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Tribune News Network
Doha
With the coronavirus pandemic causing the closure of national borders and the suspension of international travel, governments in emerging markets have begun to explore whether domestic tourism can kick-start their economies, Oxford Business Group (OBG) has said in its latest report.
Although international travel ground to a halt in the first quarter of 2020, OBG said, domestic tourism could become a popular approach to stimulating economic growth as restrictions are eased in many countries around the world.
The revival of domestic travel in emerging markets is being led by countries that have been comparatively successful in avoiding large-scale outbreaks of the virus, and which rely on tourism for a significant portion of GDP.
One such country is Vietnam. With international travel expected to remain severely limited for the foreseeable future, in mid-May the government launched the “Vietnamese people travel to Vietnam destinations” programme, designed to stimulate domestic tourism.
Running until the end of the year, the programme aims to develop specific tourism products and tours that cater to the needs of local travellers during the pandemic. Meanwhile, airlines, travel agencies, resorts and hotels are offering discounts of up to 50 percent to encourage internal travel while incoming flights are still banned.
Elsewhere in South-East Asia, Thailand that last year welcomed around 40 million tourists, making it the most popular destination in the region, has also outlined efforts to incentivise domestic travel from July.
Some $31.3 billion that is expected to be borrowed by the government in 2020-21 is likely to be channelled towards incentives and subsidies to help stimulate the industry.
Meanwhile, the Philippines, which in 2018 derived 12.7 percent of GDP from tourism, has outlined a series of safety measures, including sanitation and physical distancing regulations, necessary for the re-establishment of domestic tourism.
The importance of domestic tourism to the Philippines had been growing before the pandemic, with the country recording 110 million domestic tourists in 2018, an increase of 14.1 percent from the previous year.
Although domestic tourism will undoubtedly offer some relief to emerging economies that have suffered under the virus lockdown, it is unlikely to fully compensate for the losses incurred from international travel restrictions.
The global economy is expected to contract by 3 percent this year and emerging markets by an average of 1 percent, according to the IMF. Furthermore, widespread job losses around the world have placed significant pressure on household finances, leaving many people either unwilling or unable to spend money on travel. This will disproportionately impact lower- to middle-income countries, where tourism was previously geared more towards foreign visitors.
For example, while tourism accounted for around 12 percent of Vietnam’s GDP last year, domestic spending only made up an estimated 40-45 percent of this.
“As such, efforts will need to be made to not just encourage more domestic trips, but also to entice domestic tourists into spending more when they visit local destinations that might not be an easy task considering the current pressures on household finances,” the report said.
Similarly, in Thailand, tourism accounts for around 17.4 percent of direct and indirect GDP, of which just 6 percent comes from domestic tourists.
Meanwhile, estimates have suggested that the Philippines and Morocco could lose around $9 billion and $3.5 billion respectively in tourism receipts this year.
As part of so-called ‘travel bubble’ plans, some countries have looked towards opening international borders to countries that have successfully limited the spread of the virus.
World leaders in this regard have been the Baltic states of Estonia, Latvia and Lithuania, which in mid-May opened their common borders to kick-start movement between the countries.
Meanwhile, the governments of Australia and New Zealand have discussed creating their own travel bubble.
In terms of emerging countries, tourism officials in Vietnam have suggested that the country could create its own travel bubble with Australia and New Zealand, or alternatively with the key tourist markets of China and South Korea.
Indonesian officials, meanwhile, have said that Bali may begin a phased reopening to foreign tourists at some point between June and October if the island can demonstrate sustained success in controlling the virus.
Doha
With the coronavirus pandemic causing the closure of national borders and the suspension of international travel, governments in emerging markets have begun to explore whether domestic tourism can kick-start their economies, Oxford Business Group (OBG) has said in its latest report.
Although international travel ground to a halt in the first quarter of 2020, OBG said, domestic tourism could become a popular approach to stimulating economic growth as restrictions are eased in many countries around the world.
The revival of domestic travel in emerging markets is being led by countries that have been comparatively successful in avoiding large-scale outbreaks of the virus, and which rely on tourism for a significant portion of GDP.
One such country is Vietnam. With international travel expected to remain severely limited for the foreseeable future, in mid-May the government launched the “Vietnamese people travel to Vietnam destinations” programme, designed to stimulate domestic tourism.
Running until the end of the year, the programme aims to develop specific tourism products and tours that cater to the needs of local travellers during the pandemic. Meanwhile, airlines, travel agencies, resorts and hotels are offering discounts of up to 50 percent to encourage internal travel while incoming flights are still banned.
Elsewhere in South-East Asia, Thailand that last year welcomed around 40 million tourists, making it the most popular destination in the region, has also outlined efforts to incentivise domestic travel from July.
Some $31.3 billion that is expected to be borrowed by the government in 2020-21 is likely to be channelled towards incentives and subsidies to help stimulate the industry.
Meanwhile, the Philippines, which in 2018 derived 12.7 percent of GDP from tourism, has outlined a series of safety measures, including sanitation and physical distancing regulations, necessary for the re-establishment of domestic tourism.
The importance of domestic tourism to the Philippines had been growing before the pandemic, with the country recording 110 million domestic tourists in 2018, an increase of 14.1 percent from the previous year.
Although domestic tourism will undoubtedly offer some relief to emerging economies that have suffered under the virus lockdown, it is unlikely to fully compensate for the losses incurred from international travel restrictions.
The global economy is expected to contract by 3 percent this year and emerging markets by an average of 1 percent, according to the IMF. Furthermore, widespread job losses around the world have placed significant pressure on household finances, leaving many people either unwilling or unable to spend money on travel. This will disproportionately impact lower- to middle-income countries, where tourism was previously geared more towards foreign visitors.
For example, while tourism accounted for around 12 percent of Vietnam’s GDP last year, domestic spending only made up an estimated 40-45 percent of this.
“As such, efforts will need to be made to not just encourage more domestic trips, but also to entice domestic tourists into spending more when they visit local destinations that might not be an easy task considering the current pressures on household finances,” the report said.
Similarly, in Thailand, tourism accounts for around 17.4 percent of direct and indirect GDP, of which just 6 percent comes from domestic tourists.
Meanwhile, estimates have suggested that the Philippines and Morocco could lose around $9 billion and $3.5 billion respectively in tourism receipts this year.
As part of so-called ‘travel bubble’ plans, some countries have looked towards opening international borders to countries that have successfully limited the spread of the virus.
World leaders in this regard have been the Baltic states of Estonia, Latvia and Lithuania, which in mid-May opened their common borders to kick-start movement between the countries.
Meanwhile, the governments of Australia and New Zealand have discussed creating their own travel bubble.
In terms of emerging countries, tourism officials in Vietnam have suggested that the country could create its own travel bubble with Australia and New Zealand, or alternatively with the key tourist markets of China and South Korea.
Indonesian officials, meanwhile, have said that Bali may begin a phased reopening to foreign tourists at some point between June and October if the island can demonstrate sustained success in controlling the virus.
