Policy Report: Which Southeast Asian Countries Truly Profit from Tourism
Introducing Return on Tourism Impact (RoTI): A New Framework for Tourism Investment Accountability and Performance
Executive Summary
Tourism has long been a major economic driver across Southeast Asia, but policymakers often focus on raw visitor arrivals or total revenues, ignoring the efficiency and effectiveness of public and private sector investments in the sector. This policy report introduces Return on Tourism Impact (RoTI) as a robust policy framework to assess the real returns a country earns from investing in tourism — both in monetary terms and qualitative socio-economic outcomes.
RoTI, inspired by metrics like Return on Invested Capital (ROIC) and Market Value Added (MVA), seeks to measure the value generated per unit of investment. In doing so, it enables governments to benchmark performance, make smarter funding decisions, and better prioritize infrastructure and promotional strategies. This report provides a detailed comparative analysis of RoTI across six major Southeast Asian economies — Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam — and identifies both best practices and policy gaps, particularly with regard to the Philippines.
Understanding RoTI: A Strategic Tourism Performance Indicator
At its core, Return on Tourism Impact (RoTI) is a metric that compares the total tourism value generated — through revenues, GDP contribution, employment, and social value — against the amount invested by the government or through public-private partnerships in the tourism ecosystem. It combines both quantitative factors, such as international visitor arrivals, spending, and contribution to GDP, with qualitative variables, such as brand strength, infrastructure quality, sustainability, and socio-cultural impact.
This makes RoTI a more comprehensive and strategic measure than traditional tourism metrics. A nation with high a RoTI is not necessarily the one with the most tourists, but rather the one that converts investment into sustainable, inclusive, and profitable tourism returns.
The formula can be expressed as:
RoTI = (Total Tourism Value Generated) ÷ (Total Tourism Investment)
A high RoTI indicates efficient, impactful tourism strategies; a low one suggests suboptimal investment outcomes.
This enables a clearer understanding of not only how much tourism contributes to the economy, but how efficiently a country is harnessing this sector.
Tourism Performance Snapshot: Six Key Southeast Asian Nations
In recent years, all six countries under review have made significant investments to revive tourism post-COVID, but the outcomes differ significantly. For context, the most recent data shows:
Thailand welcomed approximately 35 million tourists in 2024, generating around US$30 billion in revenues, or roughly 19.2% of GDP, making tourism a national pillar.
Malaysia recorded around 25 million international arrivals with US$20.9 billion in tourism revenue, equivalent to 8% of GDP, reflecting its strong market recovery.
Vietnam surprised observers with a record US$33 billion in tourism receipts from about 17.5 million international arrivals — roughly 6.8% of GDP — driven by effective policy reforms and visa liberalization.
Singapore, despite its size, brought in 16.5 million visitors and US$16.4 billion in receipts (around 3% of GDP), largely through business and luxury tourism.
Indonesia, with 13.9 million visitors, generated approximately US$9.75 billion, or about 5.8% of GDP, thanks to its Bali-centric model.
The Philippines drew 5.9 million international arrivals in 2024, generating US$13.1 billion in tourism receipts, contributing 8.9% of GDP.
While these numbers may seem encouraging in isolation, they tell only part of the story. To understand which countries are truly maximizing their tourism investment, RoTI offers a clearer lens.
Estimating RoTI: How Efficient Is Tourism Spending?
Tourism development requires significant public investment — ranging from airport expansions and road infrastructure to international marketing campaigns and visa policy reforms. Countries that can generate high tourism revenues at relatively low costs demonstrate superior RoTI.
In the case of the Philippines, the Duterte and Marcos administrations allocated approximately US$23 billion over several years to tourism infrastructure and promotional programs. Yet in 2024, total tourism receipts were only about US$13.1 billion, implying a RoTI of approximately 0.57 — meaning the country earns only 57 cents for every dollar invested. This suggests inefficiency in execution, whether due to poor infrastructure, weak branding, or administrative hurdles.
The Philippines’ Estimated RoTI: ~US$13.1 billion revenue ÷ US$23 billion investment = ~US$0.57 per US$1 spent — indicating low efficiency.
In contrast, Vietnam’s estimated tourism investment from both national and provincial governments was about US$17 billion, generating US$33 billion in value. This implies a RoTI of nearly 1.94, meaning nearly US$2 in returns per US$1 invested, a model of highly efficient tourism growth.
Thailand, with massive inbound tourism and decades of brand equity, consistently maintains a RoTI above 1.5.
Malaysia and Singapore, with more modest tourist numbers but relatively low public tourism spending, also demonstrate strong returns, while Indonesia’s RoTI is constrained by geographic dispersion and infrastructure bottlenecks outside Bali.
Estimated RoTI of Selected Southeast Asian Countries
Below is a summary table showing the estimated Return on Tourism Impact (RoTI) for the six Southeast Asian countries analyzed.
Notes:
Investment estimates are derived from public spending reports, budget statements, infrastructure programs, and promotional campaigns.
Where exact investment figures were unavailable, approximations were made based on multi-year national tourism plans, press releases, and third-party tourism development data.
RoTI is a revenue-based ratio and does not include indirect benefits (e.g., job creation, multiplier effects), though these are discussed qualitatively below.
Beyond Numbers: The Qualitative Drivers of RoTI
While quantitative returns matter, qualitative factors can significantly impact long-term RoTI:
Brand Strength: According to the Digital Brand Score (DBS), Singapore and Thailand lead Southeast Asia in brand equity, with scores above 147, compared to the Philippines’ 120.8, the lowest in the region.
Infrastructure: Modern airports, seamless public transportation, and integrated destination management help raise RoTI by improving visitor experience and increasing average spend per trip. The Philippines suffers from airport congestion, limited inter-island connections, and patchy road networks.
Ease of Travel: Visa waivers, digital entry platforms, and regional connectivity boost tourist flow and reduce friction. Vietnam and Malaysia have adopted aggressive visa liberalization, while the Philippines remains comparatively rigid.
Sustainability and Local Inclusion: Nations that link tourism with community empowerment, sustainability, and SME development not only raise RoTI, but also build resilience. Vietnam and Thailand have successfully integrated ecotourism and heritage preservation into their tourism value chains.
RoTI and Job Creation: The Employment Multiplier
Tourism is labor-intensive, offering employment across a wide range of skill levels — from hospitality and transport to arts and crafts. In the Philippines, tourism supports approximately 6.75 million jobs, yet the lower RoTI limits the quality, pay, and scalability of these roles.
Compare this with Thailand, where a larger tourism base sustains over 7 million jobs with higher average incomes, or Vietnam, where tourism supports a fast-growing sector of youth employment and community enterprises. High RoTI ensures not just job creation, but meaningful, sustained livelihoods.
The Philippines’ RoTI Problem — and the Path Forward
Despite its rich natural beauty, cultural assets, and English-speaking population, the Philippines underperforms in RoTI due to four key weaknesses: inadequate infrastructure, weak international branding, restrictive visa policies, and limited data-driven planning.
To address these gaps, the following policy actions are recommended:
Institutionalize RoTI Monitoring: Create a national scorecard that tracks returns on tourism investments at the regional and national levels. This transparency will drive accountability and smarter policy choices.
Improve Physical and Digital Infrastructure: Prioritize upgrades to key gateways (NAIA, Cebu, Davao) and inter-island transport. Implement seamless booking, navigation, and payment systems.
Relaunch the Philippine Brand Globally: Develop a campaign that goes beyond beaches — highlighting cultural, culinary, and eco-tourism assets. Use data to target high-value source markets.
Liberalize Visa and Entry Policies: Expand visa-free access for key markets like India, China, and the EU. Launch a modern e-visa platform to reduce entry friction.
Align Public Investments with Impact: Focus funding on regions and projects with proven RoTI, using cost-benefit analyses to prioritize initiatives.
Engage the Private Sector and Communities: Partner with investors and local communities to build authentic experiences, not just resorts. Empower SMEs through training, digital access, and financing.
Conclusion: Making RoTI the New North Star
As global competition for tourists intensifies, simply attracting more visitors is no longer enough. What matters is how efficiently a nation converts tourism investments into economic and social value. RoTI provides a vital lens for policymakers to evaluate which strategies are truly working, and which are not.
A nation with a high RoTI is not necessarily the one with the most tourists, but rather the one that converts investment into sustainable, inclusive, and profitable tourism returns.
In the case of the Philippines, the data shows that significant investments have not yet yielded commensurate returns. However, the potential remains immense. By adopting a RoTI-driven approach, the country can make tourism not only a source of revenue, but a catalyst for inclusive development, regional equality, and global relevance.
Policymakers should consider RoTI not as a retrospective evaluation tool, but as a forward-looking guide — one that ensures every peso, dong, or baht spent in tourism builds real, lasting value for its citizens.