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Early market trends: Southeast Asia’s road to recovery

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As restrictions begin to ease across Southeast Asia, some countries are finding life after lockdown easier to navigate than others. From domestic demand to booking behaviour, we spoke to industry experts about early market trends and how the situation is unfolding across the region

When the global outbreak of Coronavirus (COVID-19) began to spread across the world, Southeast Asia’s tourism sector saw a striking drop across all countries. While some destinations – including Vietnam, Malaysia and Thailand – are starting to see early signs of travel recovery, other countries – including India, Indonesia and the Philippines – continue to battle various degrees of lockdown as the pandemic intensifies. 

“Each country across the region is currently behaving differently,” says Bernard Kee, Regional Manager of Southeast Asia at STR, a global market data company. “Even Singapore and Malaysia which are very close neighbors have very different ways of managing the crisis. The reality is that the majority of Southeast Asia is still in the woods, but countries with good reserves coupled with strong government social policies are better positioned to weather this pandemic.”

The rise of the domestic economy

As the situation continues to unfold one thing is clear: domestic travel is kickstarting the region’s recovery. “We still haven’t seen meaningful recovery in intra-regional and long-haul travel,” says Vikas Bhola, Regional Director of South APAC at “However, we’ve seen some green shoots in the domestic travel space, with customers gravitating towards local destinations that are within driveable distances.”

Some countries with vast geographic landscapes and a history of domestic travel are seeing this trend emerge more rapidly, with Vietnam being the first to announce the easing of domestic restrictions. 

The growth in drive tourism is echoed by Chetan Patel, Vice President at Onyx Hospitality Group – a hotel management company with properties across Southeast Asia – who says despite domestic flights being back in operation in some countries, people are avoiding air travel at this stage. “Travellers are using driving as a mode of transportation and we’re seeing more business in destinations that are within driving distance,” he tells Click. “The first weekend we opened a property that is within driving distance of Bangkok, we saw over 80% occupancy. We didn’t even have 10% occupancy when we announced that we were going to reopen.

“For cities, the business is still quite far off. There’s really not much you can do to stimulate the domestic demand there and the supply is way over what’s needed for the market,” he continues. “Bangkok, for example, has so much supply but it was mostly built for foreign inbound tourism. So, we’re seeing low occupancy and performance there compared to other areas where it is easy to drive from large population centers.”

While the domestic market is bringing demand to the region, STR’s Kee advises market watchers to take occupancy data with a grain of salt as quarantined guests and trapped workers/visitors can skew stats. “We saw small occupancy booms in Manila, The Philippines, during March and April when the lockdown first happened there,” he says. “But when the government eased its ‘enhanced community quarantine’ in June and people were able to return to their hometowns, we saw a drop in occupancy from 50% to 30%.”

People hiking
Countries with a vast geographic landscape, such as Vietnam, are seeing domestic travel fuel recovery. Image credit: Thanh Tran, Unsplash


When comparing the region’s performance, Kee looks to markets including Sydney, Perth, Tokyo and Hong Kong, which have started experiencing spikes in domestic travel. “While some Southeast Asian countries are starting to see similar patterns to the comparable markets, it’s still too early to conclude – we don’t see a clear behavior yet,” he adds.

What are customers searching for?

There’s a divide in sentiment across the region when it comes to preferred property types. “As a result of the desire for destinations which are more drivable distances from big cities, we’ve seen some preference for vacation rental accommodation – villas, guest houses, etc.,” says’s Bhola. “On the other hand, we’ve also seen demand for more premium chain hotels that are associated with higher hygiene standards.”

Booking behavior has also shifted since the pandemic started. “During April, booking windows were either very short or several months out - and that’s very COVID-19 behavior,” says Bhola. “It’s important for partners to not only look at their short-term availability but also their long-term to attract those customers planning in advance.”

“We’ve also seen that our customers are gravitating towards properties with a flexible cancellation policy. Having that cancellation flexibility helps cater to the demand we’re seeing across the region by giving customers the confidence to book in the first place.” 

Winning guest confidence with certification 

By now it’s known that cleanliness is top of mind for guests worldwide, with Southeast Asia consumers being no different. For independent properties without a global brand standard to stand behind, Onyx Hospitality Group’s Patel recommends looking to local government guidelines to enhance safety procedures and reassure customers. “The best thing to do is to comply with local regulations and follow what the government is setting as a standard,” he says. “If you follow those, you can then apply for certification.”

One such sanitation initiative in Southeast Asia is the SG Clean quality mark, which worked with the Singapore Tourism Board to implement and promote. Providing certification to properties if they meet criteria based on certain hygiene and safety standards, the initiative is one example of how is working behind the scenes to provide support to various governments, industry bodies and, in turn, its partners.


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Image credit: Unsplash
  • Recovery in Southeast Asia is out of sync, with some countries starting to see early signs of recovery while others continue to battle various degrees of lockdown
  • Domestic travel is kickstarting the region’s recovery, with customers avoiding air travel and gravitating toward destinations within drivable distances 
  • Countries with vast geographic landscapes and a history of domestic travel are seeing the industry recover faster than others
  • Consumers in the region are searching for flexibility along with both last-minute and long-term booking windows