Inflation seen to impact on local travel spending

Rising inflation may impact occupancy rates of two- and three-star hotels as it would affect the purchasing power of Filipinos, a property services firm said.

“Higher inflation affects the purchasing power of Filipinos. So there could be some belt-tightening for local travelers,” Colliers International Philippines research manager Joey Roi Bondoc told The STAR in a text message.

Headline inflation hit a five-year high of 5.2 percent in June, higher than the 4.9 percent forecast by the Department of Finance (DOF).

Bondoc said the hotels and restaurants subsegment has been growing by about eight percent per annum from 2009 to 2017,which shows that Filipinos’ leisure spending has been growing and indicates that Filipinos continue to allot a part of their disposable income on travels.

“So it is interesting to know how much Filipinos are willing to skimp on travel expenses given the rising prices of other necessities,” Bondoc said.

“With local travellers and staycationers skimping on travel spending, this might affect the occupancies of two-to three-star hotels that primarily cater to millennials and staycationers,” he added.

The Department of Tourism (DOT) earlier said while it recognizes the impact of the country’s economic status on the tourism sector, it emphasized that tourism is a very resilient sector.

“Admittedly, the economic status of a country plays an important role in enticing visitors to come, but the DOT, under my stewardship, will continue its aggressive promotions and marketing efforts to ensure that we hit out targets and sustain the momentum,” Tourism Undersecretary Benito Bengzon Jr. earlier said.

He added that the agency is hoping to rake in additional visitor receipts this year despite the country’s rising inflation rate, driven by the higher purchasing power of tourists brought by the stronger dollar.

Bengzon said the tourism sector has already seen significant growth in visitor receipts in the first four months of the year.

“For the past four months, we have recorded a 53.93 percent increase in tourism revenues and with this being said, we are hoping that the current value of the peso against the US dollar will bring in additional tourism receipts as a result of the stronger purchasing power that this will give our visitors,” Bengzon said.

Visitor receipts from January to April amounted to P140.5 billion compared to P91.3 billion in the same period last year.