Old money, new money

The world, as we all know, is divided between the haves and have-nots. In the travel industry, everybody is going after the haves – people with high disposable incomes who can afford to chase after the sun halfway around the world – and the new haves or emerging markets that are just discovering that money can literally buy warmth during winter.

Spend seven days in the snow-covered, sub-zero-2temperature cities of Berlin and Moscow, and you will understand why their people are so important to every Asian country offering year-round sun and sand. You will realize why Europeans in general troop to Asia during a winter that hangs on too long, when the ground is frozen, and the temperature ridiculously low even as spring is just around the corner, and why Anton Chekhov saw only "a winter that was bleak, dark and bereft of hope." Who wants to freeze their toes when they could be digging them in warm sand in a beach paradise? Or to bundle up in layers of clothing – even if it’s pure cashmere – when they could be running around in a bikini on a shoreline?

This was the proposition of Asian countries at the International Tourism Exchange (ITB) in Berlin last March 8 to 12, where 10,856 exhibitors tried to outdo each other in wooing the German and European travel industry. Regarded as the Olympics of Travel Fairs, ITB attracts nearly 150,000 travel agents and individuals, and 7,2000 journalists from around the world.

Old money, new money; established markets, emerging markets – the Germans are the world’s leading travelers, and the Russians the emerging spenders. Every country with sun and sand all year round is basing its tourism projections on their citizens’ need to winter in a warm climate.

The Philippine participation at ITB was led by the Department of Tourism (DOT) and major travel agencies and tour operators. As in any travel fair where we compete with Asian neighbors whose promotion budgets make ours look like loose change, creativity was in order.

Modest in size compared with other countries, though the biggest the Philippines ever had in its 20-year participation at ITB, the booth nevertheless attracted attention with its photo wall of the country’s underwater riches, natural wonders like Banawe Rice Terraces, and sun, sun, sun. A video wall was set up in one part of the booth showing idyllic images of the country with music by haunting music by Richard Tann. Also present in were the Bayanihan National Folk Dance Company, who always attracts attention with their interactive tinikling, and a pair of masseurs to provide free hilot.

The competition was so fierce that exhibitors – whether tourism boards like the DOT or airlines or travel agencies, operators or hotels – put up all sorts of gimmicks. Korea, for instance, held an exhibition of German kids doing taekwondo stunts that included splitting an apple speared by a very sharp sword. Thailand highlighted its cuisine by putting up a fast-food stand, while its different regions such as Chiang Mai had their own booths. India had dancers in traditional wear while its low-cost carriers occupied put up their own gimmicks. Singapore showcased its modernity with a giant video wall. Even Timor Leste, formerly known as East Timor before it gained independence in 2002, put up a stand for the first time in the ITB’s 40-year history. And then, of course, there were the specialty tours, which included "gay and lesbian travel," cruises, as well as medical tourism (some operators in Africa are offering cosmetic surgeries with safaris on the side).

So, with everybody offering the same things – sun, sand, and friendly people – how did we grab the attention of a market so used to being wooed? Well, for one we had the poster boy of the country’s tourism industry, DOT Secretary Joseph Ace Durano, looking quite heroic in a barong tagalog given the temperature outside, as he dispatched interviews with the German media one after the other.

Durano says, "What’s important is that we get out there. Along the way, as we gain better insights into the market, we start adjusting. What we’ve been doing for the past two years is putting more science into our promotions. I always tell our team heads that the worst thing for us is to be paralyzed because you cannot steer a vessel that is not moving. Last year, because of limited resources – both human and capital – we were preoccupied with setting up our operations in North Asia, our staple market. Starting end of 2005 we were ready to look for other pockets of opportunities. We had sporadic activities in Germany, UK and Russia and this year since we have additional budget, we’re moving up from sporadic to annual campaigns to copy our success in North Asia."

Venus Q. Tan, tourism attaché for Eastern, Western and Central Europe, says, "The problem is no longer arrivals from Europe, it’s capacity. We just don’t have the rooms. It’s a good problem in a way and one we can address. The priority of DOT in the recent past was to pump resources in the short-haul markets of Asia, now we have to address the issue of balance with the long-haul market."

According to Venus, Germans have one of the longest paid holidays in Europe – 30 days a year – and they usually stay in destinations for two weeks, but since resorts and hotels block off rooms for Asian travelers, whose average stay is a week, it’s become harder for Europeans to go on a long holiday in the Philippines.

A career tourism officer for the past 25 years, Venus says confidence is back in the Philippines as far as tourism is concerned (investing in the country is another matter, what with the unresolved Fraport airport issue). She’s been working in Frankfurt for the past six years and couldn’t have picked a tougher time to be assigned there than year 2000, when the Sipadan kidnapping happened and the German media was following the story every day until the hostages were released. "Immediately after the kidnapping a lot of German tour operators dropped the Philippines and arrivals dropped in half."

Now, with renewed interest, things are looking up. "With the German market we get a lot of repeats. It’s the perfect match for us because they’re looking for sun, sea and rustic destinations. Europeans prefer the kubo but luxurious type of destinations."

Germans are inveterate travelers, they work hard so they can travel, and hey, they like the Philippines! Never mind that in the beginning DOT’s WOW Philippines campaign caused some confusion among Germans who pronounce "W" as "V" (VOV Philippines). Venus laughs and says, "We insist that it means Wealth of Wonders or Warm Over Winter or Wealth of Whales."

"WOW Philippines is a fantastic campaign, it’s good that the Secretary didn’t change it because it’s hard for us tour operators every time a new tourism secretary takes over," says Nadja A. Trinchera, director of sales at Rajah Tours Philippines.

The campaign in Europe is focusing on the Philippines as a destination for nature, culture, and adventure. In Berlin, DOT launched an info ad shown on subway screens. It’s a five-second ad but it’s enough for now to sustain visibility and awareness.

"We’re always looking for non-traditional ways to promote the country," says Durano. "Traditional mediums are crowded and we can’t outspend other countries."

In Central London last year, they launched the taxicab ads; for Taiwan they’re sponsoring the filming of a telenovela in the Philippines, which will be aired in Japan and Korea as well; in China – Beijing, Shanghai and Guangzhou – they’ve put up light-box ads in walls where newspapers are posted; for Korea and Japan, they’ve hired local celebrities to promote the Philippines.

There is a new appreciation for tourism efforts in the Philippines, thanks in large part to solid promotions programs and congressional support. For this year, Congress gave the department a P300 million increase in its promotions budget – and the money is going where it matters. DOT last year created teams to focus on particular markets and decentralized authority and resources to its foreign offices.

As Baron Travel’s Maria Aurora Tadeo puts it, "the teams are so makulit in getting us ready for travel fairs abroad, they send circulars and reminders to everybody."

And with good reason too – our travel agencies need this kind of exposure abroad to run after new clients and sustain old relationships. Baron Travel, which hasn’t been participating in ITB for the past five years, and Rajah Tours for two, have both experienced a dip in group tours with their absence. "Participation is a long-term investment for us," adds Rajah’s Nadja Trinchera. "We may not see the results immediately but we do see it. The incubation period for Europe is especially long because they plan for the following winter."

DOT Assistant Secretary Edu Jarque, whose 25-year experience in the US and European markets is put to good use in strengthening its strategies in the home office, declares proudly: "The feast of famine is over."

For the longest time, he says, the country has been participating in fairs such as the World Travel Market (WTM) in London but we didn’t have sustaining promotions until recently.

He also cites DOT’s role in "shepherding," whether in making it easier for investors to put up tourism infrastructure in the country or helping a destination get its act together. Jarque cites the success of Davao in hosting the annual ASEAN Travel Forum (ATF) this year, the biggest travel mart in Asia.

"A lot of people were not sure about Davao’s hosting of the ATF. First, it’s in Mindanao, and second if it was going to be ready. We’ve had it in Manila twice and once in Cebu. After Cebu hosted it, its tourism picked up. We really prepared Davao, we trained the front liners for a year, and the mayor cleaned up the city – as in really cleaned it up! It did a wonderful job and it was perfect. There are travel agencies who’ve gone back home and are now putting Davao in their catalogues. We’re hoping the ATF would do for Davao what it did for Cebu."

Congressmen from the country’s three top destinations – Representatives Antonio Alvarez of Palawan, Florencio Milaflores of Aklan, and Miles Roces of Manila – were also present at ITB and at DOT’s selling mission in Moscow.

"This is an eye opener," Alvarez says after seeing the huge stands of Thailand and Indonesia, which were selling their countries per region at ITB. "We will get there soon. Now we know where the money is going in effectively promoting the country."

The congressmen say that to fast-track tourism efforts government must focus only on four or five select destinations, pump money into these places for five years to develop infrastructure and make them accessible and capacity-ready, and then move on to another set of destinations.

"We have one million priorities, if we do them all at the same time, nothing will happen," says Milaflores.

Roces adds, "When you focus government departments in one direction, the growth becomes faster."

Alvarez says if we’re going to make this happen, "the tourism department should be given the command of other departments, like DOTC, DPWH to give focus on infrastructure development."

This would then make the DOT Secretary the most powerful position in the Cabinet. It does sound logical, but is it doable given enormous bureaucratic egos and the turf wars it would provoke? Well, can pigs fly?

Forbes magazine’s annual list of billionaires includes 33 Russians (they doubled their fortunes last year), taking the No. 3 spot, following the US and Germany. The Russians are awash with new money and they’re spending it on destinations such as Turkey, Egypt, Dubai, Tunisia and Thailand – countries where they don’t need visas or are given one upon their arrival.

In just three years, Russia brought down the number of people living in poverty from 30 million in 1999 to 13 million in 2002. A remarkable achievement if you think about the long bread lines the world media splashed right before the collapse of the Soviet Union in 1991. Today, the only lines you will see in Moscow are at the counters of malls and entrances to museums.

A report by the Global Refund says that Russians are the "new shopaholics," after the Japanese and Americans. It’s hard to imagine that anybody can equal the Japanese who literally camp out for days when new designer collections from Hermes or Louis Vuitton are rolled out in Tokyo – but it seems Russians are up for the challenge.

After ITB in Berlin, the DOT and private sector headed for Moscow for a selling mission – again one of the sustaining programs following its participation in Russia’s travel fair last September.

Durano signed a bilateral tourism agreement with his counterpart, Minister Vladimir Strzhalkovsky, formalizing cooperation and paving the way to simplify border control and other formalities related to tourism exchange.

The DOT is currently working with the Department of Foreign Affairs (DFA) in institutionalizing a visa-upon-arrival scheme for Russian nationals, which will be especially beneficial for charter groups.

Strzhalkovsky is a man that looks so stern we were almost scared to interview him, but he revealed a sense of humor when he complained that nobody has yet invited him to visit the Philippines. He says that for Russians, the Philippines is "still an unknown country as our tourists are going to Thailand, Malaysia and Indonesia. But I am pleased that the Philippines is serious with this effort. Russians are looking for countries with warmth during winter, and they like to explore new countries rather than visit the ones they have been to."

The Philippines to Russians is what Europe is to Filipinos – a destination where we stay longer to make the trip worth the cost. Jarque says the only problem with Russia is that, since we have no direct flights to or from Europe, it’s harder for their tour operators to bring groups here. DOT is talking with Russian carriers for the possibility of filling this void. Jarque met with a Russian agency in Moscow who brought to the Philippines two tour groups, which had to fly to Japan – a much longer route – to get here. "They do want to come to the Philippines, there’s a clamor, and they’re wiling to put in the additional expense."

DOT also launched the first ever Philippine Guidebook in the Russian language, published by the Argento Group. Bringing in Russian media to the Philippines is as equally important as selling the Philippine in Russia. Durano says media fam tours to the Philippines are being intensified and in fact early this year they hosted the top-rated Russian travel show Vokrig Sveta (Around the World) to film three episodes on Philippine destinations.

So don’t be surprised if restaurants in Boracay start replacing the cheap staple rum Coke with vodka, or start serving caviar. After all, if we’re going to be welcoming the world’s new rich, we may as well serve them in style.