asian-nations-look-to-hasten-reopening-in-sudden-rethink
Spread the love

When European countries started reopening their borders to one another back in June and tourism within the EU began anew, it raised some envious eyebrows in the APAC region but didn’t make a ripple in terms of policy. Most APAC countries were thoroughly mired in lockdowns; governments were not only maintaining draconian restrictions but reassuring their populations that borders would be open only over their dead political bodies.

How that has changed in just a few short weeks. APAC countries are now making noises about accelerating the restoration of their tourism industries to pre-covid norms. Restrictions are being eased, quarantine periods waived; tourism businesses are being told by politicians to get up and dust themselves off, and airlines are announcing the recommencement of international flights.

Although it is premature to say that the continent is reopening en masse, governments are leaving no doubt that welcoming back tourists is high on their agendas. No government wants to be leading a place that’s not having fun while everyone else is partying. (Except, perhaps, Western Australia’s.) Peer pressure is forcing everyone’s hands.

Huge potential gains

The gains for retailers across much of Asia, and particularly in tourist-oriented businesses in tourism-dependent countries, are likely to be massive.

According to my estimates, based on tourism spending in 2019, Asian retailers, excluding those in mainland China, will be on the receiving end of a US$170 billion ($229.8 billion) sales jolt in 2022 if they should achieve reopening by the new year or shortly thereafter.

The biggest gainer in sheer dollar terms would be Thailand, which stands to notch a US$32.5 billion increase in retail food and beverage sales, amounting to a staggering 6 per cent of GDP. Four other countries could expect an increase of more than $15 billion in the first year: Japan, Macao, Hong Kong, and India. Cambodia can expect a sales boost on the order of US$2.7 billion, which doesn’t seem like much but if you’re a Cambodian it means a lot, because it’s about 10 per cent of the country’s GDP.

The potential gains in countries like Thailand, Cambodia, Macao, and Hong Kong will be felt not just in terms of sales but in employment, too.

Still a few obstacles in the way

But first, even governments at the pointy end of the reopening movement need to eliminate hurdles that will continue to dissuade tourists from showing up.

Thailand, for example, whose economy has suffered immensely during two years without foreign visitors, announced that vaccinated tourists could enter without quarantine from November 1. As always, there is devil in the details though. Vaccinated tourists will still have to spend their first night holed up in a government-approved hotel while they await the result of a PCR test administered on arrival. They also need to apply for a vaccine passport that takes about seven days to process, and have proof of medical insurance to cover covid-related expenses up to $50,000.

These niggling obstacles will cause many would-be visitors to wait or go elsewhere, but Thailand has shown in recent weeks that it is increasingly willing to ease up on the red tape in order to get its vaunted tourism industry rebooted.

Other countries in the region are following suit. Malaysia is accelerating its own reopening plan, announcing that its international doors may now open a crack in November, rather than December, as was mooted earlier. Probably only neighbouring Singaporeans would be welcomed initially, and even they would be able to travel only to limited locations. Still, baby steps.

Singapore itself has already thrown down the welcome mat for vaccinated travellers from the US, Australia, and a number of countries in Europe, although passengers must be tested within 48 hours of departing for Singapore and immediately upon arrival, whereupon they have to go to a hotel and wait for the results. If the test comes back positive, they are set free on the island.

Elsewhere, governments that were dragging their feet are now smelling the coffee. Cambodia, for example, still isn’t giving tourist visas out yet but two carriers have announced the commencement of direct flights from Thailand and the government is urging the country’s tourism-related businesses to start sprucing themselves up to get ready for international visitors.

Scrubbing up for the return of consumers

There is plenty of sprucing up to do: Cambodia, like Thailand, suffered a kind of de-urbanisation during the pandemic, in which the normal developing-country shift of labour from countryside to city was thrown into reverse. Tempting people back may prove more difficult than it would appear because many of these rural ‘refugees’ have become discouraged by the arbitrariness of lockdowns that have, by turns, removed and reinstated, and then removed again, their employers’ businesses over a two-year period.

Meanwhile, the Vietnamese Government is opening its major tourist destinations for international visitors in December. International tourism is worth almost US$6 billion to Vietnam’s retailers, or about 2.3 per cent of the country’s GDP.

Some countries, such as Japan, are still mum about reopening any time soon. In Japan though, international tourist spending is less important to the economy. International receipts are worth about 1 per cent of GDP in a normal year, about half of which goes to retail, food, and beverage. Japan also exports a lot of big-spending tourists, so continuing to have its borders closed is less impactful on the economy.

South Korea is nominally open, but still requires a 14-day quarantine period regardless of vaccination status, so  it is still closed, in effect, to all but the small trickle of visitors who don’t mind spending the first two weeks of their holiday in a hotel room. As in Japan, international tourism accounts for a relatively small chunk of South Korea’s GDP.

Optimism is high

The overall mood across the continent, though, is one of greater optimism that border restrictions are easing faster than governments anticipated a few months ago. Retail and shopping centre industry spokespeople have become more vocal in urging governments to up the pace of reopening. In the big tourism centres of South-east Asia, shops are opening their doors and renovations are ongoing and visible everywhere.

In many instances, the shop or the restaurant that reopens over the next few months will be superior to the old one that stood in its place, with more than just a fresh coat of paint and frequently under new ownership after the previous owner bailed out in the pandemic. These are hopeful signs, but governments around the region can still help by pushing forward their border opening plans. For many retail and food service businesses, there is an awful lot of suffering to alleviate.

The post Asian nations look to hasten reopening in sudden rethink appeared first on Inside Retail.