Asean Investor

Advertising is an investment

ASEAN_Investor
Publish date: Thu, 20 Nov 2014, 02:47 PM
Marc Djandji, CFA is the Editor-in-Chief of The ASEAN Insider, a subscription-based monthly investment newsletter committed to finding compelling investments backed by powerful structural trends in Southeast Asia. He is also a co-Founder and Partner of ASEAN Strategy Group Ltd., an independent investment banking boutique focusing on cross-border M&A and corporate finance advisory for companies in the small to mid-market segment in Southeast Asia.

Manila Philippines

Tourism Secretary Mon Jimenez has a very intriguing and eminently doable idea: Make Changi Airport in Singapore a gateway to the Philippines. It's a fascinating concept of two governments working together for the benefit of both.

Singapore is one of the two major hubs in Southeast Asia (Hong Kong is the other), receiving 900-1,000 flights per day from 100 airlines. Manila, in comparison, draws around 400 flights per day from 37 airlines. Tourists can fly to Singapore-15.6 million did last year-stay for two or three days, which is quite enough in Singapore, and proceed to the Philippines for a few days. And then they return home through Changi, to spend the last of their money in that wonderful airport.

The beauty of this idea is that it starts the inevitable deregulation/denationalization of the airline industry and fits ideally into the Asean Economic Community concept of opening borders and creating a regional oneness.

It's a brilliant idea that President Aquino and the very effective Foreign Secretary Albert del Rosario can pursue. We need tourists. Growth has been impressive since the slogan "It's more fun in the Philippines" hit the scene-some 10-percent growth per year. But last year's 4.7 million visitors pale in comparison to those of our neighbors. In fact, the Philippines ranks a sad last to everywhere else in Southeast Asia: Thailand at the top gets 26.7 million visitors; Malaysia, 25.7 million; Singapore, 15.6 million; and Vietnam, 7.6 million.

One must wonder why Thailand attracts so many tourists despite political chaos; it must be the elephants. But we have something better: Filipinos, with their genuine good humor and friendliness. Plus we have beautiful, serene beaches and diving and ecotourism sites recognized by travel and leisure organizations worldwide. You can't not have a good time here.

Well, actually you can because the government isn't matching this personal and destination attraction. Infrastructure is lousy; getting to the resorts isn't a dream but a nightmare. The Philippines has great potential to become a hub for sports, recreation, wellness/medical, and retirement tourism, but the systems and facilities are not in place.

The tourism secretary also intends to privatize the management and operation of the Ninoy Aquino International Airport, and eventually all airports. As President Fidel Ramos said early in his term, "Government should not be in businesses that business can do." Business can "do" airports. It makes great sense, the sooner the better. BUT choose a contractor, local or foreign, that is an expert at the job, not the cheapest or, worse, a friend.

But before you even get to that airport, getting a visa is a hassle. Why do you need one at all? What's the purpose of a visa? I suppose to ensure that you don't stay here permanently, or overstay, and that you're not a terrorist or other undesirable.

Let's take those one by one. Staying permanently-what's wrong with that? You stay, you work, you contribute to the economy. If you're here for criminal activities, the police can catch you. As for overstaying, where's the sense in that? As a tourist, the longer you stay, the more you spend, so why limit it to 30 days?

As for undesirables, when you arrive you pass through immigration. Every nation has the right to refuse entry to anyone at that border. So, do the checking there and deny entry if there's concern. Innocent tourists and businessmen won't have a problem.

Tourism is among today's top dollar-earning sectors. But unlike the other sectors such as information technology-business process outsourcing, it creates jobs all over the country, or can. The beauty of tourism is that it gets wealth out to the boondocks where it's most needed. Agriculture is in such a mess (ammunition for many columns here) that tourism is the best one to save the rural folk. Mining, the other rural business, is dead under this administration.

But to get people here you have to spend money. You don't go somewhere you don't know about. Actually, it's not an expense but an investment. The money spent on advertising is an investment as it's more than recouped in the revenues that the country generates. In previous years the Philippines trailed its Asean peers in terms of actual government spending on tourism. And it seems the government has realized this, as in the latest survey (2013), the World Economic Forum noted that "government spending on the sector as a percentage of GDP is now first in the world, and tourism marketing and branding campaigns are seen to be increasingly effective."

The tourism department led by Secretary Jimenez must be commended for this, and such gains must be sustained and even increased as there's a lot of catching up to do.

The business community is one group that likes to hear it like it is. And its members are an attractive niche to encourage to become not only businessmen but also tourists. They should be encouraged to time their business trips to the Philippines so they can bring their families over for the weekend.

Just a suggestion regarding marketing: Don't just come out with glossy and well-edited videos of the "magic" of the country. Everyone does that; it's no longer believable. There aren't fiestas every day, elephants aren't walking down the streets. Tell the truth, point out some weaknesses, and how they're balanced by the positives. Make your story believable. Getting through the airport and to your first night in a hotel is not pleasurable. Show it, but also show how it's all worth it (put some humor in it, perhaps). Show how the friendliness at breakfast far outweighs the frustration of the night before.

More tourists, more money, more jobs and livelihood. Tell it like it is and people will come.

By Philippine Daily Inquirer

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