Tourism, IT-BPM to continue to drive Cebu’s economy

More tourists are expected in Cebu and Central Visayas in 2018 with the sector continuing to be resilient and to grow despite the challenges in the passing year.
CDN FILE PHOTO

(Second of three parts)

The major economic drivers of Cebu and Central Visayas in 2017 like tourism, information technology-business process outsourcing and construction will continue to sustain the economic growth of these areas in 2018.

Efren Carreon, National Economic Development Authority in Central Visayas (Neda-7) director, said that these major industries would continue to sustain the economic growth in Central Visayas.

The tourism sector in Cebu and the region continued to perform well last year despite suffering a major scare with the terror attacks in Bohol in April and the 5-month Marawi siege starting in May.

Carreon said that the region’s tourism industry remained resilient despite the occurrence of negative events during the covered period.

“The incidents did not affect the performance of the region’s tourism industry as tourists, especially from Asian countries continued to travel to the region despite negative travel advisories issued by some countries,” he said, citing the 11.2 percent increase in foreign visitor arrivals in the region.

The Neda-7 chief is optimistic of the sector’s growth this year especially with the two major infrastructure projects in the region to be completed in the middle of the year — the Mactan Cebu International Airport Terminal 2 project and the Panglao Airport in Bohol province.

Tourism hopes

Edilberto Mendoza, past president of the Cebu Association of Tour Operations Specialists (Catos), said he has always had high hopes for Cebu’s tourism industry.

He said he looks forward to the opening of the second passenger terminal at MCIA in 2018, and expects more flights coming in as well as new players in the airline industry.

“Our tourism industry skills program is also focused on training the grassroots level in handling tourists, which is also the aim of the administration of President Duterte as part of the Asean integration,” he said.

Mendoza added that with all these in place, stakeholders can expect a more vibrant tourism sector in Cebu throughout the coming year.

“Tourism really brings in the opportunities. Tourism is the magnet for economic development. With more tourists, come more jobs and services,” said Melanie Ng, who is also optimistic of the opportunities of the tourism industry this year.

Fewer tourists

Despite the industry’s strong economic performance last year, the attacks in Bohol and the siege of Marawi did affect the sector but not as widely as it was expected to be.

Central Visayas saw fewer visiting tourists during the first half of 2017 compared to the same period in 2016.

According to preliminary data from the Department of Tourism in Central Visayas (DOT-7), 2.98 million visitors came to the region between January and June 2017, down by 3.5 percent from the 3.10 million arrivals recorded during the first six months of 2016.

“The 3.85 percent drop may be attributed to what happened earlier this year, but it may also be due to incomplete reports from provincial tourism offices,” said Tourism Regional Director Joshur Judd Lanete II.

Nonetheless, Lanete said they are still looking forward to an increase in the number of tourist arrivals when the final figures for 2017 are completed in the first quarter of 2018.

Accommodation sector

Carlo Anton Suarez, Hotels, Resorts, and Restaurants Association of Cebu (HRRAC) president, said 2017 had been one of the happier years for the hospitality sector.

Hotels in the city averaged at least 75 percent in occupancy while resorts on Mactan Island fared better at 80 percent.

With more tourists expected to come to Cebu with the opening of the new international passenger terminal building at the Mactan-Cebu International Airport (MCIA) by June next year, Suarez said he also anticipates more hotel rooms to be added to the metropolitan’s inventory in 2018.

Room inventory

Cebu currently has an inventory of 11,800 rooms with 2,500 rooms to be added in the next few years, according to investment management firm JLL.

In its special report for Cebu, property management and research firm Colliers International Philippines noted that the province attracted 4.17 million local and foreign tourists in 2016, up by 25 percent year-on-year.

Colliers said the expansion of the airport would entice more foreign airlines to mount more direct flights to Cebu.

The research firm added that Cebu’s rising attractiveness as a tourist spot and growing competitiveness as an investment destination should support a 15 to 20 percent growth in tourist arrivals over the next 12 months.

“This should sustain hotel occupancy of between 65 percent and 70 percent across Metro Cebu from 2017 to 2018,” Colliers said.

Bright spot

Cebu is also poised to be in a bright spot in 2018 as more international players enter the hospitality market, including Sheraton, Marriott, Dusit, and Ascott, among others.

Even with the aggressive expansion of foreign brands here, Suarez said this is something local players are looking forward to as this would put Cebu on the map.

“Cebu, per se, is promising. Foreign companies and local players should partner. This would make a good combination. I see it as something that would complement Cebu,” he said.

However, this would also mean that local developers should level up by improving their services and branding to make their properties more competitive.

IT-BPM growth

For the local IT-BPM sector, 2017 was also good for majority of the companies locating here.

According to Wilfredo Sa-a Jr., managing director at the Cebu IT-BPM Organization (CIB.O), 2018 looks to be very interesting as well.

The industry leader said there will still be growth next year, although stakeholders expect it to be slower than growth in previous years.

“The industry is maturing. We’ll probably expect a tapering of growth in the industry,” he said.

IT-BPM workers

Based on industry estimates, Metro Cebu is home to about 140,000 IT-BPM workers, although Sa-a said this could have grown to between 150,000 and 160,000 by the end of 2017.

He said the Cebu City government targets to generate 200,000 jobs in the IT-BPM industry by 2019, with the sector expected to grow by at least 10 percent each year until then.

AI concern

Employment will also be challenged by the development of artificial intelligence (AI) use in IT-BPM services, which was seen to put thousands of jobs in the industry at stake.

Sa-a assured that AI has no radical impact at the moment, but warned it will, eventually.

“With AI factored in, we are projecting a slower growth in employment. We target to employ 1.8 million by 2022 from 1.15 million in 2016. By 2022, 30 percent of those jobs will be outside of Manila,” he added.

Sa-a shared that the top 10 companies in Cebu all grew this year, evidenced by the expansion of several locators such as Accenture and Sykes, among others.

“Others were silent, but they also expanded in other buildings. There was still growth despite all the national and international noise,” he said.

This year also saw the entry of new business process outsourcing (BPO) companies in Cebu including Dover Business Solutions, MoPro, Fujitsu, and a shared services company, among others.

To sustain this growth, CIB.O is maximizing the employability of senior high school students in Cebu.

The organization recently partnered with the Cebu City government, through the office of City Councilor Joy Young, Cebu City Department of Education, and the Department of Information and Communication Technology for a program called Learning English Application for Pinoys (LEAP).
LEAP, a 40-hour self-paced training program, was introduced to 27 senior high schools in Cebu City in August last year to help improve the oral

communication skills of SHS students to boost their employability in the BPO sector as well as other industries such as tourism and hospitality.

CIB.O has also collaborated with several companies for its career caravans aimed to entice public and private senior high school students to pursue careers in the IT-BPM industry.

“Companies have become more aggressive in their search for talent,” said Sa-a.

Sa-a said he is also working closely with other stakeholders to regain Cebu City’s place in the top ten of Tholons’ list of global cities by 2018.

Cebu City placed 7th in Tholons’ top outsourcing destinations in 2016, although it slipped to 12th place in 2017 due to changes in the research criteria.

(To be concluded)