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Source: Asia Development Bank

Nisha Pillai:

Hello and welcome to ADB Insight, a webcast by the Asian Development Bank on development issues facing Asia and the Pacific. I’m Nisha Pillai.

Tourism is one of the foundations of the Asia Pacific economy.  Some 700 million people holiday here in a normal year. But this is not a normal year. 

Once bustling tourist hotspots resemble ghost towns as the impact of COVID-19 casts a heavy pall over the entire industry. 

Tourism here stands to lose 70 million jobs plus 1.1 trillion dollars in GDP — more than any other region in the world.

And travel hubs are feeling the impact just as much as the destinations themselves, as the entire travel industry tries to figure out how to re-open safely during a global pandemic. What precautions will operators and travelers have to take? And how will the industry need to adapt in order to survive?

Later we’ll have a panel discussion with experts from the development hotel, and airline sectors.

But first to our interview. Tiffany Misrahi is Vice President for Policy at the World Travel & Tourism Council .

Tiffany Misrahi, thank you for joining us on ADB Insight.

Well, we know that the COVID pandemic has had the most devastating impact on the travel and tourism sector. Could you put this in context for us? Give us the big picture both globally and also specifically for the Asia Pacific region.

Tiffany Misrahi:

Sure, and maybe to start I’ll give you a perspective where this sector was about a year ago. We accounted for 330 million jobs on the planet, 10.3% of global GDP and our sector was growing faster than the global economy for the ninth consecutive year.  But to give you a sense of the magnitude of the crisis, here are our latest estimates. We’ve seen that so far 142 million jobs of the 330 million have been lost to date as a result of COVID19. That amounts to $3.8 trillion dollar losses and we estimate that if restrictions don’t get eased and things don’t get better by the end of the year, that figure could reach 174 million jobs.

Nisha Pillai:

Could you give us a sense of the social impact of this? The scale of the job losses is beyond belief. What does it mean in terms of lives, the gains that have been made getting people out of poverty? Can you paint us a picture?

Tiffany Misrahi:

The thing is, travel and tourism isn’t only a sector that has a high contribution to GDP and jobs, it employs obviously many, many people, but it has tremendous social impact. It meaningfully changes the lives of people and all the communities that it touches. It reduces poverty inequality. It enriches community both economically and socially. It fosters innovation. It preserves ecosystems and we really believe that it’s a sector where people can start at the bottom and make it all the way to the top. So you could start the career as a receptionist and become the general manager.

Nisha Pillai:

It’s no surprise, then, that across the industry there’s a hunger to get going again and reopen, but that depends critically on consumers feeling safe to travel, and governments feeling that it’s safe to reopen borders. And that’s very difficult to achieve, isn’t it? Because countries are battling with this pandemic. Many in the region feel we’ve now managed to get a handle on things. We’ve making some progress. Why would we risk opening up our borders? It’s just not worth it. How do you persuade them?

Tiffany Misrahi:

You know, I think it’s the value that we’ve talked about. I think the importance of the impact of travel and tourism on their country, on their economy on the people. You know, it fuels so many economies around the world and we want to make sure that countries are not only healthy from a health perspective, but also from an economic one. And it’s finding that right balance and ensuring the health and safety of people economically and socially.

Nisha Pillai:

What advice can you give to governments who are beginning to consider whether to open up, and to development organisations like the ADB? What kind of role can they play to facilitate this process?

Tiffany Misrahi:

So actually under the leadership of Saudi Arabia and its presidency of the G20, the global travel and tours in private sector was asked to put a plan together through WTTC to support the recovery of the sector and hopefully bring back 100 million jobs. One point that we highlighted was modifying quarantine measures to be for positive tests only – so replace blanket quarantines with a more targeted and effective approach and thereby significantly reducing the negative impacts on jobs and on the economy.

The second is to continue to support the most affected by COVID19  within the travel and tourism sector – whether it’s the SME’s or the larger corporations in terms of fiscal stimulus, incentives and the protection of workers.

And finally, I think it’s going to be credibly important to continue investing in crisis preparedness and resilience to better equip the sector to respond to future risks or shocks.

Nisha Pillai:

Tiffany Misrahi, you’re such a powerful advocate for the industry. Thank you for joining us on ADB Insight.

Tiffany Misrahi:

Thank you for having me.

Nisha Pillai:

I want to bring in our panel now and we’re joined by Doctor Mario Hardy Hardy, CEO of the Pacific Asia Travel Association; Subhas Menon, Director General of the Association of Asia Pacific Airlines; Sophia Chua , director of Quality Assurance and Compliance at Banyan Tree Hotels And Resorts, and Steven Schipani, the ADB’s tourism specialist for Southeast Asia. Welcome to you all.

Nisha Pillai:

Steven Schipani, I’d like to start with you. Although travel and tourism is in pretty bad shape right now, what do you think of the prospects for a gradual recovery, given that in our area the Asia Pacific region so many countries have dealt with the pandemic really robustly, and community transmission is extremely low?

Steven Schipani:

Thank you Nisha.  I think there’s actually very strong prospects for a good recovery in the countries that have been able to control COVID, and their efforts are continuing to prevent COVID well. 

Now, that said, we expect in recovery in phases, the first phase being domestic tourism. Later, when borders are safe to open and countries can agree with one another on protocols to do that, we would expect the resumption and international tourism. But right now, countries – for example the People’s Republic of China, Vietnam, Thailand  – that have large domestic markets, large populations, they’ve seen a quick rebound in domestic tourism.

Nisha Pillai:

Sophia Chua, if I can bring you in now, are you seeing that on the ground at Banyan Tree? Are your properties in China, Vietnam, Thailand seeing a rebound compared with others in your portfolio?

Sophia Chua:

Hi Nisha, thanks so much. Yes, actually domestic market travel is actually picking up, especially in China. So pre-COVID there was already a domestic demand, but it has surged even more post COVID in the current times, because of the need to travel around and also because of other lockdowns in other countries. 

Nisha Pillai:

Mario Hardy, some areas in the region are so dependent on travel and tourism. Over 50% of their economy comes from our sector. They can’t simply afford to sit it out, can’t they? They’re not going to be able to get domestic tourists to fill that gap. Or will they?

Mario Hardy:

No. We know from research that we conducted earlier in the year that many of the SMEs and small businesses and resorts around the region here are closed. Many of the businesses have closed permanently, which is obviously a real challenge. 

Nisha Pillai:

Subhas Menon, arguably the airline sector has been hit hardest of all. How do you see the current outlook?

Subhas Menon:

Well, it doesn’t have to be as dire as it seems at the moment. This is because I think governments in the Asia Pacific region are risk averse. We have seen a good recovery in the domestic market. In fact domestic travel is up to almost  70% from what it was in 2019, with capacity around 80% of what it was a year ago. Because the governments have taken a lighter touch to domestic travel and opened up domestic travel, it has rebounded. So if a similar sort of approach is taken to international travel, I think we will see a quicker revival and recovery.

Nisha Pillai:

But you can understand why so many governments in the region are “risk averse” as you put it, or super cautious: they look at what happened in Europe, where travel bubbles were created over the summer and now there’s a second wave of COVID going on. So what would you say to persuade them that it will be different where you are in the Asia Pacific region?

Subhas Menon:

Well, in the Asia Pacific region, I think that there are two factors. One, the containment of the virus is apace, and secondly the response to the virus has been very, very good, not only in terms of testing but also contact tracing and making sure that public health facilities can cope. As long as public health facilities can cope, and as long as contact tracing and testing are good, then the risk is mitigated, as far as the risk of importation of cases is concerned.

Nisha Pillai:

I’m going to ask all of you for your response to that. Are you as confident as Subhas Menon that Asia will be different. Mario Hardy, why do you think that Asia might be any different from the experience in Europe?

Mario Hardy:

I think here in Asia most countries have a really good handle on the number of cases in their respective countries. Everyone around Asia is very accustomed to wearing masks. So the protocols are really well observed by the population here. I think what is really important is a safe re-opening, reopening gradually and not blanket to all destinations, but to green corridors with respective destinations, and opening gradually, and ensuring that the safety protocols are put in place, good testing is put in place, good contact tracing, the common pass or the digital health passport put in place to track who’s been tested, when they have been tested, and when a vaccine is available, who’s been vaccinated etc. 

Nisha Pillai:

Digital passports that you just mentioned, Mario Hardy. Now that requires transparency of data across borders, a lot of personal information, health information tracking information. Might there be resistance from travelers about sharing their data in this way? Sophia Chua, could I ask you that question?

Sophia Chua:

Yes, I think a digital passport, although it’s good, I think there is a concern on data privacy, especially if it’s going to be tracking every move. So usually for example, in Singapore we all have to install an app by December or, if not, currently you are actually checking in and checking out at various locations as you go, so the government actually knows where you’re moving. So this question then begets the traveler, would they want to be tracked by the host country’s government in that sense?

Nisha Pillai:

So what about quarantines? Tiffany Misrahi from the World Travel and Tourism Council said that quarantines don’t work, they should be dispensed with. If someone has a negative test that should be trusted by the country they’re going to. What do you think?

Subhas Menon:

Well, it is the greatest impediment to travel, I think. You know, it’s like basically swatting a house fly with a sledgehammer. And the reason why people are quarantined is so that the health authorities can do the testing.  So why not just shoot straight to testing? Because that will be the measure of choice, also of travelers who are prepared to put up with testing in order to be able to travel. 

But I think the biggest issue is the trust among governments, because we need governments to come together, see eye to eye and draw up protocols for testing and implementation of measures, so that everything is harmonized and everything is standardized, rather than the patchy framework that we have to confront today.

Nisha Pillai:

Mario Hardy, quarantines… are we ready to dispense with them?

Mario Hardy:

We certainly hope so. We have the same philosophy as WTTC. Actually pretty much all international organizations are under same opinion, that actually quarantine is only effective if people are actually positive. But if you’re negative, testing is really critical. As Subhas mentioned, as long as we do pre-departure testing, possibly testing at arrival if necessary, there is no need for quarantine. It’s a discouragement for people to travel. It’s inconvenient and really costly for the travelers also, and affects the economy.

Nisha Pillai:

Steven Schipani, what is the ADB doing to get governments to be a little less cautious and talk to each other and coordinate their response so the tourism can get off the ground again?

Steven Schipani:

Well Nisha, one of ADB’s priorities is promoting regional cooperation, and we see in a pandemic situation like this, regional cooperation is more important than ever. So ADB, with our coronavirus response, lending and technical assistance and with policy advice that we’ve been making available for our developing members, we’ve convened a number of expert groups whereby we’ve worked with high-level decision makers in government to give advice on formulating sound policies for a cautious reopening, for a response and other recovery measures that can take place. 

Nisha Pillai:

We’ve been talking a lot about what governments should do, but what about the industry itself? So Sophia Chua, can you tell us what is Banyan Tree doing, and the hotel sector doing, to address the immense health and safety challenges of COVID19?

Sophia Chua:

So for Banyan Tree we’ve actually launched the ‘Safe Sentry’ program. So it’s actually an integrated health and well-being program. So we look after the health by enhancing the cleaning measurements that the hotel is taking. We do provide safe places for the guests to stay, so we also have the well-being section where we focus on deep sleep or focus on helping them improve their well-being through various relaxation modes, as well as also bringing some activities in the villa. So, for example, you have online yoga or meditation sessions, as well as maintaining a very safe environment, so the guests have the assurance that the place is safe. In addition to that, we do work with a third-party Certification Office that does the certification for our hotels, so it’s in progress to make sure all the hotels are independently certified that they are clean and safe for travelers to come.

Nisha Pillai:

OK, so independent certification is clearly key. Subhas Menon, what is the airline industry doing to address the same point that travelers are really safe when they’re in the skies?

Subhas Menon:

Well, not just the airline industry, but the whole aviation industry has adopted and applied what we call the International Civil Aviation Organisation’s “CART Takeoff Guidance”, which was issued at the beginning of June. This addresses every single aspect of the traveler’s journey, from before he comes to the airport and gets on a flight, until he arrives at the destination. These measures are all being implemented, including social distancing, mask-wearing – which is compulsory – and the guidance recommends that only travelers and airline and airport workers are allowed at the airport. Also, contactless and digital services are provided at the airport. 

On the aircraft we have what we we call ‘HEPA filters’, which are the high efficiency particulate air filters – basically, hospital grade filters which recirculate air every two minutes, mixing in with air from the outside. In hospitals it’s usually about every 10 to 20 minutes, whereas on aircraft it’s every two to three minutes.

Nisha Pillai:

But you know, Subhas, despite what you’re saying, most people are really anxious about getting on board a plane, being up in the air for two hours or more. How safe is it to travel? What would you say to them?

Subhas Menon:

It is very safe. Even though they’re very few passengers right now, there have not been any proven incidents of in-flight transmission. What countries are guarding against is important cases where people who are catching the infection abroad and bringing it home. They’re not really catching it on the airplane. So all the measures that can be taken have been implemented, and I think air travel is one of the safest possible modes of transport for anyone to consider.

Nisha Pillai:

Mario, how safe are airports?

Mario Hardy:

I believe they’re pretty safe, and I’ve traveled on a domestic flight recently. And of course we have to get there a little bit earlier: there are new protocols in place at the airport, temperature checks, sanitizations and other checks are conducted, at least for domestic travel. 

For international travel you’ll have your testing also, which will take a little bit more time. But I didn’t feel necessarily unsafe in the airport in any other ways; we were wearing our mask obviously, sanitizing. But it will affect travelers moving forward in the sense that their journey will be longer.

Steven Schipani:

I also think that it’s important to communicate clearly to consumers, to travelers, to people – whether it’s on a plane, ground transport, or others – what those protocols are, what government, what the private sector is doing to make sure that the tourism and travel industry is safe to receive visitors. The ADB, we’re the convener and we help advise a number of intergovernmental sub-regional tourism working groups across Asia and the Pacific. 

And this is something that we’ve heard from governments – that OK, we really want to be able to communicate clearly, can you give us some good examples, good policies, good practices, what we can do to get the message out once again, just so consumers are informed that efforts are really being made to make to make ensure that you’re safe in your travels.

Nisha Pillai:

Is that message getting through do you think, Steven Schipani?

Steven Schipani:

I think it is, and you look at the print media, look at what’s online, it’s easier and easier to find this information now. In the beginning there were mixed messages. Sometimes messages were unclear so this further undermined travelers’ confidence in terms of good information for decision-makers.     

Nisha Pillai:

We’ve been talking a lot about getting the nuts and bolts in place. But do people actually want to travel? Mario Hardy, is there any evidence to support that?

Mario Hardy:

Yes, earlier in the crisis we conducted a sentiment analysis across China, and later in the crisis, not too long ago, about two months ago, we conducted a similar sentiment analysis across Europe and the rest of Asia, and there’s an immense desire for people to travel overseas, and most people have said as soon as the borders are reopened they will jump into plane. They will travel. 

Nisha Pillai:

So let’s be positive for a moment. Let’s assume you managed to persuade countries to begin to reopen their borders. Apparently, people want to travel the demand is there. Are we ready to go? Is the infrastructure ready and in place? Can we just click our fingers and get going?

Steven Schipani:

Asia Pacific has some of the best gateway infrastructure in the world – modern airports, other types of port of entry facilities. And with the expanded availability of testing I think the answer is yes.

Nisha Pillai:

Subhas?

Subhas Menon:

Yes, I think so. You know, I think several airports in the Asia Pacific region are also building testing centers. But notwithstanding, there are enough tests being conducted in most countries. Just imagine thi: domestic travel is already  70% of what it was in 2019. How is that possible? It is because people want to travel. They’re happy to travel,and airports and airlines are able to accommodate travel with all the new measures and precautions that need to be taken. Otherwise we will not be able to see travel bounce back to to the levels that they have. Everyone is ready to travel. Airlines are ready, airports are ready to receive travelers. We just hope that the governments will be able to apply the same risk-mitigating measures that they applied for domestic travel, to international travel.

Steven Schipani:

In terms of readiness, we’ve seen some countries announce that they are in fact ready to do that, and I recently saw that Singapore and Hong Kong, China have set up a travel bubble whereby they’ll allow testing upon departure and arrival without mandatory quarantine. 

Back to the Issue of quarantine. I think that yes, travelers would be very averse to quarantine, especially if it was more than a few hours for a test upon landing. Business travelers or international experts that move around, they may be willing to quarantine for a longer period, but it would be very difficult to get a resumption and international leisure travel while we have longer quarantines in place.

Nisha Pillai:

Tell us more about these travel corridors that some countries are beginning to talk about in bilateral negotiations. Give us a quick overview.

Steven Schipani:

Sure. Well, I mentioned Singapore and Hong Kong, China. I also understand that Thailand is talking to the People’s Republic of China, which is its largest sending market. And I would guess that other countries are also speaking with the People’s Republic of China, because it is the world’s largest source market. For international tourism it forms the top market, and in many countries in Southeast Asia or across Asia and the Pacific. So Thailand is in talks with the People’s Republic of China, a number of different provinces I understand in the Pacific Region – Fiji, New Zealand, Australia – earlier were in talks about setting up what they call a ‘Bula bubble’. This means ‘welcome’ in the Fiji language and I believe those talks are on-going.

Nisha Pillai:

Well, someone who’s involved in trying to iron out this kind of travel bubble or travel corridor is Sophia Chua from the Banyan Tree group. Sophia, I understand Banyan Tree is part of discussions to open up a corridor between Singapore and the Maldives, and Singapore and some Indonesian islands. What do you see as the potential stumbling blocks at this stage that need to be ironed out before this can happen?

 Sophia Chua:

Yes, so some of the key stumbling blocks we see is firstly there’s a lot of mention on various protocols that you have for the airport for the airlines, for the hotels and all. It’s more of an alignment of this protocols across the whole travel ecosystem that’s important, because you cannot have various protocols, and for a traveler you have to take a test maybe two, three times. Can they be standardized tests or standardized protocols that will be followed throughout the whole journey, so make it easier for a traveler to go from one place to the other, and have both governments acknowledge the same protocols that are being followed by both sides. 

Secondly, is the integrity of the PCR test, because currently every government is doing it differently. So do we have a digital passport, digital health passport or similar test or app that was mentioned earlier that is recognized across both borders? 

And thirdly, obviously is government support and government approval with regards to the quarantine.

Nisha Pillai:

The COVID pandemic has turned all our lives upside down. What is it doing to the industry in terms of driving change, accelerating change towards possibly a more positive, and more stable and robust industry? Is that too much of a big ask?

Mario Hardy:

So what we’ve seen is an acceleration of implementation of new technologies. Technologies that are already in progress, pre-COVID19 are now actually being accelerated. Touchless check-in at hotels and flights, airports etc., and payment technologies and others that are were there but were anticipated to get in several years from now are now actually being implemented today. That’s a really positive side of it. The other positive side is that we know from search that people are purposely looking for eco-tourism or sustainable destinations to travel to, and also for hotel properties and resorts and other products in tourism that are greener at this point, which is really interesting.

Steven Schipani:

Yeah, Mario, on that I agree, and we’ve seen that at the ADB, we’re helping the Philippines prepare a tourism project now, and some of the potential investments that the government’s identified as important are small infrastructure; we’re helping to spread tourists to natural areas where they can be more in touch with nature, local experiences. But also contactless payments, helping local, small and medium enterprises, being able to use contactless payment technology and other types of technologies that can make the consumer feel safer along that tourism value chain.

Nisha Pillai:

So finally I’d like to ask each of you in turn. Do you have one key message for governments for policymakers about how to get the industry going again? What would you advise?

Subhas Menon:

Well, my thought is that the industry has come together during this crisis and I believe the industry is speaking with one voice. We also need the governments on board. We can totally understand why the government’s prioritizing the containment of the virus. But we want them to come on board and we want them to include us in the planning and development of the infrastructure as well as reimagining air travelers’ journey so that we can successfully re open air travel.

Nisha Pillai:

Sophia Chua, your thoughts please?

Sophia Chua:

Yes, I think it’s important that everyone works together. So governments need to assist because we do have industry alliances that were created out of this pandemic to be able to think out of the box and create test cases or pilot projects to be able to show that tourism can work in this kind of time and place. So I think it’s more that they need to work together with the various stakeholders in this travel ecosystem, to be able to have a safe environment for all travelers to be able to travel.

Nisha Pillai:

Steven Schipani, your key message.

Steven Schipani:

Well, I think that tourism is a tremendously resilient industry. It supports millions of jobs. It generates billions and billions of dollars each year in revenue and investment across Asia. And the Pacific is tremendously important for the economies in the region.

It’s important to remember that Asia Pacific hasn’t lost what makes it such an attractive tourist destination, both for domestic and for international tourists. The tourism industry needs help to weather the storm, and I hope that we can use this once in a lifetime event to really re-imagine, re-think the way the tourism industry operates, so that we can build that greener, we can build back more inclusive and we can build that more sustainable tourism.

Nisha Pillai:

Mario Hardy, looks like you have the final word.

Mario Hardy:

Thank you, Nisha. You know, we understand the difficulties and the challenges that governments are facing at the moment, deciding between the health and safety of their citizens and residents with the reopening of their borders. But we as an industry need to have plans in place. We want to understand from the various governments a timeline and the protocols that will be put in place, how and when the reopening will start, so that businesses can plan for it, they can actually budget for 2021, they can train their staff, bring their staff back into their business and start promoting and selling their products for  2021 and 2022 onwards. So preparedness and planning is really key.

Nisha Pillai:

Mario Hardy, Steven Schipani, Sophia Chua, Subhas Menon, thank you to you all for joining us on ADB Insight, and for a rich and insightful discussion. Wherever you’re watching us from, thank you for joining us too. I’m Nisha Pillai. Goodbye.

MIL OSI Global Banks