The SLEEPING GIANT of Southeast Asian tourism

Despite recording a new high of 5 million visitor arrivals last year, the Philippines remains the lowest earner of tourist dollars among Asean’s six major economies. 

In 2014, Thailand was top earner with receipts of $38.4 billion from 24.78 million tourists. Malaysia was No 2 despite receiving more visitors (27.44 million,) generating revenues of $16.7 billion. No 3 was Singapore with 15.1 million tourists and earnings of $17.44 billion, followed by Indonesia with 9.44 million and $10.7 billion in revenues, and Vietnam (7.87 million tourists, earning $8.17 billion). The Philippines was No 6, with 4.83 million tourists and $4.84 billion in receipts. That may since have changed, though, with Cambodia closing in on 4.5 million visitors and $3 billion in revenues. Laos also had 4.16 million tourists in 2014, although its earnings were just $641 million.

Guenter Taus, president of the European Chamber of Commerce in the Philippines, put the lowly position down to a lack of infrastructure and relatively high cost of travel. 

What to do? The government should first start addressing the difficulties foreign tourists face in reaching their final destination in the Philippines. The solution is to develop international airports in the regions. As things stand, about 70 per cent of visitors enter the country at Ninoy Aquino International Airport in Manila. Poor connectivity between the airport and tourist destinations in the north and south triggers countless tourist complaints each year.

The privatisation of regional airports through the flagship public-private partnership programme (PPP) was a step in the right direction. However, bidding delays have pushed this to the next administration. The plan is to auction contracts for the development, operation and maintenance of the regional airports in two bundles – the first to include the 20.26-billion-peso Bacolod-Silay Airport and 30-billion-peso Iloilo Airport, and the second, the 40.57-billion-peso Davao, 14.62-billion-peso Laguindingan, and 2.34-billion-peso New Bohol airports.

For 2016, the government is targeting a 10-per cent increase in tourism revenue (250 billion pesos) and a 13-per-cent jump in arrivals to six million tourists. The next administration can actually do more. Admittedly, there is much to be done if the Philippines is to become a hot tourism destination, particularly for big spenders. For one, it needs to attract foreign investment in infrastructure and facilities that meet tourists’ expectations. More specifically, the Tourism Department needs to identify specific sectors that hold the biggest potential – ecotourism, medical, cruise and high-end tourism. This will help potential investors determine where to put their money.

It’s clear that Philippine tourism has potential for unlimited opportunities for both domestic and foreign investors. The government should give priority to this sector, encourage infrastructure investment via incentives, and then conduct an extensive marketing campaign to draw in the visitors.

For the Philippines, tourism is low-hanging fruit that can easily be converted into an engine of sustainable and inclusive growth. All it needs is more attention from the government.