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
Source: NSCB Philippine Tourism Satellite Account

2005

2006

2007

Tourist Arrivals, 2004-2008
3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 2004 2006 2006 2007 2008

Tourist arrivals grew at an average of 10.6% in the last five years. Mid-2008 saw the global financial crisis affecting travel movement of major tourist source markets: - Japanese outbound declined by 9.6% - Korean outbound dropped by 7.6% - USA outbound travel decreased by 0.4%

Growth Rate

20.1%

14.5%

8.4%

8.7%

1.5%

Top Tourist Markets, 2008
700,000 600,000 500,000 5.0% 400,000 0.0% 300,000 -5.0% 200,000 100,000 0
Korea Arrivals USA Growth Rate Korea China Australia Taiwan Hong Kong Canada Singapore United Kingdom

15.0%

Ma r ke t
10.0%

A r r iv a ls 6 1 1 ,6 2 9 5 7 8,2 4 6 3 5 9,3 0 6 1 6 3 ,6 89 1 2 1 ,5 1 4 1 1 8,7 82

G ro w th R a te - 6 .4 % - 0 .1 % - 9.0 % 3 .9% 8.1 % 5 .9% 4 .2 % 1 2 .1 % 6 .6 % 9.7 %

K o re a USA Ja p a n C h in a A u s t r a lia T a iw a n

H o n g K o n g 1 1 6 ,6 5 3 Canada 1 0 2 ,3 81 1 0 0 ,1 7 7 87 ,4 2 2

-10.0%

S in g a p o r e UK

-15.0%

40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0%

Fast Growing Tourist Markets, 2008
34.3% 28.8% 28.1%

18.8% 15.8% 13.9% 12.1% 11.0% 9.7% 8.1%

Russian Federation

UAE

Vietnam

France

Norway

India

Canada

Spain

United Kingdom

Australia

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% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% 2004
Source: NSCB Philippine Tourism Satellite Account

31.66% 24.14%

22.68%

8.31%

2005

2006

2007

Domestic Travel Movement
20,000,000 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
Growth Rate
* 2008 Preliminary

Annual Average Growth Rate = 16.24%

2005
17.22%

2006
7.42%

2007
20. %

2008 *

20.01%

Arrivals in Selected Tourist Destinations First Quarter 2009
Cebu Boracay Davao City Camarines Sur Zambales Bohol Negros Oriental Palawan Legaspi City Sorsogon 0 50000 100000 150000 200000 250000 300000 350000 400000 450000
2008 2009

Tourist arrivals in selected destinations grew by 10.33% in the first quarter of 2009. Domestic travel movement increased faster by 12.87% than foreign arrivals which expanded by 4.25%

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
Ce u oracay ohol Pala an 0
2007 2008

Since 2006, the focus on Tourism for Central Philippines Super Region has spurred the: - Expansion in tourist arrivals - Rise in room supply - Increase in investments - Hike in employment - Diversification of products

5000

0000

5000

Fregat Aero Moscow-Cebu
MOSCOW

Valdavia Air Novosibirsk-Cebu Vladivostok Air Vladivostok-Cebu
NOVOSIBIRSK

Philippine Airlines Narita-Cebu

China Southern Shanghai-Cebu Mandarin Air Taipei-Cebu Cebu Pacific Taipei-Cebu China Airlines Taipei-Cebu Hong Kong Airlines Hong Kong-Cebu Philippine Airlines Hong Kong Cebu

Jet Airlines Kazakstan-Silay

Asiana Airlines Pusan-Cebu Korean Air VLADIVOSTOK Incheon-Korea Shenzhen Airlines Shanghai-Cebu SHANGHAI Mandarin Airlines Taipei-Kalibo
TAIWAN

Qatar Airlines Doha-Cebu Malaysia Airlines Kuala Lumpur-Cebu SeaAir Kota Kinabalu-PuertoPrincesa

Legend: Red ± Existing Blue ± New Routes

Cebu Pacific Singapore-Cebu Silk Air Singapore Cebu

Asian Spirit Palau-Cebu

Economic Impact of Tourism
In Million

4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 2004
Jobs

The tourism sector created 4.3 million jobs from 2004 to 2008

8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0%

2005
Growth Rate

2006

2007

2008

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 0

468,633

2,291,352

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% 9.64% 9.62% 9.60% 9.58% 9.56% 9.54% 9.52% 9.50% 9.48% 2004 2005 2006 2007 9.55% 9.54% 9.62% 9.66%

On the average, employment in tourism industry was 9 .5 percent of the total employment from 2 0 0 4 to 2 0 0 7

Source: NSCB Philippine Tourism Satellite Account

Tourism Strategy 
Market ² Product Focus  Establish Tourism Zones  Destination Development: Central Philippines

Definition of a good market portfolio for the DoT
High Tactical / Momentum

Core Markets 

Markets 

With focused spend can relatively quickly generate increased arrivals

Markets that deliver the ³bread & butter´ Bulk of new investment Best capabilities allocated

Ensure mix of countries creates balance across:  



Growth cycles Market development Short haul vs. long-haul Seasonality Investment required

Ability to Win 

Maintenance Markets 

Markets that are on the radar Activity only to occur if there is spare capacity

Investment / Turnaround Markets   

Competitive Position: How competitive is the Philippines vs. key competitors (SE Asia) ? Ability to Deliver: How adapted is the Philippines offer to consumer needs? 

Invest in these markets ahead of return i.e. invest for the future   

Low

Size of Opportunity 


High 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
Kore a 

Continue to focus bulk of resources and best people on existing core markets (China, Japan, Korea, US Balikbayan) Increase investment and focus on Tactical/momentum markets (Australia, Russia, Germany, US/Canada) Maintain investment in turnaround markets (Hong Kong, Taiwan, Singapore) focusing efforts on addressing key barriers to growth Monitor maintenance markets (UK, Netherlands, Switzerland, and Denmark) on an annual basis to test for low-hanging fruit Cut focus on Italy, Spain, and India

Aus tralia Japan Rus s ia 

Ability to Win 

Ge rm any Canada

China US 

Competitive Position Ability to Deliver

Ne the rlands

HK Taiw an 

Sw itze rland De nm ark UK

Singapore 

Italy India Spain

Low Low 


Size of Opportunity
Current Attractiveness Future Attractiveness

High 

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
² ² ² ² ² ² ² 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
² Dive and adventure in the United Kingdom and Scandinavian Countries ² Adventure in Australia

Focused Marketing and Promotions
‡ Organized the following international events in the Philippines
² UNWTO 6th International Tourism Forum for Parliamentarians and Local Authorities ² Hong Kong Association of Travel Agents Annual Meeting ² United Federation of Travel Agents Association Congress ² Spa and Wellness Summit ² World Health Tourism Congress

‡ Launched new campaigns
² Adventure Philippines ² Live Your Dream ² 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 Ecotourism Diving Bird Watching Cultural Conventions & Meetings Medical Tourism Education Agri-Tourism Sightseeing Adventure Shopping Trekking Historical Incentive Wellness Filming Rural/Community-based

P 150 Billion worth of private sector tourism investments were endorsed from 2004 ² 2008.

Endorsed Tourism Projects, 2004-2008 (in Million Pesos)
100,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 2004 2005 2006 2007 2008 1,288 11,938 22,344 20,432 93,766

Compared with 2004 level, 2007 and 2008 investments continued to demonstrate substantial growth due to rising demand for accommodation and new generation of tourism facilities and services

Major Tourism Investments
Year 200 Name Manila Ocean Park Hyatt Hotel and Casino Pamalican Island Tourism Ecozone Misibis Resorts and Esate Hilton Cebu Resort and Towers Marco Polo Plaza 2006 CCP Culture and Tourism Ecozone Manila Bay Tourism and Leisure Park Manila Marriot Hotel John Hay Tourism Special Ecozone San Lazaro Leisure Park Sta Rosa Complex Tourism Ecozone Club Misibis Location Manila Manila Palawan Albay Mactan Cebu City Pasay Paranaque Pasay Baguio Cavite Laguna Albay Category Theme Park Hotel Tourism Ecozone Resort Hotel Hotel Tourism Ecozone Tourism Ecozone Hotel Tourism Ecozone Tourism Ecozone Tourism Ecozone Resort Investments (in Pesos Million) 1,008 3,98 37 343 1,637 398 2,300 2 ,043 2,6 6 2,600 926 617 122

Major Tourism Investments
Year 2006 Name Boracay Shangri-la Hotel and Resort Bellevue Bohol Imperial Palace Water Park & Resort 2007 Khi-Ali Manila New Port City St. Francis Cabrini Medical Tourism Camarines Sur Tourism Park 2008 The Medical City Makati Medical Center Location Boracay Bohol Cebu Makati Pasay Batangas Camarines Pasig Makati Category Hotel Resort Resort Hotel Tourism Ecozone Medical Tourism Tourism Ecozone Medical Tourism Medical Tourism Investments (in Pesos Million) 4,030 334 3,180 7,6 0 7,641 1,418 1,002 1,160 2,972

Proclaimed Tourism Enterprise Zones
Date Proclaimed June 2002 April 2004 March 200 October 200 February 2006 November 2006 July 2007 May 2008 July 2008 November 2008 Proclamation PP No. 212 PP No. 619 PP No. 803 PP No. 927 PP No. 998 PP No. 1179 PP No. 1330 PP No. 1 17 PP No. 1 7 PP No. 1681 Tourism Economic Zone Eastbay Arts, Recreation and Tourism Zone Fort Ilocandia Tourism Ecozone Boracay Eco-Cultural Village Island Cove Resort & Leisure Park Resorts & Enterprise Village Pamalican Island Tourism Ecozone St. Frances Cabrini Medical Center San Lazaro Leisure Park Newport City Cyber Tourism Zone Imperial Palace Waterpark Resort and Spa Tourism Economic Zone Location San Roque, Angono, Rizal Ilocos Norte Boracay Island Cavite Albay Palawan Batangas Laguna Villamor Airbase, Pasay City Lapu Lapu City Cebu

Projected Visitor Arrivals
Year 2009 2010 2011 2012 Volume Medium 3,1 4,711 3,204, 3,328,261 3,498,002 High 3,197, 01 3,319,006 3, 26, 77 3,823,867 Growth Rate Medium 0. % 1.6% 3.9% .1% High 1.9% 3.8% 6.2% 8.4%

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

500

0 Travelers % Share 0.0% 5.0% 10.0% 15.0% 20.0% 25.0%

NC R CA Re R gio nI Re gio nI Re I gio Re n II gio I n Re IV gio A nI V Re B gio nV Re gio Re n VI gio nV Re gio II nV Re III gio n Re IX gio Re n X gio nX Re gio I nX Re gio II nX III AR MM

Domestic Travelers, 2005

Purpose of Visit of Domestic Travelers
ed ca / Hea th
¤ ¤ ¢

980

tudy

 

 

 

 

 

 

 

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000

 

s t Fr ends or e at ves
¢ ¤ £ ¢ ¢

 

P easure/ acat on
¢ ¤

 

us ness
¢

¨ §¦

¢

©

¢¦

Government

ss on

51

379

E

515

3 032

 

Others

4 079

¡

¥

¦ ¢ ¡

8 200

13 200