The increase in visitor count in 2008 is greatly attributed to the strong performance of the European markets led by Russia which posted a growth of 34%, France by 19%, and the United Kingdom by 10%.  Scandinavian countries also recorded substantial increments as arrival from Finland grew by 19%, Norway (16%) and Sweden (6%).

 

In addition, the Department of Tourism’s (DOT) effort to diversify and offer new tourist products like adventure, diving and bird watching provided impetus to stimulate, increase in awareness of the country’s tourist potentials and also substantial turnout of high-value visitors with greater propensity to stay longer and spend more.

 

 

 

Chinese tourists during the year expanded to 163,689 as the DOT worked with Chinese travel agents and airlines to mount new charter flights between Shanghai and Nanning to Cebu, Guangzhou to Clark, Nanning and Kunming to Manila.

 

The recovery of the Taiwanese market was another significant highlight as it hit 118,782 arrivals, reflecting 5.86% growth.  Mandarin Airlines chartered flights between Taipei-Kalibo and Cebu as well as Kaoshiung-Cebu yielded high tourist turnout from Taiwan.

 

Australia surpassed its previous year record with 121,514 arrivals, posting 8% increase.   It also overtook Taiwan and Hong Kong, ranking it in the 5^th place.  Canada, another strong market, continued to show significant improvement with 102,381 tourists.

 

The Middle East market led by the United Arab Emirate and Saudi Arabia posted 29% and 7% hike, respectively, in tourist arrivals as Middle Eastern airlines enjoyed an average of 90% load factor between Manila to Dubai and Abu Dhabi as well as Cebu to Doha.

 

Korea and the USA remained the top source markets with a share of 19% and 18%, respectively, accounting for 38% of the total tourist inflow. 

 

 

Cruise arrivals surged by 22% with Manila and Cebu being the major ports of call.  Aside from MV Costa Allegra, five (5) new cruise ships arrived with an aggregate of 4,226 passengers.

 

2008 saw the contraction in total outbound travel of key source markets.  Korea’s total outbound declined by 4.9% (-549,054)[1].  Japan’s total outbound travel slipped by 7.4% (-1,290,591) and the USA[2] by 0.4 %.

 

This trend underpinned the United Nations World Tourism Organization (UNWTO) report that tourism growth in the Asia and the Pacific region was declining rapidly by mid-2008. Arrivals to Singapore dropped by 1.5% in spite of several high profile events.  Foreign tourists to Hong Kong with exception of arrivals from China also declined by 4.5%.[3]

 

Despite these market developments, international visitor arrivals to the Philippines grew by 1.5% in 2008, reaching 3,139, 422.

 

Dispersing Growth to Regional Destinations

 

The DOT’s strong initiative to disperse tourist arrivals to various regional destinations provided the stimulus to expand tourism demand, capacities and investments.

 

International visitors directly arriving in Cebu grew by 6.23% with a volume of 397,355.

 

Joint tour programs launched by the DOT and its partner travel agents and airlines in China and Taiwan increased demand.  Air connectivity between Cebu and the cities of Shanghai and Taipei with almost daily charter flights were established.

 

As a result, the market share of Cebu to total visitor arrivals went up by 5%.  Chinese tourists to Cebu also grew by         74% while Taiwanese visiting the City increased by 42%.

 

Indian tourists to Cebu posted 42% growth as the DOT pursued aggressive promotions on incentive travel, shopping and leisure holiday.  Support of the private sector through familiarization trips and participation in travel fairs created more partnerships, sealed deals and greater collaboration in this market.

 

Another major hub, Clark recorded a 10% hike with 106,016 tourist arrivals.

 

This feat ranked Clark as the 3^rd busiest international airport as its market share to total arrivals went up by   8% with the additional charter flight launched by China Southern Airlines between Beijing-Clark during the year.

 

Todate, there are 62 flights from Clark to major tourist markets vis-à-vis the previous year record of 38.

 

With Mandarin Airlines’ regular charter flights between Taipei and Kalibo,   Taiwanese visitors to Boracay Island posted hefty growth of 254%. In addition, Russian tourists to Boracay grew substantially by 314% as the DOT continued to actively support partners to sell holiday packages in this market.

 

Chinese tourists going to Boracay Island rose by 71% to 21,741 during the year.    Singaporean and Australian visitors also went up by 83% and 41%, respectively.

 

 

The positive tourists flow has likewise increased room supply in key destinations of the Central Philippines to 32,696. Cebu, Boracay and Bohol accounted for 70% of the total count.

 

Cebu has 13,967 rooms or 43% of the total capacity.  Boracay has 5,524 rooms while Bohol has 3,336 rooms. 

 

Among the new hotels which opened in Cebu during the year were the Crown Regency Tower (280 rooms) and Alpa City Suites (84) in Mandaue. Construction of 1,801 rooms is ongoing with big resorts such as Imperial Palace Water Park Resort and Spa (616 rooms) and Queen’s Island Resort (386) in Medellin set to open in 2009.

 

In Boracay, 2,132 rooms are under construction, which include Shangri-la Resort and Spa (219 rooms) Seven Stones (100), Nandana Resort (100), and Regency Lagoon (90).   All to open in 2009.

 

Expanding Tourism Receipts to key destinations

 

The DOT and its partner schools continued participation and visibility in major educational tourism fairs in Korea and other source markets resulting in the robust growth of the ESL[4] sector of the tourism industry.

 

During the year, the ESL program generated Php 203.9 Million.  Aside from Metro Manila, schools in Bacolod City earned a total revenue of      Php 62.6 Million or 31% of the total. Education institutions in Baguio collected Php 30.4 Million.

 

4,092 Koreans are currently enrolled in the program, representing the highest turnout of foreign students, with Bacolod and Baguio City as most preferred locations with 2,182 foreign student-visitors.

 

 

 

Majority of the participants attend the course for 20 days extending up to a maximum of 100 days.  January, February and July were the peak registration periods.

 

On diving, dive shop operators in Cebu and Bohol generated Php 26.6 Million in gross receipts.  In Central Philippines, Cebu is the most visited site with 3,186 dive enthusiasts. Japan is the major source market with 1,814, followed by Korea with 1,371 and Germany with 434 dive- tourists.

 

 

 

Working with key industry players both local and abroad has helped the DOT raise quality of the product and boost the market’s interest and enthusiasm.

 

The Philippines was featured as the Destination of Honor at the Paris Dive Show, signifying the French market’s renewed interest in the country.   Numerous citations and accolade were received by the DOT at the German Boot Show, Russia Golden Dolphin Festival, Spain Tour Buceo and Japan Marine Dive Show.

 

Based on the survey conducted by TNS of 10 medical tourism facilities in Manila and Cebu, a total of Php 260.2 Million revenues were generated by said facilities from 4,677 foreign patient-tourists who sought medical services in 2008.

 

Majority of the tourist-patients came from USA, Japan and Guam.  Other markets were Saipan and Palau.

 

Though the results from TNS survey would seem to account for a small share of the total number of medical facilities, it shows however the potential for growth in the medical tourism sector.

 

To further drive the growth of this sector, the DOT together with medical facilities participated in major medical tourism fairs in the new markets such as Middle East, Europe and the United States.

 

Participation in these fairs showcased the Philippines’ leading edge in the field of medical and aesthetic services while promoting various tourist destinations where patients may relax and recuperate.  Contracts and business leads where likewise generated during these events.

 

The World Health Tourism Congress, the first to be held in Asia, will be hosted by the DOT in March 2009.  This strategically positions the Philippines in the global medical tourism market.

 

Revenues from ESL, diving and medical are expected to increase as more tourists avail of these tourism products and services.

 

Intensifying Tourism’s Impact on the Economy

 

Based on the National Statistical Coordination Board report, tourism receipts to GDP ratio grew from 1.9% in 2003 to 3.4% in 2007.  This feat augurs well to the sustained expansion in arrivals and receipts over the last five years.

 

Tourism’s average share to the country’s GDP in 2000 to 2007 was 6.2%, making the sector a key growth driver.

 

On similar note, tourist receipts ratio to total exports more than doubled from 3.9% in 2003 to 7.9% in 2007 as expenditure of inbound visitors surged to US$ 4.88 Billion.

 

Domestic tourism expenditure meanwhile posted double digit growth of 19.8% in 2003 to 2007, indicating higher appreciation for the country’s tourism products by local residents.

 

Consequently, the increase in economic activities due to tourism investments in destinations also escalated construction services as it grew by 23.1% in 2007.

 

Direct employment in tourism totaled     3.25 million for 9.7% of total employment as of 2007.

  

Revisiting the Demand Landscape

 

As the UNWTO expects rapid slowdown in international tourism growth as a result of the global economic downturn starting in mid-2008 and forecasted to last for 3 years, the DOT together with industry leaders worked to review and revise growth targets.

 

This initiative takes into account the current drop in outbound travel movement from major sources, uncertainties and extreme market volatility and decline in both consumer and business confidence. 

 

Evaluation of air seats and room supply required in destinations was also undertaken.

 

The growth outlook for 2009 will continue to be weighed down by the contraction of outbound travel in key source markets.  A 0 to 1.9 % growth for 2009 is likely, largely depending on the recovery of key source markets.  This projection is consistent with the adjusted forecast by the UNWTO of        -2% to 0% growth for the Asia-Pacific region.

  

Positioned for the Next Growth Spurt

 

A  stable international demand and strong domestic demand for Philippine tourist destinations will sustain the current expansions of tourism facilities and services in the country.  The continued expansion in capacity prepares Philippine Tourism for the next growth spurt when major markets recover.

 

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