Issue #97 - 6 Reasons Why Asia Pacific Travel & Tourism in 2022 is Not Normal!
Tourism confronts an unfolding era in which nothing is quite as it would seem.
It’s been a hectic 7 days for the region’s travel industry.
TravMedia Summit Asia 2022, Hotel Investment Conference Asia Pacific (HICAP) and the region’s premier tourism showcase, ITB Asia, took place this week in Singapore.
It was a chance to catch up (or ‘de-Zoom’) with many people for the first time in 3 years. Hotel ballrooms and cocktail bars did a roaring trade.
Sat around a terrace table overlooking Sentosa last Sunday, conversation turned to “Covid experiences.” Everyone chipped in about how their bodies and minds had been affected by contracting the virus.
And then a Chinese journalist from Beijing, making her first overseas trip since the pandemic began, delivered a conversation-stopping moment:
“I don’t know anyone who has had Covid-19.”
That comment reminded me that 2022 has contexts we are yet to fully grasp.
Thanks for being onboard.
- “IN THE NEWS”
- 6 Reasons Why Travel & Tourism in 2022 is Not Normal!
Tourism confronts an unfolding era in which nothing is quite as it would seem
“IN THE NEWS”
“Keynote speaker Gary Bowerman, one of Asia's most renowned travel analysts, on-air hosts and authors, discussed Rethinking the Travel & Lifestyle Economy, outlining the latest trends and explaining how travel brands can capitalise on changing consumer perceptions and the evolving travel and lifestyle economy.”
Many thanks to Nick Wayland, Julie Ott, Gaynor Reid and the team for making the TravMedia Summit Asia 2022 such a fast-moving and enjoyable two days for everyone.
6 Reasons Why Travel & Tourism in 2022 is Not Normal!
During my keynote this week, I outlined a few factors making 2022 an outlier. Travel and tourism are entering an era in which nothing is quite as it would seem.
Here are 6 thoughts on this theme:
1) One Billion Passengers
Let’s set the context by rewinding to January 2020. The Pacific Asia Travel Association (PATA) published a forecast that Asia Pacific could receive 971 million international visitor arrivals (IVAs) in 2024. Almost one billion.
Given the average growth in IVAs across the region of 5.3% from 2014-2019, that was not an unrealistic prediction.
We know what happened next.
But if that forecast had proved correct, Asia Pacific would have handled an extra 256 million IVAs between 2019-2024, or slightly less than the population of Indonesia - the world’s fourth most populace nation.
Earlier this year, PATA’s updated forecast range for IVAs into Asia Pacific in 2024 spanned from a ‘low’ scenario of 501.9 million to a ‘high’ scenario of 817.7 million.
2) Free Flights & Liquidity
In early October, after removing the on-arrival hotel quarantine mandate, Hong Kong’s Tourism Board said it would give away 500,000 flight tickets. Free of charge.
The goal is to incentivise visitors to return after two-and-a-half years of lockout.
It was a fine piece of PR, and was picked up by media around the globe.
The details of the free ticket promo are yet to be confirmed, but the strategy was first proposed in August 2020. Hong Kong Airport Authority purchased the tickets from local airlines to “inject liquidity.” More than 2 years later, the ticket freebie is in play.
Hong Kong International Airport handled 2.25 million passengers in the first 9 months of 2022, compared to 55.43 million in the same 2019 period.
3) BIG Percentages
Statistical reporting of tourism is highlighting year-on-year gains. These are huge in South East Asia, where tight border restrictions were in place for much of 2021. The comparative increases will moderate in 2023, but for now they are surreal reminders of the scale of dislocation caused by pandemic border closures. Here are 3 examples:
In the first half of 2022, Malaysia reported a 4,112.7% year-on-year rise in arrivals. This equated to 2.13 million visitors compared to 50,613 in the same 2021 period.
Meanwhile, Indonesia claimed annual visitor growth of 2,028% from January to August 2022.
And, in September, Cambodia’s Angkor Wat temple ruins recorded a 2,075% upswing compared to the same month in 2021.
4) A Record Hotel Rate
Hotel room pricing is usually qualified as the dynamic interplay of supply and demand. It’s often a little more complex, especially as travel patterns and input costs are realigning.
In July 2022, Singapore recorded its highest monthly average room rate (SGD259) since September 2012, when it hit SGD261.66.
In July, Singapore welcomed 726,601 visitors (compared to 1.8 million in July 2019, when the average room rate was SGD218.66). Average occupancy in July 2022 was 79%, REVPAR was SGD204.29, and there were 1.55 million available room nights.
In September 2012, average occupancy was 83%, REVPAR was 216.04, and there were 1.27 million available room nights.
5) Economies Under Pressure
Central Banks across Asia Pacific are under pressure as the cumulative impacts of a pandemic, war, oil supply shocks and shifting geopolitics deflate currencies, inflate prices and push up interest rates. Here are 3 examples:
The annual rate of inflation in Sri Lanka reached a record 73.7% in September. (It was 21.5% in March). Food inflation was 85.8%, with non-food inflation at 62.8%.
In Japan, the Yen slipped to a 32-year low of JPY151 to the US dollar last week forcing the central bank to intervene for a second time in 2 months - having not previously done so for 24 years.
The IMF forecasts China’s economy to grow by 3.2% in 2022, and 4.4% in 2023. In both years, it will lag Emerging Asia (4.4% / 4.9%) but an economic slowdown in China will drag down growth across Emerging Asia.
6) Covid Re-Alerts
Early last week, copious column inches assessed Xi Jinping’s comments on Dynamic Covid-Zero in China. Then came a debate about China potentially cutting quarantine from 10 days to 7.
Meanwhile, media attention is turning to rising Covid infections. Almost 1 year after the emergence of Omicron persuaded South East Asian governments to postpone reopening plans, new variants are spreading.
Three nations are worth watching: Singapore, South East Asia’s air hub, Indonesia, its largest country, and India, where the Delta variant began its destructive path in 2021.
Straits Times reported the first community case of the recombinant XBB variant in Indonesia, adding new Covid infections are rising in 24 provinces. Antara reported Indonesia’s Ministry of Health is testing and tracing and advising people to get a vaccine booster. The Jakarta Post noted “vaccine shortages across the country.”
For now, Singapore says it will hold back on re-introducing “vaccination-differentiated measures,” but is monitoring closely as daily cases rise.
XBB cases are “rising in India,” notes Hindustan Times as the Diwali celebrations commence.
And, that’s a wrap for Issue 97.
The newsletter (which is published every 2 weeks) will return on 6 November.
Until then, find me on Twitter, LinkedIn, the Asia Travel Re:Set website and The South East Asia Travel Show.
Happy travels,
Gary