Digital platforms needed to boost travel sector — PATA

The Philippine travel and tourism sector has the potential to further increase its contribution to gross domestic product (GDP) if it fully embraces digital platforms and data innovation, a report by the Pacific Asia Travel Association (PATA) said.

In a joint report with Oxford Economics, PATA revealed that the 91 percent of travel within the Philippines is organized or reliant on online research. This is above the 77 percent average in the Asia Pacific region.

“Internet penetration is roughly consistent with the regional average in the Philippines, at 47 percent, although costs are relatively high. As a greater proportion of the domestic population are able to afford travel, lower costs would facilitate continued growth,” the report said.

The report cited the country’s adoption of a “Cloud First” approach in 2017, as the factor which helped it leapfrog practices in other destinations which embraced digital interactions earlier.

“Along with prioritization of digital services by the central bank, and an absence of data localization measures, this will enable the identified growth opportunities to be realized,” the report said.

It added, however, issues relating to internet access, speed and costs still need to be addressed.

Meanwhile, the report said online tourism currently supports a very large proportion of activity at 17.6 percent the Philippines GDP and 16.1 percent of all employment; while the travel and tourism sector as a whole supports 21.2 percent GDP and 19.5 percent employment in the economy, including indirect and induced impacts.

Despite the significant contribution, PATA said there is still a potential GDP growth premium of 0.6 percent, which would generate 266,000 new jobs, which would be driven by faster connection speeds and a reduction in access costs.

PATA and Oxford pointed out that a large proportion of businesses are seemingly already using digital platforms to interact with travelers throughout the travel process.

It added that most appropriate platforms should continue to be leveraged while new businesses should be encouraged to follow best practice in online use.

“By leveraging the data generated by online interactions there is a significant growth opportunity for the travel sector in the Philippines. Government policy is supportive of digital growth, however, WEF indices suggest that digital skills are low within the destination,” the report said.

Also, investment in skills, and the digital network, including lower costs, would help to realize the growth opportunity.

Moreover, the report emphasized the role of the domestic travel demand, which generates around 85 percent of the economic benefit.

“Continued economic development will be key to future growth, but developments in other source should not be overlooked,” the report said.

Based on figures from the Department of Tourism (DOT) domestic tourists reached 95 million in 2017.