Tourism, back on its feet

Tourism, back on its feet

Tourism, the fourth largest industry in the global economy, verily a generator of Philippine economy, has become an important sector that has an impact on development.

Those on the track say the main benefits of tourism are income creation and the generation of jobs. For many regions and countries, it is the most important source of welfare.

The government correctly can generate revenue and also enhance household income through the development of this sector and ease austere visa policies for international visitors/tourists.

How does the tourism industry help to develop the country? In developing countries like the Philippines, tourism helps by providing jobs, generating income, diversifying the economy, protecting the environment, and promoting cross-cultural awareness. Tourism is the fourth- largest industry in the global economy.

Without a doubt, the tourism industry is among the sectors that have been greatly affected by the COVID-19 pandemic.

The closing of borders, airports, and hotels as well as restrictions on mass gatherings, land travel, and related services across the world put around 100 to 120 million jobs at risk, as estimated by the World Tourism Organization.

In the first quarter of 2020, the period when the travel restrictions and lockdowns in most countries started, international tourist arrivals declined by 22 percent, resulting in an estimated loss of US$80 billion in global tourism receipts.

In such period, 97 destinations had totally or partially closed their borders for tourists, 65 destinations suspended international flights totally or partially, and 39 destinations were implementing the closing of borders (i.e., banning the arrivals from specific countries).

In the Philippines, the government closed the airports in Luzon on March 20 as part of the Enhanced Community Quarantine that started on March 16. The tourism sector had felt the negative impact of the pandemic on its performance much earlier.

In other countries, travel restrictions and measures had started as early as January that year, and had impacted the Philippine international tourist arrivals.

Domestic tourists, on the other hand, also limited their travel for fear of contracting COVID-19. The Department of Tourism reported that international tourism receipts in the first quarter of the year declined to P85 billion, 36 percent lower than the revenues in the same period the previous year.

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To understand the impact of COVID-19 on the Philippine tourism industry, PwC Philippines, together with the Department of Tourism, surveyed 247 decision makers across the different subsectors two months after the strict lockdown.

Given the travel restrictions and closure of businesses, 88 percent of the respondents expected losses of over 50 percent of their 2020 revenues.

Sixty-three percent of the respondents also said they expected their businesses to normalize within six months to over a year. Such findings were worrying because the tourism industry contributed 12.7 percent of the country’s GDP in 2019, and provided 5.71 million jobs in the same year.

Globally, the World Travel and Tourism Council estimated that it could take up to 10 months for the industry to recover.

But while the last two years have been tough because of COVID-19 lockdowns, this year, the tourism industry is “firmly” on the road to recovery, the World Tourism and Travel Council said.

This, as the WTTC’s Economic Impact Report, revealed on April 20 that the Philippine tourism industry generated $41 billion or 10.4 percent of GDP in 2021.

WTTC President and CEO Julia Simpson, who stressed the growth was because of domestic travel and relaxed restrictions, said the tourism economy had passed through the critical point and is getting better.

And Tourism Secretary Bernadette Romulo-Puyat had said in 2020 that she had “high hopes” the industry would recover: “We will come out better from the present challenges that we face.”

The WTTC said the tourism industry in the Philippines has recovered in 2021 with a 10.4 percent share of GDP. While it was still lower than the 22.5 percent in 2019, it was higher than the 4.85 percent in 2020.

The EIR, the WTTC said, was based on constant 2021 prices and exchange rates from the Oxford Economics and the United Nations World Tourism Organization.

Simpson said the industry contributed $41 billion to the Philippine economy in 2021, higher than $37 billion in 2020, which was an 81 percent drop from $93 billion in 2019.

A 20.5 percent rise in employment was likewise seen last year, as revealed by the PSA and the WTTC—5.72 million in 2019, 4.68 million in 2020 and 7.8 million in 2021. The 7.8 million was equivalent to a 20.5 percent growth.

Puyat said the DOT is working on making travel easier and seamless for all. “We’re getting there,” she said, stressing that with the relaxed restrictions, especially on travelers, the “industry will recover.”

Simpson said the $41 billion share of the tourism industry to the economy even helped the Philippines to be the world’s fourth fastest-growing economy in 2021.

Last March, the DOT said that since the Philippines opened its borders (Feb. 10 to Feb. 18), 47,715 travelers had arrived—45 percent or 21,409 were balikbayan while 55 percent or 26,306 were foreigners.

Last April 17, the DOT revealed there were already 272,000 international arrivals.

This, as the Philippines was ranked 13th in Asia’s Travel-Ready Index 2022 of the UK-based The Economist Intelligence Unit with an overall score of 3.75. The EIU said a lower score indicates advantageous conditions for recovery.

Simpson said that by 2032, the industry is seen to grow by 6.7 percent, higher than the 5.6 percent, which is the expected overall economic growth rate.

In 10 years, the WTTC said the tourism industry’s GDP share could be worth in excess of $155 billion or 21.4 percent of the economy.

Likewise, employment is expected to rise yearly by an average of three percent over the next 10 years, generating a critical 2.9 million or 21.5 percent of all employment in the Philippines. (ai/mtvn)

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