Local visitors to speed up tourism recovery
With domestic travel still mostly driven by local visitors than foreigners, the Philippines’ tourism sector is seen recovering faster than those in destinations reliant on foreign tourists, debt watcher Moody’s Investors Service said on Tuesday.
In a report, Moody’s said that their lack of economic diversification and fiscal space will leave small island-economies more vulnerable to a projected sustained decline in tourism activities amid the COVID-19 pandemic.
“Travel restrictions and national quarantines to mitigate the spread of the coronavirus will severely reduce tourism activity in 2020, with willingness and capacity to travel potentially affected through the medium term. The resulting decline in tourism-related revenue and export earnings will weaken fiscal and external positions in tourism-dependent economies. Credit pressures will be greatest for those most heavily reliant on tourism and with limited fiscal space and external buffers to absorb the shock,” Moody’s said.
Moody’s expects Bahamas, Belize, Georgia, the Maldives, Montenegro as well as St. Vincent and the Grenadines to be the most badly hit by the current tourism slump.
Moody’s said it expected domestic tourism activity to lead the recovery in travel.
In the case of the Philippines, Moody’s noted that domestic tourism played a larger role in the tourism sector, where it accounted for more than 80 percent of total tourism activity.
Also, “Asian economies, including the Philippines, Cambodia and Thailand, have relatively diverse economic structures, with larger manufacturing sectors and more diverse services sectors, which indicate a greater ability to diversify away from tourism over a multiyear period,” Moody’s said. —Ben O. de Vera INQ
Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.