Predictions of a tourism future that is driven by sustainability priorities post-lockdown are met with the reality of domestic travel demand driven by accessibility, pricing and branding. While the journey to a tourism reset seems fraught with obstacles, industry leaders say the effort is worth it.
By TTG Asia reporters
Early predictions by industry observers that meaningful travel would come into favour as tourism recovers, inspired by reflections on life and responsibility to Mother Nature during the lockdown, are turning out to be a dream that will not yet be entirely fulfilled.
While there has been some domestic travel demand for off-the-beaten-track or rural destinations as well as places that were once bustling with tourists but now deserted, most travel and tourism suppliers say that recovery today is driven more prominently by destinations that are accessible by self-drive, particularly if they offered an island or resort sojorn with an established hotel brand, and a stronger desire for attractively-priced deals.
Thailand, Malaysia and Vietnam are among the first countries in the region to see a revival of domestic travel, and as such serve to demonstrate the potential and limitation of domestic travel as well as forecast how recovery may play out in other locations.
Suyin Lee, managing director of Discova, found that Thai customers prioritise travel convenience and ability to “explore at their own pace with social distancing”, and therefore favour self-drive holidays.
The preference for accessibility extends to Vietnam. According to Lee, off-the-beaten-track destinations that are within two- to eight-hour drives, such as Ha Giang, Central Highland, Mekong Delta and beaches like Nha Trang, Phan Thiet, are rising in popularity.
Vivu Journeys in Vietnam, which has switched to servicing domestic customers, is now building up new products for customers in secondary locations two to three hours from the main cities, revealed Thuy Tran, country manager.
Christian Stoeckli, general manager at Diethelm Travel Thailand, observed some interest in “life in the countryside” but found that most travellers are drawn to Pattaya and Hua Hin or to temples around Bangkok.
Jean-Baptiste Richard, general manager, EXO Travel Thailand, has observed “a deep interest in rediscovering some classic parts of the country that were somehow left behind in the mind of domestic travellers”. Destinations like Koh Tao, once major international tourist draws, are welcoming more Thai residents who favour newly empty and uncongested beaches and dive sites.
The appetite for meaningful travel appears stronger among corporate clients. In Malaysia, local corporate programmes are gravitating towards unique activities with a Corporate Social Responsibility component, “as (participants) are aware of the impact Covid-19 has had on travel and the local communities,” Lee elaborated.
While the preference for meaningful experiences is not as strong and consistent as industry leaders had expected to see, a recovery that is led by sustainable tourism products could help ensure a safer return to travel.
Chitpol Watcharapan, senior director, international programmes at ethically responsible travel agency Local Alike, believes that community-based tourism (CBT) is the way of the future. He explained: “The capacity of local communities is in itself too small for mainstream tourism, which automatically reduces risk (of infections). In the past, we may have regarded mass markets as being desirable; now it turns out that the smaller capacity of CBT helps (the concept) to shine because it means less health risk.”
Recovery in focus: unequal distribution
The current state of tourism recovery has highlighted the persistent problem of unequal tourism distribution, where not all tourism destinations are seeing the same rate of business rebound.
Travel professionals have also observed that city hotels in all three countries are absorbing a heavier impact than popular resort destinations, and that resorts within driving distance are performing best.
Illustrating the impact, Boon Kwee Lim, chief operating officer of Dusit Hotels and Resorts, shared that while his Chiang Mai and Phuket hotels were suffering even with deep discounts, his property in Korat, a three-hour drive from Bangkok, has been frequently booked out at normal rates post-lockdown. Chiang Mai and Phuket are best accessed from Bangkok by short flights, although lengthy train/bus rides are also available.
At the same time, countries that have shut their state borders due to a resurgence of infections are not seeing major domestic movements. The International Air Transport Association (IATA) stated in a news release at the end of September that “domestic markets in Australia and Japan actually regressed in the face of new outbreaks and travel restrictions.”
On a broader scale and on a positive note, initial travel and tourism recovery has served to emphasise the value of domestic tourism. While often overlooked in importance compared to international arrivals, UNWTO data from 2018 showed that domestic tourism was already six times that of international arrivals and accounted for nine billion domestic trips globally pre-Covid.
Taleb Rifai, former secretary general of the United Nations World Tourism Organization (UNWTO) recently stated during a panel at the Virtual Destination Mekong Summit that the crisis has put domestic and regional tourism squarely at the forefront where they belong, serving as a wake-up call to the travel industry.
IATA data has found that domestic traffic recovery is outpacing international traffic. Indonesia’s Air Transport Statistics showed a 135.7 percent spike in domestic passengers from June 2020 to July 2020, following a 79.7 percent decline from July 2019 to July 2020.
Travel data and analytics firm ForwardKeys found that search ratios between domestic and international flights have more than reversed year-on-year between 2019 and 2020 in many countries.
“We are seeing domestic travel in countries such as China and Vietnam soaring due to pent-up demand. For instance in China, domestic travel has surpassed pre-Covid levels in the weeks leading up to Golden Week (October 1-7),” shared Jameson Wong, APAC director of ForwardKeys.
Obstacles to recovery
Despite the latent curiosity of domestic travellers that industry players can leverage before a full recovery of global travel, there exists a concern that economic devastation will weaken spending capability.
Stoeckli pointed out that “the economic situation and steadily growing unemployment can and will break (current domestic travel demand)”.
Sharing the same concern, Diethelm Travel Malaysia’s managing director, Manfred Kurz, noted that many Malaysians who have lost their job or facing the threat of unstable income “don’t have the financial (ability) to explore the country during their holidays, although rates are very low”.
Domestic tourism is also unlikely to provide sufficient cushion against the pandemic’s blow to overall tourism performance. Richard noted that two-thirds of Thailand’s tourism income usually came from foreign travellers – a contribution that the domestic market will not be able to achieve.
Laurent Kuenzle, CEO, Asian Trails, also highlighted that domestic tourism does not “support the entire tourism industry with (expenditure on) tours, transfers and other local services” like international tourists do.
Yet another obstacle to domestic travel recovery is the threat of new Covid-19 infections. “People have to feel safe or they won’t travel,” declared Kuenzle.
Fortunately, according to ForwardKeys’ Wong, one of the interesting observations is that “with each second or third subsequent wave of infection, the impact (on tourism) is less pronounced”.
Kien Tran Trong, chair of the Vietnam Tourism Advisory Board, backed this assertion, saying that Vietnam’s domestic tourism was quicker to recover from its second wave in Danang, where the lockdown was applied only to specifically affected regions. This could be a lesson to be learnt for countries that are just experiencing their second wave.
Creative incentives needed
To inspire both domestic travel as well as a sustainable approach to travel, a different marketing approach must be taken.
Iskandar Mirza Mohd Yusof, senior communications director at Tourism Malaysia, said travel and tourism players have to “re-strategise and come up with more interesting and creative packages to allow Malaysians to enjoy an affordable holiday domestically”.
As such, Iskandar predicts a wave of niche products, such as sports and wellness, gaining success as well as a rise in ecotourism and experiential tourism. “Rural areas and off-the-beaten-track destinations will be more popular, especially among younger and adventurous travellers,” he stated.
Nithee Seeprae, the Tourism Authority of Thailand (TAT) executive director for the Advertising and Public Relations Department, and former TAT executive director of the Southern Region, shared that the Thai market responds well to incentives such as seeing their favourite celebrities visit destinations. “Phuket fared much better after pop icon Yaya Urassaya Sperbund was seen visiting the island,” he shared.
He pointed out that market players might need to get more creative with their incentives, for example, segment their markets more carefully, or target particular groups according to lifestyles and interests.
The TAT has been successful with its CBT promotion to domestic travellers. The 20 trips it arranged to local communities in the south, which included a social responsibility component, such as beach clean-ups, received good response from hundreds of trip-goers.
Some Asian governments have also resorted to subsidising cost of travel to encourage their residents to head out and support an ailing industry. In Singapore, all adult citizens are given S$100 (US$73.70) worth of The SingapoRediscovers Vouchers to be used on staycations, leisure attractions and local tours. Japan’s Go To Travel campaign dishes out subsidies of up to 20,000 yen (US$190) per day for locals on domestic trips.
The desire for travel coupled with tourism marketing initiatives have helped to trigger domestic interest. According to Sojern’s travel data, the Indonesian government’s marketing initiatives to boost safe domestic travel have lifted hotel search performance. While numbers in May were down 70 percent since January 2020, they have steadily improved and are now only down 35 percent.
Developing for the future
Taking these initial recovery travel performances into consideration, global and regional tourism organisations are of the view that a strong and sustained travel recovery will require committed development of the domestic tourism market, especially to secondary and lesser known locations; a rebalance of tourism development and environmental considerations; as well as more intense public/private cooperation to kickstart international travel.
Mario Hardy, CEO of Pacific Asia Travel Association (PATA), emphasised that this is a great time for countries in the region to shift their focus to domestic travel, stating that the development of secondary locations will be key in making a sustainable recovery.
This is something that Thailand has done well, he opined, indicating that countries like the Philippines and Indonesia are also working towards these goals, which will pay back handsomely in the long run although it may be more challenging for them due to their extremely spread-out geography.
According to Hardy, public and private stakeholders should be on the lookout for opportunities to highlight secondary destinations and their draws by organising events or conferences in new locations, as these can be very effective ways to put these destinations in the spotlight and uncover their hidden charms.
Also training an eye on the big picture, WTTC’s spokesperson said the rise in preference for remote destinations “could be an amazing opportunity for the development of new destinations within countries” and allow them to “benefit from all tourism has to offer, including its tremendous economic and social impact”.
There is value in stimulating all tiers of travellers to travel sustainably, including local communities to travel among themselves, opined Nithee. “While currently there is a trend to travel to luxurious destinations, ultimately people must come back to reality, which is financially sustainable travel and seeking quality travel experiences. It’s something that the TAT has been campaigning for, and that people are starting to pay more attention to,” he said.
Ary Suhandi, executive director of the Indonesia Ecotourism Network, a non-profit organisation focusing on developing and promoting ecotourism in Indonesia, called for a tourism reset and a return to the fundamental principle guiding tourism development which requires advancements to be balanced with ecology.
Referencing the current focus on health and safety guidelines, Ary said these protocols are not new to tourism.
“Safety, cleanliness and order are part of the Sapta Pesona (seven charms) principles that Indonesia has set to develop a destination sustainably,” he explained. Sapta Pesona, an action programme introduced by the late Soesilo Soedarman, the former minister of tourism, post and telecommunications in the late 1980s, emphasises steps that tourist destinations must comply to attract travellers.
“Social distancing is also not new. In ecotourism, we call it carrying capacity, the maximum number of people in one place at one time. It is just that we have not practiced them diligently or have forgotten,” he added.
Balancing sustainability and economic recovery
Maksim Soshkin, research and analysis specialist, Shaping the Future of Mobility, World Economic Forum (WEF), recognises that sustainable development may take a backseat to economic recovery for some tourism stakeholders struggling with the current business fallout.
However, there are many areas in which the sector’s economic recovery is based on reaching sustainability goals, and part of the WEF’s mission is to identify those areas, shared Soshkin.
“For instance, Covid-19 has led to increased demand for nature destinations. However, the success of those destinations will depend on how well-protected natural resources are,” he said.
Many of the tourism industry’s sustainability challenges cannot be resolved by just sector participants, he added. This is where WEF comes into the picture, leveraging its convening power to bring together diverse and widespread groups of stakeholders to solve problems that cannot be tackled individually.
“For example, to develop a competitive and sustainable tourism economy, collaboration is required between sector companies, public authorities, ICT players, infrastructure developers, environmental groups and residents, just to name a few stakeholders,” explained Soshkin.
“Sustainable development means expanding the number of stakeholders involved, which leads to coordination issues. Moreover, everyone from consumers to DMOs often lack real-time, quality data to make sustainable decisions,” he added.
“Technology also needs to be appropriately leveraged to help solve sustainability challenges, while mitigating potentially negative impacts such as reduced employment. WEF helps tackle such hurdles by acting as a platform for decision makers from all of these areas to meet and work together.”
Partnerships for the future
Executives at leading travel and tourism organisations also regard closer cooperation as the key to bringing the travel and tourism industry closer to a strong and sustained tourism recovery.
In UNWTO’s Global Guidelines to Restart Tourism, public and private collaboration is identified as one of the key guidelines to recovery. As well, WTTC observed that based on past crises, “public and private collaboration, along with global coordination, is key to a fast recovery”.
The WTTC has described Covid-19 as an “unprecedented crisis” which will “require a high level of global collaboration.” To this end, the organisation has created its Safe Travels stamp and global protocols, “to lend consistency to destinations across the globe and instil confidence in consumers”.
Despite numerous challenges to ensure travel and tourism’s restart is indeed sustainable, Harry Hwang, director, regional department for Asia & the Pacific at the UNWTO, observed a “need to see what the opportunities are for us to prepare and work together”.
Until then, the industry must heed the lessons to date of domestic tourism initial restart that uneven distribution of benefits, incentive dependant growth and demand focus on major centres require creative partnerships to ensure economic recovery does not exclude sustainable recovery.