Tourism investments seen to grow 3.8%-A A +A
Wednesday, March 19, 2014
TRAVEL and tourism investments in the Philippines are expected to grow by 3.8 percent to P84.39 billion this year, according to the World Travel & Tourism Council (WTTC).
Last year, the sector accounted for P81.3 billion or 3.6 percent of total investments, contributing 11.3 percent of the country’s Gross Domestic Product (GDP) and generating 4,295,110 jobs, or 11.3 percent of total employment.
WTTC is an international organization of travel industry executives promoting travel and tourism. Each year, the organization undertakes an economic analysis of the impact of the travel and tourism sector in 184 countries.
In 2013, the sector’s contribution to the global economy rose to 9.5 percent or $7 trillion, not only outpacing the wider economy but also growing faster than other significant sectors such as financial and business services, transport and manufacturing, the report said.
It generated nearly 266,000,000 jobs or 8.9 percent of total world employment – or one in 11 jobs on the planet.
WTTC president and chief executive officer David Scowsill said in a report emailed to Sun.Star Cebu that 2013 was another successful year for the sector. He said that for four consecutive years now, the strong demand of international travelers fueled the growth of the sector.
“Visitor exports, the measure of money spent by these international tourists, rose by 3.9 percent at a global level year on year, to $1.3trillion, and by over 10 percent within South East Asia,” he said.
“It is clear that the growth in travel and tourism demand from emerging markets continues with pace, as large rising middle- classes, especially from Asia and Latin America, are willing and more able than ever to travel both within and beyond their borders.”
Scowsill said the “sustained demand in the sector together with its ability to generate high levels of employment continues to prove the importance and value of the sector as a tool for economic development and job creation.”
In the Philippines, spending by international tourists for both business and leisure trips reached P221 billion. In 2014, it is expected to grow by two percent to P225.5 billion as it attracts 4.7 million international arrivals.
It further reported that leisure travel spending in the country generated 71.1 percent of P668.9 billion compared to business travel spending at P271.4 billion. This year, they are projected to grow by 3.2 percent or P690.2 billion and 5.5 percent or P286.4 billion, respectively.
Domestic travel spending, on the other hand, generated 76.5 percent compared with foreign visitor spending of 23.5 percent in 2013. This year, domestic travel spending is forecast to grow by 4.4 percent to P751.1 billion.
2014’s outlook remains promising as the sector is forecast to grow by 4.3 percent.
WTTC said much of this growth is being “driven by higher consumer spending as the recovery from recession gathers pace and is becoming firmly established.” It said tourists are expected to spend more per trip and stay longer on their holidays in 2014, while long haul travel, especially among the European markets, is also expected to gain a greater share of international tourism demand.
Profitability for travel companies should also start to edge up, bringing opportunities for further job creation in the process, the report said.
Scowsill said that while the forecast over the next 10 years look “extremely favorable” with growth rates at four percent annually, this will require destinations and regional authorities, particularly those in emerging markets, to create a favorable business climate for investment in infrastructure and human resource support.
Governments also need to take action, Scowsill stressed. “This will require governments to implement more open visa regimes and to adopt intelligent rather than punitive taxation policies. If the right steps are taken, travel and tourism can be a true force for good.”
Sought for comments, tourism advocate and The Islands Group president Jonathan Jay Aldeguer said the positive forecast for travel and tourism is great news for the country, especially to tourism destinations that were hit by the twin calamities last year.
Although travel will become more competitive not only for businesses in the sector but for all the destinations, he said the Philippines has the potential to do very well in the region. He said, however, that the country needs to be more prepared for growth.
Aldeguer noted that on top of the list of priorities should be infrastructure, especially airports and anything related to transportation. “This is the most critical part we should address immediately,” he said.
Alice Queblatin, Tourism Congress Visayas vice president for travel and tour groups, said the growth of the sector not only lies on the government’s initiatives but also on private tourism stakeholders.
She said that while they are creating new tour products to meet various niche markets, they are also working on increasing the competitiveness of stakeholders through skills and management training with the help of the Department of Tourism and Asian Development Bank–Canadian International Development Agency.
Visitor arrivals in the Philippines reached 4,681,307 in 2013, surpassing the previous year’s record of 4,272,811 by 9.56 percent, according to DOT.
Central Visayas had 3,292,606 visitor arrivals last year. This year, DOT 7 expects to log 3.6 million arrivals, 4.4 million by 2015 and 5.8 million by 2016.
Published in the Sun.Star Cebu newspaper on March 20, 2014.