to its development plan: it wants to increase its fleet
from its present 75 aircraft to 112 by 2015 and 171 by 2020. Only last year, the
government had approved a plan for 85 aircraft by 2015 and 107 by 2020.
Vietnam Airlines says it is asking for the plan to be revised in order to expand
its routes, both domestic and international.
The Vietnam Airlines system includes 18 subsidiaries and 14 joint ventures. In
July 2012 the Ministry of Transport unveiled plans to restructure the group over
the next eight years: it will have four aviation service companies, 15 other
subsidiaries and 12 joint ventures. Vietnam Air also has a 49% share in
Cambodia Angkor Air, which was formed in 2009.
Table 7.18 Passengers carried on Vietnamese airlines, 2011

( 1000)
Vietnam Airlinesa
Jetstar Pacificb
Air Mekong
Vietjetc
Total
Domestic
International
13,000
2,500
710
0
8,000
2,500
710
0
4,000
0
0
0
Sunday, May 18, 2014 9:53:17 PM
a
b
c
Other reports give the following figures: 9,340,000 for 2009; 12,300,000 for 2010, 13,500,000 for 2011.
Estimates.
Operations started in December 2011.
Sources: Various reports from Vietnam Airlines and US and United Kingdom embassies.
Vietnams major low-cost carrier (LCC) is Jetstar Pacific, a joint venture in

which Qantas has a share of about 30% and Vietnam Airlines about 70%.
Formally, Jetstar Pacific is part of the Jetstar group of LCCs operated by
Qantas, but currently it does not have any international services (and
reportedly does not plan any in the near future). It provides 13% of all seat
capacity on the domestic market, giving the Vietnam Airlines group over 90%
of total domestic capacity. It plans to be operating up to 15 Airbus A320-200 by
2014.
VietJet Air, Vietnams first privately-owned airline, began flying between Hanoi
and HCMC in December 2011, after considerable delays attributed to the
global economic slowdown and regulatory issues; Air Asia withdrew from a
plan to take a 30% share in the airline. It is introducing services to Da Nang,
Haiphong and Nha Trang in 2012 and hopes to introduce international services
in 2013; it is aiming for a 10% share of the domestic market in 2012 and 30%
in 2013. It has a fleet of three leased Airbus A320-200.
Air Mekong is a small, privately owned domestic carrier with a 6% share of all
domestic seat capacity, operating four Bombardier CRJ900 and two Airbus
A321. Vietnam Air Service Co (VASCO) is a Vietnam Airlines subsidiary,
operating charter and general aviation services.
Flight capacity out of Hanoi

and Ho Chi Minh City
171
Vietnam Airlines uses both Hanoi and HCMC as its gateways. HCMC is the
best-connected airport in the country: in the winter 2012/12 timetable
(according to SRS Analyser for October 2012), HCMC airport will have direct
flights to 57 destinations. Vietnam Airlines alone offers connections to 44 cities,
including six long-haul destinations (Frankfurt, London, Moscow, Paris,
Melbourne and Sydney). Hanoi is linked to 48 destinations, of which 41 are
served by Vietnam Airlines (including the same six long-haul destinations).
Sunday, May 18, 2014 9:53:17 PM
Table 7.19 International seat capacity out of Hanoi and Ho Chi Minh City,
by destination region, 2008-2012
(one way seats)
AAGRa (%)
2012 2008-2012
2008
2009
2010
2011

HCMC Asia
HCMC Middle East
HCMC Europe
HCMC Australasia
Hanoi Asia
Hanoi Middle East
Hanoi Europe
Hanoi Australasia
633,183
4,199
17,212
13,238
392,862
16,140
9,504
684,417
4,284
15,637
17,408
428,170
17,519
10,073
763,915
7,588
20,564
16,985
492,896
17,863
11,417
904,437
13,870
24,838
22,812
612,222
5,314
22,504
13,793
936,817
25,300
33,326
17,416
650,818
9,974
23,812
16,606
10.3
56.7
18.0
7.1
13.5
10.2
15.0

HCMC Asia
HCMC Middle East
HCMC Europe
HCMC Australasia
Hanoi Asia
Hanoi Middle East
Hanoi Europe
Hanoi Australasia
638,702
4,097
20,036
17,708
379,376
17,351
9,800
712,421
4,488
21,017
16,152
429,268
17,838
11,043
796,975
4,335
22,632
19,023
503,287
19,028
13,950
901,615
17,277
33,347
21,715
585,057
5,574
25,287
14,982
983,345
27,452
35,732
19,982
627,086
10,190
25,419
18,927
11.4
60.9
15.6
3.1
13.4
10.0
17.9

In 2012, Singapore and Bangkok were the top air links from Hanoi and HCMC
(the destination with the largest seat capacity). While Singapore is the largest
destination in available seats out of HCMC, Bangkok remains the top
destination out of Hanoi. From HCMC, Kuala Lumpur ranks second. However,
a high proportion of capacity to Kuala Lumpur consists of LCC flights, which
are less favourable for long-haul transfer traffic despite the presence of
AirAsia X for routes to Australia.
172
Chapter 7 Vietnam
Table 7.20 International seat capacity out of Ho Chi Minh City SGN and Hanoi HAN, 2012
(total annual capacity for the top six destinations
Singapore
Bangkok
Kuala Lumpur
Taipei
Hong Kong
Seoul
Siem Reap
SGN
HAN
813,191
687,974
494,439
428,935
407,498
383,353
na
276,846
461,191
na
227,383
206,178
331,552
247,892
Sunday, May 18, 2014 9:53:17 PM
The number of intercontinental airlines serving Vietnam has fluctuated over the
years. From Europe, only four airlines serve Vietnam: Air France, Lufthansa,
Aeroflot and Turkish Airlines. However, Finnair will begin flying to Hanoi in
summer 2013, with three frequencies weekly, continuing the airlines strategic
focus on traffic between Asia and Europe. LOT and Transaero pulled out in
2012. United Airlines provides services to New York via Hong Kong (China)
and Tokyo.
The fastest growing presence in Vietnam comes from the Middle East: monthly
available seat capacity jumped by 59% between October 2011 and October
2012. In addition to Turkish Airlines, Vietnam is now served by Qatar Airways
and (from June 2012) Emirates. Emirates is the only airline offering non-stop
services to Dubai out of HCMC, allowing short connections to all of Europe,
Africa and North America. Etihad plans to introduce a daily frequency between
Abu Dhabi and HCMC in October 2013.
Currently, only Vietnam Airlines serves Australia, with flights to Melbourne and
Sydney (Jetstar pulled out of Darwin and Sydney in 2011).
The share of low-cost carriers (LCCs) in international traffic out of Vietnam has
not grown as rapidly as it has in other South-East Asian markets. LCCs
account for less than 20% of seat capacity, compared with, typically, 25% to
32% in other ASEAN countries. However, they account for most of the capacity
between Indonesia and Vietnam and over 40% of capacity between Vietnam
and Singapore and between Vietnam and Malaysia.
Table 7.21 Total international seat capacitya of low-cost carriers out of Hanoi and HCMC,
2008-2012
( 1000 one-way seats)
Hanoi
HCMC
a
2008
2009
2010
2011
2012
816
1,275
786
1,370
685
1,586
755
1,776
728
1,753
Does not include Mekong Airlines or Vietjet. The decline in total number of seats is attributed to the bankruptcy of
Mekong Airlines and a reduction of Jetstar Pacific flights after its restructuring in 2009-2010.
Prospects for traffic

out of Vietnam
173
The prospects for rapid growth in air travel out of Vietnam would appear to be
excellent. The continued rise in standards of living and the further internationallisation of Vietnams economy will generate demand. However, Vietnam will
need to adopt a more flexible approach towards air transport liberalisation, in
particular by not systematically protecting Vietnam Airlines.
In a position paper released early in 2011, IATA said: The future for Vietnamese
aviation is bright. By 2014, Vietnam is projected to be the worlds 3rd fastest
growing market for international passengers and freight, and the 2nd fastest for
domestic passengers. But it is a future that cannot be taken for granted.
Vietnamese aviation must be built and supported by sound policies that take
into account that this is a dynamic industry where change is the only constant.
There are still many gaps in the airline network out of Vietnam, particularly to
North America (there are no flights to Canada or US cities other than New
York) and Australasia (Perth and perhaps Auckland are potential destinations).
As for Europe, Vietnam Airlines has been talking about services to Berlin,
possibly after the new airport is opened.
Vietnam also needs to install immigration facilities at more regional airports to
allow direct services from secondary cities such as Nha Trang, Dalat and
Haiphong. There is also potential for LCCs to provide more services to
secondary Asian cities in Japan, China, Indonesia and the Philippines.
Sunday, May 18, 2014 9:53:17 PM
The Travel Trade

Structure of the travel
trade
Vietnam has a large, but unquantifiable, number of travel agents and tour
operators, but the majority handle inbound and domestic travel. Of the
outbound travel groups, two dominate: Saigontourist Holding Company, which
is rated by the VNAT as one of the leading tourism corporations in Vietnam;
and Vietravel.
Saigontourists main business is inbound it comprises 8 travel service
companies, 54 hotels, 13 resorts and complexes, and 28 restaurants. It is also
involved in some 50 local joint ventures, public-private sector JVs and joint
stock companies, and 9 JVs with foreign partners. Vietravel is considered to be
the leading e-tour company in Vietnam and has frequently been voted
Outbound Tour Operator of the Year.
Both offer premium long-haul tours as well as short-haul packages, mainly
based on group travel.
There is no serious player as yet in the online travel agency (OTA) market,
according to Singapore-based Web in Travel, but a recently signed joint
venture between Australias Wotif Group and Vietnamese Thien Minh Group
will see the two parties establish an OTA under the brand of iviVu.
Buffalo Tours is also an important local player because it is one of the few
independent regional tour operators, with operations in Vietnam, Thailand,
Cambodia and Lao PDR, plus its own sales offices in London and Sydney.
There are also many smaller portals in Vietnam created by entrepreneurs who
are inspired by the successes of Expedia, Ctrip and Wotif.
174
Chapter 7 Vietnam

Economic outlook
Vietnam remains the smallest and poorest economy among the five markets
covered by this report which, since it is increasingly well integrated into
ASEAN and the globalised world economy, suggests that it might have the
strongest potential for growth. It has sometimes shown its potential for very
rapid growth, but has been unable to sustain it. It has been on a roller-coaster
ride again in 2011-2012 a ride which is not yet over. In forecasting a gradual
recovery in real GDP growth towards 6.8% in 2015, the IMF is being
moderately optimistic: there must be a relatively high probability that Vietnam
will overshoot or undershoot that target.
For the time being, however, the relatively low per-capita GDP limits its
potential as an outbound tourism market, by comparison with other ASEAN
countries.
Outlook for tourism
The outlook for the outbound travel market from Vietnam would therefore seem
to be very positive, but one likely to continue to lag some way behind its
ASEAN neighbours. Middle- and upper-class families (in terms of socioeconomic and educational status) will also remain predominant. But they are
likely to choose more expensive destinations such as Australia, Europe or the
United States of America for their trips in order to enjoy new experiences in line
with their rising disposable incomes.
Sunday, May 18, 2014 9:53:17 PM
At the same time, the percentage of backpackers should increase significantly

as the young population, who can speak better English, usually prefer freeand-easy travelling to enjoy freedom and privacy. Nevertheless, the majority of
tourists will continue to travel in organised tour groups. And their most popular
destinations will continue to be neighbouring countries, such as China,
Singapore and Thailand.
Air transport will remain the most popular mode of transport by a wide margin.
Cruises are expensive and mostly unfamiliar to Vietnamese, while land travel is
only possible (but still difficult) if they go to China or neighbouring countries of
Indochina.
One possible threat to growth, however, could be the fluctuating exchange
value of the Vietnamese dong, specifically the potential for the dong to
depreciate in value. This would lead to rising costs for Vietnamese tourists.
Other threats such as natural disasters and political unrest in certain countries
might dampen demand.
Tour operators are also worried about the high price of the dollar on the black
market as commercial banks often refuse to sell dollars when the currency is in
short supply, forcing outbound tour operators to buy dollars on the
underground market where the price is higher than the official rates.
Forecasts
The Pacific Asia Travel Associations (PATA) Asia Pacific Tourism Forecasts,
2012-2014 are very bullish about the Vietnam outbound market, at least with
regard to destinations that measure Vietnamese arrivals, which are relatively
few and far between. And understandably, the forecasts only cover
destinations within the Asia Pacific region. The following table summarises the
175
absolute volumes projected for each year from 2012 to 2014, highlighting the
average annual growth over the period.
Annual growth is forecast to be much slower for Japan and the Philippines
from fairly low bases and Vietnamese travel to Australia is, somewhat
surprisingly, predicted to decline by as much as 11% per annum over the
period. The best growth is likely to be for neighbouring ASEAN countries:,
notably Cambodia, Lao PDR and Thailand.
Table 7.22 Vietnam: Outbound tourism forecastsa, 2012-2014
Destination
Cambodia
Lao PDR
Thailand
Singapore
Malaysia
Korea (Rep. of)
Japan
Australia
Philippines
Actual
2010
Forecasts
2012
466,695
431,011
380,368
322,853
159,271
90,213
41,862
37,246
17,311
798,940
709,760
597,640
441,463
201,904
120,833
39,529
30,564
18,256
2013
2014
AAGR b(%)
2010-2014
912,125
826,405
670,407
471,165
229,630
128,647
43,793
26,924
18,926
1,028,459
945,672
758,717
496,925
243,087
136,684
48,912
23,773
19,668
21.8
21.7
18.8
11.4
11.2
11.0
4.0
-10.6
3.2
a
b
Sunday, May 18, 2014 9:53:17 PM
Source: Pacific Asia Travel Association, Asia Pacific Forecasts 2012-2014, 2012.
Tourism Economics forecasts for outbound travel from Vietnam, which provide
absolute volumes and annual growth per annum from 2011 to 2018, show a
less optimistic scenario, but with growth picking up year by year after a dip in
2012. . It should however be noted that these forecasts were developed in
2010, which explains the discrepancy in the total for 2011 with that in the
earlier table for outbound trips in 2007-2011.
Table 7.23 Vietnam: Forecast outbound visits, 2011-2018

2011
2012
2013
2014
2015
2016
2017
2018

% change
6
1,471
2
1,518
3
1,583
4
1,663
5
1,743
5
1,830
5
1,917
5
Forecast cumulative arrivals worldwide from Vietnam.

Impact of the ASEAN

Economic Community
Asian Nations should stimulate demand for travel. In line with this, airlines
are planning to increase their frequencies between ASEAN countries, and are
expected to open new regional routes.
176
Chapter 7 Vietnam
ASEANs ICT Master Plan 2015 also proposes specific measures to improve
digital connectivity and to bridge the digital divide, which includes the creation
of an ASEAN broadband corridor and Internet exchange network.
Sunday, May 18, 2014 9:53:17 PM
Official and trade

organisations
General Statistics Office

of Vietnam (GSO)
www.gso.gov.vn/default_en.aspx
Vietnam National Administration

of Tourism (VNAT)
www.vietnamtourism.gov.vn/english
Vietnam Tourism Association
www.vietnamtourism.com
Destination NTOs
The following countries national tourism organisations (NTOs) have offices in

Vietnam: Malaysia, Singapore, Thailand and (from end-2012) Hong Kong
(China).
The International Travel Exhibition takes place annually in September in

HCMC.
Sunday, May 18, 2014 9:53:17 PM
List of Acronyms
ADB
AOT
ASEAN
ASITA
ATTA
BPS
CAAS
CAAV
DCA
EU
FDI
FIT
GDP
GDS
GSO
HCMC
HNWI
IATA
ICAO
IMF
ITU
KLIA
LCC
LCCT
MAHB
MATTA
MICE
MOU
NATAS
NCL
OECD
OTA
PATA
SIA
SPH
STB
PPPs
TA
TAT
TBP
UMNA
UN
UN DESA
UNDP
UNWTO
VFR
Asian Development Bank

Airports of Thailand
Association of South-East Asian Nations
Association of Indonesia Tour and Travel Agencies
Association of Thai Travel Agents
Badan Pusat Statistik (Statistics Indonesia)
Civil Aviation Authority of Singapore
Vietnams Civil Aviation Authority
Department of Civil Aviation
European Union
Foreign direct investment
Fully independent travel
Gross domestic product
Global distribution system
General Statistics Office of Vietnam
Ho Chi Minh City
High net worth individual
International Air Transport Association
International Civil Aviation Organization
International Monetary Fund
International Telecommunications Union
Kuala Lumpur International Airport
Low-cost carrier (airline)
Low-cost carrier terminal
Malaysia Airports Holdings Berhad
Malaysian Association of Tour and Travel Agents
Meetings, incentives, conferences and exhibitions
Memorandum of understanding
National Association of Travel Agents of Singapore
Norwegian Cruise Line
Organisation for Economic Co-operation and Development
Online travel agency
Pacific Asia Travel Association
Singapore Airlines
Singapore Press Holdings Ltd.
Singapore Tourism Board
Purchasing power parities
Tourism Australia
Tourism Authority of Thailand
The Travel Business Partnership
United Malays National Organisation
United Nations
UN Department of Economic and Social Affairs
UN Development Programme
World Tourism Organization
Visits to friends and/or relatives
177
178
List of Acronyms
Sunday, May 18, 2014 9:53:17 PM
VNAT
WEF
WTTC
Vietnam National Administration of Tourism

World Economic Forum
World Travel & Tourism Council
179
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Key Outbound Tourism Markets

Indonesia, Malaysia, Singapore, Thailand and Vietnam

Copyright 2013, World Tourism Organization (UNWTO) and Tourism Australia

World Tourism Organization (UNWTO)

Tel.: (+34) 915 678 100

Tel.: (+61) 2 9360 1111

Tel.: (+34) 913 08 63 30

Objectives and Scope of the Study

South-East Asia in Context

Asia Pacific Tourism Trends

Comparative Analysis of the Five Markets

Other representatives of Tourism Australia and the World Tourism

This study, developed as a collaborative project between Tourism Australia

Key Outbound Tourism Markets in South-East Asia

The five markets

Singapore is a very wealthy city-state with a GDP disproportionate to

Malaysia is now regarded as a middle-income, newly industrialised

Key Outbound Tourism Markets in South-East Asia

Although Indonesia is a much bigger country, its prosperity has come

Vietnam has, over the last 50 years, suffered the extremes of

There is a huge variation in spending power in the five countries.

The Pacific Asia Travel Associations (PATA) Asia Pacific Tourism

Key Outbound Tourism Markets in South-East Asia

Vietnam has a relatively large population (second only to Indonesias), but

In July 2012, the World Tourism Organization (UNWTO) commissioned a joint

Data sources and

Key Outbound Tourism Markets in South-East Asia

South-East Asia in Context

In order to understand the relative importance of the five South-East Asian

A fast growing region

Chapter 1 South-East Asia in Context

International tourist arrivals in Asia Pacific by origin, 1980-2030

Source: UNWTO, Tourism Towards 2030.

Even though data on departures is subject to more limitations than data on

In terms of international tourism receipts, growth in the Asia Pacific region

Key Outbound Tourism Markets in South-East Asia

(Province of China) (27th), Indonesia (34th), Thailand (35th), Philippines (45th)

Recent Trends in Air Travel

Asia Pacific and South-East Asia in particular are experiencing a boom in

In a recently published report, Asia Pacific Online Travel Overview, Fifth

but longer-haul routes

The most important is the arrival of low-cost, long-haul carriers such as

Chapter 1 South-East Asia in Context

Air New Zealand

Non-stop or direct services by network and low-cost airlines.

Indonesia, Malaysia, Singapore, Thailand and Vietnam.

DPS = Denpasar, Bali;

Air Asia X and Indonesia AirAsia.

Seat capacity originating in Jakarta is down 16%, since Garuda has

Key Outbound Tourism Markets in South-East Asia

Surprisingly, the biggest increase in seat capacity will be out of Manila

although recent news

Factors Affecting South-East Asian Outbound Travel

Chapter 1 South-East Asia in Context

Filipino travellers have a growing preference for travelling independently,

Growing middle classes

Family and friends (61%)

IPK Internationals latest World Travel Monitor is re-emphasising a point which

Forecast middle-class population in the Asia Pacific region, 2011-2031

Source: Airbus Industries forecasts, 2011.

Becoming a member of the middle classes, however, does not necessarily

Key Outbound Tourism Markets in South-East Asia

Outlook for South-East Asian Outbound Travel