It’s likely to get worse before it gets better for the Asian tourism industry. But forward-thinking players will know to take advantage of the current downtime to meet the pent-up demand for travel once recovery comes — which may not be far off.
As major destinations in Asia come out of the traditional high season to enter into the shoulder months of March and May, tourism operators are concerned that the widening spread of the coronavirus worldwide could put a further damper on travel demand to the region, compounding woes for a sector already hard hit by massive cancellations since the crisis began in late January.
When outbound travel from China was severely crimped after the Chinese government discouraged its citizens from going abroad, the key international markets of Europe, India and the Middle East were still propping up business for some sections of hotels and tour operators in Asia.
But as the virus spreads into more than 76 locations and infected more than 90,000 people worldwide, there are worries that demand for Asia may soon evaporate as travel anxiety mounts in other parts of the world.
Surviving Lean times
For Thailand, which is now exiting the high season that traditionally spans October through February, the next two months will be a critical time for the country’s tourism sector, particularly for smaller players that may not have enough financial reserves to wait out the damage of the virus outbreak.
The “real test” will begin in March, said Douglas Martell, president and CEO at Onyx Hospitality Group, a Bangkok-based hotel management company with 52 properties across Asia Pacific, of which 31 are in Thailand.
“For January and February, we still have American and European markets with their holidays booked ages ago. But as we come out of the high season to go into the [so-called] Asian season, we’re still not seeing bookings for March and April yet, and that’s probably the toughest time,” he shared.
Likewise, Burasari Group could no longer look to other source markets to fill out rooms, even if the Thai boutique hotel management firm had “never depended too much on the Chinese”, the company’s director of sales and marketing Pieter Willaert told Skift.
“During the earlier part of the crisis we saw cancellations from the Chinese first and then the American market, but now cancellations have hit all markets. And the domestic Thai market isn’t biting, despite the promotions we’re offering.
“March and April are going to be disastrous,” he remarked, echoing Martell’s outlook for the immediate months. “You have cancellations on one side, and no pick-ups on the other side. There’s nothing much we can do, so we can only sit it out.”
Unequal exposure, uneven impacts
While headlines of how Asia’s major tourist destinations like Thailand, Japan and Singapore were hard hit by plunging Chinese visitor numbers, the paucity of media attention was a welcomed relief for smaller, lesser-visited destinations in the region.
“We did see a large influx of cancellations when fear-inducing headlines became widespread in the media. China and Hong Kong bore the brunt of the cancellations, but countries like Indonesia and Myanmar were having a less difficult time,” said Ewan Cluckie, global director of marketing (digital, creative and communications) at destination management company Discova.
By evading the coronavirus spotlight, either due to low reported cases of infections or perceived geographical separation from Asia’s worst-hit nations, traveler confidence for such countries as Sri Lanka, Myanmar and Laos were relatively unaffected, industry players in these destinations told Skift.
Chamindra Goonewardene, director of sales and marketing at Resplendent Ceylon, a luxury resort chain in Sri Lanka, has only started seeing a slowdown in bookings in the recent two weeks. “Sri Lanka, India and the Maldives are perceived to be less affected by the virus, so [until recently] we are still seeing travel interest from markets like the Middle East,” he said.
Cluckie added: “We still see demand for places without reported infections like Myanmar. The frequency of new enquiries for Myanmar hasn’t dropped, although they’re usually enquiring about travel later this year, not in the immediate one or two months though.”
However, with more airlines announcing reduction in capacity and suspension of routes, and no longer just limited to Asia, Laos Mood Travel Co-Founder and General Manager Laurent Granier is concerned that the ongoing cut in global flight services will further curtail air accessibility to the landlocked country, which is dependent on feeder hubs like Bangkok, Seoul, Hong Kong and Singapore to fly tourists into its borders.
“We handle mostly FITs and MICE visitors, who typically stop in Laos for two to three days. Although Laos itself hasn’t been much affected by the virus, but as a destination we’re highly dependent on other transit destinations.”
Another worry, said Granier, is whether Europe would start discouraging its citizens from traveling abroad, following into the footsteps of more “sensitive” markets like the US which “stopped coming around two weeks back [mid-February]”.
Already, forward bookings made for departures from France to Asia, excluding China, in the March to May 2020 period has already taken a 14 percent beating, according to joint findings by ForwardKeys and Pacific Asia Travel Association’s French Chapter.
The last-minute cancellation of ITB Berlin last Friday further illuminated the unresolved issue of refunds, said Granier. “European tour operators are now in debate over who should bear the costs of refunds, and this creates a lot of stress for everyone,” he said.
“It wasn’t so dark in Europe two weeks back.”
Pent-up demand builds up
Despite the uncertain outlook, Granier is seeking consolation that the virus crisis only struck Southeast Asia towards the end of the high season. “We’re not feeling the heat in terms of cash flow yet, as we were already four to five months through the high season,” he said. “I suppose the loss would had been higher in a destination like Mongolia, which is just going to start its season.”
Even as Asia tourism has been caught flat-footed by the sharpness of the tourism downturn, Onyx’s Martell is confident that the coronavirus, like many other crises that struck Thailand, will eventually pass.
In difficult times like now, the hotel chief executive is instead keeping his focus on a recovery plan to meet the pent-up demand that could swiftly pull the tourism sector out of its hole.
David Kevan of UK-based Chic Locations, which specializes in luxury travel to Southeast Asia and the Caribbean, expressed: “Moving forward there are signs here [in the UK] that we are all getting fatigued with the constant headline news. If I put my optimistic hat on, I do think in about a month’s time we shall see some roots of recovery.”
Promotions, he added, will play a key part to lure travelers back to Asia. “Extra-value offers will probably install more confidence to travel than any surgical mask or medication. Clients want something to look forward to.”
That’s exactly what Asian operators are banking on as they await the light at the end of the tunnel. Meanwhile, Willaert is pinning his hopes for the European market to make a comeback to Thailand by July or August.
“And the Chinese? They will be the first to jump back,” he said.
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Photo Credit: Asia tourism is bracing for more challenging times ahead as the virus spreads outside of Asia. Meanwhile, operators in countries like Laos have been less affected, in part due to scant media coverage of the country. Sasha Popovic / Flickr
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