Tourism recovery seen held back by delayed return of China visitors

Tourism recovery seen held back by delayed return of China visitors

THE RECOVERY of the tourism market lags the rest of the region due to infrastructure constraints and the slow rebound of visitor arrivals from China, analysts said.

Michael L. Ricafort, chief economist of Rizal Commercial Banking Corp., said the Philippines’ tourism performance was lagging even before the pandemic.

“There has been a lot of catching up since the pandemic and also even before the pandemic with other ASEAN or Asian neighboring countries,” Mr. Ricafort said in a Viber message.

“This is largely due to infrastructure constraints that limit the capacity of airports and accommodation and MICE (meetings, incentives, conferences, & exhibitions) facilities to cater to a much larger number of foreign tourists,” he added.

In 2023, the Philippines logged 5.4 million international visitors which is only 65% of the 8.24 million foreign arrivals seen in 2019, but at par with the 65% average within Asia and the Pacific.

Mr. Ricafort said upgrades are needed to airports, particularly the Ninoy Aquino International Airport (NAIA), which will share future traffic to and from the capital with the Bulacan and Sangley airports.

“There is a need as well as for integrated tour packages that will be cheaper and more convenient to attract more foreign tourists,” he said.

“There is also a need for more mass transport systems such as railways that are integrated into major airports to make it more convenient for local and foreign tourists to travel,” he added.

China Banking Corp. Chief Economist Domini S. Velasquez said slow growth can be attributed to geographical constraints and absence of Chinese tourists.

“The Philippines lags behind its other ASEAN neighbors in terms of tourist arrivals, which can be attributed partly to geographical constraints, as the country cannot be accessed by land,” Ms. Velasquez said in a Viber message.

“However, another factor contributing to the below-target numbers, especially during the pandemic, is the absence of Chinese tourists,” she added.

Before the pandemic, China was the country’s second top source of international arrivals after South Korea. However, China only ranked fifth last year.

South Korea remained the top source of international visitors accounting for 26.41%, followed by the US (16.57%), Japan (5.61%), Australia (4.89%), and China (4.84 %).

“The sluggish growth and high unemployment in China have hindered the phenomenon known as “revenge travel,” wherein Chinese tourists typically exhibit strong travel demand. As a result, the expected influx of Chinese tourists has been limited,” Ms. Velasquez said.

Mr. Ricafort said the Philippines has strong potential in further growing the tourism economy with much room to improve in many elements of the product offering.

“The tourism business is low-hanging fruit that can generate more business, employment, and other economic activities as a major source of growth or a bright spot for the economy,” he said.

The United Nations World Tourism Organization (UNWTO) projected international tourism to fully recover to pre-pandemic levels this year, with some markets expected to surpass 2019 levels by 2%.

However, the UNWTO said that the rebound is subject to the pace of recovery in Asia and the resolution of various conflicts.

“There is still significant room for recovery across Asia. The reopening of several source markets and destinations will boost recovery in the region and globally,” it said.

“Chinese outbound and inbound tourism is expected to accelerate in 2024, due to visa facilitation and improved air capacity. China is applying for visa-free travel for citizens of France, Germany, Italy, the Netherlands, Spain and Malaysia for a year to Nov. 30,” it added.

The Manila International Airport Authority (MIAA) said it remains optimistic in the growth of passenger traffic in NAIA this year.

“As stated in our earlier release, 2023 passenger movements hit 45.39 million. This is still lower than our 2019 data or pre-pandemic levels, where we handled 47.69 million passengers,” MIAA said in a Viber message.

“But… from 2020 to 2022, passenger traffic has been growing. So we are expecting higher passenger traffic this year compared to 2023, possibly reaching pre-pandemic levels,” it added.

The MIAA said passenger traffic rose 47% last year versus the 30.94 million passengers seen in 2022.

The Department of Tourism set a 7.7 million international visitor target this year, which if borne out would be equivalent to 93% of the foreign arrivals in 2019. — Justine Irish D. Tabile