India Contributing to a Bigger Share of the ASEAN Tourism Pie – IPP-REVIEW

By on August 12, 2019

In recent years, Southeast Asian economies
have become dependent upon
Chinese tourists. Apart
from trade and foreign direct investment (FDI), this has often been cited as an
important component of China-ASEAN (Association of Southeast Asian Nations) linkages. Tourism is vital for ASEAN countries. According to estimates, it provides
direct and indirect employment to over 30 million people. As of 2017, tourism
accounted for a significant percentage of the total GDP of some of the ASEAN
member states; 12 percent in Thailand, 6 percent in Malaysia in 2018 and 16 percent in


Apart from geographical proximity,
visiting ASEAN countries makes logistical sense for Chinese tourists. Nine of the ten
ASEAN countries offer visa-free or visa-on-arrival policies for Chinese
citizens and every week there are 2,700 flights from China to ASEAN countries. Securing
visas of Western countries is a major hassle for Chinese nationals, though in
recent years things have begun to change.


The first half of 2019 witnessed a decline in the
number of Chinese tourists visiting ASEAN countries such as Vietnam (3 percent)
and Thailand
(5 percent). Slowing down of the Chinese
economy and the US-China trade war have been cited as the main reasons for this
decline in the number of Chinese tourists visiting ASEAN countries. Thailand,
which has been dependent upon tourism, was once a preferred destination for Chinese
tourists. In 2018, the number of Chinese tourists visiting Thailand was
estimated at a staggering
10 million. They
spent an amount of
120 billion baht, accounting
for nearly a quarter of the total tourist expenditure.


Although Chinese still top the number of
tourists visiting Thailand, there has been a visible drop due to a
boat tragedy in
Phuket in July 2018 in which 47 Chinese lost their lives, as well as the
appreciation of the
Thai baht against the Chinese yuan.


While economic factors are cited as the
key reason for a reduction in the number of Chinese tourists visiting ASEAN
countries, it is important to keep in mind that Southeast Asia benefited immensely
from the fact that Chinese tourists prefer neighboring countries, and have limited
alternatives (given Beijing’s strained ties with Tokyo and Seoul). The
improvement of China’s ties with Japan and South Korea has resulted in more
Chinese tourists now preferring to travel to
Japan and South
. This is evident from the figures. While there was a 12
percent increase in Chinese tourists visiting Japan year on year (in the first
half of 2019), South Korea witnessed a rise of a whopping 29 percent


While Southeast Asian economies will lose
economically as a result of the decline in Chinese tourists, they have also
been seeking to attract tourists from other countries and wanting to reduce
their dependence upon Chinese tourists. To make up for the decrease in Chinese
tourists, ASEAN countries (
Thailand, Cambodia
and Vietnam)
have tried to ease visa procedures.
Thailand introduced a waiver on the 2,000 baht (65 USD) visa on arrival fee for
20 countries including
India, Maldives,
Taiwan, and Saudi Arabia
and extended it to October 2019.


Although the number of Chinese tourists
visiting ASEAN is way more than those from other nationalities, some ASEAN
countries have also been complaining about the behavior of Chinese tourists,
and the fact that they do not contribute sufficiently to local economies,
because they tend to patronize Chinese shops and businesses. Locals in
Cambodia have
begun to take note of this.


Thailand have on several occasions complained
about the behavior of Chinese tourists. The country was in fact compelled to
etiquette manuals for
Chinese tourists. The Chinese government itself also issued advertisements
which stated how Chinese tourists should behave overseas.

India may not be able to compete with China
in the economic sphere, but in the longer run, with a growing middle class, it
can certainly contribute to ASEAN tourism and emerge as a competitor.

A number of ASEAN countries have also been
complaining about zero dollar tours. Tour operators attract tour groups through
cheap food and accommodation. Once they have reached the destination, they are
forced to purchase goods from Chinese stores.
Thailand in 2016
imposed an arrival fee of 1,000 baht
(around 30 USD) and a minimum 1,000 baht per day fee for inbound Chinese tour
groups. Other countries like
Cambodia and Vietnam have objected to this zero dollar tours,
saying that the local economies do not benefit.


While Chinese tourists have started
travelling in large numbers to all ASEAN countries, Indian tourists’ preference
is generally Thailand, Singapore, Malaysia and Indonesia. Hence, in view of the
falling number of Chinese tourists, countries like Thailand can look to India
to fill the gap. Indeed, there has been a rise in the number of
Indian tourists visiting Thailand in the past decade. In 2018, 1.6 million Indians visited Thailand.


Increased air connectivity (there
are over 300 flights a week connecting Thailand and 16 Indian cities), options
for reasonable flights (13 carriers fly from India to Thailand), visa waivers
and the growing purchasing power of India’s burgeoning middle class have played
a pivotal role in the increase in number of tourists visiting Thailand. Most
Indian tourists also tend to spend reasonable amounts. Thailand has also become
a common choice for
. In 2018, it is estimated that 300 Indian destination
weddings took place. The expenditure for each wedding is estimated at 8-9 million


Other Southeast Asian countries,
especially CMLV (Cambodia, Myanmar, Laos and Vietnam) countries can also
attract more tourists. There is a growing interest about Vietnam in India. By
the end of 2018, the number of Indian tourists visiting Vietnam surpassed 100,000,
which was an
80 percent increase year on year and was nearly half of the total number of tourist who
have visited Vietnam. This is likely to witness a further increase with greater
connectivity between both countries.


In January 2018, India and Vietnam
discussed, on the side lines of the ASEAN-India Commemorative Summit, about
direct air
between both countries. In June 2019,
Vietnam Vice-President Dang Thi Ngoc Thinh and Indian Foreign Minister S
Jaishankar discussed, on the sidelines of the Conference on Confidence Building
Measures in Asia, about a
direct flight between Hanoi and Kolkata. Indigo Airlines, a
private Indian carrier, will start operating non-stop Kolkata-Hanoi flights daily
in October 2019. Myanmar has also introduced a
visa on arrival facility for Indian tourists


Attempts should also be made to increase
the number of Indian tourists visiting Cambodia. With its abundance of cultural
and historical attractions, Cambodia can emerge as an important tourist
destination. In 2017, the number of
Indian tourists visiting Cambodia was estimated at 60,000 while in the same year, the number of Chinese tourists travelling to Cambodia was estimated at over 1.2 million compared to 1.8 million in


ASEAN countries (other than Thailand,
Singapore and Malaysia) should be promoting tourism not just in New Delhi, but
in other Indian cities which have high consumption power. ASEAN countries
should try to build linkages directly with Indian states with whom they have
economic, cultural and historical links. Apart from having more direct flights,
it is also important to look at more sister city arrangements between cities in
ASEAN countries and India.


India may not be able to compete with
China in the economic sphere, but in the longer run, with a growing middle
class, it can certainly contribute to ASEAN tourism and emerge as a competitor.
Tourism to ASEAN will also play an important role in bolstering India’s Act
East policy, and enhancing people to people linkages. It will need more out of
the box thinking, especially in terms of greater connectivity.

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