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Market Insight - August 2012
TOURISM GROWTH: MAKING IT MORE FUN IN THE PHILIPPINES
The tourism industry has been one of the key growth sectors of the country over the past several years. In 2011 foreign visitor arrivals grew by about 11.3% to about 3.9 million from 2010. The target hoped to be achieved by the end of 2012 is 4.6 million. From the President’s latest State of the Nation Address, there are about 2.1 million tourists that have visited the Philippines as of the end of June 2012. To achieve this target an average of 420,000 foreign visitor arrivals has to be reached in each of the remaining six months of the year to hit the target. This is a tall order considering that it is only during the peak seasons that the 400,000 arrivals mark is breached. Even more ambitious is the targeted 10 million foreign visitor arrivals by the end of the President’s term in 2016 which is more than double the year end’s target.

The government is headed at the right direction in attaining this goal. The Tourism Department’s “It’s More Fun in the Philippines” campaign is actively and aggressively promoting the country as a major tourist destination. In tandem with the Local Government of Puerto Princessa the massive campaign undertaken resulted into the recent recognition given to the Puerto Princessa Underground River in Palawan as one of the new 7 Wonders of the World. Likewise, the beaches of Boracay and Palawan have been consistently recognized as part of the best world and are a must to visit. Other tourist destinations have also been discovered and developed and are likewise being extensively promoted.

Improving accessibility to these areas is critical in sustaining the tourism industry. Both the government and private sector have invested heavily in infrastructure development such as the construction and upgrading of roads, airports and other transportation facilities. Eliminating some of the hassles in getting to these areas provides a better overall experience for these visitors and may even result in a return visit and referrals for others to visit as well.

The lack of accommodations was reported to be one of the reasons why some tourists forego their scheduled visit to the country. Realizing this, investments in hotels and resorts by both foreign and local groups have continuously entered the market. This resulted into the construction of new hotels and resorts and the upgrading of existing facilities. These investments cut across the different segments from luxury to budget accommodations to cater to the spending capabilities of the different tourists.

To further improve the industry, promotional tie-ups between some airlines and hotels have been established to offer airline passengers discounted rates if they check in with their partner hotels. There are other bright spots in the industry that may lead to the realization of the 10 million arrivals target. The gaming industry is one that is seen to be a major boost to the tourism industry. The upcoming PAGCOR Entertainment City in the Manila Bay reclamation area is the much anticipated development to date. Major international gaming operators in partnership with their local counterparts have committed to putting up their gaming establishments within the entertainment city. Development of the area has started with the first hotel casino slated for completion and operational by early 2013. The rest of the gaming establishments are set for completion and operation over the next three years. Aside from the gaming aspect, the PAGCOR Entertainment City shall include high end shopping facilities, residential developments and other amusement and leisure facilities providing a total entertainment destination that is touted to rival the gaming island of Macau.

Another bright spot in the industry comes by way of the medical tourism. From anecdotal information a number of foreign visitors come to the country to undergo some form of medical procedure. With the upgraded medical facilities and the presence of qualified, competent and highly skilled doctors in the country, major medical procedures such as a coronary bypass and angioplasty can be availed at a fraction of the cost as in some developed countries like the US. This has likewise facilitated the international accreditation of these institutions and establishments that makes these procedures covered by their health insurance.

Foreign visitors also avail of minor procedures like cosmetic surgery (e.g. wrinkle removal, liposuction, et. al.). The clinics for these procedures utilize the latest technology and equipment available in the market. These procedures are also undertaken by equally qualified, competent and highly skilled doctors at more affordable rates according to the testimonials of some of the previous patients. Some of these clinics even offer luxury hotel type amenities to make the patients more comfortable and lessen the stress involved in these procedures.

The retirement industry is one of the segments of tourism that has the potential to be a major source of revenue. According to the United Nations World Populations Prospects in 2008, there will be over 500 million persons aged 65 and over by the end of 2010 and this number will increase to over 700 million by 2020. The Philippine Retirement Agency (PRA) is targeting to get 1 million of these supposed retirees to settle here in the Philippines by 2016.

The availability of adequate health and medical care is one of the key factors that the segment can capitalize on to promote the Philippines as a retirement destination. At this stage of their life, health issues become one of the top concerns of retirees, especially those who require day to day assistance. As mentioned earlier, there are a number adequate medical and health facilities in the country. Not only are the facilities up to par but so are the people extending the care such as the Filipino doctors, nurses and caregivers who are known to give that extra attention. This naturally caring attitude of Filipinos is what makes them endearing to their patients making them highly in demand both here and abroad.

On top of the health and medical care, adequate housing facilities and budgetary constraints also share top concern. Housing will be less of an issue as a wide selection fitting all types of budgets are readily available in the market. Most of these retirees will be living on their pension making it imperative to maximize its utilization. The Philippines has one of the lowest costs of living, ranking 85th among 90 countries surveyed (source: www.numbeo.com). This translates to their pension going farther to cover their everyday expenses and may even allow for more leisure activities or even visit the different tourist destinations.

All things said, the Philippines have what it takes to be a premiere tourist destination. All that is needed is the will to see everything through. If this happens, we can safely and confidently say that “It’s more fun in the Philippines”.

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