THE past 12 months have been vibrant for Cebu’s tourism industry. Department of Tourism (DOT) 7 Director Rowena Montecillo said that as of September, Cebu recorded 1.7 million in tourist arrivals, up 11.07 percent from the 1.5 million tourists recorded in 2011.
Foreign arrivals to Cebu increased by 13.65 percent while domestic arrivals went up 9.26 percent. DOT 7 is expecting to hit two million tourist arrivals by yearend of 2012.
The relatively stable Asian markets and the combination of increased tourist arrivals and additional rooms were among the growth drivers of the industry this year, according to Hotels, Resort and Restaurants Association of Cebu (HRRAC) president Hans Hauri.
Cebu Pacific, on the other hand, credited the “It’s More Fun in the Philippines” campaign as among the key factors that fueled growth in the industry this year.
“The new ‘wind in the sails’ provided by the tourism campaign speaks directly to the rest-and-recreation-seekers, backed by a tourism product that is inviting, attractive, varied and definitely a proposition to return again to first-time travelers,” said Hauri.
The relative stability of Asia as a marketplace also influenced the growth of the industry. Statistics showed Asia tourists leading arrivals, specifically from Japan, which logged a 24.46 percent growth; Korea, 8.90 percent; and China, 16.33 percent.
Occupancy
Hauri said the 61 percent average occupancy across Cebu shows the stability of the sector. Room supply increased by 11 percent in 2012. Hauri said they expect a 10 percent increase this year with 500 more rooms being built. Cebu City has 141 hotels with 9,335 rooms.
The completion of the 500 rooms is expected to generate up to 5,000 new jobs for Cebuanos, tourism officials said.
Aside from new hotels, Montecillo said new products were also put in place to provide additional attractions.
These include Papa Kit’s Marina and Fishing Lagoon in Liloan, Danasan Eco-Adventure Park in Danao City and the Gabii sa Kabilin or Night of Heritage organized by the Ramon Aboitiz Foundation, Inc. which are generating buzz for being family- and group-oriented recreational activities. Cebu companies also diversified their businesses and ventured into tourism after seeing its potential as a revenue generator.
An example of this is the newly opened Lakwatsa Resto Lounge, which promotes cultural nightlife in Cebu, by couple Wilson and Melanie Ng of Ng Khai Development Corp.
Hauri, who is the vice president of the Tourism Congress of the Philippines for the Visayas, said the airlines were the ones “spearheading the initiatives to drive new business opportunities.”
DOT 7’s Cebu Sales Missions to Singapore and Malaysia led to opening of Cebu Pacific’s new direct route from Cebu to Kuala Lumpur, Malaysia and Bangkok, Thailand.
New additional flight from Cebu to Incheon, Korea via Jeju Air has also helped increase arrivals.
“Cebu remains to be one of the top Philippine destinations, for leisure and business travel,” said Cebu Pacific vice president for marketing and distribution Candice Iyog.
Cebu Pacific flew close to 9.8 million passengers as of September.
Hauri said key drivers for corporate travels are the IT-BPO industry, banking and
financial services, manufacturing, trading and education.
Pharmaceutical and insurance industries were also the key drivers for Cebu’s Meetings,
Incentive, Conference and Exhibitions (MICE) business.
Montecillo said her office also worked with various government agencies, including Department of Public Works and Highways for tourism roads infrastructure; Department of Science and Technology for livelihood projects; Department of Trade and Industry for the improvement of the tourism value chain; Philippine National Police for the Tourism Oriented Police for Community Project; Bureau of Fisheries and Aquatic Resources for the preservation of protected areas; Technical Education and Skills Development Authority for the training of tourism frontliners; Cebu Ports Authority for the proposed DOT satellite office in some ports; and the Commission on Higher Education and Department of Education on educational tours.
Airport expansion
The government, under its public-private partnership program, also opened the bidding for the P8-billion expansion of the Mactan-Cebu International Airport. Conglomerates like Ayala Corp. and Aboitiz Equity Ventures; Metro Pacific Investment Corp. and San Miguel Corp. have expressed interest in joining the bidding.
Hauri, however, cautioned that challenges still remained. The China market, which logged strong arrivals during the first four months of the year, plunged following the conflict over Spratly’s Island.
“It brought the market to a literal standstill,” said Hauri. But he said the decline was offset by increased arrivals from Japan and Korea
The decline of Chinese tourists also affected tourism sub-sectors such as Cebu’s spa industry, according to Spa and Wellness Association of Cebu (Swac) president Johnny Siao.
“This problem with China resulted in a substantial decline of spa customers,” said Siao, noting that Chinese tourists are among Cebu spas’ top clients as they come in bigger groups.
“We truly hope that politics might be put aside and the resumption of a normal flow of travelers can be envisaged,” said Hauri.
In 2012, Qatar Airways suspended direct flights to Cebu because of rising cost and high operating expenses. It was the only link to markets in Europe and Middle East.
Montecillo, however, reported there was no significant impact on arrivals from Europe.
Air rights
Iyog identified limited air rights between countries; the existence of Common Carriers Tax (CCT) or Gross Philippine Billings Tax; and the Federal Aviation Authority (FAA) Category 2 status and International Civil Aviation Organization (Icao) Significant Safety Concern as some of the unresolved industry issues that continue to limit the growth of the industry.
“Expansion or growth is not just about the physical infrastructure but it also refers to air rights between countries. If the air rights between countries are limited then so are the potential clients,” said Iyog.
She said that if the country targets 10 million tourists by 2016, it would need 15 million seats in terms of entitlements. On the other hand, the existence of CCT could “turn away” airline companies. The elevation of air safety status to Category 1 would also allow local carriers to expand operations in other foreign countries.
Philippine Airlines is hopeful that the Category 2 safety status will be upgraded to Category 1 by this year so it could start serving New York City and other major cities in Europe.
Hauri said they want to increase foreign tourist arrivals who are big spenders as they would drive income of people in the industry.
“To that end, we need more air connections from major areas like Europe, the USA as well as Russia,” he said.
Cebu is seen to strengthen its position as the no. 2 airport in the country but s facing challenges from other secondary airports like Iloilo, Bacolod, Bohol, Cagayan de Oro and Caticlan, which are all vying for international connections.
DOT 7 is projecting 2.6 million to 2.8 million tourist arrivals in Cebu by 2013.
“We have all the right instruments in place to make 2013 a better year,” said Hauri.
He referred to growth drivers like air connections, rooms supply, value-rates, promotions campaigns, working committees on improving infrastructure, tourism-focused policies and experienced workforce.
Hauri said recent purchases of new aircrafts by airline companies add capacity to the market. Iyog said Cebu Pacific is planning to grow its Cebu hub this year with the delivery of seven new Airbus A320 units.
DOT 7 is also preparing for a number of international cruise ships to visit Cebu and Bohol and the visit of 500 Japanese English as Second Language (ESL) students for a familiarization tour in Cebu by 2013. She said this will be the first of a series of familiarization tours of ESL students from Osaka, Japan.:
Source: Sunstar Daily
