The travel and tourism (T&T) sector has become an important driver of growth and prosperity for many countries. It is estimated that the T&T sector accounts
for about 9 percent of GDP and employment worldwide. Yet, despite its economic weight and the many benefits it provides, numerous obstacles hinder its development,
including in countries of the Association of Southeast Asian Nations (ASEAN). Using a unique methodological framework, this Report studies those obstacles, as well as the enablers of development for eight ASEAN member countries and the region.
By 2015, ASEAN member countries aim to establish the ASEAN Community (AC), a security, economic, and socio-cultural community of over 600 million people
that should by then account for almost 5 percent of world GDP. ASEAN leaders have long recognized the vital role T&T can play in realizing their vision. They have been joining forces to address T&T-related issues, which greatly benefit from regional cooperation, such as promotion and marketing, connectivity,environmental protection, visa policies and mobility, and sector liberalization. The ASEAN members have been successful in several aspects, but also experienced setbacks and are still facing major challenges, as this study shows.
The potential for developing the T&T sector isenormous. The Southeast Asia region has many assets to lure the visitor. It boasts some of the world’s most spectacular landscapes and attractions, vast ecosystems with stunning wildlife, and rich culture and
history. It possesses a long tradition of tourism, and is strategically located in the heart of Asia, the world’s most economically dynamic region. The extraordinary diversity of ASEAN countries, while posing some challenges to integration, further enhances the attractiveness of the region, which offers complementary tourism experiences and appeals to visitors of all types. The T&T sector plays an important role in the overall ASEAN economy. It is estimated to account for 4.6 percent of ASEAN GDP and 10.9 percent when taking into account all indirect contributions. It directly employs 9.3 million people, or 3.2 percent of total employment, and indirectly supports some 25 million jobs. The analysis, however, reveals a very mixed picture in terms of the tourism performances of individual ASEAN
countries. Singapore, for example, draws 20 times more tourists per capita and 30 times more receiptper capita than the ASEAN average. Malaysia is one of the world’s top 10 destinations, with about 25 million visitors per year, while the Philippines, despite its much
larger population, attracts six times fewer. The Travel and Tourism Competiveness Index (TTCI) sheds some light on the factors underpinning such mixed results. Measuring travel and tourism competitiveness Developed by the World Economic Forum in collaboration with experts from the sector, the TTCI is a comprehensive framework that aims to measure the
factors and policies that make it attractive to develop the T&T sector in different countries. It is based on three broad categories of variables that facilitate or drive T&T competitiveness. These categories are summarized in the three subindexes of the Index: (i) the T&T regulatory framework subindex; (ii) the T&T business environment and infrastructure subindex; and (iii) the T&T human, cultural, and natural resources subindex. The first subindex captures those elements that are policy related and generally under the purview of the government; the second subindex captures elements of the business environment and the “hard” infrastructure of each economy; and the third subindex captures the “softer”
human, cultural, and natural elements of each country’s resource endowments. Each of these three subindexes is composed of a number of “pillars”. There are 14 pillars in total: (1) Policyrules and regulations;
(2) Environmental sustainability;
(3) Safety and security;
(4) Health and hygiene;
(5)Prioritization of Travel & Tourism;
(6) Air transport infrastructure;
(7) Ground transport infrastructure;
(8) Tourism infrastructure;
(9) ICT infrastructure;
(10)Price competitiveness in the T&T industry;
(11) Human resources;
(12) Affinity for Travel & Tourism ;
(13) Natural resources; and
(14) Cultural resources.
Each of the pillars is, in turn, made up of a number of individual indicators, of which there are 75 in all. The dataset includes both data from the World Economic Forum’s annual Executive Opinion Survey and quantitative data from publicly available sources, international
organizations, and T&T institutions and experts. The fourth edition of the TTCI was published in The Travel and Tourism Competitiveness Report 2011 and covers a record 139 countries. Switzerland tops the TTCI rankings for the third edition in a row, followed by
Germany and France. ASEAN performance in the TTCI Through the lens of the TTCI, we identify the strengths that can be leveraged and the obstacles that must be addressed for ASEAN fully to reap the benefits of T&T. The assessment reveals ASEAN member countries in the TTCI 2011 draws a very mixed picture of the region. Singapore (10th), Malaysia (35th), Thailand (41st), Brunei Darussalam (67th), Indonesia (74th), Vietnam (80th), the Philippines (94th), and Cambodia (109th) span almost the entire rankings of 139 economies. Due to limited data availability, Lao PDR and Myanmar are excluded from
the analysis. With only three countries featured in the top 50 of the TTCI, the T&T sector in ASEAN undoubtedly faces a number of challenges. Yet, one must recognize that there exists a close relationship between performance in the TTCI and prosperity, and the rankings continue to be led by advanced economies, of which group Singapore is the only representative among ASEAN members. This is explained by the fact that advanced economies, on average, fare significantly better in most areas of the TTCI, including hard and soft infrastructures, regulatory framework, security, and public health. These factors
benefit all sectors, boosting productivity and economic development. In other words, advanced economies had to have these factors in place in order to attain their
“advanced status” In T&T. At 35th, Malaysia is actually the top-ranked developing country overall and, seen in this light, its performance can be qualified as strong. Indeed, all
seven ASEAN members feature among the 10 best developing economies in Asia, alongside China (39th), India (68th), and Sri Lanka (81st). Nepal, Pakistan,
Bangladesh, and Timor-Leste all place behind Cambodia, ASEAN’s worst performer. As for Singapore, it is the best-performing advanced economy outside Europe and North America. It leads the Asian Tigers, ahead of Hong Kong (12th), Korea (32nd), and Taiwan, China (37th). It also precedes Australia (13th), New Zealand (19th), and Japan (22nd).The analysis of of their performances in the TTCI allows us to classify ASEAN member countries
into four groups. Singapore is in a league of its own, leading ASEAN in all but two pillars of theTTCI. Second, Malaysia and Thailand do well, despite a few weaknesses. The third group consists of Vietnam, Indonesia, and Brunei Darussalam, which all display very wide performance swings. Finally, both the Philippines and Cambodia present serious shortcomings in most pillars.Despite the diverse performances, there exist common strengths and weaknesses throughout the region. Most ASEAN countries are blessed with
extraordinary natural and cultural heritages, which obviously provide fertile ground for T&T development. It must be noted that these countries could do more to showcase and preserve their heritage. The competitiveness of the sector, however, does not necessarily hinge on natural and cultural heritage—Singapore and Cambodia being two extreme examples.Government prioritization of T&T is another strength shared by most ASEAN countries.Concrete actions, however, do not always follow.A third area of strength is the region’s affordability. Visiting the region is relatively cheap by international standards. Undoubtedly, price competitiveness is an asset, given the present economic context.
On the other hand, inadequate infrastructure in vast swaths of the region remains a significant obstacle to the development of not only the T&T sector but the private sector in general. This deficit hinders physical connectivity, exacerbates disparities, and undermines
the vision of the ASEAN Community. ASEAN and its members are aware of the problem and consider it a priority. But more than political will, bridging the gap will require massive investment in coming years. A second area of concern is the poor public health situation, alarming in some parts of ASEAN, where inadequate sanitary infrastructure and poor hygiene result in poor health outcomes. Unhealthy conditions are an inconvenience for tourists, but for the society at large, they are a major issue requiring urgent attention.
Environmental stewardship represents another area of relative weakness. Conservation efforts must be commensurate with the region’s extraordinary natural heritage and the tourism attractiveness it derives from that heritage. Governments in the region face the
daunting challenge of balancing the socio-economic interests of different stakeholders while meeting the sustainability imperative. Their success has been partial and, despite their commitment, evidence shows that the natural environment is under great strain and
deteriorating in many places. The ASEAN Tourism Strategic Plan 2011-2015 provides a roadmap to 2015 to address most of the bottlenecks and leverage the strengths identified in this Report. Provided they get implemented, these measures will not only unleash the potential of the T&T sector, but also boost the region’s competitiveness, help the
region’s poorer countries to move up the value chain, produce enormous socio-economic benefits, and greatly contribute to the realization of the ASEAN Community.
The Report contains a pillar-by-pillar analysis of the results for ASEAN countries. A number of text boxes complement the analysis. Among the topics is an overview of global and regional trends in tourism; a review of the various initiatives carried out by ASEAN to
develop the T&T sector; an analysis of ASEAN’s group performance in the TTCI as it compares with other country groups; a review of ASEAN’s single visa program and visa requirements; an analysis of intra-ASEAN air connectivity; and an assessment of the region’s natural heritage. The Report also features the ASEAN Scorecard which reports the detailed performance of ASEAN countries in the different components of the TTCI.
for about 9 percent of GDP and employment worldwide. Yet, despite its economic weight and the many benefits it provides, numerous obstacles hinder its development,
including in countries of the Association of Southeast Asian Nations (ASEAN). Using a unique methodological framework, this Report studies those obstacles, as well as the enablers of development for eight ASEAN member countries and the region.
By 2015, ASEAN member countries aim to establish the ASEAN Community (AC), a security, economic, and socio-cultural community of over 600 million people
that should by then account for almost 5 percent of world GDP. ASEAN leaders have long recognized the vital role T&T can play in realizing their vision. They have been joining forces to address T&T-related issues, which greatly benefit from regional cooperation, such as promotion and marketing, connectivity,environmental protection, visa policies and mobility, and sector liberalization. The ASEAN members have been successful in several aspects, but also experienced setbacks and are still facing major challenges, as this study shows.
The potential for developing the T&T sector isenormous. The Southeast Asia region has many assets to lure the visitor. It boasts some of the world’s most spectacular landscapes and attractions, vast ecosystems with stunning wildlife, and rich culture and
history. It possesses a long tradition of tourism, and is strategically located in the heart of Asia, the world’s most economically dynamic region. The extraordinary diversity of ASEAN countries, while posing some challenges to integration, further enhances the attractiveness of the region, which offers complementary tourism experiences and appeals to visitors of all types. The T&T sector plays an important role in the overall ASEAN economy. It is estimated to account for 4.6 percent of ASEAN GDP and 10.9 percent when taking into account all indirect contributions. It directly employs 9.3 million people, or 3.2 percent of total employment, and indirectly supports some 25 million jobs. The analysis, however, reveals a very mixed picture in terms of the tourism performances of individual ASEAN
countries. Singapore, for example, draws 20 times more tourists per capita and 30 times more receiptper capita than the ASEAN average. Malaysia is one of the world’s top 10 destinations, with about 25 million visitors per year, while the Philippines, despite its much
larger population, attracts six times fewer. The Travel and Tourism Competiveness Index (TTCI) sheds some light on the factors underpinning such mixed results. Measuring travel and tourism competitiveness Developed by the World Economic Forum in collaboration with experts from the sector, the TTCI is a comprehensive framework that aims to measure the
factors and policies that make it attractive to develop the T&T sector in different countries. It is based on three broad categories of variables that facilitate or drive T&T competitiveness. These categories are summarized in the three subindexes of the Index: (i) the T&T regulatory framework subindex; (ii) the T&T business environment and infrastructure subindex; and (iii) the T&T human, cultural, and natural resources subindex. The first subindex captures those elements that are policy related and generally under the purview of the government; the second subindex captures elements of the business environment and the “hard” infrastructure of each economy; and the third subindex captures the “softer”
human, cultural, and natural elements of each country’s resource endowments. Each of these three subindexes is composed of a number of “pillars”. There are 14 pillars in total: (1) Policyrules and regulations;
(2) Environmental sustainability;
(3) Safety and security;
(4) Health and hygiene;
(5)Prioritization of Travel & Tourism;
(6) Air transport infrastructure;
(7) Ground transport infrastructure;
(8) Tourism infrastructure;
(9) ICT infrastructure;
(10)Price competitiveness in the T&T industry;
(11) Human resources;
(12) Affinity for Travel & Tourism ;
(13) Natural resources; and
(14) Cultural resources.
Each of the pillars is, in turn, made up of a number of individual indicators, of which there are 75 in all. The dataset includes both data from the World Economic Forum’s annual Executive Opinion Survey and quantitative data from publicly available sources, international
organizations, and T&T institutions and experts. The fourth edition of the TTCI was published in The Travel and Tourism Competitiveness Report 2011 and covers a record 139 countries. Switzerland tops the TTCI rankings for the third edition in a row, followed by
Germany and France. ASEAN performance in the TTCI Through the lens of the TTCI, we identify the strengths that can be leveraged and the obstacles that must be addressed for ASEAN fully to reap the benefits of T&T. The assessment reveals ASEAN member countries in the TTCI 2011 draws a very mixed picture of the region. Singapore (10th), Malaysia (35th), Thailand (41st), Brunei Darussalam (67th), Indonesia (74th), Vietnam (80th), the Philippines (94th), and Cambodia (109th) span almost the entire rankings of 139 economies. Due to limited data availability, Lao PDR and Myanmar are excluded from
the analysis. With only three countries featured in the top 50 of the TTCI, the T&T sector in ASEAN undoubtedly faces a number of challenges. Yet, one must recognize that there exists a close relationship between performance in the TTCI and prosperity, and the rankings continue to be led by advanced economies, of which group Singapore is the only representative among ASEAN members. This is explained by the fact that advanced economies, on average, fare significantly better in most areas of the TTCI, including hard and soft infrastructures, regulatory framework, security, and public health. These factors
benefit all sectors, boosting productivity and economic development. In other words, advanced economies had to have these factors in place in order to attain their
“advanced status” In T&T. At 35th, Malaysia is actually the top-ranked developing country overall and, seen in this light, its performance can be qualified as strong. Indeed, all
seven ASEAN members feature among the 10 best developing economies in Asia, alongside China (39th), India (68th), and Sri Lanka (81st). Nepal, Pakistan,
Bangladesh, and Timor-Leste all place behind Cambodia, ASEAN’s worst performer. As for Singapore, it is the best-performing advanced economy outside Europe and North America. It leads the Asian Tigers, ahead of Hong Kong (12th), Korea (32nd), and Taiwan, China (37th). It also precedes Australia (13th), New Zealand (19th), and Japan (22nd).The analysis of of their performances in the TTCI allows us to classify ASEAN member countries
into four groups. Singapore is in a league of its own, leading ASEAN in all but two pillars of theTTCI. Second, Malaysia and Thailand do well, despite a few weaknesses. The third group consists of Vietnam, Indonesia, and Brunei Darussalam, which all display very wide performance swings. Finally, both the Philippines and Cambodia present serious shortcomings in most pillars.Despite the diverse performances, there exist common strengths and weaknesses throughout the region. Most ASEAN countries are blessed with
extraordinary natural and cultural heritages, which obviously provide fertile ground for T&T development. It must be noted that these countries could do more to showcase and preserve their heritage. The competitiveness of the sector, however, does not necessarily hinge on natural and cultural heritage—Singapore and Cambodia being two extreme examples.Government prioritization of T&T is another strength shared by most ASEAN countries.Concrete actions, however, do not always follow.A third area of strength is the region’s affordability. Visiting the region is relatively cheap by international standards. Undoubtedly, price competitiveness is an asset, given the present economic context.
On the other hand, inadequate infrastructure in vast swaths of the region remains a significant obstacle to the development of not only the T&T sector but the private sector in general. This deficit hinders physical connectivity, exacerbates disparities, and undermines
the vision of the ASEAN Community. ASEAN and its members are aware of the problem and consider it a priority. But more than political will, bridging the gap will require massive investment in coming years. A second area of concern is the poor public health situation, alarming in some parts of ASEAN, where inadequate sanitary infrastructure and poor hygiene result in poor health outcomes. Unhealthy conditions are an inconvenience for tourists, but for the society at large, they are a major issue requiring urgent attention.
Environmental stewardship represents another area of relative weakness. Conservation efforts must be commensurate with the region’s extraordinary natural heritage and the tourism attractiveness it derives from that heritage. Governments in the region face the
daunting challenge of balancing the socio-economic interests of different stakeholders while meeting the sustainability imperative. Their success has been partial and, despite their commitment, evidence shows that the natural environment is under great strain and
deteriorating in many places. The ASEAN Tourism Strategic Plan 2011-2015 provides a roadmap to 2015 to address most of the bottlenecks and leverage the strengths identified in this Report. Provided they get implemented, these measures will not only unleash the potential of the T&T sector, but also boost the region’s competitiveness, help the
region’s poorer countries to move up the value chain, produce enormous socio-economic benefits, and greatly contribute to the realization of the ASEAN Community.
The Report contains a pillar-by-pillar analysis of the results for ASEAN countries. A number of text boxes complement the analysis. Among the topics is an overview of global and regional trends in tourism; a review of the various initiatives carried out by ASEAN to
develop the T&T sector; an analysis of ASEAN’s group performance in the TTCI as it compares with other country groups; a review of ASEAN’s single visa program and visa requirements; an analysis of intra-ASEAN air connectivity; and an assessment of the region’s natural heritage. The Report also features the ASEAN Scorecard which reports the detailed performance of ASEAN countries in the different components of the TTCI.