Asia prepares for recovery

BANGKOK: How do we sensibly and effectively restart travel and tourism in an industry that employs one in 10 workers globally; a workforce decimated by the Covid-19 pandemic?

According to the World Travel & Tourism Council (WTCC) travel and tourism’s direct, indirect and induced impact last year in 2019 accounted for:

• US$8.9 trillion contribution to the world’s GDP
• 10.3% of global GDP
• 330 million jobs, 1 in 10 jobs around the world
• US$1.7 trillion visitor exports (6.8% of total exports, 28.3% of global services exports)
• US$948 billion capital investment (4.3% of total investment)

Tourism recovery is the top topic, and all sections of our industry are looking and learning while seeking answers to the crisis.

The plethora of webinars popping up with recovery and ‘next step’ discussions is testament to the energy and interest in getting back to work.

But are webinars useful? Last week TTR Weekly editor, Don Ross, suggested that webinars often fall short in good common sense. “Since the Covid-19 pandemic banished us all to our homes to live under lockdown, we are inundated with promotions for webinars that promise to navigate the travel industry back from the brink to a new norm. The deluge of webinars promises to show us the way forward, but so often when we tune in to the talkfests, they fluff on the details. They avoid the obvious and concentrate on the obscure, I suspect we attend webinars hoping the experts can offer some old fashioned common sense to help us survive the financial storm,” he wrote.

The tourism industry has taken a huge hit from the coronavirus; the UNWTO puts the loss at USD450 billion. The virus has infected at least 3.48 million people worldwide and killed more than 244,000. Top tourist destinations such as the United States, Spain, Italy and France are among countries with the highest number of infections.

People will only travel again if they feel it is safe to do so – this was best expressed by Ross again when he wrote: “ In the Covid-19 world, common sense dictates we will travel when it is safe and when we have the spare cash. That’s what we are not addressing in webinars. The pandemic is breaking the bank for everyone, but how will we ensure health safety in order to reboot travel?”

Recovery is uppermost in the minds of Skål International and the UNWTO. The Board of Affiliate Members, which CEO of Skål International, Daniela Otero, is a member, has been discussing how to structure the tourism sector’s response, especially in the recovery phase and what should be the priorities to be taken into consideration by governments.

Work is already underway at the UNWTO on the first drafts of possible reopening protocols applicable to all the sectors of the industry, noting that once governments allow, it will be necessary to move quickly with action as tourism is among the hardest-hit industries due to COVID-19 and its consequences.

The UNWTO estimates the losses to international tourist arrivals worldwide this year could fall by as much as 30%.

The UNWTO recalls that tourism has been a reliable driver of recovery in the wake of past crises, generating employment and revenue. Tourism, the UNWTO states,

“Has wide-ranging benefits that have transcended the sector, reflecting its broad-based economic value chain and deep social footprint.”

Around 80% of all tourism businesses are small-and-medium-sized enterprises (SMEs), and the sector has been leading the way in providing employment and other opportunities for women, youth and rural communities and tourism has a great capacity to create jobs after crisis situations.

Since the start of the current crisis, UNWTO has been working closely alongside the World Health Organization (WHO) to guide the sector, issuing key recommendations for both high-level leaders and individual tourists.

To rebuild and restart travel we are so dependant on air uplift. Once airlines start flying again, the industry can recover. How long that will take is widely discussed.

PATA CEO Dr Mario Hardy said: “The number one question on everyone’s minds is, how long before we recover? This isn’t a simple question to answer.”

He believes Asia will deliver the largest rebound in travel to the Asia Pacific region in 2021, according to the updated forecast released by PATA. The research claims visitors should deliver 610 million visitor arrivals in 2021 (of which 338m are inter-regional). Growth in total visitor arrivals of 4.3% compared to 2019 (585 million).

The growth in international visitor arrivals (IVAs) is likely to vary by source regions, with Asia expected to rebound with the fastest growth rates relative to 2019.

During the expected recovery phase in 2021, Asia should generate significantly improved arrival numbers, rebounding from a loss of 104 million visitors between 2019 and 2020 to grow 5.6% to 338m in 2021 relative to 2019.

It will not be all plain sailing. We will face competition from around the globe for tourists, and our regular visitors – including those from mainland China.

Hong Kong Tourism Board chairman, Pang Yiu-kai, noted that while it was difficult to predict when the industry would recover from the Covid-19 pandemic, a V-shaped rebound was impossible in the face of restrictions overseas and flight suspensions.

What was certain he said was that every market would spend hundreds of millions of dollars, or even billions, to chase after tourists as the pandemic had paralysed global travel and battered the industry since February, he said.

“The tourism landscape will be reshaped, there will be a new normal,” the HK tourism chief said during its annual conference to 1,500 industry stakeholders.

Pang also said that based on market analysis, mainland tourists and those from short-haul markets would travel domestically soon after the pandemic died down. The tide will turn.

“The post-pandemic recovery would contrast with that after the outbreak of severe acute respiratory syndrome (SARS) in 2003,” he said.

“In 2003, the SARS outbreak was mainly in Hong Kong. For Covid-19, the whole world is affected,” Pang said.

Although economic activities had gradually resumed across the border and people were returning to work, mainland travellers would place greater emphasis on health and nature after months of confinement, Pang said agreeing with our earlier comments from Don Ross.

“When choosing destinations for future trips, they will be more price-conscious and will favour those that pose low risks to health,” he said. “The MICE market on the mainland has slowed down, and activities have been held online or postponed.”

“Regionally, young and middle-aged Japanese, Koreans and Taiwanese would be the most eager to travel, but would favour short-haul trips because of financial and holiday leave constraints,” he said.

Long-haul travel would take longer to recover, and Hong Kong’s outbound sector might not resume until the last quarter of this year, he added.

Executive director Dane Cheng Ting-yat said the HK board had earmarked HK$400 million (1.66 billion baht) to support the industry through a three-stage approach. It was currently carving out a recovery plan as the first stage.

Tourism is one of Hong Kong’s four pillar industries, contributing 4.5% to the gross domestic product in 2018.