The impact of visa-free travel on ASEAN this summer, and how travel brands can capitalise
According to the UNWTO World Tourism Barometer, the recovery of international tourism fell short of expectations in 2023.
Despite this, Singapore has seen a significant upturn, welcoming 5.71 million international visitors so far this year, which is about 90% of the pre-Covid 2019 figures. This resurgence is mirrored across the region, with Thailand reporting 9.4 million foreign tourists in the first quarter of 2024, contributing an estimated 454.6 billion baht ($12.4 billion) to its economy. Malaysia is also aiming to surpass its pre-Covid levels following a strong performance in 2023.
In anticipation of this year’s peak summer travel season, the industry is expecting a few trends to drive movement both regionally and worldwide. There’s the rise of “Coolcation”, where travellers seek cooler climates to escape the heat. Sport tourism is also growing; the upcoming Olympic and Paralympic Games in Paris are a major draw for tourists, including those from Asian countries.
To bolster tourism growth in the region, many countries have implemented visa-free travel to support inbound and outbound traffic. The introduction of visa-free agreements between China and Thailand, and China and Singapore, is expected to further boost tourism in Southeast Asia.
As part of Singapore’s progress towards its 2040 Tourism Vision, Singapore passport holders will soon be able to travel to Timor-Leste without a visa, according to an announcement by the Ministry of Foreign Affairs (MFA).
To understand the impact of visa-free agreements in the region, we got in touch with Dr. Guy Llewellyn, Associate Professor from EHL Hospitality Business School Singapore, to learn about how these agreements are reached and what travel brands can do to capitalise on increased inbound and outbound travel.
Q: What criteria goes into deciding a visa-free pass for certain countries, and what is that process like?
It involves a nuanced and multifaceted process. Economic factors play a significant role, with countries possessing strong trade relationships and significant investment interests more likely to offer visa-free travel to facilitate business and economic exchanges. By easing travel restrictions, these countries aim to boost trade and investment, enabling businesspeople to travel more easily and forge new economic ties.
Tourism is another crucial consideration. Allowing visa-free access can attract more tourists, directly benefiting the local economy through increased spending on accommodation, dining, shopping, and attractions. This influx of tourists boosts tourism-related businesses and services, creating jobs and stimulating economic growth. When deciding on visa-free policies, countries evaluate these potential economic gains, aiming to enhance their tourism appeal and overall economic prosperity.
Regional agreements, such as the European Union’s visa-free travel among member states, facilitate smoother travel processes and enhance regional integration, benefiting both travellers and member states. The Association of Southeast Asian Nations (ASEAN) is considering similar policies, anticipating benefits akin to those seen in the EU, such as increased mobility and economic cooperation.
Beyond economic incentives, countries must consider other factors such as security, immigration control, socio-political stability, human rights records, and public opinion. The decision to grant visa-free access is a strategic one, balancing the benefits of increased economic ties and tourism against the need to maintain security and control over immigration.
The process of establishing visa-free travel involves several stages, starting with diplomatic negotiations and drafting agreements. These agreements undergo risk assessments and economic impact studies before seeking governmental and, sometimes, legislative approval. Once approved, the policies are implemented, including updates to border control systems and administrative procedures. Continuous monitoring and periodic reviews ensure that visa-free arrangements remain effective and secure, allowing countries to adjust policies as needed to maintain a balance between openness and security.
Q: What are some data-backed benefits of visa-free travel?
Visa-free travel brings significant economic and social benefits, particularly through increased tourism. Studies by the UNWTO and WTTC in 2012 showed that visa facilitation policies can lead to a 5% to 25% annual increase in tourist arrivals.
Countries that adopt visa-free policies typically see substantial increases in tourist numbers. For instance, after China implemented a visa-free policy on December 1, 2023, daily tourist numbers from France, Germany, Italy, the Netherlands, Spain, and Malaysia rose by 39% in the first three days compared to the last day of November.
In Singapore, China has become the largest source of tourists, with numbers expected to exceed pre-pandemic levels in the upcoming months. This could be attributed to the visa waiver between two countries that took effect earlier this year.
The impact of visa-free policies shows a lasting effect. For example, Vietnam saw a 20% increase in tourists from Italy, Germany, Spain, the UK, and France within nine months of introducing visa exemptions in 2018. This growth remained stable year on year.
Dr. Guy Llewellyn, Associate Professor, EHL Hospitality Business School Singapore: Visa-free access is beneficial, but it must be part of a broader strategy to boost tourism effectively.
Q: How can travel brands capitalise on visa waivers and finetune their solutions to meet new trends?
Firstly, targeted marketing campaigns highlighting easier travel can effectively reach potential tourists in visa-waived countries. Collaborating with tourism boards and airlines can further boost visibility. For example, the partnership between Agoda and the Singapore Tourism Board demonstrates how such synergies can enhance the travel sector and draw more visitors.
Creating customised travel packages with special deals and discounts tailored to specific markets and customer segments is also essential. For instance, business travellers may prefer packages that include amenities like meeting rooms and transportation services. Meanwhile, services in native languages can appeal to travellers from specific markets, such as China.
Travel brands should focus on offering personalised experiences, simplifying online booking systems, and forming strategic partnerships with local businesses and influencers to provide well-rounded and unique experiences.
Q: What are some of the biggest challenges of implementing visa waivers across certain regions and how can they be addressed?
One of the primary challenges is ensuring that visa waivers do not compromise national security, as visa-free travel can increase the risk of illegal immigration, terrorism, and other criminal activities. Investing in advanced border control technologies, such as biometric verification and real-time data sharing, will help manage the increased flow of travellers efficiently while maintaining high security standards. For example, the Automated Border Control System (ABCS) installed earlier this May at Changi Airport in Singapore enhances security with biometric data acquisition while reducing pressure from growing traffic through the airport.
Economic disparities between countries in the APAC region also pose a challenge, as wealthier nations may fear an influx of economic migrants from less affluent regions, potentially straining social services and labor markets. Addressing this requires clear criteria for visa-free travel, such as proof of financial stability and return tickets, alongside policies that promote economic cooperation and development assistance to reduce migration pressures.
Additionally, implementing visa waivers across the region requires substantial regional coordination to harmonise differing legal frameworks, border control practices, and administrative procedures. Recently, Singapore and Sri Lanka authorities have discussed sharing practices and improving border management capabilities. Communications among immigration authorities to develop standardised protocols can ensure consistent and effective implementation of visa waivers.
Q: What can tourism boards do to highlight visa-free travel within the region to promote inbound and outbound travel?
Tourism boards should ensure their websites and mobile apps feature comprehensive information on visa-free travel, including guides and itineraries. Developing targeted marketing campaigns that highlight the ease of visa-free travel through digital marketing, television commercials, and print ads is crucial.
Proactive public relations and media outreach, such as issuing press releases and engaging with travel influencers, can generate significant public interest at home and abroad. The content should be simple and engaging to inform and capture the attention of potential travellers. Additionally, utilising data analytics to understand traveller preferences and implementing feedback mechanisms ensures continuous improvement in marketing strategies.
Strategic partnerships with airlines and travel agencies are also beneficial. These partnerships can target specific markets and audiences through co-branded promotions and customised deals, attracting travellers from regions with visa-free agreements.
Participating in travel fairs, exhibitions, workshops, and webinars allows tourism boards to promote visa-free travel directly and reach travellers in countries with which they share visa-free programs. Additionally, promoting cultural exchange programs and organising cultural events can attract tourists interested in cultural immersion, further highlighting the benefits of visa-free travel.
Q: What have been some of the biggest misconceptions regarding visa-free travel?
Firstly, “visa-free” does not mean unlimited stays or the absence of entry requirements. Typically, visa-free entry allows for only short-term visits, usually ranging from 30 to 90 days, depending on bilateral agreements. Additionally, many countries have specific entry requirements, such as health checks, proof of return tickets, sufficient funds for the stay, and sometimes proof of accommodation. Travellers often ignore these limitations and arrive unprepared, leading to potential legal issues, fines, and denied entry.
Within the hospitality industry, a significant misconception is that visa-free travel alone will lead to a substantial increase in tourism. While visa-free access removes one barrier, other factors such as marketing efforts, infrastructure, and overall destination appeal are crucial in attracting tourists. Visa-free access is beneficial, but it must be part of a broader strategy to boost tourism effectively.
Another misconception is that visa-free travel is a permanent arrangement. Political, economic, and security considerations can lead to changes in visa policies. Additionally, visa-free travel is not always reciprocal. A country might offer visa-free access to citizens of another country but not receive the same privilege in return. Understanding the nuances of each visa waiver agreement is essential for both travellers and hospitality professionals.