Tourism Industry

Performance

Department of Tourism
Report on the Performance of the Arroyo Administration
House Oversight Committee
16 July 2009
Tourism Agenda: Increase Tourist
Arrivals to 5 Million by 2010

 Generate more foreign exchange for the economy

 Create jobs and livelihood for Filipinos

 Enhance infrastructure to link tourists destinations

 Economic Impact of Tourism
6.19%
6.19%
Average share of tourism to GDP = 6.2%
6.18%
6.17%
6.17%
6.16%
6.16%
6.15%
6.15%

6.14%

6.13%
2004 2005 2006 2007
Source: NSCB Philippine Tourism Satellite Account
 Tourist Arrivals, 2004-2008
Tourist arrivals grew at an
3,500,000
average of 10.6% in the
last five years.
3,000,000

2,500,000 Mid-2008 saw the global

financial crisis affecting
2,000,000 travel movement of major
tourist source markets:
1,500,000

1,000,000
- Japanese outbound
declined by 9.6%
500,000 - Korean outbound
dropped by 7.6%
0 - USA outbound travel
2004 2006 2006 2007 2008
decreased by 0.4%
Growth Rate 20.1% 14.5% 8.4% 8.7% 1.5%
 Top Tourist Markets,
2008
700,000 15.0%

Market Arrivals Growth Rate

600,000 10.0% Korea 611,629 -6.4%
USA 578,246 -0.1%
500,000
5.0% Japan 359,306 -9.0%
400,000 China 163,689 3.9%
0.0% Australia 121,514 8.1%
300,000 Taiwan 118,782 5.9%
-5.0% Hong Kong 116,653 4.2%
200,000
Canada 102,381 12.1%
-10.0% Singapore 100,177 6.6%
100,000
UK 87,422 9.7%
0 -15.0%
Korea USA Korea China Australia Taiwan Hong Kong Canada Singapore United
Kingdom
Arrivals Growth Rate
 Fast Growing Tourist
40.0%
Markets, 2008
34.3%
35.0%

30.0% 28.8% 28.1%

25.0%

20.0% 18.8%
15.8%
15.0% 13.9%
12.1%
11.0%
9.7%
10.0% 8.1%

5.0%

0.0%
Russian UAE Vietnam France Norway India Canada Spain United Australia
Federation Kingdom
 Economic Impact of
Tourism
• Foreign tourism receipts to GDP ratio
grew from 1.9% in 2003 to 3.4% in 2007

• Foreign tourism receipts to Total Exports

ratio more than doubled from 3.9% in
2003 to 7.9% in 2007

Source: NSCB Philippine Tourism Satellite Account

 Economic Impact of Tourism

Domestic tourism expenditure posts

double digit growth!
35.00% 31.66%
30.00%
24.14%
25.00% 22.68%

20.00%

15.00%

10.00% 8.31%

5.00%

0.00%
2004 2005 2006 2007

Source: NSCB Philippine Tourism Satellite Account

 Domestic Travel Movement
20,000,000 Annual Average Growth Rate = 16.24%
18,000,000
16,000,000
14,000,000
12,000,000
10,000,000
8,000,000
6,000,000
4,000,000
2,000,000
0
2004 2005 2006 2007 2008 *

Growth Rate 20.01% 17.22% 7.42% 20.33%

* 2008 Preliminary
Arrivals in Selected Tourist Destinations
First Quarter 2009
Cebu
Boracay
Davao City
Tourist arrivals in selected destinations grew
Camarines Sur by 10.33% in the first quarter of 2009.
Zambales
Domestic travel movement increased faster by
Bohol 12.87% than foreign arrivals which expanded
Negros Oriental
by 4.25%

Palawan
Legaspi City
2008 2009
Sorsogon

0 50000 100000 150000 200000 250000 300000 350000 400000 450000

 Economic Impact of
Tourism

• Partly because of investments in tourism

destinations, construction sector grew
by 23.1 % making it a big factor in the
record economic growth in 2007

• Tourism accounted for 9.5% of total

employment

Source: NSCB Philippine Tourism Satellite Account

 Room Supply in Selected Destination of
Central Philippines Super Region

Cebu Since 2006, the focus on

Tourism for Central
Boracay Philippines Super Region
has spurred the:

Bohol - Expansion in
tourist arrivals
- Rise in room supply
Palawan - Increase in investments
- Hike in employment
- Diversification of
0 5000 10000 15000 products

2007 2008
 Fregat Aero
Moscow-Cebu

MOSCOW
Valdavia Air
Novosibirsk-Cebu
Vladivostok Air
Philippine Airlines
Vladivostok-Cebu
Narita-Cebu

NOVOSIBIRSK Asiana Airlines

China Southern
Pusan-Cebu
Shanghai-Cebu
Korean Air
VLADIVOSTOK Incheon-Korea
Jet Airlines Mandarin Air
Kazakstan-Silay Taipei-Cebu
Cebu Pacific Shenzhen Airlines
Taipei-Cebu Shanghai-Cebu
SHANGHAI
China Airlines
Taipei-Cebu Mandarin Airlines
Hong Kong Airlines Taipei-Kalibo
Hong Kong-Cebu TAIWAN
Philippine Airlines
Hong Kong Cebu
Qatar Airlines
Doha-Cebu

Malaysia Airlines
Kuala Lumpur-Cebu

SeaAir
Kota Kinabalu-PuertoPrincesa
Asian Spirit
Cebu Pacific Palau-Cebu
Legend: Singapore-Cebu
Red – Existing Silk Air
Blue – New Routes Singapore Cebu
Economic Impact of Tourism
In Million The tourism sector created 4.3 million
4,500 jobs from 2004 to 2008 8.0%
4,000 7.0%
3,500 6.0%
3,000
5.0%
2,500
4.0%
2,000
3.0%
1,500
1,000 2.0%

500 1.0%
0 0.0%
2004 2005 2006 2007 2008

Jobs Growth Rate

Jobs created with increased tourist arrivals
totaled 1.5 Million from 2004-2008
Tourist Arrivals

2008 57,863 3,139,422

2007 303,351 3,091,993

2006 268,719 2,843,345

2005 404,713 2,623,084

2004 468,633 2,291,352

0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 500,000
 Economic Impact of Tourism
9.66% 9.66%
9.64% 9.62%
9.62% On the average,
9.60% employment in tourism
9.58% industry was 9.5
9.56%
9.55% percent of the total
9.54%
9.54%
employment from 2004
to 2007
9.52%
9.50%
9.48%
2004 2005 2006 2007

Source: NSCB Philippine Tourism Satellite Account

 Tourism Strategy
 Market – Product Focus

 Establish Tourism Zones

 Destination Development: Central

Philippines
 Definition of a good market portfolio for the DoT

High Tactical / Momentum Core Markets

Markets  Markets that deliver the Ensure mix of countries
 With focused spend can “bread & butter” creates balance across:
relatively quickly  Bulk of new investment
generate increased
arrivals  Best capabilities
 Growth cycles
allocated

Ability to
 Market development
Win Maintenance Markets Investment / Turnaround
 Markets that are on the Markets  Short haul vs. long-haul
radar  Invest in these markets
 Activity only to occur if ahead of return  Seasonality
 Competitive Position: i.e. invest for the future
there is spare capacity
How competitive is the
Philippines vs. key  Investment required
competitors (SE Asia) ?
 Ability to Deliver: How
adapted is the Low High
Philippines offer to Size of Opportunity
consumer needs?  Current size and growth
 Potential size and growth

Note: Competitive Position (market share, awareness (unaided, aided), positivity towards RP, consideration of RP, information seeking about RP, likelihood of
visiting), Ability to Deliver (Ease of access, trade interest, product availability, importance of safety, Fit of assets vs. consumer preferences, seasonality of arrivals,
presence of English speaking population),
 Market Prioritization Framework
Implications
High  Continue to focus bulk of resources
and best people on existing core
Korea markets (China, Japan, Korea, US
Balikbayan)

Australia
Japan
 Increase investment and focus on
Tactical/momentum markets
Ability to Win Germ any
Russia
China
(Australia, Russia, Germany,
Canada US US/Canada)
 Competitive
Position
Nethe rlands HK  Maintain investment in turnaround
 Ability to Deliver
Taiw an markets (Hong Kong, Taiwan,
Sw itzerland Singapore Singapore) focusing efforts on
Denm ark UK addressing key barriers to growth

 Monitor maintenance markets (UK,

Italy India Netherlands, Switzerland, and
Spain
Denmark) on an annual basis to test
Low for low-hanging fruit
Low High
Size of Opportunity
 Cut focus on Italy, Spain, and India
 Current Attractiveness
 Future Attractiveness

Note: **US campaigns and activities can be extended to Canada; *Given limited resources and inherent barriers to activation, UK market has
been de-prioritized. However, UK remains a good investment market in Europe
Source: Monitor Analysis
Focused Marketing and Promotions

• Participated in major international travel fairs

– ASEAN Tourism Forum
– PATA Travel Mart
– Internationale Tourismus Borse, Germany
– World Travel Mart, United Kingdom
– China International Travel Mart, China
– Japan Association of Travel Agencies Tourism Fair, Japan
– Korea World Travel Mart, Korea

• Launched market specific campaigns

– Dive and adventure in the United Kingdom and Scandinavian Countries
– Adventure in Australia
Focused Marketing and Promotions

• Organized the following international events in the Philippines

– UNWTO 6th International Tourism Forum for Parliamentarians and Local
Authorities
– Hong Kong Association of Travel Agents Annual Meeting
– United Federation of Travel Agents Association Congress
– Spa and Wellness Summit
– World Health Tourism Congress

• Launched new campaigns

– Adventure Philippines
– Live Your Dream
– Shop Fest
Focused Marketing and Promotions

• Organized familiarization trips for wholesalers, travel agents

and members of the media in major source markets

• Tapped the Bollywood Film Industry of India

• Undertook innovative marketing through billboard, bus, train

and taxi advertisements as well as thematic motif in
Philippine Pavilion during travel fairs
 Tourism Products
Beach Holiday Sightseeing
Ecotourism Adventure
Diving Shopping
Bird Watching Trekking
Cultural Historical
Conventions & Meetings Incentive
Medical Tourism Wellness
Education Filming
Agri-Tourism Rural/Community-based
 P 150 Billion worth of private sector tourism investments were
endorsed from 2004 – 2008.

Endorsed Tourism Projects, 2004-2008

(in Million Pesos) Compared with 2004
100,000 93,766 level, 2007 and 2008
investments
90,000
continued to
80,000 demonstrate
70,000 substantial growth
due to rising demand
60,000
for accommodation
50,000 and new generation
40,000 of tourism facilities
22,344 20,432
and services
30,000

20,000 11,938

10,000 1,288

0
2004 2005 2006 2007 2008
 Major Tourism Investments
Year Name Location Category Investments
(in Pesos Million)
2005 Manila Ocean Park Manila Theme Park 1,008
Hyatt Hotel and Casino Manila Hotel 3,984
Pamalican Island Tourism Ecozone Palawan Tourism Ecozone 375
Misibis Resorts and Esate Albay Resort 343
Hilton Cebu Resort and Towers Mactan Hotel 1,637
Marco Polo Plaza Cebu City Hotel 398
2006 CCP Culture and Tourism Ecozone Pasay Tourism Ecozone 2,300
Manila Bay Tourism and Leisure Park Paranaque Tourism Ecozone 25,043
Manila Marriot Hotel Pasay Hotel 2,656
John Hay Tourism Special Ecozone Baguio Tourism Ecozone 2,600
San Lazaro Leisure Park Cavite Tourism Ecozone 926
Sta Rosa Complex Tourism Ecozone Laguna Tourism Ecozone 617
Club Misibis Albay Resort 122
 Major Tourism Investments
Year Name Location Category Investments
(in Pesos Million)
2006 Boracay Shangri-la Hotel and Resort Boracay Hotel 4,030
Bellevue Bohol Bohol Resort 334
Imperial Palace Water Park & Resort Cebu Resort 3,180
2007 Khi-Ali Manila Makati Hotel 7,650
New Port City Pasay Tourism Ecozone 7,641
St. Francis Cabrini Medical Tourism Batangas Medical Tourism 1,418
Camarines Sur Tourism Park Camarines Tourism Ecozone 1,002
2008 The Medical City Pasig Medical Tourism 1,160
Makati Medical Center Makati Medical Tourism 2,972
 Proclaimed Tourism Enterprise Zones

Date Proclaimed Proclamation Tourism Economic Zone Location

June 2002 PP No. 212 Eastbay Arts, Recreation and Tourism Zone San Roque, Angono,
Rizal
April 2004 PP No. 619 Fort Ilocandia Tourism Ecozone Ilocos Norte
March 2005 PP No. 803 Boracay Eco-Cultural Village Boracay Island
October 2005 PP No. 927 Island Cove Resort & Leisure Park Cavite
February 2006 PP No. 998 Resorts & Enterprise Village Albay
November 2006 PP No. 1179 Pamalican Island Tourism Ecozone Palawan
July 2007 PP No. 1330 St. Frances Cabrini Medical Center Batangas
May 2008 PP No. 1517 San Lazaro Leisure Park Laguna
July 2008 PP No. 1557 Newport City Cyber Tourism Zone Villamor Airbase,
Pasay City
November 2008 PP No. 1681 Imperial Palace Waterpark Resort and Spa Lapu Lapu City
Tourism Economic Zone Cebu
Projected Visitor Arrivals
Year Volume Growth Rate
Medium High Medium High
2009 3,154,711 3,197,501 0.5% 1.9%
2010 3,204,555 3,319,006 1.6% 3.8%
2011 3,328,261 3,526,577 3.9% 6.2%
2012 3,498,002 3,823,867 5.1% 8.4%
Domestic Travelers, 2005
5,000 25.0%
Travelers % Share
4,500
4,000 20.0%

3,500
3,000 15.0%
2,500
2,000 10.0%
1,500

1,000 5.0%
500
0 0.0%
R R I II
CA gi o n i o n o n I
II A B V VI II III n IX X XI II III MM
NC i n I V I V i o n
o n n V
n V o i o n
o n n X
n X R
g
R e R e R eg egi o gi o
n
R e g e gi e gi o g i o i g
eg R e R e g
i
egi o e g i o
A
R e R
R Re R R R R
 Purpose of Visit of
Domestic Travelers
Others 4,079

Medical/ Health 980

Government Mission 51

Study 379

MICE 515

Business 3,032

Pleasure/ Vacation 8,200

Visit Friends or Relatives 13,200

0 2,000 4,000 6,000 8,000 10,000 12,000 14,000