Domestic travel has helped the Philippine tourism industry’s recovery, enabling to make up for the “shortfall” in international arrivals’
Leechiu Property Consultants (LPC) Director for Hotels, Tourism and Leisure Alfred Lay noted that “domestic travel is so big and strong that it can make up for, now in the short term, the shortfall of international arrivals.” LPC is a real estate advisory firm.
Lay made his observation during the presentation of the LPC Q2 2025 Philippine Property Market Report in Makati City. “It can do that for a long time, and the long-term goal for domestic tourism would probably to double (its) size within the next five to 10 years,” he added.
The LPC official pointed out that domestic tourism expenditure in 2024 reached PHP3.16 trillion, surpassing the pre-pandemic level of PHP3.14 trillion in 2019. Tourism contributed 8.9% of the country’s gross domestic product (GDP) last year.
International tourism expenditures, on the other hand, stood at P699 billion, up from P600 billion pre-pandemic levels, despite missing the 2024 targets.
In an interview, Lay said he expects inbound arrivals this year to reach at least six million, even as the arrival of South Korean visitors, the Philippines’ top market, has seen a decline in the past five months, likely due to the “negative media coverage” in South Korea over security issues in the country. He pointed out, however, that long-haul tourists are increasing and have offset the decline.
The LPC report indicated that Korean arrivals in the first five months of 2025 dipped 19% to 552,000 from 682,000 in the same period last year, while inbound arrivals from the United States, Canada, Japan Australia surged between 9% and 19.4%. Additional routes and flight frequencies, the report said, are likewise expected to sustain this upward momentum.
Lay shared that in terms of travel affordability to the Philippines, the country only ranks in the “middle of the pack” particularly in hotel average daily rates (ADR) compared to Southeast Asian neighbors and competitors.
The LPC report showed that the Philippines ranks fourth in hotel ADR at P6,048, with Thailand (P8,171), Cambodia (P6,591), and Vietnam (P6,359) in the top three slots. “We’re still very price competitive across the region, and we will continue to be so for quite a long time,” he said.
“As we scale, we improve our infrastructure, our transportation costs come down, and that will keep us relevant and will improve our numbers over the mid to long-term,” he assured.