ck and no question either that retailers are benefiting. The only problem is that it is all happening at a much, much slower pace than expected. Take Singapore, for example. The Lion City was accustomed, in pre-Covid times, to welcoming more than 25 million international tourists a year, with an average length of stay of 3.5 days. In the first six months of 2019, the Singapore Tourism Board recorded 9.32 million visits. This year in the same six-month period, arrivals were 6.28 million, a shortfall of 33 per cent. Average length of stay is roughly the same. Thailand, in ‘normal times’, scoops up a whopping 12 per cent of its gross domestic product (GDP) from international tourists, and here, the situation is similar to Singapore, with a shortfall of about 40 per cent of international visits compared with the first half of 2019.  Likewise, in Japan, international arrivals through the first four months of the year are down just under 40 per cent from the January-April period of 2019. How is it affecting retail? One company with massive exposure to both domestic and tourist customers is Thailand’s Central Retail.  Central operates shopping malls and retail stores throughout Thailand and Vietnam in just about every conceivable format and across virtually every retail category, from fresh food to apparel to white goods. Its geographic dispersion enables it to segment out its performance in tourist-oriented versus non-tourist-oriented areas. Despite foreign arrivals to Thailand in the first quarter of 2023 being down close to 40 per cent from the same quarter of 2019, Central reports that its sales to international tourists were up 36 per cent.  In the key tourist provinces of Chiang Mai, Chonburi, Phuket and Surat Thani (which includes the resort island of Koh Samui) the company says its supermarket and hard goods sales are up 18 per cent and 26 per cent, respectively, from the same period in 2019, while fashion is running neck and neck.  Keep in mind that this is not same-store sales growth, but total stores, so it incorporates sales from units opened in the past three years. Still, these numbers look very encouraging because they suggest that as tourism climbs back to 100 per cent of pre-Covid, there will be a substantial amount of retail upside to go with it. But why are the tourist numbers themselves down? There are a number of reasons for the sluggish recovery in tourism. The first is the airlines that bring the tourists in and ship them out.  Seat capacity for flights into and out of Asia is still well down from 2019. OAG Aviation, which tracks global arrivals and departures, states that international seat capacity in mid-July was still in the cellar compared with the same time in 2019. International flights into and out of Southeast Asian countries were down 22 per cent from 2019 levels, into and out of Northeast Asia they were down 37 per cent. Into and out of South Asian nations, the number of flights was up slightly, by 5 per cent.  Why are there still so few flights? When the pandemic started and borders were either shut tight or restrictions were in place, depending on the country, airlines grounded planes in desert parking lots, suspended many routes and flew fewer times on the routes that remained. This also meant laying off employees, including administrative staff and flight crews. When demand kicked back in and gathered momentum in the second half of 2022, the airlines just couldn’t respond fast enough.  In the airline industry, it isn’t as easy as just picking up the phone and calling in employees who have been laid off for two years, since the training and re-training requirements are non-trivial. Getting the pilots in cockpits was part of the problem, since many were rusty and needed to refresh their skills in simulators followed by some practice in the real thing. Since it hasn’t been possible to restore capacity quickly enough to meet demand, there remain fewer flights than in 2019 and the prices are higher. The price situation has been aggravated by other factors, including the still elevated price of jet fuel and – of consequence to long-haul flights into and out of Asia from North America and Europe – the closure of Russian airspace, which has forced airlines to re-route flights and made them longer and more expensive. Unlike North America and Europe, which were the first to relax border controls, many important Asian ports of entry reopened only in the second half of 2022. And those countries and regions that have been the last to reopen are also among the most affected by the slower restoration of flight routes and the higher prices. China only lifted quarantine restrictions for international travellers at the beginning of this year, and it took until the middle of March for China to start issuing foreign tourist visas again. What can retailers expect? Reports by retail operators like Central and luxury brand retailers in Tokyo, including those at department stores, that they are enjoying significant sales uplift are great news, but there is more growth to come as the travel situation normalises.  The tourist arrival numbers are clearly trending upward, although the speed of that increase has been disappointing for the reasons noted above. Some have predicted the end of cheap air travel but with the entrance of new competitors and the steady decline in jet fuel prices since they peaked in mid-2022, predictions about the death of cheap travel seem premature. It’s just a little slower to get back to normal. From the standpoint of the retail and hospitality industries, a key part of the revival will be China. At the moment, the Chinese just aren’t travelling anywhere near as much as they used to outside of China itself. Instead, they are taking advantage of domestic normalisation to take trips inside their own country.  The once common sight at Asian airports of dozens of eager Chinese tourists oozing forward and clustering around a banner-wielding tour leader is still rare. As things stand, it looks like it will take at least until the end of the year, and perhaps even until the middle of next, for things to truly get back to the way they were.