After an 84 percent drop in arrivals last year — a sharper decline than the 74 percent contraction felt globally — the Fitch Group predicts that international travel flows across the Asia Pacific region will see a gradual return beginning in the second half of 2021.
The forecast signals more stagnancy ahead for retailers in markets dependent on Chinese tourists, like Japanese department stores. But it is good news for a cohort of retailers, including duty free players DFS, that are investing in domestic travel hotspots like Hainan as domestic demand gains ground.
Despite the region’s progress in containing and recovering from Covid-19, international flights remain largely on hold. Strict border controls remain in place and even after restrictions are lifted following vaccine rollouts, the credit rating agency projects that arrivals will remain “well below pre-pandemic levels” with a wider rebound in APAC tourism likely to occur after 2021.