Tourism Struggles to See Its Future in Southeast Asia

Proudly contributed by Vincent Vichit-Vadakan

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Empty Suvarnabhumi Airport of Thailand in April 2020.
Picture: Amphon Chansirisri
licence: CC-BY-NC-ND 4.0

The hard-hit tourism industry in Southeast Asia looks for ways out of the pandemic. From promoting domestic tourism to ‘travel bubbles’ to Thailand’s Phuket Sandbox scheme to bring back international travelers, all ASEAN countries are facing novel challenges of the ‘novel’ coronavirus. What are countries doing to counter the disastrous effects on tourism? And what can countries learn from each other?

Before the onset of the coronavirus pandemic, Southeast Asia had grown hugely reliant on revenue from tourism. According to the World Travel & Tourism Council, the sector contributed USD 393.1 billion to the GDP of the countries of Southeast Asia in 2019, almost double the figure in 2010 of USD 197.3 billion. In Cambodia, tourism accounted for over a third of GDP in 2019; in Thailand the figure is estimated to be about 20%. But when international travel came to a screeching halt in 2020, the industry was one of the hardest hit.

The start of a pandemic

On 13 January 2020 in Thailand, a woman from Wuhan was found to be carrying what was still referred to as the ‘novel’ coronavirus. It was the first case in the world detected outside of China. As the number of cases rose in Thailand, businesses and schools were ordered to close, and curfews and travel restrictions were imposed. Thailand suspended international commercial flights on 4 April 2020.

A similar pattern rippled across Southeast Asia. Most countries pursued a ‘zero transmission’ policy that justified draconian measures designed to prevent any spread of the virus. At various points, all countries opted for restrictions on international and domestic travel, subjecting arrivals from abroad to stringent conditions like testing, quarantine, contracting insurance and paying cash deposits. All countries have imposed some form of lockdown or curfew that has had a huge impact both socially and economically. In certain countries like Thailand and Vietnam, the zero transmission policy kept numbers down, at least initially. In others, like Indonesia, the Philippines and Malaysia, authorities have been in a constant struggle to keep serious cases and mortality rates in check, with the containment of movement one of the only tools at their disposal.

Looking inward for domestic tourists

As the health crisis dragged on, governments began to implement measures to support their tourism industries, some with a certain degree of success, while other schemes were quietly shelved. No country has found the magic formula to revive tourism.

When international travel all but dried up after the first quarter of 2020, countries realized that they had to turn to their domestic markets. In Lao PDR, the Lao Thiao Lao (Lao People Travel in Laos) program took to social media to encourage locals to explore their own country, offering incentives like raffles and competitions for free stays and flights. The program relied largely on private sponsorship and grants, with little public investment. It is unclear if the program will find the financial backing for a second year of promotions.

Few countries reached directly into their coffers to kickstart domestic tourism. The notable exception was the THB 20 billion (approx. USD 608 million) stimulus package in Thailand called Rao Thiew Duay Gan (We Travel Together) that covered a share of domestic travelers’ hotel stays and plane tickets and provided vouchers to spend on local services like restaurants and tourist attractions. Though plagued with fraudulent claims – one 100-room hotel allegedly filed for reimbursement on 300 rooms – the plan was considered a success, providing a lifeline to many businesses. The relaunch of the improved, reportedly fraud-proof scheme was scheduled for May 2021, but the date clashed with a steep rise in coronavirus cases that began in April. The plan has now been shelved indefinitely.

Another country that has attempted to pump cash into the industry is Singapore, where the government invested SGD 320 million (approx. USD 236 million) in the SingapoRediscovers program. This provides each Singaporean with vouchers for hotel staycations and other attractions. By the end of April 2021, Singaporeans had injected some SGD 200 million in vouchers and out-of-pocket spending into the flailing industry, and the program has been extended until the end of 2021.

Like its neighbors, Brunei saw tourist arrivals plummet, from over 330,000 in 2019 to just 62,000 in the whole of 2020. As a result, it has turned to its own relatively affluent local population to support domestic tourism. Last year, the national carrier Royal Brunei Airlines flew highly-publicized ‘flights to nowhere’ over the Borneo coast and rain forest. The flights sold out.

The sultanate has also reached out to its own business community, and promoted MICE (meetings, incentives, conferences, exhibitions) facilities to a domestic audience. Similarly, before the current restrictions that place strict limits on public gatherings, the Thailand Convention & Exhibition Bureau (TCEB) offered incentives that ranged from free lunches to cash handouts to encourage both the public and private sector to hold meetings around the country, stay overnight and visit local tourist attractions.

Elsewhere, Vietnam’s Quang Ninh province where Halong Bay is located welcomed 2.5 million domestic tourists in the first six months of 2021. The province hopes to be one of the first in Vietnam to reach herd immunity by vaccinating 70–80% of its population by April 2022. At one point, Vietnam Airlines reported an increase in capacity on domestic flights over pre-COVID-19 figures, particularly on the Ho Chi Minh City–Hanoi route, the country’s busiest. Domestic tourists spent VND 3.1 trillion (approx. USD 135 million) in the first quarter of 2021. But since then, both Hanoi and Ho Chi Minh City have gone into lockdown, postponing any hopes of a quick recovery.

Domestic tourism simply cannot compensate for the loss of international revenue. The average spending for an international tourist in Vietnam in 2019 was USD 673; in contrast a domestic tourist spent just USD 61. The arrival figures in Thailand are also telling: the country counted 39.8 million international arrivals in 2019 versus fewer than 40,000 for the twelve months beginning April 2020, when international commercial flights were halted.

Opening up

Southeast Asian countries therefore are eying the return of foreign tourists. 2020 was China-Myanmar Culture and Tourism year. Though the event was postponed due to the onset of the pandemic, the Myanmar government that took power in February 2021 is standing by the policy to encourage more Chinese tourists to visit the country. But between civil unrest and the unchecked spread of coronavirus, not to mention China’s restrictions on the movement of its own citizens, it remains to be seen if and when tourists will be willing and able to return.

The Lao government is also looking to China, in no small part because of the Laos–China Railway that is part of the line connecting Kunming to Singapore that crosses the landlocked country. When the line opens in December, Laos hopes to see tourists coming from Yunnan province in China, as well as travelers from Thailand, though service may initially be limited to freight.

In pursuit of the lucrative MICE market, Cambodia has announced that it will host the ASEAN Tourism Forum in Sihanoukville in January 2022. The event will also include the meeting of national tourism organizations and a summit of the region’s tourism ministers. It remains to be seen to what degree the event will be hybrid, using online technology as well as welcoming visitors in person. Also looking at the same market segment, the Singapore Tourism Board (STB) has commissioned a white paper on the future of MICE post-COVID-19.

Exploring another avenue to reopen to international tourism, Vietnam is just one of the countries that has attempted to negotiate travel bubbles with low-risk countries. As plans were on the verge of being finalized for Taiwanese tourists to arrive in the golf and beach resort town of Da Nang, Vietnam experienced a new surge in COVID-19 cases last April,  halting planned arrivals. Current discussions are centered on the Phu Quoc and Khanh Hoa opening to vaccinated tourists later this year. Bali in Indonesia was also among the destinations that were considering similar schemes. Hopes were running high for a reopening in July, but they were dashed when COVID-19 cases in Bali skyrocketed in June. Bali is on track to vaccinate 70% of its population by September, allowing officials to be hopeful that they will be able to welcome tourists in the fourth quarter of 2021. Similarly, Malaysian officials are looking at Kuching in eastern Malaysia and the resort island of Langkawi as potential destinations for foreign tourists when travel resumes.

Read the full article at Heinrich Boll Stiftung: https://th.boell.org/en/2021/08/24/tourism-covid-19?fbclid=IwAR29PBVPMREDpi-2L5PMSZlSjJhbrHUrtriGnEMwUhYNOmfINh_vnCKocW8

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