Fitch Ratings: What Is the Outlook for Tourism in Asia

The international tourism recovery in APAC has generally been trailing the rest of the world, due in part to more cautious easing of border restrictions and China’s stringent controls on cross-border travel. Fitch expects the recovery will gain greater traction and turn increasingly broad-based in 2023, underpinned by pent-up demand for travel, stepped-up reopening efforts among lagging destinations, continued improvement in international flight capacity and a slow revival of Chinese outbound tourism.

A full recovery of international tourism to pre-pandemic levels may take a few years in many APAC countries.

buy hydroxychloroquine online no prescription pharmacy

We assume China will relax its “dynamic zero-Covid” policy only gradually from 2023, and further Covid-19 outbreaks remain a key risk of future setbacks.

Moreover, we anticipate that multiple challenges could dampen consumer confidence and impede a sustained tourism recovery in APAC, such as slower global growth with a likely recession in Europe and the US, high energy prices and geopolitical uncertainty.

South Asia has led the tourism recovery across APAC. The Republic of Maldives is already practically back to pre-pandemic levels, while India and Sri Lanka have had weaker tourist inflows, though still stronger than many APAC peers. However, we expect the political turmoil and economic crisis with shortages of food, fuel and electricity in Sri Lanka will weigh on its near-term tourism recovery prospects.

Tourist inflows have been trending up recently in the Pacific and southeast Asia, as more countries have fully reopened borders and eased quarantine and tourist visa requirements. We expect recovery in northeast Asia will remain relatively subdued in 4Q22, as restrictive border policies and quarantine rules are maintained to varying degrees, especially across the greater China region.

buy keflex online no prescription pharmacy

Travel prospects are a key rating driver for some tourism-dependent sovereigns. International tourism receipts were at least 5% of GDP in 2019 for two-fifths of Fitch-rated APAC soveriengs, led by Macao (75%) and the Maldives (56%), followed by Thailand (12%), Hong Kong (9%), Malaysia (6%) and Sri Lanka (6%). The pandemic shock could have an enduring impact on growth prospects, external service balances and labour markets of some APAC economies, should the tourism recovery be more protracted than we anticipate.

Strong intra-regional tourist flows such as from India and long-haul European travellers support the tourism recovery in APAC. We expect that a return of Chinese tourists – when it comes – will facilitate recovery in destinations where Chinese tourism was formerly an economic growth driver, such as Hong Kong, Macao, Thailand and Vietnam.

Notify of
Inline Feedbacks
View all comments
Would love your thoughts, please comment.x