Tourist arrivals will increase in H2 2022 but not return to pre-pandemic levels before late 2023 due t o lockdowns in China

Tourist arrivals into ASEAN will increase in the coming months but not return to pre-pandemic levels before H2 2023

As all ASEAN countries have reopened borders and eased testing requirements, B2C firms (especially alcohol and spirits companies) and healthcare firms should plan for higher demand from tourists over the next 18 months. Spending on brick-and-mortar services and retail will continue improving, making it critical for firms to plan their manpower and inventory to capitalize on the recovery in tourism spending. B2C firms should avoid any drastic slashes in marketing budgets, as a global growth slowdown (from late 2022 to early 2023) will not lead to a major slowdown in tourist arrivals. 


All ASEAN countries are seeing a revival of the tourism sector after two years of border restrictions. Tourist arrivals have recovered the fastest in Thailand. The number of tourists reached 1.1 million in July, growing by about 46% MOM. Indonesia and Vietnam have seen a steady recovery as well, with tourist arrivals growing 63% MOM in June and 49% MOM in July, respectively. Although Malaysia hasn’t released data after March 2022, the government removed COVID testing requirements for all travelers regardless of their vaccination status, which has likely supported the recovery in tourism demand. Tourist arrivals into the Philippines have improved in recent months as well, but due to stricter testing requirements, the recovery has been slower compared to its ASEAN peers.     

Our View

Although tourist arrivals are increasing across ASEAN and will continue to do so, no country will reach pre-pandemic levels before H2 2023 due to multiple global headwinds that will slow recovery. Tourists from China, which account for about 22% of total tourists to ASEAN, will likely not return before H2 2023. Moreover, rising inflation levels and likely mild recessions in the US and Europe will dampen tourist inflows from these two regions (for our detailed global view, click here). Firms can expect a recovery over the next 12 months, albeit not as fast as originally expected. The reopening of borders will also lead to a recovery in medical tourism, providing a boost to major hospitals in the region. The tourism sector’s recovery will be a major tailwind to growth in ASEAN through 2023 amid a global growth slowdown and rising costs.

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