Vaccine passports, domestic tourism, pricey flights – is this the future of travel in a post-pandemic Asia?


But catering to local travellers cannot fully make up for the downturn, experts say, while changing appetites and abundant concerns mean the future is anything but certain

British tourists, flying with Thomas Cook, queue at the Enfidha International airport on September 23, 2019, on the outskirts of Sousse, south of Tunisia’s capital Tunis. (AFP / FETHI BELAID)

Kok Xinghui in Singapore
Published: 8:30am, 2 Jan, 2021

When international travel returns, it’s likely tourists will have to use a second passport – a globally recognised one that shows all the vaccines they have taken. Even with the new documentation, however, the free movement of people that happened in pre-pandemic times is unlikely to return this year, with travellers mostly limited to travel bubbles or business lanes. And with fewer flights and more vaccines and tests, hopping aboard a plane is likely to become a lot more expensive – and a lot less frequent.

Those were the predictions of tourism experts who spoke to This Week in Asia – with the additional point that just like last year, travellers are more likely to stick to exploring their own countries rather than heading overseas.

Hotelier Ho Kwon Ping – the executive chairman of Banyan Tree Holdings, which runs hotels across Asia, America, Africa and the Middle East – told a recent conference that travel would become more purposeful, with people thinking harder before buying a flight ticket, whether for leisure or business.

Meanwhile, Abhineet Kaul, senior director of public sector and government at Frost & Sullivan, said it would be “at least 2024 before tourism is back to the levels of 2018 and 2019”.

Travel has changed drastically since January last year, when countries around the world began to ban flights from China in reaction to the spread of the coronavirus there. As the restrictions spread in the wake of Covid-19, international travel ground to a standstill. Little has changed almost 12 months later, with many countries now banning arrivals from Britain and South Africa due to a more infectious variant of the disease.

There have been incremental efforts to open some travel channels. Thailand recently eased travel restrictions on visitors from 56 countries, including Singapore, Japan and the United States, allowing entry to tourists with a health certificate to prove they are free of Covid-19 – though they must still quarantine for 14 days.

Vietnam has from September allowed outgoing commercial flights to seven Asian destinations, but domestic carriers are still barred from operating inbound flights. Visitors from the likes of Brunei, Vietnam and New Zealand are allowed to enter Singapore, but travel is not permitted in the opposite direction. Meanwhile, a highly anticipated travel bubble between the island nation and Hong Kong collapsed when the latter saw a resurgence of Covid-19.

The United Nations World Tourism Organization (UNWTO) expects international tourism to decline over 70 per cent in 2020, regressing to the levels of 30 years ago. In the January-October period last year, it estimates that the world lost US$935 billion in tourism export revenues, or more than 10 times the loss that occurred during the 2009 global economic crisis, as 900 million holidaymakers cancelled their travel plans.

The Asia-Pacific region saw the biggest decrease in foreign tourist arrivals, at 82 per cent, while the UNWTO expects that a rebound in international tourism will occur no sooner than 2023. This was a devastating blow for the region, where tourism has long been a huge driver of economies.

In 2018, receipts from the industry accounted for 17.8 per cent of Cambodia’s gross domestic product, and more than 11 per cent of Thailand’s. On the Indonesian island of Bali, up to 70 per cent of residents depend on tourism. Figures from countries such as Vietnam also help illustrate the situation: it hosted just 3.8 million foreign tourists last year, a far cry from its record of 18 million in 2019.

The industry was in a mode where the growth was just taken for granted, but Covid-19 has changed that dynamic and mindset

“After nine years of non-stop growth, this has been catastrophic for the firms involved. The airlines, hotels, cruises, tour agencies,” said Kaul from Frost & Sullivan. “The industry was in a mode where the growth was just taken for granted, but Covid-19 has changed that dynamic and mindset.”

Airline data also reflects the extent of the catastrophe. In November last year, Singapore Airlines flew just 45,600 passengers –a 97.6 per cent drop from the year before, while Malaysia Airlines has grounded 75 per cent of its aircraft.

Some of the damage is permanent, with airlines such as Hong Kong’s Cathay Dragon and Thailand’s NokScoot folding. The situation is slightly less dire for countries with a huge domestic market, but even domestic air travel in India, for example, is at 65 per cent of pre-pandemic levels.

“When we emerge from the pandemic, our world and our industry will undoubtedly be different,” said Nuno Guerreiro, regional director at Booking.com, who anticipates that travellers will expect more flexibility and reassurances, such as the ability to cancel and change dates without charge.

Nguyen Ai Ngoc, 32, founded Local Buddy Tours in 2017 with a few of his friends. Their outfit provided personalised private tours to popular destinations in central Vietnam, such as Da Nang, Hoi An and Hue, benefiting from the rise of cheap and convenient travel that drew European, Australian and American travellers in droves.

It was so easy to buy a budget ticket and move around Asia, booking cheap accommodation on the go, that Local Buddy Tours served over 200 customers a month before the pandemic. But if the future holds more “purposeful” travel and tourists no longer arrive in hordes, Ngoc’s business cannot be sustained. Last year, he had just one customer every few months. He has already turned to tutoring to make ends meet.

Others have also realised the need for a pivot. Kaul from Frost & Sullivan said this meant new tourism strategies with a different mix of products and markets, and products such as long-stay tourism, vaccine tourism – in which people travel to other countries with the express purpose of receiving a certain inoculation – or mental wellness tourism.

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As governments urge residents to travel domestically instead of overseas, Lux Group, a luxury tourism company in Vietnam that exclusively caters to high-end tourists from Europe and the US, has been offering discounts of 50 per cent to local travellers instead and allowing children on cruises at no charge. Founder Pham Ha said the pandemic “felt like World War III”, and that it would take four years before he could again serve 10,000 customers a year.
Booking.com has also been “boosting local alternative accommodation like ryokans [or Japanese inns] and diversifying our offerings for our customers”, Guerreiro said. The company has collaborated with government programmes such as Japan’s “Go To Travel” campaign, which subsidises up to 50 per cent of transport, hotels, restaurants, tourist attractions and shopping within the country. The campaign has, however, been put on hold until January 11 due to a spike in Covid-19 cases.

Clearly, things change quickly in a post-Covid-19 world. For Guerreiro, that means Booking.com has to “continue to be resilient, diligent and nimble in our approach”.

Tourists ride a tour vehicle along Singapore’s Marina Bay. Photo: AFP
Tourists ride a tour vehicle along Singapore’s Marina Bay. Photo: AFP
Brands and companies aside, appetites for travel have also changed. While cabin fever is high in the small city state of Singapore – so much so that tickets quickly sold out when the Hong Kong travel bubble was announced – experts say potential travellers in nations with larger hinterlands are less keen to venture outside their borders.

With China banning outbound tours, many tourists from the country have taken to exploring at home. In August, the volume of domestic flights in China recovered to 95.4 per cent of 2019’s level, while 13 Chinese carriers operated more flights compared with a year earlier. At Booking.com, domestic travel made up more than 70 per cent of their global room bookings in the third quarter of 2020, up from 45 per cent in 2019.

This domestic travel trend could be here to stay. In a survey of 20,000 travellers across 28 countries conducted by Booking.com, 17 per cent planned to travel within their own country in 2021, and 12 per cent intended to do so beyond even that time frame. For those interested in international travel, only a third would go to the “other side of the world” in 2021, instead preferring nearby, regional destinations.

‘TOO AFFORDABLE?’

Still, domestic travel “cannot totally make up for the loss of international travel” in terms of the numbers of travellers and their spending power, said tourism expert Wong King Yin from Singapore‘s Nanyang Technological University.

For confidence in international travel to return, she said, there needed to be a new global health management system and widespread use of an effective vaccine.

With nations around the region already taking delivery of vaccines, all that remained was for an internationally recognised “health passport” to detail the sort of vaccines a traveller already had, Wong said. She thinks this is likely to become a permanent feature of travel in the future, the same way September 11 turned tighter security into a permanent feature of flying.
Thailand’s ‘sea gypsies’ benefit from absence of tourists in PhuketThailand’s ‘sea gypsies’ benefit from absence of tourists in Phuket
03:19

Thailand’s ‘sea gypsies’ benefit from absence of tourists in Phuket

Thailand’s ‘sea gypsies’ benefit from absence of tourists in Phuket
The only concern was that “there are still many people who may not want to try the first batch of vaccines”, Wong said, pointing to lingering fears and concerns over side effects from vaccinations.

Frost & Sullivan’s Kaul said he did not expect tourism to rebound quickly even with the vaccines, adding that it was still uncertain whether people would need periodic inoculations, such as annual flu jabs.

Apart from vaccines, he said there was a need for global standards when it came to cleanliness and hygiene, while Wong said countries would need good contact-tracing methods.

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“It is important to not become complacent in curbing the spread of the virus,” said Booking.com’s Guerreiro. “It will be some time before there is an effective plan in place to give people and governments confidence for people to travel freely … How we respond in the next few months to this virus will be critical in progressing towards a full recovery.”

Whether people travelled would also depend on the overall economy, consumers’ financial health and confidence in their own economic futures, he said.
Right now, global economies look bleak – the International Monetary Fund estimates that global GDP shrunk 4.4 per cent in 2020. But while it predicts 5.2 per cent growth in 2021 as economies inevitably pick up after the Covid-19 recession, governments are not expecting employment rates to recover as quickly, as companies struggle to recoup their losses and repay debts. In Indonesia, as many as 2.56 million people have lost their jobs due to the pandemic, while Singapore is facing its worst recession in decades and saw its unemployment rate rise to 3.6 per cent in September.

“Maybe in the past, you could go to Bali twice a year, but now you can only go there once,” Wong said. “Maybe in the past it was too affordable.”
Additional reporting by Sen Nguyen

SOURCE https://www.scmp.com/week-asia/economics/article/3116142/vaccine-passports-domestic-tourism-pricey-flights-future-travel

Categories: Asia

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