Australia
China
India
Indonesia
Japan
Malaysia
Philippines
Singapore
South Korea
Taiwan
Thailand
Vietnam
After two years of a hard-hit pandemic-induced economic downturn, Southeast Asian (SEA) countries are gearing up to accelerate their recovery from long lockdowns. With tourism being a key driver for many SEA countries, lifting travel restrictions is essential to revive the economies further.
The roll-out of vaccinations allowed travellers to commute with certain restrictions in place even as cases of Covid-19 rose across the world. However, the World Tourism Organization (UNWTO) reported that International tourism rebounded only slightly with a 4% upturn last year, compared to 2020. For this year, the UNWTO expects international tourism to grow between 30% and 78% compared to 2021.
Arrivals in Asia and the Pacific were still 94% lower when compared to pre-pandemic values, and the expectation is that international travel won’t be able to support the region’s tourism sector until 2024.
But numbers are on the upswing. “Travel to the Asia-Pacific region shows impressive signs of improvement as destinations gradually reopen their borders to visitors, in line with customer demand,” says Julia Simpson, president of the World Travel & Tourism Council (WTTC). A study by WTTC and its knowledge partner ForwardKeys noted that Asia-Pacific countries saw a significant increase in arrivals in the first quarter of 2022 as compared to 2021, with bookings for the region up 275%.
The International Air Transport Association expects that the domestic and international traffic within the Asia Pacific will reach 68% this year and sees a full recovery by 2025.
Thailand and Philippines to profit from reopenings
Thailand gradually loosened its entry restrictions for tourists over the last months. “Looking back at the first three months of this year, we see the numbers of infected international tourists entering the kingdom keep falling,” said Thailand’s Centre for Covid-19 Situation Administration (CCSA) spokesperson Taweesilp Visanuyothin. Since early May Thailand is allowing visitors to enter and travel in the country without testing and quarantining.
The Thai government is expecting to significantly boost the economy again with this move. Thailand relies on tourism, which accounts for 20% of its GDP. Tourism minister Phiphat Ratchakitprakarn expects to accommodate 8 million to 15 million tourists this year, which is a big jump from 427,869 in 2021. The Governor of Thailand’s Central Bank expects the country to make full recovery by 2026.
The Philippines also lifted their ban on international tourists, hoping for a quick economic recovery. “The recent influx of tourists reflects enthusiasm towards visiting our country, which in turn will accelerate the revival of our tourism industry,” said Philippines Tourism Secretary Bernadette Romulo Puyat.
Tourism plays an important role in the country. According to the Philippine Statistics Authority, in 2019 over 8 million tourists brought 2.51 tn pesos ($50 bn) to the country, accounting for nearly 13% of the country’s GDP. For this year, the Philippines Department of Tourism is expecting 2 to 5 million international tourists.
Also for Singapore, tourism is an important pillar of the economy contributing to nearly 4% of its GDP. Since April 2022, all fully vaccinated travellers can visit Singapore quarantine-free with simplified Covid-19 measures. The Singapore Tourism Board said that there are “encouraging signs of recovery”. Last year, with travel restrictions still in place, 330,000 visitors arrived in Singapore, bringing an estimated $1.4 bn ($1.9 bn Singapore dollars) into the country.
Vietnam, having closed its borders for international tourism for about 2 years, reopened in March. Tourism in Vietnam contributes 9.2% to the country’s GDP. The tourist arrival in the country already surged by 89% in the first quarter of 2022. According to data released by the Vietnam government, the number of domestic tourists totalled 9.6 million in February 2022, which is 4.8 times of 2021.
Southeast Asia tourism: pandemic as an opportunity
While the pandemic has had devastating impacts on tourism in Southeast Asia, the ADB says that it can become a catalyst to reshape the sector in sustainable and inclusive ways.
During ADB’s Southeast Asia Development Symposium 2022 in March, participants highlighted the need for a transformative reform agenda to drive growth, e.g. by leveraging technologies to foster inclusion and green practices in tourism.
According to a report launched by ADB, Southeast Asia’s projected growth rate at 5.1% is fueling optimism about its economic prospects. However, tighter interest rates, widespread unemployment, new virus variants, weak investments, inflationary pressures, narrowing fiscal space, and climate threats could undermine the region’s recovery, warns the report.
