The State of Southeast Asia Survey
Targeting the Tourism Dollar from ASEAN
China is the world's biggest source of tourists, but ASEAN is not far behind it. As borders open up, it might be worthwhile looking at enticing tourists from ASEAN.
It is almost impossible to keep Southeast Asia off anyone’s travel bucket list as the region offers pristine beaches, majestic landscapes, and rich cultures. But, it is highly possible to overlook the region’s potential as a consumer of the global tourism industry.
Here are some promising statistics. The total combined GDP of ten ASEAN countries was valued at US$3.2 trillion in 2019, which places ASEAN as the fifth largest economy globally after the United States, China, Japan, and Germany. With high economic growth projections and firm commitments to realise an open and integrated market, ASEAN is well on track to become the fourth-largest economy by 2030. Sixty-five per cent of the region’s population is expected to be middle class by then, with 60 per cent of them under 35 years of age, making them a perfect consumer for the international youth travel market such as edu-tourism, apprenticeships, volunteering, and independent travel.
In 2019, the ASEAN-6 — Indonesia, Malaysia, Thailand, the Philippines, Singapore, and Vietnam — spent almost US$90 billion in international tourism expenditures, including payments to foreign carriers for international transport (Table 1). As a benchmark, the ASEAN-6’s total number of international tourism expenditures is approximately a third of China’s, the largest spender in global tourism and the contributor of almost 20 per cent of all international tourism expenditure.
Despite its small population, Singapore was the largest spender in ASEAN-6, with US$25.24 billion in 2019. It was followed by Thailand in second place with US$16.85 billion. Meanwhile, tourists from Indonesia, Malaysia, and the Philippines spent around US$12 to 14 billion in that year.
While ASEAN has shown steady growth in international tourism expenditure in the past years, the Covid-19 pandemic has hit the international travel industry hard. The total international travel expenditures from the ASEAN-6 slumped to US$24.83 billion in 2020 and rose to only US$38.55 billion in 2021. Data from the Economist Intelligence Unit predicts that ASEAN-6’s total international travel expenditures will only return to the pre-pandemic levels in 2024 (Table 1).
Who has benefitted from ASEAN’s tourism dollars? Although one might be tempted to treat ASEAN as a single market, the region has highly diverse market segments. Attracting tourists from the region will require understanding its diversity and travel behaviours. According to a European Travel Commission’s study, Singapore, a small but highly networked global city-state, reported a high volume of outbound travellers to Australia in 2017. Meanwhile, Indonesia, the largest country by population in ASEAN, recorded a substantial number of outbound travellers to Saudi Arabia in the same year. Unsurprisingly, Indonesia has the world’s largest Muslim population and is a crucial source of income for Saudi Arabia’s pilgrimage tourism market.
Despite showing a promising number of outbound international tourists, unfortunately, many ASEAN countries, especially the developing ones, do not enjoy the privilege of travelling freely.
It is also interesting to analyse preferences among ASEAN citizens. In a recent survey published by ISEAS-Yusof Ishak Institute, Japan topped the list of favourite travel destinations, with 22.8 per cent of ASEAN citizens in the survey picking Japan as their favourite holiday destination (Table 2). Those who chose Japan are mainly from Laos, Singapore, Thailand, the Philippines, Indonesia, and Malaysia. Meanwhile, the European Union and ASEAN came in as the second and third favourite destinations to visit, with 19.2 per cent and 14.0 per cent share of votes, respectively.
Among those respondents who chose ASEAN as their favourite destination, Singapore is the top choice with a share of 27.9 per cent, followed by Thailand and Indonesia (Table 3). Interestingly, some ASEAN respondents in the survey turned to domestic tourism due to the sudden halt in global travel during the coronavirus pandemic. For instance, more than half of the respondents from Thailand prefer to travel in their own country.
Despite showing a promising number of outbound international tourists, many ASEAN countries, in particular the developing ones, do not enjoy the privilege of travelling freely. Holders of Indonesian, Philippine, Vietnamese, Laotian, Burmese, and Cambodian passports will likely face challenges when travelling, especially to more advanced economies that employ burdensome visa fees and paperwork requirements. According to the Global Passport Ranking by Henley & Partners, Vietnamese citizens can only travel to 54 countries without a visa. In comparison, Singaporean citizens, who rank second on the list, can travel to 192 countries without obtaining a visa.
International tourism activities will resume soon. Many countries such as Thailand, the Philippines, Cambodia, Vietnam, and Australia have chosen to live with the pandemic endemically and are opening up their borders to international tourists. South Korea will likely be opening up for tourists in April too. As the race to revive their economies is ramping up, it is time for these countries to seriously consider attracting ASEAN tourists to visit their countries and reduce barriers to their mobility across borders.
Melinda Martinus is the Lead Researcher in Socio-cultural Affairs at the ASEAN Studies Centre, ISEAS – Yusof Ishak Institute.