Helping Southeast Asia Revive Tourism and Boost Sustainable, Inclusive Investments

Date Published
December 22, 2021

The Southeast Asia Sustainable Tourism Facility will help policy makers design measures to revive the industry, such as attracting longer-staying, higher-spending visitors. Photo credit: ADB.

The tourism industry in Southeast Asia was enjoying robust growth before the COVID-19 pandemic. In the BIMP-EAGA subregion alone, tourist arrivals were steadily increasing and were forecast to grow even further. However, the pandemic hit the tourism and travel industry hard worldwide, and it has yet to get back on its feet.

The Asian Development Bank (ADB) has set up a $1.7 million technical assistance facility to accelerate Southeast Asia’s tourism recovery, boost inclusive, sustainable development in the sector, and help local tourism entrepreneurs, especially women and youth, adopt digital platforms to grow their businesses.

A green and competitive industry

The Southeast Asia Sustainable Tourism Facility will help countries identify and prepare environmentally sustainable tourism projects and catalyze private financing to support them. It will help businesses better operate tourism facilities and deliver digital tourism services.

The facility will also help policy makers design visa policies, online short-term rental, and other measures to attract longer-staying, higher-spending visitors and remote workers, allow more small entrepreneurs to legitimately operate accommodation services, and boost tourism tax revenues.

“Projects supported by the facility will develop green and resilient urban and transport infrastructure in secondary cities to improve the tourism sector’s competitiveness, help create jobs, protect the environment, and accelerate inclusive digital transformations,” said ADB Principal Tourism Industry Specialist for Southeast Asia Steven Schipani.

Economic impact

In 2019, travel and tourism accounted for 12.1% of Southeast Asia’s gross domestic product (GDP) and employed 42 million workers, mostly women working for small and medium-sized enterprises (SMEs). But international visitor arrivals dropped 82% in 2020 from 2019, while domestic tourism remains constrained by travel restrictions and reduced economic activity. The sector’s contribution to regional GDP fell by 53% in 2020, pushing more people into poverty.

In BIMP-EAGA, visitor arrivals dropped by 76.0% in 2020, while tourism receipts fell by 79.1% to $6.2 billion from $29.7 billion in 2019.

Even before COVID-19, Southeast Asia trailed global tourism competitiveness benchmarks for ground, port, and urban infrastructure, information and communication technology readiness, and environmental sustainability. Governments hope to address these challenges in tandem with efforts to revive tourism.

The ADB facility will support key tourism-related priorities set out by the Association of Southeast Asian Nations (ASEAN) and subregional tourism strategies in Southeast Asia. It includes a $500,000 grant from ADB’s Technical Assistance Special Fund. In addition, ADB will administer a $225,000 grant contribution from the Project Readiness Improvement Trust Fund financed by the Nordic Development Fund, a $500,000 grant from the Republic of Korea e-Asia and Knowledge Partnership Fund, and a $500,000 grant from the Spanish Cooperation Fund for Technical Assistance.