Tourism Struggles to See Its Future in Southeast Asia

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 eyeing 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.

Playing in the Sandbox

Arguably the most closely-watched initiative in the region has been the Phuket Sandbox, a case study in reopening borders safely. The plan was the object of minute scrutiny for months before the island opened to vaccinated tourists on 1 July this year. Broadly speaking, the Sandbox was always designed to admit fully vaccinated travelers from low- to medium-risk countries who met certain criteria and allow them to roam the island for 14 days before being able to travel on to other destinations in Thailand. However, the devil was in the details. In the weeks prior to the island's opening, conflicting affirmations circulated with the speed of fake news.

From vaccinating locals and reassuring them that every precaution had been taken, to requiring vaccinations for visitors or jobseekers from other Thai provinces where vaccines are still in short supply, to protocols for handling tourists who had been in contact with people who tested positive, to where Sandboxers could go and with whom they could go there, the scheme seemed to raise as many questions as it answered.

Stefanie Korényi, a German blogger who was on one of the early flights into Phuket, briefly became a cause célèbre when she was forced into quarantine instead of being allowed to visit the island because she was seated next to a passenger who had tested positive on her flight.

While the fear of imported cases was one of the obstacles to bringing tourists back, the systems put in place did detect those cases successfully, allowing travelers to be isolated before they could mingle with the public. In the first seven weeks of the Sandbox, only 66 tourists tested positive for COVID-19.  Instead most of Phuket's 2,500-plus cases since April 2021 have been domestic, begging the question: Why weren't they screened before entering the island?

But it's too early to say what lessons have been learned from the Sandbox, and from Thailand's parallel plan to reopen the island of Samui that began 15 July called Samui Plus. The rollout was supposed to continue with the reopening of Chiang Mai and Pattaya to foreign tourists in September, but is now likely to be postponed by at least a month.

The way forward

Despite the crisis, there is some optimism in the air. An Indonesian developer recently signed an agreement with Paramount Pictures to open a theme park in Bali, the biggest in Southeast Asia, in 2025; six new hotel projects have been announced in the Thai resort town of Hua Hin; in Cambodia, sleepy seaside Kep is widening its beachfront to make it more attractive to tourists.

However projections concur that things will not be rosy in the short to medium term. In Singapore, current projections see a return to financial stability in the tourism industry in 2024. In Thailand, the National Economic and Social Development Council predicts that the industry may not recover until 2026. Under those conditions, it will be years before the tourism sector can stand on its own two feet again. How governments and the industry itself should approach this uncertain period is complex. No one answer will solve the problem and just because an idea works in one place doesn’t mean that it’s transferrable to another.

In June 2021, Singapore was perhaps the first country in ASEAN to explicitly articulate the idea that COVID-19 is something people can live with. But that assessment was shaken less than two weeks later when COVID-19 outbreaks provoked a new lockdown including the closure of restaurants and other businesses. (After a month of closures, those restrictions are gradually being eased.)

Thailand, long a proponent of the 'zero transmission' model, has been preparing public opinion for a shift away from that policy. As early as June, authorities conceded that reopening the country was a “calculated risk” but an economic imperative for the livelihood of its population. Two months later, a proposal was tabled focused on “learning to live with COVID-19”, including targeted vaccination, better tracking of the virus and keeping hospitalizations below critical capacity, echoing the measures announced in Singapore.

The ministers on the Singaporean COVID-19 task force enumerated four points they claim will make the plan a success: vaccination, testing, treatment and social responsibility. But even such a common sense answer isn’t applicable throughout the region, with vaccination rates lagging and varying widely from country to country.

As of 19 August 2021, Vietnam, once the world’s poster child for COVID-19 crisis management, has yet to fully vaccinate even 2% of its population;  Thailand stands at 8.2% fully vaccinated; Indonesia, the Philippines, Laos and Brunei are at between 11 and 15%; Malaysia is at 39%, Cambodia at 46% and only Singapore has reached a level of herd immunity at 74%. (No reliable figures are available for Myanmar, where the on-going internal conflict has had an unexpected side effect: a black market for vaccines that can fetch 25 times their ordinary price.)

Testing and treatment are only possible where people have access to affordable healthcare and modern facilities, which is far from the case around the region. And social or civic responsibility has been an issue raised by some of the latest clusters that can be traced back to the nightclubs of Bangkok and Singapore, where the collective good was not foremost in people’s minds.

To get through the current crisis, the industry is clearly in need of outside support. In the Philippines, the government has offered the sector PHP 10.1 billion (approx. USD 202 million), of which PHP 6 billion is in the form of zero-interest, zero-collateral loans. Singapore has covered up to 50% of salaries in culture, tourism and aviation. Thailand recently announced limited support for all small businesses, not just tourism-related ones.

But for many people who depended on the industry for their livelihood, it may all be too little too late. In Myanmar, where social unrest, violence and the rampant spread of COVID-19 already form insurmountable obstacles, the UN’s International Labor Organization reports that 25% of tourism jobs have been cut in the first half of 2021 and that effective working hours have been cut by 45%. The Cambodian Ministry of Planning reports the closure of 3,000 tourism businesses has resulted in 45,000 jobs lost. The lack of public support is glaring, not just in the form of aid but in assisting the unemployed to find jobs in other sectors.

Learning lessons and from each other in ASEAN

The Sandbox has demonstrated that not only is preparedness key, but so is clear communication, and not just in the form of marketing campaigns to attract visitors. Locals need to understand the risks and the benefits involved, and be reassured that authorities are looking after their best interests, both economically and in terms of public health. Clearly in a rapidly changing landscape, flexibility and adaptability are key, but making it clear that solutions are not just black or white is essential. Failure in this area creates issues in credibility and trust, as numerous skeptics have pointed out.

If there are definite lessons to be learned from the Sandbox in terms of providing information and reactivity to changing situations, can the countries of Southeast Asia also learn from each other? In its role as ASEAN Chair in 2021, Brunei will preside over the publication of the Post-COVID-19 Recovery Plan for ASEAN Tourism, in discussion since December 2020, due to report on the impact of the pandemic on the sector and highlight best practices. It will be interesting to observe if strong leadership will be effective in a crisis that has knock-on effects throughout the region. Providing a platform for exchange and support would be a rare opportunity for ASEAN to prove that it does not live up to its reputation of being “all talk and no action”.

In the meantime, national tourism agencies should play to their strengths and continue to promote their destinations, even if international travelers can't just hop on a plane yet. Destinations should not lose sight of the values they were beginning to embrace before the pandemic. The Philippines wants to transform Boracay from an ecological disaster provoked by mass tourism into an environmental role model for the world. And finding alternatives to mass tourism that are closer to local communities and cultures, and are more respectful of nature, will not only have more direct benefits to locals but will also respond to a real demand from travelers once the current crisis passes.



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Vincent Vichit-Vadakan is a Bangkok-based freelance writer. His writing has appeared in publications around the world including the South China Morning Post, Nikkei Asia, The Guardian, Insider and Travel+Leisure Southeast Asia. In addition to social issues and current affairs, his work also reflects his keen interest in food, tourism and culture.

The views expressed in this article are not necessarily those of Heinrich Böll Stiftung.