China will emerge as the world's largest economy by around 2040 and pass the USA as the largest outbound travel market in 2025. What will this mean for the Australian travel industry, which is currently the country's second largest export earner?
As industry participants know, the travel industry has a number of unique characteristics. One is a susceptibility to shocks on both supply and demand, such as wars, coups, terrorism, diseases and corporate instability.
While these tend to be short lived, occasionally fundamental changes occur, such as the development of long haul aircraft or low cost carriers.
Like the US, this market will consist of multiple customer segments that will require targeted value propositions. To compete successfully in this market, Australia will firstly need to market the destination, possibly around low cost packages, then upsell to finer segments as the market becomes more sophisticated.
Implications for Australian Players.
Our belief is that the emergence of China as the world's largest economy will prove to be another fundamental change for which the Australian travel industry must prepare now.
Download the discussion paper - Is the Australian Travel Industry Ready for China
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