More Fun in the Philippines
By Kenneth Lowe
June 8, 2012
A combination of beautiful beaches, year-round sunshine, interesting historical sites and a hospitable population is generally fairly effective in forming the seeds required to capture a part of the world’s largest service sector—tourism.
Many Southeast Asian countries have spent the last 20 years trying to take advantage of their natural and cultural attractions to participate in the US$6.3 trillion global tourism market, with numerous success stories. An increase in the number and quality of attractions has seen “Surprising Singapore” reach over 9 million inbound tourists recently, whilst Malaysia, with the slogan “Malaysia, Truly Asia,” has improved (and continues to improve) its infrastructure. This has helped ease travel from neighboring Singapore, and led to more than 24 million visitors to Malaysia in 2010.
However, not all countries across the region have enjoyed a similar fate despite sharing similar attributes. The Philippines is one such country that has historically been tarnished by safety issues such as terrorist activity, poor travel infrastructure (including no direct flights from Europe) and a reputation for the seedy side of tourism. It has also suffered from the overall lack of a “brand name.” All of these factors have hindered the enthusiasm of prospective tourists, and I myself can testify that the Manila airport, upon my arrival there last month, was not exactly representative of a gateway to a world class tourist experience. Over the years, rampant political corruption in the Philippines has also prevented the country from better utilizing its impressive natural resources. Tourism development is amongst the most labor intensive industries and could help to provide jobs and opportunities for lower skilled workers to move out of poverty.
But with the election of President Benigno Aquino in 2010, there has been renewed fervor to try to advance tourism in the country. A snappy viral marketing campaign called “It’s More Fun in the Philippines” is helping things. But the effort is also accompanied by more tangible changes including a target to reopen flight routes to European countries as existing tax regulations are changed, and the building of a Las Vegas-style area in Manila Bay called “Entertainment City Manila.” Much of the tourism drawn to Macau and Singapore has come from strong intra-Asia demand for high-end casino gaming that also includes family friendly entertainment. Realizing this, the Aquino government is keen to adopt a similar approach by providing lower tax rates to foreign gaming companies to enter this market with local partners. The strategy has already had some success: Resorts World Manila opened in 2010 and another two integrated resorts are expected to open in Manila by the end of next year.
Tourist arrivals to the Philippines have already started to rise at 11% year-over-year in 2011. As the Philippines rebuilds its reputation internationally and also strive to attract visitors from neighboring Asian countries, the hope is that last year’s nearly 4 million arrivals will rise as high as 10 million by 2016. This could be a meaningful driver of both future employment and GDP growth for the archipelago nation if existing plans come to fruition.
(c) Matthews Asia