Improved Connectivity to Further Boost PH Tourism

From the visit of Pope Francis to the APEC summit, the Philippines has played host to major international events in 2015; so much so that the Department of Tourism (DOT) has dubbed 2015 as the "Visit the Philippines" year because of the activities and projects in the pipeline that could possibly attract tourists and investors.

The target for foreign arrivals this year has been adjusted to a more conservative 5 to 5.5 million (from the previous 6 million forecast); targeting an increase of around 10 to 12 percent compared to 2014's 4.83 million.

During the first half of the year, DOT has recorded 2,619,625 visitors which is a 7.65% increase compared to 2014, which had 2,433,428 arrivals.

Tourists from South Korea are still the top visitors in the country, followed by the Americans. In the coming years, the DOT is reportedly targeting to increase the tourism revenue to somewhere around $6 to $8 billion, with its eyes set on Middle East, Japan, Europe and other high-yield markets which would likely spend about $1,000 per visit to the country. As it is, they're already laying the groundwork for enhanced connectivity through more flight destinations, upcoming airport upgrades, and other updates and developments in the pipeline.

Data from the United Nations World Tourism Organization showed that over 1.1 million tourists have crossed international borders in 2014, despite global crises and challenges in different parts of the world. These numbers present how huge a potential there is on the tourism and travel industry, especially for an emerging market like the Philippines.

Ranking 74th in the World Tourist-friendly Index, the country has the potential to attract more foreign investments, boost local businesses and generate jobs. But, before it can set its place in the global compass, the Philippines should strengthen its connectivity first in order to extend its reach and make it easier to travel in and around the country.

PH's market potential

While it is a known fact that tourism can generate jobs and boost economic development outside the CBDs and other urban centers, there is a need for improved infrastructure and tourism facilities so that the travel industry can truly flourish.

International institutions have recognized the Philippines' potential for tourism; with its heritage sites, must-see destinations, cheaper cost of living and culturally-rich activities that entice foreign and local tourists to visit the country.

• Forbes Magazine has included PH in its list of top 25 countries for retirement.
• Lonely Planet has also dubbed the country as a must-see destination in 2015.
• PH has been listed as one of the top beach holidays by UK's Telegraph.
• It also received the award for the Best Tropical Island in 2014 by TTG Asia and Travel.
• PH leisure and travel destinations and tourism potential have also been cited by Conde Naste, Trip Advisor, Travel & Leisure, CNN Travel and other renowned travel and investment groups.
• The city of Vigan in Ilocos is now part of the new 7 Wonder Cities of the World.
• UK's Youthful Cities Affordability Index has also recognized Manila as one of the most affordable cities in the world for young people.

However, its abundant natural resources are not the only marketable aspect of its tourism. The Philippines has much to offer to the visitors of the country year after year with its multi-faceted tourism products.

• PH's rich culture and heritage is a big draw to tourists as well. They come here for the unique Asian experience and colorful way of life.
• With the popularity of the BPO and KPO industry, PH is developing more Meetings, Incentives, Conferencing and Exhibitions (MICE) destinations, not only in Manila but also in other high-potential investment destinations in the next-wave cities.
• PH is also known for its world-class sun and beach holidays, with top-class destinations such as Palawan, Boracay and Siargao. Cruise and nautical tourism, along with diving and marine sports activities, are growing in popularity.
• Foreigners, such as South Koreans, come to PH to study English and pursue other studies. The country has top-class schools and universities that offer competitive rates for education compared to other nations.
• With PH's aggressive tourism campaign, more leisure and entertainment spots are being developed to cater to more tourists.
• A good number of hotel and leisure developments are in the pipeline, including world-class casinos and gaming destinations, health and wellness centers, and shopping outlets.

PH is becoming a much-desired place for people to retire because of the lower cost of living options here and the more laidback lifestyle. It's a friendly place for foreigners and a great place to invest or start a business.

Potential markets

Foreign investors and major real estate developers are looking into building a diverse portfolio catering to the luxury and budget segment, as well as the under-served mid segment of the market. 

As the casino in Macau suffers from a backlash, PH can benefit from the lost revenue and accommodate game enthusiasts and other tourists who are looking for an alternative gaming and entertainment destination, especially with the opening of Melco Crown Entertainment Ltd.'s City of Dreams casino, Bloomberry Resorts Corp.'s Solaire Resort and Casino, and other top-class gaming venues. The spillover, following the decline in revenue from the Macau casinos, can lead up to a 33 percent gain for PH, according to a forecast by Deutsche Bank.

The joint tourism drive between PH and Singapore can further boost the country's tourism receipts. With Singapore's 11 million European travelers year after year, PH can benefit from becoming a travel extension option. Tourists who fly to Singapore can do their shopping and exploring in a couple of days and can be shuttled off to PH's southern islands for exploration. After which, they can then go back to Singapore for their return flights. It's a win-win for both, as Singapore expects to grow its business by 20 percent while PH gets its fair share of visiting tourists to Mindanao's top destinations.

There are around 103 million tourists who traveled to Southeast Asia last year, and it's expected to grow further. PH can benefit from the huge turnout and the aggressive tourism campaigns even of its Asian neighbors such as Malaysia and Singapore. With Asia becoming a top spot for travel, PH has a strong potential to earn more revenue from growing foreign arrivals. With more direct flights, PH could anticipate an expansion in its tourism sector. The demand for international flights, coupled with seat sales from local airlines and other packaged tours, are increasing among the young professionals and families who are keen on traveling.

Futhermore, the emerging luxury developments in the country and the influx of international hotel and resort brands are attracting the more affluent tourists to visit the islands. However, PH has yet to be ready to meet the demands and accommodate the traffic with good-quality infrastructure and by decongesting its airports and seaports.

Connectivity updates

As infrastructure, airports and seaports are key for tourism prosperity, it is important to watch the initiatives of the government with regard to these aspects. At present, there are around 70 international, domestic and community airports in the Philippines, and the government is in the process of building public-private partnership deals to improve some of the major gateways in the country. 

Aside from the Ninoy Aquino International Airport in Manila, efforts for expansion and improvement are in place for the Cebu-Mactan International Airport, IloIlo International Airport, Puerto Princesa International Airport in Palawan, Legazpi Airport, Clark International Airport, Kalibo-Boracay International Airport, and Davao International Airport.

From 2011-2013, 30 new aircrafts by major carriers have been added to cater to flights from different cities in other countries. Through these gateways, PH has established a connection to various destinations in Europe, North America, Middle East, Asia-Pacific, and East Asia. New international air routes to PH include Istanbul-Manila, Jakarta-Manila, HK-Kalibo, Xiamen-Manila, Jin Jiang-Manila, Addis Ababa-Manila, New York-Manila, and Port Moresby-Manila.

Chartered air routes to PH have also been opened and expanded. New international chartered air routes include Shanghai-Kalibo, Taipei-Kalibo, Taipei-Puerto Princesa, Kaoshiung-Cebu, and Taipei-Cebu.

To increase the convenience of traveling in and around the country, 20 strategic clusters have been developed (7 in Northern PH, 6 in Central PH, and 7 in Southern PH). These clusters are connected to an international gateway. This program focuses on rehabilitating and creating accessible roads, implementing local tourism projects, and catering to niche markets around the world.

Aside from boosted marketing campaigns, PH has also developed various economic zones. The 18 tourism eco zones include Fort Ilocandia in Ilocos Norte, John Hay in Baguio City, Belle Grande in Manila Bay, San Lazaro Tourism & Business Park, and The Mactan Newtown in Cebu.

Medical tourism in the country is also marketed widely now, with the promotion of St. Luke's Medical Center and Saint Francis Cabrini Medical Tourism Park. Tourism developments are scattered all around the country.

In Manila, some of the tourism developments are centered on its main business districts. These development projects include the entry and expansion of international branded hotels such as Marco Polo Hotel Ortigas, Marriott Hotel Manila II, and Shangri-La at the Fort.

To further improve and establish connectivity, on-going and upcoming projects not only focus on improving accommodation and transportation facilities but also on developing healthcare and wellness centers as well as enterprise zones and tourism estates.

A good number of airport projects are up for bidding. Billions of pesos worth of contracts are on the line for developing and maintaining 6 regional airports: the New Bohol (Panglao) Airport, Puerto Princesa Airport, Laguindingan Airport, Bacolod-Silay International Airport, Iloilo Airport; and the Davao International Airport. These gateways are expected to accommodate a total of 20 million passengers by completion.