Tourism
December 13, 2016 at 08:00
Tourism
I participated in last week’s Tourism Summit and was reminded again that Tourism is the economic sector with the highest potential to create inclusive growth, through employment generation and economic development in remote areas across the archipelago. The Philippine government has recognized the tourism sector’s potential as a key growth driver and is developing a number of initiatives to promote tourism development, including a National Tourism Development Plan up to 2022, which provides a road map for national tourism development. However, while international arrivals showed double-digit growth in 2015, the Philippines has a long way to go before it becomes a top tourist destination in the region.
International connectivity, domestic connectivity and destination development require improvement in line with international standards if the Philippines is to become a desirable tourist destination. Europe has a long tradition in tourism excellence and, therefore, investment by European companies can drive the development of tourism infrastructure on a par with top international standards. However, they need to be assured of an attractive investment environment. Additionally, improving connectivity with Europe will be a decisive factor to increasing European visitors to the Philippines.
We, therefore, set out a number of recommendations that aim to improve international connectivity, domestic connectivity and destination infrastructure in support of the development of the Philippines as a top international tourism destination:
- Improvement of international and domestic connectivity
- Development of internationally competitive tourism destinations
III. Facilitation of investment through adequate data collection on supply in the hospitality sector
Market data
The Philippine tourism industry is growing faster than the global and Asian average and is expected to be one of the key economic drivers by 2021. Specifically, in 2015 international arrivals to the Philippines grew by 10 percent to 5.3 million, while the collective growth of international arrivals to the region was 2.6 percent, with a total of 96.7 million visitors. At a global level, international travel increased by 4.4 percent to a total of 1.1 billion travelers.
According to the World Economic Forum’s Travel and Tourism Competitiveness 2015 Report, the Philippines is the most improved Asia-Pacific economy in terms of the overall travel and tourism competitiveness index, rising to a rank of 74 among 141 economies, from 82 out of 140 in 2013. Tourism will always remain a major global industry, and this sector is recognized by the government as an important contributor to the generation of foreign-exchange earnings, investments, revenue, employment and the country’s output growth.
According to the Philippine Statistics Authority, the tourism industry in the Philippines accounts for one in every 10 jobs in the economy, or a 12.7-percent share in the total employment. Statistics from the Department of Tourism (DOT) showed that the tourism industry was able to generate $5 billion and generate approximately 4.9 million jobs in 2015.
At the Tourism Summit I reiterated that the Philippines should focus on becoming the destination for medical tourism and retirees:
A major opportunity, which can drive tourism growth in the Philippines, is medical tourism. With state-of-the-art facilities in many hospitals, an expanding pool of competent health-care professionals with good English communication skills and reasonably priced medical services, the Philippines is bound to be one of the major players of the expanding global medical-tourism industry.
More and more foreign retirees are looking to settle in the Philippines. Aside from the affordable cost of living, expats enjoy things the country is known for, such as its beaches, tropical climate, warm and hospitable people, discounts for senior citizens and the duty-free import of household goods. In the Annual Global Retirement Index 2016, the International Living Magazine ranked the Philippines as 17th out of the 23 best countries to retire in. The Annual Global Retirement Index bases its rating on a number of composite factors, namely, real-estate costs, special benefits for retirees, cost of living, leisure amenities, health-care services, infrastructure and climate. The retirement industry has made considerable contributions to the economy, reflected largely in revenues from visa deposits of Special Resident Retiree’s Visa (SRRV) holders. Introduced by Philippine Retirement Authority (PRA) in 1987 to entice foreign nationals and former Filipino citizens to retire in the country, retirees can either apply for multiple entry privileges and rights to stay permanently or indefinitely in the country by way of visa deposits ranging from $10,000, to $50,000, and $1,500 for former diplomatic corps workers. In 2014 the PRA enrolled 4,781 new retirees. Total visa deposits of SRRV holders as of December 31, 2014, amounted to $452 million.
The European Chamber of Commerce of the Philippines and the Retirement & Healthcare Coalition have spent time and effort in getting this subsector of tourism going but did not find the right partners in the government to drive this “sunrise” subsector.
