KUALA LUMPUR: Fitch Ratings expects a slow recovery in international tourism across Asia Pacific next year, despite higher vaccination coverage and stepped-up reopening efforts.
The firm said the evolving global epidemiological situation posed a high degree of uncertainty and a tourism recovery in destinations with low vaccination rates, such as the Philippines and Indonesia (BBB/Stable), would remain vulnerable to setbacks.
"Pent-up travel demand remains to be diverted domestically, as we believe it will take time to restore confidence in cross-border travel safety. We expect China to maintain its 'zero-Covid' policy through most of 2022, with quarantine-free travel corridors set up only for Macao and Hong Kong.
"China was a key source market for tourism-dependent economies, such as Thailand, pre-pandemic," Fitch Solutions said in a note today.
International travel remains subdued across Asia Pacific as border restrictions are being reimposed amid the Omicron Covid-19 variant.
The regional economies had been slower to ease cross-border travel restrictions than other regions, even before Omicron, due to local outbreaks and slow vaccination rollouts, especially in south Asia and Asean, Fitch Ratings said.
Fitch Rating said many regional economies had been implementing reopening strategies prior to the Omicron variant, driven by falling virus cases and accelerating vaccine rollouts.
"This was led by Thailand's easing of border restrictions in early November, followed by Vietnam, Malaysia and the Philippines," it added.
Fitch Ratings said the emergence of Omicron had upended reopening plans for the time being at some economies.
"Japan has prohibited foreign visitors since late November, while Thailand tightened quarantine-free entry applications for inbound travellers for a two-week period in mid- December, with the exemption of the 'Phuket Sandbox' scheme initiated in July 2021.
"Singapore has temporarily suspended flight ticket sales for the "vaccinated travel lane" scheme. However, not all economies have shelved reopening plans. Australia extended its travel bubble scheme to Japan and Korea in mid-December, despite a short delay," it added.