Now that official figures are in, the Philippine government’s efforts to promote the country, along with just good word-of-mouth, appear to have paid off with a laudable bump in tourist arrivals. However, serious inadequacies in infrastructure have been curbing the country’s tourism growth potential, raising doubts on whether the more optimistic targets can ever be reached without more aggressive cooperation from other government agencies and investments from the private sector.

A record high of 2.8 million tourists traveled to the Philippines in 2006, an 8.4 percent increase from 2005.

Also for the first time, Koreans have displaced Ameri­cans and Japanese nationals from the top spots in tourist figures during the last quarter of 2006, vindicating President Arroyo’s statement in a recent speech that “Korea is the most important source of tourism today in the Philippines”.

Especially during the monsoon season, Koreans account for the major tourism expenditures coming to the Philippines last year. Department of Tourism (DOT) Secretary Joseph Ace Du­rano said that “Koreans who topped last year’s overall arrivals patronized the most expensive and most sought-after resorts to­day in the country,” dispelling his critics that the DOT is target­ing low or non-spenders in its tourism promotion strategies. In fact he added that “to get three million tourists [the original target for 2006], we don’t have to go further or go all over the world. What we need is 500,000 tourists from Korea, same number from Japan, and 200,000 from China.”

In addition, he said that the DOT is aggressively eyeing the 6 million outbound tourists of India and the 10 million of Russia. The European market, particularly the UK and Germany, as well as Australia are other places that the DOT is eyeing.

Apart from touring, many Koreans also come to the Philip­pines to learn the English language. Although the uptrend is en­couraging to tourism investors, the official figures still fell short of the 3 million target for 2006. The Philippine Travel Agencies Association contends that tourist arrivals could have reached 3 to 3.5 million in 2006, but insufficient accommodation facilities held arrivals down. According to them, the country has been los­ing around 500,000 foreign tourists and USD400 million every year due to the room shortage, especially outside Metro Manila.

Bohol, Boracay, Cebu, and Davao have all been identified as tourist destinations with limited hotel capacity.

Devastating typhoons in the last quar­ter of 2006 may also have contributed to cancellations. Every tourist booking that is cancelled or refused has been computed by the Bangko Sentral ng Pilipinas to cost the country around USD800 in potential income. But Sec. Durano has stated that upon completion of new resorts and ho­tels, bringing the number of rooms to about 18,000 by the end of the year, the prospects for 2007 are even better. The Philippine government is aiming for 5 million visitors a year by 2010.

Records show that from 2001 to 2006, average occupancy rate in Metro Manila reached as high as 70 percent for the De­luxe and First Class hotels and 60 percent for the Standard and Economy accommo­dations.

The steady rise in arrivals and occu­pancy in recent years has attracted more investments in the tourism sector, whether in the construction of new facilities or the expansion and renovation of existing structures. The DOT has endorsed a total of 44 accommodation projects amount­ing to Php25.7 billion during the last four years. The bulk or 59 percent were hotel projects amounting to Php18.6 billion.

In 2006, there was a flurry of expan­sion projects among the most popular des­tinations in the country. Boracay’s 4,077 existing facilities were augmented with the expansion of 344 standing rooms and the construction of 1,002 more new rooms, bringing the total to 5,423.

In Cebu City, 32 rooms were expanded among its 5,859 existing rooms, while 435 new rooms were constructed for a total of 6,327 facilities. On Mactan Island, exist­ing rooms totaled 2,536, 38 underwent ex­pansion, while 758 were constructed, for a total of 3,332. In Palawan, of the 2,394 existing rooms, 249 were expanded while 161 were constructed bringing the total to 2,804.

The Department of Tourism attributes the growth to its having laid new ground­work to expand its focus. It explains that it is now investing across a broader port­folio of markets in a measured, disciplined and systematic way to yield growth in the present and future, through the following actions: Accelerating demand in existing core markets such as China, Japan, Korea, and Filipino-Americans, by developing resources and people.

Increasing invest­ment and focusing on strategic markets like Australia, Russia, Germany and North America. Reinvigorating the Asian invest­ment markets of Hong Kong, Taiwan and Singapore by focusing efforts on address­ing key barriers to growth and improving our trade effectiveness. And monitoring other markets on an annual basis, such as the scuba diving market of the UK, Italy, Spain and France. The DOT is also priori­tizing China because of its growth poten­tial and proximity. China has now become the Philippines’ fourth largest market, up from the 11th in 2004.

Apart from accommodations, flight frequency plays an important role in en­ticing tourism arrivals. Presently, there are a total of 556 weekly flights to the Philippines with 142,354 available seats. In comparison, Hong Kong has 97, while Singapore has 75 weekly flights. Also, flights to Korea and Japan have a share of 10 percent while Taiwan and the United States tally 7 percent in the Asia-Pacific flight share, according to the United Na­tions World Tourism Organization.

In summary, the DOT promises to be aggressive in its mission to increase fur­ther the tourism arrivals by addressing “supply constraints around accommoda­tion and aviation capacity through specific investment projects—new resorts, inter­nationalization of airports, new air routes and frequencies, improving tourism ex­perience—to pave the way for continued growth.”

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