As the fastest-growing T&T region, Asia-Pacific continues to increase in importance for the global industry. In 2017, it was both the second-largest destination for international visitors and boasted the second-largest volume of international tourist receipts. Moreover, the region is the biggest source of global outbound tourist spending, with most of this spent on intraregional travel. Based on GDP figures, Asia-Pacific also has the largest aggregate domestic travel market. Consequently, for many local countries it has become crucial to remain competitive within the region to attract growing international arrivals, contend with domestic T&T offerings of regional rivals and take advantage of their own growing domestic markets. Since the last edition of the report, Asia-Pacific trails only Europe in terms of TTCI score and rate of score improvement.
In addition to a rapidly growing middle class, Asia-Pacific can rely on a robust balance of natural and cultural resources to generate tourism: the region boasts the TTCI’s second-best score for the former and top score for the latter. The region also continues to improve its above-average level of international openness and T&T prioritization, indicating a strong commitment to trade and travel by many Asia-Pacific countries. Moreover, the growing number of international and domestic travellers are supported by, and drive, the world’s largest and still rapidly expanding aviation market. As a result, one of the region’s greatest leads over the global average comes from its air transport infrastructure. Asia-Pacific also scores above the global averages for ground and port infrastructure as well as all the pillars of the Enabling Environment subindex. Much of this specific competitiveness performance is concentrated in Eastern Asia-Pacific and to a lesser degree South-East Asia, while South Asia leads in terms of overall improvement growth.
Despite Asia-Pacific’s many strengths, the region does face several challenges. Although tourist service infrastructure has become more developed, most Asia-Pacific countries outside of the Eastern Asia-Pacific subregion still have more room to improve in this area to meet the global benchmarks. More importantly, environmental sustainability remains the region’s greatest competitiveness constraint. Many countries suffer from high air pollution, water stress, below-average levels of wastewater treatment, endangered wildlife and forest loss. Nevertheless, there has been some progress made on this front as more environmental treaties have been ratified, helping the average Environmental Sustainability pillar score to climb. Notably, a significant portion of this growth in score came from new data related to fish stock status, which provides a more up-to-date measure of marine health, but as such reduces the ability to directly compare this pillar between 2017 and 2019 performance. Furthermore, increasingly accurate statistics show that, on average, the region is not protecting as much of its natural assets as previously thought. If the region manages to balance expanding tourism demand with environmental and developmental sustainability it will continue to improve its competitiveness. In the ten years to 2029, the World Travel and Tourism Council forecasts that regional countries covered by this year’s TTCI will increase their T&T GDP by nearly 80%, accounting for over half of the global growth.
Eastern Asia-Pacific is the most competitive subregion in Asia-Pacific by far and the second-most competitive in the world. Furthermore, the subregion acts as the engine of T&T in Asia-Pacific, accounting for over half of the parent region’s international tourist arrivals and receipts and most of its outbound spending. Eastern Asia-Pacific’s greatest advantage relative to both the regional and global averages comes from its well-developed cultural and—to a lesser extent—natural resources. As one of the world’s economic centres, with a particularly strong dependence on trade and globalization, the subregion provides exceptional connectivity. It includes some of the world’s best air, ground, port and ICT infrastructures. Travel is further bolstered by high degrees of T&T prioritization and international openness. Among all the subregion’s covered in this report, Eastern Asia-Pacific witnessed the fastest improvements (by percentage rate) to its tourist service infrastructure score, and is home to almost all the wider region’s above-global average scorers for this category. In addition, since most of Asia-Pacific’s high-income economies are located here, the Eastern Asia-Pacific consistently leads regional competitors on business environment, human resource and labour market, safety and security and health and hygiene performance. Nevertheless, while exceeding the broader regional scores for environmental sustainability, it scores at about the global average. Finally, the subregion remains fairly expensive, dissuading potential visitors.
Six of the subregion’s eight economies covered in the report have improved their T&T competitiveness since 2017. Mongolia experienced the greatest improvement in score (by percentage), moving up nine spots to rank 93rd globally. The country showed improvement on most pillars; it has Eastern Asia-Pacific’s strongest rate of growth for health and hygiene (50th to 38th), T&T prioritization (102nd to 85th) and natural (79th to 62nd) and cultural (62nd to 59th) resources. At the same time, Mongolia remains the subregion’s least competitive country, requiring more improvements to business environment (83rd), ICT readiness (85th), international openness (128th), environmental sustainability (131st) infrastructure (111th) and natural and cultural resources. Taiwan, China had the subregion’s largest decline in competitiveness (30th to 37th), due to significantly tightened visa requirements (37th to 119th), waning cultural resources and business travel (26th to 36th) and recalibrated figures showing a drastic reduction in protected areas (20th to 118th). Japan remains the subregion’s top scorer, ranking 4th globally thanks to its rich natural (25th) and cultural (5th) resources, overall infrastructure (8th), T&T prioritization (23rd), international openness (6th) and enabling environment (10th). Meanwhile, China (13th) is Eastern Asia-Pacific’s largest T&T economy, accounting for over one-half of the subregion’s T&T GDP. The country has the index’s best score for the Natural and Cultural resources subindex but faces hurdles on Environmental Sustainability (120th).
South-East Asia outscores the global average in overall competitiveness. The subregion depends on T&T more than any other subregion for its GDP, with a particular emphasis on international arrivals versus domestic tourism. Many visitors are attracted to the subregion’s combination of rich natural resources and price competitiveness, with the latter being its greatest advantage relative to other countries in the broader Asia-Pacific region. It’s no surprise, then, that, given this importance of tourism, the subregion outscores the global and Asia-Pacific scores for T&T prioritization and international openness. In addition, the subregion’s above-average air transport infrastructure continues to improve at a rapid pace, especially in regard to the number of operating airlines and route capacity. On the other hand, South-East Asia still trails global and regional means for tourism services infrastructure. Most—but not all—of the subregion’s economies also score lower for ground and port infrastructure, hindering travel. Enabling Environment scores—and the Health and Hygiene pillar in particular—should continually be enhanced in order to compete with Eastern Asia-Pacific. Yet this subregion’s greatest weakness relative to the global average is environmental sustainability, which has been impacted by deforestation, an increasing number of threatened species and insufficient wastewater treatment. Consequently, the subregion’s natural assets are under threat, with the scores on this pillar declining over the past two years due to new data showing less habitat protection than previously believed.
Seven of the subregion’s nine economies improved their T&T competitiveness since the last edition of the report. The Philippines had the fastest rate of improvement, moving up four places to rank 75th globally. The country showed impressive improvement on overall infrastructure (90th to 80th) and ICT readiness (86th to 82nd), but still faces challenges when it comes to safety and security (135th). On the other hand, Singapore had the greatest percentage decline in score (losing four places) but remains the subregion’s most competitive T&T country, ranking 17th globally. It has a world-class business environment (2nd), human resources and labour market (5th), ICT readiness (15th), safety and security (6th), T&T policy and conditions (2nd) and overall infrastructure (3rd). Despite this, Singapore dropped from first to third for international openness, due to increased visa requirements (16th to 50th) and a drop in scores for its natural (103rd to 120th) and cultural resources (28th to 38th). Cambodia (98th) remains the lowest scorer in South-East Asia, trailing the subregion on the Enabling Environment (106th) and Infrastructure (101st) subindexes. Thailand (31st) has South-East Asia’s largest T&T GDP, which is reinforced by some of Asia-Pacific’s most attractive natural resources (10th) and most efficient tourist services infrastructure (14th).
South Asia is the only subregion in Asia-Pacific to score below the global average for T&T competitiveness. Its strongest advantage relative to the global average comes from its price competitiveness and natural and cultural resources, yet it trails Asia-Pacific on the latter two pillars and the global index on all other pillars. South Asia ranks low for infrastructure, with underdeveloped tourist service infrastructure representing its greatest relative disadvantage. Low ICT readiness, international openness, safety and security and health and hygiene are other key weaknesses. However, South Asia also experienced one of the fastest rates of improvement since the last edition of the report, including the greatest subregion percentage jump in scores on ICT readiness.
Four of the five subregion’s economies improved their T&T competitiveness over the past two years. Bangladesh had the world’s greatest percentage improvement on its overall TTCI score, helping it move up five spots to rank 120th globally. The country enhanced its safety and security (123rd to 105th), ICT readiness (116th to 111th), T&T prioritization (127th to 121st), price competitiveness (89th to 85th), ground and port infrastructure (74th to 60th) scores at double-digit rates. Environmental sustainability also increased (128th to 116th), but much of the growth came from an improvement in indicators measuring marine sustainability. However, India, which accounts for the majority of South Asia’s T&T GDP, remains the subregion’s most competitive T&T economy, moving up six places to rank 34th globally. From a subregional perspective, the nation has better air (33rd) and ground and port infrastructure (28th), international openness (51st) and natural (14th) and cultural resources (8th). Compared to global benchmarks, the country can also add price competitiveness (13th) to its roster of strengths. However, India still needs to enhance its enabling environment (98th), tourist service infrastructure (109th) and environmental sustainability (128th). Sri Lanka is the only country to decrease in competitiveness (64th to 77th) in South Asia due to falls on business environment (50th to 79th), international openness (67th to 100th) and natural resources (31st to 43rd). In particular, increased visa requirements (16th to 50th) have hindered openness, while natural area protection numbers show a lower percentage of territorial coverage (39th to 112th), reducing the advantage of natural assets. Pakistan (121st) remains the least competitive country in South Asia when it comes to T&T, including the region’s least favourable safety and security (134th) conditions.
Selected Country/Economy Analysis
Japan remains Asia-Pacific’s most competitive T&T economy, ranking 4th globally. While the country’s large economy provides it with an expansive domestic market, the nation has recently witnessed a boom in international tourist arrivals and receipts. Over the years, the T&T industry remains a priority (23rd), with increased government funding (42nd) and more effective marketing campaigns (26th). Moreover, Japan continues to become more open (10th to 6th) to international visitors and business. As travel barriers continue to drop, visitors are attracted to its unique cultural resources (5th)—the country’s greatest advantage relative to the regional and global averages. The country scores high for aggregate cultural and intangible heritage (7th), and its abundance of sports stadiums (3rd) help Japan position itself for upcoming international sporting and other events. Additionally, the country’s central position within the global economy guarantees numerous international association meetings (7th).
International and domestic travel is made easy by continued improvements to already well-developed air transport (19th) and tourist services (29th to 19th) infrastructure. Revisions to road density data also shows Japan’s ground and port infrastructure—already recognized for ground transport efficiency (1st)—to be even more developed than previously thought. Online and in-person travel services are also bolstered by good ICT readiness (10th) and exceptional customer orientation (2nd). However, Japan still has room to better utilize its promising natural resources (25th). Improved area protection data shows that the nation could yet do more to expand habitat protection (76th), which is critical given Japan’s high number of threatened species (132nd) and global rank of 97th for fish stock pressure (a new indicator for measuring fishing of overexploited or collapsed fish stocks). Yet the country’s greater commitment to environmental treaties (31st to 17th) does show the potential to improve sustainability in the future. Lastly, Japan can further enhance its competitiveness by continuing to improve its price competitiveness (113th), which is characterized by low purchasing power (128th).
China is by far the largest T&T economy in Asia-Pacific and the 13th most competitive globally (up two spots from 2017). It welcomes more international visitors than any other country in the region and its T&T industry benefits from a large and growing domestic market. The cornerstone of China’s competitiveness is its exceptional natural resources (4th) as well as the TTCI’s highest score for cultural resources. The nation has the greatest number of UNESCO Natural World Heritage sites in the world as well as impressive wildlife (6th). It also ranks first on intangible heritage and cultural and entertainment digital demand, second for sports stadiums and eight for business events. Fairly low hotel prices (25th) and reduced ticket taxes (58th to 35th) help minimize the cost of staying and traveling within and to China. Moreover, travel is facilitated by an extensive list of air carriers (7th) that have produced the second-largest airline capacity in the world. Intra-country travel is also made easier by one of the world longest railway networks, which gets relatively positive marks for quality (17th) and efficiency (25th). However, given China’s future tourism potential and needs, more investment needs to be diverted to enhancing the quality of roads (42nd), airports (53rd) and ports (55th).
Comparatively low and declining prioritization of T&T (50th to 66th), unfavourable international openness (76th), characterized by strict visa requirements (132nd), and underdeveloped tourist service infrastructure (86th) also create hurdles for potential visitors (although gains have been made in tourist service infrastructure). Further, despite improvement, China still scores low for environmental sustainability (120th). The country faces several environmental challenges, including very high air pollution (136th to 137th), deforestation (52nd to 53rd), endangered wildlife (120th to 122nd), depleting water resources (55th to 67th) and continued insufficient wastewater treatment. Unsurprisingly, despite its impressive natural resources, the degree to which people travel to China for nature-based tourism is below average and decreasing (89th to 95th). Similarly, potential visitors might also be worried about China’s health and hygiene (62nd) and safety and security (59th) conditions, though significant progress has been made to both. A strong human resource and labour market (24th), combined with gains on business environment (92nd to 53rd) and ICT readiness (64th to 58th) do bode well for T&T investment and the related online ecosystem.
Bangladesh witnessed the greatest percentage increase in T&T competitiveness in the world, allowing it to move up five places in the rankings. While much of the growth is due to a low starting base (the country still ranks 120th globally) it also indicates the nation’s high potential for upward mobility. The country ranks just above average for the total number of known species (49th) and oral and intangible cultural heritage (43th), which indicates potential for natural and cultural tourism and might explain the rapid rise in international arrivals. Though it still requires substantial enhancement, the country’s growth in tourism also coincides with improvements on elements that have traditionally hindered travel. The most significant improvement came from safety and security (123rd to 105th), which has been a major concern in previous years. Increasingly favourable perceptions of government commitment to the T&T industry (111th to 109th) and country brand strategy ratings (97th to 77th) has also contributed to a greater prioritization of T&T (127th to 121st). Additionally, enhanced ICT readiness (116th to 111th) and better overall infrastructure (115th to 109th) are likely to make Bangladesh more conducive for travel.
At the same time, international openness has actually declined (104th to 114th), due to increased visa requirements (46th to 53rd), while tourist services infrastructure (133rd) remains the country’s greatest disadvantage relative to the global average. To continue improving its T&T competitiveness, Bangladesh could further cut red tape. For instance, the country scores substantially lower than the Asia-Pacific average for time required to deal with construction permits (129th). Improving this indicator could push forward recent gains on business environment (104th to 94th), encouraging investment in T&T. Furthermore, investment barriers could be reduced and travel services enhanced by improving human resources and the soundness of the labour market (120th), which would need to include increasing female labour participation (128th) and further work on labour force qualification (107th). Expanding total protected areas (102nd) could help preserve threatened wildlife (112th), reduce rising deforestation (43rd to 60th) and enhance Bangladesh’s utilization of natural assets for tourism. In fact, the nation’s nature tourism is also threated by lax environmental regulations and enforcement (105th), and overall attractiveness of the country is held back by severe air pollution (140th) and a lack of wastewater treatment.