Asia Travel Re:Set #13 – China Wants its 'Hyper Trains' to Refashion Travel
"Countries creating air bubbles is just another way of protecting home carriers."
Hello. Welcome to Asia Travel Re:Set
“The coronavirus has infiltrated our thought patterns in every aspect of daily life, but most especially our attitudes to leisure, which by definition means travel.”
I delivered that phrase in a presentation for the ASEAN Tourism Research Association this week.
I was quite proud of the construction. Until I started reading Fareed Zakaria’s new book, 10 Lessons for a Post-Pandemic World. In it, he writes:
“COVID-19 is the single most consequential event in our lifetime.”
Inarguable. Effortlessly articulated.
The point - or, at least, the one I was trying to make - is that we currently do not know the full consequences of the pandemic on human psychology and behaviour.
Moreover, its ultimate impact on travel patterns.
To counteract this, we try to override what may be frantically occurring beneath the surface. It is our coping mechanism. Our way of supposing that this will one day end.
And so we read upbeat travel search surveys that contradict - in some cases, flagrantly - more rigorous evaluations of consumer spending intent.
Attempting to bridge this gap, we ‘like’ projections setting outline parameters - which are being pushed ever outwards - for when air travel will “return to 2019 levels.”
But what if that never happens?
What if no modelled timeline can give the comfort the travel industry craves?
Take rapid testing. Would a universal, accurate and responsive system magically unlock the airport gates? Or are too many factors at play?
What if governments don’t buy it, and refuse to sanction resumptions of travel?
And what if travellers simply do not trust rapid testing, and never will? Ditto the array of vaccines being laid out for governments to select, purchase and administer.
In this week’s pre-election TV debate, the US president admitted that should a vaccine become available in 2020, 100 million vials would be distributed. The population of the US is approximately 330 million. The salvational maths simply don’t add up.
And what if the balance of travel demand and supply - which is fundamentally ruptured - cannot recalibrate to our liking?
These are gloomy scenarios, but they underpin the decisions being made. Just look at the headcount reductions for major airlines. The travel supply chain is weakened.
Yes, pent-up travel demand exists. But what if that bottled desire is based on who we used to be, how the world once looked and why we previously travelled?
The world of travel we spied at Bangkok Suvarnabhumi Airport on Wednesday night, when the first cohort of Special Tourist Visa travellers, arrived was deeply unsettling.
Seeing those 39 (or was it 41?) Chinese arrivals waiting outside the terminal in plastic wraps, gloves and face shields may colour the way we think about travel for some time.
And that is maybe something we must accept.
We’d all love to leave 2020 behind as a ‘failed year’. But the scarring is sore - and, as Mr Zakaria, attests - consequential.
Just 6 stories in today’s edition, but in a little more detail.
Back to the normal 8 next Sunday.
Thanks for being onboard,
Gary
The Sunday Itinerary
- DashBoard
An Asian Travel Pot Pourri
- QuoteBoard
Thailand, the Philippines, Travel Bubble ‘Protectionism’
- The Good, The Bad & The Bubbly
- This Week’s Asia Pacific ‘Top 6’
Will COVID-19 Derail or Accelerate High-Speed Train Travel?
Singapore Racks Up 11 Bilateral Travel Deals
China Extends its Ban on Outbound Groups
India Gets Proactive on Reopening
Sabah, AirAsia & Malaysia’s COVID-19 Crisis
How Has COVID-19 Impacted Travel KOLs?
DashBoard
An Asian Travel Pot Pourri
90%: The minimum predicted fall in visitor arrivals to Macao in 2020 compared to 2019. It could be higher. (Macao Government Tourism Office)
76%: Decrease year-on-year of international visitors to Angkor Wat in Cambodia. (Cambodian media)
27.8%: Fall in domestic air passengers in South Korea in September compared to the same 2019 month. (Ministry of Land, Infrastructure & Transport)
24%: The reduction in staff at Cathay Pacific, which announced 8,000 job losses this week. (Official statement)
20%: Proportion of outlets to be closed by Japan’s largest travel agency, JTB, over the next 5 years. (The Asahi Shimbun)
QuoteBoard
You heard it here…
“It’s a welcome sign that foreigners are confident in our safety measures… I instructed officials to take good care of the tourists, because if they’re safe, Thais are safe too.”
Anutin Charnvirakul, Thailand Health Minister (Official statement)
“I am not sure if this would contribute to the boost of travel. It may increase the (anxiety) of travellers, particularly inside an aircraft when you are unsure if the stranger next to you is truly negative.”
Ritchie Tuaño, President, Philippine Travel Agencies Association discusses removing the need for Filipino travellers to take a pre-flight antigen test (Manila Bulletin)
“Countries creating air bubbles is just another way of protecting home carriers at the cost of international free travel and open skies.”
Akbar Al Baker, CEO, Qatar Airways (Flight Global)
The Good, The Bad & The Bubbly
Why have so few Travel Bubbles opened? In late April, Australia and New Zealand floated the notion of a Travel Bubble. The possibility of quarantine-free air travel ignited hopes of escaping travel bans and border closures. That was 6 months ago.
Was it a false dawn, or were expectations simply too high?
On The South East Asia Travel Show this week, Hannah Pearson and I dive deep into the murky world of travel bubble negotiations.
We discuss the various definitions that are applied - from air travel bubbles and air corridors to fast tracks and green lanes.
We also assess the progress of 3 high-profile travel bubbles - Hong Kong-Singapore, Australia-New Zealand and India-Maldives - which illustrate the diverse challenges that stand in the way of more bubble agreements.
Listen to the podcast here
1) Will COVID-19 Derail or Accelerate High-Speed Train Travel?
Throughout the 2010s, Asia’s Pacific air route map expanded exponentially. Airlines criss-crossed the skies and more passengers than ever flew over and within borders.
Rail travel, meanwhile, remained largely parochial. Few trans-national routes are offered, and none that offer the speed and comfort of either air travel or – in places like China, Japan, South Korea and Taiwan – domestic train trips.
The pandemic won’t automatically change that fact. It didn’t need to. Expansionist rail policies based on years of advanced train and track technology R&D in China – but also Japan and South Korea – were already at play in South East Asia and India. Not to mention Africa and parts of Europe.
Constructed and funded by Chinese firms, the Kunming-Laos high-speed railway (HSR) is slated to open in late 2021. Chinese built rail networks are also under various stages of discussion or development in Indonesia, Malaysia, Philippines and Thailand.
While delays appear inevitable for many reasons – including the ability to repay debt financing - these projects are still viewed as priority infrastructure projects.
“This week, China upped the stakes by unveiling a new bullet train it says can travel at up to 400 km per hour.”
This week, China upped the stakes by unveiling a new bullet train it says can travel at up to 400 km per hour.
Since 2003, China has rolled out a (still enlarging) nationwide HSR network.
[I took an early ride on the spectacular 51-hour Shanghai-Tibet route in 2007.]
The bullet railway now extends to 35,000 km. This comprises 71.4% of the total planned route roll-out of 45,640 km. Trains travel between 200 and 350 kph.
“China is now eager to connect its own HSR by building a complementary rail network throughout South East Asia.”
China is now eager to connect its own HSR by building a complementary rail network throughout South East Asia.
It hopes the new hyper-speed train will accelerate its overseas deal-making, as it is designed to “run on international railways with different track gauges and power supply standards.”
Manufacturers in the northern city of Changchun say it can operate in a temperature range from -50C to 50C, and is deployable on “90% of the global rail network.”
The new train counts:
“‘A focus on Russia’ but is also ‘targeting the needs of European and Southeast Asian markets’.”
Interestingly, China Daily says the new train has “a focus on Russia” but is also “targeting the needs of European and Southeast Asian markets.”
China is not alone in viewing overland travel as a catalyst for economic growth.
India has embarked on an aggressive railway upgrade, and will relaunch the luxury 7-day Golden Chariot train packages from Bengaluru through Karnataka, Tamil Nadu and Kerala in January 2021.
On the downside, co-development with Japanese rail technology companies of India’s first high-speed rail line – a 508 km route from Mumbai to Ahmedabad - looks likely to be pushed back to 2028.
Japan pioneered high-speed rail with its shinkansen bullet trains in 1964.
The JR Central rail company has been developing a JPY9 trillion MagLev (magnetic levitation) rail route from Tokyo to Nagoya and Osaka. The trains could hit a top speed of 500 kph. This would outpace China’s single MagLev line, which opened in 2004 between Shanghai Pudong Airport and the city.
Riding that is, trust me, like being strapped to a bullet.
However, an onset in 2020 of environmental and COVID-19 related delays – something the shinkansen trains rarely endure – means the 2027 opening for the Tokyo-Nagoya and 2037 launch of the Tokyo-Osaka MagLev lines are receding into the distance.
2) Singapore Racks Up 11 Bilateral Travel Deals
“Progressive” is a word you hear frequently from Singaporean ministers and travel industry personnel. It refers to the city state’s gradual, but assertive, approach to restoring arterial lines for business-driven travel.
These bilateral accords – albeit limited in scope – presage more expansive deals for informal travel in future. Most likely, leisure travel accords would also be phased and staggered.
This week, Singapore jointly announced a Reciprocal Green Lane with Germany under its Safe Travel Pass scheme. This is the first bilateral agreement with a country outside of Asia Pacific since Singapore began selectively rebooting air access.
It will permit “essential travel for business or official purposes” via direct flights between the two countries. This means approved carriers only. The procedural requirements have yet to be released.
It follows an “in-principle” agreement with Hong Kong to establish a bilateral Air Travel Bubble, announced on 15 October. Travellers – not to mention hotels, restaurateurs, bar owners, retailers, taxis and ride-hail drivers – in both cities are anxiously awaiting the start date details.
Meanwhile, from Monday 26 October, a Reciprocal Green Lane with Indonesia enters into force. This will permit essential and business travel via 2 airports, Singapore Changi and Jakarta Soekarno-Hatta, and 2 ferry terminals. Nationals travelling in either direction will require a safe travel pass, plus documents from an official sponsor – such as the state department or an approved business entity.
The Germany, Hong Kong and Indonesia deals take the Lion City into double digits under its Safe Travel Pass scheme.
Those 3 upcoming implementations add to 8 active agreements, with Australia, Brunei, China, Japan, Malaysia, New Zealand, South Korea and Vietnam.
They fall under slightly differentiated - and occasionally overlapping - categories:
Air Travel Pass: Australia, Brunei, New Zealand, Vietnam
Reciprocal Green Lane: Brunei, Malaysia, Japan
Fast Lane China: China, South Korea
Periodic Commuting Arrangement: Malaysia
But do these agreements have any tangible effect on Singapore’s travel economy?
It is too soon to give a definitive Yes or No answer.
Since the outset of the pandemic, Singapore has been candid about the necessity to protect Singapore Changi’s hub status for the greater benefit of the national economy.
The airport is a vital engine of commercial activity for a nation of 5.7 million people. The Transport Minister called Changi “the lung of Singapore.” Without sufficient flows of people, goods and services, Singapore's economic struggles to breathe.
But given the restricted scope of these accords, Singapore is not expecting immediate travel spend returns. Instead, it is piecing back together Changi’s regional and global connectively to grow aircraft traffic in a controllable way.
It handled 11.4 million passengers from January to September, compared to 68.3 million in the same 2019 period. Most of those were front-loaded at the start of 2020. Singapore Changi handled 90,200 passengers in September, up from 24,500 in May.
Air freight movements have fared rather better, totalling 1.13 million tonnes in the year so far to September, compared to 2.15 million tonnes in the same 2019 period.
Some 5,620 aircraft movements in September was up from 4,470 in May. Aircraft movements for January-September totalled 105,000, versus 382,000 in the first 9 months of 2019.
In terms of visitors, Singapore welcomed 2.7 million arrivals by August 2020, again front loaded in the early part of 2020. This represents a 79.2% year-on-year shortfall.
And how about this for a “definitively 2020” statistic?
The average length of visitor stay so far this year is 46.7 days – up 1,210.3% on 2019.
It, of course, is an anomaly underpinned by the majority of arrivals being returnees and passholders weighted against essential business and air travel pass visitors.
3) China Extends its Ban on Outbound Groups
In the week before the US Presidential election, the world’s economic eyes will focus intently on China. From 26 to 28 October, the 5th plenary session of the Communist Party’s 19th Central Committee will set out its blueprint for the next 5 years.
Expect the phrase “dual circulation” - which prioritises inbound and Chinese investment into the domestic economy - to pop up on several occasions.
Domestic consumer demand is the identified catalyst of near-term growth. As state media reported this week, the objective is to “reduce China's dependence on external demand to achieve growth sustainability.”
In short: keep spending in the home economy.
Seemingly, we won’t hear very much about outbound travel.
In this context, it may be no coincidence that this week China’s Ministry of Culture and Tourism said travel agencies must step up COVID-19 control and prevention measures as winter approaches. They will “not be permitted to offer services to non-resident foreigners”, and “outbound group tours are forbidden.”
“Travel agencies will ‘not be permitted to offer services to non-resident foreigners,’ and ‘outbound group tours are forbidden’.”
China Daily commented that the announcement means China will:
“Maintain the suspension of outbound group tours and inbound tourism due to the high risk of a resurgence of coronavirus infections this winter.”
Beijing-based Global Times went one step further:
“Industry players said they expected the restrictive rules could be lifted in the third quarter of next year."
It added that outbound group travel would become viable once more '“when a vaccine could be used worldwide.”
Interestingly, Chinese media also distanced the government from the first group of Special Tourist Visa (STV) travellers that entered Thailand this week, saying:
“It is unclear whether the travellers went to Thailand via a travel agency or on individual tours. Under the current guidelines, Chinese citizens are not allowed to take outbound trips that are part of a group tour.”
The report added:
“Travellers who leave the mainland may be quarantined as long as 28 days depending on the control and prevention measures put in place at their destinations.”
No previous media comment had been proffered about the Chinese STV group.
Eagle-eyed sleuths will spot that these new winter regulations apply to tour groups, and make no mention of independent travellers.
That said, state media noted a comment from the Ministry of Culture and Tourism:
“We are now transforming and targeting the vast domestic tourism market instead.”
Global Times media reinforced the point:
“The aviation industry is about to get the schedule for the winter season, and mapping more domestic routes is obviously the choice for Chinese airlines as they try to save themselves from losses.“
4) India Gets Proactive on Reopening
If Singapore’s lead phrase of choice is “progressive,” India is going with “graded.”
This week, the government decided to:
“Make a graded relaxation in visa and travel restrictions for more categories of foreign nationals and Indian nationals who wish to enter or leave India.”
Sounds great. But this wouldn’t be 2020 if a closer reading of the fine print weren’t required.
So let’s dig a little deeper.
Firstly, why is this happening now?
India’s economy has been ransacked by COVID-19. The IMF predicts a -10.3% GDP contraction in 2020, with an 8.8% rebound in 2021.
Caveats, of course, must apply to every forecast right now, no matter the subject matter, and the IMF includes several in its October 2020 World Economic Outlook: A Long and Difficult Ascent report.
The world’s second-most populace nation is nearing 8 million COVID-19 infections, and 120,000 deaths. The official death rate is, though, lower than the US or Brazil.
Despite its travails with coronavirus suppression, India is reappraising travel. The economy needs international flows, even though the domestic sector is starting to look healthier, especially - as is proving to be the case with locked-down Asian travel economies in 2020 – at weekends and public holidays.
As a result, states are introducing new domestic travel initiatives and promotions.
But, scheduled international flights remain suspended in and out of India. This means the rule relaxation will apply to flights operated under India’s air transport bubble arrangements or “non-scheduled commercial flights as allowed by the aviation ministry,” says The Times of India.
At present, the Ministry of Civil Aviation lists 18 bilateral agreements under the Transport Bubble and Air Travel Arrangement categories. In effect, most of these are for overeseas Indian nationals seeking to return.
These are defined as:
“Temporary arrangements between two countries aimed at restarting commercial passenger services when regular international flights are suspended as a result of the COVID-19 pandemic. They are reciprocal in nature, meaning airlines from both countries enjoy similar benefits.”
Nations with which India has struck agreements range from Afghanistan to France and Iraq to the US. Indian media recently reported that negotiations are under way with 13 more countries, including Italy, Australia, Philippines and Thailand.
India has now restored all existing travel visas - except electronic, tourist and medical visas - for more categories of foreign and Indian nationals. This includes “overseas citizens of India and ‘persons of Indian origin’ card holders,”plus “all foreign nationals intending to visit India for any purpose, except on a tourist visa.”
It’s somewhat confusing, and probably doesn’t quite live up to the headline billing afforded to it by some international media outlets.
We are becoming accustomed to reading between the lines, and then scraping through various sub-surfaces to reach the vital elements of travel agreements.
To its credit, much of India’s media has been circumspect and measured, and raised solid questions about the future trajectory of India’s graded approach.
For India’s travel sector, this is being interpreted as a step in the right direction. But for now, it offers not much more than a hint of further promise up ahead.
How very 2020.
5) Sabah, AirAsia & Malaysia’s COVID-19 Crisis
And so to Malaysia, where a(nother) political crisis has galvanised the nation.
That aside, this week’s big travel news saw AirAsia confirm a RM300 million loan from Sabah Development Bank as part of its fundraising efforts. I will get to the (interesting) points of the deal shortly, but it’s worth assessing Sabah’s strategic input.
There is an evident raison d’être for the investment.
Sabah is one of 2 Malaysian states (along with Sarawak) located on the island of Borneo. Administratively known as East Malaysia, Sabah shares Borneo with the sultanate of Brunei, and Indonesia’s North, East, Central, West and South Kalimantan provinces. It is to East Kalimantan that Indonesia plans to relocate its capital from Jakarta – although that plan is reportedly on hold.
Only in recent years, has Sabah started to tap its tourism potential. Two key factors drove this upswing: AirAsia and China.
AirAsia has built a strong presence in Sabah, which it views as a vital expansion market. Its geography and diverse landscapes and cultures offer a chance to accelerate arrivals from China, South Korea and, more gradually, Japan.
Sabah would not be just a destination, but also a transit point for North East Asian travellers into Kuala Lumpur, Penang and Langkawi.
Back in August 2018, AirAsia predicted it could fly 9 million passengers through Sabah by 2023 and 18 million by 2028. It supported the Sabah government’s plans to expand Kota Kinabalu International Airport. Two other airport upgrades were scheduled for Tawau and Sandakan.
Sabah – and AirAsia’s - optimistic outlook was burnished in 2019, when Sabah welcomed 4.2 million domestic (2.7 million) and inbound (1.5 million) arrivals - up from 3.9 million in 2018.
Some 1.1 million of the inbound arrivals came from North East Asia, primarily China (599,000) and South Korea (397,000). Interestingly, October-December were the weakest months for Chinese arrivals, while December was the top month for South Koreans.
What happened next is a familiar story.
From January to July 2020, Sabah welcomed 806,428 total arrivals, down 66.2% compared to 2019.
And then things got worse.
A controversial Sabah state election on 26 September became a “super spreader.” Rising case numbers were worsened by politicians and campaigners jetting in and out from the peninsula. On 24 September, Malaysia recorded 74 infections. By 18 October, the daily figure reached 871 cases. It has continued upwards, as has the death rate.
From seemingly COVID-safe, Malaysia has regressed to a point of political meltdown, and calls for a State of Emergency. Sabah remains the nexus of the outbreak.
“Sabah’s hospital beds are now 99.5% full," reported the Malay Mail.
By Saturday, Sabah accounted for 11,285 of Malaysia’s 25,742 infections, and 91 of the 221 deaths. This placed it far ahead of Selangor, 3,880 cases, 25 deaths. Yesterday, Malaysia surpassed 1,000 daily cases (1,228) for the first time, with 889 in Sabah.
Sabah Investment Bank’s loan to AirAsia may be viewed as a forward attempt to heal Sabah’s savaged economy. The funds will enhance AirAsia’s supply chain operations in Sabah, and create new jobs. AirAsia also confirmed they will “part-finance a project to turn Kota Kinabalu International Airport into an international hub for AirAsia.”
In the immediate future, though, the travel sector in Malaysia - and Sabah in particular - appears deeply troubled.
6) How Has COVID-19 Impacted Travel KOLs?
For nearly two decades, I’ve received – and actually read – scores of press releases each week. Nowadays, they mostly promote new openings and brand partnerships, but often they tout travel sentiment surveys. I tend to discard the latter.
But, one in particular caught my eye this week. So, many thanks to Gary Yu, Associate Director, Asia, of PRCO in Hong Kong for some genuinely revealing insights.
Right now, we all wonder when our travel liberties will be restored, and – once that occurs – whether overseas travel will feel safe. However the Asia Travel Re:Set unfolds, travel marketing will require storytellers - perhaps more than ever - to share their insights and experiences in imaginative and engaging ways.
With that in mind, Gary’s team interviewed 7 top KOLs worldwide about how their work has changed in 2020, how they adapted - and how they view the future of travel.
The influencer brigade was eagerly embraced by luxury, FMCG and travel brands during the 2010s to engage personally and emotionally with their social media fans. But before the pandemic, their role was being challenged from three angles:
· Broader integration of user-generated video content in travel marketing
· Live-streaming, which propels video salespeople into online personalities
· A new CGI creed of lifelike KOLs who influence without travelling, or existing.
Let’s be honest, travel influencers aren’t universally admired. But this can be unfair, and perhaps envy-related. I’ve worked with several KOLs, particularly in China, and the best ones are not just contracted because of their big fan bases. Yes, they are good self-promoters, but that has helped drive vast followings and big earning power.
“In-demand KOLs work hard, travel frequently and post voraciously. They are also embraced with a warmth that journalists are not, and the best influencers use this power to tease out destination or hotel secrets that may otherwise go unreported.”
In-demand KOLs work hard, travel frequently and post voraciously. But they are also embraced with a warmth that journalists are not, and the best influencers use this power to tease out destination or hotel secrets that may otherwise go unreported.
They are also astute observers of aesthetic, lifestyle and travel trends. Moreover, KOLs play an important awareness-raising role for emerging destinations in ad-saturated mega markets, like China and India.
Here are a few of the insights from the interviews that I found most revealing:
China
Wang Hongyu (aka Daokang) is a frequent travel KOL via his WeChat account Wangqu Traveller, and a former editor of National Geographic Traveller in China.
“It is not optimistic that overseas travel will begin again before the 2021 Spring Festival. Family overseas vacations for Christmas and Spring Festival will not occur as in previous years.”
In this context “Replacement” has become a key word in Chinese travel:
“There are two main meanings: one is the substitution of domestic destinations for foreign locations. The second is self-reliance of domestic hotels. Rebranding can mean saying goodbye to international brands or operating independently. An example is the delisting of Alila Yangshuo Sugar House. More boutique and luxury hotels will embark on the road to being independent brands.”
UAE
Nael Abu AlTeen is a Dubai-based travel and lifestyle influencer, who has worked with more than 500 hotels and resorts worldwide, plus several airlines and tourism boards.
“I didn’t travel for 8 months. In Dubai, I focused on promoting local tourism, hotels, restaurants and activities inside the UAE, especially Dubai. My first trip since the pandemic is Maldives. I’m here now, because it’s an island and I feel more safe. It’s not a city, and feel I need to have less interaction with people.”
Hong Kong
Benedict Yuen is a frequent traveller who vlogs and reviews destinations and hotels worldwide on Instagram. He is well-known for hosting a local travel TV show, Inspiring Journeys.
“Basically all my personal and work travel stopped. I’ve had no trips at all. The pandemic has taught me not to rely too much on presenting yourself in just one angle. Relying on travel means no business can come in. So, I am now doing vlogs on YouTube for luxury hotel staycations in Hong Kong.”
As mentioned in the intro, this week I strapped on my marketing strategist hat to give the above presentation for the ASEAN Tourism Research Association. The event drew around 800 attendees (there were 2 other speakers, I must add!)
The brief was to segue from the (largely enforced) Sea of Sameness we have witnessed in travel marketing in 2020 to a more uplifting and substantive outlook for 2021.
What influences will drive travel narratives next year, and who will tell the most compelling stories?
Where is purpletop hill?
Who is imma? And why does she matter?
And how did Jay Chou, Cuba and mixology cocktails combine to tell inspiring Chinese travel stories this summer?
Watch here (start point 38.40)
[The slides are available in pdf format. Email me if you’d like a copy.]
And, that’s a wrap for Issue 13.
Until next Sunday, you can catch me on Twitter and LinkedIn, and at Check-in Asia. Each week, I’m also on The South East Asia Travel Show.
Feel free to hit me up with thoughts, comments and feedback to gary@check-in.asia
Speak soon,
Gary