Issue #56 - What Does Reopening Langkawi Mean for Malaysia & South East Asia?
A limited domestic travel reboot presages a cautiously changing mindset.
Hello. Welcome to issue 56 of Asia Travel Re:Set…
So, this week, it’s all about Malaysia.
After a tough year - which featured some of the region’s tightest movement restrictions - the deadlock is being partially unblocked.
Langkawi - a scenic archipelago straddling the Thai border, and a popular weekend getaway - began welcoming vaccinated local travellers on 16 September.
I’m booked and ready to fly.
Thanks for being on board,
Gary
The Sunday Itinerary
- This Week’s Top 6
New Zealand, China, Thailand, Fiji, Northern Mariana Islands, Australia
- What Does Reopening Langkawi Mean for Malaysia & South East Asia?
A limited domestic travel reboot presages a cautiously changing mindset
This Week’s Top 6
Encouraging net-zero emissions news from New Zealand, where the national carrier will work with Airbus to research hydrogen-fuelled aircraft.
Mega numbers once more in China, which announced that over 1 billion of its citizens are now fully vaccinated against COVID-19.
New reopening delays in Thailand as the highly anticipated BangkokBox is pushed back to mid-October. Possibly.
Target date dilemmas also in Fiji, which is preparing to reopen to tourists in November. Or maybe December.
Unique USP from the Marianas Visitor Authority, describing itself as “the only marketable, government-endorsed destination for South Korean citizens.”
Nascent signs of a revival in (parts of) Australia, as New South Wales prepares to introduce a pilot 7-day home quarantine scheme for returning travellers.
What Does Reopening Langkawi Mean for Malaysia & South East Asia?
A limited domestic travel reboot presages a cautiously changing mindset.
Permitting travel to a relatively small archipelago for resident-only tourists doesn’t appear - in the global pandemic context - a very big deal.
And, trust me, I understand when people worldwide question South East Asia’s obsession with Bubbles, Sandboxes and Vaccinated Travel Lanes. I get asked about them constantly.
BUT (1). The South East Asia region has been hit extremely hard by the Delta variant. This surge followed the virus’s devastating impact on India earlier in the year. India’s experiences shocked ASEAN governments, and influenced the immense subsequent caution. This context is extremely important.
BUT (2). 2021 has been gruelling in Malaysia, including a 6-month State of Emergency, the fall of a government, an intense battering for the economy, fomenting public anger and long periods of lockdown.
Restarting travel to Langkawi is, therefore, a psychological boost, even for Malaysians who are sceptical about travel safety while new daily cases hover above 15,000.
It is a pressure valve release. Especially as the launch date, 16 September, was Malaysia Day, a national holiday.
The impact is noticeable beyond Langkawi. This weekend in KL, parks, cafes and restaurants are packed for the first time in months. The mood has uplifted remarkably.
So, firstly, the broader context…
Malaysia has endured an extremely tough year…
Despite having the 6th-largest population (approx 32.7 million) of the 10 ASEAN nations, it counts the 3rd-highest COVID-19 cases (2.08 million) and deaths (22,743).
The nation has endured three lengthy lockdowns, including the most recent which - in the capital city KL - lasted from mid-May to mid-August.
Malaysia closed its borders on 16 March 2020. International travel has only been permitted with a strict hotel quarantine on return. Flights, however, remain minimal, strict conditions are placed on applications - and all travel is officially discouraged.
Then, in August, Malaysia loosened the reigns slightly. A 14-day home quarantine, instead of the formal hotel version, is now permitted for vaccinated Malaysian residents. This must be applied for in advance of leaving the country.
Perhaps the biggest national impact, though, has been the disappearance of domestic travel, which was shut down on 13 January 2021.
This week’s reopening of a single destination - Langkawi - offers the first chance for vaccinated adults (and unvaccinated kids) to travel interstate for 8 months.
Malaysia counts one of the best vaccination rates in South East Asia…
Around 56% of the adult population is fully vaccinated, and 67% has received one jab. In Langkawi, that figure is officially estimated to be upwards of 90%.
It is this factor that is driving a governmental rethink - albeit a cautious one - regarding travel as part of a broader reopening of the national economy.
It is much needed. Countless businesses have closed, unemployment is rising and the national finances have worsened considerably.
Malaysia’s tourism industry is estimated to have generated RM240 billion in 2019. COVID-wrought economic destruction is now evident across the travel landscape.
“The tourism industry is too important to either ignore or abandon without any concerted financial assistance,” former Finance Minister Lim Guan Eng said this week.
Reopening Langkawi may be an inflection point…
Malaysians are avid travellers, both at home and abroad. This week’s strong booking volumes and social media positivity contrast with the national gloom that prevailed.
The timing was smart. Langkawi welcomed back tourists with 2 weeks left of the school holidays. This has helped generate booking demand. Starved of revenue throughout, airlines and resorts responded with heavily discounted deals.
Early results are promising. Around 1500 arrivals on Day 1 offers encouragement given that airlines will gradually ramp up flight frequencies - especially from KL, the primary source market for Langkawi.
Malaysia’s air market is saturated. As well as being home to AirAsia - the region’s largest LCC which supercharged regional air travel over the last decade - it also counts Malaysia Airlines and its Firefly LCC, and Malindo - jointly owned by Indonesia’s Lion Air. There’ll be no shortage of flights if Langkawi stays on course.
AirAsia’s CEO Tony Fernandes is driving organisational change, as his airline expands into online lifestyle services - a SuperApp, in the digital parlance du jour.
A relentlessly savvy marketer, Fernandes this week unveiled AirAsia’s new ride-hailing service in … Langkawi.
There will be glitches…
Initially (as reported in issue #55), tourists were told to obtain a police permit before travelling to Langkawi. That mandate was later rescinded.
The government threw a late curveball by saying, the day before the reopening, that all travellers must take an antigen test at the airport before departing to Langkawi. This caused a social media kerfuffle, but seems to have worked out OK.
Five travellers tested positive on Day 2 of the pilot reopening. Those travellers have been assured they can rebook their trip for a future date. That’s a positive, confidence-building approach from the government, airlines and hotels.
Other destinations, naturally, want (need to get) in on the action…
18 months without international travel and 8 months sans domestic travel have decimated Malaysia’s visitor economy. Now, destinations are spotting an opening window to lobby their case to the government.
This will intensify in the coming weeks.
The popular destination of Penang is among those pleading for permission to readmit domestic travellers - especially, Malaysians wishing to visit friends and relatives living there [and Penangites wanting to travel to KL for similar reasons].
The official word is that Malaysian destinations will be able to reopen for inoculated local tourists once they reach an 80% vaccination threshold.
And, of course, no travel restart in ASEAN occurs without a forecast...
Malaysia’s Ministry of Tourism, Arts & Culture is predicting “about 200,000 domestic visitors to Langkawi” between now and year end.
[NB: When Thailand opened the Phuket Sandbox for international travellers on 1 July, it projected 129,000 visitors in the first 3 months. It is struggling to achieve one-third of that target.]
The Langkawi target may prove ambitious, especially if other domestic destinations are permitted to open up and, thereby, dilute demand.
But, if Malaysia were to get near that total - and gradually reopen other locations to local tourists en route - it would represent genuine progress.
If there are no setbacks, booking demand for Christmas and New Year could break records. I was in Langkawi for New Year 2020/2021, and - with domestic-only visitors - I’ve never seen it busier or more vibrant during 11 years of living here.
And the upshot is…
As the Phuket Sandbox delivers lacklustre results from an inbound-only strategy - and other nations (Vietnam, Indonesia) plot a similar path - Malaysia has a chance to demonstrate that domestic markets are too important to be overlooked.
Certainly now. And perhaps for many months to come.
What does the reopening of Langkawi for vaccinated domestic travellers mean for Malaysia’s travel sector? Could it usher the return of international travel in the near future? And what about the rest of ASEAN? On Thursday, I was invited by CNA to discuss these issues on its flagship Asia Tonight show.
Many thanks to Becca Rowland and John Grant for inviting me back onto the monthly OAG Webinar on 15 September. On “Air Travel Demand Remains Soft - So What Can We Expect for Next Winter?” we discussed the latest aviation industry data and forecasts in Asia Pacific and worldwide - and the outlook for the next 6 months.
Enjoyed this panel with Prof. Wolfgang Georg Arlt, CEO of the China Outbound Tourism Research Institute (COTRI), and Pauline Suharno, President of ASTINDO. The session on the future outlook for Chinese tourism to Indonesia formed part of the Global Tourism Forum: Leaders Summit Asia - Indonesia event on 15-16 September - and was streamed to 25,000 viewers worldwide.
Thailand has grabbed the 2021 headlines in South East Asia. On this week’s The South East Asia Travel Show, we chat with Bangkok-based Vincent Vichit-Vadakan about the protracted development of the Phuket Sandbox, its lacklustre results so far and the impact on domestic travel. We also look ahead to the still-unconfirmed next phase of Thailand’s reopening, which could include the capital, Bangkok.
And, that’s a wrap for Issue 56.
Asia Travel Re:Set takes a mini break next week as I will be… in Langkawi.
Back on 3 October with Dr Jaeyeon Choe for a special issue of the Asia Pacific Travel & Tourism Report. More soon.
Have a great couple of weeks,
Gary