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6 Mar, 2006

ITB Berlin Turns 40 As Industry Swirls With Change

BERLIN: The world’s largest travel show, ITB Berlin, celebrates its 40th birthday this week amidst tumultuous changes taking place in global travel & tourism.

Thailand will be fielding its biggest contingent ever — 117 companies will be part of the Thai pavilion, up from 111 companies last year, and several other companies will participating separately via their own individual booths.

A number of events are planned to publicise the 60th anniversary (Diamond Jubilee) of His Majesty the King’s accession to the throne.

This year, representatives from over 180 countries and territories are expected to gather in the 26 halls of the Berlin Exhibition Grounds, a total area of 160,000 sq m that dwarfs the 65,000 sq m events halls of Excel London, home to the world’s second largest international travel show, the World Travel Market.

Launched in 1966 at a time when Germany was rising as an industrial powerhouse, the ITB has proved an important platform for generating the huge growth in German travel for leisure, business and MICE. At one stage, Germans were the world’s undisputed leaders in global travel.

Although many other shows have emerged worldwide, the ITB remains the dominant global event. While space constraints force other shows to remain focussed on specific geographic or market segments, the ITB’s need to fill space means that it has to try and offer everything for everyone.

In recent years, it has added specific niche-market segments like cruises, business travel, travel technology, health and wellness and youth travel. A whole new conference attached to the event stretches out over the entire five days.

In 2005, the show was attended by 10,409 exhibitors, of whom 8,192 were from abroad, 83,987 trade visitors and 7,285 journalists.

However, changes in global travel trends as well as the increasing costs of attending the show pose significant challenges to its dominant position.

According to Pacific Asia Travel Association (PATA) statistics, German visitor arrivals to the Asia Pacific have fallen from 4.28 million in 2000 to 3.87 million in 2004.

Mr John Koldowski, Managing Director of PATA’s Strategic Intelligence Centre attributes this to the impact of global geopolitics, health and safety scares, economic issues within Germany and the emergence of low-cost airlines and new destinations within Europe itself.

He points out, however, that significant shifts are taking place within German travel patterns to the Asia Pacific.

India, China, Korea and Japan are all reporting strong increases in German visitors, for reasons that include a combination of leisure and business traffic. China has been arguably the biggest winner with German arrivals rising from 239,062 in 2000 to 365,329 in 2004.

On the purely leisure front, Germans are showing interest in new destinations, with distinct increases in travel to Myanmar and Laos.

Among the losers are Philippines, Singapore, Sri Lanka, Malaysia and Indonesia.

Indonesia, especially, has suffered due to the domestic troubles that has seen national airline Garuda Indonesia pullout its flights from most of Europe. German arrivals to Hong Kong are also down as German visitors divert to the Mainland destinations.

Thailand seems to be holding its own so far. Once Thailand’s largest source-market from Europe, Germany has been overtaken by the much faster growing UK market.

German arrivals by country of residence have risen from 378,562 in 2000 to 449,765 in 2004. Mr Koldowski says that’s not a bad performance, given the fact that arrivals plunged to 389,293 in 2003 due to the SARS crisis and the Iraq war.

In January–November 2005, visitors from Germany at Bangkok International Airport totalled 327,355, up 5.49% over the same period of 2004. Final figures for 2005 were projected at 420,000 with a target of 510,000 set for 2006.

Within the overall figure, however, Thailand is seeing strong growth in German business travellers, convention delegates and repeat visitors. Young people and retirees are also up, although first-timers are down significantly.

One area that needs attention is the average daily expenditure. Due to the strength of the Euro, European tourists are being able to spend less even as they get higher levels of services and products.

TAT figures show that the average per person daily expenditure of European visitors has fallen from US$ 128.26 in 1995 to US$ 92.97 in 2004. German average daily spend in 2004 was even lower at US$ 92.50.

Thailand is projecting a total of 13.8 million international visitor arrivals in 2006, with revenue earnings of 486 billion baht (about US$12 billion).

Mr Koldowski says that ITB Berlin will need to work hard to maintain its dominant position.

He notes that one of the biggest trends is more travel within the Asia-Pacific region thanks to greater economic integration and facilitation, the emergence of regional and sub-regional groupings, low-cost airlines and improved transportation infrastructure.

Massive new convention and exhibition centres similar to those in Germany are being built in China, and will emerge over time in India. All this space will need to be filled and new travel exhibitions will emerge that will put further competitive pressure on the ITB.

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