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Adapting Asia Pacific tourism to a post-pandemic future

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Participants of a tour group of 4000 Chinese tourists take pictures in front of the Chapel Bridge during their visit to the central Swiss city of Luzern, Switzerland. (Photo: Arnd Wiegmann/Reuters)

Authors: Jun Wen and Fangli Hu, Edith Cowan University and Danni Zheng, Fudan University

The Asia Pacific tourism industry was thriving before the COVID-19 pandemic, driven by strong demand from Chinese tourists with increasing disposable incomes.

Pre-pandemic, Chinese tourists’ arrival to the Asia Pacific region was forecast to increase to 150 million by 2020, with an aggregate expenditure of US$230 billion. But this did not materialise due to pandemic-related travel restrictions that still affect Chinese tourists today.

Historically, Chinese tourists tended to travel as part of package trips involving group tours with multiple destination stops. This trend is changing as younger Chinese tourists favour more independent forms of travel that allow greater flexibility. But the thriving tourism industry was completely disrupted by the pandemic. The Asia Pacific suffered an 84 per cent plunge in overseas visitors and recorded a 300 million decrease in tourist arrivals. This led to a massive slowdown in the aviation, hotel, restaurant and tourism industries that still lingers today.

As Asia Pacific’s travel and tourism industry slowly recovers to pre-pandemic levels, some key trends have emerged. There is higher demand for rural and coastal destinations that have natural elements and offer more privacy compared to urban destinations.

This is influenced by COVID-19 lockdowns which were particularly harsh for those living in high-density city apartments. Ongoing COVID-19 concerns mean that tourists tend to keep their travel plans simple, flexible and close to home.

There has been a significant increase in eco-tourism and wellness-based tourism. Since the pandemic, physical and mental health awareness has increased. This is part of a broader trend of younger tourists seeking socially conscious and sustainable tourism that supports the local community and the environment.

The tourism industry is largely driven by the private sector, but it still depends on an intricate network of government rules, inter-country travel agreements and infrastructure investments. In the short term, tourist destinations and governments need to be vigilant about protecting against overtourism as travel rebounds in key markets — excluding China — in the Asia Pacific region.

Overtourism is defined by UNWTO as ‘the impact of tourism on a destination… that excessively influences perceived quality of life of citizens and/ or quality of visitors’ experiences in a negative way’. Contemporary youth emphasise sustainability and this provides opportunities for governments to promote new sustainable tourism initiatives and enterprises.

The future of tourism across the Asia Pacific must include diversification that extends beyond the traditional demographic of overseas visitors. In 2019, domestic tourist expenditures across the Asia Pacific reached an all-time high. Destinations must be promoted to domestic markets to support the quick return of visitors in the short term.

In the medium term, destinations should strive to diversify visitors and build resilience. The pandemic has inadvertently led to some silver linings by reducing overtourism, which has dispersed job creation and the economic benefits of tourism spending for top destinations, while supporting tourism beyond these destinations.

The tourism industry can recalibrate the travel market to promote interregional travel and redress the balance away from China in the short to medium term. Chinese outbound tourism is not forecast to restart until at least 2023  and will not return to its pre-pandemic levels until 2024 due to China’s zero-COVID-19 policy.

Beijing has remained firm with its zero-COVID-19 policy, which effectively bans outbound travel. International flights are severely restricted and international arrivals are subject to strict quarantine. Although China is easing its quarantine and travel restrictions, the timeline for a return to ‘normal’ remains unpredictable.

Hong Kong’s tourism industry will likely take two to three years to recover. While the current ‘0+3’ quarantine policy has attracted some Asian tourists to Hong Kong, it is still insufficient to boost tourism. But there are still opportunities for Hong Kong tourism investors.

The gradual progression of the 0+3 policy toward the complete removal of entry quarantine restrictions and the continued promotion of quarantine-free customs clearance for travellers from mainland China provides a glimmer of hope for Hong Kong’s tourism recovery. Once mainland China’s outbound travel resumes,…

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Getting Vietnam’s economic growth back on track

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Vietnam’s economy grew 8% in 2022 but slowed in 2023 due to falling exports and delays in public investments. The economy’s future depends on structural reforms and reducing dependency on foreign investment.

Vietnam’s Economic Roller Coaster

After emerging from COVID-19 with an 8 per cent annual growth rate, Vietnam’s economy took a downturn in the first half of 2023. The drop was attributed to falling exports due to monetary tightening in developed countries and a slow post-pandemic recovery in China.

Trade Performance and Monetary Policy

Exports were down 12 per cent on-year, with the industrial production index showing negative growth early in 2023 but ended with an increase of approximately 1 per cent for the year. Monetary policy was loosened throughout the year, with bank credit growing by 13.5 per cent overall and 1.7 per cent in the last 20 days of 2023.

Challenges and Prospects

Vietnam’s economy suffered from delayed public investments, electricity shortages, and a declining domestic private sector in the last two years. Looking ahead to 2024, economic growth is expected to be in the range of 5.5–6 per cent, but the country faces uncertainties due to geopolitical tensions and global economic conditions.

Source : Getting Vietnam’s economic growth back on track

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Thailand’s post-pandemic economic recovery still trailing behind

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Thailand’s economy is struggling to recover from the impact of the COVID-19 pandemic, with slow growth in GDP and GDP per capita. The government has implemented short and long-term policies to address economic challenges.

## Thailand’s Economic Slowdown

Thailand’s real GDP and GDP per capita have yet to outpace pre-pandemic figures, unlike other ASEAN countries. The Thai economy was severely affected by the pandemic, causing a slow economic recovery. The country’s large informal economy and dependence on tourism made it particularly susceptible to the impacts of the pandemic. While economic growth in 2023 was driven by activities in the travel sector, the manufacturing sector continued to contract, and merchandise exports continued to decline.

## Government’s Economic Policies

The new government’s short-term economic policies include providing a one-time digital cash payment to approximately 50 million residents, debt relief measures, and efforts to cut energy and electric train costs. Long-term economic measures consist of new free trade agreements, green industry projects, and a land bridge project. However, these measures have faced criticism from Thai economists due to significant fiscal implications and rising public debt-to-GDP ratio.

## Challenges in International Trade and Industrial Policies

Thailand’s new government is looking to boost international trade through free trade agreements. However, concerns are raised regarding the effectiveness of FTAs in driving global value chains and boosting trade. Additionally, industrial policies that emphasize domestic value added are being reconsidered in light of evidence that it runs counter to development from engaging in global value chains. The success of Thailand’s economic growth goals will depend on how supply-side constraints are addressed and resolved.

Source : Thailand’s post-pandemic economic recovery still trailing behind

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The United States and China’s complex cooperation and rivalry continue

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The US-China relationship in 2023 had complex economic and technological dynamics. While trade remained substantial, there’s also intensified technological competition, as both countries seek to enhance communication and cooperation in 2024.

Economic and Technological Dynamics

The world has witnessed a complex tapestry of economic and technological dynamics between the United States and China, with 2023 marking a period of continued economic interdependence and technostrategic rivalry. Despite a nominal dip in US imports from China, bilateral trade volumes remained substantial. US exports to China totalled US$135.8 billion and imports stood at US$393.1 billion for January–November 2023.

Economic Relations and Tensions

Policymakers, cognisant of the perils inherent in economic decoupling, have started to eschew such a course. High-level meetings and initiatives offered a positive glimpse of potential bilateral relations. In contrast, the high-tech landscape in 2023 was tense. The United States reinforced its global stance against China’s ascendancy, supported by US political parties.

Future Prospects

Moving into 2024, the US–China economic and technological relations are poised to undergo a shift, characterised by enhanced communication, selective cooperation, and balanced management of both interdependence and competition. There is a mutual understanding among senior officials of the potentially devastating repercussions associated with misunderstandings and miscalculations in the US–China relationship. 2024 is expected to witness increased economic dialogues between Beijing and Washington.

Source : The United States and China’s complex cooperation and rivalry continue

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