Featured Post

MABUHAY PRRD!

Wednesday, January 18, 2012

Philippine Tourism and The Philippine Leadership’s Lack of Strategic Thinking


The tourism slogan is an amusing distraction given the gradual destruction of an independent judiciary and the oligarchy’s continuing capture of the Philippine economy. The “It’s more fun in the Philippines” blurb also fueled the nationalist sentiments of Pinoys to the point where the culture of denial blatantly glosses over the festering sores of poverty and inequality just to promote the slogan. We ought to see the slogan for what it is – a government program to generate revenue for the tourism businesses – and raise more taxes aka “government revenue” from the tourism sector.

The question is – are we doing this right?

What is Tourism?

Here are some definitions from Wikipedia

Tourism is travel for recreational, leisure or business purposes. The World Tourism Organization defines tourists as people “traveling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business and other purposes”.[1]

Tourism brings in large amounts of income in payment for goods and services available, contributing an estimated 5% to the worldwide gross domestic product (GDP), and it creates opportunities for employment in the service industries associated with tourism.[2] These service industries include transportation services, such as airlines, cruise ships and taxicabs; hospitality services, such as accommodations, including hotels and resorts; and entertainment venues, such as amusement parks, casinos, shopping malls, music venues and theatres.

In general, tourists visit in order to: 1) experience attractions, food, culture 2) visit friends and relatives and 3) attend and participate in events.

Where is Philippine Tourism coming from?

I recall that during the Ramos presidency (1992-1998) the battle cry was to promote investments, trade, and tourism. These three were always together as part of a continuum of economic development. The model we used can be encapsulated in the following manner:

1. Tourism serves as a “demo”, an opener into the Philippines. It gives people an idea of what the country can offer. What it’s like to live here, albeit temporarily.

2. Trade is bolstered by tourism. When tourists get to know more about the stuff that’s being done here and the stuff that can be sold here as well – more trade opportunities are opened up.

3. The sustained interaction of tourism and trade creates sustainable conditions for long term involvement with the economy leading to investments.

4. More foreign investments leads to more foreign tourists and more trade – and the cycle continues.

It was a good model, we created the buzz and put the Philippines right back into the radar screen of global business. Unfortunately, after we primed foreigners to tour and trade and got them on the verge of investing – the Constitution put on a dampener on foreign investments.

I realized that the model’s flaw is that it did not factor in the role of the restrictive constitutional provisions. In doing so, the Philippines missed out on leveraging tourism inflows to increase economic growth – BIG TIME.

And given that Filipinos were resistant to opening the economy to competition; bought the nationalist protectionist line hook, line and sinker; and did not want to tamper the constitution – there wasn’t really much we can do, except offer fiscal incentives. Obviously, we we wear easily beaten by the more liberal economies of Singapore, Thailand, Indonesia, Malaysia, and Vietnam. Today, we are still taking a beating.

Then the ASEAN financial crisis hit and tourism arrivals declined during Estrada’s term, and continued into the earlier part of Arroyo’s term.

Still, it does not take rocket science to figure out that prior to Arroyo, foreign tourist arrivals averaged two million (2M) per year. By 2004, tourism arrivals were increasing. The 3,000,000 tourist arrivals per year was breached in 2007 and has stayed at the 3.5M range in Nov 2011.

I wonder how the tourism arrival figures will look like by the end of 2012. Will there be an increase? Will there be a decrease? How will it look like two years from now, three years from now, at the end of Aquino’s term? Here’s what I know though, the Philippines is struggling to hit the 3M per year level while its neighbors in ASEAN exceed 20 M foreign tourist arrivals per year. For instance in 2008, Malaysia had 22,052,000, Thailand had 14,536,000, even tiny Singapore had more than twice the foreign tourist arrivals of the Philippines at 7,778,000.

If it’s really more fun in the Philippines, how come more are going elsewhere BUT the Philippines? Not only that, how come tourism arrivals are going lock step with the investment growth in these areas?

Shouting harder does not make your product any better.

At times, we get too stuck up with the slogan instead of letting the product speak for itself. Thus, instead of arousing curiosity, attraction, and fascination – we get the push back. The problem is we get angry when we get a sales objection and try to overrun it with slogans when we ought to be listening to the market and satisfying it.

With the kidnapping of foreigners and tourists taking root as a cottage industry as Aquino throws the Philippine economy into a ditch, it begs the question on how this will affect foreign tourist arrivals.

The typical Pinoy answer would be to put the onus on government to improve tourism. I am not sure if that is the right answer because government has this habit of creating more problems as a solution to another problem.

Is Sloganeering Enough?

I would prefer a market-driven solution, one that involves both foreign and domestic providers, on equal footing.

Being an archipelago, the Philippines faces a disadvantage – the lack of contiguousness of its attractions. These however, is not insurmountable and in fact the lack of contiguousness should be turned into an advantage – a Unique Selling Proposition even. The upside of being an archipelago after all is that geographically separate islands tend to develop diverse customs, traditions, food stuff, and the like.

Access to these attractions will always be paramount – and the question is whether to limit the providers to Filipino businesses only, or to expand the providers so in order to increase market share. Of course, the current Filipino predisposition to have Filipinos only, distribute Filipino attractions misses out on the wider market covered by non-Filipino travel agencies. Indeed one of the issues has been of cost. Is it because the products are rare? Or is it because there are only few suppliers? Instead of telling Pinoys and their foreign guests to make do with what’s available – what’s keeping us from letting anyone in who can make what’s available, even better? Supply-side economics and the restrictive Philippine constitution’s economics obviously don’t mix.

Filipino tourism groups should also start stepping up to the plate and stop using tax money to pay for their promotions. Rather, the industry should start looking at more tax breaks for promotions expenses, staff training, capital outlays instead of hitting on subsidies from taxpayers.

Reality Check

In closing, I look back at the time when I was still with the “Invest In Davao” project and we were on a mission to generate more trade, investment, tourism arrivals for my hometown of Davao. So there I was delivering my spiel – why Davao is the place to be – no typhoons, stable peace and order, access to water, stable electricity, literate work force. I was also bragging about the tourism growth in Davao of more than 25% compared to the previous year.

Then I asked our host about their tourism. Our host at that time were the people who constructed Orlando International Airport. They told me that tourism arrivals in Orlando were 25 million. Sheesh.. I was bragging about Davao’s 150,000 tourist arrivals – and these guys were talking in the millions. These guys were operating in a different place of consciousness… lol.

And the past couple of days reminded me of those darn days in 1997. It’s more fun in the Philippines? Really? Let me clue you in

Orlando welcomed a record-breaking 51.455 million visitors in 2010, up 10.5 percent from 46.6 million in 2009. Domestic visitation accounted for 47.78 million visitors, a 10.3% increase over 2009; and international travel totaled 3.675 million, an increase of 12.6% from 2009.

Mocking and contempt aside, for Filipinos who have already left, the only reason why it’s more fun in the Philippines is family and friends. And even that – is starting to look.. not fun. Not when you see the poverty and chicanery that’s being pulled over their heads. Tourism is not an end itself – but it can be. But just because it can be, should it then remain a silo? I assert that tourism is but one of many tools that can be harnessed for economic well-being under a framework of free markets and limited government.

As the Philippines faces a confluence of issues that in my opinion are driven by economics, we need to look beyond slogans – and give importance to the product. After all no slogan can beat a satisfied customer’s testimonial. And no slogan can whitewash an irate customer’s wrath.

Maybe when the Philippines tops the Orlando foreign visitor arrivals of 3.675 million million in 2010 (and Orlando is not even a country!), I’ll believe that it’s more fun in the Philippines.


About the Author

BongV

has written 335 stories on this site.

BongV is the webmaster of Antipinoy.com.

14 Comments on “Philippine Tourism and The Philippine Leadership’s Lack of Strategic Thinking”

  • mga ulol wrote on 14 January, 2012, 15:05

    in the simplest form, tourism is akin to “inviting friends to your house”… rules >>> first: clean the house… second: make sure the house occupants are civilized… third: see to it that there’s no amuyongs, magnanakaws, kidnappers in the area… fourth: food and recs are in good order… fifth…. etchastera, etc…
    flipland couldn’t even pass the first rule…
    ♥♥♥

    [Reply]

  • Ian Martin wrote on 14 January, 2012, 21:54

    European tourists especially are not coming to Phils. because there are few direct connections, only KLM and this will stop soon in April. What puts them off? The taxation method of the government, who have a fixed amount for the tax per plane (for routes that Phils planes do not operate on). Also Phils. planes are banned from Europe because of safety reasons.
    But Philippines must be one of the most attractive countries in the world, with fantastic people, cheap, why are tourists not coming?

    [Reply]

    Matt Wilkie Reply:

    Its not as cheap as people often think, decent housing is artificially inflated, food quality is often poor and difficult to source many items. Corruption is rife in almost every part of Philippines life. More importantly there are a lot more welcoming nations than the Philippines that invite tourists with open arms.

    [Reply]

    ian martinez Reply:

    Where I live, I pay 3000p monthly to rent a concrete house, Yellow Fin Tuna is 70p a kilo, rice 30p a kilo, a SM beer is 20p, my yaya is 2000p a month, Visas are easy to get. It is very very cheap to live here, you can live like a king ! There is an unspoilt beach 1km away.

    But i agree with the rest of what you say.

    Philippines could emphasise it’s Spanishness and how cheap it is, the markets in Manila like Divisoria ! But the first thing is to make travel easier and cheaper. With all the Low Cost Carriers springing up, it will attract many tourists from South East Asia. The first hurdle has been cleared.

    [Reply]

    Dumdum Reply:

    Cleared the first hurdle? Yeah, right. The original poster was talking about *direct* flights from the European region (and European tourists, at that), not flights to a bigger tourist hub (say, Thailand or Singapore) and take another connecting flight to the Philippines via the low-budget carriers you speak of.

    Also realize that these commenters are Westerners who are more used to larger living spaces (i.e. houses in Ayala Alabang, White Plains, and the like – at a cost of tens of thousands of pesos a month), and not the small concrete houses you brag about. I will agree about cheap food, though.

    Vince Lampa Reply:

    Matt Wilkie, that’s a spot-on assessment of how it is there.

    [Reply]

    Vince Lampa Reply:

    Matt Wilkie, that’s a spot-on assessment of how it is there.

    [Reply]

    ReturnOfTheComeback Reply:

    What a joke, the Failippines is one of the most REPULSIVE countries in the world. Don’t be deluded just because you’re lucky enough to live in a beach resort rural area where your money allows you to live like a king. If you don’t have enough money and/or you live in someplace else other than a beach resort rural area, this country is hell on earth. Why do you think sooo many (too many) people want to migrate eh?

    [Reply]

    ian martinez Reply:

    Yes you are right , most Filipino people would leave to work abroad, but I am talking about foreigners living in a beautiful land that is very cheap, populated by mostly pleasant happy people who are poor, yes. I do live like a king, teenage girls flirt with me when I go shopping (sorry, i AM bragging this time but making serious point too). It is a sort of balancing out, BECAUSE it is so cheap, it is attractive to live here. I feel that I have a part in stimulating the local economy, and it is a sort of pleasure to pay people.
    On a smallish island you are not exposed much to crime, corruption I read about but i am not PERSONALLY touched by it. But I am personally exposed to living like a king and having a great time. I would say that most foreigners are also totally enchanted by the Philippines, from a foreigners point of view. Even Mr Wilkie lives here, he seems to like it really .
    But i can see the bad side, but they will go away some day.

    [Reply]

    ian martinez Reply:

    If it was a well run country without problems, i couldn’t afford to live here and live like a king. So yes being a crap poor country attracts some foreigners, and is a big pull for holidaymakers too.

    ian martinez Reply:

    I must mention that i am a European foreigner

  • concerned_citizen wrote on 14 January, 2012, 23:58

    It’s more fun in the Philippines because ignorance and delusional thinking are the key ingredients to our country, the Failipphines. With so much the world has to offer us, we think small-scale and never dream big. We are more busy watching our dear telenovelas and living in the culture of impunity. We’d rather elect officials based on a family name forever perpetuating the political dynasties. We never use our logic and reasoning but instead we cling to the hypocrite and narrow-minded teachings of our Catholic Church. It’s more fun because we continue to delude ourselves as very important in the world when in fact we are the bottom of the pot.

    [Reply]

  • nivram wrote on 15 January, 2012, 11:06

    I just want to make a suggestion, try making some merchandise like shirts having antipinoy.com printed on as a form of advertising the site. it may increase the number of readers of the site. just a suggestion

    [Reply]

  • Hyden Toro wrote on 15 January, 2012, 18:09

    Many countries have given restrictive travel advisories on the Philippines. It is because of its peace and order situation; it’s crime situation; its scam artists’ paradise situation…the country is too much polluted…boys and girls prostitutes and their pimps, bothering tourists is also the cause.
    I have never seen the Philippines featured in any Travel Magazine, as a destination for tourists…I’ve seen Cambodia, Vietnam, Thailand, and other countries. But, never the Philippines.. Even the tiny nation of Nepal was featured…
    I have an American friend who visited our country last year. His wife’s necklace was snatched by a Jewelry snatcher; and the Police did nothing. They were there in the Mall, where this snatching happened…I told him: the Police is in cahoots with the snatchers…If they will tell their experience to their : relatives, or friends, or other people…this will contradict any slogan, you put, to attract tourists…Clean your house first; before you invite visitors to visit you…

    [Reply]

1 comment:

A A said...

nice posting, thank for information.