The Importance of Tourism for the Philippines

21 January 2010

Message of Rep. Ferdinand “Bongbong” Marcos Jr.
Delivered by: Mr. Gerardo V. Eusebio

Foundation Day
College of International Tourism and Hospitality Management
Lyceum of the Philippines
14-16 December 2009

When I received your kind invitation to serve as Guest of Honor and Keynote Speaker in your Foundation Day celebration, I expressed my regrets that I would not be able to accept because of prior commitments on my calendar. Be that as it may, I agreed to send a message for your observance.

The gist of my message is this: Tourism is vital to our economy and our country. And we must accelerate now more than ever tourism development all over our archipelago.

I know what some will immediately say – that at this time of global slowdown, there will be fewer people traveling so we should not expect more tourists to be visiting us this year.

My answer is this:

First, regardless of the slowdown in the West, tourism will remain a major global industry, accounting for one out of every 9 jobs and 11% of consumer spending. In 2008, tourism arrivals totaled 924 million, a growth of 2% over 2007 despite the second half slowdown. In 2009, the World Tourism Organization projects either modest growth or at worst a standstill.

At its first meeting last January 28 in Madrid, the WTO Tourism Resilience Committee declared that tourism can play a major role in stimulus programs because of “its immense capacity for creating jobs and its recovery potential.”

Tourism in short will be at the cutting edge of the global economy in 2009 and beyond.

The challenge for the Philippines is how to get a greater share of the tourist traffic of over 900 million annually. The area of greatest tourism traffic growth today is the Asia Pacific, which has been growing by 13% in recent years. By getting a good portion of this traffic, we can make up for any shortfall in tourists from the US and Europe.

From the estimated over 3 million tourists we will receive this year, we should aim for 3.8 to 4 million arrivals in 2010. If Malaysia can get 18 million, Thailand 14 million and Singapore 10 million from the traffic, why can’t we aspire to get 4 million next year?

Third, Tourism is important to our people because it is a major jobs generator as a labor-intensive industry. Today, the travel and tourism industry – with 1.4 million jobs -- accounts for 4.1% of jobs in the economy. But this can be substantially increased to as much as 10% percent of employment – the global average -- if we fulfill the promise and potential of our tourism.

Fourth, tourism is a major dollar earner, and every dollar we earn from tourism is classified as exports in the country’s book of accounts. Last year, tourism receipts totaled over $4 billion. We earn on average $880 from every tourist visitor. At this time therefore when our export earnings are contracting because of the economic slowdown in the West, tourism can help make up for the shortfall if we increase the number of arrivals.

Fifth, tourism benefits all regions and provinces once they are integrated by adequate infrastructure into the loop of tourism development. I know this like the palm of my hand because I have been governor and now am representative of Ilocos Norte, where tourism is an indispensable source of income and jobs.

In a study undertaken by McKinsey some years ago, the consultancy firm projected tourism as a major driver of growth in the Philippine economy if only we will focus on what has to be done. With strategic investments in the sector and careful attention to what we can offer the tourist, McKinsey said that we could achieve 5 million tourists a year in no time, and that from there on we could reach the high end of global tourism.

Sadly, we could not heed that study because of lack of resources and different priorities for public spending. Today, with a new decade and a new administration dawning on our country, I say it’s time we take up the challenge.

I submit that tourism is deserving of a stimulus package as any other sector in the government’s priority list. It is a mistake that we only allocated P1.2 billion to tourism in the national budget when it can contribute so much more to economic growth and national development.

In advocating intensive tourism development during this period of global uncertainty, I am not just pushing for better infrastructure and more hotel accommodations. I am batting for a comprehensive program to upgrade our tourism facilities and services so that we can finally compete in this vital global industry. That program should include more affordable packages for tourists, better facilities, better security and a totally improved tourism experience for everyone who visits our country.

Both the promise and the failings of Philippine tourism were starkly brought home by a Chinese tour operator who visited me a few years ago. She told me: “I can bring one million tourists to the Philippines. But where will they sleep and eat? Will there be transport? Can you offer good competitive prices for their travel? Can you ensure their safety?”

Sadly, I could not answer her affirmatively on all her questions.

The reality is: Demand outpaces supply in our travel and tourism industry today. More people want to come here than we can handle – because of the inadequate number of flights, rooms and facilities available. Our carrying capacity for tourism stands at the lower end of the spectrum. And our prices are still too high to seriously compete among the tourism giants.

We have much to learn from what Thailand did with its tourism at the start of the Asian economic crisis in 1997 – a crisis which began incidentally on its shores. In the face of the collapse of its financial system and real estate market, and the massive contraction of its economy, Thailand made a key decision to use tourism as a weapon to get back on its feet. With Amazing Thailand as its banner, it consecrated itself to a multi-pronged program to turn itself into a top tourist destination in the world and enable tourism to contribute to national income in a big way.

Today, just a decade later, Thai tourism accounts for nearly 7 percent of Thailand’s GDP. Thailand is the 18th most visited country in the world with 14 million tourists annually. (France is first with over 79 million tourists.) The average stay of tourists is 9.19 days. Thai cuisine is now ranked as one of the top five in the world. And the country competes in nearly every tourism category – from beaches to wellness to shopping to adventure tourism and whatever.

I do not see why we cannot do the same – the same focus, the same dedication, the same no-nonsense attitude to always reach beyond what has been already achieved.

The point is that the total world tourist traffic is huge and we are getting only a small share of it so far. Even if the traffic volume were to contract this year because of the crisis, it’s no big deal for us to keep or increase our market share if we put together the right package. That is the lesson of every country that has aggressively developed its tourism.

Investing in tourism now is sound because it can boost the economy by generating jobs, increasing foreign exchange income, spreading benefits to the countryside, and enable us to become more competitive in this vital global industry.

If we focus on both transformative reform and capacity building, we can take Philippine tourism to a new plane as McKinsey has suggested. As we improve infrastructure and facilities, we will transform the total service and image we present to the world.

When we learn to exploit tourism, instead of exploiting the tourist, the real dividends will come. Tourism will become “a gift that keeps on giving” to our country.

The importance of all this to HRM and tourism students here at Lyceum University cannot be overstated. More than any industry, tourism provides jobs in abundance. More than any industry, tourism brings out the best that our country has to offer the visitor. And finally, tourism is special because of the foreign exchange that it earns for the nation.

As we enter a new decade, I will do my utmost to help spur the accelerated development of Philippine tourism. If I am lucky enough to get elected to the Senate, I will push for measures to increase funding for tourism development and promotion and the implementation of the new Philippine Tourism Development Act. And I will certainly urge the new President who will take over the reigns of government to give tourism special priority in his program.

This I pledge, and this is the message I will leave with you as you mark the founding day of your College of International Tourism and Hospitality Management.