Domestic travel to cushion Asean tourism, but region awaits return of Chinese visitors

THE revival of domestic travel will support South-east Asian tourism in the near term.

But the sector still awaits a return of Chinese tourists, who made up one-quarter of arrivals before the Covid-19 pandemic, a new report has observed.

Yuwanee Prommaporn, Thailand hotels and tourism analyst at Maybank Kim Eng, called Chinese visitorship "important to the recovery of tourism in Asean".

She said: "We believe the recovery in Asean tourism could be slow and not visible until 2022 when most countries achieve their mass vaccination plans and reopen borders."

Until large-scale reopenings can take place, Ms Yuwanee expects domestic travel to dominate sprawling markets such as Indonesia and the Philippines.

"However, domestic tourism alone will not be able to replace the international travel, which is almost always more profitable due to the longer-stay nature," she said.

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Ms Yuwanee also has a negative outlook on Thailand's tourism sector, which is a top destination by volume for Chinese tourists in South-east Asia.

She has a "buy" call on just one counter in the Thai market: Airports of Thailand (AOT), for its "sound long-term fundamentals".

Otherwise, "none of the operators will see full profit recovery to the pre-Covid level until FY2024, a year later than previously projected", she said, citing a rise in novel coronavirus cases and a slow vaccination roll-out in Thailand.

That's as she observed that the impact of Covid-19 "has been severe in countries such as Thailand and Cambodia", given their high economic reliance on the tourism sector.

"An important driver of the sector's recovery could be each country's vaccination plan, which should also determine the country's reopening timeline," said Ms Yuwanee.

Around the region, Maybank Kim Eng favours AOT and Airports Corp of Vietnam (ACV) for "monopolistic positions in airport business in the fast-growing destination".