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Asia’s tourism industry is on the road to recovery as the world embarks on a journey to reclaim normalcy after the Covid-19 pandemic. As per UNWTO, the Asia Pacific tourism sector has achieved 54% of pre-pandemic levels in the first three months of 2023, and this trend is set to gain momentum as most destinations in the region, including China, have reopened.
China, a key regional player, saw a domestic travel resurgence with 8 million trips during this year’s Chinese New Year. This generated almost 376 bn yuan ($51.40 bn) in revenue, indicating a 90% domestic travel volume recovery from 2019 and spending at around 70% of pre-pandemic levels.
Moreover, on August 10, 2023, the stock prices of tourism-related companies throughout Asia experienced a boost after China decided to lift the ban on group travel to multiple nations, including Japan, the U.S., and South Korea. Experts believe that Japan stands to be one of the major beneficiaries of this move, as the world’s third-largest economy recorded 30% of all inbound tourists from China in 2019.
Overall, 2023 has been a good year for Japanese tourism as the foreign visitor numbers surpassed 2 million for a second consecutive month in July. This recovery signifies a return to approximately 78% of pre-pandemic levels, according to Japan’s National Tourism Organisation.
Furthermore, Tokyo is now one of five Asian cities (including Bangkok, Beijing, Seoul, and Singapore) that have been included in the roster of 25 global cities where the travel and tourism industries have the greatest impact on their respective local economies, as indicated by the World Travel and Tourism Council (WTTC).
Previously, the World Travel and Tourism Council (WTTC) reported that tourism constituted 10% of the Asia-Pacific’s GDP and was responsible for generating 10% of the region’s employment in 2019. Looking forward, the Asia Pacific tourism market is expected to grow at a CAGR of 11.6% between 2023 and 2033, amounting to $138.35 bn.
“After three years of effective shutdown, travellers and shoppers are expected back in droves, and investment is flowing in, and stimulating tourism brightens the outlook for the entire region,” said Morgan Stanley.
International visitor arrivals bolster Asia’s tourism industry
A pivotal driver of growth in Asia’s tourism industry is the substantial increase in international visitor arrivals (IVAs) this year. Notably, the rise in visits from foreign tourists isn’t limited to Japan alone.
“In the APAC region, international tourism flows have continued to recover during the first half of 2023…helped by the reopening of mainland China’s international borders for tourist travel,” said S&P Global.
Exploring this phenomenon, the global ratings agency highlights that Thailand experienced a remarkable influx of 6.5 million IVAs during the first three months of 2023, surpassing more than half of the total international visits recorded in 2022.
Similarly, the Philippines observed an aggregated count of 2 million IVAs between January 1 and May 12, a significant contrast to the 2.65 million foreign visits to the country documented throughout 2022. Likewise, Singapore welcomed a total of 4 million foreign visitors between January-April 2023, surpassing the 6.3 million recorded by the country last year.
Meanwhile, Hong Kong experienced a significant rise in IVAs as well, reaching 7.3 million between January and April 2023. This is compared to the 16,182 IVAs recorded during the same period last year when substantial COVID-19 border controls were in effect for both Hong Kong and mainland China.
The future of Asia’s tourism sector
A robust surge in collective international visitor arrivals (IVAs) across the Asia Pacific region is anticipated for 2023, as per a report by the Pacific Asia Travel Association (PATA).
Projected IVAs for 2023 vary from 705 million in the ‘mild’ scenario to 516 million in the ‘medium’ scenario and approximately 390 million in the ‘severe’ scenario, according to the report.
Looking forward, the PATA expects the mild and medium scenarios to pick up momentum through 2025. On the flip side, the ‘severe’ scenario predicts a 10% deficit in IVA figures for 2025 when compared to 2019. China is a likely winner in all three scenarios according to PATA.
“While these forecasts are extremely encouraging, hurdles still remain, and the travel and tourism sector will require ongoing vigilance and operational flexibility as these issues present themselves over the coming years,” said Peter Semone, Chair of the PATA.
Also, estimating the consistency in Asia’s travel flow is difficult because the past two years of the shutdown have also led to innumerable layoffs, business closures, and loss of income for travelers. So, while the tourism restrictions have been lifted in Asia, the financial ability to travel remains a pertinent question.
