Tourists are back in Southeast Asia – but the strong recovery is showing signs of a crackdown

After more than two years of lockdown and border controls, Southeast Asia is finally experiencing some semblance of the old days of travel.

According to flight data analytics firm Cirium, flights are steadily returning to 2019 levels in the region’s major economies, with Singapore, Thailand and Malaysia being the most popular destinations this year.

In Singapore, which had the highest number of inbound flight bookings in the region this year, bookings rose from nearly 30% of 2019 levels in January to 48% by mid-June. According to Cirium, the Philippines also saw a sharp increase in bookings from about 20% in early January to nearly 40% by mid-June.

Tourism is a major moneylender for Southeast Asia, An area that saw more than double the international visitors According to the United Nations World Tourism Organisation, from 63 million in 2009 to 139 million in 2019.

In Vietnam, Singapore and Malaysia the industry accounts for about 10% and 20% of GDP and 25 . is between, According to one of the GDP in Thailand, Cambodia and the Philippines May 2022 report Published by Asian Development Bank.

Cirium’s chart on the absolute number of flight seats booked in 2022 in Southeast Asia and Nepal.

The pandemic was “probably more devastating in Southeast Asia than in the rest of the world”. [because] “Governments kept borders closed for almost two years,” said Gary Bowerman, director of travel research firm Check-In Asia. “There were restrictions on domestic travel as well.”

“If you compare it with North America or Europe, for example, in both the years 2020 and 2021 … they had some tourism and travel flows,” he said.

changing travel habits

Most countries in Southeast Asia, including Singapore, Thailand, Indonesia, Malaysia, Vietnam and the Philippines, have stopped requiring fully vaccinated travelers to take a COVID-19 test before travel.

Later Singapore dropped its pre-travel testing requirement in April, “Business is picking up fast and furious,” said Stanley Fu, founder of local tour operator Oriental Travel & Tours. Travelers are booking longer trips and spending more than ever, he said.

Before the pandemic, the company used to receive around 20 tour bookings a week, mostly for tours lasting three to four days. Now, it is handling 25 bookings a week, some for trips of up to 10 days. Fu said the average spending on customized tourism has increased from about $2,000 per person before the pandemic to $4,000 to $6,000 today.

“It’s because of the journey of revenge,” Fu said. “He’s made substantial savings over the past two years.”

As tourists are spending more time in Singapore, Fu and his team of tour guides are taking customers to places outside the normal tourist itinerary – residents in the suburbs to see tai chi and order coffee at hawker centers “The way to Singapore,” he said.

Joanna Lu of Ascend by Sirium, the company’s consultancy arm, said people are also spending more time planning their travels. They are “making sure they are covered for unexpected changes,” she said.

not your usual tourist

With China largely shutting down, tourism operators in Southeast Asia will target Japanese, South Korean and especially Indian tourists to make up for the lack of Chinese visitors, said Gary Bowerman of Check-In Asia.

Sajjad Hussain | AFP | Getty Images

According to the Asian Development Bank, in 2019, visitors to China made up more than 30% of tourists to some Southeast Asian countries, a fact that makes China’s prolonged border closures even more painful for the region.

“The decline in traffic in China deepened in April as strict travel restrictions limit air travel to and from the country,” Lu said, adding he doesn’t expect the situation to change anytime soon.

Asia’s travel recovery lags behind that of other continents, said John Grant, chief analyst at travel data company OAG, because of its reliance on international visitors, particularly from China, as well as different reopening strategies in the region. .

According to OAG, about 66% of flight capacity in Southeast Asia compared to pre-pandemic levels – as measured by scheduled airline seats. OAG data shows Europe and North America have returned to about 88% and 90% of their pre-pandemic capacity, respectively.

The sky will be cloudy ahead

Southeast Asia’s travel recovery also faces other global hurdles: rising costs and interest rates, inflation and a potential recession.

According to the International Air Transport Association, jet fuel prices in early June were 128% higher than a year earlier. Airlines are increasing fares as a result, but “at least to date it doesn’t affect demand because people’s demand has been down for two years,” Grant said.

But that could change quickly if fuel surcharges coincide with inflation in passengers’ discretionary spending, he said.

Bowerman said rising interest rates are likely to devalue the currencies of emerging economies against the US dollar, making imports more expensive and increasing how much travelers can spend on non-essentials like holidays.

Despite these forces, say travel insiders Most people are yet to cancel their plans.

Expedia’s Asia public relations head Lavinia Rajaram said Singapore-based travelers are already planning year-end vacations, while others are booking trips for the quieter months of September and October.

Also, if airlines get their flight capacity back to pre-Covid levels, air ticket prices may return to normal, Rajaram said.

Fu said he expects to see more conferences and exhibitions in Singapore in the second half of the year, where companies can engage agencies like him to organize side tours for business visitors.

Where are the workers?

Even if Southeast Asia continues to attract streams of tourists, air carriers may have to turn away if they can’t find enough staff to service their flights.

Many workers in the air travel industry quit or were laid off during the first two years of the pandemic. There were 50% fewer jobs in the aviation industry at the end of 2021 Compared to pre-Covid times – from 87.7 million to about 43.8 million – according to aviation benefits Beyond Borders, a global air transport association.

Flight cancellations, delays and overcrowded airports Disappointing summer travel season in Europe And North America, low pay has made working in airports and airlines unattractive, and Workers are striking in Europe Against low wages and poor working conditions.

Travel chaos in other parts of the world that has not yet struck Southeast Asia is a situation that officials in the region hope to avert.

According to the agency, Singapore’s Changi Airport Group wants to fill 250 vacancies by the end of the year. The airline said in an email to CNBC that Singapore Airlines has selected over 800 cabin crew from several thousand applications, which is “three to four times more” than it received in pre-Covid days.

The Malaysian Aviation Commission told CNBC that local airlines are “actively seeking to recruit,” but “demand for air travel remains uncertain as Malaysia moves into the endemic phase of COVID-19.”

Singapore Airlines said passenger capacity averaged about 61% of pre-pandemic levels in the first quarter and is expected to increase by 67% in the second quarter of 2022, the airline said in a statement in May 2022.

Roslan Rahman | AFP | Getty Images

But there were crack marks. In April, Changi Airport Group was to some flights According to local media reports, the four-day long weekend due to staff shortage.

Malaysian media reported 1 in 10 domestic flights flying during the Hari Raya Adilfitri festival period in late April and early May were delayed, partly due to labor shortage,

Mayur Patel, OAG’s regional sales director for Japan and Asia-Pacific, said airlines were denied additional slots to land or take off because airports did not have enough manpower to accommodate the additional flights.

“I think the plan is to go back to pre-Covid levels, but with [the] China uncertainty, it will be … difficult,” Patel said.