WEEK 4: FUNDAMENTALS AND

PRINCIPLES OF TOURISM
PRODUCT DEVELOPMENT
PLANNING
COURSE PACK

NOTE TO READER:
This Course Pack is intended for academic use by the academic community of the College of
Hospitality and Institutional Management, Our Lady of Fatima University. Any alterations to the
document renders the pack invalid, unless duly edited by the Course Developer.

Second Edition, 2022

Arjay A. Punongbayan, CTP, CGSP
 Chapter 2a: Fundamentals of Tourism Product Development Planning
CHAPTER 2A
FUNDAMENTALS OF
TOURISM PRODUCT
DEVELOPMENT PLANNING
UNIT OF COMPETENCY:
Learning Outcomes:
Course Pack Contents:
1
Critically analyze the factors that affect tourism product
development in tourist destinations including destination
and product characteristics
1. Ascertain the fundamental issues in tourism
development and product planning.
2. Determine the different principles and procedures for
tourism product development.
2.1 Fundamental Issues in Tourism Development and
Product Planning
2.1.1 Tourism Organisational and Institutions
Structures
2.1.2 National and Regional Coordination
2.1.3 Comprehensive, Integrated and Inclusive
Planning
 Chapter 2a: Fundamentals of Tourism Product Development Planning 2

FUNDAMENTALS AND PRINCIPLES OF TOURISM PRODUCT DEVELOPMENT

PLANNING
Before looking specifically at the role, and process by which governments can assist, in Tourism
Product Development, it is advisable to consider the broader picture, namely policy, planning
and management of the overall tourism sector.
These have been divided into two broad groupings:
1. Fundamentals e.g. aspects that need to be put into place before effective and
sustainable Tourism Product Development can take place – in other words the necessary
‘hardware’.
2. Principles and procedures e.g. the optimal steps in developing and bringing a tourism
product to fruition – the ‘software’.
There are three fundamental issues to which all destination authorities need to give the most
careful and detailed consideration, namely:
1. Structures – establishing appropriate institutional arrangements for tourism.
2. Inter-agency coordination – tackling the challenge of coordination both between
central government departments and down the line to the regional and local administrations.
3. Planning system – establishing a planning system and a full planning process that
gives adequate guidance but encourages originality and stimulates investment. Tourism is
unlike any other economic sector in that it involves the state, private sector and community
where it takes place. Under such circumstances:
– planning for tourism is vital;
– a different approach to policy and planning is needed to that used for other sectors;
– in order to create an economically successful and fully sustainable sector over the long
term, tourism planning should be comprehensive, fully coordinated and undertaken over
an extended time frame.
Then there are a series of principles that underpin all sound Tourism Product Development
planning and successful operation, whether stimulated by the public sector or arising from
private sector or community initiative:
1. Understanding market tastes and trends – market research;
2. Market: product ‘matching’;
3. Designating tourism development areas/zones;
4. Undertaking extensive stakeholder consultation – including with the local communities in
the areas of development – in an open manner and in a spirit of co-operation;
5. Pursuing flagship development opportunities;
6. Identifying opportunities for clusters, circuits and events;
7. Preparing a full product portfolio and investment plan;
 Chapter 2a: Fundamentals of Tourism Product Development Planning 3

8. ensuring that personnel with the appropriate tourism technical skills are in place at
national, regional and local levels to carry the process of Tourism Product Development
forward; and
9. Drawing up a marketing and promotion strategy to support the tourism product
developments, and implement a programme of marketing communications.
Table 2.1 Principles and procedures of Tourism Product Development

Activity Purpose

Market research
Market: product matching
Tourism/product development
areas
Stakeholder consultation and
collaboration
Flagships/hubs
Clusters, circuits and events
Understand profile, characteristics, tasks and trends of markets and segments
Identify products and services to be developed in line with market requirements
Identify areas within the overall destination appropriate for specific types of
product development
Ensure the opinions and aspirations of all relevant stakeholders – local, national,
international – are canvassed and taken due account of in the Tourism Product
Development plans prepared
Identify outstanding features within one or more tourism/product
development areas where major products can be developed to constitute ‘hubs’
to attract tourists
Create the ‘spokes’ fed through the ‘hubs’ by bundling together a range of
attractions and activities, creating tourism routes, and organising festivals and
events

Product portfolio and
investment plan
Human resource development
Marketing and promotion
Formulate the various Tourism Product Development opportunities into a
cohesive and integrated development plan, and prepare and disseminate
a product investment portfolio for prospective investors
Create vocational training and managerial educational programmes that
produce the level and calibre of personnel needed by the planned
tourism product developments
Feature the tourism product developments in the positioning of
individual tourism development areas as part of the overall destination
branding.

Fundamental Issues in Tourism Development and Product Planning

 Tourism Organisational and Institutions Structures

The complexity of the cross-cutting nature of tourism gives rise to the problem of
coordination – discussed later in this chapter – since tourism, by virtue of being a
temporary increase in the population of the destination, has all the needs and impacts of
the permanent population – and a few additional ones. It is a question of whether
tourism should be:
• treated separately for government policy and planning purposes;
• linked with another government ministry or department according to the
destination’s development priorities; or
• incorporated within all the other sectoral government ministries and departments
of which it is a part.
 Chapter 2a: Fundamentals of Tourism Product Development Planning 4

If “tourism” is not specified in the title of the government ministry or department

responsible for it, there has been the tendency in the past for it to be treated as an
insignificant sector by government policy makers and planners; but if tourism is a stand
alone ministry or department, there arises the problem of coordinating the needs and
impacts of the sector as they relate to the responsibilities of other government ministries
and departments. Tourism has always struggled to have a position within the
government institutional hierarchy commensurate with its contribution to the economy of
the country. It was seen as a ‘candyfloss’ sector rather than a ‘real’ industry. Though that
perception has gradually been rectified over the decades, and tourism has moved up in
the hierarchy of ministries over the past two decades in line with its importance to the
economy and the stand-alone ministry now has a far stronger standing with other
ministries and departments, the sector still punches below its weight in terms of
government recognition and status in many destinations.
Historically, tourism has tended to be combined with other areas, selected on the basis
of their synergies and in line with government priorities e.g. civil aviation, economic
planning, trade and industry, arts and culture, environment, sports. There have even
been examples where it has been combined with public works, education/training/labour
and foreign affairs. Nowadays, it tends to be associated with the main resources utilised
for tourism e.g. culture, natural resources.

 National and Regional Coordination

Coordination for tourism occurs both horizontally (e.g. inter-sectoral between different
government departments and agencies) and vertically (e.g. between different levels of
government). It is vital at central level between the different ministries and departments
with responsibility for an aspect related to tourism, as well as between central,
regional/provincial and local levels.

The means of putting in place a system of delegated authority and communication

between central, regional and local governments to achieve effective coordination will
vary from destination to destination, depending on government structure and present
institutional arrangements. The need is to avoid creating unwieldy bureaucratic
structures while giving stakeholders at each level – including at local level – and from the
private sector a “voice” in plans and strategies developed for the country and the regions
within it. Furthermore, this “voice” needs to be based on sound, technical knowledge of
tourism, and to be representative of the divergent views about tourism development and
marketing.

 Comprehensive, Integrated and Inclusive Planning

Tourism has a huge range of direct and indirect impacts – as explained earlier since
tourism takes place where other people live, it adds to the needs and impacts that the
permanent population has, as well as creating the need for special facilities such as
commercial lodging. Government planning, regulation etc is therefore needed.