Taxes and Tourism Study
The APEC Tourism Working Group (TWG) is working on a study, ”An Assessment of the Role of Taxation in Promoting Travel and Tourism Growth in the APEC Region” that aims to: a) assess the impact of current taxation measures as well as their modifications/ changes over time in relation to travel and tourism demand, revenues, and job growth in participating APEC economies; b) evaluate the comparative position of taxation levels in the travel and tourism industry against taxes imposed on other key sectors in participating APEC economies to ensure fair and equitable treatment of taxation across industries in the region; and c) determine the degree of inhibition to regional economic integration and growth by taxation policies.
A conference on this issue was held in Boracay, the Philippines, on 19 May 2015. This study is conducted in cooperation with the private sector, represented by the World Travel & Tourism Council (WTTC), which has compiled a similar study.
Developing ‘Smart Traveller’ Programmes to Facilitate International Travel within APEC
In order to fully tap the economic potential of international tourism, smart technologies can be used to enhance tourist safety. Away from their home economies and exposed to possible threats, foreign travellers are a vulnerable group. ‘Smart Traveller’ programmes has the potential to provide travellers with regular updates on their destinations as well as keep them connected with their home economies. TWG members will explore ‘Smart Traveller’ models as travel facilitating tools and seek to develop guidelines as a basis for their own ‘Smart Traveller’ programs.
Enhancing Air Connectivity in the APEC Region
Improving air connectivity between APEC economies can stimulate the growth of tourism and trade, resulting in economic and social development, and job creation particularly for women, young people, and rural communities. However, efficient flow of goods, services, capital, and people in the APEC region is restricted and blocked by limitations and gaps in air connectivity between economies. Geography still defines the nature of air connectivity between the Americas and Asia-Pacific in global air transport. TWG endeavours to identify the gaps in air connectivity based on market demand within the APEC region and recommend possible solutions.
While TWG will focus on people connectivity, as well as in improving supply chains across the APEC region. TWG will work together with relevant stakeholders to pro-actively identify air connectivity opportunities as well as provide APEC-focused data, market based assessments, and analytics to airline network planners in order to help airlines improve air connectivity in the APEC region.
The movement of travellers across the Asia-Pacific region for business and leisure is vital to economic growth, as stated in the APEC Travel Facilitation Initiative (TFI) and the 2012 Leader’s Declaration. Traveller-friendly airports, falling under the Airport Partnership Program component of the TFI, allows pilot economies to lead the implementation of a partnership in which government and stakeholders in the private sector work with individual airports to showcase best practices for creating a welcoming airport environment.
The APEC region represents the world’s biggest passenger aviation market. According to the International Air Transport Association (IATA), Asia-Pacific passenger traffic is projected to grow at 5.7%, with around 300 million additional passengers by the end of 2017. Traffic within the Asia-Pacific region will represent 31.7% of global passengers in 2017, up from 28.2% in 2012. IATA also predicts that the number of air travellers around the world will grow from 2.4 billion in 2010 to 16 billion by 2050, with much of this growth expected to occur in the Asia-Pacific region.
The APEC region is home to some of the world’s busiest airports. Airport Council International (ACI) statistics ranked 38 airports in the APEC region in the top 50 by account of passenger movement. The airport is an instrument of hospitality, yet inefficient and stressful entry and exit processes create an uncomfortable experience. TWG seeks to find a good system that balances security and hospitality aspects of passenger processing at APEC airports.
Sustainable Development of Tourism Destinations
In early 2014, the APEC Tourism Working Group came up with a report on sustainable tourism concepts, guidelines, indicators and certifications, which were insights from the Sustainable Development of Tourism Destinations study. Aside from tourism sustainable practices and guidelines, the study also resulted in the development of a tourism sustainability tool to provide insight and information on developing a sustainable tourist destination.
Growing Tourism Travel in the Region
Recovering from the 2008 financial crisis, travel and tourism in the region has shown consistent growth and contributed significantly to APEC economies. According to the World Travel and Tourism Council, travel and tourism constituted 8.5% of total APEC GDP or USD 3.6 trillion in 2013. In the same year, the sector contributed 8.8% of total employment, and 4.9% of total exports (goods and services). Total APEC GDP contribution is expected to grow by 4.6% per year, adding over 40 million more jobs by 2024.
At the recent meeting of the APEC Tourism Working Group, Australia, China, Indonesia, Malaysia, Peru, Chinese Taipei, United States have all reported that their inbound visits from overseas has continued to increase in 2013. The record also indicated increasing outbound tourism travel from APEC economies. According to China, its outbound tourism in 2013 reached 98.19 million. It is also important to note that domestic tourism remains strong. Indonesia noted 248 million movements in 2013.
Travel Facilitation Initiative
Following up on directives by APEC Leaders and Ministers, APEC member economies continue to implement travel facilitation initiatives to promote tourism in the region. A report in 2013 by the World Travel and Tourism Council and United Nations World Travel Organization projected that APEC visa facilitation could lead to 57 million additional tourists and USD 89 billion to GDP, resulting in some 2.6 million additional jobs. Since 2013, Japan has provided visa exemptions for tourists from Thailand and Malaysia. As a result, Japan has seen an increase of tourist numbers by 96% and 53%, respectively, between July-Dec 2013 after the visa relaxation. Japan also has provided a stay period extension for multiple-entry visas for tourists from Indonesia, and introduced multiple entry visas for the Philippines and Viet Nam. Chinese Taipei has also introduced a temporary permit for cruise passengers.
China, Japan, and Chinese Taipei have also introduced Muslim-friendly tourist programs to tap into the tourism market especially from economies with a significant Muslim population. The programs include prayer facilities at international airports, Muslim friendly services, information provision, and halal-food programs.
Improving Skill Standard to Facilitate Regional Integration
The APEC Tourism Working Group has taken the initiative to establish the APEC Skill Standards System. Since 2000, the project has developed almost 400 Skill Standard Units covering general and tourism sectors, the majority of which are based on the Indonesian and Australian National Competency Standards.
TWG has been working on developing occupational skill standards in the tourism industry with the aim of designing a training system that would significantly improve human resource development in APEC’s tourism sector. Regional confidence in training outcomes and qualifications awarded will stimulate intra-regional investment and the flow of human resources in the industry.
The skill standard developed by APEC has been utilized by individual economies as well as other regional organizations such as ASEAN in developing their own scheme of mutual recognition agreements in this area. TWG is continuing work to improve tourism skills in order to facilitate trade and investment in the sector.