Issue #92 - "Domestic Tourism Destinations Must See Themselves as Competitors to Foreign Destinations"
South East Asian governments are paying greater attention to domestic tourism
Welcome to Issue 92 of Asia Travel Re:Set…
We live in increasingly complex, and confounding, times.
I am currently researching a new report on travel and tourism in South East Asia. Speaking to industry leaders across the region, the opinion spectrum is, well, a pretty broad spectrum.
The outlook for travel over the next 6-12 months is both outwardly optimistic and noticeably nervous - with several caveated stances in between. Strikingly different opinions exist between and among destinations and industry segments.
At times, it’s easy to feel regionally flush with anticipation, quickly followed by the onset of global recessionary nausea.
Amid the various views about the inbound and outbound outlook, one sector elicits almost unbridled positivity: domestic travel.
Today’s issue takes up this theme.
Thanks for being onboard.
The Sunday Itinerary
- “IN THE NEWS”
- "Domestic Tourism Destinations Must See Themselves as Competitors to Foreign Destinations"
South East Asian governments are paying greater attention to domestic tourism
- Checking Malaysia’s Travel Recovery Pulse
In conversation with Tunku Dato Seri Iskandar Tunku Abdullah
“IN THE NEWS”
The Quest for 'Quality Tourism.' As travel in South East Asia begins to recover after long border closures, new government policies are designed to increase traveller spending. I wrote about the potential cost rises for inbound and domestic tourists in this article for the Asia Media Centre.
Thailand's next gambit could be casino tourism. It’s a complex, long-term play. The casino resort market is fairly crowded in Asia Pacific, and the path from legalising gambling to attracting casino tourists is tricky, as Japan is proving. Thanks to Peden Doma Bhutia at Skift for including my comments in this well-researched piece.
"Domestic Tourism Destinations Must See Themselves as Competitors to Foreign Destinations"
“The pandemic has triggered a tourism reset. How this unfolds from here is uncertain, but [South East Asian] governments and tourism boards have been forced to embrace domestic markets. This shift would not have occurred without a prolonged, world-altering interruption. Prior to the pandemic, domestic tourism enjoyed little state support in terms of finance and marketing.”
I wrote those words way back in Issue #47, What Have We Learned About Domestic Tourism During COVID-19? (4 July 2021).
The article added that while South East Asian nations had focused on attracting Chinese tourists, China’s own long-term tourism vision was internally driven:
“China redefined the model for driving tourism through an infrastructure build-out. For the past two decades, it has ploughed vast investments and resources into national infrastructure to stimulate travel spending alongside overall economic development.”
As countries in South East Asia turn to tourism as a platform for reviving their economies, some are looking to rebalance the inbound, outbound and domestic mix.
1) Building ‘Tourism Resilience’ in Indonesia
The protracted economic shocks of the pandemic are driving the recovery debate towards the concept of ‘resilience’.
Indonesia believes domestic tourists will be essential to achieving a stronger degree of ‘economic resilience’ to confront potential future shocks.
“We want domestic tourists to account for 60–70% of our (tourism) industry backbone. Hence, if (extraordinary conditions) occur, such as the COVID-19 pandemic, the visits will not be completely depleted,” says Coordinating Minister for Maritime Affairs & Investment, Luhut Binsar Pandjaitan.
He adds: “More than half of our tourists, particularly in Bali, are foreign tourists. We do not want that anymore.”
His logic is inarguable.
Indonesia is a vast nation of 276 million people (only China, India and the US have larger populations) spread across over 17,000 islands. The opportunities, both in geographic and demand terms, for domestic travel are huge - and mostly untapped.
2) 80:20 Split in The Philippines
The Philippines is the region’s second-biggest country, with its second-largest population of 112 million. Recently elected President Ferdinand Marcos Jr wants domestic tourism to be a “major pillar” of the national economy.
“Recent Philippine Tourism Satellite Accounts indicate that Philippine tourism is 80% driven by domestic tourism and 20% foreign tourism,” reports Business World.
New Tourism Secretary Christina Frasco believes the country “should bank on domestic tourism and explore this simultaneously with international tourism to yield better economic returns,” reports Inquirer.
The former Mayor of Liloan, Cebu, Ms Frasco speaks from experience. She recently said: “From our experience in Cebu, it was really domestic tourism that helped Cebu in its recovery from the ravages of the pandemic and typhoon Odette.”
3) Rolling Out the Numbers
The biggest domestic tourism opportunities will avail in the region’s largest countries. Indonesia and the Philippines have a combined population of nearly 400 million people and over 24,500 islands to explore. Vietnam (98.5 million) and Thailand (66 million) also offer large and diverse geographies for sizeable populations to discover.
That said, Malaysia, Cambodia, Laos and Brunei (with a population range from 33 million to 430,000) are all looking to boost domestic travel spend in the coming years.
In Indonesia, 1.8-3.6 million international visitors are forecast in 2022, compared with 550 million domestic trips.
In Thailand, tourism revenue is forecast to reach THB1.73 trillion in 2023, with THB970 billion from inbound and THB760 billion from domestic travel.
In Vietnam, annual domestic visitor arrivals “are expected to reach pre-COVID-19 levels of 85 million by October this year.”
In Laos (population: approx 7.5 million), “1.9 million domestic visitors will make trips this year” compared to an estimated 1 million inbound visitors.
4) Rethinking Domestic Marketing in Malaysia
The titular quote of this week’s newsletter is by Tunku Dato Seri Iskandar Tunku Abdullah, Group Executive Chairman of Melewar Group. On The South East Asia, the experienced tourism industry leader in Malaysia and ASEAN commented:
"Domestic tourism destinations must see themselves as competitors to foreign destinations. They need to continue promoting and innovating to have a fair share of the Malaysia travel market, and not just allow the foreign NTOs to be marketing in Malaysia and attracting Malaysians to go to South Korea or Switzerland or wherever."
Go on, I dare you - try arguing with the solidity of that logic!
5) Long-term Play or Short-term Expedient?
Will this Covid-formed enthusiasm for domestic travel endure? Or is it a coping mechanism until inbound travel rebounds on a larger scale?
If the pandemic taught us anything, it’s that making cast-iron predictions is risky. As cricket commentators like to say, we need ‘soft hands’ to carefully cajole our expectations as circumstances shift.
South East Asian tourism has progressed considerably in the past 5 months. For now, North East Asia lags far behind.
Only once the 2 regions become fully reconnected, and two-way travel gains momentum, will we have a clearer grasp of the parameters of overall recovery.
Until then, the domestic travel focus is welcome. Let’s hope it’s accompanied by qualitative research studies into domestic travellers’ changing expectations in order to tailor tourism services that offer excitement and staying power.
Should cogent, research-guided domestic tourism strategies develop in South East Asia, the region might be able to match this sentence (also from Issue #47, see above):
“Strong and supported, China’s domestic tourism sector will continue to flourish whenever outbound travel is permitted once again.”
“Both Malaysia and ASEAN have been generally dependent on the Chinese outbound market, so we need a conscious and strategic shift to other markets.”
On this week’s The South East Asia Travel Show, we discuss Malaysia’s travel recovery with Tunku Dato Seri Iskandar Tunku Abdullah, Group Executive Chairman of Melewar Group. An experienced tourism industry leader in Malaysia, ASEAN and Asia Pacific, Tunku is a life member of ASEANTA and a Former President of PATA.
His expert insights on the recovery outlook are well worth a listen.
Listen to Checking Malaysia’s Travel Recovery Pulse, with Tunku Dato Seri Iskandar Tunku Abdullah, here:
🎧 Website 🎧 Spotify 🎧 Apple Podcasts
Or search for The South East Asia Travel Show on any podcast platform.
And, that’s a wrap for Issue 92.
The newsletter (which is published every 2 weeks) will return on 28 August.
Until then, find me on Twitter, LinkedIn, the Asia Travel Re:Set website and The South East Asia Travel Show.
Happy travels,
Gary