HMA has kindly been given permission to reproduce an extract from the book Strategic Hospitality Leadership: The Asian Initiative, published by John Wiley & Sons, Asia in 2010. This is an extract from Chapter 12, Looking Ahead at Hospitality Trends in Asia by Russell Arthur Smith.

 

 

The future of the hospitality industry in Asia promises great opportunity for continued growth, and this potential is in line with the projected estimates of tourism arrivals to this region in the next few years. The changes in the Asian hospitality and tourism sector were accelerating before the global economic crisis began. With this region emerging from the economic crisis, it is highly likely that growth will continue apace as before, although other regions may remain economically subdued. The Asian region will be significantly transformed within five to 10 years.

 

According to Michael Enright and James Newton (2005), the Asia Pacific will overtake the Americas to become the world’s second largest tourism region, as measured by arrivals, after Europe. Among the major destinations in the region, China is the unrivalled market leader, followed by Hong Kong, Malaysia, Thailand and Singapore. This forecast is supported by the United Nations World Tourism Organization (2009), which sees East Asia, and the Pacific and South Asia growing at annualized rates of 6.5% and 6.2% over the 25-year period up to 2020. These compare with the forecast rates of 3.8% and 3.1% for the Americas and Europe, respectively. This growth is despite the impact of the global economic crisis.

 

The global financial crisis of 2007 to early 2009 had slowed the expansion that the hospitality sector had experienced in preceding years in Asia. The economic downturn had indeed presented unique challenges, which resulted in the delayed launch of new initiatives, slowed implementation of ongoing projects, and, in some organizations, caused major restructuring.

 

However, despite the economic meltdown over those two and a half years, the tourism and the hospitality industry is expected to bounce back and enjoy continuous growth in the next few years. Economic indicators, such as the analyses by STR Global (2009), a leader for lodging-industry benchmarking and research, support the notion that while other regions continue to be mired with the aftermath of the global financial crisis, the Asian region has bottomed out and is set to expand. The reasons for the region’s economic positive performance now are much the same as before the economic crisis. The governments of the Asian region had taken positive steps to encourage economic development, moved to build the necessary infrastructure, and encouraged local and foreign investment in the sector. These reasons still hold true and will continue to propel the region ahead of other regions.

 

 

Emerging from the crisis of 2009, the tourism and hospitality sector faces major challenges in the next several years. These challenges are related to the quickening pace of change and expansion within the sector in Asia, the ongoing pipeline of projects across Asia, the environmental impacts.