Cebu Pacific Air is hoping Tourism Australia to will commence marketing activities in the Philippines and if Australia reduced the price of a visa for Philippine citizens, leading to a further boost in Filipino visitor numbers.
The Philippines has emerged as one of the fastest growing source markets for the Australian tourism industry. In the first five months of 2017 Filipino visitor numbers to Australia were up 21% to nearly 53,000, according to Tourism Australia data. Of Australia top 15 source markets, the Philippines grew the fastest.
In 2016, the Philippines was the fourth fastest growing of the top source markets after Taiwan, South Korea and Japan. Filipino visitor numbers to Australia were up 19% in 2016 to slightly over 107,000.
Filipino visitor numbers were also up 21% in 2015, making it the second fastest growing source market that year after China. Filipino visitor numbers were up a slightly more modest 13% in 2014.
In the first five months of 2017 Filipino visitor numbers to Australia were up 21% to nearly 53,000…the fastest growth of any market in the top 15
The accelerated rate of growth in Filipino visitor numbers over the last three years is due partially to the launch of services to Sydney in Sep-2014 by Cebu Pacific. As the first LCC in the Australia-Philippines market, Cebu Pacific has stimulated demand. Prior to Cebu Pacific’s entrance there were approximately 70,000 annual Filipino visitors to Australia and now there are nearly 120,000.
Cebu Pacific quickly became the largest airline in the Manila-Sydney market and recently announced plans to expand its Sydney service to daily in Dec-2017. The airline has been operating four to five weekly flights (depending on the time of year) on Sydney-Manila since launching the route in Sep-2014.
Cebu Pacific until now has had fewer frequencies on Sydney-Manila than Philippine Airlines (PAL) and Qantas, which operate seven weekly and six weekly flights respectively. However, Cebu Pacific uses high capacity 436-seat A330-300s, giving it more capacity than either competitor and the upcoming increase to a daily service will widen the gap over PAL and Qantas.
Cebu Pacific COO Advisor Rick Howell told Blue Swan TV on the sidelines of the 1-Aug-2017 CAPA Australia Pacific Aviation Summit in Sydney that the airline has been pleased with the performance of the Sydney route, pointing out that after six months the Sydney-Manila market had doubled in size to become the largest airline on the route. “The market has actually developed in a really healthy way,” Mr Howell said.
Mr Howell said the market could grow even faster if Tourism Australia invested some of its marketing budget in the Philippines and if Australia reduced the price of a visa for Philippine citizens. He pointed out the Philippines is not currently one of the markets Tourism Australia targets while the cost of a visa is typically more than the cost of the Cebu Pacific flight to Sydney.
Philippines is not currently one of the markets Tourism Australia targets while the cost of a visa is typically more than the cost of the Cebu Pacific flight to Sydney.
“There’s a real government incentive to pick up the game,” Mr Howell said. “Without any assistance from Tourism Australia we have not only doubled the market but continually increased the number of Filipinos coming to Australia.”
At the moment, the Philippines is not a large enough source market to trigger investment from Tourism Australia. However, given the rapid rate of growth it could soon reach a point where investment will be warranted. “I expect it won’t be too long where they won’t be able to ignore it,” Mr Howell said.
The Philippines is now the fifteenth largest source market for Australia’s tourism industry after New Zealand, China, the UK, the US, Japan, Singapore, Malaysia, South Korea, India, Hong Kong, Germany, Canada, Taiwan and Indonesia. (Based on Tourism Australia data for the first five months of 2017.)
Australia is a larger source market for the Philippines tourism industry and is growing – but not nearly as fast as inbound traffic from the Philippines. Australian visitor numbers to the Philippines were up 4% in 2016 to 251,000 and another 4% in 1H2017 to 131,000, according to Philippines Department of Tourism data.
As Blue Swan has previously highlighted, Cebu Pacific sees growth potential in both the inbound and outbound segments from Australia. Sydney also has a large Filipino community, resulting in significant ethnic and visiting friends and relatives (VFR) traffic.
Cebu Pacific carried 137,000 passengers to and from Australia in 2016 with an average load factor of 64%. Cebu Pacific’s load factor on the Sydney-Manila route has improved thus far this year – to approximately 80% – giving it the confidence to add capacity.
Cebu Pacific one-way weekly seat capacity to Sydney: Sep-2014 to Jan-2018
Source: CAPA – Centre for Aviation & OAG.