Tourism the next growth engine

(Part II)

It is providential that the current Administration has embarked on a rebalancing of the trade, investment, and cultural relations of the Philippines with the rest of the world. Without decoupling with its traditional partners such as the United States, Europe and Japan, the Duterte Administration has been giving more attention to its neighboring countries in Northeast and Southeast Asian countries, especially to China, South Korea, and Taiwan. Fortunately, in 2015 the Department of Tourism profiled the various nationalities visiting the Philippines through the Annual Visitor Sample Survey conducted across the country’s various airports as well through data gathered from Arrival/ Departure (A/D) cards. Although Chinese visitors still lagged behind other nationalities in 2015, as indicated above the Chinese are expected to top the list of visitors by 2019 eclipsing Korea as the top source of tourists for the Philippines.

As a strategic guide to tourism and travel establishments who want to cater especially to the Chinese, I present the results of the study revealing the particular characteristics of the Chinese tourist market compared to other nationalities that visited the Philippine during the survey period:

--About 63% of Chinese tourists were married and majority (62%) were travelling with their spouses, children and relatives, a lot more so than other nationalities. This familyorientation may be considered a positive factor since the Philippines is also steeped in family-centered domestic tourism. It also bodes well for keeping a morally-sound environment in the tourism destinations which usually are spoiled by backpackers and single individuals looking sometimes for the wrong kinds of fun and entertainment.

--Chinese average daily expenditure per capita registered at a relatively low $84, although the study shows that while they cut back on spending for accommodation and food and beverage they spend heavily on entertainment, recreation, tours and shopping. Koreans were the huge contributors in terms of foreign tourist receipts with an average daily spending of $200. The Chinese low expenditure on accommodation may be considered a bright opportunity for bed and breakfast establishments that can be registered with airbnb. These enterprises can dot the rural areas and can generate more employment in these areas where underemployment is the most serious problem. They can also be compatible with the efforts of the Government to give a big push to the development of small and medium-scale enterprises. A bnb establishment is usually run like a family business.

--As regards shopping, a good number of Koreans (92%) and Chinese (84%) are wont to do it in tourist duty-free stores while the other three major nationalities (USA, Japan, and Australia) were more willing to go to the shopping malls, possibly due to longer average length of stay.

--A relatively large number (13%) of Chinese visitors were motivated to go to the Philippines through television/radio/ internet ads. This figure is much higher compared to the other major visiting nationalities. This makes it very necessary for our T&T enterprises to do a great deal of digital marketing targeted to the Chinese market.

--A small number (1.6%) of Chinese tourists said that they went to casinos. This is a significant decline from the 3.0% in 2014. This could be possibly already a result of the anti-corruption crackdown started under the leadership of President Xi Jiping. Nevertheless this percentage is still above that of the other four nationalities that averaged only 0.3%, indicating that our gaming industry should still especially orient their marketing efforts towards the Chinese.

--More than one out of six (17%) Chinese respondents came to the Philippines to explore investment opportunities. The other nationalities averaged only 0 to 1%. This information jibes well with my own experience about large investors, especially in the infrastructure area. The majority of investors who have been asking for economic briefings regarding opportunities to invest in the so-called Duternomics list of infrastructures come from China. The next group would be the Taiwanese, who have been expressly told by their President “to go South.”

--Good climate is the one thing that the Chinese liked in the Philippines much more compared to that of the other visitors. Other factors that international visitors found positive were the warm hospitality they received and the country’s beautiful sceneries and attractive beaches. No wonder that since the start of more friendly relations with China occasioned by the more friendly diplomatic relations achieved by the Duterte Administration, we have seen a surge of Chinese visitors in key destinations like Boracay and Panglao.

--The thing that the visitors most disliked about the Philippines, as expected, was the heavy and chaotic traffic. This perennial problem in urban areas like Metro Manila and Metro Cebu should be converted into an opportunity for other top tourism destinations like Central Luzon, La Union, Aurora, Camarines Sur, Albay, Palawan, Bohol, Batangas, and Davao to attract foreign tourists away from these congested urban areas. Fortunately, there are increasingly more direct flights to international airports outside Metro Manila and Metro Cebu that can be gateways for foreign tourists. I was especially encouraged to learn that almost half of the first PPP projects approved by the Duterte Administration have to do with the improvement of airports in Iloilo, Davao, Cagayan de Oro, Bacolod, Panglao and other possible tourism destinations. I hope to see more emphasis on such airports as Clark, Caticlan, San Vicente (Palawan), Coron (Palawan), General Santos, and the Fernando Base in Lipa City (which will be primarily an international cargo airport but can also cater to passengers wanting direct access to such attractive tourism destinations as the Jamilo Coast, San Juan, Anilao, Mabini, Matabungkay and Matuod without having to pass through congested Manila. (To be continued).

For comments, my email address is bernardo.villegas@uap.asia.