By Ma. Stella F. Arnaldo @akosistellaBM / Special to the BusinessMirror
THE country’s oldest and most respected tour operator is appealing to local hotels, especially those in Bohol and Cebu, to cut their rates.
Alejandra Clemente, chairman of Rajah Tours Philippines, made this appeal after foreign tourists canceled their trips to the two provinces, after advisories were issued by several foreign governments warning about traveling to the Philippines, especially to Central Visayas.
“You know, two months after the Aquino assassination [when no tourists wanted to come here], Philippine Airlines and the hotels dropped their rates. This was how we got back the tourists,” she said. The problem is, she noted, hotels no longer want to do that, especially since summer is considered a peak season for tourists.
“The hotels are fantasizing they are [attracting] high-yielding tourists, willing to pay their high rates,” Clemente pointed out to the BusinessMirror, shortly after meeting with officials of the Department of Tourism (DOT).
Rajah Tours lost 380 Japanese tourists who were supposed to go to Cebu for a vacation but were unnerved because of the travel advisories. Clemente estimates that the country may have lost visitor receipts amounting to P30 million from the cancellations of this particular tour group. (See “DOT still confident of meeting 8 million arrivals target despite Bohol cancellations” in the BusinessMirror, April 22, 2017.) Canada, Australia, New Zealand and Japan issued travel advisories against the Philippines days before the Holy Week, leading to the cancellations.
For her part, Tourism Secretary Wanda Corazon T. Teo, after meeting with tourism stakeholders last week, said she would meet with the hotel associations again to request them to drop their rates “in times of crisis”, just to encourage tourists to come to the Philippines. The other industry stakeholders that backed Clemente’s call for hotels to lower their rates during their meeting with DOT officials included representatives from the Philippine Tour Operators Association, National Association of Independent Travel Agencies and the Philippine Travel Agencies Association.
“When I spoke to my counterpart in Thailand recently, I asked him how he dealt with the political crises and other issues that have cropped up, which may have deterred foreign tourists from visiting their country. He told me that they immediately cut their prices, especially the hotels. He said, never mind that they sell the rooms even at a loss; what’s important is that they get the tourists to come back to Thailand,” the DOT chief stressed.
Aware of the country’s hotels resistance to cutting their rates, she said this was why she always appealed to foreign businessmen to invest by opening hotels in the Philippines. “When they come here, there would be more hotels built, thus lowering the prices of rates.”
Earlier in her appointment to the DOT’s top post, Teo said she wanted to standardize hotel room rates to be able to compete with the likes of Bali and Bangkok. (See “Teo to lower room rates to hike arrivals”, in the BusinessMirror, July 2, 2016.)
This is not the first time an appeal has been made to Philippine hotels to lower their rates, which is considered among the highest in the Asean region. Even Teo’s predecessor, Ramon R. Jimenez Jr., had tried to get hotels to cut their rates. “We are seen as a very high-end option. Mahal nga ang Pilipinas e! We’re actually more expensive than Thailand. For some reason, the local operators believe that the quality of the services is such that they can get away with a premium, and so far so good. During the peak season, it’s not a problem…. But I have to convince them [hotels and resorts] during the off-season ‘magbaba naman kayo ng presyo,’” he said in an interview in the first months of his tenure at the DOT. But his overtures were rebuffed by hotel owners, who said they do drop their rates during the lean season.
A January 2016 report by STR Global, showed that the average daily rate (ADR) of hotels in the Philippines has risen from P5,360 (US$107.20) in 2013 to almost P5,700 ($114) in 2015. (BusinessMirror exchange rate at P50:$1) Average hotel occupancy has been almost steady for the two-year period, from 64.5 percent in 2013, 67.6 percent in 2014, and 67 percent in 2015.
The same report also indicated that the ADR of Philippine hotels has bumped up by 65 percent, compared to its other Asian neighbors, like Indonesia (+55 percent), Malaysia (+almost 60 percent), Thailand (+60 percent), and Japan (less than
65 percent).
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Swapang ang mga Pinoys.