At time of writing, India has 1.07 million Covid-19 cases and has suffered 26,816 deaths; south-east Asia has 1.39 million cases with 33,543 deaths; and China has 85,937 cases and 4653 deaths.

The World Tourism Organization (UNWTO) estimates that in 2020, global international tourist arrivals could decline between 20% and 30%. Small and medium-sized enterprises – 80% of the tourism sector – are expected to be particularly impacted.

Travel and tourism employ 57.5 million people in the 21 Asia-Pacific economies. The UNWTO also estimates that during the first quarter of 2020, the pandemic caused a 35% decrease in tourist arrivals in the region, with north Asia declining by 40% and south-east Asia by 33%. It predicts that Covid-19 could cause a global annual decline of between 60% and 80%.

Asia’s tourism has been devastated by strict lockdowns, sealed borders, grounded flights, restricted international travel, and bankrupted businesses. Many travel hotspots are deserted. 

Internal domestic travel is now a key recovery focus task. Some Asian countries, such as China, Japan, Thailand and Vietnam, are promoting domestic travel by offering reduced prices to popular destinations.

A second initiative is ‘travel bubbles’, whereby visitors from countries deemed as low risk from Covid-19 are allowed to visit. A third initiative is to give higher priority to business travellers, to ensure continued connections with external markets. The regional forum Asia-Pacific Economic Cooperation (APEC) is considering incorporating health protocols in its Business Travel Card.

A fourth recovery step is medical trials to reduce quarantine time. Currently, a medical trial is being conducted between Taiwan and Stanford University to reduce the minimum number of days a person who has already tested negative for the virus needs to be isolated to perhaps just 72 hours.

Challenges remain, with restoration of trust in international travel being a key challenge. Travel concerns caused by fear of contracting Covid-19 and repatriation, should a second wave of the coronavirus occur, are much harder to address. Politics also delay travel bubble negotiations.

Disputes caused by Covid-19 are also likely to delay the resumption of existing travel links, such as those between Australia and China. Finally, not all Asian countries share the same idea of having fast border reopenings, especially with the cooler season approaching in the third quarter of 2020. This is a cause for concern since respiratory diseases tend to spread more during cooler weather.

When SARS struck in 2003, the world economy then was growing at 4.3%, when China did not play a key role. When Covid-19 first struck, the world economy was growing at 2.9% in a more interconnected world. Gone are V-shaped growth projections; rather, we now face a survivalist L-shaped recovery over the next few years.

Lawrence Yeo is founder and principal consultant of AsiaBIZ Strategy, a Singapore-based management consulting firm providing Asia market research, business strategy development and export/FDI promotion services.

This article first appeared in the August - September edition of fDi Magazine.