Aug 012013

One of the first lessons in advertising I learned many years ago from the late Antonio de Joya is this: nothing kills a good product or service faster than great advertising. I am seeing this happening right now in our tourism effort.

Tourism Secretary Ramon Jimenez belongs to my generation of advertising professionals who has become as legendary, if not more so, than the likes of my late mentor Tony de Joya. I worked with Mon on the Petron account in the early ’80s, followed his fantastic career and I can say he has to be one of the best in my generation.

Mon is in the habit of creating great advertising. Working with a younger generation of advertising geniuses, he has produced just about the most effective advertising campaign for Philippine tourism ever. It’s more fun in the Philippines, we promised, and it has created an interest in our country like we have not seen in a long time.

And that seems to be the problem we now have to face: we cannot live up to its promise. Sure, we have the great beaches, and even greater people with our world renowned hospitality. But we have horrible infrastructure and that problem will negate our efforts to promote tourism if that has not started to happen already.

For example, let us take Kalibo International Airport, the gateway to Boracay, our principal tourist destination. Interest in Boracay is so high that there is no longer a low season… tourists are flocking there even now in the rainy season. There isn’t a decent room to be had if you go there without prior reservations.

I know… Trishy, my daughter who lives in Anaheim, was just there late last week and got back a few days ago. She and her family, an Argentinian-American husband, two kids and two friends from California, didn’t exactly have the best of time in this visit.

Business ( Article MRec ), pagematch: 1, sectionmatch: 1

Trishy loves Boracay and wanted to celebrate her wedding anniversary there. But now she said that was her last visit, unless things improve.

Boracay itself seemed to her, to be hosting more than the number of tourists it can reasonably carry. The beach is still fine but not as clean as it was when we used to go there 10 or so years ago. Tourist gouging is prevalent. Her real problem with this visit was Kalibo International Airport.

Maybe it was an unusually bad day at the Kalibo airport. But a friend who runs a hotel in Boracay tell me that it is a normally bad day there everyday for more than three years or so or since they opened it up to international flights.

The terminal simply cannot take in the number of passengers being disgorged by increased domestic and direct flights from Korea, China, Japan and even Russia on a daily basis. There is also not enough space on the ground to take in more than four A320s at a time.

My other US-based daughter who was there last February complained of the inadequacies of the terminal building… the lack of flight monitors, inadequate public address system and general state of bedlam. I suppose it only got worse.

Last Monday, Trishy got to the terminal to take the 4 p.m. flight to Manila of Zest Air. But Zest Air had big problems that day. Its direct flight from Incheon was delayed four hours due to bad weather in Korea. One Zest Air plane was immobilized in one of the gates. It needed a spare part from Manila but because Kalibo was so congested, the flight with it couldn’t come in.

Indeed, one Zest Air flight with passengers on board was waiting for five hours at NAIA for clearance to fly to Kalibo, which was too congested to receive it. The Zest Air flight from Korea was eventually allowed to leave Incheon but was directed to land in Cebu where it waited for at least a couple of hours. Kalibo was still too congested to receive the flight.

As for my daughter and her family, they finally took off around 9 p.m. and got to Manila shortly thereafter. She wanted to complain but a man on the 9 a.m. flight was at the airport at 6 a.m. and he left at 9 p.m. with her. She sat next to the pilot of the 11 a.m. flight and he was at the airport for at least 10 hours.

Her problem was that she booked her flight with a small airline. With a limited number of aircraft, when delays happen in the morning, the whole day’s schedule is screwed. In fact, the plane they finally took back to Manila was an Air Asia plane, the sister company of Zest.

But airline delays happen… the real problem is the horribly inadequate terminal in Kalibo. Imagine waves of passengers just piling into the terminal which can only take a couple of hundred passengers. Kalibo also needs more capacity to take in more planes at a time.

My fear here is that Kalibo’s barbaric airport is the first and last impression tourists have of our country. Assuming they enjoyed Boracay, that will be forgotten and the last impression is that horrible airport in Kalibo.

 In our social media crazy world, negative experiences spread like wildfire. Soon, we would have lost all the benefits of an outstanding marketing campaign. Indeed, one way of stunting the growth of Philippine tourism is a bad experience in our airports.

I know Tourism Sec Mon Jimenez sees the bright side of congested airports: we are getting more visitors. But come on, Mon, unless you can get Sec. Jun Abaya to fast track these key airports, you are wasting your time.

The hard truth is, we are simply not ready for tourism prime time. CAAP’s John Andrews told ABS-CBN: “Changes are being done… but maybe its pace is too slow [that] it’s not keeping up with the growth of the airline industry.”

In the meantime, manage the bad airports better so there is a chance it can be more fun in the Philippines.

Foreign investments

DTI Sec. Greg Domingo sent me his reaction to my Monday column that touched on FDIs.

I read your column today regarding your statement on low investments in the country and I would like to share with you some information that hopefully can soften your stance.

From my experience as DTI Secretary and a former head of BOI and from the people in our investor servicing groups who have experienced investor inflows for more than a decade, we have not seen this high level of new investment activity as now and have never been busier. And the investment activity is broad based, large scale and many with big global brand names such as Coke, Nestle (coffee creamer), Brother (printers), Canon (printers), Fujifilm (high performance lenses), Bandai (toys), IBM (IT/BPM) Accenture (IT/BPM), ConvergOYS (call center/BPM), Shimano (bicycle parts) and many more.

The demand for factory space has been so big that many of the biggest industrial parks in the Laguna-Batangas corridor have run out of space and are now aggressively looking for expansion space.

If you look at the breakdown of our strong GDP numbers, the industry sector surpassed the services sector in terms of growth in the 4th quarter of 2012 and 1st quarter of 2013. Manufacturing grew by a whopping 9.7 percent in 1Q 2013. Services continued to grow at a high rate of seven percent or more. All these would not have been possible without massive investments.

IPAs (Investment Promotions Agencies including PEZA, BOI, Clark, Subic, etc) experienced all time records highs in total registered investments in 2011 and 2012, $17.2 billion and $16.5 billion, respectively, compared to $6.6 billion and $12.0 billion for 2009 and 2010, respectively. Of those figures, the amount of IPA registered investments from foreign companies totaled $5.9 billion and $6.8 billion in 2011 and 2012, respectively. Please note that 98 percent of PEZA registrations are realized while the rest experience a realization rate in excess of 80 percent.

Outside IPAs, foreign companies have been investing as well in a big way. These companies primarily serve the domestic market. We have a partial list of these companies.

FDIs have started to rise significantly as well and have a chance of exceeding $4 billion this year based on the results of the first four months – still below where we want it but multiples of where we started three years ago.

FDI: 2009 $1.96 billion, 2010 $1.29 billion, 2011 $1.81 billion, 2012 $2.79 billion.

The apparent disconnect between FDI and realized IPA registered plus non-registered foreign investments may be better explained by early September when we get the results of an analysis DTI is undertaking of the financial statements of the top 1000 foreign owned companies in the Philippines.


Speaking of tourists, what do you call someone in Congress who is honest, ethical, intellectual, law abiding, and truthful?

A tourist.

Boo Chanco’s e-mail address is Follow him on Twitter @boochanco

 Leave a Reply