Attracting tourists

Last week the government finally exempted foreign airlines from paying certain taxes and fees that they complained were discriminatory and imposed only in the Philippines.

The enactment of Republic Act 10374 came too late for Air France-KLM, which scrapped its direct flights between Manila and Europe in April last year, effectively ending all such air interconnection since Philippine carriers cannot fly directly to Europe.

Let’s see if RA 10374, plus the recent positive audit findings by the International Civil Aviation Organization (ICAO), will lure back the European carriers, whose passengers account for much of the tourist arrivals in our region.

Without those direct flights, and with the refusal of Europeans to provide travel insurance coverage for the Philippines, millions of Europeans have been flying to Singapore, Kuala Lumpur, Bangkok and Bali, hopping over to Ho Chi Minh and Hanoi (and increasingly to Cambodia’s Siem Reap) without bothering to take a look at the Philippines.

This is indicated in the official figures for foreign tourist arrivals in 2012. Even with nearly 4.2 million arrivals last year – a nine percent increase from 2011 – the Philippines still lagged behind four of the five founding members (minus Brunei) of the Association of Southeast Asian Nations plus Vietnam, or the so-called ASEAN-6. In 2011, a dismal four percent of 81 million international tourists in Southeast Asia visited the Philippines.

We are also the laggard in the ASEAN-6 in the latest Travel & Tourism Competitiveness Report prepared by the World Economic Forum (WEF). Of 140 countries included in the report, the Philippines ranked 82nd, behind Vietnam (80th), Brunei (72nd), Indonesia (70th), Thailand (43rd), Malaysia (34th) and Singapore – the only Asian country in the top 10, retaining its 10th rank from 2011. Cambodia ranked 106th. Laos, Myanmar and Timor-Leste were not included.

In East Asia, Japan ranked 14th overall, Hong Kong 15th, South Korea 25th, Taiwan 33rd and China 45th.

We’re ranked behind Ecuador and ahead of Trinidad and Tobago. Haiti was ranked as the least competitive, followed by Chad, Burundi, Sierra Leone, Guinea, Lesotho, Mauritania, Yemen, Algeria and Madagascar.

Switzerland is ranked as the most competitive, followed by Germany, Austria, Spain, the UK, the United States, France, Canada and Sweden.

The good news for us is that our 82nd place is a big jump from 94th in 2011, meriting special mention in the WEF report on emerging market economies.

“In this category, rising stars include Panama, climbing from 56th to 37th, and the Philippines, which climbed from 94th to 82nd on the back of policy improvements supporting the industry,” the report said.

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Tourism Secretary Ramon Jimenez said the government is spending about P12 billion on tourism-related infrastructure, mostly to improve access to tourism destinations.

The WEF report ranked the country at the top spot in spending on the travel and tourism sector as a percentage of GDP. The country was also cited for its natural resources, price competitiveness, and for cutting down visa requirements.

Cyberspace has raised global awareness of Philippine travel attractions. Boracay, Palawan, the whale shark playgrounds, plus several hotels have been selected by travelers in online polls as the world’s best.

Those travel websites are reliable in their reviews. I have used them extensively in planning my own trips overseas and have never been disappointed. They are accurate, detailed, and generally fair in their assessments, pointing out both the pluses and minuses in a particular destination. It’s good to know that the world is discovering what many Filipinos have known all along: we have many world-class travel destinations.

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Now if we can address the weaknesses, as pointed out by the WEF report, our competitiveness in the sector can improve further.

Among the factors hindering competitiveness, according to the WEF report, are safety and security concerns, the length and cost of starting a business in this country, inadequate health and hygiene, plus the underdeveloped ground transport, tourism and ICT infrastructure.

There are more detailed recommendations from the Joint Foreign Chambers of the Philippines. Among these are the removal of the travel tax as a source of public sector revenue, the introduction of long-term-stay visa for two new categories of foreigners, reduction of differential and discriminatory charges that are higher for foreign tourists, and amendment of the Sanitation Code (Presidential Decree 856) for a correct definition of a wellness spa.

Investors and local travel industry players alike also point out the need to upgrade manpower skills in the travel and tourism sector, including tourism officers of local government units.

The foreign chambers want local exam standards appropriate to high school graduates for massage therapists. They also want better quality of data on the tourism sector.

And if we want to promote medical tourism, there must be an effective system of accreditation for tourist, medical travel and wellness facilities, according to the foreign chambers.

Improving health and hygiene facilities is also important if we want to promote the country as a retirement haven.

The biennial WEF report, whose theme is “Reducing Barriers to Economic Growth and Job Creation,” notes that travel and tourism can boost economic resilience and job generation. The industry accounts for one in 11 jobs around the world. Any administration that wants to create sustainable employment while protecting the environment and promoting local culture should give priority to this sector.

Before the WEF report was released in Geneva, the Joint Foreign Chambers had pointed out, “the key to unlocking the job creation potential of tourism is investment mobilization by both the public and private sectors.”

The WEF produced its report with data partners including the International Air Transport Association, the World Tourism Organization, the World Travel & Tourism Council, and the International Union for Conservation of Nature. Several major hotel chains and international carriers also provided inputs. Jumping from 94th to 82nd place in the WEF competitiveness report is not  an easy feat.

If the other concerns can be addressed, the improvement can be sustained. The target must be to overtake at least some of the ASEAN-6 in the next competitiveness Report.