Monday, September 6, 2010

Philippines' reputation takes a hit

The Philippines, with its 7,100 islands, has some of the best beaches
in Asia and some of the best diving spots in the world.

It has outstanding resorts, spas and eco-tourism spots – but it still
fails to attract the same numbers of foreign tourists as many of its
South East Asian neighbours.

Last year, slightly more than 3 million tourists visited the
Philippines while Malaysia had 23.6 million, Thailand 14 million,
Indonesia 6.4 million, Singapore 9.6 million and Vietnam 4 million,
according to statistics from the Association of South East Asian
Nations (ASEAN).

Terrorist bombings on the Indonesian island resort of Bali and Jakarta
this decade have not kept tourists away; nor has Thailand’s internal
political problems, nor the Boxing Day tsunami in 2004 in which more
than 200,000 people died.

So why is the Philippines different, even before the tragic events of
the Manila bus hijacking at the end of last month?

“Part of the problem is perception,” says a foreign former Manila
hotel manager who does not want to be identified.

“To many foreigners, the Philippines is seen as lacking
infrastructure, perceived as being too expensive when compared to
other regional destinations and, above all, not a safe place to spend
a holiday.

“The failed rescue of Hong Kong tourists in which eight died along
with their hijacker – a disgruntled, sacked policeman – did not help
the Philippines as millions watched it live around the world. The fact
that it was bungled so badly did nothing for the image of the

On the same day a minibus carrying South Koreans who had just arrived
in the country was shot at on a busy road and forced to stop just a
few kilometres from Manila’s international airport. When one tourist
refused to hand over his money and valuables, he was shot dead.

In June, a foreign senior manager at the five-star Shangri-la Hotel
was shot dead in broad daylight while walking to work in the business
district of Makati.

“I would expect many people who had considered the Philippines as a
possible holiday destination are probably looking elsewhere now,” says
the former hotel manager.

While its South East Asian neighbours pour billions of dollars into
their tourism sectors, the Philippines, despite much discussion on the
subject, does very little.

“The reality is that the vast majority of tourism destinations [in the
Philippines] are serviced by second and third-rate facilities with
poor maintenance regimes and sub-standard service offerings, not to
mention the time-consuming and cumbersome challenges of getting to and
from any of the country’s destinations,” the Manila-based economic and
political risk consultancy Pacific Strategies and Assessments (PSA)
said in a July report.

“There is little hope, even with the best promotional campaigns in
place, that the Philippines will improve its attractiveness to savvy
tourists when all of its South East Asian neighbours offer far
superior accommodation.”

PSA made the point that while the Philippine government allotted US$28
million (Dh102.8m) for its tourism agency last year, it spent only $2m
promoting itself overseas.

Thailand allotted $138m to its tourism authority and spent almost a
third of that on promotion.

Alberto Lim, the Philippines tourism secretary, said last week the
botched rescue of the Hong Kong tourists had probably cost the
Philippines about $70m in tourism revenue.

“The tension is still there and will probably take three months before
it finally dissipates and enables the industry to recover,” Mr Lim

He estimated more than 100,000 tourists from Hong Kong and China have
so far cancelled their bookings, hitting the revenues of the two main
local carriers, Philippine Airlines (PAL) and Cebu Pacific.

Tourists from Hong Kong and China comprise about 9 per cent of all
annual international arrivals and could pull down the number of
foreign visitors to the country this year by between 5 and 10 per
cent, some analysts have said.

The hostage drama on August 23 lasted 11 hours and ended when a police
special weapons and tactics team stormed a tourist bus in downtown

Eight of the 15 tourists held captive by the former policeman were
killed in the ensuing shootout. The policeman, who had been sacked
this year for extortion, was also killed.

The day after the bus siege, local stocks and the country’s peso were
hit. The main Philippine Stock Exchange index ended a six-day winning
streak by losing 2.3 per cent – its biggest one-day fall since June.

On the foreign exchange market the news was not any better, with the
peso retreating 47 centavos to close at 45.53 to the dollar.

The markets recovered by the end of the week but the tourism sector,
one of the weakest and least developed in South East Asia, continued
to take a battering with Hong Kong placing a “black alert” on the

The alert, the most severe of a three-stage system, suspends package
tours and advises travellers not to go to areas where their safety may
be at risk.

Last Sunday in Hong Kong about 80,000 residents took to the streets to
voice their anger at Manila and the administration.

Last Wednesday, the Hong Kong tourism chief James Tien said he was in
favour of continuing the black alert.

“Even if the alert were to be lifted, I doubt you will find many
people from here wanting to go to the Philippines,” Mr Tien said.

PAL said this week there had been a number of cancellations of flight
bookings for passengers coming from Hong Kong and other Chinese cities
bound for the Philippines. The airline said more than 1,000 tourists
from Hong Kong and China had cancelled their bookings.

Despite the reduced passenger load Jaime Bautista, the president of
PAL, says the airline will maintain its current flight frequency until
the situation returns to normal.

“We’re closely monitoring the situation and will decide soon whether
we will maintain or reduce flights,” Mr Bautista says. “We share the
grief and understand the Hong Kong people’s wrath. We are optimistic
that fears of travelling to the Philippines will be temporary.”

The worst-case scenario for the company, he says, would be the
reduction of flights to Hong Kong, from which about 6 per cent of
PAL’s revenues come. PAL flies to Hong Kong five times a day and also
flies to Macau, Shanghai, Xiamen and Beijing.

Direct flights from Hong Kong to Laoag City in Ilocos Norte, northern
Philippines, have been cancelled indefinitely, said Ronal Estabillo,
the manager of Laoag International Airport.

He told the Philippine Daily Inquirer newspaper last week he had
received a letter from executives of Hong Kong Express Flights
notifying the airport of the cancellation of the airline’s direct

The Hong Kong airline flies in twice a week to the home province of
the former president Ferdinand Marcos.

The city has become a popular destination for Hong Kong and Chinese
tourists as it is only 45 minutes’ flight from the former British
colony and has some of the country’s better golf courses, a resort
that caters to the Chinese and a casino.

Each month about 1,200 Hong Kong tourists visit the city for “rest and
recreation”, Milagros Gonzales, a provincial tourism officer, told the
paper. “This will hurt the local industry.”

The local budget carrier Cebu Pacific says several of its passengers
from Hong Kong have also asked to have their flights rebooked or

Meanwhile, the Philippine Travel Agencies Association says eight
hotels and seven resorts had reported cancellations by tourists from
Hong Kong and other parts of China.

That amounts to 300 rooms in popular tourist destinations such as
Bohol, Palawan, Boracay, Cebu and Manila.

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