If the New Year is a time to feel optimistic, tourism organisations across the Asia Pacific region were certainly feeling the positivity. The Pacific Asia Travel Association (PATA) was certainly upbeat; releasing an executive summary report in February stating that providing conditions remain benign, 2024 would be the year when the region would finally surpass 2019 for the number of international visitor arrivals.
In addition, in the best-case scenario growth momentum was predicted to continue into 2026, with the association’s CEO Noor Ahmad Hamid adding a few provisos. He said: “We cannot, however, expect uniformity in growth from that and other source markets across all the destinations of Asia Pacific, as many will increase their inbound counts at their own pace and in their own time.
“Furthermore, we must recognise this as the time of fast-paced and constant changes. All of us must remain vigilant of sudden shifts within the industry and be prepared with viable strategies and appropriate coping mechanisms for future uncertainties.”
While Ahmad Hamid admitted that even in a worst-case scenario, the full recovery could be delayed by two years, the overall message was broadly positive and this optimism was shared by AsiaPac’s two biggest tourist destinations, Japan and Thailand.
Eastern promise
Japan certainly was braced for a strong year with the country’s largest travel agency JTB predicting while outbound travel would still only be at 72.2 per cent of 2019 levels at 14.5 million travellers, the number of inbound international visitors would finally exceed 2019 at 103.8 per cent.
Things started well too, with the destination breaking the 3 million overseas traveller mark for the first time in March with 3.1 million recorded.
Gary Bowerman, director of travel consultancy Check-in Asia said: “Japan is the biggest story at the moment, inbound numbers are crazy and March was their record number of inbound arrivals ever.
“The weak yen is encouraging people to go there but hotel rates are increasing fast particularly in the three big cities of Osaka, Tokyo and Kyoto.”
However, Bowerman added the figures recorded were for the first four months of the year when the region’s travel naturally peaks, buoyed by numerous public holidays across the region.
Meanwhile, the situation was also positive in Thailand, which received 28 million overseas tourists spending 1.2 trillion baht ($32.8 billion) in 2023 and predicted 35 million international visitors for 2024, spending ($52.4 billion). Bowerman said: “Within South East Asia everyone is competing with Thailand or Singapore, Thailand because it does tourism so well and Singapore because it is so forward thinking.”
However, while both destinations might have hit the ground running in 2024, John Grant, partner at aviation data company OAG warns that both destinations are suffering to different extents from the two-year-old Russian invasion of Ukraine and the delayed return of their core Chinese market.
Japan has suffered badly from the European war and the ensuing enclosure of Russian airspace which has forced airlines to reroute aircraft, with flight times growing by at least two hours and leading to falling international scheduled departure seats from 37.7 million in 2019 to 34.7 million this year.
Drilling into Europe, OAG data shows 11,900 fewer scheduled seats in 2024 from Japan to London’s Heathrow than the 262,988 available in 2019 – a drop of 4.5 per cent - and other European airports have been harder hit.
Amsterdam Airport Schiphol’s scheduled seats have fallen by more than half from 179,870 in 2019 to 82,154 this year. Meanwhile Helsinki Airport, the headquarters of Finnair which pre-Covid was targeting the Far East with flights routed over the Arctic north has seen scheduled seats arrival fall by a 37.6per cent from the 2019 figure of 336,340 seats.
“Japan is a victim of geography and location, unfortunately,” Grant said.
Thailand has also been impacted by the Russian airspace closure and international scheduled seat departures from the country currently sit at 26.7 million, down from 31 million in 2019 with regional airports most likely to bear the brunt.
However, as one of the destinations still available to Russian travellers it has seen considerable growth to Russian airports, including 371 percent to Khabarovsk with 43,096, 148 per cent to Irkutsk at 62,562 and 70 per cent to Vladivostock with 42,072 seats.
China still sleeps
More worryingly though for both destinations Grant argued is the much desired but ongoing failure of the Chinese market to venture overseas.
While Chinese travellers’ failure to return to Europe en masse has been well documented, Grant said the China’s ongoing economic woes in the wake of Covid has curtailed even regional overseas trips while domestic tourism becomes increasingly popular.
The impact on Japan has been stark, with Beijing down from more than one million in 2019 to 616,059 now and Guangzhou down from 410,909 to 258,228 in the same five-year period while other airports including Chengdu and Yanji and which offered 2019 service are no longer operating.
Thailand tells a similar story with overall seat departures for the first quarter in 2024 falling by 36.8 per cent compared to 2019, although this drop has increased to 41 in March with 684,000 seats.
Grant said this is part of a fundamental change in the Chinese market and destinations need to act now to deal with the shortfall.
He added: “One of the lessons we’re now learning is that everyone has become too dependent and too complacent in the Chinese market.
“Nowhere highlights that more than Thailand where the market has become very dependent in Chinese inbound travel and have now got to find alternate markets that are higher value if possible.
“It’s very unlikely China is going to return to the type of profile and energy that we saw in previous years, it’s just too difficult.”
Alternatives
Grant added Middle Eastern carriers are filling some of the capacity gaps caused by the absent Chinese. However, Bowerman argued despite this Thailand and Japan need to be wary of Middle Eastern promise.
Bowerman said: “The two big mega markets are China and India and the Middle East is now very successful in attracting these two markets and that potentially could attract travellers away from South East Asia.
“The Middle East is now seen as a very aspirational destination but the challenge for markets like India and China to the Middle East is the distance – it tends to be an eight-hour flight and a four to five hour flight radius is the sweet spot for Chinese travellers.”
While the rest of 2024 could yet surprise us, any negative political developments could be very bad news and leave us looking back longingly at the first quarter peaks.