Pressing the Reset Button on Tourism

Below is the number of annual foreign tourist arrivals in nine selected Southeast Asian countries from 2011 to 2019.

  201120122013201420152016201720182019
1Cambodia2,8823,5844,2104,5034,7755,0125,6026,2006,700
2Indonesia7,6508,0448,8029,43510,40711,51914,04015,81016,100
3Malaysia24,71425,03325,71627,43725,72126,75725,94825,83026,100
4Philippines3,9174,2734,6814,8335,3615,9676,6217,1278,260
5Singapore13,17114,49115,56815,09515,23116,40417,42518,51019,100
6South Korea9,79511,14012,17514,20113,23117,24213,33615,34717,502
7Taiwan6,0877,3118,0169,91010,43910,69010.73911,07011,840
8Thailand19,09822,35426,54724,76029,88132,53035,38138,28039,797
9Vietnam6,0146,8487,5727,8747,94410,01312,92215,50018,000
 Sub-Total93,328103.078113,287118,048122,990136,134141,965153,674163,399
 % Annual Growth (9 countries) 10.4%9.9%4.2%4.1%10.6%4.3%8.2%6.5%
 % Annual Growth (Philippines) 9%9.5%3.2%10.9%11.3%11%7.7%15.2%

China, the world’s biggest market for outbound tourism, contributed a total of US$262.1 billion to countries they visited in 2019 from some 166 million outbound Chinese tourists, representing around 12% of their population. The Philippines attracted 8.26 million foreign tourists in 2019, a million higher than 2018, with 1.74 million coming from China, but that total arrival number is far less than the total number of visitors from China going to Thailand alone. A total of 11 million tourists from China visited Thailand in 2019 out of 39.8 million foreign tourists.  While China is the Philippines’ second biggest tourism customer next to South Korea, the Philippines is not in China’s top 10 favorite destinations: Hong Kong, Thailand, Japan, Vietnam, South Korea, Singapore, Indonesia, Malaysia, Russia, USA and Cambodia. It also accounts for less than 1% of China’s outbound tourism.

I have noted the following:

  1. Thailand overtook Malaysia as the regional tourism leader briefly in 2013 but pulled away starting 2015, now with 24.3% relative market shares, from 20.4% in 2011. Former regional leader Malaysia’s 26.5% relative market share in 2011 has been reduced to 16% by 2019. Malaysia’s attractiveness as a tourist destination has been steady for years, but it has started to flatten for the last three consecutive years since 2016.
  2. The countries with the biggest foreign tourism growth for the last 8 years (2019 compared to 2011) have been: 1) Vietnam 3 times, 2) Cambodia 2.32 times, 3) Indonesia 2.1 times, 4) Thailand 2.08 times, and 5) Philippines 2.04 times.
  3. The countries with the biggest foreign tourism growth for the last 3 years (2019 compared to 2017) have been: 1) Vietnam 39.3%, 2) South Korea 31.2%, 3) Philippines 24.7%, 4) Cambodia 19.6%, and 5) Indonesia 14.6%
  4. Thailand attracted 10.8 million Chinese tourists in 2018 but almost fell flat at 10.99 million in 2019 because of a deadly ferry disaster in Phuket in July 2018. They have started attracting the Indian market, with 1.6 million tourists visiting Thailand in 2018 and close to 2 million in 2019, their biggest source of growth today, followed by tourists from Russia.
  5. While the Philippines attracted 1.74 million Mainland Chinese in 2019, it only attracted 135,000 tourists from India in the same period. Indians’ preferred destinations are Thailand, Singapore, USA, Malaysia, Dubai, Sri Lanka, Australia, Japan, Bhutan and Maldives.
  6. The foreign tourist arrival growth rate in the Philippines has been faster than the average of 9 countries since 2014 (except for 2018 when Boracay was closed for renovation).
  7. The growth of foreign tourists arriving in the Philippines was highest in 2019 at 15.2%, the highest ever in the Philippines since 2005. 80% of the incremental growth of 1.13 million tourists in 2019 came from two big sources: South Korea and China.
No. of Foreigner Tourists Arriving in the PhilippinesSouth KoreaChina
20191.98 million1.74 million
20181.58 million1.25 million
20171.6 million968,000
  1. The relative tourism market shares of the Philippines, among the above 9 countries being studied, has been increasing from 4.1% between 2011-2014, 4.4% in 2015-2016, 4.6% in 2017-2018 to 5% in 2019, the highest ever recorded.  
  2. The tourism secretary of the Philippines during these periods are Ramon Jimenez (2010-2016), Wanda Tulfo Teo (2016-2018) and Berna Puyat (2018 to present)

What do I conclude from this?

  1. After the COVID-19 pandemic, tourism in different countries will compete to attract foreign visitors again. Consumers will have a different mindset when they travel, with countries that were able to prevent the pandemic (the crisis preventers) like Taiwan, New Zealand and Vietnam having an advantage from a safety perspective. Countries that were able to extinguish COVID (the crisis extinguishers) like Thailand and Malaysia will not be far behind. Countries that are still fighting COVID-19 now, like Indonesia and the Philippines, will not have difficulty attracting people from other countries who suffered the same fate, but will take some time to attract those from the crisis preventer segment.
  2. Vietnam, currently number 4 after Thailand, Malaysia and Singapore, will likely overtake Singapore to be in the region’s top 3 countries, not only based on their historical growth rate but will also leapfrog as a tourist destination due to the way they handled the COVID-19 crisis. It will also likely leapfrog Malaysia within the 5-year period of 2020-2025. Vietnam will be Thailand’s biggest medium-term threat in tourism. 
  3. The dynamics of night life, one that Thailand is known for much better than the Philippines is, will change, providing a potential reset button in tourism. Consider the following: 
  • Nights out will have a different meaning. Safety will be a big concern. Outdoor venues will be more popular.
  • The traditional high-volume business model of night clubs will not work. They need to increase prices with continuous mindfulness for social distancing, effectively reducing profitable space by 50 to 60%.
  • Filing out a form with real personal data will be unlikely for night clubs. Some countries even have rules against solicitation, which includes getting personal data of potential clients (including calling cards, telephone numbers, etc.). 
  • Many clubs will not survive several months of being closed, and many also would not survive the new business model of having lesser people.
  • Close contact and intimacy will no longer be attractive in the short and medium term due to potential transmission of droplets in areas like in dance floors, as it runs contrary to the use of face masks and protective screens and not wanting to be exposed to another or surface with high risk of being exposed to many other people.
  • The thought of contact tracing when something goes wrong may be discouraging for individuals and establishments.
  • New apps allow concerts and events to be held online, but for alternative forms of adult entertainment, there will still be cultural limits to applying these tactics and exposing oneself as a worker in these industries.
  • People need to be entertained, but the pleasure to pain ratio should not just be acceptable. Safety must have certainty.

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