Asia is on course to reach pre-pandemic levels of tourism in the first half of next year, according to Fitch Ratings, citing weaker currencies, government efforts to lure visitors, and a jump in outbound travel from China.
The Asia and Pacific region had a slower recovery from the pandemic than the rest of the world, the ratings company said in a report, citing data showing the Middle East, Africa, Europe and the Americas have already either exceeded or are on course to beat pre-Covid tourist arrivals in the first half of this year.
Thailand this week said foreign tourist arrivals surged 37% to 16.2 million in the year through June 16, with Chinese accounting for 3.2 million of those visitors. Both companies and analysts have said the rebound in travel will help both profits and regional economies, particularly in tourist destinations in Southeast Asia.
“This year’s expected leap in visitors from abroad could power a double-barrelled growth boost not only to Southeast Asia’s tourism industry but also to its broader economy,” Bloomberg Intelligence analyst Sufianti said in a May 28 note. “Thailand could get the biggest boost given its notable income from foreign visitor receipts.”
That’s leading some consumer companies to expand. CP All PCL, which operates of 7-Eleven convenience stores in Thailand, plans to open about 700 new stores in the country and to further expand in Cambodia and Laos, it said in May. Similarly, PT Map Boga Adiperkasa — which operates Starbucks in Indonesia — should benefit from the travel boom, Mirae Asset Sekuritas Indonesia economist and head of research Rully Wisnubroto said in Jakarta on June 4.
Singapore earlier this year burnished its image by being the only Southeast Asian nation to host Taylor Swift’s Eras Tour concerts, to the annoyance of some other parts of the region. Swiftmania led economists to upgrade their growth estimates for the city, and drove United Overseas Bank U11 credit card fees to a record high, while Las Vegas Sands plans more space for live entertainment to complement its casino resort in the city.
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“Entertainment is a very important part of the mix,” Las Vegas Sands CEO Rob Goldstein said at an investor conference in late May. “We’re proposing to build a very big part of that into our new building in Singapore.”
Fitch said a surge in outbound visits from China has bolstered the regional tourism recovery, though it cautioned that those travellers are showing restraint in spending.
There are also other risks to the tourism recovery, Fitch said, including elevated airfares and energy prices, along with heightened geopolitical tensions. A global shock or economic downturn, especially in China, could dampen demand for travel and spending, it said.
“In addition, the impact of climate change presents challenges for some APAC economies that depend more on nature-based tourism in the near term, for instance due to coral bleaching, coastal floods, more frequent storms and other extreme weather events.”
