ASEAN’s tourism recovery in 2023 was a story of two halves. The recovery lost steam in the second half of 2023, largely because China’s “revenge travel” after the reopening turned out to be shorter and smaller in magnitude.
Maybank Research Pte Ltd in its ASEAN X Macro today (Jan 22) said tourist arrivals to ASEAN grew +388% in the first 6 months of 2023 and slowed to +67% in the Jul-Nov period. At 77% of pre-pandemic levels in Nov 2023, total visitor arrivals to ASEAN were modestly higher than at the start of 2023 (61% in Jan).
Less Sizzle in 2024, But Still Healthy
Maybank Research forecast total visitor arrivals to ASEAN-6 growing by about +27% in 2024 (vs. +130% in 2023), recovering to 98% of pre-pandemic levels by this December. Recovery will be faster in Malaysia, Thailand and Singapore.
For the full 2024, we expect visitor arrivals to be about 10% below 2019 pre-pandemic levels. Visitor arrivals in 2024 will likely fall short of 2019 levels in all ASEAN-6 countries. Non-China markets will help cushion the sluggish China tourist rebound, but cannot fully offset it. Government targets for the Philippines and Vietnam may be too optimistic.
Hotels & Tourism Receipts: Uneven Recovery
Hotel occupancy rates have risen more modestly relative to the tourist arrivals, as more hotel rooms came back on stream. Hotel occupancy rates have climbed to relatively high levels and are close to pre-pandemic rates in Thailand and Singapore. Longer stays may be one reason for the higher hotel occupancy rates in Thailand.
Tourism revenue has been mixed and uneven, with visitors spending more than before in Singapore and Malaysia, but less in Thailand.
Growing Non-China Markets
Other countries are emerging as important markets, cushioning and replacing the gap from a sluggish China recovery. India tourists are in the top 5 and account for larger market shares in Indonesia, Singapore and Thailand. Koreans have overtaken China as the #1 market in Vietnam, and remains #1 in the Philippines. Indonesians have overtaken China as the #1 market in Singapore.
Malaysians have leapfrogged China as #1 in Thailand. New non-China markets emerging in the Top 5 include Russians in Thailand and Australians in the Philippines.
China: Awaiting a Decisive Takeoff
Maybank IB expects outbound China tourists to return to pre-pandemic levels only in late 2025. China tourist flows to ASEAN have recovered to only 38% of pre-pandemic levels in Nov 2023, as “revenge travel” remained hotter at home than abroad.
The wide disparity can be attributed to i) consumer belt-tightening amid a weak economic climate; ii) limited international flight capacity, which led to pricey airfares for overseas routes; and iii perceived bottlenecks in visa applications. In 2024, higher flight capacity, lower fares and waiver of visas for Chinese citizens will support a more decisive tourism recovery.
