Power hike won’t affect Cebu’s tourism, says tourism department


EVEN with the anticipated power rate increase in Cebu effective next month, the province will continue to attract tourism-related investments.

Tourism Secretary Ace Durano raised this optimism saying the move now to hike power rates “will not discourage” businessmen from investing in tourism-related developments such as hotels and resorts.

In a text message, Durano said he has talked to several hotel managers in Cebu last Monday but they are not opposing to the expected in increase in power costs.

“They are not against an increase per se as they understand the need to create an environment that will attract new investments in the power sector,” Durano’s message read.

Durano said the hotel managers made no mention whether Cebu’s hotel room prices will also increase as a result of a jump in the cost of electricity.

“Considering that other destinations in Asia are pretty much giving away the rooms, I believe hotels and resorts in Cebu may have to absorb the cost, otherwise, the price difference between Cebu and other world destinations will further widen,” he said.

Durano added that although tourism is one of the energy-intensive industries, its overall cost of operations is much lower than those of the airline companies.

Ensuring the stability of hotel and resort room rates is an important factor to continue attracting investors to the tourism industry.

“We are one of those investment destinations where prices are stable compared to Bangkok, Singapore and Bali where they are virtually giving their rooms for free at $10 or $20 a night. While this is good for tourists, it is bad for investors,” he explained.

The challenge for the Philippine tourism sector, Durano stressed, lies in constructing more hotel rooms while maintaining price stability and good occupancy rates.

“The rates of our hotels are not dropping. They are quite stable because of stable demand of tourists and the occupancy is good. It would be a different story if demand is low and rates dropped, and then the electricity cost increases. But that is not happening in the tourism industry now,” he said.

The demand is apparent in the increase in arrivals of Chinese, Russians, and Indians to the country.

In his further comment with regard to the expected increase in power cost in Cebu, Durano suggested, “The final increase should be implemented in stages in a span of one year to allow the market to absorb it without causing dislocation or disruption.”

“It’s a matter of finding the rate of increase and the pace of implementation that will support all the needs of the stakeholders,” he added.

Last week, various groups in Cebu have opposed the petition to increase rates—by P1.146 per kilowatt-hour in the Visayas—by the National Power Corp. and the Power Sector Assets and Liabilities Management.

The Mactan Economic Zone Chamber of Exporters and Manufacturers, for one, said the move will affect the viability of their industries and place the jobs of thousands of employees at risk.


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