Tourism planning must reflect market realities

Tourists on the world famous Boracay beach in the Visayas enjoy their water activities such as sailing on Friday, April 23, 2022. FILE PHOTO BY JOHN ORVEN VERDOTE

Tourists on the world famous Boracay beach in the Visayas enjoy their water activities such as sailing on Friday, April 23, 2022. FILE PHOTO BY JOHN ORVEN VERDOTE

TOURISM is a major economic engine for the Philippines, and with every change of administration, the new secretary of tourism and the Department of Tourism (DoT) launch an ambitious and enthusiastic plan to attract more visitors to the country and expand the tourism sector.

The current Department of Transportation under Secretary Ma. Esperanza Christina García Frasco is no different, but it faces much more difficult challenges than its predecessors. For your tourism strategy to be successful, the DoT and tourism stakeholders will need to be acutely aware of market conditions and adjust their plans to match.

Some of those challenges were revealed in a webinar Thursday hosted by the economic analysis and advisory group Oxford Economics and the International Air Transport Association. The current reality and medium-term prospects for the air transport industry have been set out in detail and are somewhat bleak.

Global economic conditions are not conducive to growth in air travel, the Oxford Economics analyst explained. Although the global economy contracted in the second quarter, it does not appear to be getting worse; Inflation and commodity prices, with a few exceptions (the Philippines may be one of them), peaked around April and are slowly declining. However, the world economy still does not seem to be improving. Consumer confidence continues to fall and, with it, consumer discretionary spending; As a result of this and other factors, economic growth forecasts for the next two years are modest.

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Looking specifically at the air transport sector, an initial surge in passenger demand following the lifting of most restrictions around the world has leveled off, with overall demand still at least 20 per cent below pre-pandemic levels of 2019. Domestic demand is recovering slightly faster than international demand, but both are lagging behind and the Asia-Pacific region is experiencing the slowest recovery in the world. Much of this is due to a cooling economy in China, which has been hit by general economic conditions, a series of localized pandemic lockdowns and a severe drought across much of the country.

Globally, the long-term growth forecast is around 2.4%, but air travel demand isn’t expected to return to 2019 levels until sometime in 2024; domestic demand could recover by mid-2023, with international demand returning to pre-pandemic levels by the end of 2024. Here in the Asia-Pacific region, a full recovery is not expected until 2025, with demand internal returning a little to its previous level. ahead of international demand.

So what does all this mean for tourism planning? First, any current assumptions about the number of overseas visitors, including returning Filipino workers, are probably overly optimistic; tourism planners should lower those expectations. That does not mean ignoring the international market, of course, but perhaps it should be given less priority than domestic tourism, which seems to offer better prospects for a faster recovery for the tourism sector.

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In one respect, that may turn out to be an advantage, since domestic tourism reaches areas where foreign visitors do not, or at least not in significant numbers. However, to maximize the advantage, the Department of Tourism will need to expand its coordination with other departments and levels of government. The Department of Transportation can, for example, provide valuable information to the Department of Transportation and the Department of Public Works and Highways on the development of transportation infrastructure serving potential tourist sites. Similarly, the Department for Transport needs to expand its reach to local governments in areas such as support and oversight of tourism-related businesses (obvious, like hotels and restaurants, but also other potential attractions like local markets, shops, and farms). ) and managing the preservation of and access to local historic and scenic areas.

In short, while the Department of Transportation should certainly continue its efforts to market the country to foreign visitors, it should be aware that, for the next two years at least, results are likely to decline. The time between now and 2024 or 2025 can be used to boost the domestic tourism base, which will pay dividends in both the short and long term; if done well, the work to create exciting destinations for domestic tourists will attract and be accessible to foreign visitors as well, once the expected millions return.

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