60px

451px

Amadeus

Blog

Why the barbell is more than just a pole with heavy weights

Karun Budhraja

Vice President, Corporate Marketing & Communications, Amadeus Asia Pacific

Perhaps you like to use free weights and stack weights to opposite ends of a pole to create a heavy barbell that you can lift in the middle.

Do you pump weights at the gym?

In our latest report , we see that economic growth in Asia Pacific also takes the shape of a barbell.

Let me explain.

Four major travel trends are set to shape the Asia Pacific region in the coming years –The Me Effect ,The Red Tape Effect ,The Leapfrog Effect , and finally The Barbell Effect.

We call it the Barbell Effect because as the Asia Pacific economy continues to grow, travel grows with it, but on opposing sides of the spectrum – budget travel will boom but so too will luxury travel, which will create a barbell shaped growth path.

Travel expenditure infographic

People from emerging economies will be travelling more frequently, but on a strict budget, which will stimulate rapid growth in budget airlines and economy hotels.

At the same time, wealthy travellers will increase, particularly from China, India, and Indonesia. For these individuals, travel will be a big part of their leisure spend helping to stimulate the luxury travel market.

So why growth at both ends?

Well, while the number of travellers from China, India and Indonesia, in particular, will increase exponentially, even by 2030 they will, on average, be much less wealthy than their counterparts in developed economies.

By 2030 GDP per capita in India, China and Indonesia will only be 20-25% of that in Australia, Japan and Singapore.

Today, Asia Pacific accounts for almost a quarter (23%) of total middle-class spend globally, while almost a third (28%) of the world’s middle class population is based in Asia Pacific.  But by 2030, these numbers will jump to 59% and 66% respectively.

Despite its enormous population (over 1 billion), fewer travellers from India visited Asia Pacific destinations in 2011 than from either Australia or Singapore (even if we exclude Singaporean visitors to Malaysia).

Travel expenditure infographic

But by 2030, the enormous increase in the middle class in China, India and Indonesia will generate an additional 100 million additional visitors to Asia Pacific destinations – with 70 million of the increase coming from India and China alone.

As the bulk of the growth comes at the top and lower ends of the scale, we expect to see travel services providers increasingly focus their investments – and marketing efforts – on these segments. This may often require a multi-brand approach to target budget, midscale, upscale and luxury travellers as a single brand will be challenging to use for these disparate groups.

Read more about this important travel trend in ourShaping the future of travel in Asia Pacific report and let us know your thoughts on how the Barbell Effect will impact in Asia Pacific.


Tags

Asia Pacific, Research