Asia Travel Re:Set #32 - Travel Bubbles Are Back!

"Travel Bubbles didn’t succeed in Asia in 2020, so are they workable in 2021?"

Hello. Welcome to Asia Travel Re:Set…

Travel Bubble fever broke out this week in Asia Pacific.

Again.

Taiwan’s Transport Minister revealed the island nation has been having bubble chats with Japan, Singapore, South Korea and Vietnam since “late last year.” It recently added Palau to the roster.

Malaysia’s Ministry of Tourism, Arts and Culture said it intends to build a bubble between the island of Langkawi and Indonesia “by the second quarter of this year,” and - hopefully - with China. A list of other potential partners was reeled off.

Every country in Asia, it must be said, is on record as being “hopeful” about China.

Meanwhile, Singapore reiterated its commitment to the on-hold Air Travel Bubble with Hong Kong, despite the latter seeing infections spike. Indonesia’s Ambassador to Singapore told state media that bubble “deliberations” are ongoing between the two countries. Australia is directing its travel bubble intentions towards Singapore.

Tracking Thailand’s thought bubble is never easy. Its retitled reopening strategy, ‘the Andaman Sandbox’, posits Phuket, Koh Ngai, Railay and Khao Lak for the first phase comeback as early as July. Maybe October. Possibly April. Koh Samui wants in, too.

And, yes, China is Thailand’s “top priority” market. Plus India, Germany and Italy. And many others. Thailand is looking beyond bubbles. It wants a full-on reboot.

In some ways, it feels like a flashback to 6 months ago. Most of these discussions gained form in October 2020 - when the original Singapore-Hong Kong Air Travel Bubble was unveiled.

While neighbouring nations mulled travel bubbles back then, Thailand launched its Special Tourism Visa. It’s going its own way once more.

No country wanted to be left out last October. Nor do they now that vaccines, digital health passes and economic urgency are moving the dial towards real action. Everyone is watching everyone else.

The problem today - just as then - is disentangling the substance from the spin.

Clouding the landscape are statements that funnel through local media - and get related as, well, stated. Travel Bubbles are therefore “Game On”. Even if they aren’t - or, at least, not yet.

So, today I’ve analysed a handful of factors that render travel bubbles rather more nuanced than is sometimes presented.

Thanks for being on board,

Gary


Each Sunday, Gary Bowerman charts the week’s key talking points for visitor economies across Asia Pacific.

Check out more at www.asiatravelreset.com


The Sunday Itinerary

- DashBoard 

  • From 21.648 billion down to 0 in Asia Pacific this week.

- QuoteBoard 

  • Hong Kong investment in AirAsia, Langkawi-Indonesia bubble, Australian stimulus. 

Travel Bubbles Are Back!

  • Vaccine Rollouts are Slower Than Hoped

  • Reduced Quarantine vs No Quarantine

  • The Perils of ‘One-Way’ Bubble Thinking

  • Micro Bubbles vs Regional Balloons

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Big thanks to Skift, who adapted last week’s edition: The Pandemic 12 Months On: 10 Shared Learnings for Travel & Tourism into a Guest Column.

READ THE SKIFT ARTICLE HERE


DashBoard

From 21.648 billion down to 0 this week in Asia Pacific.

  • HKD21.648 billion: Cathay Pacific’s official net loss in 2020. [Cathay Pacific]

  • 200,871: Number of visitors welcomed to the Maldives in 2021, as per 4 March. Top 3 source markets are India, Russia & Ukraine. [Maldives Marketing & PR Corp.]

  • 83.4%: Visitor arrivals to Malaysia slumped by more than four-fifths year-on-year in 2020, according to newly published figures. [Tourism Malaysia]

  • 7: Thailand vows to halve the quarantine period from 14 days for vaccinated travellers to the country. Phuket wants to remove quarantine altogether. [Thailand Health Ministry / Bangkok Post]

  • 0: Tokyo will host the delayed 2020 Olympics without spectators from overseas. Around 1 million inbound visitors were forecast to attend the Games. [Kyodo News]


QuoteBoard

You heard it here…

“When we look at the peers in the same industry, I see there’s a good opportunity [to invest]. I see that AirAsia will be the first group of companies that will bounce back.” 

Hong Kong businessman Stanley Choi Chiu-fai on the decision to grow his shareholding in AirAsia Group to become its third-largest stakeholder. [SCMP]

“We are looking forward to restarting leisure travel by introducing a travel bubble between Langkawi and Indonesia, hopefully by the second quarter of this year.” 

Nancy Shukri, Malaysia’s Minister of Tourism, Arts and Culture. [The Edge]

“This package isn’t going to provide the benefit, nor directly tackle the dire predicament facing tourism enterprises and our visitor economy. So many tourism businesses have experienced so few visitors this past year. We fear these measures will also not deliver stimulus in time to sustain many enterprises and their workforces.”

Simon Westaway, Executive Director of the Australian Tourism Industry Council, responds to the Federal Government’s tourism support package.

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Travel Bubbles Are Back!

As mentioned in today’s intro, a new wave of Travel Bubble excitement is breaking across Asia Pacific.

While the air corridors being discussed were mostly conceived in the 2020 Northern Hemisphere autumn - before the winter surge of COVID-19 infections - Bubble Chat is being re-upped by two 2021 differentiators: Vaccines + Economic Urgency.

In the months since travel bubbles faded from the radar, structural dislocation has manifested in many Asian economies. More businesses have closed, many more livelihoods have been adversely affected. More interest rates cuts are inevitable.

Finance ministers that recognise the ruinous consequences of borrowing at 2020 levels to patch up deeply scarred economies want the financial tap of travel turned back on.

The hoped-for leverage of COVID-19 vaccines in travel bubble negotiations, though, is dragging its heels. Vaccine programmes are slow off the blocks in much of the region - although it is worth noting Asia Pacific counts 5 of the world’s most populace nations. These are #1 and #2 (China and India), #4 (Indonesia), #5 (Pakistan) and #8 (Bangladesh) - plus 4 countries ranked between 11 and 20 globally.

In addition, pre-flight testing protocols - which will be vital to ensure the safety and confidence of travellers for the foreseeable future - are inconsistent, untrusted and under-resourced. Most countries in the region are reporting “imported infections” throughout the week, even though air passenger numbers are extremely low.

Vaccine Roll-Outs Are Slower Than Hoped

Vaccine programmes are proving harder to accelerate than hoped for in many Asian countries. Vaccine scepticism, too, is a bigger barrier to progress than policymakers anticipated. Thailand’s suspension of the Oxford-AstraZeneca vaccine this week sent more shockwaves of concern through South East Asia.

In addition, although China’s proposed vaccine health pass solution garnered plentiful press attention, the logistical, administrative and political challenges of integrating it across borders are sizeable. Continuous tracking in travel is still a way from the gate.

The above table shows that for total vaccination shots administered, China and India rank in the world’s top 4 (actually, the top 3 if you accept that the EU – ranked 3rd - is not actually a country). The only 2 other Asia Pacific nations in the top 20 are Indonesia (#17) and Bangladesh (#19). 

“Thailand’s suspension of the Oxford-AstraZeneca vaccine this week sent more shockwaves of concern through South East Asia.”

The vast populaces of China and India, however, see them disappear off the chart for the ‘share of the population fully vaccinated’ ranking (see chart below). From the region, only Indonesia (#20) places among the global top 20.

That is pretty impressive achievement - but the attained rate is just 0.5%.

Some countries, Malaysia for example, are still negotiating to complete their vaccine portfolios. Others, like Vietnam, Singapore, Thailand and Taiwan, are awaiting the clinical trial results for homegrown vaccines to supplement their purchased imports, and – crucially – persuade ‘fence-sitting’ sceptics about the safety of getting a shot.

Reduced Quarantine vs No Quarantine

The travel bubble ideal is to remove the 14-day COVID-19 quarantine (or Stay Home Notice) that acts not just as a disincentive but an immovable obstacle to travel.

In the pre-vaccine era this goal encountered several stumbling blocks - the largest being the range (and unreliability) of pre-flight testing in different jurisdictions. Borders were, lest we forget, closed to prevent the import of COVID-19 infections - and, later, new virus variants.

Internationally approved testing protocols and processes could have removed the quarantine safety net. It didn't happen.

Now, while vaccine programmes are slowly hitting their straps, policymakers are unsure about which vaccine - if any - definitively stymies transmission. In turn, they are prevaricating about whether quarantines can be reduced or eliminated.

"Nobody is going to come to Singapore and stay for 14 days [quarantine].”

This week, Thailand’s Public Health Ministry proposed cutting the mandatory on-arrival quarantine to 7 days, from 14. This is perceived as a necessary ‘social contract’ concession to break open its borders to visitors from up to 70 “medium risk” countries. It looks like a preliminary step towards abolition.

In that sense, Thailand’s approach is different to bilateral travel bubbles, whereby the quarantine stipulation would be removed on both sides.

Another issue is that everyone talking bubbles in South East Asia wants to engage the same countries. The big outbound markets that bring the big spending. And no-one appears satisfied with just one bubble partner. In this context, removing quarantines altogether would seem risky.

In South East Asia, Singapore and Thailand look the likeliest to phase out quarantines.

With a population of 5.7 million, Singapore is positioned to complete its vaccine programme at a relatively early juncture. And it wants vaccinated travel corridors.

"Nobody is going to come to Singapore and stay for 14 days [quarantine]," said Transport Minister Ong Ye Kung this week. He added:

"[Combine vaccination programmes in other countries [with testing, and you can possibly open up a safe travel corridor.”


Newer subscribers can read the previous coverage of Travel Bubbles (click the links)...

Issue #16 – 15 Things the Singapore-Hong Kong Air Travel Bubble Tells Us About Pre-Vaccine Travel

Issue #12 - Air Bubble Reunions Go AWOL in Australia


The Perils of ‘One-Way’ Bubble Thinking

Media reports in some countries imply that travel bubbles are primarily an instrument to revitalise inbound travel.

Comments attributed to Zulkifly Md Said, Director General of Tourism Malaysia, in The Malaysia Reserve on Wednesday noted:

“The government plans to attract essential and leisure travellers into the country via the travel bubbles to revitalise the tourism and culture industry.”

No mention was made regarding outbound travel. This is either an excusable oversight or a policy statement.

Welcoming back overseas visitors has the potential to cause a degree of resentment if residents are not able to reciprocate.

The recent experiences of Australia provide a warning.

The so-called ‘Fortress Australia’ approach of Zero Covid Tolerance has sparked a slate of internecine frictions - not least with regard to travel bubbles.

It’s worth remembering, Australia was a co-originator of the ‘Travel Bubble’ term.

Prime Minister Scott Morrison and New Zealand’s Prime Minister Jacinda Ardern signposted a potential bilateral air travel project in late-April 2020.

Things didn’t work out quite as planned.

A spike of infections in Melbourne and across Victoria resulted in Australian travellers being precluded from the bargain. Hence, the Trans-Tasman Travel Bubble commenced in mid-October last year with New Zealand residents permitted to enter Australia. There was, and currently is, no reciprocation for Australians.

This continues to rankle with Australians, although efforts are being made to convert the one-way bubble into a two-way corridor in the coming months.

And, this weekend, news emerged that Australia may - in the coming months - form a travel bubble with Singapore. More details will follow in due course.

Micro Bubbles vs Regional Balloons

As mentioned above, the original concept of a travel bubble - as promulgated by Australia and New Zealand - was fairly simple.

It would be a bilateral agreement permitting quarantine-free travel between two countries with a similar track record in COVID-19 containment.

Starting with low visitor quotas, it could be scaled up if virus transmissions did not increase. Crucially, the concept would be scrutinised over a period of months between the two countries.

This would make it logistically manageable, reduce pressure on COVID-19 testing systems and enable either country (or both) to track, trace and lock down if cross-border infections were detected.

That idea was floated 11 months ago. Economic pressures Asia-wide have spiralled in the intervening period.

Hence, governments are hedging their bets by starting to negotiate potential bubbles with different ‘“low- or medium-risk?” countries.

Talk has even surfaced about Regional Balloons – or multilateral bubbles among neighbouring countries or groupings.

Actually, only one Balloon has received any air.

An ASEAN Travel Balloon was proposed in December as a way to collectively rebuild aviation, tourism and hospitality in the 10 countries of South East Asia. The ASEAN economies, as COVID-19 has emphasised, rely on international travel flows. 

ASEAN, though, is a light-touch regional grouping. In contrast to the EU - to which it is often compared - it (purposefully) does not have legally binding institutions and foreign policy goals. There is no single currency or Central Bank.

The 10 members have distinctive geopolitical and economic goals and harness their own external trade relationships. They also nurture their own aviation strategies.

Moreover, COVID-19 has been contained with varying degrees of success across ASEAN. This week, Cambodia registered its first death, Indonesia its 38,329th.

Expecting the 10 countries to agree shared Travel Balloon protocols, when they have prevaricated for so long on forming an ASEAN Single Air Market, was unrealistic.

Micro bubbles between ASEAN countries, though, will pop up in the coming months.


After 12 pandemic months, do policymakers in South East Asia better understand the differences between 'travel' and 'tourism'? Does the travel sector have a better handle on the climate crisis? If Travel Bubbles didn’t succeed in 2020, will they work in 2021? And, will tourism authorities invest in domestic travel once borders reopen?

All this and more on this week’s show: LISTEN HERE


And, that’s a wrap for Issue 32.

Until next week, find me on TwitterLinkedIn and the Asia Travel Re:Set website.

If you have nothing better to do on Monday afternoon, I’m speaking at the 8th ASEAN Tourism Research Association Annual Forum, which is being live-streamed.

And feel free to send comments and feedback to gary@check-in.asia 

Have a great week,

Gary