International tourism recovery in Asia has been uneven, with the Philippines still lagging due to its heavy reliance on Chinese tourists, a Bank of America (BofA) Global Research said.
In terms of tourism recovery, countries like Japan and Vietnam are leading the way, BofA said in a report, while China, Hong Kong and the Philippines are lagging.
"Hong Kong and the Philippines have been hurt by the slow return of Chinese travelers, who increasingly prefer domestic destinations," BofA said.
Tourist arrivals in the Philippines, Hong Kong and Taiwan remain below 80 percent of pre-Covid levels.
China, meanwhile, stands out as an outlier due to its significantly delayed reopening, with foreign border entries/exits at less than 40 percent of pre-Covid levels as of the end of 2023.
Chinese residents resumed traveling abroad in 2023, much later than visitors from other countries, impacting tourism recovery in destinations like the Philippines and Hong Kong that rely heavily on Chinese tourists.
BofA said that Chinese arrivals in the Philippines are only at 20 to 30 percent of pre-Covid levels, which is lower than other regions.
It noted that besides the delayed reopening of Chinese borders, the shifting preferences of Chinese consumers are also influencing trends.
It revealed that Chinese travelers are showing more interest in domestic cities with unique cultural experiences, which has slowed their return to international destinations.
"Accessibility is an important factor when it comes to travel decisions ... this helps explain why some regions have seen faster recovery while the others have not," it said.
BofA also pointed out the impact of currency fluctuations on tourism recovery in certain countries.
Although Asia has typically been more affordable than Europe and North America, BofA said that the recent sharp depreciation of some Asian currencies against the US dollar has made the region even more attractive to tourists.
It was explained that the recent tourist arrivals, compared to local currency performance against the US dollar in 2023, revealed that Japan's tourism benefited from a notable decline in the value of the yen, and Vietnam may have benefited from a weaker Vietnamese dong.
In contrast, the tourism sectors in Taiwan, the Philippines and Hong Kong, which had relatively stable currencies in 2023, did not experience this advantage.
"Looking ahead, we think the FX (foreign exchange) factor bodes well for the region's tourism outlook, while the return of Chinese visitors might mean a bumpy recovery," BofA said.
BofA anticipates that currencies across Asia will generally strengthen against the US dollar over the next two years but remain relatively weak compared to historical levels.
Consequently, countries with weaker currencies, especially Japan, are expected to continue attracting tourists in the near and medium term.
Source: Manila Times
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