Tourist arrivals seen to breach pre-COVID levels

The country’s tourism sector is expected to sustain its recovery this year, with international arrivals hitting 8.21 million, effectively closing in to preCOVID levels, according to a unit of Fitch Solutions.

In a report, BMI Country Risk & Industry Research said tourism in the Philippines is poised for a strong rebound for 2024 after travel was halted for many years due to the pandemic.

As such, BMI said tourist arrivals could increase by 50.6 percent to 8.21 million from last year’s 5.45 million. This will effectively close in to the 8.26 million arrivals recorded in 2019, right before COVID hit.

Similarly, this will be seven percent above the baseline target of 7.7 million visitors set by the Department of Tourism.

BMI noted that the recovery will be driven by increasing arrivals from key source markets in Asia such as South Korea, China, as well as from Europe and North America, primarily the US.

Last year, South Korea remained as the top source of international visitors, contributing 26 percent or 1.42 million.

The US came in next with 903,299 tourists or 16.57 percent followed by Japan, 5.61 percent; Australia, 4.89 percent, and China, 4.84 percent.

“Over the medium term, we forecast that tourist arrivals to the Philippines will continue to expand with the market offering tourists from its key source markets a relatively affordable destination, which benefit from easy access and strong transport links,” BMI said.

By 2028, tourist arrivals are expected to hit 9.5 million, representing an average annual growth rate of 15.8 percent.

Despite the rosy picture, BMI warned that there are short term risks to the country’s tourism outlook.

BMI emphasized that this could stem from heightened consumer inflation in the country’s key source markets.

“We expect inflationary pressures to ease over 2024, but consumers will remain price sensitive in the short term,” BMI said. “This is likely to be reflected in increased travel to domestic and short haul destinations, a trade down from long-haul international destinations, which have a higher price point,” it said.

Nonetheless, the research unit noted that the Philippines remains to be a relatively affordable travel destination, thereby benefiting from strong regional arrivals due to its proximity and strong transport links with other markets.