A Tentative Asia-Pac Rebound Starts to Take Shape

David Beckam

Table of Contents

After two years with some of the world’s strictest entry and travel restrictions during the Covid-19 pandemic, the Asia-Pacific region appears primed for a business travel comeback. But geopolitical events as well as some countries’ unclear pandemic strategy have colored that optimism with a cloudy veneer.

Unlike most of North America and Europe, the wave of the omicron variant of Covid-19 in some locations in the Asia-Pacific region still hadn’t peaked. Countries including South Korea, Malaysia and Vietnam in mid-March still were seeing record-high daily levels of new Covid-19 cases, several weeks after the wave peaked in the United States.

And while most experts expect the omicron experience in Asia-Pacific generally to follow the pattern the variant established—run through the population with an extremely high caseload that recedes relatively swiftly with comparatively milder outcomes—another factor has roiled travel forecasts for the region. Russia’s ongoing invasion of Ukraine triggered sanctions and reciprocal airspace closures throughout Europe, spurring international carriers to cancel some Asia-Pacific service and reroute others away from Russia.

The International Air Transport Association this month suggested the “sanctions and airspace closures are expected to have a negative impact on travel, primarily among neighboring countries,” particularly as the cost of fuel rises.

Still, there are plenty of reasons to expect increasing levels of international business travel throughout the Asia-Pacific region in 2022 and beyond. Several countries are beginning to ease travel and entry restrictions or have announced timelines for doing so, and corporates in the region, as in other regions, appear to have a level of pent-up business travel demand. Whether the resulting volume will increase throughout the region or recover first in particular locations remains to be seen, but there is significant variance in this year’s edition of BTN’s Corporate Travel Index.


Pricing Disparities

On the whole, the average total business travel per diem in the region in the fourth quarter of 2021 were very close to its level in the fourth quarter of 2020, only about $2 lower, less than a 1 percent decline. But that consistent average conceals some dramatic changes, particularly in Japan.

The average Q4 2021 business travel per diem in Tokyo, frequently the world’s most expensive city in prior editions of the Corporate Travel Index, declined 38.5 percent year over year, and per diems in Osaka-Kobe declined nearly 19 percent. Locations in Australia started to recover, conversely, with Q4 2021 business travel per diems in Melbourne and Sydney up not only 14 percent and 27 percent year over year respectively but also exceeding the pre-pandemic levels of the fourth quarter of 2019.


2022 Outlook

Australia in fact appears to be on the vanguard of 2022 corporate travel recovery as well, after the federal government in February lifted nearly two years’ worth of entry restrictions and allowing fully vaccinated foreign visitors. It’s a move that experts believe will help kickstart demand in the area and could prompt other area governments to similarly lift restrictions.

“Things are quite optimistic in Australia at the moment, because of all of the recent changes in border opening and lessening of restrictions,” said Charlene Leiss, president of the Americas for Australia-based global travel management company Flight Centre Travel Group. “We’ve already seen considerable uptick in the corporate business.”

Jamie Pherous, managing director of Australia-based TMC Corporate Travel Management, said “we’re all seeing a very, very strong rebound” after Australia lifted restrictions and projected that market would strengthen further.

In order to benefit the local economy and trade and everything else, [China will] have to follow suit. Because the world seems to be opening up and learning to live with this virus, which is moving from pandemic to endemic, and I don’t think any country’s going to want to be left behind for too long.”

FCM’s Charlene Leiss

“We’re quite optimistic about the business travel space as we’re moving forward, though we’re also quite cautious, should governments start changing their minds again,” he said.

Once on the ground, travelers are not facing severe restrictions upon arrival. “Even though we are still in a restricted situation, we are pretty much free to go wherever we want,” Vankeirsbilck said. “Restaurants are fully open.”

Domestic and regional business travel in Africa has been returning at a higher rate than international travel. Heavy restrictions from some of the key feeder markets into the continent has remained a barrier for international business travel growth, Birochau said.

South Africa, for example, traditionally has a lot of business travel from the U.K., which did begin to improve once the U.K. scrapped its “red list” that put heavy restrictions on travelers from South Africa and other African nations, he said. For Kenya, one of its largest markets is Dubai, which had a ban on travel to it and other African nations until last month. Asia, and China in particular, also was a major source of international business travel to Africa.

“China is completely closed, so there’s no real opportunity to grow in this market,” Birochau said.


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