Learning Hub
ENG
BM
CHI
FAQ on ASEAN Tourism amid China’s Border Re-opening
Over the last three years, ASEAN’s tourism sector experienced one of its worst slumps in tourist arrivals following the Covid-19 outbreak. Hotels were vacant and beaches were empty.
With the lifting of China’s travel restrictions in January 2023, what does the potential return of Chinese tourists mean for the ASEAN economies?
1. How important is tourism to the ASEAN economies?
Blessed with rich cultural diversity and heritage as well as breathtaking landmarks and sceneries, South-East Asia attracts a large amount of tourists every year.
The tourism industry is a major source of income and employment for many ASEAN economies. In the pre-pandemic year of 2019, the tourism sector’s contribution to the countries’ respective gross domestic product (GDP) ranged from 5.6% for Indonesia to as high as 22.5% for the Philippines (Table 1). Prior to the Covid-19 pandemic, employment in the ASEAN tourism sector accounted for up to 20% of the countries’ total labour force in 2019.
Table 1. Tourism Sector’s Contribution to ASEAN-6 Economies
Countries
|
Tourism as % of GDP
|
2019
|
2020
|
2021
|
Philippines
|
22.5
|
4.8
|
10.4
|
Thailand
|
20.3
|
8.2
|
5.8
|
Malaysia
|
11.7
|
3.6
|
4.1
|
Singapore
|
11.0
|
4.8
|
3.9
|
Vietnam
|
7.0
|
3.3
|
2.6
|
Indonesia
|
5.6
|
2.8
|
2.4
|
Source: World Travel & Tourism Council
2. What was the impact of the Covid-19 pandemic on ASEAN tourism?
As tourism is a key sector for the ASEAN economies, movement restrictions imposed to curb the spread of Covid-19 had a great impact on the region’s tourism revenues. For example, international border closures in 2020-2021 led to a sharp 80% drop in tourism spending in the Asia Pacific region to US$90.6 billion in 2021 from US$441.2 billion in 20191.
Over the same period, total employment in the ASEAN-6 tourism sector was estimated to have declined by 5.2 million workers to 32.1 million2. Subsequently, with the gradual lifting of travel restrictions, tourism spending within the Asia Pacific region rose to US$131.4 billion in 2022 with the return of 100.5 million tourists3.
3. What is the trend of Chinese tourists’ contribution to ASEAN tourism?
China’s robust economic growth, rising income levels and growing appetite for international travel are among the reasons why Chinese tourists are the biggest contributors to the global tourism market. In 2019, Chinese tourists spent an estimated US$255 billion1 worldwide, of which 13% was spent in ASEAN countries. Clearly, Chinese tourists have become an increasingly significant source of tourism revenue for the ASEAN region.
From 2010 to 2019, Chinese tourist arrivals in the ASEAN region grew by an average annual rate of 23% before registering a sharp decline in 2020 due to the pandemic (Figure 1).
Meanwhile, the share of Chinese tourists to the total number of tourists in selected ASEAN countries also increased from 2010 - 2019 (Table 2); with Chinese tourists accounting for a significant share in Vietnam, Thailand and the Philippines over the same period.
Table 2: Proportion of Chinese Tourists in Selected ASEAN Countries
Countries
|
Chinese Tourists/ Total Tourist (%)
|
2010
|
2013
|
2015
|
2017
|
2019
|
Vietnam
|
17.9
|
25.2
|
22.4
|
31.0
|
32.2
|
Thailand
|
7.0
|
17.4
|
26.6
|
27.6
|
27.6
|
Philippines
|
5.3
|
9.1
|
9.2
|
14.6
|
21.1
|
Singapore
|
10.1
|
14.6
|
13.8
|
18.5
|
19.0
|
Indonesia
|
6.0
|
9.2
|
12.1
|
14.9
|
12.9
|
Malaysia
|
4.6
|
7.0
|
6.5
|
8.8
|
11.9
|
ASEAN-6
|
7.3
|
13.3
|
16.1
|
19.9
|
21.5
|
Source: AseanDataPortal
4. What are the investment opportunities available from a potential revival of tourism in ASEAN?
With the re-opening of international borders, the following industries are poised to benefit from an expected recovery of tourism in ASEAN:
(a)
|
Hotel & Hospitality: Increased tourist demand for accommodation would lead to higher occupancy rates at hotels and other lodging providers.
|
(b)
|
Food & Beverage: Restaurants, cafes and other food & beverages providers are expected to benefits from higher tourist arrivals.
|
(c)
|
Transportation and tour providers: A pick-up in tourist activities would benefit transportation service providers such as airlines and car rental companies, as well as other service providers such as tour guides and leisure operators.
|
Figure 2: Industries Poised to Benefit from a Recovery of Tourism in ASEAN
5. What is the recent trend of Chinese tourist arrivals in the ASEAN region?
The return of Chinese tourists in ASEAN countries has seen a gradual recovery following the lifting of China’s travel restrictions on 8 January 2023. In 1Q 2023, ASEAN-5 recorded about 1.0 million Chinese tourist arrivals in total, representing 17% of the levels seen in 1Q 2019. Moving forward, based on official targets set by the tourism ministries of the ASEAN-5 countries, Chinese tourist arrivals are expected to recover to 13.0 million in 2023 from 0.8 million in 2022 (Figure 3).
Conclusion
In summary, following the re-opening of China’s international borders in January 2023, Chinese tourists are gradually returning to their favourite holiday destinations within the ASEAN region. Although it may take some time for ASEAN tourism to fully recover to pre-pandemic levels, the potential return of Chinese tourists, coupled with the growth of other tourist arrivals, are expected to contribute positively to the region’s economies over time.
1 United Nations World Tourism Organization (UNWTO)
2 World Travel & Tourism Council
3 United Nations World Tourism Organisation
This article is contributed by Public Mutual and is prepared solely for educational and awareness purposes, and should not be construed as an offer or a solicitation of an offer to purchase or subscribe to products offered by Public Mutual. No representation or warranty is made by Public Mutual, nor is there acceptance of any responsibility or liability as to the accuracy, completeness or correctness of the information contained herein.