Southeast Asia’s vibrant tourist economy has suffered several down years, resulting from the COVID-19 pandemic. 2023 may be the year that the travel to the region gets back on its feet and sets the stage for a broad economic recovery. That rebound will be greatly assisted by the elimination of China’s zero-COVID policy and the return of the country’s tourists to their favorite overseas destinations.
The number of annual Chinese travelers visiting foreign nations was in the hundreds of millions prior to outbreak of COVID-19 and Southeast Asian nations like Thailand and Singapore were among their top destinations. Rising travel by Chinese nationals in the region should generally benefit the international travel industry, as well as the non-travel sectors of Southeast Asia’s economies.
Related ETFs: Global X FTSE Southeast Asia ETF (ASEA), Defiance Hotel, Airline, and Cruise ETF (CRUZ)
Southeast Asia, typically supercharged by a powerful tourist economy, has suffered harshly from a downturn in travel throughout the past two years. The World Travel & Tourism Council’s (WTTC) annual “Travel & Tourism Economic Impact” report for 2022 showed that, compared with pre-pandemic levels, tourism revenue in 2020 collapsed by -59% in Asia-Pacific, more than anywhere else. Recovery efforts in 2021 were muted as the region’s rebound was weaker than that of Europe and North America’s.
A huge reason for that is the Asia-Pacific’s reliance on Chinese tourism, which has been heavily suppressed by border closings and other restrictions emanating from China’s long-standing zero-COVID policy. For context, 2019 saw 155 million Chinese travelers go abroad, spending $254.6 billion. China averaged about 12 million outbound air passengers per month in 2019, but those numbers fell 95% during the Covid years, according to Steve Saxon, a partner in McKinsey’s Shenzhen office. Per CNN reporting, he predicts that figure will recover to about 6 million per month by the summer.
Southeast Asia, home to key eastern tourist economies like Thailand, Malaysia, and Vietnam, was particularly slammed by 2020-2022’s drought of travelers out of China. 32 million Chinese citizens traveled to Southeast Asia in 2019, according to Rane Worldview. A year later, that number dropped to just 4 million, a decline of -90%. However, with zero-COVID recently rescinded and Southeast Asia retaining few pandemic-era restrictions on…
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