Tourism is one of the fastest-growing industries in Asia with various factors driving strong growth. Several Asian countries have promptly recognized tourism’s potential to boost economic growth and generate significant foreign exchange earnings. In fact, Tourism is widely recognized as a major economic driver in the Philippines.
According to data released by the Philippine Statistics Authority (PSA), in 2019 the contribution of Tourism Direct Gross Value Added (TDGVA) to the Philippine economy increased by 10.8% to Php 2.48 trillion, from Php 2.24 trillion in 2018.
The country received 8,260,913 visitor arrivals in 2019, a 15.24% increase over the previous year. In the same year, the data showed that employment in the tourism sector reached 5.71 million, a 6.5% increase from 5.36 million in 2018. This is equated to a 13.5% contribution to overall employment in the country. The Department of Tourism (DOT) was on track to meet a target of 9.2 million tourists arriving in 2020 until the pandemic occurs.
Due to strict border controls and COVID-19 protocols, the number of foreign tourists and visitors plunged to 1.32 million in 2020, an 83.97% drop from 8.26 million in 2019. Only foreigners on official business, spouses of Filipino citizens, and dual citizens, among others, were permitted entry. In addition, the TDGVA was estimated to be Php 973.31 billion in 2020, a -61.2% decrease from Php 2.51 trillion in 2019.
The abrupt decline in tourist arrivals, followed by a demand plunge in the tourism sector, has resulted in millions of mass lay-offs in tourism-related industries. With total employment estimated to be 4.68 million in 2020, a -18.1% decrease from the previous year. The economic downturn also wiped out many businesses, particularly micro, small, and medium-sized (MSMEs) businesses that catered to tourists or worked in related industries.
Vaccination for the Tourism Sector’s Recovery
The timely implementation of the vaccination program, as the third pillar of the government’s recovery strategy, will anticipate the gradual reopening of the economy as well as giving tourists the confidence to travel again.
According to “The Philippine Travel Survey Report: The Evolving Landscape of Domestic Travel in the Philippines” by DOT, Asian Institute of Management, and Guide to the Philippines, at least 31% of respondents believe that a proven vaccine is a “requirement for a fast tourism recovery,” and 24% believe that faster and cheaper testing is the key.
The study also revealed that the testing and quarantine requirements, as well as the various permits required by local government units, discourage people from traveling. The DOT has also recorded a lower number of guests and visitors months after the reopening of some key domestic tourist destinations. It is clear that standardized travel protocols for all regions would encourage tourism while the pandemic is still ongoing.
In addition, a report was released by Tripadvisor, the world’s largest travel guidance platform entitled ‘A Shot in The Arm for Travel? Examining the Vaccine’s Impact on Leisure Travel Demand’, revealed that global vaccine rollouts are driving increased demand for vacations, with vaccinated travelers likely to stay longer and spend more on their trips than unvaccinated travelers. Moreover, vaccinated travelers are a key driver of demand, as 32% of vaccinated travelers worldwide said they had booked a domestic vacation, with 80% agreeing that the vaccine was a factor in their decision to book. Meanwhile, 19% of unvaccinated travelers had already planned a domestic trip, 70% of those respondents planning a domestic trip in Singapore are waiting to receive at least one dose of the vaccine before booking.
Vaccine Passport Act
As the rollout of COVID-19 vaccines continues, countries are exploring how the technology can help reopen borders by identifying those who are protected against the virus.
Ang Probinsyano party-list Rep. Ronnie Ong, filed House Bill No. 8280, or the Vaccination Passport Act, in December 2020, which will serve as official proof of COVID-19 vaccination for travelers in the country. This aims to protect the public’s health and safety while balancing the right of people to travel, with the goal of assisting society and the economy in recovering from the effects of the pandemic. The issuance of a vaccine passport is expected to increase travel and population flow, as well as benefit vaccine production and tourism.
The Department of Tourism (DOT) supports the proposed vaccine passport for arriving visitors, believing that it will help boost travel confidence. “This is a concept that we are supporting because this will help facilitate cross-border travel,” according to Tourism Undersecretary Benito Bengzon, Jr..
Members of the Association of Southeast Asian Nations (ASEAN) are also considering the issuance of a digital coronavirus vaccine certificate in order to revitalize the region’s tourism industry.
Meanwhile, the European Union has stated its support for a “Digital Green Certificate,” which would allow citizens with proof of vaccination, a negative coronavirus test result, or recovery from COVID-19 to travel across all 27 member states. Digital Covid-19 vaccine passports or certificates are being developed by countries such as the United Kingdom, China, and Japan, as well as private groups.
Beyond the vaccine
COVID-19 is proving to be a driving force in the Travel and Tourism sector to accelerate the adoption of digitalization and innovation. Amid the strict stay-at-home orders, consumers now expect contactless technologies as the primary standard for a safe and seamless transaction as well as a travel experience.
As the government continues to slowly ease domestic travel and reopening some destinations with health and safety protocols in place, tourism-related organizations and the DOT, have been establishing market strategies to reflect emerging trends in travel that have arisen as a result of the pandemic, such as digital transformation projects in a bid to promote “smart tourism” that banks on contactless transactions, and created a Travel Philippines app to ensure that the right and updated information is properly disseminated.
Given the renewed interest in safety and cleanliness among travelers, businesses should not only implement such protocols but also communicate with travelers in a clear and simple manner. Providing them with easily accessible, accurate, and timely information.
Nonetheless, tourism-related businesses and the government should take this opportunity to rebuild the sector by assisting players in upskilling and digitizing their operations, rethinking their business models, ensuring compliance with safety and health regulations, and encouraging the people to get vaccinated as soon as possible.
Written by: Mary Grace Ladringan and Angelo Gandia
Aviso Valuation and Advisory Corp. is a real estate consultancy firm that offers valuation and business advisory services compliant to 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.
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References:
https://www.philstar.com/other-sections/newsmakers/2021/06/15/2105439/jab-tourism-new-normal
https://www.philstar.com/business/2020/06/22/2022500/tourism-contributes-127-gdp-2019
https://psa.gov.ph/content/share-tourism-gdp-127-percent-2019
http://www.tourism.gov.ph/industry_performance/Dissemination_forum/2019_Tourism_Industry_Report.pdf
https://www.pna.gov.ph/articles/1092873
https://www.pna.gov.ph/articles/1131254https://psa.gov.ph/content/share-tourism-gdp-54-percent-2020
https://businessmirror.com.ph/2021/02/26/tourism-firms-fret-over-survival-seek-vaccines/
https://www.healthline.com/health-news/vaccine-passports-what-they-are-and-why-you-may-need-one-soon
https://asia.nikkei.com/Economy/ASEAN-eyes-digital-vaccine-certificate-for-post-COVID-travel
