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Reinventing Asia’s tourism sector: coronavirus response calls for new tactics

By Murray Hunter - posted Friday, 22 May 2020


Long after the Covid-19 emergency restrictions and lockdowns have been lifted, one of the last industries that will recover is international tourism, which has been decimated by border closures, leaving air transport and airports to grind to an almost-complete halt.

Most hotels are empty, temporarily closed, with some never to open again. Resorts, tourist attractions, sporting complexes and golf courses, entertainment venues, and restaurants are shut down. Tour operators are dormant without any incomes for at least three months. This has cost billions of dollars in revenue, millions of jobs, with thousands of companies closing their doors never to reopen.

The peak Asian tourist season has been lost, along with the annual Chinese New Year travel frenzy. The Songkran festival in Thailand and Easter were cancelled. Muslim Eid this year will either be cancelled or heavily restricted. Great international sporting events like the Tokyo Olympics, Formula One, International Tennis, Tour de France, and football calendars have all been cancelled. Parks, beaches, forests, entertainment precincts, and promenades are eerily empty.

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International tourism is an important economic contributor across the Asian region. Thailand had almost 40 million international visitors last year. Estimates of tourism contribution to GDP vary between 14-21 percent, depending on how it is counted. Importantly, Thai tourism employs about 3 million jobs, or 10 percent of the workforce, and supports many small and micro-businesses.

Malaysia had 26 million international visitors in 2019. The government has been promoting tourism in an effort to decrease its reliance on the export of primary products. Tourism contributed more than 13 percent to GDP in 2019 and employed 3.4 million people, or 23 percent of the workforce in 2017. The government has long promoted domestic tourism with its Cuti Cuti Malaysia (holiday in Malaysia) campaigns, with a large stock of budget hotels, resorts, and homestays across the country. Singapore had 19.1 million international visitors last year, as an important regional tourist hub, contributing around 4.1 percent to GDP.

Vietnam, where the government is trying to diversify the economy away from manufacturing, received approximately 18 million visitors in 2019. Currently, tourism contributes around 6.6 percent towards GDP, employing almost 2 million people, or 3.6 percent of the workforce.

Indonesia is growing in popularity as an international tourism destination with 16.1 million international arrivals in 2019. Tourism contributes around USD 62 billion of just under 9 percent of GDP. The tourism sector employs around 4.5 million people or around 100 percent of total employment. Apart from Bali and East Java, Indonesia is geared towards the well-developed domestic tourism sector, which still dominates.

The Philippines had almost 9 million international visitors last year, with the sector employing around 5.3 million people and contributing around 12.7 percent of GDP. Cambodia and Laos had 6 million and 4 million international visitors respectively last year. Myanmar had 6 million international visitors last year, contributing 6.8 percent to GDP and employing more than one million people. Tourism has been rising very quickly in Cambodia: it's becoming a very popular place, contributing around 32 percent to GDP and employing almost one million people. Laos is much less dependent on tourism, accounting for approximately 13.7 percent of GDP in 2017. Some 80 percent of the region's tourists come from within the region itself. China is an important outbound contributor with, for example, Thailand receiving 10 million Chinese tourists representing 27.5 percent of tourist arrivals.

The impact of the loss of international tourism will be different on each country within the region. Least affected will be Vietnam and Laos. Malaysia and Indonesia have large domestic markets that can partly compensate for the loss of international tourists. Thailand and Cambodia are the most vulnerable countries.

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A number of challenges facing sections of the tourism industry existed before the Covid-19 crisis. Speculative investment in hotels resorts, homestays, restaurants and other tourist attractions have been made across the region without adequate due diligence around true market opportunities. As a result, a large number of underperforming, cash-strapped projects were already floundering. In many places, hotels and resorts are in oversupply.

Some resorts have been built in places where tourists don't go, a long way from restaurants, food stalls and shopping centres, without any thought to logistics and marketing. A rush to cash in on the homestay movement has left places like Perlis, Malaysia without enough long-term rental accommodation stock. Many white elephants have been built without business wisdom and craft expertise.

Even before the Covid-19 crisis, the number of Chinese visitors to Thailand had dropped due to well-publicized fatal accidents, forcing some small to medium establishments specifically aimed at Chinese clientele to either go up for sale, or close up. A recently introduced Hotels Act in Thailand requires hotels to keep records and pay tax. It has caused much owner anxiety, leading to many boutique hotels, resorts, and guesthouses going up for sale. In Malaysia many long-established local Chinese-owned and managed medium hotels are on the market due to the difficulty in competing against the new generation of budget accommodation.

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Article edited by Margaret-Ann Williams.
If you'd like to be a volunteer editor too, click here.

Originally published in Asia Sentinel



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About the Author

Murray Hunter is an associate professor at the University Malaysia Perlis.

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