Manila, June 9, 2017 – Colliers International Philippines believes that improving the country’s travel and tourism competitiveness is important if the government is to achieve its target of attracting 7 million foreign tourists this year. This, in turn, should boost hotel occupancy rates and entice local and foreign businessmen to ramp up their leisure-related investments in the country.
A report released by the World Economic Forum (WEF) indicates that the Philippines’ travel and tourism competitiveness slipped by 5 notches to 79th this year from 74th in 2015. The Philippines continues to be part of the bottom 50% of all countries surveyed. The latest Travel & Tourism survey covered 136 economies.
The Philippines ranked 19th in terms of the number of world heritage natural sites as the country is endowed with rich natural resources. The Philippines was in the Top 20% in terms of price competitiveness due to attractive hotel accommodation rates and relatively low ticket taxes and airport fees. WEF agrees that the “It’s More Fun in the Philippines” campaign was effective as the Philippines ranked 49th under the “implementing tourism marketing and branding” category. Earlier, the Department of Tourism (DOT) said it will replace the tagline with “Experience the Philippines” which will be launched on June 12, Independence Day.
Meanwhile, there are several categories where the Philippines need to improve substantially. Foremost of which is safety and security where the country ranked a dismal 126th. This makes the Philippines the 11th most dangerous country for tourists after Colombia, Yemen, El Salvador, Pakistan, Nigeria, Venezuela, Egypt, Kenya, Honduras, and Ukraine. Government officials must immediately address security threats in the country as failure to do so will definitely dampen the tourism sector’s growth and constrict its potential of generating more jobs and livelihood especially in the countryside.
The government should also address the quality of air transport infrastructure in the country. Old and overstretched airports dragged down the country’s ranking in this segment – 114th. Colliers believes that the development of an alternative international gateway in Luzon as well as the expansion of regional airports in Visayas and Mindanao should further entice foreigners to visit the country, improve Philippine tourism’s competitiveness and eventually boost demand for tourism-related establishments and services.
We believe that the expansion of the Mactan-Cebu International Airport is a model for successful airport public-private partnership (PPP) projects in the country. According to the PPP center, the project is 56% completed as of end-April 2017. It is on track for completion by June 2018. The project’s completion will play a major role in promoting Cebu as a major tourist and Meetings, Incentives, Conferences, and Exhibitions (MICE) destination.
The government also needs to improve the country’s road network. Roads leading to key tourist destinations throughout the country should be paved and expanded. At present, the country ranks a lowly 104th under this category. The Department of Public Works and Highways (DPWH) is addressing this by improving national roads and ensuring round-the-clock rehabilitation of major thoroughfares.
Meanwhile, to entice more tourism-related enterprises, the government should significantly reduce the number of days and procedures required to start a business. The convoluted bureaucracy has also made the business registration process costly – turning off some local and foreign investors from putting up leisure-related businesses. This cumbersome system relegated the Philippines to 115th place in the “starting a business” category.
From 5.9 million foreign visitors in 2016, the DOT is targeting 7 million international arrivals this year or about 17% growth. Colliers International Philippines, meanwhile, is projecting a more conservative 10% increase or 6.6 million international tourists this year.
Data from the DOT showed that a total of 1.21 million visitors arrived in the country in the first two months of the year, up 11% compared to the accumulated 1.09 million arrivals in the same period last year. Korea remains as the biggest visitor-generating market, followed by the United States of America, China, Japan, and Australia. These five countries account for about two-thirds of total arrivals during the first two months of the year.
The increase in arrivals reflects the improvement in hotel occupancy in Metro Manila. For the first three months of the year hotel occupancy in the country’s capital rose to 73% from 70% in the same period last year.
Record-high arrivals and increased demand for tourism-related products and services are reflected in the recently-released gross domestic product (GDP) figures. The Other Services sub-sector, which covers tourism-related establishments, grew by 7.6% from 7.3% in the comparable period last year.
Colliers sees occupancy rates in the entire metropolitan hovering between 65% and 70% over the next twelve months. The sustained growth in arrivals supported by major international events that the country will host for the remainder of the year, should keep occupancy rates stable despite the projected new completions. Colliers sees about 4,000 new rooms being added to Metro Manila’s hotel stock in 2016.
Colliers International Philippines believes that solving safety and security issues, streamlining the business registration process, and expediting the implementation of crucial infrastructure projects should enable the current administration to meet or even surpass its visitor arrival target which should result in higher hotel occupancies in major tourist spots across the country and more businessmen investing in the country’s travel and tourism sector. These should sustain the tourism sector’s status as a major driver of the country’s economy.