Ukraine crisis clouds Southeast Asia’s fragile tourism recovery | Aviation News

Ukraine crisis clouds Southeast Asia’s fragile tourism recovery | Aviation News

Bali, Indonesia – Travel industry players worry that the war in Ukraine could derail the much-anticipated recovery of Southeast Asia’s tourism-dependent economies, while COVID-19 travel restrictions are finally lifted across the region.

The Philippines, Laos, Cambodia and Thailand are now open to vaccinated travelers, although these agreements are costly and cumbersome. Indonesia recently announced that it will restart quarantine-free travel to Bali by March 14, while Vietnam plans to reopen to tourists on March 15.

A recent survey by a panel of experts from the World Tourism Organization (UNWTO) found that nearly two-thirds of tourism professionals expect their fortunes to improve this year due to the easing of border restrictions and positive data for 2021.

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, overall global passenger traffic was up 8 percent, and demand was down 58 percent from 2019 — although Asia-Pacific’s recovery has lagged other regions.

But the Ukrainian war, sanctions on Russia and airspace restrictions have dented forecasts for the region, where Russians have become the largest and most profligate group of tourists in many top destinations during the pandemic, leading to the Chinese people who are unable to travel due to border controls have been displaced.

Popular destinations such as the Thai resort island of Phuket are already feeling the impact, with Russians making up 51,000 of the 278,000 foreigners who visited the island between November and February, according to the Tourism Authority of Thailand.

“We’ve been talking to a lot of hoteliers and they’re reporting a lot of cancellations due to reduced air traffic,” Bill Barnett, director of Phuket consultancy C9 Hotelworks, told Al Jazeera.

Gary Bowerman, a travel analyst based in Kuala Lumpur, said Russian tourists have been a priority market for destinations such as Thailand, Vietnam and Bali, Indonesia, since the decline in Chinese tourists.

“So the war will definitely affect the reopening of these countries,” Bowerman told Al Jazeera.

Russians account for nearly one-fifth of Bali tourists during pandemic [Courtesy of Ian Neubauer]

In Bali, Russia quickly overtook Australia as the largest source of tourists, with 68,000 Russian nationals flying to the island in 2020, according to Statistics Indonesia.

Russian spending on food, lodging, transport and tourism has provided the island with an important economic stimulus, which before the pandemic accounted for 60% of gross domestic product.

But as the value of the ruble plummets to a record low, fewer Russians will be able 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 the immediate and indefinite suspension of services between its Changi Airport hub and Moscow.

“Things are a mess at home. Prices are skyrocketing, people are going to start losing their jobs, and the bandwidth for withdrawals is getting narrower and narrower,” Jharil Mubarak, a Russian IT professional in Bali who was preparing to fly home with the children, told The Peninsula TV.

“Technically it will become very challenging to leave Russia very soon, and I think Indonesia will also be aligned with the Western world in terms of sanctions,” Mubarak said, referring to Indonesian President Joko Widodo’s comments on Russia’s invasion of Ukraine “Unacceptable” statement.

rising oil prize

Tourists from Russia and Ukraine will not face the new challenge of flying to Southeast Asia because of the conflict.

Russia accounts for about 10% of global crude supply, and the market is bracing for havoc from sanctions and possible retaliation from Moscow. Global benchmark prices hit $115 a barrel on Wednesday, days after breaking the key $100 mark for the first time since 2014.

“If you look at the big picture, oil prices are now above $100 a barrel, and if they stay at that level or higher, the price of jet fuel will soar,” said Bowerman, an analyst in Kuala Lumpur. “Typically, in a calm like COVID Afterwards, airlines will win back the market with additional flights and discounted fares. But the price of jet fuel will make discounting impossible.”

Airlines may struggle to get enough fuel supplies, Bowerman said.

“Long-haul airlines will be scrambling to find it,” he said. “This could reduce global demand for air travel.”

A ban on Russian aircraft from U.S., European Union, U.K. and Canadian airspace, as well as a retaliatory Russian ban, have further dampened the recovery.

Flying around the bridge between Russia, the world’s largest country, and Europe and Asia will add flight time to some routes. Just one extra hour of flight time adds $11,000 to $20,000 to the cost of travel, said John Gradek, a lecturer in aviation management at McGill University.

Flights between Europe and East Asia will be the most affected in the short term. Airlines such as Finnair and JAL have cancelled or diverted flights to major destinations including Tokyo, Seoul, Shanghai and London. But the bans have created another speed bump for the recovery of tourism-dependent Southeast Asian economies.

“People don’t say we’re not going to travel abroad because there’s a war going on in Europe,” said Barnett, a Phuket consultant.

“But we haven’t seen the full financial impact of the war on oil prices and inflation. If European markets fall and China doesn’t come back, it won’t be a good thing for an already volatile market.”

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