Tourism in a crisis

HIDDEN AGENDA - Mary Ann LL. Reyes - The Philippine Star

This is definitely one summer we will never, ever forget.

Many of us used to look forward to long weekends. In fact, many have booked flights and room accommodations as early as last year in anticipation of this year’s summer months and the long weekends of 2020 due to the spate of promos both in terms of airline tickets as well as hotel stays.

Unfortunately, these same people are the ones that had to find a way to cancel these flights and hotel accommodations, or if cancellation is not allowed, to book at a later date this year if permitted by the airline company and the hotel.

International tourism is one of those sectors that has suffered tremendously from this pandemic. According to the United Nations World Tourism Organization, international tourism fell by 22 percent during the first quarter of 2020 and could in fact decline by as much as 60 to 80 percent for the whole year compared to last year.

The UNWTO, in a just released report, said that 67 million fewer international tourists up to March 2020 translates into $80 billion in lost exports and places millions of livelihoods at risk.

In a statement, UNWTO secretary general Zurab Pololikashvili said that the world is facing an unprecedented health and economic crisis, with tourism being hit hard, and with millions of jobs at risk in one of the most labor-intensive sectors of the economy.

According to the latest UNWTO World Tourism Barometer, arrivals in March 2020 alone dropped sharply by 57 percent following the start of a lockdown in many countries, as well as the widespread introduction of travel restrictions and the closure of airports and national borders. This translates into a loss of 67 million international arrivals and about $80 billion in receipts or exports from tourism.

The UNWTO report revealed that although Asia and the Pacific showed the highest impact in relative and absolute terms as minus 33 million arrivals, the impact in Europe, though lower in percentage with a drop of 22 million, is quite high in volume.

It said that current scenarios point to possible declines in arrivals of 58 to 78 percent for the year,  depending on the speed of containment and the duration of travel restrictions and shutdown of borders.

Three possible scenarios for 2020 were presented. First, a 58 percent drop is expected based on the gradual opening of international borders and easing of travel restrictions in early July. Second, if there is a gradual opening, the drop would be higher at 70 percent. The third scenario looks at a 78 percent decline if the easing of travel restrictions happens only in early December.

The UNWTO said that under these scenarios, the impact of the loss of demand in international travel could translate into loss of 850 million to 1.1 billion international tourists, decline of $910 billion to $1.2 trillion in export revenues from tourism, and 100 to 120 million direct tourism jobs at risk.

The report noted that this is by far the worst crisis that international tourism has faced since records began in 1950, with the impact to be felt to varying degrees in the different global regions and at overlapping times, with Asia and the Pacific expected to rebound first.

The good news, though, is a rebound is expected to happen in 2021.

It said that domestic demand is expected to recover faster than international demand according to the UNWTO Panel of Experts survey. The majority expects to see signs of recovery by the final quarter of 2020 but mostly in 2021. Based on previous crises, leisure travel is expected to recover quicker, particularly travel for visiting friends and relatives, than business travel, it added.

The UNWTO pointed out that the estimates regarding the recovery of international travel is more positive in Africa and the Middle East with most experts foreseeing recovery still in 2020. Experts in the Americas are the least optimistic and least likely to believe in recovery in 2020, while in Europe and Asia the outlook is mixed, with half of the experts expecting to see recovery within this year, it explained.

Helping physical distancing

Another sector whose performance has a huge multiplier effect on the economy is housing.

But as we all know, construction has stopped following the start of the government-mandated quarantine. Not only are there fewer houses, condominiums and other buildings being constructed, but the worst part of it all is that millions have lost their only source of income. I am talking about construction workers and even workers of allied and support industries such as suppliers of construction materials, to name a few.

It is for this reason that the Organization of Socialized and Economic Housing Developers of the Philippines (OSHDP) has called on President Duterte, the Department of Human Settlements and Urban Development (DHSUD) and Congress to integrate the development and construction, particularly of socialized and economic housing units, into the Philippine Economic Stimulus Act.

OSHDP noted that aside from the economic multiplier effect of housing to stimulate other businesses in its many upstream and downstream value chains, as well as its contribution to job generation, providing housing is needed to maintain social distancing under the new normal by addressing unhealthy congestion and confinement to limited spaces of extended family members.

OSHDP, together with other major housing stakeholder groups, earlier appealed for the resumption of housing production, including real estate buying and selling, under strict health and work conditions.

The group also called on the Inter-Agency Task Force on Infectious Diseases (IATF) to allow real estate buying and selling even under or post-ECQ/GCQ environments, as these can be safely done through strict conditions, and through the use of electronic means.

It explained that real estate transactions, including buying and selling, has been safely done virtually or through online media like Facebook Messenger, video conferencing, as proven by such online selling platforms Lamudi, SWOOP and Dot Property. It added that even Pag-IBIG Fund had launched electronic loan availment while in the private sector, there are firms that conduct online mortgage brokering transactions with private financial institutions.

In a letter to DHSUD Secretary Eduardo del Rosario, OSHDP president Jefferson Bongat and chairman Marcelino Mendoza called for housing industry-specific incentives and financial stimulus under the Philippine Economic Stimulus bill now being deliberated by the Defeat COVID-19 Special Committee in Congress.

They said government can lower interest rates in institutional loans to housing developers, set at three percent per annum, cushioned by channeling stimulus funds through banks or financial intermediaries to answer for the difference between the lowered rate and the market rate, so that developers will continue to develop their subdivision projects even if there are no or few buyers in the meantime, for purposes of job creation and producing the sector’s multiplier effect on the rest of the economy.

For comments, e-mail at [email protected]

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