Issue #48 - 10 Reasons Why 2021 in South East Asia is Tougher than 2020

"Where does travel sit amid the converging economic, social and health issues?"

Hello. Welcome to Asia Travel Re:Set…

“Is opening up more Thai islands a wise thing to do?”

This is a question I got asked on a radio interview this week. It’s not a straightforward one to answer.

The Delta variant is scything through Thailand, Indonesia, Malaysia, Myanmar and Vietnam. The situation is serious, and becoming more so. Beyond the deaths and hospitalisations, livelihoods are disappearing and living standards plummeting.

A once-in-a-generation economic crisis is fomenting in South East Asia - and its implications are frightening.

So where does travel, or a general lack of, sit amid these converging economic, social and healthcare issues?

In Thailand, the government is aware that its tourism industry comprises “11-12%” of GDP. (The Bank of Thailand figure, not the “about 20%” quoted in various media).

After 16 months of inactivity, revitalising Thailand’s inbound sector isn’t really viewed as an option any more. The economy and currency are struggling. Badly.

BUT vaccination rates are too low to ensure the safety of residents, tourism staff, medical front-liners and visitors. That’s before we discuss vaccine efficacies.

So today, I’ve compiled 10 talking points so far in 2021 that bring together these factors. [The list is adapted from one we created for The South East Asia Travel Show.]

Thanks for being on board,

Gary

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The Sunday Itinerary

- DashBoard 

  • From 2.4 trillion down to 18 this week

- QuoteBoard 

  • Mauritius, Malaysia, Japan

10 Reasons Why 2021 in South East Asia is Tougher than 2020

  • From vaccine matching to ‘endemic COVID’ to the Delta variant


DashBoard 

From 2.4 trillion down to 18 this week…

  • 2.4 trillion: Reported value in Korean won of the Asiana Airlines-Korean Air merger. [Orient Aviation]

  • 120 million: Total litres of sustainable airline fuel taken up globally in 2021, “a small fraction of the 350 billion litres airlines consume in a ‘normal’ year.” [IATA]

  • 715,600: Maldives marked its 1st anniversary since reopening on 15 July. It welcomed this many visitors in the past 12 months. [Visit Maldives]

  • 5,710: Total vaccinated visitors for the Phuket Sandbox during its first 15 days since starting on 1 July. [Tourism Authority of Thailand]

  • 18: Sri Lanka Tourism launches a ‘buy one trip, get one free’ promotion in 18 markets, including Japan, South Korea and (strangely) Australia. [Daily FT]


QuoteBoard

You heard it here…

“Mauritius is open!”

The Mauritian tourism board commenced a phased reopening to international tourists on 15 July. [Mauritius Now]

“Malaysia Airlines (MAB Pesawat Sdn Bhd) invites interested buyers to send their proposals via email.”

Malaysia Airlines launches a tender on Linkedin (!) for the sale of 6 A380 planes. If you are interested, the deadline is 12 August.

“We will consider [permitting foreign nationals], but we will pay attention to the discussions happening domestically and internationally, in each country and region.”

Katsunobu Kato, Japan’s Chief Cabinet Secretary, answers questions about when Japan will open its borders to vaccinated travellers.


10 Reasons Why 2021 in South East Asia is Tougher than 2020

1) Malaysia Shutters Domestic Travel

The year began with a post-New Year infection surge in Malaysia. The government promptly shut down domestic travel in mid-January. With inbound/outbound travel dissuaded by a hefty quarantine requirement since mid-March 2020, banning local trips further savaged the travel sector. Today, most travel firms are shuttered, hotels closed and airline fleets grounded. In June, Malaysia published a 4-phase National Recovery Plan, suggesting domestic travel might not restart until Q4. This week, the government said it is planning to remove some travel restrictions for fully vaccinated residents. This came despite a record 13,215 infections on 15 July. The vaccine rollout is a singular bright spot, registering a daily record of 460,158 jabs on 15 July.

2) Chinese New Year Blowout

Lunar New Year provides an early boost in the calendar year for visitor economies across Asia Pacific. Chinese tourists arrive into South East Asia in large numbers, while intra-Asian travel in general is strong. Or it used to be. COVID-19 first emerged just before the 2020 Chinese New Year, and in 2021 borders across Asia Pacific stayed firmly shut. In China, despite a strong late-year recovery for domestic travel in 2020, sporadic outbreaks of the virus plus cold winter conditions saw the government actively discourage inter-provincial CNY trips. Hence, this year was another bust. In 2022, Chinese New Year coincides with the start of the Beijing Winter Olympics.

3) Pre-Festival Case Surges

With international and intra-regional travel largely off limits, domestic tourism has been the sole lifeline for visitor economies throughout South East Asia. However, local tripping centres heavily around public and school holidays and weekends. So far in 2021, some of the most popular holiday periods, such as Eid al-Fitr, Tet, Songkran and Khmer New Year, were preceded by infection surges. In some cases, this caused the relevant authorities to put in place new travel restrictions. The overall outcome was dampened demand for trips - weakening even further the revenue base of travel firms.

4) The. Delta. Variant.

“South East Asia is emerging as a battlefield for one of the world's worst COVID-19 outbreaks,” wrote The Straits Times this week. A sobering statistical comparison shows how fast the Delta variant is spreading. On 1 June 2021, the 10 countries of ASEAN counted 304,760 active cases. On 17 July: 908,688. Of that total, 527,872 (more than half a million!) are in Indonesia, 119,814 in Malaysia, 110,565 in Thailand and 58,244 in Myanmar. Total deaths across ASEAN on 1 June: 307. On 17 July: 1,725. These are the official published figures, and in some cases might be under-recorded. Vaccine rollouts cannot keep pace across South East Asia, and the critical scale means that targeting “70% herd immunity” is no longer a safe or viable option.

5) Thailand’s Phuket Sandbox

After months of flip-flopping, Thailand gave a green light the day before the Phuket Sandbox returned inbound travellers to Phuket for the first time in over a year. The first 15 days (since 1 July) brought 5,710 visitors, 10 positive tests and hectares of global article space. By any standards, that is a slow start. The Tourism Authority of Thailand has since confirmed 3 interesting points:

1) More than 50% of arrivals so far are media, ‘influencers’ and businesspeople seeking a route back into Phuket/Thailand.

2) Although Thailand has since reopened Koh Samui, it will not meet the Prime Minister’s ambitious target of reopening the entire country by the end of October.

3) The Samui Plus scheme is not applicable for domestic tourists.


I enjoyed taking part in OAG’s monthly webinar this week, with John Grant and Becca Rowland. This intriguing slide about the correlation (or otherwise) between full COVID-19 vaccination and air travel activity sparked a lively debate about vaccine supplies, population sizes, government strategies - and the timeframe for more passenger planes to return to the skies in Asia Pacific. 


6) Restricted Island Travel, Not Bubbles

Travel Bubbles seem ‘so 2020.’ Instead, some South East Asian nations want to restore tourism to island destinations. Thailand reopened Phuket on 1 July, followed by Koh Samui, with day-trips to Koh Phangan and Koh Tao (plus other islands), on 15 July. Indonesia attempted, and failed for a 2nd time, to reopen Bali, plus Batam, Bintan and Lombok, in July. Malaysia is talking up Langkawi for a potential Sandbox-style reboot. Ditto Vietnam and Phu Quoc. In the Delta variant era, decentralised locations - especially islands - are the only option to partially revitalise tourism in the near future.

7) Singapore Plans for “Endemic COVID”

On 31 May, Singapore’s Prime Minister Lee Hsien Loong gave a speech setting out the government’s vision of a ‘New Normal’. In it, he made the following remark:

“One day this global pandemic will subside but I do not expect COVID-19 to disappear. It will remain with humankind, and become endemic. The virus will continue to circulate in pockets of the global population for years to come. This also means we will see small outbreaks of the disease from time to time in Singapore… It also means we do not completely close our borders.”

This, he said, would mark a shift in how Singapore communicates its COVID-19 data to the public. It also prompted officials across ASEAN, who had never previously done so, to start uttering the word “endemic.” Singapore has not yet clarified its new strategy. But by confirming that the City State cannot “completely close our borders,” he indicated that travel loosening is on the agenda. In a region of rigid COVID caution, it signposted that Singapore wants to take a directional lead. At some point.

8) Vaccine Matching

This is one to watch, and something we will discuss in next week’s July Asia Pacific Travel & Tourism Report. Prompted by irregular vaccine supplies, and rising concerns about the efficacy of Sinovac in particular, governments are looking at mixed shot combinations. Vietnam will mix AstraZeneca (1st dose) and Pfizer (2nd jab), and Thailand plans to combine a first Sinovac jab with a 2nd AstraZeneca jab.

More next Sunday.

9) Health Crisis in Indonesia

Indonesia has long struggled to contain COVID-19, but the past 6 weeks saw the situation worsen dramatically. On 16 July, Indonesia recorded 56,757 cases (the highest national total worldwide on that date), and 1,205 deaths. Officially, it counts 58% of total active cases in ASEAN. Unofficially, it might be much more. As a result, more countries are placing Indonesia on a ‘Travel Ban’ list. These currently include India, UAE, Philippines and Sri Lanka, with several more pending. Indonesia has a vast population of over 270 million people. It targets vaccinating 208.266 million people - which would leave more than 60 million people unprotected. By 18 July, 19.82% of the population had received one dose, and 7.79% were double-jabbed.

“If we’re talking about 60,000 [new cases per day] or slightly higher than that, it’s still fine. We’re hoping the figure won’t reach 100,000. But even if we get there, we’re preparing ourselves for the worst-case scenario,” said Luhut Pandjaitan, Indonesia’s COVID-19 Response Coordinating Minister.

Indonesia suffers another one-day COVID-19 case record

10) 2021 Is Much Worse Than 2020

In overall terms, each quarter this year seems worse than the previous one. Travel businesses - especially SMEs, which existed on narrow margins before the pandemic - are now running only on fumes. Vaccine rollouts in nations where the most progress is being made - Singapore, Malaysia and Cambodia - are unlikely to have an appreciable impact until the back end of 2021. Significant portions of the travel supply chain simply won’t make it through until then. In countries with larger populations to vaccinate - Thailand, Vietnam and Indonesia - the situation looks especially parlous.

Covid-19 variant wreaks havoc on South East Asian economies as retail, tourism stumble

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This week’s The South East Asia Travel Show welcomed Vancouver-based Ernst Flach, Executive Director at Wagstaff Media & Marketing, to discuss the current state of the travel recovery in North America. He also answers the BIG question: When will American and Canadian travellers return in big numbers to Asia?


And, that’s a wrap for Issue 48. 

Next week sees the welcome return of Michelle Dy and Dr Jaeyeon Choe for Issue 5 of the monthly Asia Pacific Travel & Tourism Report. Can’t wait!

Until then, you can find me on TwitterLinkedIn, and the Asia Travel Re:Set website. 

Have a great week,

Gary