Tourism in Asia Hard Hit by Three Factors

Ukraine War and Chinese Lockdowns Add Fuel to COVID’s Devastating Blow

Analysis by Mohan Srilal

COLOMBO (IDN) — The COVID-19 pandemic dealt a devastating blow to tourism across Asia that has been a driving force of economic growth, particularly in countries like Sri Lanka, Maldives, Thailand and Indonesia. Today there’s a trifecta of impacts on the tourism industry in the region first from COVID, then the conflict in Ukraine and lately the lockdowns in China.

Tourism that propelled the small islands nation in the Indian Ocean—the Maldives—into a middle-income country had to close its borders for the first time in 2020, but after its reopening in July 2020 Maldives gradually started to attract tourists because it was seen as a safer location for a holiday with sparsely populated isolated islands. Thus, in 2021 the Maldives attracted 1.3 million visitors. Then issues beyond their control impacted the visitor arrivals from China and Russia two of its biggest markets.

After recovering from the devastating Easter Sunday terrorist attacks in 2019 and the two-year COVID pandemic, Sri Lankan tourism was picking up towards the end of 2021. The conflict in Ukraine dealt a heavy blow to this recovery as Russians and Ukrainians have been coming to Sri Lanka in large numbers for years, especially during the European winter. Ironically when Sri Lanka opened after the COVID lockdowns it were Ukrainian tourists who came in first on a packaged tour.

Added to this is a homemade crisis, the political protests that were mounted across the country beginning in March that crippled an already shaky economy and Sri Lanka attracted world news headlines for all the bad reasons. With many countries issuing travel warnings to their citizens against going to Sri Lanka, the travel industry is now facing an unprecedented crisis that would close down many of the tourist industry service providers in the coming months.

It is ironic that the protestors that were demonstrating against government policies that have brought the country to almost bankruptcy, is cutting the arm of the very industry that should bring in the much-needed foreign currency to overcome the economic crisis.

< Sigiri Frescos is a major tourist attraction in Sri Lanka.| Credit: Kalinga Seneviratne

Before the pandemic, tourism brought in some USD 4 billion in foreign exchange revenue to the country each year. Tourism has been the third-largest foreign exchange earning industry in Sri Lanka, beaten only by worker remittances and the apparel industry. Tourism also has a high value-added component of around 80 per cent, with only a few food items and other items being imported. With substantially reduced income streams, the tourist industry is now in a tailspin, running out of cash—like the government’s Central Bank— to sustain its operations.

“Hotels are struggling to maintain minimal operations. Costs are going up weekly and food costs are skyrocketing. Menus have been pruned down, due to unavailability of food items,” noted Srilal Mitthapala, former President of the Tourist Hotels Association of Sri Lanka in a commentary published by the Daily Mirror here. “Even with the exchange rate appreciation, bringing in some enhancement of the equivalent rupee yields from the US dollar room revenue, the increase in costs outweighs this.”

“Therefore, there may have to be a room rate increase to make operations viable. In the post-COVID environment, when all destinations are trying to entice tourists back, such a rate increase may jeopardise our competitiveness in the world market,” he warned.

China’s lockdowns are also having a huge impact on tourism revenue across Asia, as Chinese tourists have been the economic growth engine for the tourism sector across Asia, especially since the European economic crisis of 2008. As Bloomberg put it recently, the lockdowns have created a “$280 billion black hole” for global tourism. Thailand is facing the pinch most because when the pandemic arrived, over 10 million Chinese visitors have been arriving annually in the kingdom.

Though Thailand’s tourism industry is slowly limping back into life with the famous nightclubs recently allowed to open, yet, the night markets are still deserted and so are the food vending streets that are popular with Chinese visitors.

It is ironic that China which first faced the COVID-19 virus and imposed lockdowns and quickly reopened cities claiming the virus was under control, is now going back into a zero-COVID policy when most other countries in the Asian region (and elsewhere) are learning to live with the virus treating it as endemic rather than a pandemic. China, which exported some 100 million tourists a year before the pandemic has now virtually closed the country to its 1.4 billion population.

Thailand is now looking beyond the Chinese market to help revive its badly hurt tourism industry. Tourism Minister Pipat Ratchakitprakarn told South China Morning Post that he expects Thailand to welcome between 7-10 million foreign tourists this year—but still a fraction of 2019’s 39.9 million. To offset the lack of Chinese visitors, Thailand is now looking at Russia, France, the UK, Germany, Israel and Saudi Arabia.

All travellers entering the country must undergo screening, including a body temperature check, and present the required documents to the Immigration/Health Control officer.  Non-Thai nationals need to apply for a ‘Thai Pass online’ before their journey to Thailand. However, the government has announced this requirement will be lifted on July 1.  Incoming travellers, regardless of their country of origin, are no longer subjected to COVID-19 tests on arrival.

Bali is another tourism hotspot in Asia where most of its people were dealt a devastating blow by the COVID lockdowns. It has opened up slowly to foreign visitors since March this year, but the predominantly Hindu island is now worried they are attracting too many “trashy tourists”, who disrespect the local culture and religion.

South China Morning Post reported that recently, a Canadian man who filmed himself dancing in the nude on Mount Batur, and a Russian influencer who stripped naked for a photo shoot on a 700-year-old tree in a temple compound have insulted the local Balinese. Social activist Niluh Djelantik warned in an Instagram post: “You are welcome to have a good time and enjoy our island. But if you don’t respect us, deportation and consequences are waiting.”

After almost two years of pandemic travel curbs, Bali dropped its quarantine requirement for vaccinated visitors completely in March and resumed the visa-on-arrival process. In 2019, some 6.2 million foreigners visited and their absence in the intervening years has been keenly felt.

In a bid to entice more tourists back, Bali governor Wayan Koster has called for Jakarta to recognise that COVID-19 had become endemic on the island, with cases stable “at 10 to 20” per day and a positivity rate that is “always under 2 per cent”.

In the decade before the pandemic, tourism across Asia has undergone a dramatic transformation with the region no more dependent on serving western tourists and the phenomenal growth in the tourism sector was fuelled by the growing middle classes of Asia travelling in the region, supported by region’s budget airlines and hostel accommodation. The question is whether these days will come back and how long would it take for that to happen? [IDN-InDepthNews – 19 June 2022]

Image: Chinese tourists at Koh Samet Beach in Thailand. Credit: Kalinga Seneviratne

IDN is the flagship agency of the Non-profit International Press Syndicate.

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