The Covid-19 crisis has exacerbated the tourism industry’s pre-pandemic structural challenges, the latest report by the Asian Development Bank (ADB) revealed on Friday, May 13.
In an ADB report entitled “Supporting Post Covid-19 Economic Recovery in Southeast Asia,” the Manila-based lender said that even prior to the pandemic, the tourism sector was beset with four structural challenges.
These were over reliance on foreign tourists with focused on a few destinations; the lack of infrastructure outside major destinations; high informal employment; and it only attracted low-cost travelers.
The structural challenges worsened when Covid-19 struct in 2020 and created new challenges for the industry, ADB said.
According to the ADB, now that tourists are more aware of the importance of health precautions, it has become a crucial consideration in selecting travel destinations.
Moreover, ADB said there are indications that Covid-19 could lead to a fundamental decline in long haul international tourism, which was exacerbated by the adoption of digital tools for virtual meetings, incentives, conferences, and events tourism.
Lastly, tourists—while it is not new—are now looking for environmentally sustainable destinations.
To address these concerns, ADB suggested four policy response areas for tourism.
The first is focusing on ways to restore demand as well as strengthening of domestic tourism by developing marketing campaigns to convince travelers it is safe to travel.
“This requires coordinating and implementing proper procedures to reduce information gaps and minimizing risks,” ADB said.
Second is building new channels of demand to diversify tourist destinations and develop lesser-known points of interest, while tapping into high growth segments like ecotourism, health and premium wellness experiences, and halal tourism.
The third involves capacity building to support future digital demand, touching on the need for authorities to invest in training workers in both digital and nondigital skills to tackle the issues of low pay and informality.
The fourth calls for increasing industry resilience, where the tourism industry in each country must work closely with central and local governments to improve communication channels.
“Creating a permanent crisis management task force may also ensure that a country’s tourism sector is better able to cope with future shocks,” ADB said.
In 2020, the Philippine tourism suffered a sharp decline of 84 percent in international arrivals. Before the pandemic, the sector contributed 22.5 percent to the economy, or $92.6 billion.
But because of travel restrictions, the country’s tourism receipts plummeted to only $17.8 billion, equivalent to 4.8 percent of the country’s gross domestic product (GDP).