Mideast war, high costs halt PH tourism growth despite Chinese surge—industry analyst

MANILA — Foreign tourist arrivals to the Philippines flattened in the first eight months of 2026 as surging global fuel costs triggered by Middle East tensions curbed long-haul travel, a property research firm said on Wednesday, citing industry data.

Leechiu Property Consultants said the country welcomed 4.4 million international visitors between January and August, virtually unchanged from the 4.38 million recorded during the same period last year.

Growth hit a peak of 12 percent in February before momentum stalled in April and turned negative year-on-year from May onward. The downturn follows the closure of the Strait of Hormuz during the Iran conflict, which doubled jet fuel prices, pushed up airfares, and prompted flight cuts across long-haul routes. Full-year arrivals are now expected to fall below 2025 levels.

Despite the overall slump, source markets underwent a major realignment. Chinese arrivals surged about 93 percent to 303,000, buoyed by a 14-day visa-free entry policy introduced in January and the return of direct flights. In contrast, arrivals from South Korea—the country’s second-largest market—dropped 22 percent to 744,000. The United States remained the top origin market at 926,000 arrivals, up two percent.

Hotel developers, however, continue to bet on long-term expansion. The latest Accommodation Pipeline Report recorded 45,884 planned rooms across 213 properties, backed by P387 billion pesos in committed capital through 2032. About 70 percent of planned rooms sit in areas with direct international flights.

Industry experts emphasized that easing access remains critical to unlocking growth across the archipelago.

“Some destinations with strong private-sector commitment, such as Puerto Princesa, are served by international airports that sit underused because they have no direct international routes. Developers are betting on these places, but travelers cannot yet fly to them directly,” said Adam Domingo, Leechiu Senior Manager of Hotels, Tourism, and Leisure.

Domingo said the government can introduce direct international routes to these destinations. Creating new routes is faster than building or expanding airports, he said.

The relocation of turboprop flights from NAIA to Clark also deserves scrutiny, Domingo said, as island destinations that depend on turboprops report that business is down. 

“Is the relocation a factor? The industry needs the data to answer that. A review of the impact would show what works best for the whole industry, from travelers and resorts to the workers who depend on them,” Domingo said.

“Unless we change how we do tourism at a basic level, foreign arrivals are likely to stay near today’s levels into next year,” he added.

Making travel easier, through visa-free entry and additional direct flights, has led to a rise in arrivals, with China being a prime example as it has sustained growth since February. 

“Reducing travel friction produces results,” he said.