People's Republic of China
Through its proactive role in building a world-class digital infrastructure, China has transformed itself into a world digital leader, leapfrogging the world in mobile payments and advancing towards a cashless economy. Currently, 61.2% of global mobile payment users are Chinese, with transactions made through mobile payment in China totalling over $12.8 trillion in 2017.
Alibaba and Tencent, through Alipay and WeChat Pay respectively, dominate the mobile payment market; enabling, in collaboration with the Chinese government, convenience, speed and security. This transformation has required public-private collaboration, with the Chinese government making point of sale machines more readily available and advocating for the online payment market.
Having become the biggest spender in outbound travel and the most important mobile payment market, China is leading payment behaviour trends among global travellers. In fact, 77% of Chinese outbound travellers use mobile payment, a figure which could rise to over 90% should Chinese tourists be given the opportunity. The top five reasons Chinese travellers opt for mobile payment overseas are convenience (67%), quicker checkout (61%), no need to exchange foreign currency (46%), security (43%) and no need to bring a wallet while travelling (38%).
While mobile payments are widespread in China, there are still barriers in overseas mobile payments and as such untapped potential for the Travel & Tourism sector. In effect, non-cash payments reduce the cost of printing, handling, and circulating banknotes; and can help in the struggle against tax evasion, corruption, and illegal activity when smartly regulated.
The rise of high-speed rail has been essential in restoring rail travel as a key element of a nation’s transportation network; and Japan has led the way for decades. Since Japan debuted the Shinkansen (“bullet train”) in 1964, it has expanded across the country, now linking most of the main cities from North to South with trains operating in excess of 250km/h and covering over 3000km through its routes. While the Shinkansen was originally built and operated by the government-owned Japanese National Railways, it has become part of the privatised Japan Railway Group since 1987.
The Shinkansen has carried over 10 billion passengers since its inauguration, transporting a staggering 420,000 travellers on a typical weekday; and has a pristine record for safety and timeliness, with no fatal train derailments or collisions and average delays of just 36 seconds.
Through its highly efficient rail system, Japan has created a sophisticated solution to enable workers to get from one dense city to another. At the same time, it has successfully enticed tourists to use rail to easily access far-flung destinations across the country. While rail travel in Japan can be costly, rail passes are sold at discounted rates for either 7 or 14 days to foreign tourists. What’s more, to address, the language boundary, Japan has included four languages in its stations and onboard signage.
This is particularly noteworthy, in light of the exponential growth in international arrivals to Japan over the past decade, increasing by 271%, from 8.4 million in 2008 to 31.2 million in 2018. Of Japan’s record 31.2 million international arrivals in 2018, about 57.7% or 18 million foreign travellers ventured outside of the Tokyo, Nagoya and Osaka metropolitan areas and spent 1.8 trillion Yen ($16.4 billion). International visitors seeking experiences, such as skiing, visiting hot springs, and engaging in nature tourism, have a stronger tendency to go beyond the three traditional metropolitan areas.
Looking to 2020, Japan is aiming to reach 40 million international arrivals. In this context, rail travel has the significant advantage of enabling Japan to continue growing international arrivals while spreading foreign visitors across the country and avoiding overcrowding.
Copenhagen is the foremost example of a city which went through a major infrastructural transformation process to shift from the use of cars to bicycles. This self-proclaimed “City of Cyclists” has the ambition to be the world’s best city for cyclists by 2025 - and is on its way to achieving that goal.
The results to date are impressive. Four out of five households in Copenhagen have access to a bicycle and 49% of all trips to work and education are done by bike. In fact, in 2018, 1.44 million kilometres were cycled by Copenhageners daily, with 97% of cyclists saying that they are satisfied with the cycling conditions. Copenhageners’ cycle because it’s faster (46%), it’s easier (55%), it’s a workout (46%), it’s cheaper (26%), it’s convenient (21%) and its eco-friendly (16%).
This shift in policy was justified through the calculation of the socio-economic costs of cycling vs. automobility; which revealed that the net social gain for each cycled kilometre is €0.16 compared to the net social cost of €0.09 per kilometre driven by car. The societal benefits of cycling have now been estimated at €228 million per year.
On this basis, the city of Copenhagen invested over the past decade DKK 2 billion ($300 million) in bicycle infrastructure including cycle tracks, Green Cycleroutes and cycle superhighways and bicycle parking; while promoting the “bicycle city” as a desirable future. This has been key in cultivating social identities supportive of bicycle cultures, and thus enabling this joint infrastructural and behavioural change. The city takes a data-driven strategy to monitor and address traffic and user needs; integrating infrastructure, maintenance, policy and user interaction in its holistic approach.
Through this transformation, Copenhagen has involved tourism in its vision, creating materials addressing visitors. The city not only offers bike tours but has created a free bike system, with half of all available bikes being used by tourists. The shift from cars to bikes has changed the character of Copenhagen, which has become calmer, quieter and less polluted; in turn making it a more attractive tourist destination. In fact, in 2018, Lonely Planet ranked Copenhagen as the top city to travel to in 2019, while European expats rated it as the top city to live in.
London, United Kingdom
Unlike many other destinations, London and the United Kingdom were successful in making the 2012 Olympics both a feel-good experience for spectators and a favourable investment with positive returns for the City of London.
In its bid, the London Culture, Sport & Tourism Committee, highlighted the Olympics as an opportunity to reassert London’s status as a world city, to accelerate redevelopment in East London and showcase London and the United Kingdom’s diversity and sporting abilities on the world stage.
The City did its best to deliver on its promises, as the London Games led to the regeneration of East London, from a 500-acre area of mostly toxic wasteland which was converted into the Olympic Park and 11,000 homes were built following the Games. Beyond the venues for the Olympics, London cleaned up and regenerated its canals, extended transport and built new transport links, and also invested in hospitality infrastructure.
The Games also had a positive tourism impact with 1.2 million tickets sold to foreign residents, while domestic visits to London increased by 9.5%. The Olympics also welcomed 16,500 athletes, 4,000 technical officers, 4,000 Olympic movement officials and 21,000 accredited members of the press.
Moreover, the 2012 Games are estimated to have generated a net increase in tourism arrivals of 10.8 million between 2005 and 2017, generating £2 billion contribution to GDP and supporting over 61,000 jobs additional years of employment between 2005 and 2017. It was estimated that just under half of the GDP impact of £2 billion from tourism would take place in the years following the Olympics. To ensure the continued growth of the Travel & Tourism sector post-Olympics, VisitBritain launched its “GREAT” campaign in the months following the games.
While the cost of the London Olympics and Paralympics amounted to £8.77 billion, the Games have been estimated to contribute £16.5 billion to the UK GDP over 12 years according to Oxford Economics, with 70% forecasted to be generated ahead of and during the Games, and the remainder 30% to be produced as part of its legacy. In effect, research shows that Londoners were still reaping the benefits from the Olympics in 2018, with events taking place in the 2012 venues generating £134 million ($176 million).