Issue #122 - South East Asia Plans the Next Phase of its Tourism Catch-Up
The region will fall below the UNWTO's global tourism recovery forecast in 2023.
Welcome to issue 122 of Asia Travel Re:Set.
Yesterday, 11 November, marked 44 months since the WHO declared Covid-19 a pandemic, on 11 March 2020.
That precipitated 2 years of prohibitive travel restrictions across South East Asia.
A little more than 6 months ago, the WHO announced, on 5 May 2023, that the virus no longer constituted a “public health emergency of international concern”.
On Friday, 10 November, the UNWTO, referenced global data “pointing to a return to 95% of pre-pandemic tourist numbers by the end of the year.”
South East Asia will fall well below the worldwide 95% recovery rate in 2023, and concerns are emerging about a slowdown in 2024.
So let’s follow that train of thought…
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- “IN THE NEWS”
- South East Asia Plans the Next Phase of its Tourism Catch-Up
The region will fall below the UNWTO's global tourism recovery forecast in 2023.
- 8 Under-the-Radar Travel Talking Points in South East Asia
From Thailand to Brunei, Indonesia to China and Singapore to Japan.
“IN THE NEWS”
“Thailand's lauded tourist industry is missing its biggest customers: the Chinese.”
After a 3-year pandemic absence, Thailand hoped that 2023 would bring back Chinese business and leisure travellers en masse. The rebound has been slow. This fine article by BBC News' Jonathan Head addresses some of the reasons why - with a couple of comments from me. Click HERE to read.
“Panic is probably the right word.” The sentiment coursing through South East Asian tourism boards grew gradually more gloomy in 2023. While ASEAN nations were prepared to compete toe-to-toe to attract Chinese visitors, they overlooked one vital factor. And then, suddenly… “Everybody has realized that this year, there is another competitor — and that’s China.” Many thanks to Rachel Cheung for including some of my comments in this piece for The Wire China. Click HERE to read (paywalled).
South East Asia Plans the Next Phase of its Tourism Catch-Up
“The Meeting discussed the synergies to foster a strong collaborative relationship between tourism and transport sectors which can effectively contribute to the regional economic growth.” ASEAN Press Statement, 10/11/23
The above photo shows how seriously South East Asian governments are taking tourism as the shadow of Covid-19 border closures lengthens. Dr Kao Kim Hourn, Secretary-General of the Association of South East Asian Nations (ASEAN), is pictured at last week’s meeting of regional Tourism Ministers and Transport Ministers in Luang Prabang, Laos, which is the 2024 chair of ASEAN.
The meeting set the scene for the 2024 edition of the annual ASEAN Tourism Forum, which will be hosted in the Laotian capital, Vientiane, from 22-27 January.
A Shared Thread: Connectivity
ASEAN meetings of any kind tend to generate well-intentioned statements and task force missions, but not much more. The divergent economic interests and strategic policy goals of the 10 member nations - Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam - often outweigh their shared objectives, and make constructive progress difficult.
In tourism terms, the gulf between Thailand - which forecasts up to 28 million visitors this year, and Brunei, which is unlikely to record 250,000 arrivals - is vast. Indonesia, Thailand and Vietnam collectively account for 63% of regional airline seat capacity.
There is, however, a thread that unites the 10 members: the need to improve regional transport infrastructure and connectivity. Barely a month goes by without another new cross-border rail link being proposed. All governments want more regional flight connections. Hence, the meeting of ASEAN Tourism and Transport Ministers noted:
“The capacity and connectivity of transport play a significant role in how a destination will be developed, particularly in influencing the mobility and overall experience of visitors.”
This presages another issue. From where will the funding, resources and technology come? There is caution about accumulating new infrastructure financing debt with China. Japan, South Korea, India and Middle Eastern states are potential alternative sources, but there isn’t a universal ASEAN consensus.
Why Does This Matter Now?
In short, the region’s slowing tourism catch-up is seen to need institutional impetus. Although the pandemic highlighted that ASEAN governments always pursue national over regional interests when it comes to tourism, better transport connectivity would support regional economic development - which is ASEAN’s stated priority.
Four years ago, Hannah Pearson and I were preparing to launch the pilot edition of The South East Asia Travel Show. Based for several years in KL, we both contended that the region was becoming a catalyst of tourism growth and entrepreneurialism - but many of the vital issues weren’t being critically discussed in depth or context.
The UNWTO’s figures showed that visitor arrivals to South East Asia increased by 8% in 2019 against a global average of 4%. Tourism expansion was a hot topic.
It sounds futile given what happened next, but applying annual growth of 8% to the 144 million visitors received by the 10 ASEAN nations in 2019 would reach 196 million arrivals in 2023. Annual growth of 4% would deliver 168 million arrivals this year.
Taking each country’s best estimate for 2023, the combined ASEAN arrivals total looks likely to be around 100 million - a 69% recovery from the 2019 level - but, potentially, only 50% of what “might’ve been”.
We can debate the (sustainable) viability of using visitor arrivals as the metric to gauge the success (or otherwise) of tourism, but it’s the one regional governments rely upon. It’s the one they filter through national media, and is used as a comparative in a highly competitive market to attract foreign investment for travel infrastructure.
Concerns for 2024
Which brings us to a thought-provoking article, Uncertainty clouds outlook for Singapore’s aviation and tourism, in The Straits Times. Written by aviation analyst Brendan Sobie, it shows how air passenger traffic and visitor arrivals to Singapore - which has been hitherto fairly bullish about its post-pandemic recovery - have stalled. This is, Sobie, writes, “a concerning trend that could derail Singapore’s aspirations for a full recovery in 2024.”
Does this downswing of demand for travel to and from Singapore set a concerning benchmark for the rest of the region - or is it a cyclical blip?
Tricky to say given the diversity of supply and demand factors and variable recovery rates across a vast and highly differentiated region. That said, several airlines are offering big discounts on intra-regional routes at the moment.
The unfolding situation will be closely monitored by ASEAN governments in the coming months - and by this newsletter.
8 Under-the-Radar Travel Talking Points in South East Asia
Could Brunei become a new aviation hub connecting China and South East Asia? How might AI and an apocalyptic sci-fi landscape boost movie tourism in Thailand? On this week’s The South East Asia Travel Show, we discuss 8 talking points that may not make major headlines but are highly interesting. These include a start-up airline planning to fly Chinese passenger jets, a shattered glass sightseeing bridge in Indonesia and a new tourism agreement between Japan and the Philippines.
Listen to 8 Under-the-Radar Travel Talking Points in South East Asia, here:
Or search for The South East Asia Travel Show on any podcast platform
And, that’s a wrap for Issue 122.
The Asia Travel Re:Set newsletter will be back on 26 November.
Until then, find me at LinkedIn and The South East Asia Travel Show.
Happy travels,
Gary