Southeast Asia’s tourism industry begins to recover unevenly

Southeast Asia’s tourism industry is welcoming back international visitors after Covid-19, with European and North American visitors partially filling the gap from Chinese and Russian visitors.

Uneven recovery

According to travel data analytics firm ForwardKeys, accommodation bookings for international flights to Southeast Asia reached 38% of pre-pandemic levels at the end of March, up significantly from 10% at the start of this year. Singapore and the Philippines led the way in increase in bookings. Airline bookings are a future indicator and arrivals figures also include locals returning to their home countries.

Philippine Tourism Secretary Bernadette Romulo-Puyat said: “We are the first to cut all the red tape. Tourists are quite happy because upon arrival, they are free to go.”

Singapore records lowest visitor arrivals since 2003 | SME & Entrepreneurship Magazine

Singapore records lowest visitor arrivals since 2003 | SME & Entrepreneurship Magazine

Singapore and the Philippines currently only require fully vaccinated travelers to perform a rapid Covid-19 antigen test prior to entry. In contrast, the more complex requirements of Thailand, the most popular destination in Southeast Asia before the pandemic, have caused the country to fall from the top spots in terms of tourism recovery.

ForwardKeys data shows that bookings by international visitors to Singapore and the Philippines reached 72% and 62% respectively compared to 2019 levels, while the rate in Thailand was only 24%.

Marisa Sukosol Nunbhakdi, President of the Thai Hotel Association, said: “The on-arrivals PCR can cost 2,000-2,500 baht ($60-$75) and can cost a lot especially for groups, (making) people hesitant to travel. If another country does not have entry requirements, people would rather go there … less hassle.”

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However, the recovery of tourism in Southeast Asia in particular and Asia in general has been slower than in other regions including Europe, which eased restrictions on visitors months ago.

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The International Air Transport Association (IATA) forecasts that domestic and international traffic in the Asia-Pacific region this year will only reach 68% of 2019 levels and reach pre-pandemic traffic before 2025, one year behind the rest of the world.

For example, in February, when Singapore began to lift entry restrictions, visitor arrivals to the country nearly quadrupled from a year earlier, but only 9% of arrivals in February 2020. Not to mention the number of visitors entering Singapore in February including a large number of work visa holders from Malaysia and India.

Earlier this week, the Governor of Thailand’s central bank, Sethaput Suthiwartnarueput, said that it will not be until 2026 that Thailand’s tourism industry fully recovers. In 2019, tourism accounted for about 12% of the country’s gross domestic product (GDP). Tourism and travel in Southeast Asia, known for its white sand beaches, historic architecture and warm climate, contributed $380.6 billion to the region’s GDP in 2019, equivalent to equivalent to 11.8%, according to the World Travel and Tourism Council (WTTC).

The proportion of European and North American visitors increased sharply

The composition of international visitors to Southeast Asia has also changed. Once the largest group of foreign tourists in Asia, Chinese tourists are now stuck at home due to strict blockade orders. More than 25% of the 40 million foreign tourists who visited Thailand in 2019 were Chinese. This year, Thailand is expected to welcome 5-10 million international visitors from countries like Malaysia and other Asian neighbors.

Japan still closes its borders to most international visitors, and the number of Japanese visitors to Southeast Asia is small. Meanwhile, the impact of sanctions from the West makes a large number of Russian tourists absent in this area.

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According to ForwardKeys, in the first four months of this year, one-third of international visitors to Southeast Asia were Europeans, up from 22% in 2019, while the share of visitors from North America has increased more than doubled, to 21% from 9% in 2019. Visitors from other Asian countries accounted for only 24%, down sharply from 57% in 2019.

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Rabil Lian, a guide with a leading Singapore travel agency, said: “Things changed a lot for the better over the last month. We are seeing a boom in bookings.”

Lian, 51, has guided five groups of European tourists over the past four months and says Australia is also becoming a popular destination. In Vietnam, in the first quarter of this year, the number of foreign visitors nearly doubled from a year earlier. Vietnam lifted nearly all restrictions on visitors just last month but is expected to welcome only 25% of international arrivals compared to 2019 levels.

@ Reuters

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