The worst is over for the travel industry, but expect a ‘spotty’ recovery, hotelier says

SINGAPORE — There’s pent-up demand for travel, but the tourism industry may take two steps forward and one step back on its path to recovery, the founder of a hospitality company told CNBC this week.

Ho Kwon Ping, executive chairman of Banyan Tree Holdings, said while there’s no real way to measure the appetite for international travel in Asia, domestic travel has seen strong demand.

“You can extrapolate from this and draw the conclusion that, when it’s safe to travel internationally, the same pent-up demand that’s driving domestic tourism today will also affect international travel,” he told CNBC’s “Squawk Box Asia” as part of the Milken Institute Asia Summit.

Airlines and tourism were badly hit when the Covid-19 outbreak forced borders to close.

“I think the worst is over for sure, in terms of the travel industry,” he said. “The only thing that’s really unclear right now is how long recovery will take.”

Ho said the recovery is likely to be “very spotty.” While he sees more countries trying out bilateral quarantine-free “travel bubbles,” they will have to close if the local coronavirus situation worsens.

That’s what happened with the Hong Kong-Singapore travel bubble, which was postponed before it could begin because of a spike in Hong Kong’s case numbers.

“We’ll have to expect that there will be two steps forward, one step backwards,” he said.

Mike Milken, chairman of the Milken Institute, said the coronavirus crisis has to be solved on the world stage.

“The message of this pandemic is none of us are safe unless all of us are safe. Whether you’re in Kenya, or South Africa or Nigeria, or in Brazil, or in France or in Singapore or Korea, people move,” he said.

Still, through vaccines and trial and error, Banyan Tree’s Ho said there will be a return to “normality.”

“We see the light at the end of the tunnel, we see the shape of what’s happening beyond the tunnel,” he said.

Separately, Ho predicted that the way people travel will change. “We will return to purposeful travel,” he said.

That means tourists won’t get on a plane for a weekend away “without even thinking much of why we wanted to do it,” and businessmen will use video conferencing instead of traveling to a meeting only to fly back immediately.

“What will happen now is, people will think more before they travel,” he said. Leisure and business travel will still continue, but it won’t happen on a whim. “Everyone has to adjust to that — less mindless travel and much more mindful travel.”

Ho also said “democratic tourism,” or mass tourism for the huge middle class in Southeast Asia, must be “reimagined” to be more thoughtful.

“I think democratic tourism is something to be encouraged … it is the right and desire of people to see the world around them, but it must be more thought out,” he said. “It cannot just be the same scenario … packing people into buses, taking them off into a site, taking a picture.”