The global tourism industry has been hit hard by the Covid-19 pandemic, as border closures and travel restrictions prevented tourists from venturing overseas. In emerging markets such as the Philippines the slump in international tourism took a heavy toll on local communities that depend on the industry for their livelihoods, as well as starved these countries of a vital source of foreign exchange. Tourism generated P4.7trn ($93.5bn) for the Philippine economy in 2019 and supported nearly a quarter of all jobs in the country, either directly or indirectly.

After attracting a record of nearly 8.3m international tourists in 2019, the government was targeting 9.2m arrivals in 2020 before the pandemic hit. In the wake of a strict nationwide lockdown imposed in March, visitor numbers decreased by 62.2% in the first five months of the year compared to the same period in 2019. As of December 2020 the suspension of tourist visas was still in place, meaning full-year figures are likely to be considerably lower than previous years. Nevertheless, there is some hope that the reopening of domestic tourism could build the foundations for a recovery in 2021.


In consultation with key stakeholders, in April 2020 the Department of Tourism (DOT) launched the Tourism Response and Recovery Programme (TRRP). Together with two stimulus bills passed that year, the TRRP outlines both fiscal and non-fiscal support measures for tourism-related businesses to help them survive the difficult economic period and be ready to capitalise on new opportunities once the pandemic wanes. The DOT also announced that, in partnership with the Development Bank of the Philippines and the Land Bank of the Philippines, it would extend low-interest loans to tourism enterprises affected by the crisis. Moreover, the most recent of the stimulus bills – known as the Bayanihan to Recover as One Act, or Bayanihan 2 – earmarked P10bn ($198.9m) for tourism, including P6bn ($119.3m) for loans and subsidies for micro-, small and medium-sized enterprises (MSMEs).

Domestic Potential

Central to the recovery strategy is the initial resumption of domestic tourism as a prelude to the reopening to international tourists in 2021. Outbound Filipino tourists spent $616.9bn abroad in 2018, so it is hoped that at least some of this expenditure will be channelled into the domestic market. To help facilitate the safe resumption of domestic travel, the TRRP outlines stringent health protocols that operators and other sector players must follow in order to accept guests.

Starting in late October 2020 Filipinos were permitted to travel abroad for leisure purposes, but with most international borders still closed and the pandemic ongoing, few are likely to do so in the short term. This has created an opportunity for local destinations that are willing to accept an influx of visitors from other regions of the country.

Although destinations have been permitted to accept domestic tourists since June 1, 2020, many local government units (LGUs) were initially slow to reopen due to fears of imported Covid-19 cases despite the protocols outlined by the DOT. However, more destinations announced reopening plans as the year progressed. The island destination of Boracay reopened to domestic tourists on October 1, with hotels permitted to operate at 50% capacity and visitors required to pass a PCR test 72 hours before departure. Tourists are also required to register with the provincial government to obtain a QR code for contact tracing purposes.

El Nido in Palawan agreed to reopen to domestic tourists from October 30, but initially just nine hotels in the area were permitted to accept guests – with most of them high-end resorts that are out of the price range of most Filipinos. Elsewhere, Bohol, another popular island destination, reopened to domestic tourists on November 15 under similar conditions to Boracay. Visitors must choose from itineraries provided by the local authorities and cannot opt for independent tours. Meanwhile, the surfing capital of Siargao reopened on November 23, with flights resuming on December 1. Visitors to the island are required to show a negative PCR test taken 48 hours before arrival, and will be asked to take an antigen swab upon arrival if the PCR test was taken more than 48 hours before. In addition to these islands, tourist spots within driving distance of Manila began to open to visitors from beyond their immediate region in the second half of 2020, although the rules regarding tests and travel requirements were dependent on LGUs.

“The tourism industry is looking at a V-shaped rather than a U-shaped recovery due to growing, pent up demand for travel,” Aileen Clemente, chairman and president of Rajah Travel, told OBG. “The most significant barrier to overcome is the lack of harmonisation or implementation of safety and travel protocols across the different regions. This prevents seamless travel across different parts of the Philippines. The second biggest barrier is the requirement to quarantine in some regions instead of undertaking a pre-travel Covid-19 test.”

To better understand the sentiments of Filipinos towards domestic travel, stakeholders such as the DOT, Tajara Leisure and Hospitality Group and travel platform Experience Philippines conducted several surveys between March and May 2020. The main insights from their surveys include the fact that travellers are likely to opt for rural, secluded and natural areas as well as beaches over mainstream and urban centres; that they are likely to want customised experiences; and that health and safety protocols, as well as cost, will be key considerations.

Going Digital

Beyond the stimulation of domestic tourism, efforts have been made to digitalise the tourism industry. This is not only important for facilitating contactless transactions to limit exposure to Covid-19 and effective contact tracing programmes, it also helps to promote the Philippines to international travellers looking for post-pandemic options. Through social media, even MSMEs can reach and interact with potential travellers around the world, simultaneously promoting their business while showcasing various attractions and growing the country’s brand recognition.

Such individual efforts can complement government promotional activities. In 2020 official promotional videos encouraging tourists to “Stay at home, dream, and wake up in the Philippines” were released, featuring famous sceneries and activities throughout the country. The DOT’s Travel from Home initiative provided virtual backgrounds of famous Philippine destinations to be used on video conferencing platforms. Elsewhere, the administration of the Walled City of Intramuros partnered with Google Arts and Culture to create a website that allows users to virtually tour 17 museums.

Moreover, the DOT held webinars for stakeholders throughout the year to help them adapt to the new normal, with digitalisation a key theme. Operators can also make use of Rajah Travel’s Tourism Knowledge Centre, which features digital tools that can help manage visitor flows and facilitate contactless transactions. In the long run, digital transformation can enhance the competitiveness of the Philippine tourism sector. As travel resumes, online booking platforms and QR codes are likely to become increasingly common, which will ease the process for tourists and make operators more accessible to the international market.

Take Flight

Looking ahead, positive news around Covid-19 vaccine trials in late 2020 could bode well for the resumption of international travel in 2021. By the end of 2020 some destinations in the region had begun to cautiously open to international tourists. For example, Thailand began offering 60-day visas for foreign tourists in November, with applicants having to show a minimum bank balance, adequate medical insurance and be willing to quarantine for 14 days. Singapore and Hong Kong also agreed to open Asia’s first so-called travel bubble in November, allowing residents to travel freely between both destinations. However, in a sign of the ongoing challenges of the pandemic, the opening of the bubble was postponed for two weeks on November 21 amid a surge of Covid-19 cases in Hong Kong.

The Philippines has been cautious in opening to foreign arrivals and had yet to give official indication of when the issuance of tourist visas would resume as of late November 2020. Rajah Travel believes the short-haul market will be the first to recover once international tourism restarts, with the source markets of Japan, South Korea and Taiwan likely to lead the way. It is hoped that digitalisation, combined with the experience of providing a safe environment for domestic tourists, will allow operators to embrace more opportunities in the new normal.