Asia is gearing up to revive the tourism sector amid new waves of Covid-19 infections. The region’s confidence comes from the rollout of vaccines and improved efforts to manage the crisis. While many countries have announced plans to accept international travelers, the reopening comes with restrictions and entry requirements.
The tourism and hospitality industry has emerged as one of the key drivers of growth among the services sector throughout Asia, especially in emerging economies. But without a doubt, 2020 and H1 2021 were challenging years for most economies amid global lockdowns and international tourist arrivals in Asia-Pacific being virtually zero by early 2021.
However, several improvements in official tourism numbers have compelled the Pacific Asia Travel Association (PATA) to revise its Asia Pacific Visitor Forecasts 2021-2023 report.
The PATA’s initial forecast for the region for 2020 was 121.843 million international visitor arrivals (IVAs), but actual IVAs are now at 126.475 million. Compared to 2019, this is a reduction of international visitors by 82%.
And losses are expected to continue in 2021 for the Asia and the Pacific sub-regions. At best, Asia would post a 50.8% annual change in IVAs from 2020 to 2021, while the Pacific is projected to record -4.6% at best. This will be enough to pull the Asia Pacific region to an annual increase of 27.2% between 2020 and 2021. This is the best case scenario according to the study. Worst has it at -60.2% for the region.
However, some nations are still struggling to keep their tourism sector afloat due to the virus resurgence. David Fassbender, Senior Portfolio Manager and Head of Southeast Asia, PGIM Real Estate, expects a recovery from 2022 onwards, driven by pent-up demand for leisure travel, especially with national targets to vaccinate the majority of the population by the end of 2021.
“However, the vaccination efforts are not progressing fast enough in all markets, so that the opening of some markets could take much longer,” Fassbender told AsiaFundManagers.com.
Vaccination holidays to boost tourism
Some Asian countries are already open for tourism again, including Hong Kong, Maldives, Thailand, Sri Lanka, and Singapore. Others are open for essential travelers only, e.g. India, Japan, and Taiwan. However, entry requirements and restrictions apply.
To bring in more tourists to Bali, Indonesia is planning to launch a vaccination holiday scheme for the province. However, plans to reopen for tourist in July were pushed back due to a recent surge in Covid-19 cases in the country.
“We are targeting the end of July, beginning of August, but we just have to be mindful of where we are in this recent spike. We will be waiting for the situation to be more conduciv,” Tourism Minister Sandiaga Uno said. He wants to bring cases down to about 30-40 daily from the current approx. 200 cases per day.
Vaccination in Bali has been prioritized to revitalize the tourism-dependent economy. About 71% of the Balinese population has been vaccinated so far.
Under the vaccination holiday scheme, it is planned that Indonesians traveling to Bali will receive the Chinese vaccine Sinovac for free, while foreign tourists will have to pay a fee. Options for Pfizer, Moderna and Novavax will be considered depending on the supply. The vaccine holiday are planned to last for 14 days, allowing tourists to receive two shots, one upon arrival and one on departure. Covid-19 tests will be required for all people traveling by air to Bali.
Meanwhile, a sandbox project aims to restart tourism in Thailand. Despite the third wave, foreign guests are again allowed to visit the island of Phuket, without a two-week hotel quarantine. However, only for those who have been fully vaccinated.
Tourism is one of the most important economic sectors, and Phuket is considered the most popular destination for tourists in Thailand.
Vietnam’s and Philippines’ tourism sector shattered
Vietnam has been touted worldwide as a success story in the Covid-19 pandemic response. It is one of only three Asian countries that recorded economic growth in 2020. However, Vietnam’s pandemic control measures have gravely affected its tour and hospitality groups.
A Ho Chi Minh City Tourism Department report in mid-March revealed that 90% of small and medium-sized inbound travel companies had stopped their operations.
Vu The Binh, Deputy Chair of the Vietnam Tourism Association (VTA), said that 2.6 million out of the 2.9 million workers in the sector had lost their jobs. The current fourth wave of Covid-19 cases does not help their case as varying degrees of lockdowns have been imposed across Vietnam.
With around 25% of the country’s gross domestic product (GDP) coming from tourism, according to data from consultancy firm Pear Anderson, the Philippines were struck to the core.
When the sector contracted by 84% in 2020, and its economy shrank by 9.5% due to the global health crisis, the job losses reached between five and six million. Tourist arrivals in the Philippines went down from 8 million in 2019 to just 1.3 million in 2020. Prominent hotel Marco Polo Davao closed down in June 2020, while the Makati Shangri-La Manila decided to temporarily halt operations.
Vaccination drives remain slow, and the new UK and Africa variants have been detected in the Asian nation as well. While lockdown restrictions have been easing and domestic travel is now allowed in some destinations, visa restrictions for foreign tourists are yet to be lifted in the Philippines.