Southeast Asian countries are barreling ahead with plans to reopen their borders to international travel, after the COVID-19 pandemic devastated the region’s key tourism industries.
The pandemic pushed 4.7 million Southeast Asians into extreme poverty in 2021—defined as those earning less than $1.90 a day—the Asian Development Bank (ADB) said in a report released Wednesday. The report, citing the International Labour Organization, estimates that 9.3 million people were unemployed as a result of the pandemic in 2021—and predicts that the job scarcity will only be reduced to 4.1 million in 2022.
Tourism represents more than 10% of GDP in countries like Thailand and Cambodia, which makes reviving the tourism sector critical to the region’s post-pandemic economic recovery. But tourist hotspots face a tough challenge in bringing back international travelers, as continued COVID restrictions and Russia’s invasion of Ukraine threaten to hobble an already fragile recovery.
In the third quarter of 2021, international arrivals in Asia and the Pacific were 95% lower than 2019 levels, according to the ADB, citing the United Nations. The report predicts that international travel won’t be able to support the region’s tourism sector until 2024, even as more Southeast Asian economies reopen their borders for quarantine-free travel.
On Wednesday, Vietnam allowed all international travelers to enter the country without needing to quarantine. Last week, Malaysia announced that it would offer quarantine-free entry to fully vaccinated travelers from April 1.
Other countries in Southeast Asia have already lowered their travel restrictions. Thailand relaunched its quarantine-free travel scheme in early February after a brief pause caused by the emergence of the Omicron COVID variant. The country announced Friday that travelers would no longer be required to hold documentation certifying they are COVID-free.
Finally, Indonesia is considering expanding quarantine-free travel—currently limited to the resort island of Bali—across the nation.
But two major sources of tourism for Southeast Asia are unlikely to return anytime soon.
One is China, which was the largest source of tourists for Thailand, the second-largest for Indonesia, and the third-largest for Malaysia before the pandemic. A return of Chinese tourists is “key for these destinations to be sustainable in the long run,” Haiyan Song, associate dean of Hong Kong Polytechnic University’s School of Hotel and Tourism Management, told Fortune last month.
Tourists from China are unlikely to travel abroad so long as Beijing requires them to quarantine for two weeks in a hotel upon their return, as per the Chinese government’s current policy.
The war in Ukraine also threatens to close off travel from Russia, another major source of tourists for Southeast Asia. Before the pandemic, Russian tourists were the third-largest source of revenue for Thailand’s tourism industry. Even as recently as February—the month President Vladimir Putin invaded Ukraine—Russians accounted for 8.6% of tourism arrivals in Thailand, making Russia the largest source of tourists that month.
But since the Ukraine invasion began, Russian airlines have canceled almost all their international flights, complicating travel from Russia to tourist destinations. The crashing ruble also makes international travel an expensive prospect for Russian travelers. Finally, without access to credit cards, Russian tourists have to rely on cash to pay for things overseas—and sanctions on Russian banks means they can’t withdraw more money once they get there.
Sanctions have stranded thousands of Russian tourists in Thailand and Indonesia, who have found themselves without payment options.
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