May 1, 2015
The world has changed, and so has the way people and companies do business around the globe, increasing connections and networking through the internet, partnerships and new business concepts which bring with them more innovation and expertises. Trade and Tourism will be the transcontinental businesses for a new world.
According to recent studies, China alone will bring 97 million tourists into the world market, per year, until 2023. This is a massive number of people, demanding more hotels, more airports, more airplanes and ships, trains and buses. And the industries that support tourism, or those based on tourism, will grow faster than ever.
China is becoming the largest source market for international travel. Already the global leader in tourism departures, it is estimated that China overtook the US as the largest source of international travel spending in 2014. According to analysts, in the next decade, over 60 million Chinese households will cross the annual income threshold of $35,000, at which point international travel becomes more affordable.
This growth is sustained by China's rising economy, which will permit the country's ever growing middle class to use more long-haul flights for several destinations. Already, Chinese travellers are ranked among the top spenders on a per-trip and per-night basis. Redistribution of Chinese households toward the middle and upper income classes will raise the value of Chinese travellers to international destinations as preferences continue their shift toward long-haul travel, higher-cost accommodations and upscale shopping, thus bringing more money into the world economic system, triggering other countries to grow and stabilize their economical status.
Leisure tourism comprises an increasing share of Chinese travel demand. Currently, leisure accounts for 59% of total Chinese travel and tourism spending. By 2023, the leisure share of total Chinese outbound tourism will reach 62%.
With the growing popularity of leisure travel to the US and Europe, these long-haul destinations will experience greater travel flows from China.
This idea becomes clearer when you imagine that China will overtake the US, UK and Germany to become the largest source market for long-haul travellers by 2020. In just five years. Also, continuing shift in preferences towards higher-cost accommodation and upscale shopping, which will propel chinese tourists onto the best shopping cities on the globe.
In 2013, according to analysts from Oxford Economics, cities are the primary destinations for Chinese outbound travellers, with over 85% heading for major cities around the world, including New York, Los Angeles, Tokyo, Bangkok, San Francisco, Kuala Lumpur, Venice, Milan, Rome or Las Vegas.
In the near future, chinese tourists will choose destinations that are more accessible, which means the countries with the easier visa policies for chinese citizens will gain most.
Intercontinental trade is blooming, reaching numbers only found before the economic crisis, with freight numbers rising each year, either by air and sea. Recent investments by major shipping companies and airlines dedicated solely to cargo transport has increased in the past few years, meaning a global growth of commercial exchanges between continents is near.
Trade routes will become more diverse. A new parallel lane in the Suez Canal will power the growth of trade between southeast Asia, Europe and Russia, and also between Russia, Europe and eastern Africa. Commodities and products will be transported faster, safer and more reliably, with less time consumed between producer and consumer.
The ongoing work on the Panama Canal will almost double its shipping capacity. The central american waterway will become available for bigger ships to cross. Presently, the Panama Canal is limited to "panamax" class ships and in the future the new giants of the seas will finally be able to cross it. But Honduras is a new player on global trade routes. The country's government, along with China, has announced the construction of a new, wider water channel wich will connect both Atlantic and Pacific Oceans, allowing less restrictions to shipping lanes and routes. The new Honduras Channel together with a renovated Panama Channel will be at the forefront of trade increase. This will permit the rapid expansion of international commerce and trade between continents, especially between Europe, the Americas and Asia.
The future looks bright for transcontinental businesses. Producers who export and representatives of foreign products and brands will benefit the most, as new trade routes will allow for lower freight prices and faster deliveries, increasing the availability of different commodities and processed goods.