How India, Not China, Might Save Southeast Asia's Tourism Industry

Southeast Asia's tourism landscape is undergoing a significant shift as the once abundant presence of Chinese tourists is diminishing in the aftermath of the Covid pandemic.

The region, heavily reliant on Chinese travelers for years, now faces a pressing need to explore alternative sources of tourism.

Amidst this challenge, India emerges as a potential ray of hope for Southeast Asia's tourism industry.

In the 2000s, the rapid growth in China's middle-class and relaxed travel restrictions led to an unprecedented influx of Chinese visitors to the Southeast Asian region.

From 2009 to 2019, the number of Chinese travellers skyrocketed from 47.7 million to 154.63 million. Their lavish spending contributed a staggering one-fifth ($255 billion) of international tourism spending in 2019.

Southeast Asian countries like Malaysia and Thailand saw a substantial chunk of their GDP coming from Chinese tourists in 2019, the pre-pandemic year.

According to a Business Standard report, tourist receipts accounted for 5.7 per cent of Malaysia’s gross domestic product in 2019, and Chinese tourists accounted for 17.8 per cent of that revenue. Similarly, 11.4 per cent of Thailand’s GDP was generated by tourism, with a whopping 28.1 per cent accounted for by Chinese spending.

However, the emergence of the Covid pandemic changed the landscape drastically. In 2021, the number of Chinese tourists globally plummeted to levels not seen since 2000, leaving Southeast Asia with a staggering decrease in arrivals.

For instance, Malaysia experienced a massive drop in Chinese arrivals, from 3.1 million in 2019 to a mere 7,701 in 2021.

Similarly, Thailand, which welcomed 11 million Chinese tourists in 2019, saw a huge decrease to 13,043 arrivals in 2021.

Post-pandemic, the recovery of Chinese tourism in Southeast Asia has been disappointingly slow.

With flight capacity between China and the region still below pre-pandemic levels and China's economy taking a hit, many Chinese consumers have become cautious about international travel.

As a result, Southeast Asia cannot solely rely on a return to the booming tourism era of the 2010s.

In light of these challenges, Southeast Asia may seek alternative sources of tourists to revitalise its tourism industry.

With a rising middle class eager to explore the world and a growing airline industry, India presents a promising opportunity to make up for China's missing tourists.

Like China in the 1990s, India is home to an increasingly affluent population eager to explore the world.

The Asian Development Bank has even suggested that India could be "the next China" in terms of outbound tourism.

Already, Indian tourists have been outnumbering their Chinese counterparts in destinations like Singapore, and their numbers are surging in other parts of the region as well.

To harness India's tourism potential, Southeast Asian countries may have to adopt strategies similar to those employed with Chinese tourists in the past, including easing visa policies, expanding air links and assist hotels, restaurants and attractions in customising their offerings for Indian arrival.

While India may not immediately offset the decline in Chinese tourists, diversifying the region's tourism marketing sets the stage for a more sustainable industry.

By expanding their marketing efforts and enhancing tourism infrastructure to accommodate Indian and other travelers, Southeast Asian countries can position themselves for a more sustainable and prosperous tourism industry in the years to come.