Asia Travel Re:Set #18 – Surge or Slowdown?: Travel Infrastructure in South East Asia - Part 2
"We will ask people to have a vaccination before getting on the aircraft."
Hello. Welcome to Asia Travel Re:Set
South East Asia will be a crucible of re-growth in travel. That is a contention with which I am sticking.
State-backed and private investors seem to be fronting the case.
While public debt is rising, funds are flowing into ASEAN travel projects from China, South Korea and Japan. The US can’t afford to be left out, India and European nations are scouting opportunities and Australia wants in after its stand-off with China.
However, JPMorgan said this week that funders are reluctant to invest because the travel slump is dragging down economies: "In ASEAN, for the first time in many, many years, investors are underweight every single ASEAN market."
Either way, South East Asia’s travel landscape is continuing to build out.
There’s a long recovery road ahead - but the built environment will be a vital tool for restructuring economic confidence
So, today is part 2 of my scan of the region’s major airports, railways, highways and mega-resorts that are being planned, developed or, in some cases, rescheduled.
Last week featured Brunei, Cambodia, Indonesia, Laos and Malaysia - and this issue includes a few new updates.
Today’s main countries of focus, though, are Myanmar, the Philippines, Singapore, Thailand and Vietnam.
It’s not an exhaustive list - rather a snapshot of the big-ticket projects we’ll be reading more about in future.
Thanks for being onboard.
Gary
Each Sunday, Gary Bowerman charts the week’s key developments for travel economies across Asia Pacific.
If you are enjoying this issue so far, please feel free to…
The Sunday Itinerary
- DashBoard
From 5.27 million to -40.3%
- QuoteBoard
Australia, Japan, India/Sweden
- What’s Next for Travel & Tourism Infrastructure in South East Asia? - Part 1 Updates
Cambodia, Laos, Malaysia
- What’s Next for Travel & Tourism Infrastructure in South East Asia? - Part 2
Myanmar
The Philippines
Singapore
Thailand
Vietnam
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DashBoard
From 5.27 million to -40.3%
5.27 million: India’s total domestic air passengers in October, up 34% vs September. (Directorate General of Civil Aviation)
4 million: Chinese outbound border crossings from April-December, vs 127 million in the same 2019 period. (China Outbound Tourism Research Institute)
28,000: Number of visitors to Macau on 20 November, its highest daily total for 9 months. (Macau Government Tourism Office)
20%: of Myanmar’s population is expected to initially receive a COVID-19 vaccine, according to Yangon General Hospital Emergency Treatment Dept. (Myanmar Times)
-40.3%: The fall in aggregate share prices of Asia Pacific airlines since the start of 2020. (IATA)
QuoteBoard
You heard it here…
"We are looking at changing our terms and conditions, to say for international, that we will ask people to have a vaccination before getting on the aircraft."
Alan Joyce, CEO, Qantas. [ABC]
"I think you are aware that the government panel on coronavirus said there is no evidence that shows the [Go To Travel] campaign is a major cause of the spread of the virus.”
Yoshihide Suga, Japan’s Prime Minister, defends the domestic travel programme. [Kyodo News]
“India is a growth market for us where we see more and more Indians looking toward Sweden as a must destination to visit. India is also a country connected to ‘workation’ as we have a lot of skilled professionals visiting us."
Jenny E Kaiser, Chief Marketing and Communications Officer, Visit Sweden. [Financial Express]
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- Surge or Slowdown in South East Asia? - Part 1 Updates
Cambodia - New Phnom Penh International Airport
Announced on Monday, phase one of the new USD1.5 billion Phnom Penh International Airport will be designed and built by firms including Foster & Partners, China State Construction Engineering and Metallurgical Corp of China. The airport will be 90% controlled by Cambodia Overseas Investment Corp with Cambodia's State Secretariat of Civil Aviation owning a 10% stake.
China Development Bank will provide "USD1.1 billion" of the funding, reports Nikkei Asia.
Phase one of the new airport, located 20km from the capital, is due to open in 2023.
Laos: Vientiane-Vang Vieng Expressway
The 113km expressway will officially open on 2 December, Laos National Day. The toll fees for a one-way journey will be LAK60,000, and the journey time is 2 hours.
Plans are in place to extend the highway from Vang Vieng to the Chinese border.
Malaysia: Pan Borneo Highway / KL-Singapore High-Speed Railway
Despite Malaysia's government re-committing to the Pan-Borneo Highway last week, the project is only 20% complete. Meanwhile, local media reported the ecological harm caused by "clearing a huge swathe of mangrove forest to build the highway."
Meanwhile, unnamed “well-placed sources” told Free Malaysia Today that the KL-Singapore high-speed railway will go ahead sans Singapore. Instead, the railway could terminate at Johor Bahru, on the Malaysia-Singapore border. Hmm.
- Surge or Slowdown in South East Asia? - Part 2
Myanmar
When Chinese President Xi Jinping visited Myanmar in January, it seemed likely to unlock infrastructure investment in one of South East Asia’s poorest nations.
China is Myanmar’s leading trade partner, and its second largest source of FDI – and it covets access to the Indian Ocean coastline.
The visit was intended to expedite 3 strategic projects: New Yangon City, a residential and commercial complex near Yangon inspired by the Shenzhen and Shanghai Pudong special economic zones. In October, the project received investment proposals from 9 countries, including Singapore, Japan and Myanmar. The project was initially, and controversially, awarded to China Communications Construction Co without a formal tender process.
Also on the agenda was the China-Myanmar Economic Corridor, including a new high-speed railway linking China’s Yunnan province with Mandalay and, eventually, Kyaukpyu on the Bay of Bengal. The railway appeared to have stalled, but in June Chinese engineers reportedly began surveying a potential route.
In July, China Daily reported:
“China aims to build a 5,500-km Trans-Asia Railway, which begins in Kunming and wends its way through Laos, Myanmar, Thailand, Vietnam, Cambodia and Malaysia before terminating in Singapore.”
Finally, President Xi pushed the delayed USD1.3 billion Kyaukpyu deep-water port on the Bay of Bengal, for which China International Trust and Investment Corp pledged 70% of the cost.
In mid-November, Myanmar Chamber of Commerce and Industries said Chinese infrastructure funding would step up after a COVID-era slowdown and Myanmar’s recent election. India, Japan and the US are also vying for strategic investment opportunities in a nation positioned at the crossroads of South and South East Asia.
Also this month, approval was given for a USD94 million coastal expressway linking Ayeyarwady region with Rakhine state. It is slated for completion in 2023 or 2024. Myanmar Times noted:
“The project will spur hotel and resort projects along the coast, and regional development will be further improved by tourism activities.”
Meanwhile, the Asian Development Bank and Japan International Cooperation Agency are funding an expressway and bridges connecting Bago and Kyaik Hto, which is scheduled to start in 2022-23 for completion in 2028-29.
Philippines
As the clock runs down on President Duterte’s second term in office, the PHP9 trillion Build, Build, Build national programme is straining. Promised to deliver ‘a golden age of infrastructure,’ the programme is being slimmed down.
New projects will push ahead, however.
This week, former president Gloria Macapagal-Arroyo was appointed as Presidential Adviser for “flagship programs and projects” in Clark, and proposed converting Clark Airport into a multi-purpose “aerotropolis” to support economic growth in Luzon. The airport will open its new passenger terminal in January 2021.
A big-scale upgrade of Ninoy Aquino International Airport in Manila has hit the buffers. It is still seeking a developer after the chosen consortium withdrew its proposal in July.
Over a year ago, in November 2019, the government approved phase 1 of the China-backed Mindanao Railway. Ground was due to be broken in early 2020 for the 102km train line connecting Digos, Davao and Tagum.
Inevitable delays set in, and reports suggests work will instead begin in 2021.
The Tagum-Davao-Digos line is the first stage of a proposed 830km rail loop around Mindanao, the second-largest island group in the Philippine archipelago. It is the first railway to be constructed beyond Luzon, the largest island group - and is estimated to take 10-15 years to complete.
In other news this week, the Department of Transportation confirmed construction of the new Calbayog Airport Terminal in Samar, and expansion of its runway, will be completed in December. New airports are also planned or under development in Bulacan, Zamboanga City and Central Mindanao.
Singapore
Although boasting impressive infrastructure - particularly for MICE and business events - Singapore was planning several key upgrades. Some of those are now on hold.
Perhaps the biggest on-hold story is at Singapore Changi Airport, where construction of Terminal 5 was paused in June for at least 2 years. Flight operations at Terminal 2 are currently suspended until late 2021.
While T5 remains “a critical long-term infrastructure investment for the future of Singapore’s economy”, the collapse of inter-continental air travel in 2020 weakened its viability.
In other news, Singapore Changi is constructing an onsite COVID-19 testing lab, which should open in early 2021.
Similarly uncertain are the contracted expansions of Singapore’s two integrated resorts, Marina Bay Sands and Resorts World Sentosa. The two casino resorts had their exclusive licenses extended by the government until 2030 provided they jointly make SGD9 billion in (non-gaming) expansion investments. These were pitched to include a new hotel tower, indoor arena and a Super Nintendo World theme park.
The 10-year-old Marina Bay Sands - which recently unveiled a new hybrid events broadcasting studio - said in July that its expansion plans were likely to be delayed due to the dramatic pandemic impact on its business.
As per the ‘Malaysia’ update above, the status of the Singapore-KL high-speed railway remains anyone’s guess. However, construction of the Johor Bahru-Woodlands Rapid Transit Link - which will enable cross-border rail travel between Singapore and southern Malaysia - broke ground this week. It’s slated for completion in 2026.
This week, I was invited by Channel News Asia to comment on Agoda’s contention that “Asia is leading the way in the global travel recovery”. We discussed the region’s domestic and international travel outlook, and IATA’s push for more pre-flight testing.
Watch the interview HERE
Thailand
Thailand badly needs a tourism boost. This week, Nomura forecast its “fragile” economy would be among the slowest to recover in South East Asia. Meanwhile, its Special Tourist Visa generated just 1021 visitors in October, and borders seem likely to stay mostly closed until vaccines have been administered.
In June, a consortium headed by Bangkok Airways had a bid accepted to develop U-Tapao Airport in 4 phases, targeting 30 million annual passengers by 2030, and 60 million by 2055. Work is expected to commence in late 2021.
As reported in Issue #15, Thailand is turning to rail and road infrastructure to reframe its tourism future.
Recently, the Thai government expedited negotiations with China to kickstart phase 1 of the long-delayed 101km High-Speed Railway from Bangkok-Nakhon Ratchasima.
This forms part of a 3-stage project linking the Thai capital with Nong Khai on the Laos border, where it would integrate with the Trans-Asia high-speed railway from China’s southwestern city of Kunming to Vientiane, the Lao capital.
To be constructed by Chinese companies, Thailand’s 3-stage high-speed railway will be developed over the next decade. This week, the State Railway of Thailand said 5 contracts (totalling THB40 billion) of the 14 needed for phase 1 had been signed.
In the capital, Bangkok, Bang Sue Grand Station - frequently cited as South East Asia’s largest railway station - is set to open next year. Ultimately, it will manage intercity, metro and commuter networks, and be the nexus for the high-speed railway. Bang Sue will also serve Suvarnabhumi, Don Mueang, and U-Tapao airports.
Self-drive tourism could become a pivotal part of tourism if the new Thailand Riviera road routes come to fruition. A proposed 1,500km road will span the Gulf of Thailand, a 750km highway will track the Mekong River, and a 175km roadway will traverse the Khao Yai Mountains.
Phase one of the coastal Thailand Riviera route is expected to be completed in 2023.
Also, this week, plans were floated for a THB1.5 billion, 1.95km suspension bridge from Koh Lanta to Ban Hua Hinh. If approved, the target completion would be 2025.
Vietnam
One of the few Asian economies expected to grow this year, Vietnam is positioning itself for rapid expansion over the coming decade. Foreign and domestic infrastructure investment will play critical roles.
China, South Korea and Japan are active participants in travel project funding, and Indian firms are eager to show their hand. Meanwhile, Vietnam’s Prime Minister this week proposed “a national tourism conference” to plan (and invest) for the future.
In addition, Vietnam Plus reported ongoing upgrades to tourism services:
“Many relic sites, places of interests, and entertainment venues in Hanoi have had a facelift... Entertainment venues are also revamping to attract local visitors who are believed to be the best target in plans to recover the tourism sector at this point of time.”
"Does Vietnam Need More Airports?" This question was posited by Vietnam Net as the government asked the Ministry of Transport to use Thanh Son Airport (aka Phan Rang Air Base) as a commercial airport. One reason for the proposal is the number of new power plants being built in the region, which need workers flown in and out.
Meanwhile, a USD246 million airport is under consideration near Sapa, one of northern Vietnam’s most popular tourist destinations.
Vietnam plans to have 28 airports by 2030, including 13 international hubs. By then, 280 million passengers are forecast to fly in, out and around Vietnam each year.
Earlier this month, the government approved the USD4.6 billion Long Than International Airport. Located 40km east of Ho Chi Minh City, it is scheduled for completion in 2025 with a capacity for 25 million passengers.
Construction of a 3rd terminal at the Tan Son Nhat International Airport in Ho Chi Minh City and expansion of Hanoi’s Noi Bai International Airport are also on the way.
Back on the ground, or underneath it, Hanoi’s long-awaited new metro system was due to open in December - but that seems likely to be shifted into 2021.
And the prospective bids keep coming. This week, VN Express reported that German, Swiss and Israeli firms “will invest US350 million” in areas including “digital tourism.”
As a genuinely COVID-safe nation (it's reported just 39 cases - the lowest in South East Asia), few countries are better poised for a China-led travel recovery than Laos.
In 2019, it welcomed 1 million Chinese arrivals for the first time. As reported in Issue #17, the Chinese-built Vientiane-Vang Vieng highway opens next week, and in 2021, the China-Laos high-speed railway will connect Vientiane with Kunming. However, the tourism industry has been savaged by COVID-19, and unemployment is rising.
On The South East Asia Travel Show this week, we chat to Jason Rolan, Vientiane-based editor of Laos' Airlines inflight magazine, about the Chinese influence, domestic and outbound travel, ecotourism and daily life in a COVID-normal country.
Listen to this week’s podcast HERE (or on Apple Podcasts)
And, that’s a wrap for Issue 18.
Until next Sunday, you can catch me on Twitter and LinkedIn, and at Check-in Asia.
Feel free to send thoughts and feedback to gary@check-in.asia
Next week will be a special issue on Chinese outbound travel. When will the highly anticipated “revenge travel” renaissance begin?
Speak soon,
Gary