Boracay Island to close: major airline and tourism impacts

The Philippine government is planning to prohibit visitors from visiting Boracay Island, its most popular tourist destination, for six months starting 26-Apr-2018. The government will use the closure period to clean up the island, which has been suffering from environmental degradation, illegal construction and insufficient waste management.

The unusual move could have a long term positive impact on tourism at Boracay and the Philippines as a whole. However, the short term impact on tourism in the Philippines and the country's three main airlines could be significant. Boracay accounts for approximately 6% of seat capacity at the Cebu Pacific Group and the Philippine Airlines Group while smaller Philippines AirAsia has over 20% of its capacity allocated to the Boracay market.

Boracay attracts approximately 2 million annual visitors, close to half of which are foreigners. Total visitor numbers to the Philippines reached 6.6 million in 2017, following three years of double digit growth, but with the closure of Boracay the Philippines will struggle to meet its 7.4 million visitor target for 2018.

Philippines tourism authorities will need to invest heavily in marketing alternative tourist destinations, and work closely with the impacted airlines, to avoid a decline in overall visitor numbers.