Asia’s Travel Recovery Could Look Like This

International visitor arrivals into Asia between 2022 and 2023 are projected to grow by 100 percent, highlighting the usual S-curve as demand peaks and then returns to more normal growth rates over time.

That’s according to a new Pacific Asia Travel Association (PATA) report, which examines the trends and forecasts for foreign inbound visitors into and across the region over the three-year period covering 2022-2024.

The PATA report envisages mild, medium and severe scenarios to pan the recovery of tourism in the region.

By 2024, international visitor arrivals into Asia are expected to exceed 2019 levels under the mild scenario and come close to parity under the medium scenario. The severe scenario, however, predicts that arrival numbers into and across Asia in 2024, will reach just 69 percent of 2019.

What Are the Defining Parameters?

The parameters determining the three scenarios include containment of Covid, borders remaining open with no quarantine-on-arrival policy and the reopening of entertainment and hospitality venues, PATA’s special advisor John Koldowski said.  

On the demand side, some of the key factors affecting the scenarios, apart from the desirability of a destination, include the perceived (and actual) safety of the destination, access to and from it and the ability for a rapid repatriation to home ports in the case of a sudden spike in infections and the subsequent return of containment policies. The cost of checks and treatments (if required) will also feature large, noted Koldowski, who is also the author of the summary report. “The current Russia-Ukraine war is not helping things either, especially in and around that part of Europe.”

From being one of the most-visited regions worldwide with more than 500 million visitors in 2018 and 525 million in 2019, international visitor arrivals in Asia went down 85 percent in 2020. Estimates for the full calendar year of 2021 are for an overall decrease of 70-75 percent compared to 2019.

Following contractions in foreign arrival numbers into Asia between 2020 and 2021, annual growth is predicted to return in 2022 under all scenarios.

Which Region in Asia Will be the First to Recover?

While recovery depends very much on what is being used as a measure of growth, South Asia is likely to witness the fastest recovery to 2019 levels.

The mild scenario predicts the strongest return for South Asia in 2022 with international visitor arrivals at 47 percent of 2019 levels. In 2023, arrivals into Southeast Asia are predicted to reach 89 percent of 2019, while 2024 will witness international visitor arrivals into South Asia at 123 percent of 2019. Under current conditions all three Asian destination sub-regions are predicted to exceed their respective 2019 levels by the end of 2024.

The medium scenario also pitches the strongest recovery for South Asia in 2022 with international visitor arrivals at 38 percent of 2019. Southeast Asia is predicted to reach 67 percent of 2019 levels in 2023, while in 2024, it is expected to reach 101 percent of 2019 levels, with Northeast Asia at 97 percent and South Asia at 95 percent.

However, if the scenario turns severe, recovery is likely to be restricted to South Asia throughout the 2022-2024 period, with 2024 witnessing a 75 percent return to 2019 arrival figures.    

“What is different from previous negative situations is that for the first time, both the origin and the destination policies come into play,” Koldowski said. “Travellers need to not only be permitted to leave their respective ports of origin, and arrive at a destination without too many containment measures, but then they must also be allowed re-entry into their home ports at the end of the trip and again, without too many containment measures.”

What About Air Capacity?

The report states that the return to the capacity levels of 2019 will remain elusive, as overall, just 52 percent of that capacity will be reached in 2022.

As airlines are very proficient at matching demand with capacity, as the former increases, so too will the latter, said Koldowski.

“Nevertheless, capacity is likely to be carefully managed until passenger load and profitability factors increase beyond break-even,” PATA’s Koldowski said. “Flights and capacities are likely to increase to/from viable ports, since grounded aircraft are expensive (and obviously not generating any revenue), while airport slots usage needs to be maintained wherever possible.”

Any near demand increases are likely to be rapidly satisfied, as there are countless aircraft waiting to get back onto profitable air routes.