New government policies are aimed at increasing the expense of traveler spending as tourism in South East Asia begins to recover following long Covid-19 border closures.
Aligning hotel rooms and airline seats with designer handbags may be overkill, but the current debate in South East Asia is about how to increase revenue from tourism. Essentially, how to find new ways for travelers to pay more.
The Struggle of Increasing the Expense for High-Quality Tourism
Following the devastating two-year economic impact of closed borders, South East Asian governments are putting tourism at the forefront of their recovery plans. President Ferdinand Marcos Jr. of the Philippines wants tourism to be a “major pillar” of the national economy, and Indonesia is developing new policies to improve “tourism resilience.”
These goals are directing the discussion toward “quality tourism.”
Political leaders offer various interpretations. These include high-quality tourism (Indonesia), high-yield tourists (Malaysia), high-end tourists (Cambodia), and high-value, low-impact tourism (Thailand). The goal is the same: to increase average visitor spending.
As a result of this ongoing effort to monetize inbound tourism, the overall cost of travel in South East Asia will rise. This will have an impact on both international and domestic tourists.
Increasing the Expense of Taxing Tourists in Thailand and Beyond
In Thailand, two distinctive policies are being discussed to bolster tourism revenues.
In January, Thailand’s Ministry of Tourism & Sports announced it will collect a THB300 (around $NZD13) Tourism Tax from all non-Thai arrivals to the country. Although a start date is unconfirmed, the tax should enter into force in 2022. The government says the fees will be used for a new national fund to provide medical treatment for foreign tourists, which was a widely acknowledged financial burden for Thailand before the pandemic.
Malaysia implemented a per-night hotel tax of RM10 (approximately $NZD3.50) for foreign visitors in September 2017. In addition, a ‘city tax’ is levied on hotel guests in places like Penang and Melaka. The hotel tax was a contentious issue. Malaysia’s hotel industry lobbied against collecting the fee from guests on behalf of Customs and Excise. As a result, implementation was repeatedly postponed.
In July 2019, New Zealand began collecting a $NZD35 International Visitor Conservation and Tourism Levy, two years later. This is part of a broader national discussion about the future of tourism and environmental protection. The tax revenue is used to fund projects that restore natural landscapes and species while also improving environmental resilience.
Tourism fees can also take on subtle forms. In July, Indonesia raised the passenger service charge at 19 airports across the country. The new fees differ for international and domestic flights, but they will raise the cost of airline tickets.
Increasing the Expense Borobudur Entrance Fee Hike
Tourism professionals criticized the fee for foreign visitors as being excessive and potentially prohibitive. Most backpackers would be excluded.
The proposal also raised concerns that visiting a prized site of national cultural heritage would be out of reach for Indonesian tourists. According to the government, a UNESCO study recommends limiting visitors to 1,200 per day at Borobudur, and the fees will help maintain the magnificent ruins, which are showing visible signs of over-tourism.
Komodo Island Pricing
Travelers can reach Labuan Bajo, the gateway to Komodo National Park, after a three-and-a-half-hour flight east from Yogyakarta (the closest city to Borobudur). Tourists flocked here before the pandemic to see the Komodo Dragons, the world’s largest lizard species, in their natural habitat.
Developers pushed ahead, and Indonesia wants to limit the number of visitors to Komodo Island. The mechanism it chose is to increase the expense from IDR150,000 (approximately $NZD16) to IDR3.75 million (approximately $NZD400).
Local communities claim they were not consulted and are concerned that increasing the expense will discourage visitors from visiting Komodo Island and harm small businesses such as hotels and restaurants. To emphasize their point, tourism workers began a one-month strike in early August.
The standoff was quickly resolved. Local governments agreed to keep the previous IDR150,000 entry fee until the end of 2022.
Source : Asiamediacentre