Return on Tourism Impact

Return on Tourism Impact (RoTI) sounds like a better way of measuring a country’s performance in tourism. It does not just count the number of visitors and doesn’t care about meaningless tourism awards won, but by how wisely a country spends to attract visitors.

The executive summary of a paper explains that RoTI seeks to measure the value generated per unit of investment. This is how governments should benchmark performance, make smarter funding decisions and better prioritize infrastructure and promotional strategies.

The International Investor, a blog written by Expat Pinoy business analyst Eric Jurado featured this powerful new framework that evaluates how efficiently Southeast Asian nations convert public and private investment into real economic gains through tourism.

This in-depth policy report reveals why countries like Vietnam and Thailand are pulling ahead — and why the Philippines, despite its natural beauty and cultural richness, lags behind. With RoTI, tourism officials are held accountable for their strategies and suggest smarter, more impactful policymaking.

This report provides a detailed comparative analysis of RoTI across six major Southeast Asian economies — Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.

“At its core, RoTI is a metric that compares the total tourism value generated — through revenues, GDP contribution, employment and social value — against the amount invested by the government or through public-private partnerships in the tourism ecosystem. It combines both quantitative factors, such as international visitor arrivals, spending and contribution to GDP, with qualitative variables, such as brand strength, infrastructure quality, sustainability and socio-cultural impact.

“This makes RoTI a more comprehensive and strategic measure than traditional tourism metrics. A nation with high RoTI is not necessarily the one with the most tourists, but rather the one that converts investment into sustainable, inclusive and profitable tourism returns…

“Tourism development requires significant public investment — ranging from airport expansions and road infrastructure to international marketing campaigns and visa policy reforms. Countries that can generate high tourism revenues at relatively low costs demonstrate superior RoTI.”

How did the Philippines perform?

“In the case of the Philippines, the Duterte and Marcos administrations allocated approximately $23 billion over several years to tourism infrastructure and promotional programs.

“Yet in 2024, total tourism receipts were only about $13.1 billion, implying a RoTI of approximately 0.57 — meaning the country earned only 57 cents for every dollar invested. This suggests inefficiency in execution, whether due to poor infrastructure, weak branding or administrative hurdles.

“In contrast, Vietnam’s estimated tourism investment from both national and provincial governments was about $17 billion, generating $33 billion in value. This implies a RoTI of nearly 1.94, meaning nearly $2 in returns per $1 invested, a model of highly efficient tourism growth.”

The paper noted that “despite its rich natural beauty, cultural assets and English-speaking population, the Philippines underperforms in RoTI due to four key weaknesses: inadequate infrastructure, weak international branding, restrictive visa policies and limited data-driven planning.”

Singapore and Thailand have branding scores above 147 compared to 120.8 for the Philippines, the lowest in the region.

As expected, it cited our problems with airport congestion, limited inter-island connections and patchy road networks.

“Modern airports, seamless public transportation and integrated destination management help raise RoTI by improving visitor experience and increasing average spend per trip.”

Another factor is ease of travel. “Visa waivers, digital entry platforms and regional connectivity boost tourist flow and reduce friction. Vietnam and Malaysia have adopted aggressive visa liberalization, while the Philippines remains comparatively rigid.”

Jurado suggests that Philippine tourism policymakers “should consider RoTI not as a retrospective evaluation tool, but as a forward-looking guide — one that ensures every peso, dong or baht spent in tourism builds real, lasting value for its citizens.”

Remember the Korean travel agent I wrote about last week chartering 20 flights to Boracay before the pandemic but now chartering only one flight?

His problem is the LGU, which he claims, keeps on making unreasonable rules. “The LGU in Boracay insists that the Korean guides be registered also in Boracay when they are already registered in Manila.

“Then they are harassed by immigration, etc. DOT says tourists should go to Bohol or Cebu but the problem is the high cost of hotels, resorts and safety concerns. That’s why Vietnam and Thailand draw the most tourists.”

The expensive rates in local resorts are making Pinoys go abroad instead of patronizing what is “sariling atin.”

I have experienced that in Boracay where the restaurants charge as much as — if not more — than those in Makati or BGC. They are thinking in terms of dollar pricing even if in 2024, domestic tourists made up approximately 79 percent of Boracay’s visitors, with foreign tourists comprising about 20 percent and OFWs around one percent.

Reacting to my column last week which mentioned high rates, former ABS-CBN business reporter Charo Logarta Lagamon wrote the airfare is higher as well.

“Spot on Sir Boo. I flew to Bangkok then Bhutan last week. My round-trip flight to Bangkok from Manila was way cheaper than my Manila-Cebu-Manila flight just a few days ago. Both were last-minute bookings.

“The total cost of my seven-day trip to Bhutan — which charges $100 per day per tourist, is equivalent to a three-day trip and stay at an affordable luxury resort in Palawan.”

There is big potential in being kind to domestic tourists in terms of hotel and airline rates.

According to the PSA National Tourism Satellite Account, Filipino residents made approximately 106.1 million domestic trips in 2023. A “trip” refers to a single journey by a domestic visitor (Philippine resident), regardless of distance or duration.

Official data indicates that domestic tourism spending (i.e., expenses by Filipinos traveling within the country) totaled P2.67 trillion in 2023.

We need tourism officials who know the tourism business and private tourism entrepreneurs who can think long-term and not drive away domestic tourists with rates higher than in Thailand or Vietnam.

Boo Chanco’s email address is [email protected]. Follow him on X @boochanco