Major tourism markets in Asia, like Thailand and the Philippines, have only seen a very slow recovery in the number of daily flights, in contrast to Mexico, Turkey, the UAE (and to some degree) Chile and Saudi Arabia where recovery has been stronger.
“The recovery in tourism across emerging markets (EMs) remains very uneven due to government-imposed mobility restrictions and border closures.
“Major tourism markets in Asia, like Thailand and the Philippines, have only seen a very slow recovery in the number of daily flights. In contrast, the recovery has been stronger in Mexico, Turkey, the UAE (and to some degree) Chile and Saudi Arabia, says Fitch Solutions Country Risk & Industry Research.
Asian EMs that are heavily dependent on tourism have experienced a very slow recovery in the number of daily flights, suggesting that visitor numbers are still low (top left hand of chart). This is both due to the slightly slower vaccine rollout, as well as continued local and travel restrictions.
While vaccination rates are important, Fitch says the single largest factor that helps to determine the pace of the recovery in the tourism sector is the government’s willingness to open to tourists.
The research house said that the recovery in tourism across emerging markets (EMs) remains very uneven because of government-imposed mobility restrictions, both local and international. While many governments have loosened restrictions in recent months, tourism flows have not picked up as quickly as many of these economies would have liked.
“While vaccination rates have risen in EMs, some of the vaccines used are less effective, and government restrictions remain in place. The chart below compares how important tourism is as a share of the economy, against the number of flights in the latest month available, relative to 2019 levels and two key themes stand out,” it says.
Tourism-dependent EMs elsewhere, such as Mexico, Turkey, the UAE (and, to some degree, Chile, and Saudi Arabia), have seen a stronger recovery in the number of flights. Mexico’s outperformance is, in part, due to its proximity to the US as well as its lower levels of restrictions, as proxied by the stringency index. Mexico’s outperformance comes even though its vaccination rate is lower than many other EMs.
Fitch says that while vaccination rates are important, we think that the single largest factor determining the pace of the tourism sector’s recovery is local governments’ willingness to open to tourists.