Asia Travel Re:Set #14 – Will Governments Control the Future of Travel?
China will enter 2021 by playing a gigantic game of catch up with itself
Hello. Welcome to Asia Travel Re:Set
First and foremost, thoughts go out to the people in storm-stricken areas of Vietnam and the Philippines. This can be a destructive season in Asia, and the overlay of La Niña is frightening. It places in context any discussions about the future of travel.
Once a month, Asia Travel Re:Set seizes a salient issue, and runs with it. This week, that topic is governmental policy and tourism.
On all continents, the pandemic has centralised political powers. In 2020, public health and economic priorities overlap in advanced nations just as they always have in developing countries.
Ten months into the crisis, competent governance, policies driven by (not ‘based on’) science and public trust define where COVID-19 has been, so far, best suppressed.
But we are entering the Northern Hemisphere winter. A recent outbreak in Kashgar, China, highlights how the devious nature of SARS-CoV-2 can upturn COVID safety.
Locking down countries is far easier than reopening them. Hence, the future of travel is taking the form of a Venn diagram, with overlapping circles of political, economic and public health interests.
That said, travel has long been state-dominated in much of Asia. This is usually via directly controlled tourism boards, or tourism promotion entities established as quasi-governmental agencies. Flag carriers are often an emotional symbol of nationhood.
While travel optimism oscillates in the region, the stepping up of governmental intervention will likely be an enduring outcome.
Where countries are opening up, or readying to do so, we read about smart bands to track our movements and health. We must take mandated COVID-19 tests, biometric verifications, temperature checks and, most likely, vaccines. We may need to carry a digital health passport.
Beyond the personal interventions, travel bubbles decide the airlines on which we can fly, and the hotels we can book. Insurance must be purchased from selected suppliers. Security deposits may replace, or supplement, entry visas. Cambodia even wanted our credit card details as a guarantor for potential funeral costs.
So, today’s issue is a collection of observations and analyses based on this theme.
Thanks for being onboard,
Gary
Each Sunday, Asia Travel Re:Set places in context the week’s most important travel and tourism developments in Asia Pacific. If you are enjoying this issue so far, please feel free to…
The Sunday Itinerary
- DashBoard
An Asian Travel Pot Pourri
- QuoteBoard
Japan, Australia, Malaysia
- The ’Government in Travel’ Special
Reassessing Politics & Tourism: A Starting Point
Thailand’s End-to-End Travel Landscape
Setting the Agenda for ‘Bio Bubble’ Trips: Hong Kong & Singapore
Politics & Travel in China: The World’s Tourism Superpower
The Quarantine Conundrum
Visitor Volume Targets Are Back: Japan & Saudi Arabia
The Federal Gap: Australia & The Philippines
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DashBoard
An Asian Travel Pot Pourri
JPY380 billion: Worst-case loss forecast by Japan Airlines, the nation’s largest carrier, for the 2020-2021 financial year. (The Asahi Shimbun)
THB50.63 billion: Contract value - signed by State Railway of Thailand, China Railway International and China Railway Design - for phase 1 of Thailand’s high-speed rail line that will eventually connect Bangkok with Laos. (Bangkok Post)
111: The number of consecutive lockdown days experienced in Melbourne, which came to an end this week. (Various media reported either 111 and 112 days)
7: Vietnam is planning a week-long public holiday for the 2021 Lunar New Year, from 10-16 February, in an attempt to boost travel consumption. (Vietnam Net)
4: Number of times Hong Kong International Airport has banned Air India flights after passengers tested positive on arrival. Each ban applies to a specific airline route (this week Mumbai-Hong Kong) for 14 days. (Financial Express)
QuoteBoard
You heard it here…
"We will lift the travel alerts for all regions as regular international flights have started to resume."
Toshimitsu Motegi, Japan’s Foreign Minister (Kyodo News)
"This is a national crisis facing the industry, because so many people have left tourism and hospitality to find better surety of work."
Felicia Mariani, CEO, Victorian Tourism Industry Council (The Sydney Morning Herald)
"The [travel] industry cannot bear anymore leakages from unregulated and illegal activities such as home-sharing or Airbnb that does not contribute back to the industry… This also applies to illegal tour operators offering unlicensed tour packages.”
Tan Kok Liang, CEO, Malaysian Association of Hotels (Free Malaysia Today)
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1) Reassessing Politics & Tourism: A Starting Point
Let’s travel back into ancient history. On 26 April (seemingly a lifetime ago), I wrote an article entitled Travel is About to Get Very Political.
It included this sentence:
“Each day, we read new plans, projections and potential solutions for an industry undergoing an enforced revolution… [but] the tourism ecosystem needs political leaders to press its Go buttons.”
No kidding.
“Until they act, we have no idea when or how travel restrictions will be phased out... Different nations will plot exit paths guided by their own COVID-19 experiences and shifting economic priorities. This situation may become more dynamic, but for now governments are avidly watching each other. Moving first is a political risk.”
In the intervening 6 months, COVID-19 has resulted in the entrenched politicisation of every single aspect of travel. The freedoms of industry players to operate and for travellers to take flight are diminished.
Even where low-scale reopening is occurring, control mechanisms are unrelenting as public health, politics and economics are juggled.
Will this always be the way?
Have governments secured long-term control over the way we travel?
As we look towards 2021, does 2020 simply illustrate that “We ain’t see nothing yet?”
2) Thailand’s End-to-End Travel Landscape
In recent weeks, I’ve written plenty (see here) about Thailand’s Special Tourist Visa strategy. We’ve also discussed it ad nauseam on The South East Asia Travel Show.
But while analysts, including myself, have wondered at the perceived approach from a visitor perspective - the methodology of tightly controlling the reopening process is becoming clearer. Even if the official statements vary in both style and substance.
As travel economies confront widespread business closures, job losses and the removal of independent livelihoods, the intentions of the below phrase are clear-cut.
[Independent travel businesses and FIT travellers may wish to turn away now.]
“In order to stimulate more tourism activities after quarantine in Bangkok, the [Tourism Authority of Thailand] will partner with Thai Airways International, the Thai Hotels Association and the Association of Thai Travel Agents to offer tour packages as well as help subsidise tourism expenditure for foreigners.”
Bangkok Post also reports that the Tourism Authority of Thailand is:
“Scheduled to talk with online travel agencies, including Agoda, Traveloka and Ascend Travel, about the plan to sell tour packages on their platform without charging operators a commission fee and allow tour operators to pay only 2% of transaction fee. These platforms will make booking easier for tourists.”
Whether this is simply a testing of the reopening waters, or the early-stage curation of a fully controlled end-to-end travel landscape remains to be seen.
Thailand is, however, rolling out slews of new application, screening, health management, insurance and traveller tracking protocols that vastly differentiate travel from the pre-COVID era.
3) Setting the Agenda for ‘Bio Bubble’ Trips: Hong Kong & Singapore
Two weeks ago - it seems a lot more - the Skift Asia Forum was nearing its end. Then, news filtered through that Hong Kong and Singapore had jointly announced an intention to start an Air Travel Bubble. The spirits of virtual delegates visibly lifted, and “This is great news” messages were typed and shared.
It felt like the striking of a piano chord after 10 months of silence. A template, a blueprint, upon which travel in Asia Pacific could begin refashioning itself.
Next day, Hong Kong media trumpeted “the world’s first two-way travel bubble.” This week, Hong Kong Chief Executive Carrie Lam said the scheme may start in November. Perfect for Christmas and New Year escapes.
And time to test the protocols before, perhaps, scaling it up over Chinese New Year.
But let’s not get ahead of ourselves. Not yet.
The wording of the joint announcement was necessarily couched in legalese.
Singapore’s Ministry of Transport said the bilateral Air Travel Bubble (ATB) was “reached in principle.” It would be implemented in a “a safe and progressive way.”
The volume of trips in either direction could be “scaled by adjusting the number of dedicated flights upwards or downwards, or even suspended.”
And then, “Travellers under the ATB will be required to travel on dedicated flights.”
This transition-era declaration concluded: “With a view to achieving early implementation, both governments are committed to fleshing out the full details of the ATB in the coming weeks”
As Singaporeans and Hong Kongers await the manner in which the governments will partially restore their travel freedoms - albeit in a Bio Bubble test case - the watertight terminology exemplifies how travel has changed. At least for the foreseeable future.
Their first post-lockdown trip will be characterised by certain factors.
Primarily, the ATB mechanism will not just be risk-averse, it will be stringently managed from the state centres.
Flight schedules and availability will be pre-set by governments and flag carriers. Precise health screening standards will be implemented. Traveller movement tracking undertaken. Data will be shared and scrutinised.
Passengers on the first flights in either direction will likely face the paparazzi for the first time in their lives.
And when they return home, the default question will be “So how was the trip?”
The answer could well be: “It was great. But not like before.”
4) Politics & Travel in China: The World’s Tourism Superpower
Imagine if your country generated 6 billion domestic travel trips in a single year. Would it stick or twist?
I know, it’s a barely conceivable figure, but that was the official 2019 total in China.
This year, for obvious reasons, that figure is forecast to fall to 3.4 billion trips. That includes 637 trips during the 8-day China National Day holiday in October.
So China will enter 2021 by playing a gigantic game of catch up with itself. Only India could (based on population size) feasibly come anywhere near the 2020 total, let alone 2019.
“So China will enter 2021 on a gigantic game of catch up with itself.”
Given that the entire world has been fixated with Chinese outbound travel for the past decade, focusing on domestic travel seems somewhat surreal.
It really shouldn’t be. China’s domestic sector has, for several years, experimented with new travel formats and facilitations that are unique.
Chinese domestic tourists are aspirational and demanding. They are also empowered and indulged by tech-driven travel and hospitality services that are world-leading.
But the pandemic - which emerged in Wuhan at the end of 2019 - has altered China’s political perspective. As covered in last Sunday’s Asia Travel Re:Set, this week’s policy-setting Plenum focused on expanding China’s home economy.
Post-Plenum government communiques admitted that China faces “problems and challenges.” Moreover, “the world faces the COVID-19 pandemic, with no end in sight in the next few years.” We are all facing “a complicated international situation.”
Expanding the domestic economy is a priority. Domestic travel - or, specifically, travel consumption - will be a vital contributor to the nation’s economic future.
Politics and travel are not a new combination in China. It is one of the few nations to have enacted a Tourism Law - which entered into force in October 2013.
As I wrote in my 2014 book, The New Chinese Traveler: Business Opportunities from the Chinese Travel Revolution:
"The new law was a clear statement to tour operators, travel agencies and outbound vacationers that the government was stepping up its regulation of the tourism sector, which is considered a central tenet of efforts to direct more sustained consumer input into the nation’s economic growth."
So what does this renewed focus on domestic travel mean?
Well, as reported in last week’s issue, China’s Ministry of Culture and Tourism, said:
“Travel agencies will not be permitted to offer outbound group tours… due to the high risk of a resurgence of coronavirus infections this winter.”
Followed by:
“We are now transforming and targeting the vast domestic tourism market instead.”
This week, however, media in Cambodia and Laos - two countries whose close political ties to Beijing are challenging relations with their 8 ASEAN partners - highlighted in-discussion Travel Bubbles and Fast Tracks with China.
Reading China on these kinds of issues is tricky. Such briefings to official media are often tacitly approved and publicly denied.
China is, though, highly aware of the economic impact of COVID-19 in countries that enjoy its close support. A low-yield Fast Track for essential business travel between Laos and China comes into force today. Cambodia’s Travel Bubble discussions with China may be a longer-term work in progress.
Similarly, this week’s agreement between Thai and Chinese rail companies to kick-start Thailand’s high-speed rail link connecting Bangkok with Laos, cannot be viewed in isolation.
Major Belt & Road infrastructure programmes are usually wrapped in complementary trade, diplomatic and tourism packaging.
An excellent article this week by Elizabeth Law in the Straits Times added an extra layer of late-2020 context. It noted:
“Should borders be reopened, there could be up to 7 million infections and 200,000 deaths, [China's top epidemiologist warned].”
The article quoted a 24 October interview by Dr Wu Zunyou of the China Centre for Disease Control and Prevention with China Newsweek:
"Our country is coming under global pressure [about our strategy to keep borders closed].”
Dr Wu added that there have been international calls for China to continue reopening.
The political intrigue continues…
5) The Quarantine Conundrum
Back to Singapore for the moment. This week it removed the 14-day quarantine requirement for travellers from China - if they test negative at Changi Airport. This is a decisive statement that other South East Asian countries may follow.
It’s also not the first occasion. Singapore has cut the quarantine stipulation for visitors from Australia (now including Victoria), Brunei, New Zealand and Vietnam.
This is smart pre-planning, as citizens of those countries are not currently permitted to travel overseas. But in the new politics of tourism, Singapore’s readiness to move will stand it in strong stead with the governments of those countries. As, it goes without saying, will its record on testing, tracing and suppressing the coronavirus.
From this combined perspective of public health and economic management, Singapore is taking a positive stance. But it is not alone.
Japan will lift its entry ban on travellers from China, South Korea, Taiwan, Australia, Brunei, New Zealand, Singapore, Thailand and Vietnam. The rationale is that those nations have “largely brought their outbreaks under control”. In return, Japan will ease the 14-day quarantine requirement for its own citizens who visit those countries, provided their trip is for less than 7 days.
This week, Hong Kong declared its citizens can return from Mainland China without undergoing quarantine. There will be a quota, as only 2 border checkpoints - Shenzhen Bay and the Hong Kong-Zhuhai-Macau Bridge - will be opened on a trial basis.
“The border will be further reopened in an orderly manner.”
That comment this week from Carrie Lam, Hong Kong’s Chief Executive, was widely interpreted to mean that this may be a first step towards normalising borders between Hong Kong and Mainland China.
Australia’s one-way Travel Bubble means New Zealanders do not need to quarantine on arrival to selected states. Single-direction travel bubbles don’t really work, though, because the economic and travel benefits are uneven, and resentments can arise.
Rumours swirled this weekend in Australia that New Zealand's newly re-elected Prime Minister Jacinda Ardern will permit Australians (or at least residents of ‘safe’ states) to visit New Zealand quarantine-free before Christmas. Western Australian media said the announcement will be made this week, when Ms Ardern names her new cabinet.
New Zealand media, meanwhile, referenced a possible Travel Bubble with the South Pacific Island of Niue.
6) Visitor Volume Targets Are Back: Japan & Saudi Arabia
Travel and tourism projections in recent months have focused on percentage drops. Airport passengers, hotel occupancies and travel spending are all coded red. So, too, are visitor arrivals. Most governments and tourism boards cannot return to their projectionist past while borders remain shuttered.
This week, Saudi Arabia changed the debate. Announcing that around 40 million visitors arrived in 2019, the Tourism Minister restated its goal of 100 million annual arrivals by 2030. It aims to secure a global top 5 ranking for tourist visitors.
Saudi Arabia’s ambitious target follows closely on from Japan re-committing to a goal of 60 million arrivals by 2030.
Japan, had anticipated 40 million visitor arrivals in 2020 - the scheduled year of the Tokyo Olympics. As reported in the Issue #12 of Asia Travel Re:Set, new Japanese Prime Minister Yoshihide Suga vowed to resuscitate inbound expansionism.
Saudi Arabia formally opened to international tourism for the first time in 2019. It draws Hajj and Umrah pilgrimage visitors from around the world each year.
There is a strategy in place. The nation’s Tourism Investment Fund will develop a slew of tourism projects. Some 500,000 new hotel rooms will be constructed. It will also promote the nation’s “historic sites,” 5 of which are UNESCO-listed.
Saudi Arabia and Japan both see a window for post-COVID tourism growth, and will dedicate the resources to navigate their economies in this direction.
Will it work? The next decade will tell. But in a year when industry outlooks centre on “returning to 2019 levels,” setting an entirely new agenda will, at least, jolt the eco-system.
Saudi Arabia and Japan could be influential players in the future form of travel policy, and Asian travel markets will likely be central to their strategies.
7) The Federal Gap: Australia & the Philippines
Travel watchers in 2020 will have learned a great deal about decentralised political structures in Asia Pacific. Let's take two gigantic countries as examples.
Australia is an island so big it is geographically referred to as continental. The Philippines is a sprawling archipelago comprising 7,641 islands.
Complex colonial histories and political development aligned with their sheer vastness make central governance highly challenging. Although the two governmental systems are different, they combine central and devolved powers.
Officially a Commonwealth, Australia comprises 6 states and 2 primary territories. The central government is headed by the Prime Minister, but significant powers are vested in state premiers, not least the control over borders in times of crisis.
In recent months, a fierce political battle has broken out between states that want a nationwide reopening for domestic travel, and those that are more reticent. These ongoing internal divisions continue (See Issue 12) to infuriate not just the central government, but tourism leaders - and, very vocally, - the CEO of Qantas.
National divisions on the way forward also resulted in a patchwork approach to the (current) one-way Travel Bubble agreement with New Zealand. The recommencement of ordinary life in Melbourne and Victoria (albeit still with some limitations) after a 111-day lockdown will hopefully lift some of the bottlenecks for domestic travel.
But erasing the drawn state battle lines will not be straightforward. In a country renowned for its cut-throat politics, Australia has been badly bruised by the pandemic-era divisiveness. As a result, state-by-state, rather than nationally negotiated, travel bubbles cannot be ruled out - adding an extra layer of complexity for tourists.
The Philippines, which is a Republic with a Presidential governance system, has also battled the pandemic against an overlay of provincial administrative discord.
The outbreak has been deeper and more deadly than in Australia, but the country now appears to be making solid progress. But its achievements have been hard won. At the height of the crisis, a complicated system of lockdown restrictions was imposed on different provinces.
Usually abbreviated, the system of GCQ (general community quarantine), MGCQ (modified general community quarantine) and MECQ (modified enhanced community quarantine), was far from easy to comprehend, implement or abide by.
As movement restrictions have been gradually eased, destinations like Boracay were permitted to reopen. Travellers must conform to strict rules. These include completing an online Health Declaration Card, carrying a special QR code and booking stays at hotel and resorts accredited by the Department of Tourism.
Visitors must also have their temperature checked at a registered beach station before swimming in the sea.
And, that’s a (state-sanctioned) wrap for Issue 14.
Until next Sunday, you can catch me on Twitter and LinkedIn, and at Check-in Asia.
On Thursday’s The South East Asia Travel Show, we discussed high-speed rail in Thailand, new travel bubbles and Jurassic Park Dragons. All in 20 minutes.
Feel free to hit me up with thoughts and feedback to gary@check-in.asia
Speak soon,
Gary