Asia Travel Re:Set #27 - Is ASEAN More Divided Than Ever on Travel?
"It’s been a testing week for the Association of South East Asian Nations."
Hello. Welcome to Asia Travel Re:Set…
It’s been a testing week for the Association of South East Asian Nations [ASEAN].
Responses to the military coup in Myanmar were patchy. Despite a short statement, the 10 members - Brunei (2021 ASEAN Chair), Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam - speak with various voices.
This is inevitable given the size of the region and different political and economic ties with the elected Myanmar administration. Some governments are alert to sensitivities among their populaces regarding the Rohingya issue, and the Burmese communities living in their countries.
While the global media tends to focus on China’s influence, there are other interested nations. Myanmar, after all, resides at the intersection of South and South East Asia.
These include India, and countries with significant investments in Myanmar, such as Japan, Singapore and Hong Kong.
Beyond this issue, a resurgence of COVID-19 is rendering policy making a shifting science.
ASEAN completed the week with 281,735 active cases. Some 274,180 of these are shared between Indonesia, Philippines, Malaysia and Myanmar. Add in Thailand, and 5 countries account for 280,961 of the active cases.
Put simply, the COVID-safe/COVID-insecure split within the region is vast.
The two nations with the fastest rate of new COVID-19 infections, Indonesia and Malaysia, discussed a Reciprocal Green Lane this week, while Thailand inexplicably unveiled a ‘SEXY’ travel slogan and Singapore’s 2021 World Economic Forum Special Summit was delayed by 3 months.
Meanwhile, the latest ASEAN Tourism Ministers meeting is yet to deliver substance.
All these topics except the Myanmar coup - now is not the time to talk about tourism as life-altering events unfold there - are discussed below.
Finally, ‘Thank You’ to the local journalists and citizens in Yangon and elsewhere in Myanmar who documented and shared this week’s events with the world.
It’s inspiring to see social media used in such selfless and challenging ways.
Thanks for being on board,
Gary
Each Sunday, Gary Bowerman charts the week’s key talking points for visitor economies across Asia Pacific.
If you are enjoying this issue so far, please feel free to…
The Sunday ‘ASEAN’ Itinerary
- DashBoard
From 270.20 million to -2.07 this week in Indonesia
- QuoteBoard
Aviation in ASEAN, China Tax-Free Shopping, Travel Bubbles in New Zealand
- This Week’s 6 TOP Talking Points
Will There Ever Be an ASEAN Single Aviation Market?
What’s Trust Got To Do With It? New Zealand, Hong Kong & Sri Lanka
What’s Trust Got To Do With It? South East Asia
Can Indonesia & Malaysia Build Bridges & Bubbles?
Thailand Talks SEXY Tourism
World Economic Forum in Singapore Gets Delayed
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DashBoard
From 270.20 million to -2.07 this week in Indonesia, South East Asia’s largest economy…
270.20 million: Indonesia’s population according to the 2020 census results published in late January 2021. [Statistics Indonesia]
4.02 million: Total number of foreign tourists to Indonesia in 2020, down from 16.11 million in 2019. [Statistics Indonesia]
1,204: Total COVID-19 deaths in Indonesia in the first 5 days of February 2021. [Jakarta Globe]
-9.31: Bali’s economic growth slumped into reverse in 2020. [Statistics Indonesia]
-2.07%: Indonesia experienced negative GDP growth in 2020, the first full-year contraction since 1998. [Channel News Asia]
- QuoteBoard
You heard it here…
“Cooperation and collaboration, not nationalism and jingoism, is a must for ASEAN to reopen and recover, and in time, reach its full potential post COVID.”
Tony Fernandes, CEO, AirAsia [LinkedIn]
“In my view, Chinese people who go abroad to buy luxury goods may move to Hainan, because our categories and brands are constantly increasing, and sales strategies and sales prices will also be adjusted appropriately.”
Gao Xujiang, Executive Director of Sanya Downtown Duty Free Store [CGTN]
"We will continue to pursue travel bubbles with Australia and the Pacific, but the rest of the world simply poses too great a risk for our health and our economy."
Jacinda Ardern, Prime Minister of New Zealand [New Zealand Herald]
Join travel professionals worldwide who enjoy a weekly digest of the top talking points in Asia Pacific…
This Week’s 6 TOP Talking Points
Will There Ever Be an ASEAN Single Aviation Market?
Fully opening up South East Asia’s skies has long been discussed, but was only formally adopted as a policy by the 10 members of ASEAN in 2011.
Since then, a variety of issues - including individual nations protecting their home carriers, stringent airline investment rules and external aviation access agreements with markets like China - have exerted a drag on progress.
Furthermore, unlike the EU - which has an integrated air market - ASEAN is a less formal, more consensus-based regional group. It lacks supranational institutions, such as the European Commission and European Court of Justice, which can compel member states to comply with over-arching regional policies.
In aviation terms, this means each nation continues to fight its own corner. Once air borders reopen after the pandemic, this may prove to be a missed opportunity.
On this week’s The South East Asia Travel Show, we discussed the future of aviation regulation in ASEAN with Michelle Dy, Manager, Global Affairs & Policy at AirAsia. A lawyer admitted to the bar in the Philippines and New York, she has written several papers on aviation policymaking.
This week, Michelle’s boss at AirAsia, CEO Tony Fernandes, went on-the-record to say:
“Cooperation and collaboration, not nationalism and jingoism , is a must for ASEAN to reopen and recover, and in time, reach its full potential post COVID.”
Meanwhile, Jono-Ook Lee, Head, Regional Agenda, Asia-Pacific at the World Economic Forum, said:
“Effective cooperation among ASEAN member states has been the fundamental principle for the community since its inception. The pandemic, which does not recognise national borders, is accelerating coordinated action to deploy many of the region’s on-going initiatives and programmes, which will contribute to the block’s deeper integration.”
Set against this background, Michelle offered fascinating COVID-era legal and policy insights. These included:
1) More regulatory vectors:
“The rules of the game have definitely changed, hopefully temporarily. Authorities outside of the air transportation space also get to decide whether we can fly or not, such as the Ministry of Health, National Security Commission or the COVID-19 Taskforce in each country. This is absolutely vital in a pandemic situation, but it means our stakeholder base has grown, and we have to monitor a lot more things than in the past."
2) National vs Local Authority restrictions:
“From an operational standpoint, it’s challenging to plan our network in advance… because it’s not just the national governments that impose restrictions on where we can, or cannot, fly. Sometimes local governments have a say whether they will allow travellers into their jurisdiction or what type of testing they will require.”
3) Ownership limits on airlines in ASEAN:
“In ASEAN, airlines’ inability to efficiently expand into the other countries - like companies in other industries can - is due to the foreign ownership restrictions imposed on airlines. It’s unfortunate to say, but it doesn’t look like COVID-19, and the challenges being faced by airlines, will do anything to change that whole ownership regime anytime soon.”
- The podcast is well worth a listen, click here: The Complexities of Airline & Aviation Regulations in ASEAN & Asia Pacific, with Michelle Dy, AirAsia
- And check out an excellent new book to which Michelle has contributed: Aviation Law and Policy in Asia: Smart Regulation in Liberalized Markets
What's Trust Got To Do With It? New Zealand, Hong Kong & Sri Lanka
Published this week, the above eye-catching graphic from Fitch Solutions / World Travel & Tourism Council merits more than a quick glance.
Closer inspection reveals the the nations in Asia that are economically most in need of resuscitating inbound travel.
But the pandemic has moved the policy needle into the public health realm. In many cases, it is stuck there. A diversity of containment, suppression, elimination and vaccine strategies adds an (albeit graphically invisible) complexity that seems likely to endure.
Another critical hindrance is a lack of trust between nations - based on their relative success (or otherwise) in managing COVID-19, plus numerous internal factors.
Take, for example the 6 countries and regions on the left-hand side of the graph where the importance of tourism is most pronounced - and each of which recorded negative GDP Growth in 2020. Four are in ASEAN, plus New Zealand and Hong Kong.
If we extend to the 7th on the chart, Sri Lanka commenced its “Bio Bubble” tourism reopening on 21 January. Similarly to other countries welcoming tourists, it has limited available source markets given travel bans and truncated airline services.
Nevertheless, Sri Lanka claims to have welcomed 1,682 tourists in January, down 99.3% compared to January 2020. The only way is up.
Every nation in the world would trust New Zealand, but Prime Minister Jacinda Ardern has repeatedly stated that its inbound parameters extend to selected states of Australia (Queensland and Western Australia) and Pacific Islands only this year.
PM Ardern said this week:
"We will continue to pursue travel bubbles with Australia and the Pacific, but the rest of the world simply poses too great a risk for our health and our economy."
Hong Kong suffered two significant reverses as winter approached. Firstly, China refused to countenance allowing its citizens to travel to Hong Kong. Secondly, the Hong Kong-Singapore Air Travel Bubble failed to get airborne.
Social restrictions remain in place, and the colourful Chinese New Celebrations will be muted this year. Hong Kong will work towards its primary goal of securing a border deal with Beijing, but that looks some way off at present.
Which brings us to…
What's Trust Got To Do With It? ASEAN
So what of Cambodia, Philippines, Thailand and Malaysia?
Well, they count diverse and distinctive priorities across their economies, societies and political structures.
In travel terms, it would be tricky to pick a Travel Bubble pairing between them.
Cambodia, with its extremely low incidence of COVID-19, would be unlikely to select any of those 3 nations as a preferred tourism partner.
If, as discussed below, Malaysia is intent on reopening tourism ties with Indonesia, that would seemingly remove Thailand and Philippines from the near-term equation.
Thailand and Philippines? Unlikely given their “Land of COVID” spat last year.
But will there be any bilateral or a multilateral travel agreements among ASEAN nations?
The low-key media output after this week’s Asean Tourism Ministries virtual meeting did little to suggest that much progress was made.
The ASEAN Tourism Association (ASEANTA) lobbied for tourism to resume in the 1st or 2nd quarter of 2021 to prevent the region’s travel industry from collapse.
Forget the 1st quarter. And given ASEAN’s preference for consensus-building, the 2nd quarter looks far too fast.
With entrenched positions in each country, and a low degree of trust among members about the safety of border re-openings, ASEAN looks to be more divided than ever.
Can Indonesia & Malaysia Build Bridges & Bubbles?
Between them, Indonesia and Malaysia count 227,327 active COVID-19 cases (as of 6 February): 176,433 in Indonesia and 50,894 in Malaysia. These are, by some distance, the largest current figures in South East Asia.
Indonesia has commenced the monumental task of inoculating 70% of its 270 million population. Malaysia’s vaccine programme has yet to begin, and the country remains under a Movement Control Order (MCO) until at least 18 February. Domestic travel in Malaysia is currently not permitted.
So this headline, “Green light for Malaysia-Indonesia travel bubble” published in yesterday’s New Straits Times newspaper was somewhat surprising.
Until you read the article.
It seems that Indonesian President Joko Widodo and Malaysian Prime Minister Muhyiddin Yassin did discuss “a Reciprocal Green Lane, Travel Corridor Arrangement” between both nations during their meeting this week.
But, as Malaysia’s Tourism, Arts & Culture Minister confirmed, it is one of several potential projects that have been discussed since July 2020 “with neighbouring countries such as Brunei, Singapore and Thailand or Asia Pacific countries such as Japan, South Korea, Australia and New Zealand.”
Moreover, the Malaysia-Indonesia deal would be:
“Subject to bilateral discussions and considerations based on the aspects of health, immigration, data tracking, and ongoing monitoring by relevant agencies in both countries."
Hence, the “green light” headline was just window dressing.
Thailand Talks “SEXY” Tourism
It’s never easy to know where to start when talking about Thai tourism.
Unquestionably, the most prolific ideas generator in South East Asia, the Tourism Authority of Thailand (TAT) has been throwing handfuls of concept darts at a board for several months, hoping that at least one will stick.
On 25 October, Asia Travel Re:Set Issue #13 reported a quote by Anutin Charnvirakul, Thailand’s Health Minister, on the launch of the Special Tourist Visa (STV) scheme.
“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.”
Seems a distant memory now. Reams of media writing about the STV quickly faded, as the project simply ran out of battery life. With most Asian borders closed, there wasn’t enough market activity during the Northern Hemisphere winter to make it viable.
Thailand’s Special Tourist Visa kick-off contrasted notably with its new “SEXY” travel slogan
Since then, spa quarantine and golf quarantine concepts have been proposed, and Thailand repeated its desire to attract “high-value” visitors rather than the mass market tourists that drove up its annual visitor arrivals to almost 40 million in 2019.
It’s easy to forget that less than 2 years ago - in June 2019, to be exact - Thai media was reporting a projection of up to 65 million visitors per year by 2030.
65 million.
While domestic travel has proved resilient, Thailand’s recent COVID-19 outbreak, believed to have emanated in Samut Sakhon province, resulted in intra-regional movement restrictions.
This week, 77 provinces were reclassified into 5 groups depending on risk level.
Also this week, Phuket floated a notion to inoculate its population and expedite a tourism reopening in mid-year.
There are far worse ideas than that.
Talking of which… this week, Thailand surprised the world with its “SEXY” Concept, which the TAT argues will promote safe and sustainable travel in a “new normal.”
The acronym - S – Safety and Hygiene, E – Environmental Sustainability, X – Extra Experiences, and Y – Yield - is either deliberately (and riskily) ironic, or it overlooks Thailand’s long battle to overcome an unwanted reputation for sex tourism.
Moreover, the term Yield is as unsexy as it gets in marketing speak. In a highly aspirational age, consumers really do not wish to be considered as agents of yield.
Furthermore, the official TAT explanation of Yield - “a high-value form of tourism from a group of people with high-spending potential” - is at best condescending, and at worst discriminatory.
It says the move is predicated on shifting “the Thai tourism industry out of mass tourism and towards responsible tourism with an emphasis on revenue-generating quality tourism.”
So “responsible tourism” is redefined as a function of “revenue-generating quality tourism.”
Whatever that may be.
They need to hire a new PR agency. Fast.
World Economic Forum in Singapore Gets Delayed
In the current context, a 3-month delay isn’t a big deal.
For Singapore, the pushback of the World Economic Forum meeting from 25-28 May to 17-20 August gives it more time to prepare - and to vaccinate its population.
This year’s Special Annual Meeting is decamping from its snow-bound January hangout in the Swiss Alps to the tropical Red Dot.
Singapore has been trying to lever-open its business travel sector. Since 1 October 2020, it has accepted applications for MICE events of up to 250 attendees. By 31 December 2020, it “had held 29 MICE event pilots,” says the Singapore Tourism Board.
As elsewhere, the volatile nature of COVID-19 is proving a fearful foe.
The Hong Kong-Singapore Air Travel Bubble was shut down hours before take off in November. Last weekend, Singapore suspended Reciprocal Green Lane agreements with Germany, Malaysia and South Korea until the end of April.
The warning signs for the WEF Summit were writ large.
Officially, the date change…
“Reflects the international challenges in containing the pandemic. Current global travel restrictions have made planning difficult for an in-person meeting in the first half of the year.”
Furthermore…
“Differing quarantine and air transport regulations have increased the lead time necessary to ensure that participants globally can make arrangements to join.”
In short, logistical nightmare.
The reasoning is hard to challenge.
After all, this year’s Summit has set itself an immense task:
“It will bring leaders face-to-face to focus on shaping solutions to the most pressing challenges of our times.”
This week, Singapore announced that it received 2.7 million inbound arrivals in 2020 (nearly all of which were in the first 2 months of the year. This marked a 85.7% deficit on 2019.
A Singapore Tourism Board statement, issued on 1 February, said:
“Even with the development of several vaccines, it will take time for mass leisure travel and traveller confidence to return. Therefore, we expect tourism arrivals and tourism receipts to remain weak in 2021.”
And, that’s a wrap for Issue 27.
Asia Travel Re:Set is taking a break next weekend for the Chinese/Tet New Year holiday, but a special themed mini edition will be sent to subscribers.
Until then, you can find me on Twitter and LinkedIn.
This week’s The South East Asia Travel Show will discuss the future of Chinese New Year travel marketing. Is it time for a regional rethink? Check it out on Wednesday.
And don’t forget to send comments and feedback to gary@check-in.asia
Festive greetings for the New Lunar (Lunisolar) Year,
Gary