Uneven recoveries across the region delays full recovery in 2021; normalization is targeted by 2024.
Text by Jan Yong
With optimism riding high now due to the vaccine rollout, most experts see 2H 2021 as the start of the recovery in domestic tourism with full recovery or normalization taking place from 2022 through to 2024. ‘Revenge tourism’ which is defined as increased travel activities due to pent-up demand, will certainly take place, so will ‘revenge spending’. After over a year of lockdown in its various iterations, people just can’t wait to get out of the house and see the world, whether locally or overseas.
Full recovery in 2024 in the broader economy is a reasonable timeline given the deep structural damage to some sectors of the economy like tourism. Even prior to Covid-19, sectors like the property industry was performing sluggishly.
Given that new variants of the coronavirus keep popping up in various countries, and the efficacy of the various vaccines have not been 100% proven yet, nor global herd immunity achieved, the scenario is very likely to be uneven recoveries across regions, a mid intermittent lockdowns and a growing number of travel bubbles among green zone destinations.
Vaccinations of more than 70% of the population is considered sufficient to lead to herd immunity. Countries expected to achieve that soon are Israel, the US, UK and the United Arab Emirates, which have all started their vaccine rollout in January. Within a few months, the spread has actually slowed down significantly.
The vaccine is certainly not a silver bullet nor a cure-all, but it is the only hope the world has now. Strong proof that the vaccines are not very effective is when Argentina’s President Alberto Fernandez, who has been vaccinated against Covid-19, announced early April that he has tested positive for the coronavirus. But his vaccine was the Russia n Sputnik V, whose efficacy was not as high as those made in America or Europe, according to news reports.
In the coming days, if we have more news of such post-vaccination new infections, the initial optimism might give way to pessimism. If vaccines a re not effective, what else can save the world?
Human beings have a natural tendency to hope for the best – yet few know how to prepare for the worst. Yes, there are survivalists who have stored a few years of supplies in their bunkers, and some ultra- rich have opted to stay in isolated places like parts of New Zealand or island getaways in far flung locations such as the Maldives and Seychelles (both of which a re already open for tourists).
Countries that can’t wait any longer to welcome tourists are Sri Lanka, Greece (opening in June), Ecuador, Nepal, Belize, Thailand (opening in October; Phuket in July), and Indonesia (Batam, Bintan, and Bali) all of which are putting out the red carpet for vaccinated tourists withproof of a negative Covid-19 test; some a re also welcoming non- vaccinated tourists as long as they have proof of a negative Covid-19 test.
Where to invest?
Amid the increasing number of border re- openings, is this the right time to invest in property in holiday destinations; and if so, where?
Conventional wisdom suggests investing at the bottom of the market; we are now near or already at the bottom of the market – hence the timing is now until the end of 2021 when revenge tourism is in full swing.