Southeast Asia Wants to Copy Europe’s Visa-Free Travel

Southeast Asia’s tourism industry is looking to Europe’s models of visa-free travel and Open Skies to boost their own travel and tourism prospects despite isolationist rhetoric and policies playing out elsewhere.

The Association of Southeast Asian Nations (ASEAN), a 10-member political and economic alliance for a population of 645.8 million people, which is larger than the European Union, wants a single visa policy for the region and improved Open Skies agreements with airlines.

A single visa for ASEAN countries is already in the works and could come as soon as later this year or 2018, said Kobkarn Wattanavrangkul, Thailand’s Minister of Tourism and Sports “We plan to start this between Thailand and Cambodia,” she said. “There have been some issues, not concerning security, but because we give free visas to some countries but .”

As millions of people across the region gain more disposable income for travel, tourism officials view overhauling visa requirements as an easier-to-solve problem than larger challenges such as tackling infrastructure investments in airports.

With 104 million international arrivals across the region in 2015 — many of them from China — ASEAN countries are increasingly focusing on marketing the region as one destination rather than 10 separate destinations, and that’s a big reason they seek a common visa policy.

ASEAN tourism arrivals across the 10 countries, which include Thailand, Vietnam and Indonesia, will grow by an average of 6.5 percent per year during the next decade, said Wattanavrangkul as she at the World Travel & Tourism Council Global Summit in Bangkok on April 27.

The European Union’s Schengen Area is the inspiration for ASEAN’s ambition for a single, regional visa. Indonesia, for example, is the most populous ASEAN member state and already grants visa-free travel to 169 countries — that makes Indonesia one of the world’s most liberalized countries for visa policies.

Arief Yahya, Indonesia’s minister of tourism, said in 2014 the country’s visa-free policy only included 15 countries while Singapore allowed 155 nationalities to enter visa-free, Malaysia allowed 163 and Thailand had 57 that year.

Indonesia, however, plans to scale back its current 169-country visa-free policy and designate 49 countries that are currently granted visa-free travel to visa on arrival because of the low number of arrivals from these countries.

“We’ve seen success from our visa-free program and have seen arrivals grow an average of 20 percent and range from 12 to 50 percent,” said Yahya, also speaking during the Summit.

Marketing Southeast Asia as One Destination

As parts of Europe and the U.S. are tightening travel and immigration policies, Southeast Asia is increasingly embracing more liberal travel policies and globalization.

ASEAN’s strategy for long-haul travelers from outside the region involves messaging “two countries, one destination,” such as getting travelers to consider planning a trip to both Thailand and Cambodia rather than one or the other. That’s similar to how long-haul travelers often visit Europe.

But as Skift reported in January, ASEAN’s regional tourism marketing campaigns haven’t been successful or resonated with travelers.

Wattanavrangkul said intra-ASEAN travel marketing is particularly important for the region, and the focus is on weekend destinations, as well as medical, wellness and education tourism. Last year, Thailand, for example, had 32.5 million arrivals and 27 percent of those arrivals were from the region, she said.

It’s become increasingly easier to travel within the region thanks to more air connectivity from low-cost carriers such as AirAsia. “The ease of travel is something new for Thailand that we’re now starting to talk about,” said Wattanavrangkul.

“The future plans for airport expansion, immigration, anything that concerns travel, we’re now grouping together and using tourism as the head,” she said. “In the past, planned and followed. But now, plans and follows.”

The Eurozone has made travel more seamless between various European countries during the past decade. ASEAN’s Economic Community, established under the ASEAN umbrella in 2015, calls for the integration of the region’s economies but so far doesn’t include plans for a common currency for Southeast Asia.

By 2025, the ASEAN Economic Community has committed to, “advancing a single market agenda through enhanced commitments in trade in goods, and through an effective resolution of non-tariff barriers; deeper integration in trade in services; and a more seamless movement of investment, skilled labor, business persons and capital,” according to the organization’s charter document.

The Open Skies Picture in Southeast Asia

The growth of low-cost carriers across Southeast Asia, primarily driven by AirAsia, has connected parts of the region where air travel was previously too expensive and not accessible to many travelers.

Low-cost carriers account for more than half of total airline capacity in Southeast Asia and the wider Asia-Pacific region is the world’s largest aviation market in terms of the number of passengers carried.

“The growth of travel in ASEAN is possible especially because of the growth of low-cost airlines,” said Wattanavrangkul. “Meaning that air connectivity is no longer from capital to capital but from secondary city to capital or secondary city to secondary city.”

Still, the region’s governments haven’t made Open Skies agreements as liberalized as they could be, said Arun Mishra, regional director Asia-Pacific of the International Civil Aviation Organization, speaking during the Summit.

The European Union has better Open Skies agreements in place than Southeast Asia, Mishra said. “This is because Southeast Asia still hasn’t decided on the seventh freedom, which means that the ability of airlines to fly from one foreign hub to another foreign hub isn’t allowed even now,” he said. “This is why you will see many airlines, such as AirAsia, needing to go to individual countries and form individual companies with the local partners to do this.”

Improved Open Skies agreements would help lower airfares across ASEAN countries and help regional airlines better compete with airlines from Europe, China and India, said Mishra.

Southeast Asia’s wide-ranging Infrastructure Investment priorities

Southeast Asia’s tourism growth faces threats in some areas because infrastructure investment hasn’t kept pace with demand. ASEAN estimates the region’s annual infrastructure investment needs top $110 billion, roughly two to six times what has historically been spent on infrastructure projects each year.

During one of the Summit sessions, hundreds of attendees, many C-suite executives of the world’s largest travel companies, were polled: “In which of these areas do you think Southeast Asia most needs progress and investment — Infrastructure investment, human resources, marketing or regulation?”

About half of respondents said infrastructure investment was the most pressing need for Southeast Asia’s tourism industry. Airport infrastructure in the region garnered an average score of 3.4 out of seven while ground and port infrastructure scored 3.5 in the World Economic Forum said in its recent 2017 Travel & Tourism Competitiveness report.

While airport infrastructure in much of Southeast Asia is either aging or more likely unable to accommodate demand, aviation isn’t the region’s only investment priority. The trans-national Mekong River, which runs through Vietnam, Cambodia, Thailand, Laos, Myanmar and China, is one of the jewels of the region’s maritime transport investment plans, according to Wattanavrangkul.

ASEAN countries are seeking public-private partnerships to help with investment in regional ports and maritime transportation projects.

“With infrastructure investment, we’re not only talking about the main cities,” said Wattanavrangkul. “If we want our destination to be attractive…we need to admit that the government alone cannot do all the projects in secondary cities and that’s why we’ve started to have the public-private partnerships.”

Yahya said that in Indonesia, for example, the government generally funds only 30 percent of tourism infrastructure projects. “We needed a new terminal or new runway yesterday,” he said.

ASEAN’s Tourism Integration Challenges

ASEAN countries want more public-private partnerships to jump-start infrastructure projects. But they also need to improve regulations such as making it easier for skilled professionals in the travel industry to move and work in multiple countries.

“Moving trained personnel from one country to another is really restricted because they are trained in different regulations,” said Yahya. “If we could have some harmonization of regulations within ASEAN for the free flow of labor from one country to another to meet the demand in various places that would really help us.”

The World Economic Forum recently gave ASEAN countries an average score of 4.8 out of seven for its human resource and labor market’s preparedness for tourism. It also gave the region a 4.3 out of seven for the openness of its information and communication technologies.

“ASEAN nations are also particularly inclined to prioritize tourism in their development agenda as most of them are ranked above the 50th position in this specific pillar,” the World Economic Forum report states. “Still, a large infrastructure (air, road and tourism service infrastructure) and information and communication technology readiness gap remains between the most advanced in the sub-region, especially Singapore, and to a less extent Malaysia and Thailand, versus the rest.”

Travel advisories issued for Southeast Asian nations also dampen momentum and slow integration progress, said Wanda Teo, Secretary of Tourism for the Philippines, speaking during the Summit. The U.S. Department of State, for example, has had a travel warning in place for the Philippines since April 21, 2016 because of terrorist threats and activities in the country.

Thailand’s military junta, its suppression of free speech, and violent crime and terrorist attacks near tourist attractions have also caused concerns.

Although ASEAN countries co-promoting one other as destinations sounds nice, Yahya said the region is still determining how that will work.

Especially as tourism is viewed as one of the most important industries in Southeast Asia and these countries are looking to expedite their own economic growth, ASEAN members won’t trumpet neighbors as destinations if there’s any chance it could cannibalize their own tourism.

Source: skift.com