Pandemic has hit every industry that you could think of. And one of them is the tourism sector. The tourism industry exists because of people’s drive for travel for recreation and leisure. However, because of travel restrictions, tourism has become as if it’s non-existent for quite some time. People were prohibited from traveling from one place to another, visiting another country, and such other activities related to tourism. The closing of the borders of the Philippines to tourists has greatly affected our country’s economy. The impact of tourism on real estate market can generate either positive or negative impacts under three primary categories: economic, social, and environmental. More employment opportunities, and increased standards of living, are just among the economic impact of tourism on the real estate market. The lockdowns caused by the pandemic have created a significant impact on our economy.
Taking Advantage of Investing in Real Estate on Undiscovered Islands
As we all know, the Philippines is a tropical country with the most beautiful islands and tourist attractions in the world. The tourism industry alone in the Philippines has the ability to entice and attract foreign investors. So during the entire lockdown, a lot of opportunities have really gone by. But now that the country is slowly regaining its loss, with the resumption of travel and other tourism-related activities, it is said to be a good opportunity once again to invest in real estate in the Philippines. As a result of the high tourism statistics, the question now is how can the gradual reactivation of Philippine tourism affect the real estate scene? One answer might be, that now is the time to seize the opportunity to invest in accommodations and real estate properties, especially if you live near tourist attractions. Through tourism, businesses are alive, so don’t sleep on taking advantage of this opportunity as the real estate industry has become increasingly linked with tourism.
One of the impacts of tourism on the real estate market is that when an area or property is converted to become a tourist destination, the development and construction of such property make the land more valuable. It increases the land value not just for that single property but as well as the nearby areas once it became a tourist destination. The linkage between tourism and real estate development could also be seen through the rise of a phenomenon known as lifestyle migration. It is where people migrate to a rural area but with a promising future, hoping to lower their cost of living compared to their place of origin, mostly from urban areas.
It is a well-known fact that infrastructure drives the value appreciation of properties, more so if fueled by tourism in the locality, so this impact of tourism on the real estate market inspires many Filipinos to pursue their plans of buying their dream homes. More infrastructure projects from the national government may mean more opportunities for investors because of reduced travel time making road trips fast, smooth, and easy for leisure and business travelers alike.
Impact of Residential Tourism on Real Estate Market
The result of lifestyle migration by people is what is known as residential tourism. People migrate from urban to rural areas. Because of the increasing number of people relocating to rural areas, it results in promoting a change in the use of the area, from agrarian or rural to urban. It brings foreign investors into the land market– the real estate investors and property buyers. Residential tourism produces multiple consequences, it implies an increase in the land price, promotes the marginalization of traditional economic activities, and encourages the expulsion of the local population. However, over a short period of time, lifestyle migration also could cause a spiraling effect with serious consequences for the local population.
Impact of Residential Tourism on Local Residents
As mentioned above, the impact of tourism on real estate market can generate either positive or negative impacts on economic, social, and environmental, and one of the negative impacts of such social aspects is the forced expulsion or alienation of the local residents. Oftentimes, prices increase in local stores as tourists are often more wealthy than the local residents. Not just store prices but as well as property prices increases due to the migration of some tourists. There is an increase in the demand for residential houses in some tourist areas, especially if the tourist spot is located on an island with a beach nearby. This housing demand, thus, determines the increase in residential house prices. Although, with the rise in the number of tourists, the locals could also benefit from this. Such as when new facilities are being built by the local government for the development of the area, like new roads. The exposure being received by the community from tourism activities oftentimes leads to pressure on infrastructure from the government, however, it also causes increased congestion and pollution, all of which are included in what drives the house prices.
Furthermore, the emergence of tourism activities sometimes forces or promotes the displacement of some local workers to specific jobs related to tourism. Such transportation services, like public utility vehicles, boatmen, and tourist guides, due to the rise of tourists, local residents are being forced to change their accustomed way of earning money and adapt to changes. However, at the end of the day, people will still be needing a job, especially during these trying times of the pandemic. Thus, the becoming habit of displacement of some local workers to specific jobs to cater to the revival of tourism activities perhaps would rather be more of a positive impact on the local residents than negative. Over the past two years, a lot of people have lost their jobs and the unemployment rate rose because a lot of small to medium businesses have closed due to the travel restrictions at the height of the Covid-19 virus.
The positive impact of tourism on real estate market could also be achieved in urban areas. For instance, if you have a condominium unit in a highly urbanized city, you can rent it out as an accommodation for a short stay of travelers who go on a vacation in the city. You can take advantage of the use of social media to advertise your condominium unit so that travelers could easily find your place.
If a place or region presents infinite possibilities for development and opportunities for tourism development, entrepreneurs, and land investors would definitely hunt that territory. Indicators such as uninhabited beaches, favorable weather, affordable land, real estate prices, and a low cost of living are among the wide range of factors that attract investors to buy property. This is just some positive impact of tourism on real estate market.