Philippine tourism: where to next?

All eyes are on COVID-19. The whole world is affected, and we all face an unprecedented health, social, and economic pandemic. The tourism and hospitality industries are among the first and hardest-hit sectors, and will also take the longest time to recover, unfortunately.

Airlines are on the ground; accommodation establishments, MICE, leisure and entertainment facilities are closed; travel agencies, tourist transport, and tour guides are at a standstill; and only some restaurants and coffee shops operate for takeout or deliveries.

The enforcement of quarantine and travel restrictions across the globe has immediate negative effects on travel businesses. Millions of jobs are at risk worldwide.

Asia and the Pacific, the first region to suffer the impact of the coronavirus, experienced a 35% decrease in arrivals in Q1 2020, according to UNWTO’s Report on COVID.

In the Philippines, foreign arrivals during the first quarter of this year dropped dramatically by 40.2% compared to the same period last year, according to Tourism Secretary Bernadette Romulo-Puyat. Consequently, revenue from foreign arrivals also decreased by 40.62%, from PHP 134.3 billion in Q1 2019 to PHP 79.8 billion in Q2 2020. 

International tourist arrival fell sharply in March 2020, according to UNWTO.

P43-billion stimulus package

During the special virtual meeting by the House Committee on Tourism chaired by Rep. Sol Aragones (3rd District, Laguna) on April 28, 2020, the panel discussed the proposed economic stimulus package prepared by the House Defeat COVID-19 Committee (DCC) Economic Stimulus Response Cluster.

Aragones noted that the DCC Economic Stimulus Response Cluster is working to come up with a comprehensive economic stimulus package to ensure the economy remains afloat and survive the negative effects of the pandemic. As one of the committees comprising the cluster, the Committee on Tourism convened to deliberate on how the Department of Tourism (DOT) hopes to spur Philippine tourism and help it regain momentum.

The economic stimulus package proposes a budget of P43 billion for the Philippine tourism industry. According to Aragones, the budget shall be used for incentives for domestic tourism; interest-free loans for facility improvements; participation in tourism fairs to restore or identify new target markets; other forms of tourism promotion; and grants for education, training, and advising on coping with increased health risks arising from infectious diseases and other practices for mitigating the economic effects of COVID-19.

“The hardest hit sectors are first, the airlines; second, hotels and resorts; and third, travel agents, tour operators, and bus companies. We’d like to see how DOT will address the problems, because the budget that they have has to be proportionately divided among the industry players,” said Network of Independent Travel Agencies (NITAS) President Bobby Joseph.

DOT Undersecretary Benito Bengzon said the allocations for the P43 billion stimulus fund is a work in progress and that they value the inputs from the lawmakers and tourism stakeholders.

In his presentation, DOT Assistant Secretary Roberto Alabado showed the breakdown of the fund. The matrix showed that there is an allocation of P36 billion for soft loans as working capital of tourism enterprises, to provide more employment to people; P4 billion to jumpstart the TIEZA projects to adapt to the new normal environment of the industry; and P500 million for marketing and support programs to promote domestic tourism, travel facilitation and intensified product market and development.

Additionally, P500 million shall be used to fund international market promotions and development of marketing materials and collaterals. Another P500 million shall be for capacity building for the industry stakeholders, including training of all stakeholders for the “new normal” and alternative livelihood programs which are important to micro and small businesses.

He said there is a DOT proposal to allocate P1.5 billion for an institutional support program to include tourism crisis response and economic support fund, which can be used by the private sector in supporting their activities. And because of advanced technology, Alabado said there is a need to integrate IT for tourist tracking and special database—using the GIS system—so that in case again of a crisis, their agency has the proper tools to deal with the situation on a rapid response.

DOT’s response & recovery program

Puyat presented the department’s response and recovery program as well as a snapshot of the ‘new normal’ of tourism activities in the Philippines.

“DOT’s stakeholders in the accommodation industry have been briefed on the safety protocols and measures of the Department of Health in light of the COVID-19 pandemic,” said Puyat during the special meeting.

According to her, the Inter-Agency Taskforce (IATF) also tapped the DOT to work with accommodation establishments, working on limited human resources and logistics, to accommodate repatriated Overseas Filipino Workers, health frontliners, Business Process Outsourcing professionals, bank employees, and long-staying guests who already booked prior to the enhanced community quarantine.

The DOT has also come up with Tourism Response and Recovery Program (TRRP) to support the industry. The program provides for the tourism stakeholders, workers, and business owners the necessary means in restoring the continuity of their economic needs and businesses. TRRP also seeks to minimize the impact of the pandemic on all stakeholders while identifying and developing special protection measures to ensure that the disadvantaged group is not adversely affected.

Unemployment during coronavirus pandemic

Thousands of workers are losing their work because of COVID-19—either laid off with some form of separation pay, asked to take indefinite unpaid leave (no work, no pay arrangement), or fired outright by their employers because of closed businesses. Not to mention the self-employed and freelancers who suddenly found themselves with no job.

The efforts of all parties must be focused on the important factors to save the industry, and they must speed up the support, said Joseph of NITAS.

“What about giving salaries to the employees for a couple of months in order for them just to continue doing business, just to support them. Because taking them out right now, where will they go?” he asked.

“The tourism marketing budget can be used first while waiting for the proposed additional tourism budget of Congress.”

Stakeholders’ recommendations

Zen Rooms CEO Nathan Boublil highlighted that having two or three targeted high-impact, easily implementable measures would be much more effective than waiting three or four more weeks for a wider set of measures.

First is wage subsidies, which are extremely helpful to hotel workers. “This measure must be implemented extremely fast, as every week that passes results inevitably in more staff termination across the sector.”

The second measure that is extremely important is on lease waivers. “Hotels are either owned and managed or leased and managed. It is extremely important to bring help to people who lease and manage,” said Boublil.  

“Within the hotel, two things matter in terms of P&L, staff and leasing cost. If you address those two points, you will address 80 percent of the problem today.”

To which Rep. Mark Go (Baguio City) agreed: “We need to act on the wage subsidies. This is a very important component to alleviate the conditions of our hotels and their employees. We have to look at this very seriously. Hotels cannot pay these people because they are out of business. So, I think during this time, it is very appropriate and reasonable that we take immediate action as far as the wage subsidies are concerned.”

Meanwhile, Joseph also asked support for the DOT on sustainable tourism. “We have an international school of sustainable tourism that is continuously training people all throughout the Philippines. What we have to do now it to incentivize and jumpstart everything because we cannot let go of our labor force,” he said. He also called for support of all tourism stakeholders together with the government, particularly the DOT, DOTr, and DA in responding swiftly to the exigencies of the tourism industry amid the COVID-19 pandemic.

In addition, Rep. Estrellita Suansing (1st District, Nueva Ecija) suggested to DOT to work on specific and time-bound plans not only on how to spend the P43 billion stimulus budget but also how to do the ‘new normal’ in tourism.

In the red line

Atty. Oscar Palabyab of Global Leadership in Tourism believed the Philippine tourism industry might not be open until September or it might take about a year for it to be running again.

“Among the industries adversely affected by COVID-19, tourism is in the red line. In other words, it is badly hit but at the same time, it is one of the last priorities to be put back in operation,” he said.

“What we have now is a question for survival of the industry. I fully support the proposal of the Philippine Tourism Congress of the Philippines and Bobby Joseph who said we need wage subsidies. We need to keep full employment so that businesses would not fold up. There should be a window for greater facilities to enable these businesses to have start-up capital. The way I look at it, by this time, working capital might have been used up already,” Palabyab said.

All roads lead to domestic tourism

Rep. Manuel Zubiri (3rd District, Bukidnon) suggested following the model of Australia. “Just like what Australia is doing, they locked their doors and they said, Visit Australia first. What if we follow the same model and put it into play and say Visit the Philippines first? Close the borders and let Filipinos travel within our boundaries.”

Tourism Congress of the Philippines president Jojo Clemente said the country will be relying on domestic tourism in the medium to mid-long term.

“The international markets, we reckon, will not be back until a year from now at the earliest. We have to get the economy going so that the domestic travelers can start earning salaries, so they can travel. And the places that they would go to would be the places near their homes. Ganun muna ang magiging mode ng domestic tourism (that would be the first mode of domestic tourism). As we gain confidence with air travel, as the standards are imposed for the safety and health, dyan natin umpisa makikitang gumulong ang domestic tourism (that’s when we will start to see the domestic tourism to pick up). Domestic tourism will be the priority for the next months to one year.”   

DOT Undersecretary Bengzon echoed the same sentiments. “Once the protocols for the airlines have already been established, then we will start to see movements by air across the country. But definitely, the priorities in the months to come is to encourage domestic tourism. And this is also part of our objective to help the enterprises in the different provinces and localities to get back on their feet.”

Moreover, Joseph recommended developing the agri-tourism in the country and continuously come up with existing farms to convert them into farm tourism. He also advised that there should be standards for the tourism sector to be more attractive to tourists. “Domestic tourism is continuous. What we need is the development of new destinations, cultural, historical, farm tourism, things like this. There is so much that we can offer,” Joseph said.

Still, it takes a lot of persuading for people who are quarantined at home to travel again when lockdowns are fully suspended. To this, Aragones highlighted the importance of having new standards and protocols that would allow the tourism establishments to resume operations while preventing outbreaks and spread of coronavirus. She also mentioned having an informercial “that will answer the questions of our travelers that it is already safe to travel.”

What will be after COVID-19?

Considerable challenges remain ahead. The road post-COVID-19 will be tough and uncertain.

Aragones noted that both tourism stakeholders and government officials were united in calling for increased efforts to encourage domestic travel as a major revenue generator. “Nagkakasundo tayo, iisa yung thought natin na domestic tourism ‘yung linyang tatahakin natin. At the end of the day, importante magkaroon ng COVID-free model that will serve as standard for other hotels at lahat-lahat pa na makapagsimula tayo ng turismo. Ang bottomline ng usapan natin ay gusto na natin makita ang ‘new normal’ sa mundo ng turismo,” she said.

(We all agree that we will tread the path of domestic tourism. At the end of the day, it is important to have a COVID-free model that will serve as standard for other hotels so we could start with tourism. The bottomline of our discussion is we want to see the ‘new normal’ in the world of tourism.)

Aragones said she is confident that the industry will soon be back on track as long as stakeholders, government officials, and business owners continue to work together. “At the end of the day, naniniwala ako na basta sama-sama tayo, kaya at kakayanin natin ito (I believe that if we work together, we can do this). We heal as one,” she said.

Looking for travel ideas and inspiration? Click here.