Ukraine crisis casts shadow over Southeast Asia’s fragile tourism recovery Aviation News
Bali, Indonesia – Travel industry figures fear the war in Ukraine could derail a much-anticipated recovery in Southeast Asia’s travel-dependent economies just as COVID-19 travel restrictions are finally being lifted across the region.
The Philippines, Laos, Cambodia and Thailand are now open to vaccinated travelers, despite costly and cumbersome protocols. Indonesia recently announced it would restart quarantine-free travel to Bali by March 14, while Vietnam plans to reopen to tourists on March 15.
Nearly two-thirds of travel professionals expect their fortunes to improve this year due to the easing of border restrictions and positive data for 2021, a recent survey by a panel of experts from the World Tourism Organization (UNWTO) found.
According to the United Nations World Tourism Organization, global tourism revenue will reach US$1.9 trillion in 2021, an increase of 19% over the previous year. According to the International Air Transport Association, global passenger traffic was up 8 percent overall, with demand down 58 percent from 2019, although the recovery in the Asia-Pacific region has lagged other regions.
But the war in Ukraine, sanctions on Russia and airspace restrictions have dampened forecasts for the region. Russians have become the largest and most spendthrift group of tourists to many top destinations during the pandemic, displacing Chinese who were unable to travel due to strict border controls.
Popular destinations such as the Thai resort island of Phuket have already felt the impact, with Russians accounting for 51,000 of the 278,000 foreigners who visited the island between November and February, according to the Tourism Authority of Thailand.
Bill Barnett, director of Phuket-based consultancy C9 Hotelworks, told Al Jazeera: “We’ve been talking to a number of hoteliers who are reporting a high number of flight cancellations due to reduced air traffic.”
Since the decline in Chinese tourists, Russian tourists have been a priority market for destinations such as Thailand, Vietnam and Bali, Indonesia, said Gary Bowerman, a Kuala Lumpur-based travel analyst.
“So the war will definitely affect the reopening of these countries,” Bowerman told Al Jazeera.
In Bali, after Canberra banned residents from traveling abroad, Russia quickly overtook Australia as the largest source of tourists, with 68,000 Russian citizens flying to the island in 2020, according to Statistics Indonesia.
Spending by Russians on food, accommodation, transport and tourism provides an important economic stimulus for the island, which before the pandemic accounted for 60 percent of the island’s gross domestic product.
But with the value of the ruble falling to historic lows, fewer Russians will be able to afford to travel abroad. Just getting there can be a challenge.
Last month, Singapore Airlines, one of the few airlines offering scheduled international flights to Bali, announced an immediate and indefinite suspension of services between its hub Changi Airport and Moscow.
“Things are messed up at home. Prices are skyrocketing, people will start losing their jobs, and the bandwidth to withdraw money is getting narrower,” Jaleel Mubarak, a Russian IT professional living in Bali, told Al Jazeera. Ready to fly home to reunite with the kids.
“Technically leaving Russia will soon become very challenging and I think Indonesia will also align itself with the Western world through sanctions,” Mubarak said, referring to Indonesian President Joko Widodo’s comments on Russia’s invasion of Ukraine. “Unacceptable” statement.
rising oil prize
The new challenges of flying to Southeast Asia due to the conflict are not unique to tourists from Russia and Ukraine.
Russia accounts for about 10 percent of global crude supply and the market is facing severe disruption due to sanctions and possible retaliation from Moscow. On Wednesday, the global benchmark oil price hit $115 a barrel just days after breaching the $100-a-barrel mark for the first time since 2014.
“If you look at the bigger picture, oil is now over $100 a barrel, and if it stays at that level or higher, the price of jet fuel will skyrocket,” said Bowerman, an analyst in Kuala Lumpur. After a lull like COVID-19, airlines will introduce extra flights and discounted fares to win back the market. But the price of jet fuel will make discounts impossible.”
Bowerman said airlines may struggle to secure adequate fuel supplies.
“Long-haul airlines will be scrambling to find it,” he said. “This could reduce global air travel demand.”
A ban on Russian aircraft flying over U.S., EU, U.K. and Canadian airspace, as well as retaliatory Russian bans, further dampened the recovery.
Detouring Russia, the world’s largest country by area and a bridge between Europe and Asia, will add several hours to flight time on some routes. Just an extra hour of flying can add $11,000 to $20,000 to the cost of a trip, said John Gradek, a lecturer in aviation management at McGill University.
Flights between Europe and East Asia will be most affected in the short term. Airlines such as Finnair and Japan Airlines have canceled or rerouted flights to popular destinations such as Tokyo, Seoul, Shanghai and London. But the bans have created yet another speed bump in the recovery of Southeast Asia’s tourism-dependent economies.
“People don’t say we won’t travel abroad because there’s a war going on in Europe,” said Barnett, a Phuket-based consultant.
“But we have yet to see the full financial impact of the war on oil prices and inflation. If European markets fall and China doesn’t pick up, it won’t be a good thing for an already volatile market.”