Tourism reels from crises, cooling economies

Ben D. Kritz

Ben D. Kritz

LAST week, Metrobank Research poured cold water on the optimistic plans of the Department of Tourism (DOT) by declaring the country’s target of 8.2 million tourist arrivals this year ‘unattainable,’ and suggesting in subtle terms that the DOT’s slavish focus on the Asian market would aggravate the expected downturn.

Tourism statistics for the first quarter of the year showed that 1.4 million visitors arrived, a 6.3-percent increase year-on-year. While the pace of annual growth of tourism arrivals was faster in Q1 than in previous quarters, it is nowhere near strong enough; at the current pace, tourist arrivals should total between 5.6 million and 6 million—not a bad performance, but not a particularly impressive one, either.

Little wonder, then, that the DOT has started to shift its message from focusing on arrival numbers this year, to tourism revenue next year, the target for which is set at between $6 billion and $8 billion. The DOT has not forgotten raw visitor numbers, of course; in emphasizing the revenue target to reporters last week, DOT undersecretary Benito Bengzon Jr. did mention that “realistically” the DOT was “looking at” a figure of 6 million visitors for this year.

Even the revenue target will be tough to approach; the DOT’s goal assumes each of 6 million visitors will spend an average of $1,000 to $1,300 (about P45,000 to P58,000), which is why, according to Bengzon, the marketing focus is being directed at ‘high value’ markets such as the Middle East (those countries that are not in the throes of a violent armed conflict, presumably), the European Union, and a “certain segment of the Japanese market.”

In its assessment, Metrobank Research pointed out that China, perhaps the most important tourism market for the Philippines despite the ongoing maritime dispute between the two countries, is undergoing an economic cooling that has reduced its number of travelers to the Philippines by 32 percent. While the bank did not attempt to define the potential impact of the diplomatic clash between the Philippines and China, the implication is that it could only aggravate the economy-driven downturn.

Likewise South Korea, another key tourism market, is currently facing its own economic troubles due to the stubborn outbreak of MERS (Middle East respiratory syndrome) in the country. Not only has the rapidly spreading illness temporarily wrecked South Korea’s tourism industry—the latest reports put the number of visitor cancellations at more than 50,000—there are reports of Korean travelers encountering some unpleasant scrutiny when arriving in other countries, due to fears of the illness spreading. Any downturn in visitor numbers from Korea will not become clear until second-quarter tourism figures are released later this year, but is already expected to be significant.

The slowing global economy, ongoing unrest throughout the Mideast and in places like Ukraine, and major disease outbreaks are challenges on top of the usual problems Philippine tourism authorities have to contend with such as safety concerns—now heightened because of the fiasco over the Bangsamoro Basic Law—deteriorating infrastructure, and of course, the threat of violent weather between now and the end of the year.

The DOT cannot be faulted for its enthusiasm and for energetically seeking to maximize what opportunities are available, but the optimism is incongruous to the environment that everyone else sees. Under President BS Aquino 3rd, the DOT—like almost every other key government department—has shown a strange willingness to detach itself from reality and take on goals that are completely unrealistic. As a consequence, even when tourism numbers and revenues are growing, targets are missed, and the DOT’s program looks like a failure. We see a similar outcome almost every time the revenue collection figures for agencies like the Bureau of Customs or the Bureau of Internal Revenue are announced—“highest collection ever, but still short of the target” has become such a common occurrence, it almost seems like the rule.

Everyone—everyone except the DOT, that is—already realizes that the tourism sector is not going to be this economy’s star performer this year; there are too many negative factors stacked against it, and nearly all of those factors are completely beyond the DOT’s control. A more realistic assessment of tourism’s prospects would go a long way toward improving the credibility of the agency, and would make such initiatives as can be reasonably pursued that much more effective.


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