DOT sees P42B in foregone revenues from February to April due to COVID-19

The Philippines is expected to lose P42 billion in tourism revenues from China, Hong Kong, Macau and Taiwan due to outbreak of the novel coronavirus or the COVID-19 from February to April, Tourism Secretary Bernadette Romulo-Puyat said Wednesday.

Puyat made the announcement during the public hearing on the effects of COVID-19 on the Philippine economy, which largely depends on the tourism sector for growth.

Puyat also said that for February alone, the country is expected to lose P16 billion worth of tourism revenues from the same areas of concern.

Puyat also reported that Civil Aviation Board already recorded 465 cancelled flights per week due to COVID-19, which has already killed over 1,000 people in China.

“The expected reduction of tourist arrivals from the markets affected will result to foregone revenues that will carry over until April of this year,” Puyat said.

“Efforts are being undertaken by the DOT to cushion the impact. The objective is to still stir tourism activities throughout the country to promote domestic tourism. We are discussing [the] rollout of more value-added tour packages, discounted accommodation rates and marked down prices for domestic flight,” she added. 

Puyat added that other steps in place include persistent media presence, consumer activations, travel and trade promotions, strengthened partnerships with traditional and online travel agents, promotion of summer packages and multi-destination passes, among others.

Undersecretary Romarie Edillon of the National Economic Development Authority (NEDA), on the other hand, estimated the monthly loss in tourism revenues at P22.7 billion, of which P2.7 billion are from domestic flights.

Likewise, Edillon said that those in the tourism sector would have to reduce their workforce if the COVID-19 scare lasts more than six months.

“What the government can really do is offer training packages which cost P9,000 per person for 30,000 to 35,000 people,” Edillon said.

Air Carrier Association of the Philippines Executive Director Roberto Lim also said that airlines could accumulate P3 billion worth of losses due to refund alone at the pace the airlines are cancelling flights due to the travel ban on China, Hong Kong, Macau and Taiwan.

“Just to provide some rough numbers, the basic premise here is the airline industry is involved in perishable products. Having those lost of demand in the past few weeks, that means there is going to be refunds for all of those tickets given the ban on travel markets,” Lim pointed out.

“For the next two months, one airline estimates amount of refund to reach about [a] billion pesos since they cancelled 2,000 flights. Similarly, if Air Asia and PAL will have an estimate of 1,600 cancelled flights [a month], this would be P3 billion roughly,” Lim added.

NEDA’s Edillon, however, maintained that the impact of the COVID-19 scare on the country’s gross domestic product growth is only expected to reach -0.3% since the peak season for Chinese tourists starts during the third and fourth quarter of the year.

“The Chinese tourists will really help [cushion the impact], kasi malaking share ito ng tourists,” Edillon said.

The expected reduction in tourist arrivals for other nationalities, Edillion added, is estimated only at 10%. —KBK, GMA News