War in Ukraine risks delaying recovery of Southeast Asia’s $500m tourism industry
DENPASAR, BALI – War. Spiral air fares. Canceled flights.
So far, the recovery that Southeast Asia’s tourism industry was hoping for in 2022 is looking anything but.
For two years, hotels and resorts bided their time, hoping vacationers from Asia, Europe and Australia would return to soak up the sun, rent a villa and breathe new life into an industry that, at its peak in 2019, was valued at US$380. billion (S$516 billion).
Tourism behemoths like Thailand and the Indonesian resort island of Bali, which together welcomed 46 million overseas arrivals in 2019, are easing quarantine restrictions and reopening air links with key markets like Singapore and the United States. ‘Australia.
But the war in Ukraine and sanctions on Russian banks threaten to cripple fast-growing markets, just as soaring crude oil prices are undermining spending in more established markets.
“Incredible,” said Mr. Dirk De Cuyper, Managing Director of S Hotels and Resorts.
Before the war, his company, which operates 38 hotels in Thailand and Britain, as well as Fiji, Mauritius and the Maldives, expected occupancy to return to levels close to those of before the pandemic.
Last year, S Hotels and Resorts shelled out millions for upgrades in the Maldives and Thailand, including 72 million baht (S$3 million) on ocean-view villas with private pools from 17 000 baht per night aimed at travelers with deeper pockets.
“It will certainly have a short-term impact on travel to Russia and the cost of goods and utilities,” De Cuyper said.
With nearly 24,000 arrivals in January, Russian tourists were by far the largest cohort of arrivals to Thailand and among Thailand’s top 10 neighbors including Indonesia and Vietnam.
It’s starting to change.
The number of Russian arrivals at Phuket airport has dropped by three-quarters so far this month, Mr Bhummikitti Raktaengam, chairman of the Phuket Tourism Association, was quoted in local media as saying on Thursday (March 10). .
In addition, around 3,000 nationals of the country are believed to be stranded, unable to return home after direct flights to Moscow were suspended, as well as to Russia’s Far East, according to the report.