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Travel & Leisure

Vaccine hopes lift Asia travel sector worried by COVID-19 rebound

Regional industry expects faster recovery, but prospects dimmer in Europe and US

A lone woman in an arrival zone at Tokyo's Narita international airport this month. A resurgence in coronavirus cases threatens the resumption of more travel ties.   © Reuters

TOKYO -- Asian travel companies are increasingly optimistic that recent breakthroughs in producing effective coronavirus vaccines will soon help the industry get back to normality -- even though worries persist about a near-term resurgence of the pandemic and some officials suggest incentives to travel should be curbed.

While the travel industry in the region faces relatively faster pickups than other parts of the world, as latest airline data reveals, the resurgence of newly confirmed cases in Europe and the U.S. -- even some countries in Asia -- poses a challenge for the revival of cross-border trips anytime soon.

"Hopefully, with Pfizer's news it will make mass production available to the world. ... I'm sure, with our concerted efforts, we should be able to overcome this difficulty very quickly," Jane Sun, CEO of online Chinese travel giant Trip.com Group, told Nikkei Asia in an interview last week.

Sun was referring to U.S. pharmaceutical group Pfizer's announcement last week that its vaccine candidate had been found to be more than 90% effective in preventing COVID-19. Days later, Moderna said preliminary data indicated its own vaccine was 95% effective.

The news offered tourism-related industry players a much-needed shot of hope.

"Following Pfizer's development, people will probably be able to enjoy international trips next year," said the CEO of Japanese travel agency H.I.S., Hideo Sawada. "Even if the vaccine faces challenges, the Spanish flu [from 1918] ended in two years. ... It's logical to think that COVID-19 infections are expected to be over in another year."

Both Sun and Sawada spoke on the sidelines of the Global Management Forum hosted by Nikkei.

Trip.com CEO Jane Sun, pictured in 2018, said this month that with concerted efforts the coronavirus pandemic could quickly be overcome. (Photo by Kosaku Mimura) 

Other good news for international travel has emerged recently. Starting this month, Japanese travelers to Hawaii are allowed to forgo a mandatory 14-day quarantine if they provide a negative COVID-19 test prior to arrival. The popular resort destination has welcomed tourists from other parts of the U.S. since last month.

"Business travelers are slowly returning in Asia," Sawada said. The Japanese government from Nov. 1 waived a 14-day quarantine requirement for business travelers who return after overseas trips lasting one week or less. "Leisure overseas travel should be relaxed, as demand for tourism has evaporated," Sawada said. "Many players in the region will go bankrupt unless governments open borders."

Starting from Sunday, leisure travelers between Hong Kong and Singapore will be exempted from a quarantine if they test negative prior to arrival and take dedicated flights under the "air bubble" travel agreement.

Travel has been one of the industries hit hardest by the pandemic, suffering greatly from temporary lockdowns in various parts of the world. Domestic travel is, however, starting to recover. Asia seems to be leading the rebound -- it was home to all 10 of the world's busiest domestic routes in November, according to OAG Aviation Worldwide.

The U.K.-based data provider said Monday that the route between South Korea's Seoul and its resort island of Jeju was the busiest route by scheduled seats so far this month, with over 1.3 million seats. The vast majority of arrivals to the island, dubbed the Hawaii of South Korea, are tourists who want to enjoy the beaches just a one-hour flight from the capital.

The route was also the world's busiest domestic route last year. Following it on the list for this month were Vietnam's Hanoi-Ho Chi Minh, China's Beijing-Shanghai and Japan's Sapporo-Tokyo routes.

Domestic tourism has been boosted recently in these countries, with China having 637 million domestic tourists -- more than 45% of the population -- during the eight-day Golden Week holiday from Oct. 1, according to the Ministry of Culture and Tourism.

In Japan, Tokyo has been included in the government's Go To Travel program of domestic travel subsidies from Oct. 1, allowing nearly 40 million people nationwide to travel with up to 50% discounts by the end of October.

The industry outlook remains shaky, however. Countries in Europe are in partial lockdowns again and closing nonessential shops as they experience a spike in cases even worse than earlier this year.

Internal European borders were open by August, leading residents to travel at the peak summer season, and experts claim that this drove the second wave in the region. A similar trend is also happening in North America.

In Asia, Japan is posting a surge in new cases, with over 2,000 daily cases for the first time on Wednesday. South Korea, which eased its stringent social distancing rules last month, on Wednesday recorded its largest daily increase in infections in nearly three months.

Toshio Nakagawa, the head of the Japan Medical Association, said at a news conference on Wednesday that he believes Go To Travel "was a trigger" for Japan's increase in cases, although he acknowledged the evidence is unclear.

Trip.com's Sun said China's domestic market has recovered to around 80% of pre-COVID levels, looking at the country's hotel occupancy rate and domestic flight passengers. "Whatever happens in China will soon happen in the rest of the world," she said, but "the ability every country needs to demonstrate to citizens to be able to control the virus is a precondition."

She attributed China's recovery to the government's "excellent job to lock down the country. ... It is expensive, but after two months it is cleaned up [and] people can have confidence to go out [for travel]." The travel company found from search and booking data that travelers are paying more attention to hotels and flights that not only offer safe environments but also flexible and cancel-free services.

Trip.com has made a series of efforts to inspire travelers. What has been "very successful," according to Sun, is its live commerce deals, where viewers can buy package tours to destinations featured in promotional events livestreamed via social media.

H.I.S. CEO Hideo Sawada speaks during an interview on Nov.10 in Tokyo. He warned that many travel industry players risked bankruptcy unless governments did more to reopen borders. (Photo by Kosuke Imamura) 

As of Oct. 28, its livestream programming has created a total of around $360 million in transaction volume, with more than 150 million global viewers.

Sawada from H.I.S. said he was focused on diversifying its business fields. He hopes that its conventional travel business will only account for 20% of its whole business, compared with 90% now, "in the next five years." 

The agency, known for introducing low-cost overseas travels in the 1980s, when traveling in a group package tours was common, is seeing rapid growth in new "remote trip" services. For 2,000 to 3,000 yen (about $20 to $30), consumers can use smartphones or PCs to feel as if they are traveling abroad, led by tour guides in the H.I.S. network of nearly 160 cities abroad.

Sawada expects the remote trip service will generate large profits in the coming years. The company is seeing "several hundred thousand bookings," he said.

H.I.S. last month even launched a service for remotely visiting graves, in which a customer watches online as its staff go to a relative's grave, clean it and pray.

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