BEFORE the Covid-19 pandemic hit, Filipinos had been increasing their spending on holidays and vacations abroad, with an expectedly widening amount of extra funds for leisure and entertainment brought by an expanding economy.
Prior to the Covid-19 outbreak this year, outbound tourism expenditure had been rising and reached an all-time high of P341.56 billion (current prices) in 2019, data from the Philippine Statistics Authority (PSA) showed. This represented a 2.6-percent growth which, however, was a slowdown from the 8.4-percent rise in 2018, and 42 percent in 2015. The latter was the largest increase in outbound tourism expenses recorded over a 19-year history.
Philippine Travel Agencies Association (PTAA) President Ritchie Tuaño said he is unable to explain the slowdown in growth last year, because his members’ have recorded more outbound travels. “But it could be that people were more conservative in their spending abroad to be able to make two or more trips in a year,” he told the BusinessMirror.
He ruled out the possibility of the slowdown being foreign exchange-related since the Philippine peso averaged P51.80 to the US dollar in 2019, compared to 2018, when the peso averaged P52.66. “If the peso gained strength over the dollar, the more people would spend [on their trips abroad],” he said. Travel agencies usually quote vacation packages abroad in US dollars.
As per PTAA, the Filipinos’s top leisure destinations were Japan, South Korea, Hong Kong, Taiwan, Singapore, Thailand, the United States, the United Kingdom, Israel, and Turkey.
“Japan has been the top destination for the past five to six years, and the demand has been sustained, if not increasing. There are many who make return trips to Japan,” said Tuaño.
He added, Japan and South Korea “are the closest countries that have four seasons. While China also has the same, Filipinos are more interested with Japan and Korea because of the people, culture, food and shopping. Also, Filipino travelers feel safer in these two countries.”
According to PSA data, the largest bulk of Filipinos’ spending in 2019 went to accommodations at P99.73 billion, or 29.2 percent of total outbound tourism expenditure. This was followed by P61.36 billion on shopping (18 percent), and P57.8 billion on food and beverage (16.9 percent).
Tuaño expressed optimism that outbound travel would see some recovery by 2023. “We should see the Philippine government allowing Filipinos to travel abroad before the year ends. I guess this is an important start. Soon after, we would see a few Filipinos traveling to countries which have opened up their borders to us. This will gradually grow back, and hopefully in two to three years, we can see figures close to 2019 levels. The recovery period might be shortened if a vaccine becomes available.”
Over the weekend, the PSA released newly adjusted tourism data with the change in their base period to 2018 from 2000. It reported the tourism sector’s contribution to the economy rose to 12.7 percent in 2019, from 12.3 percent the previous year. (See, “Pinoys’ local trips spending spells 22% of household bills,” in the BusinessMirror, June 22, 2020.)