Governments in Southeast Asia (SEA) plan to reopen their borders partially starting in Q2 2022, followed by an expected full reopening by Q3 2022. These reopening timelines have been pulled up compared to a few months ago, as vaccination rates have significantly improved, and hospitalizations due to the recent Omicron wave remain low. Firms should consider these revised reopening timelines as they plan to meet with local customers, teams, and distributors after a prolonged period. B2C companies in the service sector and healthcare companies dependent on medical tourism should plan for an improved demand outlook as tourism gradually improves through the year.
Thailand began allowing fully vaccinated foreigners from select countries from February 1; the Philippines followed suit on February 10. Malaysia’s National Recovery Council proposed a full reopening of borders on March 1, while Vietnam plans to fully reopen borders by mid-March. Indonesia has been the most cautious, keeping its borders mostly closed until Q2 2022 before reopening to all countries in H2 2022.
We have revised our border reopening timelines for SEA in Q1 2022 compared to our expectations in Q4 2021. Even as Omicron-driven cases spiked across these markets in early 2022, high vaccination rates and low hospitalizations have prompted governments to announce looser restrictions on tourist arrivals. Even Vietnam—a country previously following an aggressive zero-COVID stance—has recently pivoted away from this strategy. While these measures will have a positive impact on tourism arrival numbers starting in Q2 2022, firms should note that the tourism sector will not see a full recovery in 2022. This is because Chinese tourists—one of SEA’s largest tourist contingents—are unlikely to return until 2023 due to strict travel restrictions by the Chinese government.
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