International travel remains subdued across the Asia-Pacific (APAC) as border restrictions are being reimposed amid the Omicron Covid-19 variant, Fitch rating said in a report entitled Coronovirus Impact on APAC Tourism 4Q21 Update.
It said that APAC economies have been slower to ease cross-border travel restrictions than other regions, even before Omicron, due to local outbreaks and slow vaccination rollouts, especially in South Asia and ASEAN.
It said that travel prospects are a key rating driver for tourism-dependent sovereigns. Tourist arrivals have been well below pre-pandemic levels across APAC, with the exception of the Maldives (B-/Stable), which was among the first APAC economies to reopen to tourism.
Fitch said that the Maldives saw visitor flows rebound, especially from India and Russia, which may partly reflect diversion from competing destinations with tighter border controls. Better recovery prospects and reduced external vulnerabilities supported an October rating upgrade from ‘CCC’.
It said that many APAC economies had been implementing reopening strategies prior to the Omicron variant, driven by falling virus cases and accelerating vaccine rollouts. This was led by Thailand’s (BBB+/Stable) easing of border restrictions in early November, followed by Vietnam (BB/Positive), Malaysia (BBB+/Stable) and the Philippines (BBB/Negative).
However, Fitch said that the emergence of Omicron has upended reopening plans for the time being at some economies. Japan (A/Negative) has prohibited foreign visitors since late November, while Thailand tightened quarantine-free entry applications for inbound travellers for a two-week period in mid-December, with the exemption of the ‘Phuket Sandbox’ scheme initiated in July 2021. Singapore (AAA/Stable) has temporarily suspended flight ticket sales for the “vaccinated travel lane” scheme.