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The latest data from the Department of Tourism (DOT) shows that the country saw 2 million international visitors as of 24th April, up 15.1% year-on-year (y-y). Out of these, international tourists accounted for 94.5% or 1.89 million.
Earlier, property consultant Leechiu reported that international arrivals rose 18% y-y during the 1st quarter (1Q) 2024 to 1.66 million. Tourism receipts during that period reached P157.6 billion (US$2.73 million), up 120.7% vs. the same period in 2019. Last year, total tourism receipts reached P482.5 billion. The increase was attributed to the introduction of more direct flights, further easing of visa restrictions and overall pick-up in global travel.
Top source markets in terms of visitor arrivals are: (1) South Korea (27.2%); (2) US (15.7%); (3) China (6.49%); (4) Japan (6.1%); and (5) Australia (4.4%).
Recall that the DOT is targeting 7.7 million tourist arrivals this year, a 42% increase from the 5.4 million total from last year but still below the 8.26 million pre-pandemic record level in 2019. Tourism contributed 6.2% to the country’s GDP in 2022, way below the 12% level pre-pandemic.
Our View: We believe that while international tourism is picking up, domestic tourism is far from the pre-pandemic levels. In fact, tourism receipts used to account for up to 22% of household expenditure in 2019 vs. the current level of 9%.
With elevated inflation and fading revenge spending the recovery in domestic tourism will be more gradual. In terms of international tourism, we are still a few years away from reaching pre-pandemic levels (over 8 million arrivals).
What this means for Property Stocks: Increase in tourist arrivals and consequently tourism receipts should be positive for ALI and RLC which have the most exposure to the sector, at 8% and 4% of EBITDA, correspondingly.
Impact on Consumer Stocks: Higher tourism receipts add on to overall consumption, usually via restaurants and discretionary/luxury retail, thus, positive for the likes of JFC and SSI.
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