We Can’t Market Our Way Out of a Systems Problem

Issue 11 | October 2026

A periodic publication by 3AM Hospitality Consulting.

Why Philippine tourism continues to lag Southeast Asia despite everything we have going for us

I have worked in hospitality for more than 30 years, much of it around Southeast Asia, and there is something about Philippine tourism that has bothered me for a long time.

We keep talking about our enormous tourism potential, yet when the results disappoint, we seem to go back to many of the same answers. Visitor numbers fall short, so perhaps we need another marketing campaign. We get Michelin stars and Michelin Keys and understandably celebrate them. We build Tourist Rest Areas and announce programs to improve public toilets.

There is nothing wrong with any of these things. Good marketing matters. International recognition is good for our restaurants, hotels and the people behind them. And yes, every decent tourism destination should have clean public toilets.

But the bigger question is whether any of this addresses the reasons we continue to lag many of our Southeast Asian neighbours. Perhaps instead of asking what else we can promote, we should be asking what is actually holding us back.

If this were one of my hotels and the numbers kept missing budget, I would not begin with another slick advertising campaign. I would go back to basics and ask very pointed questions. Is our product good enough? Can guests get to us easily? Does the infrastructure work? Are we making it unnecessarily difficult for customers to do business with us? Are we investing in the right things? And if the numbers keep missing expectations, who is accountable for fixing them?

I think Philippine tourism deserves the same tough love.

In 2019, the Philippines welcomed a record 8.26 million international visitors. In 2025, the headline visitor count was 6.48 million—5.94 million foreign visitors and just over half a million returning overseas Filipinos. Six years after our record year, we were still well below it. [1]

That doesn’t mean Philippine tourism is failing. Domestic tourism is doing much of the heavy lifting. In 2025, domestic tourism expenditure at current prices grew 3% to PHP 3.26 trillion, while inbound tourism expenditure fell 6.4% to PHP 698.46 billion on the same basis. Tourism still contributed 8.1% of GDP, and tourism industries employed 7.7 million people. [2]

My concern is much more specific. After decades of talking about the Philippines’ extraordinary tourism potential, our international performance still isn’t where it should be.

We don’t have a tourism-potential problem

The Philippines has extraordinary raw material. We have Palawan, Boracay, Siargao and Bohol, but also hundreds of places that international travellers barely know. We have beaches, diving, mountains, biodiversity, food and culture. And we have Filipinos who are naturally good at hospitality.

I don’t think our fundamental problem is convincing people that these things exist. The harder task is converting what we have into a tourism product that is easy to buy, easy to reach and worth investing in.

If you wanted one of Asia’s most naturally gifted tourism countries to underperform, what would you do? You would make many of its best destinations difficult to reach. You would have weak connections between them. You would allow tourism development to run ahead of roads, airports, water, sewage and waste infrastructure. You would make investment slower and more complicated than it needs to be. You would divide responsibility for the visitor experience across numerous institutions, so everybody owns a piece of the problem but nobody really owns the result.

Then, when the numbers disappointed you, you might be tempted to change the marketing.

Marketing still has a job to do. There have been periods in Philippine tourism when stronger promotional activity coincided with rising inbound expenditure. [3] But it works best when the product behind it works.

If a hotel is difficult to reach, the rooms aren’t ready and the elevators keep breaking down, a brilliant advertising campaign might get more people through the door. It has not fixed the hotel. That is what I mean when I say you cannot market your way out of a systems problem.

A 2025 tourism sector review published in the PIDS Discussion Paper Series arrived at a similar diagnosis. It identified infrastructure, connectivity and competitiveness among the constraints holding Philippine tourism back. When the research was presented the following year, PIDS Senior Research Fellow John Paolo Rivera put it very simply: “The issue here is not just demand. The issue here is systems.” [3]

I saw what a different approach looked like

When I worked in Singapore, my experience with the Singapore Tourism Board was very different.

Our hotel had someone from STB who dealt with us regularly. I can’t remember her exact title, and I don’t want to invent one now, but I remember very clearly what she did. She behaved almost like a sales account manager for the destination.

She would visit us periodically, ask what was happening in the business and see where STB could help. Sometimes the issues were relatively small. At other times they involved government support, manpower or changes in technology. STB also brought the industry together through seminars and other initiatives because there was an understanding that making individual tourism businesses stronger ultimately made Singapore stronger as a destination.

That experience stayed with me. STB was not simply selling Singapore. It was working on the business of tourism.

You can still see that philosophy today. STB supports tourism businesses with technology, productivity, business-model improvements and new experiences. It has dedicated support for business events and MICE. Its Tourism 2040 strategy is explicit about pursuing quality growth, with tourism receipts expected to grow faster than visitor arrivals. [4]

Singapore is a city-state, and the Philippines is an archipelago of more than 7,000 islands. Our geography, scale and institutions are different, and STB alone does not explain Singapore’s success. What I think is worth studying is the mindset.

Singapore thinks deliberately about what kind of tourism it wants, which customers it wants to attract, what prevents the industry from delivering it and where government can help. In 2025, for example, STB said a MICE visitor spends on average almost twice as much as a leisure visitor, and set an explicit objective of tripling MICE tourism receipts by 2040. [5]

That is not simply destination marketing. It is managing tourism as a business.

Our geography is difficult. That isn’t an excuse.

I also worked in Bali, which is why I have never found our geography a sufficient explanation for our performance.

Geography matters, and moving visitors around an archipelago is more difficult and expensive than moving them around a city-state.

But Indonesia is also an archipelago. In 2025, Bali recorded 6.95 million direct foreign tourist arrivals—roughly the scale of the Philippines’ entire visitor count that year. The measures have different coverage, including non-resident Filipinos in the Philippine total, so this is a comparison of scale rather than a like-for-like ranking. [6]

Bali has plenty of problems of its own. Anyone who has spent much time there knows about the traffic, infrastructure pressure and consequences of rapid tourism development. Its success is not for us to copy wholesale.

Bali offers an example of a concentrated tourism destination connected to international demand. In 2025 alone, more than 39,000 international flights departed through Ngurah Rai International Airport. [7] That number shows the scale of access; it does not, by itself, explain Bali’s success.

The Philippines cannot change its geography. What we can change is how much friction that geography creates for the visitor.

Think about a traveller planning Palawan, or combining Bohol and Siargao. The connections should be clear, the transfer time realistic and the journey manageable without local knowledge.

We tend to see the airport, airline, road, ferry and hotel as separate businesses or government responsibilities. The international tourist doesn’t see it that way. They are simply trying to have a holiday.

There is another customer we tend to forget

The same thinking applies to investors.

Someone wanting to build a resort, restaurant, attraction or other tourism business sees one investment decision. They do not care which department owns which permit or which level of government controls which approval. They want to know whether the project works.

For an investor, it comes down to something much simpler: how difficult will this be to build, how long before I can open, and does the return justify the time and risk involved?

The longer a project takes and the more uncertainty there is around it, the harder the numbers become to justify. Eventually, the investor may defer the project or take the money elsewhere.

The tourist experiences friction as inconvenience. The investor experiences it as time, risk and lower returns. Eventually, investor friction becomes visitor friction, because projects that are delayed or never built mean fewer rooms, attractions, restaurants, experiences and supporting infrastructure.

There have been reforms intended to make investment easier, and those should be acknowledged. The question is not whether something is being done, but whether it is producing results.

The hospitality industry taught me that being busy is not the same as making progress. We can have all the meetings, plans and programs we want. In the end, the guest either has a better experience and the business performs, or it does not.

Tourism should be judged with the same discipline.

Fix the basics first

If Philippine tourism were my hotel, I would concentrate management attention on three things.

The first is access.

I would not try to develop everything everywhere. We do not have unlimited money or resources. I would pick a small number of destinations and tourism hubs with the greatest international potential and focus on making them work properly. Make it easy to fly in, connect, get to the hotel and get around once you are there. Find the biggest points of friction and fix them first.

We cannot fund everything, so spend the next peso where it will make the biggest difference.

The second is infrastructure and investability.

Before we spend more money convincing people to visit a destination, let us make sure the destination is ready for them. Airports, roads, water, sewage, waste and reliable power are not glamorous, but without them tourism does not work.

Then make it easier for people to invest. Hotels, restaurants and attractions do not build themselves. Investors need a clear process, reasonable timelines and some certainty about what they are getting into.

And measure what actually gets built, not what gets announced. An investment only matters when the money is spent, the doors open and tourists can enjoy it.

The question I keep coming back to is opportunity cost. With limited money, time and management attention, are we giving the biggest constraints enough priority? Recognition and visitor facilities have their place. The test is whether access, infrastructure and investment delivery are improving too.

The third basic is accountability and continuity.

This may be the hardest part because so much of tourism sits outside DOT. PIDS makes much the same point. Many of the things holding tourism back simply cannot be fixed by DOT alone. [8]

It would be unfair to blame DOT for airports, roads, ports, utilities, investment approvals and what happens at the local government level. Much of that is outside its control.

But that leaves us with a bigger question: who owns the overall result?

When I was a hotel GM, the buck stopped at my desk. Engineering, Sales, Housekeeping, Finance and F&B—all had their own responsibilities, but I was still responsible for how the hotel performed. I couldn’t tell the owner we missed budget because Engineering had one problem, Sales had another and Housekeeping had another. Those explanations might all be true. We still missed budget.

And the guest cared even less about our organization chart. If something did not work, it was our problem.

Tourism is far more complicated than running a hotel. A GM can direct departments in a way that a tourism agency cannot direct other agencies or local governments. Accountability therefore needs more than a name against a target. Whoever coordinates the effort needs the authority to secure delivery commitments, resolve blocked decisions and report what has actually been completed. The responsibilities can be shared; the gaps between them still need an owner.

The other thing we need is continuity. Airports, roads, destinations, hotels and international routes take years to develop. We cannot keep starting again every time the people at the top change.

That doesn’t mean sticking with something simply because we started it. Measure it. If it is not working, change it or stop it. If it is working, keep going and give it time to compound.

Measure what matters

I would start with three simple questions. Are enough international visitors coming? Are we gaining ground on our competitors or falling further behind? And what are those visitors worth to the economy?

Then look at what is driving those results: how many international seats we have, how many direct routes, how long it takes to reach our key destinations, whether the airports and infrastructure can handle the demand, how long it takes to get a tourism project approved and, most importantly, how much money is being invested.

These tell us whether we are making progress. But sooner or later, the results have to show up in the numbers that matter.

We should not congratulate ourselves because one measure improved while we continue to fall behind our competitors. And we should not explain away a bad result by finding another number that looks better.

Perhaps the answer is less exciting than we think

In hospitality, struggling hotels are rarely turned around by one brilliant idea. More often, you go back to the basics, fix what has not been working and spend your money where it will make the biggest difference. Then you keep at it, day in and day out.

I think Philippine tourism deserves that same persistence. We have plenty of reasons for people to visit. We need to get much better at making it easy for them to come.