International travel remains essentially on hold across Asia-Pacific region

THE decrease in global international tourist arrivals deepened in 4Q 2020 after a short-lived improvement in cross-border mobility in 3Q 2020.

Easing in border controls led by European countries was disrupted by a second wave of COVID-19 infections, triggering renewed, albeit less stringent, lockdowns globally.

Although the second wave is easing, it continues to weigh on an already fragile recovery outlook for tourism, and will prolong the impact on related sectors in the coming year, according to Fitch Ratings.

“International travel remains essentially on hold across the Asia-Pacific region (APAC) despite the region’s relative success in containing the coronavirus,” observed the credit rating agency.

Tourist arrivals in APAC economies fell by 84% in 2020, steeper than the 74% contraction globally, according to the World Tourism Organization.

Many APAC sovereigns have strict controls on international tourism to stem imported cases, and the restrictions were tightened in recent months. New cases flared up again in Thailand and Malaysia in late 2020 but have begun to decline modestly more recently.

“We project a slow return in international tourism flows across APAC to begin in 2H 2021, but arrivals will remain well below pre-pandemic levels,” noted Fitch Ratings.

“Even these modest projections depend on progress in virus containment and effective vaccine distribution.”

China had administered 40.5 million vaccine doses as of Feb 9. Roll-outs are underway in Singapore, India, Indonesia and Sri Lanka, and others plan to start distribution in 1Q 2021.

Some of APAC ‘s most tourism-dependent economies such as the Maldives and Macao have eased quarantine requirements for tourists with coronavirus test certificates, and saw a mild recovery in arrivals from 4Q 2020.

On the bright side, domestic air travel in China has nearly recovered to pre-pandemic levels.

Other countries in the region have also seen signs of recovery in domestic flights. Meanwhile, hotel occupancy rates have been picking up due to local pent-up demand for travel, although much of it has been supported by quarantine requirements of returning residents.

“In the months ahead, we expect more governments to try to resume international travel via two-way ‘travel bubbles’ including those that were suspended due to the recent resurgence in the virus (ie Singapore-Hong Kong and Australia-New Zealand).,” projected Fitch Ratings.

“However, a broader and more sustained resumption of international tourism flows in APAC will likely only materialise beyond 2021.” – Feb 25, 2021

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