By Justine Irish D. Tabile, Reporter
TOURISM continues to track below its pre-pandemic performance, with the accommodations sector continuing to lag the rest of the industry, giving it some potential for an upside surprise, according to Unicapital Securities, Inc.
“We think this is one of the sectors that we need to watch because they offer a strong opportunity to rebound,” Jemimah Ryla R. Alfonso, equity research analyst at Unicapital said.
Tourism gross value added remains below its pre-pandemic level of P2.51 trillion because of the “continued underperformance of the accommodation services segment, weighed down by the sluggish recovery in international tourist arrivals that remain well below pre-pandemic levels,” Unicapital said in its Midyear Outlook.
Last year, Ms. Alfonso said the tourism industry accounted for 8.9% of gross domestic product (GDP), contributing P2.4 trillion to the economy.
“In 2019, the tourism direct gross value added accounted for P2.51 trillion. Five years after that, we still hover below that threshold of P2.51 trillion,” she added.
Unicapital said tourist arrivals in 2024 amounted to 5.9 million, well below the pre-pandemic 8.3 million.
“The slow momentum continues into 2025, with data from January to April showing arrivals trailing 27% below pre-COVID levels for the same period,” it said.
“In our view, this shortfall reflects more than just a delayed return to travel. International travelers remain hesitant, as infrastructure hasn’t fully caught up yet, making it harder to move people comfortably and confidently,” it added.
Unicapital noted that the Philippines’ tourism story is getting lost in the noise as other countries ramp up efforts to grab global attention, leaving the Philippines with the lowest tourist arrivals in the region.
“We think our policymakers have stressed their support for the industry. However, we think that the initiatives or the efforts are too underpowered to steer a full recovery,” Ms. Alfonso said.
“We think we need to have a sharper brand. We need to have tourist-friendly policies as well as a seamless travel experience,” she added.
Philippine Institute for Development Studies Senior Research Fellow John Paolo R. Rivera said his outlook for tourism in the second half remains cautiously optimistic.
“With international arrivals gradually recovering and strong domestic demand, we can still approach pre-pandemic levels by 2026 if no major external shocks occur,” he said via Viber.
“The opportunities lie in high-value segments such as ecotourism, cultural and culinary tourism, medical and wellness travel, and cruise tourism, especially if we focus on improving the visitor experience, connectivity, and sustainability,” he added.
However, he said the government needs to streamline the investment and accreditation process for tourism enterprises and strengthen local government capacity for planning and crisis management.
He also cited the need to improve tourism infrastructure through public-private partnerships and adopt a smarter, data-driven approach to marketing and product development.
“A shift from quantity to quality tourism, anchored on sustainability and inclusive growth, is what will make Philippine tourism a powerhouse in Asia and one that is globally competitive and future-proof,” he added.
Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort said the lagging performance of tourist arrivals can be framed as an opportunity to catch up.
“Philippine foreign tourism numbers are still three to five times lower than other major ASEAN or Asian markets, so there are still opportunities to catch up,” he said.
“It is important to further develop infrastructure to support or sustain increased tourism numbers and revenue,” he added.
He said that it is important to develop airports, accommodation facilities, meetings, incentives, conferences, and exhibition facilities, and mass transport.
“Another source of growth is the diversification of foreign tourist sources, such as from India, which is the world’s largest in terms of population,” he added.