The December 2004 tsunami was Thailand’s worst natural disaster. It killed approximately 8,000 people from 37 countries according to a United Nations report. It affected 59,000 individuals and orphaned almost 1,500 children. Thirty thousand livelihoods were lost in fisheries, and 120,000 jobs in tourism. Damage, not including housing, was estimated at $353 million, and the Thai government had extended $1.06 billion in assistance to victims by September the following year.
Yet Thailand’s gross national product (GNP) grew at over six percent in 2005 (although the country’s GNP has yet to return to 2004’s 6.7%, for a variety of reasons, including protracted political instability). Foreign direct investment (FDI) rose dramatically that year from $6 billion to $9 billion. Tourism dropped almost imperceptibly, from 11.65 million to 11.52 million. Despite a string of negative news stories coming out of Thailand in ensuing years, FDI and tourism have remained strong compared to the Philippines.
This year, 14.5 million tourists will visit Thailand, and billions more in FDI will pour into the economy, creating jobs and boosting incomes. Thailand’s example shows that there is life after calamity. Government and the private sector have worked closely together to reassure tourists and investors alike that it is business as usual following each financial crisis, natural calamity, and political upheaval that has threatened Thailand’s economy.
What are the lessons to be learned from Thailand in the aftermath of severe natural calamity in the Philippines, and the threat of more to come? The answer is the same lessons that should have been learned long ago. This year, the Philippines will attract somewhere around three million tourists, and it will be lucky to realize $1.5 billion in FDI. One reason Thailand consistently leaves the Philippines in the dust: It communicates its positive attributes credibly, compellingly, and regularly.
Thailand’s Amazing Thailand campaign was launched in response to the 1997 Asian Financial Crisis, which started there. The campaign worked so well-and kept working so well-that it was retained for most of the next decade with little incremental tweaking. As a direct and indirect result of that campaign, anyone interested in a Southeast Asian vacation is aware of Thailand’s attributes as an attractive tourist destination.
They are not as aware of Thailand’s negatives although there are plenty. Tourists are murdered with alarming frequency, and violent attacks are a regular occurrence. Resorts are beautiful, but many of Thailand’s popular beaches have not been properly cared for and growth in fashionable tourism centers has not been well planned or managed. Carnage on the nation’s highways and roads is disgraceful. Provincial infrastructure is far from great.
No place is perfect, and there will always be at least some major imperfections. But they don’t have to be top-of-mind. Anecdotal evidence and industry surveys show that there is very little awareness of the Philippines as a tier-one tourism destination. Yet the Philippines’ beaches are among the most beautiful anywhere, its people among the most hospitable, and its restaurants among the most inviting for their excellence as well as their prices.
To be fair, the Philippines has tried somewhat to emulate the success of Thailand-and every other Southeast Asian country-in communicating its attributes. But it hasn’t tried hard enough. Because mediocre efforts produce mediocre results, perception of the Philippines hasn’t changed much. Uniquely Singapore, Malaysia Truly Asia, and Amazing Thailand ring in our ears. Clicking on the Department of Tourism’s website link for “List of Campaigns” takes the visitor to a blank page. Compare the official tourism websites of Singapore, Thailand, and the Philippines for insight into the competitive positioning of these countries and the professionalism with which these tools are used.
The record for FDI is no better. Over the past two years, efforts to remove investor incentives-despite the Philippines’ consistent last-place finish in the race for FDI-have been the principal story. Investment in the business process outsourcing industry has been sustained, but that is being driven more by the clients of services providers who want to mitigate risk by investing in the Philippines as well as other, geographically disparate outsourcing centers. The high level of appreciation for the warm and outgoing Philippine culture is communicated within the industry, but not much anywhere else.
There are of course other reasons that account for the Philippines’ difficulty in attracting tourists and FDI: fierce competition, imperfect public policy, lack of infrastructure, for example. These are real issues and need to be addressed. But they are not valid excuses for failing to communicate the Philippines’ attributes effectively. Perhaps the biggest hurdle is complacency. Even if the tourists and the investors don’t come, we still have all that remittance money.