Asia Pacific could no longer be the world’s largest travel region by the end of 2022, a new report from international travel industry analysts the Centre for Aviation (CAPA) predicts. The slow recovery has been caused by China’s ongoing border restrictions, and by Japan’s slowness in relaxing its inbound travel restrictions on tourists, according to data from ACI Asia-Pacific, one of the five regional representatives of the Airports Council International.
China and Japan are the region’s two largest travel markets, accounting for a little more than 52% of total regional capacity and 42% of regional international seats in 2019, so what happens there has a large impact on the rest of the region.
ACI Asia-Pacific’s latest traffic outlook projects that Asia Pacific regional airports will handle approximately 1.84 billion passengers in 2022, which is growth of 22% year-on-year. Regional passengers will still be down by 45% when compared to levels before the pandemic. In 2019, 3.38 billion passengers passed through Asia Pacific airports, approximately 37% of global air travelers.
Globally, airport passenger numbers are forecast to reach 6.8 billion in 2022, which represents growth of 47% year-on-year. In most regions passenger numbers are expected to return to 70-80% of pre-Covid levels. The Asia Pacific’s share of global traffic is projected to fall to 27% for 2022.
Europe, where traffic volumes have recovered to approximately 85% of pre-pandemic levels, even with the downturn in Russia, is projected to end 2022 as the world’s largest travel region, whereas North America and the Asia Pacific are expected to end the year broadly even.
Before Covid, China was the world’s largest outbound travel market, with an estimated 155 million outbound travelers, more than half of them being air passengers. According to the Chinese Tourism Academy, nearly 90% of Chinese outbound travellrs visited destinations in the Asia Pacific before the start of the pandemic.
The country’s ‘zero Covid’ approach has largely kept it closed off to international travel. China maintained scheduled air travel with 54 countries for the breadth of the pandemic, but capacity was kept to a minimum. A combination of travel restrictions, quarantines, visa changes and ‘circuit breaker’ measures – which forced airlines with infected passengers to temporarily halt operations – has kept international capacity to/from China at under 10% of typical volumes.
Japan has been marginally more open, but it too has maintained travel restrictions longer than most other markets. The country announced at the end of Aug-2022 that it was finally raising its cap on inbound tourists from 20,000 to 50,000 per day, as well as ending requirements around PCR testing and requiring foreign arrivals to have an itinerary booked through a travel agency.
The result is that international capacity in the two most important Asia Pacific travel markets has plummeted. China’s international share of Asia Pacific seats fell from 26.2% in 2019 to an estimated 5% for 2022 (including forward projections for the rest of the year), and Japan’s share has fallen from 16.6% to 10%.
Capacity growth in other markets has not been able to compensate. A few of the Asia Pacific’s other large international travel markets, namely India, are approaching full recovery, but most remain at 50% or more below 2019 levels.
Full regional recovery to 2019 levels is not anticipated until the end of 2023 or early 2024, and even then recovery is dependent on countries opening their borders and ending lingering travel restrictions, as well as the wider economic and epidemiological situations. There also needs to be continuing progress with vaccinations, work on harmonization of international travel rules and above all, a reaffirmation of political commitments towards openness and freedom of movement.
China remains the greatest unknown, and the extent to which the county’s ‘zero-Covid’ strategy is retained or relaxed will determine, to a large extent, how rapidly international travel in the region recovers in 2023. There has been no official indication that the country is willing to give up on its approach, although restrictions on international travel are slowly easing.
Since Jul-2022 rules around visas, quarantines, testing, student arrivals and the ‘circuit breaker‘ capacity limitations have all been relaxed, and authorities have commented about pursuing an “orderly” return to international travel. In another potentially positive sign for international travel, Chinese President Xi Jinping visited Kazakhstan on 15-Sep-2022, which was his first international trip since Jan-2022.
