Tourism Overview and

Directions

2011 - 2016

HSMA General Membership Meeting

18 August 2011

Scope of Presentation

Part I - Where Are We Today?

Part II - Visitors Travel Characteristics

Part III - National Tourism Development Plan

Global tourism continuous to GROW

Forecast• Visitor decline in

1998 and 2003 have

not dampen

tourism growth

• East Asia and the

Pacific overtook

Americas as

leading destination

• UNWTO forecast

global tourism to

grow at 5%-6%

between 2010-2020

Source: World Tourism Organization (UNWTO)

• China will

dislodge the

traditional

destinations

• China, Hong Kong

and Russia as

leading

destinations

• Thailand,

Malaysia,

Singapore and

South Africa will

attract more

visitors

World’s top tourist destinations

Destinations Base Year

(million)

Forecasts

(million)

Average Annual

Growth Rate

Market Share

(%)

1995 2020 1995-2020 1995 2020

China 20.0 130.0 7.8% 3.5% 8.3%

France 60.0 106.1 2.3% 10.6% 6.8%

United States 43.3 102.4 3.5% 7.7% 6.6%

Spain 38.8 73.9 2.6% 6.9% 4.7%

Hong Kong 10.2 56.6 7.1% 1.8% 3.6%

Italy 31.1 52.5 2.1% 5.5% 3.4%

United Kingdom 23.5 53.8 3.4% 4.2% 3.4%

Mexico 20.2 48.9 3.6% 3.6% 3.1%

Russian Federation 9.3 48.0 6.8% 1.6% 3.1%

Czech Republic 16.5 44.0 4.0% 2.9% 2.8%

Source: World Tourism Organization (UNWTO)

Outbound tourism trend

2010 2020 CAGR % Share

Europe 496 729 3.9% 46.7%

Asia & Pacific 197 422 7.9% 27.0%

Americas 154 232 4.2% 14.9%

Africa 28 62 8.3% 4.0%

Middle East 26 45 2.3% 2.9%

Others 29 71 9.4% 4.6%

Total 940 1,561 5.2%

Intra regional 751 1,183 4.6% 75.8%

Long haul 188 378 7.2% 24.2%

UNWTO Regional Outbound Forecasts, 2020(million)

Source Markets 2020 CAGR

Germany 153 2.9%

Japan 142 7.5%

United States 123 2.7%

China 100 12.8%

United Kingdom 95 3.3%

France 55 3.9%

Netherlands 46 3.0%

Italy 35 3.1%

Canada 31 2.0%

Russian Federation 31 4.0%

Major Tourist Source Markets(million)

Source: World Tourism Organization (UNWTO)

Source: World Tourism Organization (UNWTO)

Philippines and global tourism

International Visitors (in million)

2010 2009

World 940.00 882.00

% PH Share 0.37% 0.34%

Asia Pacific 203.80 180.90

% PH Share 1.72% 1.66%

ASEAN 67.55 60.41

% PH Share 5.21% 4.98%

Philippines 3.52 3.01

International Visitors to ASEAN (in million)

Rank Countries 2010 2009

1 Malaysia 24.58 23.65

2 Thailand 15.84 14.15

3 Singapore 9.16 7.49

4 Indonesia 7.00 6.32

5 Vietnam 5.05 3.75

6 Philippines 3.52 3.01

7 Cambodia 2.40 2.50

Source: World Tourism Organization (UNWTO)

Source: World Tourism Organization (UNWTO)

• PH lags behind ASEAN destinations

• Viet Nam has overtaken PH

• Cambodia fast rising destination

Visitor arrivals reached 3.5 million

• Roller coaster trend -

periods of ups and

downs

• Good years - bad years

• Resiliency to external

factors/ crisis

• Difficult and hard climb

to reach 3 M

• AAGR = 5.08% in 15

years

Source markets ...

44.4% East Asia

Americas

Europe

ASEAN

OFsOceaniaOthers

20.2%

10.2%

8.4%

6.5%

5.8%4.5%

39.9%

22.8%

10.9%

8.5%

6.6%6.1%5.2%

Tourism Indicators

Indicators 2010 2009 Growth

Rate

International Visitors 3.52 M 3.01 M 16.68%

International Receipts Php 109.22 B Php 99.66 B 9.59%

Domestic Travellers 25.1 M 24.9 M 0.72%

Domestic Receipts Php 932.83 B Php 810.81 B 15.05%

Total Tourism Receipts Php 1,042.05 B Php 910.47 B 14.45%

Tourism Gross Value Added Php 518.47B Php 458.98 B 12.96%

% Share to GDP 5.76% 5.72% 0.70%

Tourism Employment 3.697 M 3.547 M 2.81%

% Share to National Employment 10.12% 10.12% 0.0%

Sources: NSCB Tourism Satellite Account and DOT Statistical Reports

Scope of Presentation

Part I - Where Are We Today?

Part II - Visitors Travel Characteristics

Part III - National Tourism Development Plan

Holiday remains the main purpose

of visit to the Philippines

• Increasing holiday trips

• Greater holiday vacation for China, Japan and Korea

• Russia, Taiwan and Hong Kong are also motivated by

holiday trips

• Substantial VFRs for USA, Australia and Canada

• Growing number of business trips from India, Japan and

Hong Kong

Independent trips is increasing

• Japan, Korea, USA, Australia and Canada are seeking

from independent trips

• China and Taiwan are vetting for more package tours

• Growing independent trips from HK, India and Russia

Repeat visits are growing

• Repeat visits rapidly expanding

• Many of Chinese, Russian, Indian, Korean

visitors are frequently visiting the Philippine

Length of stay is declining

• Length of stay dropped from 16 nights in 2007 to

8 nights in 2010

• Korea, China, Japan, Hong Kong and Taiwan

stayed between 4 to 7 nights

• Australia, USA, Canada and Russia has longer

stay

ADE grew in the last 2 years

• ADE in 2010 amounted to US$ 83.93 vs US$ 75.76 in

2009

• Korea has the highest daily spending

• USA, HK, Russia, India and Australia second biggest

spenders

• China and Taiwan spend in the range of US$ 50 per

day

Shopping, accommodation and F&B are

major items of expenditure

• Shopping accounts for the biggest bulk of

visitor expenditure, followed by

accommodation, F&B

• Korea and Japan spend more on shopping

• Australia, Hong Kong, Russia and USA spend

more on accommodation

More and more visitors are getting information from

friends and business associates

• USA, Japan, Hong Kong, Russia depend on word of

mouth from friends and pears who have visited PH

• Korea, China and Taiwan solicit info from travel agents

• Australia, Canada and India secure info from internet• USA, Australia, Canada and HK are less dependent on

travel agents for information

Tourist Arrivals in Top Destinations

2000-2010 (thousand)

Source: DOT Regional Offices/ Local Tourism Offices/ Accommodation Establishments

Top destinations included: Metro Manila, Cebu, Camarines Sur, Boracay Island, Baguio City, Davao City, Cagayan de Oro,

Zambales, Bohol, Puerto Princesa City, Camiguin Island, Cagayan, Negros Oriental, Ilocos Norte

% Share of Domestic travellers = 71.82%

% Share of Foreign travellers = 28.18%

Domestic Travellers

(million)

Source: NSCB Tourism Satellite Account

• An average Filipino travels

twice in six months for

tourism purposes

• Main purpose

• Pleasure and vacation

• VFR

• Business

• Medical

• MICE

• Average spent per day is

Php 2,212 (2010)

• Average length of stay per

trip is 4 nights

Sources: NSO and NSCB

Factors shaping tourism trends

Major Determinants of Change

New economy

Advancement in technology

Travel facilitation

Security and safety

Changing visitor demographics

Globalization – Localization

Socio-environmental awareness

New marketing techniques

Tourism Megatrends

Polarization of tourist tastes

Tourists “shrinking world”

Power of electronic technology

Fast track travel

Customers will “can the shots”

Destination as “fashion accesory”

Three Es (entertainment,

excitement, education)

More focus on destination “image”

Everyone is chasing the Asian

tourist

Consumer campaign for

sustainable tourism

Scope of Presentation

Part I - Where Are We Today?

Part II - Visitors Travel Characteristics

Part III - National Tourism Development Plan

GOAL“An environmentally and

socially responsible

tourism that delivers more

widely distributed income

and employment

opportunities”

VISION

“TO BECOME THE

“MUST EXPERIENCE” DESTINATION IN ASIA.”

22

Formulate the National Tourism

Development Plan

Strategic Directions

• Rapidly expand capacity of secondary international airports

• Strengthen compliance with international air safety regulations

• Adopt policies that facilitate entry of international carriers and via free access by growth markets

• Design and implement a strategic access infrastructure program between secondary international airports and strategic destinations

Improve market access and connectivity

• Design and implement a sustainable tourism transportation and infrastructure program in the strategic destinations

• Facilitate the development of mixed use tourism complexes and community-based tourism programs in strategic locations

• Design and implement a PPP-based mandatory tourism enterprise accreditation/ certification system

• Facilitate tourism investment, and simplify business set-up and licensing procedures

• Design/ implement a five-year PPP-based and funded marketing strategy and one-year rolling action plan targeting key growth markets

Develop and market competitive tourist destinations and

products

• Clarify institutional roles and responsibilities of DOT and LGUs and undertake LGU awareness and capacity building program

• Develop a highly competent, well motivated and productive tourism workforce

• Improve governance in the area of safety, security, and in dealing with tourists, tourism investors and tourism enterprises at the national and local levels

Improve tourism institutional,

governance and human resource

capacities

Why are we underperforming?

AccessDestinations & Products

Promotions

Estimated Maximum Capacity

VS. Actual Arrivals

(MM Foreign Arrivals / year)

Arrivals

4.2

Note: 1The capacity is estimated based on the theoretically

maximum number of international arrivals in 2008;

Sources: DOT, REID

Max Arrivals

1

Airport Utilization Rate

(Passenger Movements)

No. of Intl Scheduled

Flights 2010810

Seats/wk 197,000

Total seat capacity

utilization65%

Airport2010 Ave.

Utilization

Manila 94%

Terminal 1 162%

Terminal 2 119%

Terminal 3 62%

Old

Domestic57%

DMIA 33%

Cebu 141%

Davao 133%

Laoag 18%

Tourism related infrastructure capacity is

already constrained and tightening

No. of Domestic

Scheduled Flights

2010

3,000

Seats/wk 348,000

Total seat capacity

utilization82%

Enhancing access

• Air– More seats, lower airfares

– Exchange reciprocal traffic rights (e.g.

Malaysia-PH Air Talks and the China

market)

– Direct flights to priority nine cluster

destinations

• Land

– Airport and tourism destination/

service centre connectivity

– Last mile access to tourism attractions

Developing the gateway airports

Ninoy Aquino International Airport

Runway and Terminal Congestion

Safety issues

Rationalize airport operations

Clark Airport Expansion

On-going terminal expansion

Need for clear policy with definite timeline

for roles of NAIA and Clark

27

Why are we underperforming?

AccessDestinations & Products

Promotions

21 Inclusive TourismCluster Destinations

10 Priority ClusterDestinations with 39 TDAs

Ilocos Norte

Central Luzon

Metro Manila and CALABARZON

Bicol Region

Palawan

WesternVisayas Central

Visayas

Zamboanga Peninsula

Northern Mindanao

Davao

Laoag – Vigan Tourism Cluster

Laoag International Airport

Tourism Development Areas:

TDA 1 - Laoag – PagudpudTDA 2 - Vigan

Theme:

Beach Resort, historic heritage, ecotourism, events

Destination and Product Development

Tourism Enterprise Zones in Pagudpud and Laoag

Improvement to 9 heritage sites (Php 141 Million)

Linking communities to tourism supply chain

Development Impact

2010: 34,000 jobs

2016: 29,000 additional jobs

Central Luzon Tourism Cluster

Clark International Airport

Tourism Development Areas:

TDA 1: Subic – Clark –Tarlac Corridor

TDA 2: Nueva EcijaTDA 2: PampangaTDA 4: BulacanTDA 5: ZambalesTDA 6: BataanTDA 7: Aurora

Theme:

Entertainment/amusement, sports, beach resort, events, MICE, ecotourism, wellness, medical and retirement tourism

Destination and Product Development

Mixed used resorts in Clark, Zambales, Subic

Improvement to 16 heritage sites (Php 140 Million)

Linking communities to tourism supply chain

Development Impact

2010: 72,000 jobs

2016: 75,000 additional jobs

Metro Manila and CALABARZON

Tourism Cluster

Ninoy Aquino International Airport

Tourism Development Areas:

TDA 1: Metro Manila andEnvirons,

TDA 2: Nasugbu-Looc-Ternate-Cavite

TDA 3: Laguna de BayTDA 4: BatangasTDA 5: Quezon

Theme:

MICE, Business, Resort, history, medical, and wellness, events, sight seeing, entertainment, shopping

Destination and Product Development

Tourism Enterprise Zones in Manila Bay and Batangas

Improvement to 15 heritage sites (Php 396 Million)

Linking communities to tourism supply chain

8,100 additional rooms needed (2011-2016)

7,700 planned or under construction

Development Impact

2010: 632,000 jobs

2016: 386,000 additional jobs

Bicol Tourism ClusterBicol International Airport

Tourism Development Areas:

TDA 1: Camarines and CatanduanesTDA 2: Albay-Sorsogon-Masbate

Theme:

Resort, marine, ecotourism, water sports, MICE

Market Access and Connectivity

Complete New Bicol International Airport

Destination and Product Development

Tourism roads with DPWH and DBM in national budget

P120 M for 3 projects for 2012

Improvement to 4 heritage sites (Php 105 Million)

Linking communities to tourism supply chain

Development Impact

2010: 181,000 jobs

2016: 183,000 additional jobs

Palawan Tourism ClusterPuerto Princesa International Airport

Tourism Development Areas:

TDA 1: Puerto PrincesaTDA 2: San Vicente-El Nido-TaytayTDA 3: Southern Palawan

Theme:

Coastal Island resort, ecotourism, sightseeing, MICE, adventure

Market Access and Connectivity

New Terminal and Taxiway in Puerto Princesa Airport

Destination and Product Development

Tourism Enterprise Zones in Puerto Princesa, San Vicente and El Nido

Tourism roads with DPWH and DBM in national budget

P1.38 B for 7 projects for 2012

Improvement to 6 heritage sites (Php 140 Million)

Linking communities to tourism supply chain

Development Impact

2010: 28,000 jobs

2016: 84,000 additional jobs

Western Visayas Tourism ClusterIloilo International AirportKalibo International Airport

Tourism Development Areas:

TDA 1: Bacolod-SilayTDA 2: Iloilo-GuimarasTDA 3: Boracay-Northern Antique

Theme:

Coastal and island resort, ecotourism, marine sports, events, MICE

Market Access and Connectivity

Complete Kalibo Airport upgrade

Provide international terminal service at Iloilo Airport

Destination and Product Development

Tourism Enterprise Zones in Iloilo, Guimaras and Bacolod

Tourism roads with DPWH and DBM in national budget

P1.27 B for 11 projects for 2012

Improvement to 8 heritage sites (Php 179 Million)

Linking communities to tourism supply chain

4,504 additional rooms needed (2011-2016)

Development Impact

2010: 194,000 jobs

2016: 150,000 additional jobs

Central Visayas

Tourism ClusterMactan - Cebu International Airport

Tourism Development Areas

TDA 1: Northern Cebu-Bantayan-Malapascua

TDA 2: Metro Cebu-Mactan-OlangoIsland

TDA 3: Southern CebuTDA 4: Negros Oriental-

Dumaguete-SiquijorTDA 5: Tagbilaran-Panglao

Island

Theme

MICE, Business, resort, history, events, sightseeing, entertainment, shopping, ecotourism

Market Access and Connectivity

Cebu terminal expansion and runway improvement

Gateway marketing program (e.g. World Routes)

Seamless connection from Mactan Airport to tourism

development areas

Tourism roads with DPWH and DBM in national

budget

P2.86 billion for 24 projects for 2012

Tagbiliran terminal expansion

Need for a Bohol gateway

Destination and Product Development

Tourism Enterprise Zones in Cebu and Panglao

Improvement to 17 heritage sites (Php 500 Million)

Linking communities to tourism supply chain

7,000 rooms needed (2011-2016)

5,000 rooms planned or under construction (2011-2016)

Development Impact

2010: 287,500 jobs

2016: 233,000 additional jobs

Zamboanga Peninsula Tourism Cluster

Zamboanga International Airport

Tourism Development Areas:

TDA 1: Zamboanga SibugayTDA 2: Zamboanga City-Sta.

Cruz-IsabelaTDA 3: Pagadian City-Zamboanga

del SurTDA 4: Dapitan-Dipolog

Theme:

Resort, marine sports, events, sightseeing

Destination and Product Development

Tourism Enterprise Zones in Dipolog and Dapitan

Improvement to 11 heritage sites (Php 169 Million)

Linking communities to tourism supply chain

Development Impact

2010: 61,000 jobs

2016: 14,000 additional jobs

Northern Mindanao Tourism Cluster

Cagayan de Oro International Airport

Tourism Development Areas:

TDA 1: Camiguin IslandTDA 2: Cagayan de Oro City-

Misamis OrientalTDA 3: Iligan City-Lanao del

NorteTDA 4: Misamis OccidentalTDA 5: Bukidnon

Theme:

Island resort, marine sports, history, sightseeing, events, ecotourism, adventure, business, MICE, entertainment

Market Access and Connectivity

Laguindingan Airport PPP for O&M

Destination and Product Development

Tourism Enterprise Zone in Laguindingan

Improvement to 8 heritage sites (Php 50 Million)

Linking communities to tourism supply chain

Development Impact

2010: 188,000 jobs

2016: 78,000 additional jobs

Davao Gulf and Coast Tourism Cluster

Davao International Airport

Tourism Development Areas:

TDA 1: Davao City-Samal Island-Davao del Norte

TDA 2: Davao del SurTDA 3: Compostela Valley-

Davao Oriental

Theme:

Island Resort, marine sports, history, sightseeing, events, ecotourism, adventure, business, MICE, entertainment

Market Access and Connectivity

Marketing of airport as international gateway

Destination and Product Development

Tourism Enterprise Zones in Sta Ana Wharf and Samal Island

Improvement to 2 heritage sites (Php 20 Million)

Linking communities to tourism supply chain

Development Impact

2010: 113,000 jobs

2016: 38,000 additional jobs

Product Portfolio

Nature based

Tourism

Cultural Tourism Sun and Beach

Tourism

Cruise Tourism

Shopping, Leisure

and Entertainment

MICE Health and

Wellness

Nautical Tourism

Why are we underperforming?

AccessDestinations & Products

Promotions

Promotions

Roll out new branding

Collaterals customized and product

specific to each market

Extensive use of New Media

PPP marketing programs

Marketing budget

• PH US$ 10 M, Malaysia US$ 80 M,

Thailand US$ 75 M

• Potential sources not released

(US$ 35 M from both PAGCOR and

airports)

Marketing Expenditure, 2007-2016

In US$ thousand

Source: General Appropriations, DOTCoverage: International and domestic

International and domestic tourism promotions budget has not changed significantly over the past 5 years

Foreign visitors will grow at 11% per

annum

2016

6.6 M international

arrivals

34.8 M domestic

travelers

PhP1,759 B in total

expenditure

6.78% of GDP

6.5 M employment

2010

3.5 M international

arrivals

27.9 M domestic

travelers

PhP1,042 B in total

expenditure

5.76% of GDP

3.6 M employment

NTDP Targets

Thank you for your

kind attention!