According to a new report by ForwardKeys, in partnership with Pacific Asia Travel Association (PATA), travel recovery to the Asia Pacific (APAC) region started slow initially due to strict travel restrictions and pandemic-related concerns. However, the tide is now turning, and international arrivals are making a robust comeback in the last quarter of 2023, getting closer to 2019 levels.
The recovery of the travel industry is not happening uniformly across all countries; some countries are faring better than others. South Asia is the most recovered sub-region, with a decline of only 5% in Q4 2023. This quick recovery is supported by a strong restoration of international seat capacity, which is expected to exceed 2019 levels by 4%.
Among the top regional destinations, India is the most resilient, with only a 1% decline in tourist arrivals. It is expected to reach 2019 levels of tourist arrivals in Q4 2023, as per the forward tickets.
Japan (-11%) is also expected to reach near pre-pandemic levels. The country managed to attract the interest of travelers from both regional markets – particularly, South Korea, Singapore, and Australia – and long-haul markets – more specifically, the USA, Canada, Germany, and France. The depreciation of the Japanese Yen makes the destination more affordable for a broader mix of travelers.
It is important to keep in mind that since 2019, the landscape has evolved, influenced by geopolitical events, technological advancements, and a growing focus on sustainability. Therefore, destinations and travel professionals in the region need to take these changes into account when preparing for 2024.
Despite the overall positive trend, air connectivity remains a significant challenge for the Asia Pacific travel industry. The pandemic led to reduced flight frequencies and higher airfares, which continue to affect this region. Travel to and within the region remains more expensive and time-consuming than before, hindering the region's full recovery. For example, the sub-region of Oceania (-37%) is still facing challenges in fully recovering from the impact of the pandemic. The region's strong reliance on air travel, high airfare costs, and the slow recovery of the major markets – primarily China – have complicated the recovery of major destinations like Australia and New Zealand. As a result, many travel operators have shifted their focus to the domestic markets. However, smaller destinations like Fiji, French Polynesia, or Samoa stand out as sub-regional success stories.
Despite these challenges, the Asia Pacific region possesses key assets that will propel its travel recovery forward over the coming months. These include the steady return of Chinese travelers, the growth of the Indian outbound and inbound markets, and the relentless efforts made by destination marketing organizations throughout the region to fuel travel demand.
APAC cities such as Fukuoka, Nha Trang and Nadi are all showing international arrival figures this Q4 above pre-pandemic levels, up by 55%, 17% and 11% vs. the same period in 2019, respectively.
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