Does PHL tourism rely unduly on China?


By Ma. Stella F. Arnaldo / Special to the BusinessMirror

IT may be time for the Department of Tourism (DOT) and stakeholders to review the source markets for travelers they are relying on for the recovery of the tourism sector.

Like many countries around the world, the Philippines has been highly dependent on China for the bulk of its tourist arrivals. “The government and the private sector really have to review the market mix because there have been so many changes in the global environment,” said Philippine Hotel Owners Association (PHOA) executive director Benito C. Bengzon Jr. in an interview with the BusinessMirror. “I mean, for the last several years, we were looking at Northeast Asia; the question is, will they go back to their percentage share prepandemic? So, this is also where creativity will come in on the part of the government.”

Prior to the pandemic, China placed second to South Korea among the Philippines’s
source markets for tourists, accounting for some 21 percent or 1.74 million of the 8.3-million total foreign tourists in 2019. The DOT is now working with the Department of Foreign Affairs and the Department of Justice on the issuance of e-visas for tourists from China and India to help lift international arrivals.

“That will be the subject of an interesting discussion among stakeholders, because a question we can pose is, ‘If China will not return in the next 12 months, where will we get our market?’ In fact, that is a question that should have been asked a year ago or two years ago, because it’s just been people who were saying, ‘you know, let’s wait [for China to reopen],’” said Bengzon, who was DOT Undersecretary for Tourism Development prior to his retirement in 2021.

The Meetings, Incentives, Conventions, Exhibitions sector, for instance, continues to post slower growth, despite the reopening of the country’s borders, due to the lack of events and participants from China.

Data gathered by Forward Keys, which collects global aviation data based on actual booked tickets, showed the Philippines among the lowest of destinations to which Chinese nationals would travel. (See, “Travel to PHL, Asia Pacific seen picking up in July-December,” in the BusinessMirror, March 21, 2023.)

Hotel occupancy

Meanwhile, the PHOA believes the tourism industry will likely recover to prepandemic levels in 2024. “If your international clientele is still a fraction of 2019 then we’re not there yet,” said Bengzon. “We feel that full recovery will not happen until 2024 and that will be contingent on a lot of factors that the Secretary [Christina Garcia Frasco] has mentioned [when she presented the National Tourism Development Plan]. They’re going to keep restoring flights to the other destinations outside of Manila. What’s going to be key to returning to prepandemic [levels] obviously, is getting the numbers back from the main markets in Northeast Asia, in particular to Korea, Japan, and China. If, as the Secretary mentioned, they can manage to relax the [visa] restrictions on China, that would be what would be a game changer.”

He noted that PHOA member hotels have been performing well, although still not at levels prior to the pandemic. “When you look at the performance of the hotels for 2023, and the latter part of 2022, not surprisingly it’s more than 2020, since we opened our borders only in April of last year. So in terms of occupancy, we’re getting good occupancy of 70 to 80 percent across the different categories. When you talk about revenue, it will vary from one hotel to another. On the matter of whether we are back to pre-pandemic levels, clearly we are not yet there.”

The PHOA is working with the DOT on the Philippine Hotel Industry Strategic Action Plan (Phisap) for 2023 to 2028, expected to be in place by the second half of 2023.

“Phisap will basically set the strategic direction for the Philippine hotel industry in the next five to 10 years,” he said. It will include “recommendations on the kind of facilities that we would need, and what star category, which locations,” explained Bengzon. He said hotels want to “see more details on the incentives for greenfield projects and the expansion of hotel capacities” in the plan.