In 2019, Southeast Asia’s tourism market was booming. The six largest economies in the region (Indonesia, Thailand, Singapore, Malaysia, Vietnam, and the Philippines) combined for over 127 million tourist arrivals that year. These visitors spent tens of billions of dollars, contributing significantly to regional economic activity.
Of course, things changed dramatically when the COVID-19 pandemic arrived in 2020. As lockdowns and border closures went into effect, total tourist arrivals in those same six countries dropped to just 2.6 million in 2021, more than half of which came from Indonesia.
The recovery has been slow, certainly slower than an export-oriented country like Thailand would like, but tourism in the region is starting to get its legs back. In 2022, the six big ASEAN economies recorded 39 million tourist arrivals. Last year, it was up to 91 million. Perhaps 2024 is the year when inbound tourism will return to pre-pandemic levels of 120-130 million.
Unsurprisingly, Thailand is leading the recovery. In 2019, a staggering 40 million tourists arrived in Thailand, generating $60 billion in travel service exports. Last year, there were 28 million arrivals, around 71 percent of pre-pandemic levels, and the Bank of Thailand recorded $30 billion in export earnings from the travel sector.
These numbers are higher than other economies in the region, but because tourism is so central to the Thai model of economic growth and because the industry still hasn’t fully recovered to 2019 levels, there’s been some lag in the overall economy. This is one reason why the Thai government is contemplating unusual policy responses, like the big cash stimulus program that’s in the works.
Malaysia has bounced back pretty quickly, with 20 million tourist arrivals in 2023. That is 77 percent of pre-pandemic levels. Receipts from tourism were $15.8 billion, 83 percent of pre-pandemic levels. Malaysian tourism, however, is a bit of an outlier as it is heavily dependent on Singapore and is probably not a great barometer for wider regional or global travel trends. 8.3 million arrivals in 2023 were from Singapore. Speaking of Singapore, the island-nation saw 13.6 million international visitor arrivals in 2023, an increase of 116 percent compared to the previous year.
Countries like Indonesia, the Philippines, and Vietnam are perhaps more indicative of regional tourism trends. At 11.7 million inbound visitors in 2023, Indonesia’s tourism sector is definitely recovering, but still short of the record 16.1 million who arrived in 2019. Just like then, the majority of these travelers are headed toward Bali, which is starting to feel the squeeze from overcrowding and traffic congestion once again. To ease the burden on Bali, the government has been attempting to market destinations in other parts of the archipelago, like Labuan Bajo, but given that 5.2 million tourists still arrived at I Gusti Ngurah Rai airport last year, Bali remains the marquee attraction.
The Philippines also recently sought to stimulate its tourism industry with a splashy rebrand as it recovered from the pandemic. In 2023, they unveiled a new “Love the Philippines” campaign but came under fire when it was discovered the campaign had used stock photos of other countries. The Philippines is trailing its regional competitors in the tourism game by a wide margin, with just 5 million foreign visitors in 2023. This is 61 percent of pre-pandemic levels, while other major economies in Southeast Asia are at 70 percent or above.
Tourism in Vietnam was growing at an explosive rate prior to the pandemic, with inbound visitors soaring from 8 million in 2015 to 18 million in 2019. This growth was propelled by large numbers of travelers coming from China and South Korea. In 2019, Vietnam saw 5.8 million Chinese tourists and 4.3 million South Koreans. In 2023, Vietnam’s inbound tourism recovered to 70 percent of its pre-pandemic level, with 12.6 million visitors. But while South Koreans are returning to Vietnam in large numbers (3.6 million last year) Chinese visitors have not, and at 1.7 million remain well below 2019 levels.
This is true generally around the region, and it could help explain why it’s taking a few years for the industry to get back to where it was. Chinese tourists were a big part of Southeast Asia’s pre-pandemic tourism boom, and so far inbound travel from China has been slow to recover. Given the 2023 trajectory and the fact that many currencies in the region are expected to remain weak in 2024, Southeast Asia could soon be primed for a return to 2019 levels of tourist activity. It will be interesting to see whether, and to what extent, Chinese tourists returning to the region is part of that story.