Philippine Tourism Industry (2013)

7/25/2019 Philippine Tourism Industry (2013)

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Copyright 2012 SRi Stratbase Research Institute. All rights reserved.

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2The Philippines is getting more and more rave

reviews for having some of the worlds mostbeautiful tourist destinations in the world. The

Boracay Island has been awarded the stature of

The Worlds Best Island for 2012 by the inter-

national travel magazine Travel + Leisure. This is

just one in a fast growing li st of must go Philip-

pine beaches which include Amanpulo in Pala-

wan, Caramoan in Camarines Norte and Panglao

Phil ippineTourism Industry

in Bohol. Since the declaration of the P

Underground River as one of the New 7ders of Nature, hotel accommodations

island have become fully booked until ne

This new image will hopefully start an u

edented surge in foreign visitors ying in

and experience the Philippines unique fu

culture in the backdrop of a tropical parad


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Figure 1: Top Ten Visitor MarketsSource: Department of Tourism Website

Figure 2: Visitor Arrivals to the PhilippinesSource: Department of Tourism Website

Tourism falls under the service industry of the country

which has been slowly but steadily growing since 2004.

According to the Tourism Investment Portfolio of the

Department of Tourism, the tourism industr y has been

recognized by the government as an impor tant source

of foreign exchange earnings, investments, revenue,

employment, and to the growth of the countrys output.

The inclusion of tourism as a major pillar in the MediumTerm Philippine Development Plan (MTPDP) has given

priority to a sector that has huge investment, employ-

ment and revenue potential. If developed in a sustainable

manner, it can be a powerful economic growth engine for

the country.1 By harnessing the countrys natural wealth

and famous Filipino hospitality, the tourism sector has a

rich natural resource to create wealth both in direct and

indirect business activities that generates a chain reaction

of enterprises and jobs. Tourism is also the perfect vehicle

for promoting cultural identity and responsible

stewardship of the environment.

According to the Department of Tourism, a total of

1,497,851 visitors came to the country from January to

April 2012, an increase of 14.61% over the previous years

volume of 1,306,944 for the same period. The monthof April recorded 349,779 visitors, an increase of

10.19% against its 317,443 arrivals for the same

month a year ago.2

Visitors from Korea continue to lead all other markets

as it recorded 330,343 arrivals with a share of 22.05% to

total visitor inow. This gure was higher by 15.50% than

the volume of 286,018 arrivals in the rst four months of

2011. The U.S. market ranked second as it account

16.02% of the total trafc. This market had an incre

4.70% with 239,978 arrivals compared to its contri

of 229,200 arr ivals last year.

Visitors from Japan accounted the third biggest arriv

count of 137,984 for a share of 9.21% to the visitor

volume. This market posted an increase of 6.78% vvis its output of 129,223 arrivals a year ago. The Ch

market supplied 123,262 as the fourth biggest inbo

visitors to the country. A double-digit increase of 7

was registered by this market versus its last years c

parative gure of 71,113 arrivals. Visitors from Taiw

likewise posted a two-digit growth of 34.51% contr

74,871 arrivals against its volume of 55,662 a year a


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Domestic travel is the strong backbone oPhilippine tourism, making it resilien

during times of external vulnerabilitieto health scares, terrorism, an

global financial crisis

Other markets with high growth r ates and consistently signicant volume are

Germany which grew by 15.36% (26,382 arrivals), Malaysia with 13.82% (32,363

arrivals), Australia with 13.38% (64,266 arrivals), United Kingdom with 12.92%

(41,759 arrivals) and Singapore with 11.38% (47,536 arrivals).

By regional grouping, the East Asian region topped with a 47.38% share to the

total or a volume of 709,728. Almost all of the countries from this region consis-

tently ranked among the top ve contributors of visitors with the biggest volume

coming from Korea while China recorded the highest growth. Following the East

Asian region was Nor th America, producing a combined total of 288,839 arrivals

or 19.28% share to the total visitor volume. The ASEAN region took the thirdspot in the regional ranking, capturing 7.83% of the total tourist inow by produc-

ing 117,224 arrivals.

Domestic travel is the strong backbone of Philippine tourism, making it

resilient during times of external vulnerabilities to health scares, ter-

rorism, and global nancial crisis, among others. In 2009 a group of 12

tourism destinations in the Philippines recorded a volume of 7.2 million

arrivals with domestic travelers accounting for 79% of the total. Another

indicator of the robust domestic travel market is the volume of domes-

tic air passenger trafc, increasing by 25.1% in 2009 (see Figure 4 and

Table 1).

Figure 3: Foreign Tourist Arrivals in RPby Origin, Mn, 1990-2009

Sources: DOT and NSCB

Figure 4: Domestic Air Travel PhilippinesMillions, Growth, 1990-2009Source: CAB

Table 1: Domestic Air Travel PhilippinesMillions, Growth, 1995-2009

Source: CAB


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Comparative ASEAN Arrivals

The Philippines ranked only 6th in attracting foreign tourist vis-a-vis its

ASEAN neighbours. Malaysia visitor arrivals in 2010 reached to 22.4 million

while Thailand attained 15 million, Singapore with 11.6 million, Indonesia

with 7 mi llion and Vietnam with 5 mi llion. The market shares of compet-

ing destinations in ASEAN have rapidly grown while the Philippines share

modestly expanded.

THE PHILIPPINES TOP 10 PRIORITY CLUSTERS

National Tourism Development Plan3

Under the proposed National Tourism Development Plan 2010-2016, the

Philippines was divided into 21 strategic and thematic tourism destina-

tion clusters covering 77 Tourism Development Areas (TDAs): 7 strategic

clusters are in Nor thern Philippines (Nor th Luzon, CAR, CALABARZON,

NCR) covering 27 tourism development areas; 7 strategic clusters in

Central Philippines (MIMAROPA, Bicol, The Visayas) covering 24 tourism

development areas; and 7 strategic clusters in the Southern Philippines

(Mindanao) covering 26 tourism development areas.

Of the 21 Inclusive Tourism Cluster Destinations, 10 have been designatedas Priority Cluster Destinations covering 39 Tourism Development Areas.

1. Laoag Vigan Tourism Clusters main gateway is the Laoag Inter

tional Airport. The themes for this cluster are beach resorts, histor

heritage, eco-tourism and events. LaoagPagudpud, Ilocos Norte a

Vigan, Ilocos Sur are the Tourism Development Areas for this clust

The development of the Tourism Enterprise Zones (TEZs) in Pagu

and Laoag, the improvement of the clusters 9 heritage sites that to

to PhP141,000,000 and linking the local communities to tourism s

chain will surely help the Ilocos Region to become a top tourist de

tion.

2. The Clark International Airport is the m

gateway for the Central Luzon Tourism Clu

The chosen themes for the cluster are ent

ment, amusement, sports, beach resort, eve

MICE, ecotourism, wellness, medical and re

ment tourism. There are seven (7) Tourism

velopment Areas for this cluster namely th

Clark- Tarlac Corridor, Nueva Ecija, Pamp

Bulacan, Zambales, Bataan and Aurora. Pro

development will focus on mixed used res

Clark, Zambales, Subic.

3. The Ninoy Aquino International Airport is the gateway to Metr

nila and other parts of the CALABARZON Tourism Cluster. The t

for this cluster are MICE, business, resort, history, medical, and well

events, sightseeing, entertainment and shopping. There are ve (5)

sen tourism development areas for this cluster: Metro Manila and

rons, Nasugbu-Looc-Ternate-Cavite, Laguna de Bay, Batangas and Q

zon. Product development projects include Tourism Enterprise Zo

Manila Bay and Batangas, and improvement to 15 heritage sites (P

Million). Note that there will be 8,100 additional rooms needed (2

2016) and 7,700 are planned or under construction for this cluste

4. Bicol Tourism Clusters main gateway is the Bicol International A

This clusters themes are resorts, marine li fe, ecotourism, water sp

and MICE. Camarines-Catanduanes, and Albay-Sorsogon-Masbate the chosen Tourism Development Areas. The projects for market a

Table 2: Visitor Arrivals in ASEAN Countries (*000)Source: World Tourism Organization/ ASEAN Secretariat


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and connectivity include the completion of the New Bicol International

Airport and the development of tourism roads.

5. Palawan Tourism Clusters main gateway is the Puer to Princesa Inter-

national Airport. The three Tourism Development Areas for this cluster

are Puer to Princesa, San Vicente-El Nido-Taytay, Southern Palawan. Some

projects that will help market access and connectivity include building a

New Terminal and Taxiway at Puerto Princesa Airport, building tourism

infrastructure in Puer to Princesa, San Vicente and El Nido and improve-

ment of their 6 heritage sites (Php 140 Million). The DPWH and DBM

included 7 road projects worth 1.38B in the national budget for 2012

develop tourism roads. The chosen themes of this cluster are coastal

Island resor t, ecotourism, sightseeing, MICE, and adventure.

6. The Western Visayas Tourism Cluster has two gateways, the Iloilo

International Airport and Kalibo International Airport. The Clusters

themes are coastal and island resort, ecotourism, marine sports, events,

and MICE. Bacolod-Silay, Iloilo-Guimaras and Boracay-Northern Antique

are the three (3) chosen Tourism Development Areas. Proposed Proj-

ects to increase market access is the completion of the Kalibo Airport

upgrade and providing international terminal service at the Iloilo Airport.

Destination and product development initiatives focus on the towns ofIloilo, Guimaras and Bacolod. DPWH and DBM have 11 road projects

for 2012 included in the national budget worth P1.27B. This cluster has a

shortage of 4,504 additional rooms that needs to be completes by year

2016.

7. Central Visayas Tourism Clusters main gateway is the Mactan-Cebu

International Airport. Themes for this cluster are MICE, Business Invest-

ments, Resorts, history, events, sightseeing, entertainment, shopping, and

ecotourism. The four (4) Tourism Development Areas of this cluster

are Northern Cebu-Bantayan-Malapascua, Metro Cebu-Mactan-Olango

Island, Southern Cebu, Negros Oriental-Dumaguete-Siquijor, and Tag-

bilaran-Panglao Island. Market access and connectivity projects include

Cebu terminal expansion and r unway improvement, gateway marketing

program (e.g. World Routes), seamless connection from Mactan A

to tourism development areas, 24 tourism road projects of DPW

and DBM wor th P2.86 billion in the 2012 national budget, the Tagb

terminal expansion and the need for a Bohol gateway.

Destination and product development includes Tourism Enterprise

in Cebu and Panglao, improvement to 17 heritage sites (Php 500 M

and linking communities to tourism supply chain. Note that this clu

needs to build 7,000 rooms by 2016 and only 5,000 rooms planne

under construction to date.

8. Zamboanga Peninsula Tourism Cluster has four (4) Tourism Dev

opment Areas Zamboanga Sibugay, Zamboanga City-Sta. Cruz-Isab

Pagadian City-Zamboanga del Sur and Dapitan-Dipolog. Its Main g

is the Zamboanga International Airport. The Destination and prod

development includes Tourism Enterprise Zones in Dipolog and D

9. Camiguin Island, Cagayan de Oro-Misamis Oriental, Iligan City-L

del Nor te, Misamis Occidental, and Bukidnon are the ve (5) Tour

Destination Areas of the Northern Mindanao Tourism Cluster. On

ority project that everyone is waiting for is the Laguindingan Airpo

Project. This project will help boost Laguindingan as a Tourism EnteZone and support the chosen themes of the tourism department

are island resorts, marine spor ts, historical places, sightseeing, event

ecotourism, adventure, business, MICE, and entertainment.

10. Davao International Airport is the main gateway for the Davao

and Coast Tourism Cluster. The Davao cluster was divided into thre

Tourism Destination Areas which are Davao City-Samal Island-Dav

Norte, Davao del Sur, and Compostela Valley-Davao Oriental. Ma

Davao International Airport as an International gateway of the sou

denitely develop market access and connectivity for this area. De

tion and product development include Tourism Enterprise Zones i

Ana Wharf and Samal Island.


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7

Medical Tourism

For decades, people have been traveling to the Philippines to

seek medical treatment, but only in recent years has the coun-

try been well-known as healthcare destination. This is because

of the phenomenal growth of foreigners visiting the country for

medical and health-related reasons. Medical tourists are gener-

ally residents of the industrialized nations of the world, the

countries they travel are typically the less developed ones withfavourable currency exchange ratios.

Currently, there are four hospitals in the Philippines that are

Joint Commission International (JCI) accredited.

These are: The Medical City in Pasig City, St.

Lukes Medical Center in Quezon City, Makati

Medical Center in Makati City and Chong Hua

Hospital in Cebu City.

However, there are clear differences between the pri vate health

facilities as compared to the public health system, which usually

do not offer the same quality care that patients receive from

private institutions. For medical tourists, it is advisable to avail

themselves of the medical tourism packages offered by private

hospitals and health facilities if they want to get the best health-

care services available.

Medical Tourism Philippines (MTP) welcomes tourists from all

over the world to visit the Philippines for their medical needs.

Medical tour packages are now available which offer travel and

hospital services, which take care of everything from visas, airfares,

accommodation, hospital costs for treatment and all transport.

The most common procedures are cosmetic and plastic surgery,

dermatology, weight loss surgery, ophthalmology, and dentistry.4

Cosmetic Surgery

The country has many skilled cosmetic surgeons who speci

face lifts, rhinoplastery, abdominal tucks, liposuction, and bre

mentation. These medical operations are more expensive in

of the developed countries. With many of the surgeons con

to be the best in their eld, tourists are travelling from arou

globe to have their cosmetic operations performed here.

Dental Tourism

There are many hospitals and clinics specializing in dentistry

across the country with plentiful competent dentists who a

perts in the eld offer lower dental cost works. All standard

dures are available as well as more complex ones such as th

of dental implants and bridges.

Health Spas

There are also many relaxation centers and health spas in th

try that offer therapeutic healing for the mind, body and so

natural healing resorts offer alternative treatments concentr

organic solutions. Packages that offer long stays with a detox

tion process, a natural and organic diet, meditation and masare available. After having a major operation, visiting a natur

ing center that offers these ser vices can greatly help the rec

process.

Medical tourism is an emerging industry, which is on track to

coming a multi-billion dollar industry in the years to come. N

conned to people who are sick who want to live more yea

also to people who want to look and feel better and more

they age.

Philippine medical tourism target is US$ 3 billion revenues b

The following are cost comparisons between medical procethe Philippines and equivalent procedures in the United Sta

Table 3)

Table 3: Cost of Medical Tourism in thePhilippines and USA

Source: Department of Tourism

Potentials of Philippine Tourism


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8

There were approximately 250,000 non-resident patients (foreign nationals and Filipino

expats/immigrants) who travelled in the countr y for various medical ser vices in 2006. At

least 100, 000 foreign patients visit the country each year for medical care. This has grown

extensively each year and in the rst quarter of 2009, approximately 200,000 medical

tourists have been documented as visiting the Philippines for medical care, with gures

expected to reach 600,000 by the end of the year. The vast Filipino Diaspora who settled

overseas return to the Philippines not only for family visits or vacations but also to un-

dergo minor medical, dental and other health procedures not covered by their medical

insurance in their countries of origin. In 2007 alone 180,000 Filipino expatriates visited the

country for such purposes and this is expected to increase in the coming years.

Hospitals for Medical Tourism in the Philippines

The Medical City (Pasig City)

St. Lukes Medical Center (Quezon City and Fort Bonifacio Global City)

Makati Medical Center (Makati City)

Asian Hospital and Medical Center (Muntinlupa City)

Retirement

There are plenty of reasons for foreigners to pick the Philippines as a retirement spot.

One of the factors that holds signicant appeal for retirees is the lower cost of li ving in thecountry compared to other more developed countries. Foreign retirees face the prospect

of living comfortably without having to spend as much as they would have in their own

countries. The favorable exchange rate of the peso as well as the ease of access to foreign

currency exchange shops also contribute to this appeal.

Aside from the economic reason is the natur al attraction of the Philippine environment.

With over 7,000 islands, numerous world-class tourist destinations and a warm tropical

climate, foreigners can breeze through their retirement surrounded by breathtakingly stun-

ning sights and landscapes.

The social atmosphere is also benecial considering that the second language of the Phil-

ippines is Engl ish, allowing for easier communication between citizens and foreign retirees.

But more than language, the Philippine people are widely renowned for their Filipino

hospitality. It is in the Philippine culture to be warm and receptive of others, creating an

environment that is inviting for foreign citizens to reside here in retirement.

Services with a SMILE (SWS)5

Services with a SMILE or SWS is an initiative by the Philippine Retirement Authority

serves as a contact center using various channels of communication with retirees t

answer their needs and offer the whole range of products and services provided by

pine Retirement Authoritys accredited facilities and merchant partners.

SWS streamlines the delivery of products and services of accredited retirement fac

and accredited merchant partners, to the retirees. SWS stands for Services with a

SWS will be a multi-channel service center to take the requests and orders of retire

The orders will be passed on to the retirement facilities and merchant partners.

The Philippine Retirement Authority (PRA) provides a range of ser vices to help the

tiree settle comfortably in the country:

1. Greet and AssistUpon the arrival at the airport, a PRA representative will meet and will lead

to your transportation vehicle to take you to your destination.

2. 24/7 Hotline

3. Assistance in Obtaining Basic Government Documents/Requirements

4. Assistance with Banking Matters5. Merchant Discounts

6. List of Hospitals and Doctors

MICE (Meetings, Incentives, Conferences and Exhibition)

Tourism can also be categorized according to tourism resources, activities engaged

tourists and their purpose or motivation for travelling. One of the many types of to

is MICE. Activities of MICE are par ticipating in meetings, conventions, attending and

viewing exhibits, which eventually lead to dining, sightseeing, shopping and other leis

activities.

The development of the Philippine convention industry became an ofcial governm

policy in 1976, a milestone year that marked the establishment of Southeast Asias


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full-edged convention center, the Philippine International Convention Center (PICC); and the creatio

of the Philippine Convention Bureau (PCB) as a government corporation dedicated to the promotion

Philippines as a meetings and convention destination. That same year, the Philippines successfully playe

to the International Monetary Fund-World Bank Joint Conference that signalled the entry of the Philinto the world conventions market.

Since then, the Philippines has hosted some of the biggest and most important international and regio

meetings, conferences, conventions, congresses, and events that have made its capital city, Manila, one o

acknowledged Convention Cities of the world.

MICE venues in the Philippines

SMX CONVENTION CENTER

Location: Mall of Asia, Pasay City

Type of Events: Trade Events, MICE, Car Shows,

Concerts, Entertainment Shows-Fashion Shows

WORLD TRADE CENTER

Location: Pasay City

Type of Events: Trade Events and MICE

PHILIPPINE INTERNATIONAL CONVENTION

CENTER (PICC)

Location: Manila

Type of Events: Medical Conventions, Concerts,

Political Gatherings, Graduations and MICE

CULTURAL CENTER OF THE PHILIPPINES (CCP)

Location: Pasay City

Type of Events: Theater Shows, Exhibits

CEBU CONVENTION CENTERLocation: Cebu City

Type of Events: MICE

BAGUIO CONVENTION CENTER

Location: Baguio

Type of Events: MICE, Graduations, Programs

SUBIC BAY EXHIBITION AND CONVENTIO

CENTER

Location: Clark, Pampanga

Type of Events: MICE


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0

Challenges Facing the Tourism Industry in the Philippines

The issues mostly affecting the growth of the tourism industry sector includes: 1) conges-

tion in the international airport; 2) inability to develop and expand air accessibility to key

growth markets; 3) undeveloped infrastructure works in gateways and destinations; 4)

lack of investor friendly environment; 5) low safety and security measures; 6) unimproved

quality and consistent levels of facilities and services; 7) overlapping institutional functions

between the national government and local government units resulting in uncoordinated,

fragmented and inefcient outcomes; and 8) low budgets for marketing and promotions.6

These constraints have made it difcult to implement plans and programs for the develop-

ment of the sector at the public sector level and discouraged private sector investment in

improved connectivity services and in tourist facilities and service at the destination level.

To address these constraints in the past, in 1990, the Department of Tourism with techni-

cal assistance from the UNWTO prepared a 20-year tourism master plan (1991-2010),

and subsequently corresponding tourism plans for most of the regions. In 2002, McKinsey

& Co prepared a strategy and action plan to accelerate implementation of the master

plan. More recently, the government has:

developed the Nautical Highway initiative to improve connectivity between the

Central Philippine islands and the Northern and Southern parts of the country;

prepared a sustainable tourism development plan for Central Philippines to de-

velop its outstanding potential for island, marine and resort-based tourism; and

promulgated a new tourism law (RA9593)

Tourism Act of 2009 (RA 9593)

The new tourism law of 2009 seeks to address key concerns in regard to transpor tation,

infrastructure, investment, quality standards, institutional arrangements and tourism plan-

ning.

The law mandates the representation of the tourism sector in the Civil Aeronautics Board

(CAB) that determines the nature of air services between the Philippines and foreign

points, as well to sit as an active member in all air servi ce agreement negotiations.

Its objectives are to accelerate tourism infrastructure development by mandating the

DOT to coordinate closely with the infrastructure agencies of the government, esta

the Tourism Infrastructure Enterprise Zone Authority (TIEZA) to focus on destinati

area infrastructure development and investment promotion, and to prepare an ann

tourism infrastructure development program.

It will also accelerate private sector investment in tourist facilities and services at th

nation level, the TIEZA is mandated to declare Tourism Enterprise Zones in which i

tors will receive a range of scal and non-scal incentives similar to those provided

the provisions of the Board of Investments law.

Into the Future

Over recent decades, the travel and tourism sector has increasingly become an imp

driver of economic prosperity and social progress. It stimulates growth through jobs

enterprise creation, and provides signicant foreign exchange revenues for many co

The sector generates opportunities for reducing pover ty and inequality, preserving

and cultural heritage, and upgrading infrastructure (World Economic Forum Asean

and Tourism Repor t Competitiveness Report 2012).7

The recent initiatives of the Philippine Government in the tourism sector will addre

many of the issues and constraints that have prevented the sector from achieving it

potential in the past. The tourism law provides a framework for putting in place the ning, institutional, coordination and resourcing network necessary to implement pro

and projects to accelerate the development of tourism to the highest levels.

Endnotes:

1 Department of Tourism, Tourism Invesment Portfolio

2 Department of Tourism, Visitor Arrivals

3 Department of Tourism, National Toruism Development Plan

4 Discover Medical Tourism.com, Medical Tourism in the Philippines.

5 Philippine Retirement Authority, Why retire in the Philippines?

6 Department of Tourism, NTDP

7 World Economic Forum, World Economic Forum ASEAN Travel and Tourism Competitiveness Report

Philippine Tourism Industry (2013)

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