Written By: Angelo M. Gandia
The tourism industry has been a crucial driver of economic development in the Philippines. According to the Philippine Statistics Authority (PSA), the sector made a significant contribution to the national GDP (8.6%). The increase in both foreign and local visitors has stimulated economic activities, benefiting various businesses such as hospitality, transportation, and retail. Among the forms of tourism expenditure, inbound tourism expenditure posted the highest annual growth of 87.7%, amounting to Php697.5 billion (US$11.9 billion) in 2023, while domestic tourism expenditure grew by 72.3% to Php2.67 trillion (US$45.5 billion). This industry’s widespread impact showcases its capacity to enhance regional development and ultimately contribute to economic progress across the archipelago.
Last year, the Philippine tourism sector achieved notable success, surpassing its targets and gaining international recognition. The country welcomed a total of 5,450,557 tourists (see Table 1), exceeding the projected figure of 4,800,000 by a considerable margin.
This substantial influx of tourists resulted in foreign tourism receipts totaling Php482.54 billion, underscoring the economic significance of the industry. South Korea accounted for the highest number of visits at 1,450,858, followed by the United States (903,299), Japan (305,580), Australia (266,551), and China (263,836).
The Philippines has further solidified its standing as a premier vacation destination through its notable success in obtaining recognitions at the esteemed World Travel Awards in 2023. These accolades encompass being honored as the World’s Leading Dive Destination, World’s Leading Beach Destination, World’s Leading City Destination (Manila), Asia’s Best Cruise Destination, and receiving the Global Tourism Resilience Award. These commendable achievements underscore the country’s increasingly prominent position in the global tourism sector and its effective endeavors to elevate its attractions and services for international visit.
- World’s Leading Dive Destination
- World’s Leading Beach Destination
- World’s Leading City Destination (Manila)
- Asia’s Best Cruise Destination
- Global Tourism Resilience Award
Tourism investments in the Philippines reached an impressive Php509 billion, marking a significant 34% increase from the previous year according to the Department of Tourism (DOT). Tourism Secretary Christina Frasco highlighted that the accommodation sector was the largest contributor to this growth, accounting for 51% of the total investments. This substantial influx of capital underscores the robust recovery and expansion of the Philippine tourism industry, reflecting heightened investor confidence and the sector’s vital role in the nation’s economic landscape.
The surge in investments not only enhances the country’s tourism infrastructure but also promises to boost economic activities and job creation. The Impact of Tourism in Providing Jobs Tourism has become a significant driver of job creation in the Philippines, particularly in emerging tourist destinations. As these areas gain popularity, the demand for hospitality services, transportation, guided tours, and other tourism-related activities increases, leading to a surge in employment opportunities. This trend has been particularly evident in provinces such as Siargao, Palawan, and Bohol, where tourism has rapidly expanded, transforming local economies. Employment in tourism industries was estimated at 6.21 million in 2023, higher by 6.4% compared with the 5.84 million employed in 2022. The share of employment in tourism industries to the total employment in the country in 2023 was recorded at 12.9% (see Figure 2).
The influx of tourists necessitates a broad spectrum of jobs, from hotel and restaurant staff to tour guides and transport operators. These positions often provide a stable source of income for local residents, contributing to poverty alleviation and fostering economic development. Additionally, the rise in tourism supports indirect employment in sectors such as agriculture and handicrafts, as local products and services are increasingly sought after by visitors. By diversifying economic activities and reducing reliance on traditional industries, tourism in these emerging destinations not only boosts employment but also enhances community resilience and sustainable development. The continuous growth of the tourism sector, fueled by strategic marketing and infrastructure improvements, promises to further strengthen job creation and economic stability in the Philippines.
Infrastructure Projects to Accommodate Tourism Activities
In order to support the flourishing tourism industry, substantial infrastructural investments have been undertaken by both the government agencies and private enterprises. The construction and enhancement of bridges, airports, seaports, and access roads have been among the most significant advancements in 2023. These infrastructural upgrades are vital for ensuring a seamless travel experience for visitors, making locations more attractive and accessible. Such initiatives enhance connection and mobility, thereby benefiting local economies through the improvement of transportation linkages and the promotion of increased travel and business activities.
The government’s commitment to infrastructure development is evident in projects such as the North-South Commuter Railway (NSCR) and the Metro Manila Subway Project (MMSP). These projects aim to improve transportation efficiency, reduce travel time, and enhance the overall tourist experience. The expansion and modernization of airports in key tourist destinations also play a crucial role in accommodating the increasing number of international and domestic travelers.
According to the Philippine Development Report 2023, the rise in tourist arrivals has spurred real estate developers to invest heavily in infrastructure projects that cater to tourists. The development of mixed-use properties, including residential units, retail spaces, and entertainment facilities, reflects the changing landscape of real estate influenced by the tourism boom.
However, the impact of tourism on real estate is not without challenges. It can lead to increased property prices, making housing less affordable for local residents. Moreover, over-reliance on tourism can create economic volatility in some regions, particularly during economic downturns or global crises that affect travel patterns. While tourism stimulates economic growth and development in real estate, sustainable planning and management are crucial to balance the benefits and challenges associated with tourism-driven real estate markets.
The Importance of Property Valuation, Market Study, and Feasibility Study
Property valuation is instrumental in determining the equitable market value of real estate assets, enabling investors to make well-informed decisions based on prevailing market conditions. Market studies yield insights into consumer preferences, competitive landscapes, and emerging trends, allowing investors to tailor their strategies to meet market demands effectively. Feasibility studies are crucial for assessing the financial viability of projects, identifying potential challenges and opportunities, and establishing a clear roadmap for successful project execution.
For investors eyeing tourism-related real estate projects, conducting thorough property valuation, market studies, and feasibility studies is indispensable. These analyses provide critical insights into the potential profitability and viability of investments. In previous years, such studies conducted by Aviso Valuation and Advisory for its clients were instrumental in helping them identify lucrative opportunities and mitigate risks.
Accurate property valuation ensures fair pricing, while comprehensive market and feasibility studies offer an in-depth understanding of demand trends and financial projections. This information is crucial for informed decision-making and strategic planning, ensuring the success and sustainability of tourism ventures.
Charting Progress #Beyond7641
The Philippine tourism industry continues to make remarkable strides, extending its allure far beyond the famed 7,641 islands. The performance of the Philippine tourism industry in 2023 underscores its pivotal role in national development, job creation, and real estate growth.
The sector’s expansion necessitates significant infrastructure investments and highlights the importance of detailed market analysis for potential investors. As the industry continues to grow, these elements will remain critical in harnessing tourism’s full potential to drive economic progress and development in the Philippines.
Tourism’s contribution to the Philippine economy extends beyond mere numbers; it enriches communities, preserves cultural heritage, and promotes sustainable development. The sector’s continuous growth and its adaptability to evolving global trends are pivotal to the nation’s long-term economic resilience and success.
Aviso Valuation and Advisory Corp. is a real estate consultancy firm that offers valuation and business advisory services that are compliant with international standards such as the International Valuation Standards (IVS) and International Financial Reporting Standards (IFRS). To assure that we only produce high-quality deliverables, as needed, we do tasks beyond the usual appraisal process like verifying pertinent property documents (i.e. land titles, tax declarations, etc.) with the appropriate government agencies for due diligence purposes prior to the acquisition of the properties.
