Asia Travel Re:Set #9 – The 20 Events That Shaped The Travel Year: Part II

Every country on earth would relish 600 million domestic trips in a single week

Oct 04, 2020

Hello. Welcome to the Sunday edition.

So, we end a week characterised by some small yet progressive travel ‘announcements’, albeit without adding much clarity to the region’s overall landscape.

It feels very much like a 10,000-piece jigsaw, with perhaps four edge pieces and a small corner filled in, and a handful of disconnected parts floating randomly in the middle.

If we read the fine print on Singapore’s “Reopening” to Australia and Vietnam, India’s 16 “Air Transport Bubbles” or the “Trans-Tasman Travel Bubble,” the clauses tend to overpower the tangible benefits. Thailand’s Special Tourist Visa remains perplexing.

By contrast, Laos is considering a small number of inbound charters, and Maldives appears to be making steady progress.

Meanwhile, China’s state media seemed a little underwhelmed by the size of the domestic rebound during October Golden Week.

That said, every country on earth would relish 600 million (or so) domestic trips in a single week. Many nations will not achieve that volume for perhaps a decade.

Having spoken to various travel professionals in the region this week, a sense of exasperation is evident. Clarity is in short supply and trust in governments is faltering.

And yet, it is tempting to overlook the fact that the world is still battling a pandemic.

While governments in Asia Pacific are searching for economic justifications to reopen borders, Europe in particular is retrenching at speed.

COVID-19 remains a global disease requiring a global solution - even if we accept that a regionalised world is the inevitable outcome of the crisis. Either way, shutting borders, banning travel and locking down cities only presses pause on the problem.

The map below indicates the current level of active cases worldwide. As the Northern Hemisphere winter draws near, the world is looking ever more dislocated.

Thanks for being onboard,

Gary

[Map representing the current active COVID-19 cases worldwide: Johns Hopkins Coronavirus Center]

The Sunday Itinerary

- Dashboard: Travel Bubbles

- The 20 Events That Shaped Asia’s Travel Year: Part II

Dashboard: Travel Bubbles

16: India’s Air Transport Bubbles (Afghanistan, Bahrain, Bhutan, Canada, France, Germany, Iraq, Japan, Kenya, Maldives, Nigeria, Oman, Qatar, UAE, UK, US)
9: Japan’s Residence Track agreements (Brunei, Cambodia, Laos, Malaysia, Myanmar, Singapore, Taiwan, Thailand, Vietnam)
8: Singapore’s Air Travel Pass, Reciprocal Green Lane and Fast Lane Agreements (Australia, Brunei, China, Japan, Malaysia, New Zealand, South Korea, Vietnam)
3: Laos’s under-discussion Travel Bubble and Fast-Track Immigration Policies (Japan, China, Vietnam)
2: Australian states/territories participating in phase 1 of the Trans-Tasman Travel Bubble for New Zealand travellers (New South Wales, Northern Territory)

[8: Number of terms used by the above 5 countries to define their respective policies]

“Wind back through the 2010s, and travel industry talk focused almost exclusively on a single topic: inbound arrivals.

The 20 Events That Shaped Asia’s Travel Year: Part II

11) Domestic Travel Becomes “The Thing”

Wind back through the 2010s, and travel industry talk focused almost exclusively on a single topic: inbound arrivals. Record annual visitor totals dominated the tourism mantra. The exception was China. Over the past decade, it has reshaped the way the world thinks about outbound and, equally importantly, domestic travel (see #19 below).

Elsewhere, domestic travel was under-valued, under-funded and under-strategised. Few countries dedicated sufficient marketing dollars to promote domestic tourism, or create unique experiences for homegrown tourists. Thailand and Japan introduced initiatives last year, but in a region where state planning plays a central role in tourism policy, domestic travel was usually left to the airlines and hoteliers to sort out.

“Over the past decade, China has reshaped the way the world thinks about outbound and, equally importantly, domestic travel.”

Then came the COVID-19 border closures. Panicked Tourism Ministers across the region began extolling the virtues of travel within borders. Betraying the inevitable economic pressures, they appealed to national sentiment to “help boost the economy.”

To some degree the shift prospered, although relying on local travel in countries with small populations remains forlorn. Moreover, the region’s two major air hubs, Hong Kong and Singapore, have no domestic air travel.

Across Asia, domestic travellers tend to take their trips on weekends and public holidays. They sometimes self-drive and may stay with families. Their spending priorities are different, especially as they confront shifting economic realities. Tourism policymakers neglected to fully understand these trends.

But 2020’s enforced focus on homegrown travel has thrown up some anomalies. Take Australia for example. Tourism Research Australia revealed that domestic travellers outspent international visitors last year by a ratio of more than 2:1.

12) The Beijing & Danang “Incidents”

Surveying Asia, it’s difficult to grade or compare COVID-19 impacts. In September, for instance, India skirted 100,000 daily infections on a handful of occasions. In South East Asia, the Philippines and Indonesia each surged beyond 300,000 total cases. Myanmar, which was COVID-safe for months, is recording around 1,000 daily infections, and Malaysia’s so-called “third wave” is invoking calls for a new lockdown.

Against this backdrop, the integrated suppression strategies of China, Taiwan, Hong Kong, New Zealand, South Korea and Vietnam are outstanding.

But two shocks to the system still reverberate across Asia’s travel eco-system. The first occurred in Beijing in June. The epicentre of the pandemic, China had gone 56 days without registering a local transmission. Its emergency response to COVID-19 was lowered from level 2 to level 3 on June 6.

“Two shocks to the system still reverberate across Asia’s travel eco-system.”

Then an outbreak occurred in the capital, Beijing, on 11 June. The source was traced to the Xinfadi wholesale market, which is visited by 10,000 people daily. Within four days, 76,500 people were tested and contact traced daily. A partial lockdown was imposed, schools shut and hundreds of flights cancelled. Local media reported that the coronavirus strain was different to the one in Wuhan.

Although China responded quickly, and suppressed the outbreak, the COVID-19 reappearance visibly jolted confidence within China and across Asia.

The impact of an outbreak in Vietnam was equally pronounced, and the response swift and unswerving. After a near-100 day run without a single community transmission, domestic travel was thriving, and life in Vietnamese cities appeared “back to normal.”

Confirmed infections in the coastal city of Danang in late July stoked fear across the country. Eighty thousand holidaymakers were evacuated, flights from Danang were suspended and social distancing measures re-introduced.

Hitherto acclaimed for its COVID-19 containment strategy, Vietnam suddenly faced the possibility of an escalating spike of infections. It reacted quickly and shutdown the outbreak, but once more travel confidence was impacted at home and region-wide.

13) Australia’s State Border Stand-Offs

As far back as May, Australia’s Prime Minister and Tourism Minister were strongly suggesting that overseas tourism may be off-limits for the majority of 2020. Talk of a bilateral travel bubble with New Zealand yielded the only prospect of outbound travel.

Following a devastating bushfire season, COVID-19 was further ransacking Australia’s tourism sector. Domestic travel would become the source of salvation. Or would it?

Tourism Research Australia revealed that domestic overnight travel in Australia’s visitor economy “far outweighs that of international travel.” Nine million international visitors to Australia spent AUD31 billion in 2019, compared to AUD107 billion spent by Australia domestic travellers.

But with COVID-19 disproportionately affecting Melbourne and the state of Victoria, plus – to a lesser degree – New South Wales, states began closing their borders.

Into the mix came a Save Aussie Tourism campaign, with an open letter to state governors signed by leaders from across the travel sector. Accepting the international and Victoria state border closures, the campaign questioned “the ongoing changes to policies around access to interstate travellers, [which] have resulted in crippling uncertainty among tourism operators and would-be travellers alike… These decisions erode confidence in the domestic tourism product and foresee serious, long-term damage to Australian tourism as a result.” Qantas also weighed into the debate.

A national cabinet meeting of state governors overseen by the Prime Minister forged gradual progress on state border closures. Victoria and New South Wales also managed to bring down their infection rates.

With the summer season approaching, Australia appears in a healthier position to promote domestic travel. Meanwhile, negotiations to implement a phased travel bubble with New Zealand are inching gradually forward.

14) Bali Postpones Inbound Reopening

In mid-June, the Balinese governor announced that the island would reopen in three phases. Firstly, local tourism businesses and attractions reopened on 9 July. Then, on 31 July, the start of the Eid al-Adha long-weekend holiday, domestic tourists returned to Bali. The success, or otherwise, of domestic travel would determine if international tourists could be welcomed back on 11 September.

Fixed deadlines, though, are tricky to manage in a fast-shifting, unpredictable pandemic.

Bali's domestic tourism reopening was unlike many others in Asia. Indonesia is a vast archipelago, and – as an island – Bali is only accessible by flight or ferry. Critically, Bali's two primary source markets, Jakarta and Surabaya, are COVID-19 hotspots.

“A rising COVID-19 infection rate after the return of domestic visitors resulted in Bali postponing its 11 September inbound travel target.”

The importance of domestic travel to Bali is often overlooked. In 2019, Bali Airport handled 24.17 million passengers. Of those, 6.86 million were international, and 4.97 million domestic. While the difference appears relatively low, international visitors grew 12% year-on-year, while domestic arrivals fell 10%.

A spiralling COVID-19 infection rate after the return of domestic visitors resulted in Bali postponing its 11 September inbound travel target. The issue was slightly more complex, however. Bali doesn’t control its tourism destiny. Foreign tourists are prohibited from entering Indonesia, and international flights are restricted. Therefore, it required the Jakarta government to amend the national entry rules.

Moreover Bali needed to attract visitors. With most of Asia Pacific’s borders shut, and long-haul flights from Europe almost non-existent, this required negotiating ‘travel bubble’ agreements. Key outbound markets wield the power right now, and will be highly selective about where and when they allow their citizens to travel. Indonesia’s uncontrolled infection rate proved an insurmountable hurdle.

Ordinarily, Bali would be enjoying a busy period. Hotel statistics for 2019 show that August, September and October produced the year’s highest occupancies, 67.1%, 63.2% and 63.3%, respectively. The foreseeable future looks extremely uncertain.

15) HKIA Bans KLIA Flights

In late September, Hong Kong International Airport banned flights for two weeks from Kuala Lumpur International Airport. The reason was that five passengers onboard a flight between the cities tested positive for COVID-19 on arrival. The passengers were returning from India to Hong Kong, and transited in the Malaysian capital. A similar occurrence occurred in late July, when Cambodia temporarily banned flights from Malaysia and Indonesia for the same transit-driven reason.

“The flight bans raised questions about transit controls at hub airports – but also about the testing procedures at the original point of exit.”

The flight bans raised questions about transit controls at hub airports – but also about the testing procedures at the original point of exit. Across Asia in recent months, returning citizens, workers and students have tested positive upon arrival to their destination. In some cases, they carried the required paperwork stating that they had tested negative for COVID-19 within the stipulated 72-hour pre-flight period.

These instances do little to bolster public confidence in air travel – although, in many countries, this remains prohibited for most of the population. Rapid tests, where they have been used, have proven to be of variable accuracy. Moreover, regulations requiring a negative test within 72 hours of flying are proving less than secure.

As more flights are re-introduced across Asia Pacific, passengers will want greater assurance about the end-to-end health screening protocols throughout their journey.

16) “Land of COVID”

COVID-19 diplomacy became stretched in South East Asia in August. Fault lines appeared when a Thai newspaper published an article describing the Philippines as "Land of COVID." The story reported on 165 Filipino teachers, who arrived in Thailand to teach at private schools. Unsurprisingly, it proved highly inflammatory.

The Philippine Consul General published a letter to the newspaper describing the article as “inappropriate, insensitive and unhelpful.” Philippine President Rodrigo Duterte's spokesperson then lashed out, saying “We are fierce competitors with Thailand when it comes to tourism. So I’m sure their statement that we are the 'Land of COVID' is motivated by the fact that they are struggling to invite people to come visit Thailand. They're worse off as they have a bigger tourism industry than us.”

“The Indonesians just don’t know just exactly how many who are sick are out there. At least we do."

Having taken on Thailand, the same spokesperson also turned to Indonesia. The spark this time was the Philippines overtaking Indonesia as having the largest cumulative total of COVD-19 infections in South East Asia. “Because we test more, it’s not true that we have more cases than Indonesia,” he said. “The Indonesians just don’t know just exactly how many who are sick are out there. At least we do.”

At the time, the Philippines said it had conducted over 1.6 million tests. "We are finding more cases because we are testing three times more than Indonesia,” the spokesperson added.

On the face of it, these skirmishes seem relatively low-powered. But with the 10 countries of South East Asia adopting diverse strategies to manage the pandemic, they highlight how different perceptions create barriers to a region-wide approach.

17) Thailand Special Tourist Visa

It’s difficult to know where to start – or finish. This long-running saga may have more miles to run. Thailand, which welcomed a record 39.8 million visitors in 2019, has reached an economic inflection point. Large parts of its regional economy - from Bangkok, across the mainland to the islands – are supported by tourism income.

Despite being one of the first countries outside of China to record a case of COVID-19, it has successfully contained the outbreak. A couple of “pain moments” occurred en route. The case of Egyptian military visiting a mall in Rayong province, with one marine subsequently testing positive, sparked a rush of domestic travel cancellations. A similar outcome occurred after a Bangkok DJ contracted the virus in September.

“And then The Phuket Plan transformed into the Special Tourist Visa.”

The Thai tourism authorities, which are perhaps the most prolific concept generators in Asia, hit on the idea of restoring charter flight travel to Phuket. In essence, the island – or at least, selected resorts - would become a Bio Bubble. Long-stay charter flight travellers (the initial idea was that they must travel by Thai Airways) would be quarantined, tested and confined in a defined area. They would be expected to stay for 90 days in this situation. It was, however, suggested that limited travel beyond the island may be permitted, if a further seven-day isolation period was completed.

And then The Phuket Plan transformed into the Special Tourist Visa. The quarantine and testing procedures are equally stringent (and visitors would also need to isolate at home before travelling). Visitors from “low-risk countries” only will be allowed entry. A minimum 90-day stay is required, with two 90-day extensions permitted. Full payment of post-quarantine accommodation must be posted, and proof of a minimum USS100,000 travel insurance coverage submitted. Each 90-day visa fee is THB2,000.

The scheme was officially launched on 1 October. A 22-step application procedure has been widely shared online, and local media also reported that CCTV cameras maybe installed to monitor travellers’ movements.

18) Private Travel Bubbles

As mentioned in Part I (see here), Australian Prime Minister Scott Morrison (via his New Zealand counterpart Jacinda Ardern) bequeathed the term Travel Bubble to the vernacular in late April. Since then, the subject has filled more headlines, Tourism Minister speeches and webinars than either of those leaders may have expected.

Tourism Bubbles became shorthand for any kind of travel agreement being negotiated between governments. Usually, this is in a bilateral context, with two nations discussing entry to/from each other’s countries. Sometimes, the scale becomes larger whereby Country A was seeking to negotiate Travel Bubbles with Countries B, C and D. The overlays of the latter type of agreement usually proved too burdensome.

“Tourism Bubbles became shorthand for any kind of travel agreement being negotiated between governments.”

Occasionally, countries have unilaterally announced a travel bubble with another country seemingly without an agreement being signed. More recently, the pernicious nature of the coronavirus means travel bubbles are moving towards regional, state or even city level accords, rather than nation to nation.

Another alternative is moving onto radar: "Private Travel Bubbles". As reported in Wednesday’s edition (see here), Singaporean investors are looking into a Bio Bubble travel corridor from Singapore. Today, Vietnamese media is reporting that Russian travel agencies are seeking to bring private charter groups from Russia to Khanh Hoa (which last year welcomed around 450,00 Russian tourists) in Vietnam.

This is shaping up to become a genuine trend in Asian travel.

19) China’s 600 Million Trip Boost

Over the past decade, China has catalysed a global reappraisal of almost every aspect of travel and tourism. In particular, it has shifted perceptions of outbound travel and domestic travel in a world obsessed with inbound arrivals.

China’s influence is driven, of course, by its spectacular statistics. From 57.4 million cross-border trips in 2010, China quickly became the world’s largest outbound market. By 2019, more than 150 million overseas trips were made annually.

While hugely impressive, this figure fades to grey when compared to domestic travel. Over 6 billion domestic trips were made in China in 2019. That equates to roughly four trips per person in the country.

The great annual migrations of Chinese New Year and October Golden Week are reported in China and worldwide from these two perspectives. Electrifying surges of outbound travel, and hundreds of millions of domestic trips.

“Over the past decade, China has catalysed a global reappraisal of almost every aspect of travel and tourism.”

In 2020, the start of the 40-day Chinese New Year travel period coincided with the coronavirus outbreak. Ultimately, trips were cancelled, and China ordered travel agencies to stop selling holidays. The May Labour Day public holiday arrived a little too early, with a partial recovery to around 50% of last year’s domestic travel trips.

So hopes were pinned on this week’s 8-day Golden Week holiday. Beijing-based Global Times noted “China’s tourism sector, an important indicator of the country’s overall economic health, is expected to lead to more consumer spending and lift the country’s services sector in October, following the severe impacts of the coronavirus.”

Chinese media has been fairly understated in its coverage, sticking with a prediction of around 600 million trips during the October Golden Week (compared to 782 million in 2019). Xinhua reported on day one of the holiday that “railway passenger trips [15.09 million] were at their highest level since the COVID-19 outbreak,” though that would be expected. It added that “many tourists have turned to recreational vehicles (RVs) for private and secure tours.” Interestingly, little has been reported yet about air travel.

Today, Global Times reported that domestic tourist numbers over the first three days of Golden Week reached “80.3% of the same period last year” last year.

Undoubtedly, the full-week figures will be dissected in the coming days.

20) Indian Travel Rebound On Hold

On 3 September, India recorded 83,883 COVID-19 infections. This was a new daily record, and confirmed that the world’s second most populace nation counted its fastest growing infection rate. Two weeks later, on 17 September, India’s new daily cases peaked at 97,894. The rate has since tapered slightly, with the lowest figure being 70,589 on 29 September. India currently has the second highest number of infections (6.55 million) after the US, and more than 100,000 deaths.

India’s struggles with COVID-19 inevitably damaged its travel sector. Domestic aviation is recovering, but is still more than 50% down on the weekly capacity level in January. Globally, only China, the US and Japan count larger scheduled air capacity. That said, the gap is cavernous. Chinese airlines offered around 16.5 million seats last week, with Indian airlines offering around 2.1 million, according to OAG.

“The ability of India’s travel sector to bounce back is highly anticipated throughout the region.”

This week, The Times of India reported that domestic flights “mostly comprise essential business travel or short trips to meet family members.” The Indian Premier League cricket tournament has been relocated to the UAE, cutting out a large swathe of air travel demand, and bookings remain weak for the upcoming Durga Puja holiday.

Ordinarily, Durga Puja would see large numbers of Indian travellers head to South East Asian destinations, like Singapore, Thailand, Malaysia and Vietnam, plus Hong Kong (usually via a transit in South East Asia). In recent years, flight price rises reflected the high demand. This year, those destinations are closed to tourist traffic.

For now, India’s strong growth in outbound travel over recent years has stalled – with domestic travel not offering the same allure for aspirational travellers. The ability of India’s travel sector to bounce back is highly anticipated throughout the region.

On The South East Asia Travel Show this week, we chat with Bali-based Stuart McDonald about the impact of the island’s reopening to domestic tourists:

Have domestic travellers helped to boost Bali’s economy?
Can the rise in COVID-19 infections be controlled?
How is Bali coping without foreign tourists during what should be peak season?

We also discuss Thailand’s special tourist visa, Singapore’s decision to allow Australian and Vietnamese air passengers to return, and we address what happens next for nations in South East Asia that are stubbornly refusing to open their borders.

Listen here

And, that’s a wrap for Issue 9.

Until the next issue, you can catch me on Twitter, LinkedIn and The South East Asia Travel Show. Please send ideas, thoughts and feedback to gary@check-in.asia.

Speak soon