It’s More Fun in the Philippines: Is Branding the Solution to the Tourism Puzzle?

(Author’s Note: This is an updated version of an article I originally published in November 2010, and which has become relevant again in light of the somewhat-controversial introduction this week of the Philippine Department of Tourism’s new branding slogan “It’s More Fun In The Philippines”. This article takes a look at some deeper issues in tourism, and considers whether branding is a necessary or even desirable component of national tourism aspirations.)

Tourism is looked upon as something of a golden calf in the Philippines, which becomes clear each time the country commits some internationally-embarrassing gaffe or is the subject of a less-than-complimentary assessment by some foreign institution. The desire to make tourism an effective economic driver -- and the anxiety that is caused every time some circumstance threatens that effort -- is not at all misplaced. Tourism can be a very valuable resource for the Philippines, and there is no reason it should not be pursued with some vigor. The Philippines has a lot of attributes that recommend it as a tourist destination: an attractive and varied environment, a generally agreeable climate, a collection of unique and interesting cultures, and a population which is, for the most part, friendly towards foreign visitors.

Tourism as a tool for economic development is not unlimited – like any product, it has a lifecycle and will eventually need to be replaced with something else – but it can be productive for a fairly long time, and serve as a foundation for more substantial and sustainable development. Whether it does or not depends on how it is managed, and like most parts of the Philippine economy, so far it has been managed poorly if at all. Making the best use of tourism for overall development is a bit more involved than simply laying out the welcome mat to the world and encouraging a cottage industry of souvenir-makers and street vendors.

The Good News about Tourism is…

Many of the conventional arguments in favor of tourism development are actually true. Tourism encourages a focus on preservation of local culture and environment, at least initially, and the exposure to foreign culture can encourage greater skills and language development among the destination population. The stronger argument for tourism development, however, is its ‘multiplier effect’:

Image source: Barcelona Field Studies Centre

The multiplier effect can be measured in different ways, but the diagram above illustrates the basic pattern: as a tourism business grows (a hotel in this example), it not only directly creates jobs and cashflow, but attracts related businesses that create additional jobs and income; the increase in goods and services along with the infrastructure development made possible by greater tax income improves the attractiveness of the destination, which brings in more tourists and creates more business opportunities and employment, and so on. Very few industries which focus on a single or limited number of products and services have this far-reaching multiplier effect. For a country like the Philippines that lacks a solid export-producing economy and has a political and economic system that discourages other forms of FDI, but otherwise has potentially-useful attributes to attract tourism, the formula seems like a sure winner….

But the Bad News is…

See that red box in the lower-left corner of the diagram? Revenue lost from ‘leakage’ is the Achilles’ heel of tourism. Tourism can be adversely affected by many causes – the natural product life cycle discussed below, natural or man-made disasters, terrorism or criminal activity, disease outbreaks, economic downturns – all of which are, to at least some extent,

beyond the control of the destination country and not predictable with any degree of accuracy. Revenue leakage, however, always occurs, is completely predictable, and is almost entirely controllable. It can happen in many different ways and in several ways at once:

Any tourist-related infrastructure, businesses, or services developed by outside interests – either foreign or domestic interests from another part of the country – means that the greater part of the revenue leaves the community. One of the “nine quandaries of tourism” is that in order to make use of what the country has the country often needs to borrow to develop it. Major development, particularly infrastructure developments such as roads and airports, is expensive. The destination country often has no choice but to borrow money to complete these projects, or enter into BOT (build-operate-transfer) schemes that relieve the capital-raising burden but sacrifice profits.

Another source of leakage is the increase in tourism-related imports – specialty goods needed to attract tourists, for example, different foods, recreational equipment, or vehicles.

Property values and the prices of commodities and consumer goods become inflated in tourism destinations.

Corruption and mismanagement divert funds from reinvestment and redevelopment use.

It is probably impossible to plug all the leaks, but these conditions can be controlled with careful planning and management of the tourism sector. Other factors, however, are more difficult to control, and the best the destination can hope to accomplish is to mitigate their negative effects for as long as possible:

Maintaining the ‘cultural authenticity’ sought by tourists requires artifice; this is yet another of the paradoxes that make up modern tourism’s “nine quandaries.” Barrio Fiesta, Panagbenga, and the Masskara Festival do not accurately depict authentic everyday life in the Philippines, yet that is the sort of thing tourists are expecting to see. This tends to degrade the value of tourism as a tool for productive cultural exchange and understanding, because it reinforces stereotypes – in most cases positive stereotypes, but stereotypes nonetheless.

Another paradox is that using tourism as a means to support the local population requires an orientation towards outsiders. A focus on tourism-related development, while beneficial in many respects, often means that other vital services and institutions not directly related to tourism (schools, health care systems) are neglected.

Tourism can directly contribute to pollution and congestion, and can threaten specific environmental resources (beaches, reefs, rainforests, and historic sites).

Tourism tends to be seasonal – this means the economic benefits as well as the stress on the community and the environment are usually at a maximum at the same time. The paradox here is that a shorter recovery time between seasons is economically necessary, but environmentally detrimental. Thus the environment (both the natural and man-made) degrades progressively; this shortens the tourism product life cycle.

Controlling revenue leakage and mitigating the social and environmental damage of tourism for as long as possible is vital, because tourism is impermanent – like any product, it has a life cycle that progresses through stages of discovery, growth, stagnation, and decline. What complicates tourism planning on a national scale is that the life cycle of tourism is not uniform across the entire country; much of the Philippines is either in or on the cusp of the “discovery” stage of the cycle, while popular and well-known destinations such as Boracay are well into the “stagnation” phase, if not actually already declining. The process can take decades, but it is inevitable; Spain’s Costa Brava, for example, a popular destination for UK holiday-makers since the end of World War II, has seen its tourism industry nearly collapse in the past six years. The potentially long life of the tourism product cycle is insidious, because it can lead to tourism dependence. When tourism adequately supports communities for generations, its apparent permanence leads to a false sense of security and neglect for the development of alternative economic sectors – when the end comes, the community has nothing to fall back on, and often deteriorates to a state worse than what it was before the beginning of the tourism product cycle.

Often, the only way for the community to recover from this new low is to work towards starting the cycle again, a process than can take decades. Asbury Park, New Jersey is a perfect example of this: founded in 1871, the seaside town south of New York City enjoyed a tourism boom beginning in the 1890s and lasting until about 1960, which was the year the city’s population peaked. A rapid decline followed while tourism grew elsewhere, particularly in the nearby resort areas of Atlantic City and Wildwood; it was only after 2002 – two entire generations since Asbury Park’s peak – when those areas had gone slightly beyond their own saturation points, that new “discoverers” among tourists encouraged the beginnings of redevelopment in Asbury Park.

So Where Does “Country Branding” Fit In?

The ultimate objective of a “country brand” is to maximize the tourism product life cycle by

attracting as many visitors as possible; the brand putatively invokes a memorable positive

impression of the country as a tourism destination. The tricky part of branding for tourism,

however, is that the brand is vastly more important for creating a positive first impression

among potential visitors – those who have already experienced the country, for better or

worse, will have already formed their own personal impressions that will determine whether or

not they visit again. The brand can contribute to the impressions of experienced visitors, but to

a much lesser degree, and is more likely to contribute negatively to their decisions whether to

visit again or recommend the country to other potential visitors.

The reason for this is that any brand invites some kind of comparison with an existing

impression or experience; the more specific the comparison suggested by the brand, the bigger

the risk of a negative comparison. The reason why a successful brand like “Malaysia, Truly Asia”

works is not only because it is memorable, but because it is vague. What does “Truly Asia”

actually mean? That’s up to the visitor to define for himself. The successful brand follows a

pattern established by potent branding examples in the US, such as “Virginia Is For Lovers”.

That brand slogan suggests a certain amount of romance to be had during a visit to the Old

Dominion, but lent itself well to highlighting many things to “love” about the state.

Tourism for the Philippines? Yes, but…

Despite the challenges and potential pitfalls of focusing on tourism as an economic driver, it is

still one of the better opportunities for near-term development available to the Philippines. But

in order to take advantage of the opportunity, some fundamental changes need to be made.

Here are a few suggestions:

Don’t alienate your potential customer base: Making very public and innuendo-laden criticisms

of other countries’ sovereign prerogatives to err on the side of caution in advising their citizens

of the possible dangers of traveling to the Philippines or to ensure that universally-accepted

and sound safety practices are maintained by airlines visiting their lands is pointless, and

attracts unwanted negative attention to the country. Image is everything in tourism; the

Philippines has wonderful beaches, dive sites, and other attractions, but it is not the only

country in the world that does. Dismissing the reasons given for whatever bad impression

outsiders have and presenting the Philippines as a victim of some kind of foreign bias only

reinforces the bad image.

Acknowledging the concerns and highlighting efforts to positively respond to them bolsters

credibility, particularly in periods such as the past few weeks in the Philippines where the only

news making it out of the country to international audiences has been about the horrible

tragedy of Typhoon Sendong, the kidnapping of an Australian national by terrorists, and a

landslide in Mindanao that has apparently killed upwards of 100 people. Introducing a brand

such as “It’s More Fun In The Philippines” portrays a country which is either unconcerned about

or unaware of its own problems.

Even under normal circumstances, the brand also invites comparisons the Philippines would

probably rather people didn’t make; the Ninoy Aquino International Airport is certainly not

“fun” by any stretch of the imagination, and neither is the assault-course of Metro Manila

traffic in getting from the airport to a hotel, or even to another section of the airport to meet

an ongoing flight to a final destination elsewhere in the country. A “country brand” for tourism

might not even be necessary – but if the Philippines’ tourism authorities are intent on aping

their more successful Asian neighbors in developing one, the brand should at least be

innocuous with respect to steering visitors’ attention to some of the things that can leave a bad

impression. A better brand would be undefinable, or perhaps could even make “tongue-in-

cheek” acknowledgement that some aspects of a visit to the Philippines are not for the faint-of-

heart: “Philippines – Land of Adventures”, or something along those lines.

Beyond the issues of branding and promotion, there are other perspectives to consider:

Decentralize the tourism effort: Different parts of the country have different means and

opportunities as tourism destinations, and tourism development would be best managed on a

regional level. Decentralizing tourism prevents the leakage of tourist revenues to other parts of

the country or unrelated programs, narrows the accountability gap between the community

beneficiaries and the responsible authorities, and reduces the management burden on the

national government so that it can focus on those parts of the tourism puzzle that must be

handled on a national level – things like immigration and customs management, major

infrastructure, and relationships with foreign governments.

Don’t over-develop: Domestic tourism may be driven by recreation-seekers, but cultural and

environmental authenticity is what brings in the big money from overseas visitors. It is easy to

overdo tourism development, as anyone who has visited Boracay in the past few years could

probably confirm; world’s best beach or not, the country’s premier tourist destination is a

crowded, overwrought flesh-pit only distinguishable from places like Ensenada, Daytona, or

Pineda del Mar because it’s slightly trashier and harder to get to. Focusing on properly

managing and preserving the environment and basic infrastructure and services – whether or

not those are clearly directly related to tourism – will serve the destination communities best in

the long run, and give them a solid foundation on which to cater to their visitors in their own

way, which, after all, is what most of the visitors are seeking when they arrive.

And above all…

Don’t approach tourism as an end, but as a means: Tourism is temporary; visitors come and go

even under the best of circumstances, and sudden shocks over which the country has no

control – natural disasters, economic conditions on the other side of the world, competition

from other countries – can put a sudden end to the good times. Make the best use of the

opportunity while it lasts; building useful roads, safe airports, and enforcing upgraded

standards of vessel safety so that visitors can make a comfortable and trouble-free trip to a

place like Boracay in the first place will pay dividends for a lot longer than another kitschy hotel

or nightclub that will do no one any good once the visitors disappear. The real puzzle of tourism

is not how to make it work for the country, but how to make it work for the country in such a

way that by the time it disappears, it’s no longer a necessity. If the Philippines can solve that

puzzle, the nation just might find itself, at long last, on the road to something resembling

prosperity.

Additional Reading

Hojo, Y. (2002) “The Expansions of the Essays on Tourism Multiplier Model”. The Economic Journal of Takasaki City University of Economics, 45(1): 15-33.

Shanks, C. (2002) “Nine Quandaries of Tourism”. ReVista Harvard Review of Latin America, Winter 2002.