Philippine real estate advisory firm Leechiu Property Consultants (LPC) reports that domestic travel is what’s spurring on the ongoing recovery of the Philippine travel industry.
During the presentation of its Q2-2025 Philippine Property Market Report on Thursday, 10th July, in Makati, LPC executives pointed out that revenues earned from the domestic tourism sector have made up for the shortfall in international arrivals.
According to LPC’s director for hotels, tourism, and leisure Alfred Lay: “Domestic travel can do that for a long time, and the long-term goal for domestic tourism would probably be to double the market size within the next five to 10 years.”
Lay pointed out that domestic tourism expenditure in 2024 reached PHP3.16 trillion, surpassing the pre-pandemic level of PHP3.14 trillion in 2019.
International tourism expenditures, on the other hand, stood at PHP699 billion, up from PHP600 billion pre-pandemic levels, despite missing the 2024 targets.
A well-considered forecast
Following his presentation, Lay remarked that he expects inbound arrivals this year to reach at least six million.
He noted that the arrival of South Korean visitors, the Philippines’ top market, has seen a decline in the past five months, likely due to the negative media coverage in South Korea over security issues in the country.
Despite this, however, long-haul tourists are increasing and have offset the decline.
The LPC report also saw a 19 percent decline in Korean arrivals from January to May 2025, falling from 682,000 in the first half of 2024 to 552,000.
On the other hand, inbound arrivals from the United States, Japan, Australia, and Canada surged between nine and 19.4 percent.
Lay further explained that additional routes and flight frequencies may also be expected to sustain this upward momentum.
The matter of affordability
Lay also addressed recent news reports regarding the affordability of travel to the Philippines, stating that the country only ranks in the middle of the pack in terms of hotel average daily rates (ADR) compared to its Southeast Asian neighbours and competitors.
The report pointed out that the Philippines ranks fourth in hotel ADR at PHP6,048, with Thailand (PHP8,171), Cambodia (PHP6,591), and Vietnam (PHP6,359) in the top three places.
Lay said: “I would say that we’re still very price competitive across the region, and we will continue to be so for quite a long time.. As we scale, we improve our infrastructure, our transportation costs come down, that will keep us relevant and will improve our numbers over the mid to long-term.”
