Dr Samuel Barbosa Da Cunha, CEO & Chairman at Bar Trading Japan on the travel and tourist industry in Asia and what it will take to bounce back.
COVID-19 has presented us all with so many challenges this year. And while work, health and family remain the top priorities, its impact on holiday and travel plans is also damaging economies and our mental health.
In July, much of Europe opened its borders for summer holidaymakers to enjoy a subdued beach holiday. But the optimism didn’t last long, particularly for those in the UK. While thousands still boarded a plane to Greece, Spain or Italy, they quickly found that constant changes to official travel recommendations affected the enjoyment of their summer break.
Travel anxiety is high for visitors and destinations alike
Anyone venturing to travel this year is checking Government websites every day to see what’s changing. And this uncertainty and anxiety is now synonymous with the pandemic. The free and easy days of flying wherever we want when we want to seem a long time ago. Of course, this is temporary and our airlines, travel sectors and tourism numbers will recover. We just don’t know when.
The World Travel & Tourism Council (WTTC) puts the contribution of the global travel and tourism sector at 10.3% of the world’s total GDP for 2019. It also accounted for 330 million jobs worldwide. Between 2010 and 2019 the sector experienced its highest ever growth rate, thanks to people having more disposable income, the rise of low-cost airlines and the accessibility of booking online.
Turning to South Asia, travel and tourism accounted for 6.6% of the region’s 2019 GDP. And COVID-19 came at a particularly bad time for countries like Nepal. Its tourist industry has been forced into near total shutdown, following an optimistic start to 2020 with the Government announcing it as the ‘Visit Nepal Year’. A campaign aimed at attracting 2 million tourists has obviously come to nothing, and the job losses are catastrophic. All the employees along the tourism value chain, from tour operators to Sherpas, mountain guides and trekking agencies have completely lost their income.
Smaller Asian countries struggling due to lack of tourism
Nepal highlights just how much many countries in this region rely on tourism and travel – a sector previously considered relatively impenetrable. It’s a similar story throughout Asia. For example, the Republic of Maldives relies on tourism for a third of its national revenue. The impact of COVID-19 on the economy can’t be understated.
For many countries recovery starts with attempts to rebuild consumer confidence. The Maldives opened up to tourists in mid-July, as did many other countries not just in this region but globally. Governments have implemented strict protocols to reassure people that visiting is safe. As part of this move, the WTTC began issuing a ‘Safe Travels’ certification. This stamp of approval is designed to show potential visitors which establishments have adopted the global standardized health and hygiene regimes. The stamp is backed by the UN World Tourism Organisation (UNWTO) and is used across every aspect of the tourism value chain, from airports to transport and hotels to restaurants.
Based on expert analysis of current consumer thinking, we can expect travel to increase in stages. Projections indicate that the recovery of the travel industry will be linked with proximity to start with. This will mean a gradual shift from domestic travel to regional and eventually an increase in intercontinental travel. This obviously means countries with an established large domestic market in a better position. Japan and India, for example, are able to create opportunities for stimulating growth by actively promoting regional and local tourism.
Japanese tourism industry targets ‘micro tourism’ and domestic travellers
Here in Japan the answer could lie in micro tourism. The idea of a local getaway within 30 minutes of home isn’t new in Japan. It was big in the 1970s when people had less money and shorter vacations. The obvious benefit to micro tourism in the age of COVID-19 is the lower levels of anxiety associated with it. There are far fewer inbound travellers in Japan thanks to COVID-19 and a marketing push on micro tourism for local appears to be working.
Domestic travel in every country has huge amounts of potential. In Japan before the pandemic, it amassed sales worth 22 trillion Yen. Over the same time period, travellers coming into the country brought in sales of 4.8 trillion Yen. That’s a notable difference and now is the time to focus on the needs of internal domestic tourists.
Whatever local measures are taken to boost tourism, long-term it’s critical that Governments inject capital investment into the sector. Its potential for growth and development can’t be lost. And we are seeing this with major investments still ongoing throughout SE Asia. For example. The International Finance Corporation (IFC) announced a $175 million investment in a holding company that funds the development of hotels in the Maldives and Sri Lanka.
Innovative strategies are needed for travel and tourism
Other countries such as Bhutan are looking at this difficult time for a way to strategise its growth in travel and tourism. Interestingly, Bhutan is also the only country in South Asia with no COVID-19 deaths so far. Its tourism policy has always been ‘High Value, Low Volume’, underlined by the promotion of sustainable tourism above all. The Government is working on strengthening tourism infrastructure in the country and coming up with new products and services.
And this has to be the answer for the recovery of travel and tourism around the world. Every country continues to face the challenges created by the pandemic. But it’s still evident that there is huge potential across travel and tourism that can be used to contribute to the economic recovery of each region. Investment in the infrastructure is needed so that regions can remain competitive and jobs can be retained across the sector.
Innovative solutions and long-term plans to not only rebuild the sector now, but with an eye on future resilience must be the focus. In countries where recovery plans are already underway, it’s clear that more private/public cooperation is needed to ensure that pandemic protocols are adhered to. Communication is another major factor, as there must be consistency when reaching out to potential travellers in order to rebuild their confidence.
And of course, tourists and visitors themselves will need to play their part in dealing with inevitable uncertainties. Regulations are changing all the time to help countries manage local outbreaks, changing numbers of cases and the general unpredictability of COVID-19.