Tourism boom

In the first quarter of 2023, aviation jet fuel sales of Petron Corp., the Philippines’ largest oil company, nearly doubled, because of the travel boom.

For the whole of 2023, Cebu Pacific, the Philippines’ largest domestic airline, will generate 22.5 million in passengers, according to Alexander Lao, president.  The 22.5 million is up 52 percent from the 14.8 million domestic and international passengers it carried in the whole of fiscal year 2022 and recovers the 22.5 million volume carried pre-pandemic in 2019.

The 14.8 million was up 335 percent from the passenger volume of FY 2021.  In 2022, Cebu Pacific’s system-wide revenues soared 262 percent due to the triple-digit growth of passenger growth and ancillary businesses.

Over the long term, national flag carrier Philippine Airlines will seek delivery of nine new high-capacity Airbus 350 jet planes as it pursues a massive expansion in seat capacity and route coverage.

PAL Holdings, the parent firm of Philippine Airlines, posted P5.47 billion in first quarter income, up 288 percent or nearly quadruple from P1.41 billion a year earlier. Revenues rose by 78.66 percent to P42.21 billion from P23.62 billion, thanks to a doubling in passenger sales.

PAL’s load factor, or percentage of seats sold, improved from 53.84 percent to 81.03 percent, despite the carrier’s growing reputation for bad service, bad food and bad inflight amenities. Only the graciousness of the crew is the redeeming service.

Last time I took a PAL flight, business class from Manila to Singapore this year, the aircraft had no TV monitor, no inflight music, no entertainment, only tattered leather seats. I felt cheated with what I paid, $1,500, for business class. For $1,800, you can fly business class to Europe, on the best airline.

Former Marikina mayor Bayani Fernando tells me when he took recently a Middle East PAL flight, he got COVID after landing in Manila. And the last time he took a PAL domestic flight from Mindanao, this year, the food offered was so bad he advised the inflight staff not to offer such food again if they don’t want a riot in flight.

Under Jimmy Bautista as president, PAL achieved global four-star rating and was on the brink of getting five stars when he was booted out.

Meanwhile, Kevin Tan, CEO of Alliance Global Group Inc., has disclosed his group’s plans to expand its hotel room capacity to 12,000 (from 7,000) in the next five years, to consolidate their claim of being the Philippines’ largest hotel operator.

The 12,000-room capacity will pull AGI far ahead of the JG Summit-Robinsons group, which has 5,000 rooms; Ayala Group, with 4,058 rooms and SM Group with 2,211 rooms.

There is a severe shortage of about 10,000 hotel rooms in the country, as well as space for meetings, conventions and exhibitions.

The hotel room shortage has made Manila hotel rates among the highest in the region.

A five-star hotel in BGC charges P25,000 per night, no breakfast included. That’s $455 per night.

For the same money, a tourist can get a 4-star room in Paris 55 sqm with a balcony with flowers and a stunning view of the Eiffel Tower. And breakfast is included, which is sumptuous.

“International tourism is well on its way to returning to pre-pandemic levels, with twice as many people traveling during the first quarter of 2023 than in the same period of 2022,” says the UN World Tourism Organization (UNWTO).

Overall, international arrivals reached 80 percent of pre-pandemic levels in the first quarter of 2023.

Some 235 million tourists traveled internationally in the first three months, more than double in the same period of 2022.

For 2022, over 960 million tourists traveled internationally, two-thirds (66 percent) of pre-pandemic numbers were recovered.

Asia and the Pacific accelerated its recovery with 54 percent of pre-pandemic levels, but this upward trend is set to accelerate now that most destinations, particularly China, have re-opened.

Europe reached 90 percent of pre-pandemic levels, driven by strong intra-regional demand.

The Middle East saw the strongest performance as the only region exceeding 2019 arrivals (+15 percent) and the first to recover pre-pandemic numbers in a full quarter.

UNWTO Secretary-General Zurab Pololikashvili says: “The start of the year has shown again tourism’s unique ability to bounce back.”

“In many places, we are close to or even above pre-pandemic levels of arrivals,” gushes Zurab.

“However, we must remain alert to challenges ranging from geopolitical insecurity, staffing shortages and the potential impact of the cost-of-living crisis on tourism, and we must ensure tourism’s return delivers on its responsibilities as a solution to the climate emergency and as a driver of inclusive development.”

International tourism receipts grew back to hit the $1-trillion mark in 2022, up 50 percent from 2021, driven by the rebound in international travel.

International visitor spending reached 64 percent of pre-pandemic levels (-36 percent compared to 2019, measured in real terms).

By regions, Europe enjoyed the best results in 2022, with nearly $550 billion in tourism receipts (520 billion euros), or 87 percent of pre-pandemic levels. Africa recovered 75 percent of its pre-pandemic receipts, the Middle East 70 percent and the Americas 68 percent. Due to prolonged border shutdowns, Asian destinations earned about 28 percent.

UNWTO’s forward-looking scenarios for the year project international arrivals to recover 80 percent to 95 percent of pre-pandemic levels.

UNWTO’s Panel of Experts say 2023 will be much better than 2022.

According to the experts, the economic situation remains the main factor weighing on the effective recovery of international tourism in 2023, with high inflation and rising oil prices translating into higher transport and accommodation costs.

As a result, tourists are expected to increasingly seek value for money and travel closer to home.

Uncertainty derived from the Russian aggression against Ukraine and other mounting geopolitical tensions also continue to represent downside risks.

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