Rich states' woes to hit RP tourism
By Dennis Estopace, Business Mirror | 03/16/2009 11:34 AM
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The World Travel and Tourism Council (WTC) said the economic recession in highly developed economies will hit the Philippines hard this year, posting real declines in the industry’s direct contribution to gross domestic product (GDP) and employment.
The WTTC based its statement on a study it made that showed travel and tourism in the Philippines could see a real decline in direct industry GDP of 2.6 percent to P306 billion this year, and direct employment dipping by 1 percent to 1.4 million jobs.
“The contribution of the travel and tourism economy [of the Philippines] to employment is expected to fall to 3.6 million jobs in 2009, or 10.1 percent of total employment,” said the London-based forum of a hundred chief executives of travel and tourism companies.
The 2009 Economic Impact Research of 181 countries further showed the decline is worldwide, with travel and tourism economy GDP seen to contract by 3.6 percent this year.
“It is expected to remain weak in 2010 with only marginal growth of less than the 0.3 percent already predicted on what will already be a weak 2009. As a relatively cyclical industry, its contribution to world GDP is expected to fall further in the next two years to just over 9 percent in 2010 from 9.6 percent in 2008,” said Adrian Cooper, managing director of the Oxford Economics, the WTTC’s research partner.
He added, “Job losses are likely to be significant, with employment falling by around 10 million over the next two years towards 215 million in 2010, before recovering thereafter.”
The research noted the decline is caused by the decrease in total demand by 3.2 percent this year and by 5.7 percent annually, in real terms, between 2010 and 2019.
Philippine travel and tourism total demand, or the nominal aggregate of tourism activity, represents a quarter of a percent of world market share.
Among its neighbors in the region, the Philippine total demand fared better, however, than Singapore, where the WTTC said total demand is expected to decline 7.2 percent. In Malaysia and Thailand, total demand is also expected to decline by 4.4 percent each. Only China and Vietnam are expected to post real growth in total demand but only by a measly 0.9 percent and 0.5 percent, res-pectively, this year.
Vietnam leads the Philippines in using travel and tourism to generate employment while China is forecast to lag in doing so this year.
The WTTC said among the 10 countries in the region, Cambodia is forecast to lead in job-generation via the industry, with 13.7 percent of that country’s total employment coming from travel and tourism.
Nonetheless, the WTTC expects Philippine travel and tourism to generate P877.2 billion this year in economic activity—consumption and total demand.
The value of these activities will be pulled up by spending of residents on lodging, transportation, entertainment, meals, financial services, and durable and nondurable goods.
Personal travel and tourism is forecast by the WTTC this year to hit P272.9 billion, or slightly up from the estimated P262.7 billion last year and P224.4 billion in 2007.
Intermediate consumption of travel and tourism, or the spending by government and industry for employee business travel, is forecast to dip by 0.4 percent to P120.7 billion this year, from an estimated spending of P121.2 billion in 2008.
The government is forecast to slightly increase by nearly a billion pesos from the P7.8 billion the WTTC estimated the government spent last year on art museums, national parks, immigration and customs efficiencies, all to attract visitors.
Spending by visitors on goods and services while in the Philippines is also expected to increase by P3.7 billion to P264.1 billion this year from the estimated spending last year of P260.4 billion.
The Philippines is forecast to lead Malaysia, Vietnam and China this year in terms of the share of visitor exports as a percent of total exports, but the country is forecast to lag behind in a decade in this category, to an expected 4.3 percent annualized real growth up to 2019.
“The industry is not expecting a bailout. It needs a supportive framework from government to help it weather the current storm. And governments would also do well to recognize travel and tourism’s potential to energize the economy once the current crisis eases,” said WTTC president Jean-Claude Baumgarten.
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