It is hard to imagine. Three years ago, destinations across east Asia and Oceania were enjoying near record levels of tourism with visitors from the Peoples Republic of China (PRC) serving as the fastest growing and often largest source market. The pandemic brought visitation from China, as with all international tourism, to an abrupt halt.Now, as travel restrictions ease and airlines, hotels, and casinos gradually gear up for a resumption of business, can tourist destinations in Asia, and particularly those with casino-resorts, count on a swift return to normalcy? The answer is, not without Chinese visitors, and probably not any time soon.Recent pandemic-related events in major Chinese cities have brought China’s Zero COVID policy to the forefront of international news. City-wide lockdowns forced tens of millions of residents in China’s largest cities to shelter in their homes as government officials sought to tame any local outbreaks of the virus. Scenes of empty boulevards and highways illustrated to the world how serious PRC policy makers were. While those restrictions appear to have eased, or at least dropped to a level that is no longer worthy of international news coverage, what is clear is that any resumption of international travel to and from China is a very long way off.Even when China begins to permit its citizens to travel outside its borders, residents returning home will find themselves facing onerous quarantines, possibly lasting 21 days. Few Chinese travelers in their right minds would want to venture outside the country if faced with lengthy quarantines upon their return.The question then becomes, what will be the impact of the loss of this valuable tourist segment to east Asia’s tourism destinations, and particularly to the casinos in those destinations that had come to rely on Chinese players? An examination of pre-COVID visitor arrivals to various Asian countries illustrates this.SingaporeTourism had long been an important component of Singapore’s economy, and the government had long developed strategies to foster growth in its tourism industry. In fact, the development of its two integrated resorts had as its roots the goal of growing international tourism. That strategy revived a moribund tourism industry and elevated Singapore to one of Asia’s must-see destinations.Singapore Changi Airport is resuming its position as one of Asia’s busiest travel hubs and is arguably the world’s most attractive airport. With completion of The Jewel, a shopping mall that connects three of its terminals, the airport itself has become a tourism destination. Prior to the pandemic, the airport served over 60 million passengers annually and it is expected to resume its position as one of Asia’s most important travel hubs.Singapore was one of the first countries in Asia to adopt a “living with COVID 19“ policy. To this end, in April of 2022 health officials lifted all testing requirements for fully vaccinated travelers, heralding the start of a normalized travel policy for international visitors.Prior to the pandemic, visitors from China represented the largest segment of international visitors, making up 19 percent of total inbound tourists. Those 3.6 million tourists played an outsized role in the revenue performance of the city-state’s two integrated resorts. Nonetheless, Marina Bay Sands and Resorts World Sentosa managed to survive the pandemic by relying on a relatively wealthy local clientele. The return of international visitors, particularly from India, Malaysia and Indonesia, will serve as the most important source markets. Nevertheless, those players from China will be missed.The PhilippinesTravel and resort destinations across the Philippines are poised to ramp up for what is hoped to be a near full resumption of international travel. New casino-resorts in Cebu and Clark are expected to open in the next 12 months to primarily serve international travelers. With amenities such as golf and gambling, these new properties are particularly appealing to visitors from South Korea who enjoy those amenities as part of their vacation experiences. The casinos that comprise Entertainment City are also poised to see a resurgence in business, though they too were able to survive reasonably well on local gamers.The Philippines’ travel policy is not quite as liberal as Singapore. Arriving visitors must present both proof of vaccination as well as a negative test upon arrival. While not an onerous restriction, it is one more hurdle visitors must overcome if they choose to visit.The greatest challenge to resort operators will be the loss of 1.7 million visitors from mainland China, which represented over 21 percent of international visitors in 2019.South KoreaNo tourism economy was more dependent on the PRC prior to the pandemic than South Korea. Over six million annual visitors fueled the tourism economy, particularly the resort destination of Jeju. That region’s casino industry was devastated by the pandemic as only foreign visitors were allowed to gamble in all but one of the country’s 18 casinos. Even with the resumption of international travelers, it will be near impossible to replace a market that once represented over 34 percent of inbound international arrivals.To enter South Korea, one must provide proof of a negative COVID-19 (PCR) test taken within 48 hours before departure. Alternatively, visitors may provide proof of a supervised Rapid Antigen test 24 hours before departure. While by no means onerous, this remains one further hurdle to anyone interested in visiting South Korea.VietnamPrior to the pandemic, Vietnam’s tourism industry had grown dependent on visitors from the PRC. Resort destinations in and around Danang in particular had evolved to cater to a wealthy and discriminating clientele from China. HOIANA, a multi-billion dollar integrated casino resort an hour south of Danang International Airport, was developed to appeal to this market. Other resorts dot the coast of the South Sea from Huế to the north to Hội An to the south. Other important destinations include the casinos along the country’s northern border with China.In 2019, 5.8 million visitors came from Mainland China, comprising over 32 percent of international arrivals. The PRC was Vietnam’s single most important source market and its foreigner-only casinos were deeply dependent on that market.In May of 2022, Vietnam’s Health Ministry dropped its previous rule requiring proof of a negative test upon arrival. With easing of travel restrictions, South Korea will represent Vietnam’s most important source market.SummaryThe loss of tourists from China will be felt across Asia through this summer travel season and probably through 2023. Ultimately, in order for Chinese tourists to return in any number that approaches pre-pandemic levels, one of two events must first take place: China’s Zero COVID policy goes away, or COVID goes away. Neither is expected to occur anytime soon.
June 1, 2022 1:30 PM