FREE trade agreements (FTAs) can be leveraged to help Asia-Pacific tourism industries recover from the pandemic, the Asian Development Bank (ADB) said in a report.
“The tourism sector plays a significant role in the economies of Asia and the Pacific. In particular, island economies are highly dependent on tourism services for their GDP, exports, and employment generation. The COVID-19 pandemic made the sector’s vulnerability to such shocks quite clear,” the multilateral lender said.
In the Asia and Pacific region, tourism exports fell to $99.4 billion in 2021 from $486.1 billion.
“Tourism exports in Asia and the Pacific declined sharply during the COVID-19 pandemic. Southeast Asia was the worst affected subregion in absolute decline in tourism exports, followed by East Asia,” it added.
In 2019, Philippine tourism exports accounted for 10.3% of total exports, equivalent to $11.5 billion.
“Tourism exports in Hong Kong, Cambodia, Indonesia, Malaysia, the Philippines, Thailand, Taiwan, and Vietnam declined more than 90% in 2021 over 2019,” the ADB said.
“While tourism exports improved in some economies in 2021 after falling in 2020, many others continued declining even in 2021. These include Australia, Cambodia, Fiji, Indonesia, Japan, Nepal, the Philippines, Singapore, and Thailand,” it added.
The ADB recommended utilizing bilateral and regional level FTAs and cooperation agreements.
“The foreign direct investment (FDI) data suggest a lot of intraregional investment happening, but such investments are concentrated in only a few economies in this region,” it said.
“Therefore, economies in the region may want to consider making binding commitments for FDI in tourism services in future trade agreements to attract more FDI in this sector from partner economies,” it added.
It also noted that the region has “significant intraregional capital and human mobility” but there are no ample institutional cooperation mechanisms.
“Therefore, intraregional cooperation for tourism services led by governments, in discussion with industry chambers and private bodies, should be explored to enhance the tourist attractiveness of the region as a whole. Intraregional cooperation could involve capacity building, resource sharing, technology upgrade, and travel facilitation, among others,” it added.
Unilateral policies can also help make tourism services more resilient.
It cited policies to help ramp up investments in tourism infrastructure, developing alternative tourist destinations, utilizing digital tools to enhance tourism offerings, easier tourist visa policies, and investments in human resources and upskilling, among others. — Luisa Maria Jacinta C. Jocson