Issue: April 1999
Issue: April 1999
Month Index April Issue Contents
1998 Mix and Share Performance
TFI has used the Asia Pacific Regional aggregates to analyse the outcomes for visitor arrivals in each country in the region. The annual change in the number of visitors arriving in a particular country, relative to the Asia Pacific region as a whole, can be decomposed into two component parts:
Figure 6 below shows the changes in mix and share during the year 1998 compared to the year 1997.
Figure 6: Mix and Share Performance (1998 vs 1997)
Source: Tourism Futures International.
Visitors to the Asia Pacific region as TFI has defined it declined by 3.7% during 1998. Each country’s performance in attracting these visitors is now discussed in terms of the mix and share components identified in Figure 6.
Australia
Visitor arrivals to Australia declined by 3.5% during 1998.
If each of Australia’s visitor markets had grown at the regional average growth rate it would have experienced a decline of 1.5%. Australia has a higher proportion of its total visitors sourced from Europe and New Zealand than the region as a whole and the growth in these markets mitigated the substantial decline in Asian markets.
However, Australia lost share in a number of significant markets including Singapore, Hong Kong and South Korea. This added a further 2% decline to Australia’s visitor performance.
China (excluding arrival from Hong Kong and Macau)
Visitor arrivals to China in 1998 declined by 2.6% over 1997.
If China’s visitor markets had grown at regional average growth rates China would have experienced a decline of 4.9%. The proportion of visitors to China from Korea and Taiwan is above the regional average and visitation to the region from both these markets was down (by 39.8% and 0.6% respectively over 1997).
Mitigating the mix effect however was China’s increased share from Japan, Korea and Taiwan. This resulted in a 2.3% increase in movements due to share.
The net outcome for 1998 of the mix effect of -4.9% and the share effect of +2.3% was a 2.6% decline.
Hong Kong (excluding visitors from Mainland China)
Visitor arrivals to Hong Kong (excluding visitors from Mainland China) declined by 14.1% in 1998.
If Hong Kong’s visitor markets had grown at regional average growth rates it would have experienced a decline of 3.3%. The Hong Kong reliance on visitors from Taiwan in particular and Singapore, Thailand and the Philippines is greater than the region as a whole.
Hong Kong’s loss due to the mix effect was compounded by its relatively expensive currency. A decrease in the share of visitor arrivals from Japan was the main reason for the 10.8% decrease in market share. While the region saw a decrease of 6.2% in Japanese arrivals during 1998, Hong Kong suffered a much larger 30.9% decrease in Japanese arrivals. Korea also contributed to the decline. Hong Kong experienced a 49.8% decrease in Korean arrivals (compared to 39.8% for the region). Further, while the region saw a 3.7% increase in visitor arrivals from USA, Hong Kong experienced a 3.4% decrease in arrivals from this market. These three countries, Japan, Korea and USA, were responsible for approximately 50% of the decrease in market share in Hong Kong.
The net outcome of the mix effect of –3.3% and the share effect –10.8% was the 14.1% decline in visitor arrivals.
Japan
Visitor arrivals in Japan decreased by 2.7% in 1998 compared to 1997.
If Japan’s visitor markets had grown at regional average growth rates Japan would have experienced a decline of 7.5%. Japan is heavily reliant upon the visitor markets of Korea and Taiwan (together contributing 38% of visitors in 1998). Other important markets - the USA (16% of 1998 visitors), UK (12% of visitors) and China (7%) all of which grew to the region mitigated the overall decline.
Japan increased its share of regional arrivals from the UK, USA, Hong Kong and Korea during 1998. For example, while the region saw a 16.8% increase in the number of visitors arriving from the Hong Kong, Japan saw a much larger 74.6% increase in arrivals from this market. As a result, Japan’s share of Hong Kong arrivals to the region increased from 2.3% in 1997 to 3.5% in 1998.
When the market share increases are aggregated the share effect for Japan amounted to a +4.8%.
The net outcome for Japan of the mix effect of –7.5% and the share effect +4.8% was the 2.7% decline in visitor arrivals for 1998.
South Korea
Visitor arrivals to South Korea increased by 8.7% in 1998 compared to 1997. If South Korea’s visitor markets had grown at regional average growth rates it would have experienced a decline of just 1.0%. This is the result largely of the dominance of Japan as a source market in Korea’s tourist mix (46% of all arrivals in 1998).
Korea’s loss due to the mix effect was mitigated by its share performance. An increase of 16.6% in the number of Japanese visitors to Korea compared with the 6.2% decrease to the region as a whole, was the major reason for the +9.7% share effect. Hong Kong and Singapore were also contributors to the positive share effect. While the number of arrivals from Hong Kong to the region was up by 16.8%, arrivals to Korea were up by 137.0%. The number of arrivals from Singapore to the region was up 8.2% whilst for Korea the increase was 66.1%. These share changes in the face of an overall decline in visitors for the region show the influence of Korea’s reduced costs associated with the major currency devaluation.
The net outcome for Korea of the mix effect of –1.0% and the share effect +9.7% was the 8.7% increase in visitor arrivals.
New Zealand
Visitor arrivals to New Zealand decreased by 0.8% in 1998 compared to 1997.
If New Zealand’s visitor markets had grown at regional average growth rates it would have experienced an increase of 2.1%. New Zealand is heavily reliant upon the visitor markets of Australia (34% of total visitors to New Zealand in 1998), North America (13%) and the UK (10.5%). All of these markets generated significant growth in arrivals for the region.
However New Zealand’s share effect was -2.9%. New Zealand lost share out of the UK and most of the Asian markets in 1998.
The outcome for New Zealand of a 0.8% decline in visitors in 1998 resulted from a positive mix effect of +2.1% and a negative share effect of –2.9%.
Singapore
Visitor arrivals to Singapore decreased by 13.3% in 1998 compared to 1997.
If Singapore’s visitor markets had grown at regional average growth rates Singapore could have expected a decrease of 6.4% in visitor arrivals. Singapore is more reliant than the region as a whole on growth from Indonesia (15% of it visitors in 1998), Malaysia (8%), Australia (7%) and China (5%). Japan is also important providing 14% of Singapore’s arrivals in 1998. The number of visitors from most of these markets declined in 1998.
Singapore’s loss due to the mix effect was by compounded by its share effect. Singapore lost share for most of its markets during 1998 including Australia, North America, Europe and Japan.
The net outcome of the mix effect of –6.4% and the share effect –6.9% was the 13.3% decline in visitor arrivals in 1998.
Taiwan
Visitor arrivals to Taiwan fell by 3.1% in 1998 compared to 1997.
If Taiwan’s visitor markets had grown at regional average growth rates it would have experienced a decline of 3.5% in 1998. Taiwan is heavily dependent on the performance of Japan (36% of arrivals in 1998), USA (13%), Hong Kong (12%), Thailand (6%), and the Philippines (6%). Of these markets all bar the USA and Hong Kong generated fewer travellers to the region in 1998 than they did in 1997.
The share effect for Taiwan was a mildly positive +0.4%. In 1998 Taiwan gained share out of Thailand and the Philippines.
For Taiwan the 1998 outcome of a 3.1% decline in visitors in resulted from a negative mix effect of –3.5% and a mildly positive share effect of +0.4%.
Thailand
Visitor arrivals to Thailand increased by 7.5% in 1998 compared to 1997.
If Thailand’s visitor markets had grown at regional average growth rates it would have experienced a fall of 1.9% in visitor arrivals. Japan and Malaysia are major markets for Thailand and both experienced declines in outbound travel.
The loss due to market share was more than compensated by the large positive share effect. A flurry of cheap air/ground packages accompanied the fall in the baht resulting in increased shares of regional visitors from Australia, Europe, the USA and from Asian countries such as Malaysia and Singapore.
The net outcome of the mix effect of –1.9% and the share effect +9.4% was the increase of 7.5% in visitor arrivals in 1998.
Mix and Share Summary
Figure 7 summarises the mix and share effects across the region in a scatter diagram. New Zealand is the only country examined that had a positive mix effect in 1998. Korea and Thailand were distinguished because of a large share effect. This large positive share effect was attributable to the competitive travel packages associated with falls in the value of the won and baht.
Singapore and Hong Kong experienced relatively large falls associated with negative mix and share effects.
Figure 7: Scatter Diagram Mix and Share Performance (% Change 1998 vs 1997)
Source: Tourism Futures International.
1998 Outcomes for Indonesia and Malaysia
At the time of ‘going to press’ final visitor arrival data for Indonesia and Malaysia was not available for 1998. However TFI has constructed inbound figures for these countries based on resident departures from Australia, Hong Kong, Japan, Korea, New Zealand, Thailand and Taiwan.
These show a 23.5% decrease for arrivals to Indonesia in 1998. This is despite an increase of 12.5% from Australia (largely to Bali) during the year. Substantial decreases were experienced from Hong Kong, Korea, Japan, Thailand and Taiwan.
For Malaysia the outcome for 1998 was an increase in arrivals of 2.4% with increases from Australia, Hong Kong and Thailand and decreases from Japan and Korea.