April 2020 was the craziest month in Hari Ganapathy’s entrepreneurial journey. Ganapathy is the co-founder of Indian travel planning firm PickYourTrail. With airlines grounded and hotels shut due to the rapid spread of the coronavirus pandemic, his company’s cancellations went from 2% to 100%, with revenues sinking to zero.
It’s a story that has played out across all companies in the travel sector, from online travel aggregators (OTAs) to hotels to airlines, across India and Southeast Asia. And that will spill over to hit economic growth as well, especially in countries that are heavily dependent on tourism.
While travel and tourism contributed roughly 9.2% to India’s GDP in 2018, it accounted for 13% of Southeast Asia’s GDP. About 25 million Indians were travelling overseas last year—a number expected to grow 15-18% annually, according to the UN World Tourism Organisation (UNWTO). Of course, Covid had other plans.
Southeast Asia and India, though, are attached at the hip when it comes to travel and tourism. India has been serving up 1.8 million tourists 1.8 million tourists South China Morning Post Indian travellers are important for Southeast Asia Read more to Thailand—originally expected to grow to 10 million by 2030—making it the tourist destination’s third-most important source of visitors. Places like Bali in Indonesia are also a favorite as a honeymoon destination.
So, at a time when tourism, travel and hospitality are crashing and burning, both regions stand to lose a fair bit from the other not travelling enough. More than they already have.
According to Hannah Pearson, founding partner at Pear Anderson, a boutique tourism consultancy based out of Kuala Lumpur, all Southeast Asian countries are losing revenue. Pearson’s recent report had some stats:
- Malaysia could lose US$760 million in tourism revenue
- The Philippines’ losses could reach US$3.1 billion
- Vietnam has already lost US$7 billion
- Losses for Indonesia could touch US$10 billion
- But the worst hit will be Thailand, which could forfeit as much as US$60.5 billion
Words and overall estimates alone can’t explain the beating that hotels and airlines have taken in terms of widespread cancellations—from both business travel and tourism. To get more granular ear-to-the ground data, The Ken partnered with RateGain, a travel tech company that works with a multitude of OTAs and hotels, including every Fortune 500 travel and hospitality company.
RateGain culled and analysed data from its platform for more than 135,000 hotels across India, China, Singapore, Thailand, Malaysia, Indonesia, and the Philippines. It also shared data on over 900 commercial airlines in partnership with OAG, an aviation data intelligence company.