Southeast Asia regional economy to shine with tourism surge

Wednesday, February 15, 2023

Analysts claim that the recent relaxation of restrictions in China will be beneficial to the economies of Southeast Asian countries, which have been adversely affected by the COVID-19 crisis for the past three years. The increase in private expenditure in China due to the changes is a welcome sign for the members of the Association of Southeast Asian Nations, as the country is their largest trading partner as well as tourism market.

Professor Yeah Kim Leng from Sunway University in Kuala Lumpur remarked that Southeast Asia has been anticipating the comeback of Chinese tourists for a while, as they were a major contributor to the region’s tourism industry before the pandemic.

“The emergence of the tourism sector from its three-year doldrums caused by the pandemic will be fast-tracked by (changes to) China’s COVID-19 policy and the normalization of social and economic activities throughout the region,” Yeah said.

The French financial institution, Natixis, stated that Chinese holidaymakers had become a significant factor in the global tourism industry before the outbreak of the Corona virus, with their expenditures growing to 16 percent between 2010 and 2019. The bank said that the arrival of Chinese vacationers “can be beneficial for many tourism-dependent economies and sectors, especially in Asia”.

United Overseas Bank of Singapore stated that the return of Chinese tourists to Southeast Asia will support the region’s growth in 2021. It predicted that Chinese tourists’ expenditure will make up to 9.2 percent of the regional economy. The bank, mentioning data from the online travel booking service Trip.com, said that outbound flights from China increased 254 percent on 8th December, a day after Chinese authorities declared they were easing coronavirus regulations. Southeast Asian countries were among the most sought-after destinations.

More than 30 percent of Chinese travelers in ASEAN went to Thailand in 2019, and analysts expect Thailand to remain the top beneficiary of China’s outbound tourism.

Yuthasak Supasorn, governor of the Tourism Authority of Thailand, said Chinese tourists contributed much to Thailand’s tourism industry.

“Although the number of tour groups from China is still far less than before the pandemic, we believe we will have more Chinese tourists back in Thailand soon.”

Southeast Asia has long been a favorite destination for Chinese tourists. United Overseas Bank said that more than 32 million Chinese travelers visited the region in 2019, which is 22 percent of all visitors to the region. Nearly 17 percent of Chinese tourists’ $1.5 trillion global travel receipts were spent in the ASEAN region in 2019.

Analysts stated that the fresh regulations introduced by China to manage the pandemic could help to minimise the negative effects of external pressures on Southeast Asia. Manu Bhaskaran, the CEO of Centennial Asia Advisors in Singapore, declared that apart from aiding with the revival of the travel and tourism sector in the region, increased expenditure in China could stimulate the need for imported goods.

“Southeast Asian countries export commodities and intermediate goods to China, such as all kinds of components, so there will be a benefit.”

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