Philippine Hotel Owners Association Warns Against Abolishing National Travel Tax with Citing their Potential Impact on the Domestic Tourism and Local Businesses

The Philippine Hotel Owners Association (PHOA) has expressed major concerns over the proposal to remove the national travel tax, which is a move aimed at cutting the cost of travel for outgoing passengers. Although the proposal is aimed at making travel easier and less expensive, PHOA has expressed the view that the removal of this tax at such a critical moment may have serious implications for the revival of the local tourism industry in the Philippines.

The association takes the position that while it is important to adopt policies that will improve competitiveness, the removal of the tax without a clear plan for replacement may have the unintended consequence of shifting the focus of policy to promoting outgoing tourism at a time when the tourism industry in the Philippines is still in the process of rebuilding itself.

The Growing Importance of Domestic Tourism in the Philippines

The Philippines is home to world-renowned resort destinations such as Boracay, Palawan, and Cebu, which remain key drivers of the country’s visitor economy. PHOA expressed concerns that the removal of the travel tax could shift focus away from domestic tourism—which continues to play a major role in the recovery of the tourism sector. Many local hotels, resorts, and tourism enterprises are still stabilizing after the disruptions caused by the pandemic. Domestic tourism is critical to their ability to rebuild and recover, as it provides a steady flow of visitors to local destinations, creating jobs and generating revenue.

PHOA emphasized that strengthening the inbound tourism market should be the government’s top priority, as it directly supports the livelihoods of local tourism workers, helps sustain Philippine hotels and resorts, and ensures that the economic benefits of tourism remain within the country.

Potential Impact on Local Businesses and the Economy

Tourism’s impact on the Philippine economy cannot be understated, with tourism-related businesses such as hotels, restaurants, and tour operators playing a major role in job creation. PHOA argues that the abolition of the travel tax without a clear strategy for replacing the lost revenue could have a significant impact on funding for tourism development and promotion.

Currently, funds generated from the travel tax are utilized for initiatives that help boost tourism growth in the Philippines, including marketing campaigns, infrastructure development, and improving the tourism experience for both local and international visitors. Without these funds, PHOA warns, efforts to enhance competitiveness, promote the Philippines as a tourist destination, and support the tourism workforce could be severely undermined.

In the face of this, PHOA urges policymakers to develop a comprehensive plan that will ensure tourism development continues sustainably without sacrificing the long-term growth of the sector. This includes ensuring that funding mechanisms for tourism promotion are in place to maintain the competitive edge of the Philippines as a leading tourism destination.

Calls for Industry Consultation and Policy Dialogue

Arthur M. Lopez, president of PHOA, has called for broader consultation with industry stakeholders before any changes to the travel tax are made. He stated that before implementing such changes, it is essential to have a dialogue focused on ensuring that Philippine jobs are not sacrificed for the benefit of foreign economies. Lopez stressed that Philippine tourism should remain a priority and that policies should work towards strengthening the local economy and promoting domestic tourism.

PHOA believes that, in the current post-pandemic environment, the focus should remain on revitalizing domestic tourism and ensuring that local tourism businesses have the support they need to grow. Encouraging overseas spending and increasing outbound tourism could ultimately boost the economies of neighboring countries, rather than benefiting the Philippine tourism sector and its workers.

The Economic and Tourism Impact of Travel Tax Abolition

The abolition of the national travel tax has broader implications for the Philippine tourism sector. Removing this key revenue stream could undermine efforts to recover the sector and prevent local businesses from fully benefitting from tourism growth. According to PHOA, the tourism sector is currently at a critical point, where every policy decision impacts the ability of hotels, resorts, and tourism workers to rebuild and thrive.

The travel tax currently provides important funds for tourism development, including marketing campaigns and the development of tourism infrastructure, which are vital for attracting both domestic and international tourists. PHOA argues that eliminating this tax without a clear replacement mechanism could disrupt the recovery process and slow down efforts to promote the Philippines as a sustainable tourism destination.

By focusing on inbound tourism and domestic growth, the Philippine government can ensure that tourism’s economic benefits remain rooted in local communities, thus ensuring the continued success and sustainability of the country’s tourism industry.

Supporting Domestic Tourism and Local Employment

The Philippine government must prioritize supporting local businesses and tourism workers as the tourism sector recovers. The Philippine economy stands to gain significantly from a revitalized domestic tourism market, with local hotels, resorts, and tour operators being the primary beneficiaries. These businesses are crucial for job creation, local economic growth, and the overall economic recovery of the country.

PHOA’s call for policy changes that prioritize domestic tourism and job creation echoes the need for sustainable tourism growth. By investing in local tourism enterprises and focusing on inbound tourism, the government can help create a resilient and competitive tourism sector that will provide long-term benefits for the nation.

Prioritizing Sustainable Tourism Growth

As the tourism industry in the Philippines presses forward in its recovery, the issue of the removal of the national travel tax in the country serves to underscore the need to strike a balance in the formulation of tourism policies for both domestic and international tourism. PHOA calls on the government to focus on the revival of domestic tourism and local businesses, while ensuring that any changes in taxation policies are accompanied by strategies for tourism development funding.

Through the promotion of sustainable tourism development that will benefit both local businesses and the Philippine economy, the country can ensure that its tourism industry is healthy and competitive in the face of global challenges. It is important to safeguard Philippine employment, improve tourism services, and continue to promote domestic tourism to ensure the long-term prosperity of the tourism industry.

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