P30-billion tourism investment bared
Close to P30 billion is being invested by the private sector in the tourism sector, strengthening the industry’s claim to be a new engine of growth for the economy.
While bulk of the investments is in Metro Manila, there are a rising number of investments in key tourism destinations like Davao del Sur, Cebu, Zambales, South Cotobato, Benguet, Pampanga and Palawan, data from the Department of Trade and Industry show.
In an interview with the BusinessMirror, Tourism Secretary Ramon Jimenez Jr. said: “For 2013 alone, we will have 12,500 rooms additionally nationwide. About 6,000 of those rooms would be in Manila by the end of the year.” Still, he said, there would be a gap of some 20,000 rooms by 2016.
Among the newly opened hotels and resorts this year, for instance, are the Fairmont Makati, Solaire Resort & Casino in Pasay City, Balesin Island Club in Aurora, Islands Hotel in Puerto Princesa and Park Inn by Radisson in Davao, to name a few.
Based on the National Tourism Development Plan (NTDP) of 2010-2016, the private sector is expected to invest some P192 billion in hotels, resorts, leisure-entertainment-shopping, health and wellness, convention and event/exhibition, as well as cruise and transportation facilities. To encourage these investments, the government will be pouring in some P74 billion in infrastructure, tourist-site improvement and marketing support.
The NTDP is a P266-billion national blueprint to enhance the tourism industry’s potential as a driver of the economy. The accomplishment of the plan will enable the government to reach its targeted 10-million to 12-million foreign-tourist arrivals and 36 million domestic travelers by 2016.
Data from the DTI show that investments in new tourism accommodations and facilities have been steadily increasing the past three years. From 16 projects costing P3.9 billion in 2010, registered tourism projects jumped to 21 with a total estimated project cost of P12.88 billion. In 2012 there were 22 registered tourism investments, although the estimated total cost of these projects fell slightly to P12.7 billion.
These P30-billion investments from 2010 to 2012 range from new tourism accommodations and medical-tourism facilities, as well as renovations or expansion of existing hotels and resorts.
Among the largest projects registered over the three-year period were located in Metro Manila, such as SM Investment Corp.’s Mall of Asia Arena with an estimated project cost of P3.2 billion with 18,000 seats; Xian Ti Development Corp.’s Marco Polo Hotel in Pasig City (P2.6 billion for 313 rooms); Araneta Center Hotel Inc.’s Novotel Manila in Quezon City (P2.5 billion, 399 rooms); Greenhaven Property Ventures Inc.’s Holiday Inn and Suites in Makati City (P1.97 billion, 347 rooms); Filinvest Land Inc.’s Entrata Hotel in Alabang, Muntinlupa (P1.92 billion, 345 rooms); Willmson Inc.’s Ascott Bonifacio Global City (P1.56 billion, 220 rooms); and Providence Hospital Inc.’s medical-tourism facility in Quezon City (P1.22 billion, 500 beds).
In a way, the Philippines’s brand campaign—“It’s More Fun in the Philippines”—has helped change the mindset of the Filipinos, making them eager promoters of the country, Jimenez said. With this came a change in the bureaucratic mindset as well, and the private sector’s perspective about the industry.
“The government now believes more in its ability to run tourism, not just as another activity, but as an honest-to-goodness industry. It’s now being taken seriously as an industry. The private sector, as a result of that, is now finally in on it as well,” the DOT chief said.
The booming private-sector investments in the tourism industry are in response to the steadily growing visitor arrivals.
In the first quarter of 2013, visitor arrivals rose by 10.8 percent to 1.27 million, raising the confidence of the DOT that it would achieve its 5.5 million arrivals target this year. The DOT, in a press release on Sunday, said the arrivals from January to March already accounted for 23 percent of the targeted arrivals for the year.
South Korea remains the largest source of tourists, accounting for 25.83 percent of the arrivals, or 328,454. This was followed by the United States with 186,065 arrivals (14.63 percent of inbound traffic); Japan, 14,269 (8.99 percent); China, 98,242; and Taiwan, 53,867 visitors.
The DOT reported that arrivals from the South Korean market jumped 24 percent, the highest growth among the top five major markets.
Other countries which contributed a significant number of tourists were Australia with 53,679; Singapore, 41,524; Canada, 38,486; Hong Kong, 36,005; the United Kingdom, 32,475; Malaysia, 27,212; and Germany, 22,491.
Double-digit gains were also recorded by Russia (27 percent), Hong Kong (25.04 percent), South Korea (24 percent), India (22.1 percent), Singapore (15.42 percent), Australia (12.7 percent) and Malaysia (11.9 percent).
“Month after month, we bear witness to a steady upward performance and new record highs. This only means that the efforts of the department and its partners are bearing fruit. To achieve our 2013 target of 5.5 million and 2016 target of 10 million, the department and its industry partners are actively working on stimulating greater demand overseas, while infrastructure agencies have committed to step up our convergence programs to facilitate entry and access to the different destinations in the country,” Jimenez said.
He added that the expansion and development of secondary gateways could ease the volume of traffic in the primary airport terminals of Manila, opening up the country to more visitors by bringing them closer to their destinations. Significant investments in aviation, as well as the accommodation sector, are expected to strengthen capacities in the coming years.
“With key policy reforms, such as the lifting of significant security concerns by the International Civil Aviation Organization and the rationalization of the common carriers tax, the focus is shifted to the tangible areas such as connectivity and improvement of tourism products,” Jimenez said.