Philippines Tourism Overview and Directions 2011 - 2016

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

• Visitor decline in
Forecast
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)

World’s top tourist destinations
Destinations Base Year Forecasts Average Annual Market Share
• China will (million) (million) Growth Rate (%)
dislodge the 1995 2020 1995-2020 1995 2020
traditional
destinations China 20.0 130.0 7.8% 3.5% 8.3%
France 60.0 106.1 2.3% 10.6% 6.8%
• China, Hong Kong
United States 43.3 102.4 3.5% 7.7% 6.6%
and Russia as
leading Spain 38.8 73.9 2.6% 6.9% 4.7%
destinations Hong Kong 10.2 56.6 7.1% 1.8% 3.6%
Italy 31.1 52.5 2.1% 5.5% 3.4%
• Thailand,
Malaysia, United Kingdom 23.5 53.8 3.4% 4.2% 3.4%
Singapore and Mexico 20.2 48.9 3.6% 3.6% 3.1%
South Africa will
Russian Federation 9.3 48.0 6.8% 1.6% 3.1%
attract more
visitors Czech Republic 16.5 44.0 4.0% 2.9% 2.8%

Outbound tourism trend
UNWTO Regional Outbound Forecasts, 2020 Major Tourist Source Markets
(million) (million)
2010 2020 CAGR % Share Source Markets 2020 CAGR
Europe 496 729 3.9% 46.7% Germany 153 2.9%
Asia & Pacific 197 422 7.9% 27.0% Japan 142 7.5%
Americas 154 232 4.2% 14.9% United States 123 2.7%
Africa 28 62 8.3% 4.0% China 100 12.8%
Middle East 26 45 2.3% 2.9% United Kingdom 95 3.3%
Others 29 71 9.4% 4.6% France 55 3.9%
Total 940 1,561 5.2% Netherlands 46 3.0%
Intra regional 751 1,183 4.6% 75.8% Italy 35 3.1%
Long haul 188 378 7.2% 24.2% Canada 31 2.0%
Source: World Tourism Organization (UNWTO) Russian Federation 31 4.0%


Philippines and global tourism
• PH lags behind ASEAN destinations
International Visitors (in million) • Viet Nam has overtaken PH
2010 2009 • Cambodia fast rising destination

World 940.00 882.00 International Visitors to ASEAN (in million)
% PH Share 0.37% 0.34% Rank Countries 2010 2009
Asia Pacific 203.80 180.90 1 Malaysia 24.58 23.65
% PH Share 1.72% 1.66% 2 Thailand 15.84 14.15
ASEAN 67.55 60.41 3 Singapore 9.16 7.49
% PH Share 5.21% 4.98% 4 Indonesia 7.00 6.32
Philippines 3.52 3.01 5 Vietnam 5.05 3.75
Source: World Tourism Organization (UNWTO) 6 Philippines 3.52 3.01
7 Cambodia 2.40 2.50

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 ...

4.5% Others
5.8% Oceania
6.5% OFs 5.2%
8.4% ASEAN 6.1%
6.6%
10.2% Europe 8.5%
10.9%
20.2% Americas
22.8%

44.4% East Asia 39.9%

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

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)

% Share of Domestic travellers = 71.82%
% Share of Foreign travellers = 28.18%

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

Domestic Travellers
(million)

• 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
Source: NSCB Tourism Satellite Account

Factors shaping tourism trends

Major Determinants of Change Tourism Megatrends

 Polarization of tourist tastes
 New economy  Tourists “shrinking world”
 Advancement in technology  Power of electronic technology
 Travel facilitation  Fast track travel
 Security and safety  Customers will “can the shots”
 Changing visitor demographics  Destination as “fashion accesory”
 Three Es (entertainment,
 Globalization – Localization
excitement, education)
 Socio-environmental awareness  More focus on destination “image”
 New marketing techniques  Everyone is chasing the Asian
tourist
 Consumer campaign for
sustainable tourism

Formulate the National Tourism
Development Plan

GOAL VISION
“An environmentally and
socially responsible “TO BECOME THE
tourism that delivers more “MUST EXPERIENCE”
widely distributed income DESTINATION IN ASIA.”
and employment
opportunities”

22

Strategic Directions

• Rapidly expand capacity of secondary international airports
Improve market • Strengthen compliance with international air safety regulations
access and • Adopt policies that facilitate entry of international carriers and via free
access by growth markets
connectivity • Design and implement a strategic access infrastructure program
between secondary international airports and strategic destinations

• Design and implement a sustainable tourism transportation and
infrastructure program in the strategic destinations
Develop and market • Facilitate the development of mixed use tourism complexes and
community-based tourism programs in strategic locations
competitive tourist • Design and implement a PPP-based mandatory tourism enterprise
destinations and accreditation/ certification system
• Facilitate tourism investment, and simplify business set-up and
products licensing procedures
• Design/ implement a five-year PPP-based and funded marketing
strategy and one-year rolling action plan targeting key growth markets

Improve tourism • Clarify institutional roles and responsibilities of DOT and LGUs and
undertake LGU awareness and capacity building program
institutional, • Develop a highly competent, well motivated and productive tourism
governance and workforce
human resource • Improve governance in the area of safety, security, and in dealing with
tourists, tourism investors and tourism enterprises at the national and
capacities local levels

Why are we underperforming?

Destinations
Access Promotions
& Products

Tourism related infrastructure capacity is
already constrained and tightening
Estimated Maximum Capacity
VS. Actual Arrivals
(MM Foreign Arrivals / year)
Max Arrivals
Airport Utilization Rate
(Passenger Movements)

4.2 2010 Ave.
Airport No. of Intl Scheduled
Utilization 810
Flights 2010
Manila 94%
Seats/wk 197,000
Terminal 1 162%
Terminal 2 119% Total seat capacity
65%
Terminal 3 62% utilization
No. of Domestic
Old Scheduled Flights 3,000
57%
Domestic 2010
DMIA 33% Seats/wk 348,000
Cebu 141%
Total seat capacity
Davao 133% 82%
utilization
Laoag 18%

Note: 1The capacity is estimated based on the theoretically
maximum number of international arrivals in 2008;
Sources: DOT, REID
1

Arrivals

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

Ilocos Norte

21 Inclusive
Tourism Central Luzon

Cluster Metro Manila and
CALABARZON

Destinations Bicol Region

Western
Visayas Central

10 Priority Palawan
Visayas

Cluster Northern
Mindanao

Destinations Zamboanga
Peninsula

with 39 TDAs
Davao

Laoag – Vigan Tourism Cluster
 Destination and Product Laoag International Airport
Development
Tourism Development Areas:
 Tourism Enterprise Zones in
Pagudpud and Laoag TDA 1 - Laoag – Pagudpud
 Improvement to 9 heritage sites TDA 2 - Vigan
(Php 141 Million) Theme:
 Linking communities to tourism Beach Resort, historic heritage,
supply chain ecotourism, events

 Development Impact
 2010: 34,000 jobs
 2016: 29,000 additional jobs

Central Luzon Tourism Cluster
Clark International Airport  Destination and Product
Development
Tourism Development Areas:  Mixed used resorts in
Clark, Zambales, Subic
TDA 1: Subic – Clark –
Tarlac Corridor
 Improvement to 16
heritage sites (Php 140
TDA 2: Nueva Ecija
Million)
TDA 2: Pampanga
TDA 4: Bulacan  Linking communities to
TDA 5: Zambales tourism supply chain
TDA 6: Bataan
TDA 7: Aurora
 2010: 72,000 jobs
Theme:  2016: 75,000 additional
Entertainment/amusement, jobs
sports, beach resort, events,
MICE, ecotourism, wellness,
medical and retirement
tourism

Metro Manila and CALABARZON
Tourism Cluster  Destination and Product
Development
Ninoy Aquino International Airport

Tourism Development Areas:  Tourism Enterprise Zones in
Manila Bay and Batangas
TDA 1: Metro Manila and  Improvement to 15 heritage
Environs, sites (Php 396 Million)
TDA 2: Nasugbu-Looc-Ternate-  Linking communities to
Cavite tourism supply chain
TDA 3: Laguna de Bay
 8,100 additional rooms
TDA 4: Batangas
needed (2011-2016)
TDA 5: Quezon
 7,700 planned or under
Theme: construction

MICE, Business, Resort, history,  Development Impact
medical, and wellness, events, sight
seeing, entertainment, shopping
 2010: 632,000 jobs
 2016: 386,000 additional
jobs

Bicol Tourism Cluster
Bicol International Airport


TDA 1: Camarines and Catanduanes
TDA 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
 2010: 181,000 jobs

Palawan Tourism Cluster
Puerto Princesa International  Market Access and Connectivity
Airport  New Terminal and Taxiway in
Puerto Princesa Airport
Tourism Development Areas:  Destination and Product
Development
TDA 1: Puerto Princesa
TDA 2: San Vicente-El Nido-Taytay  Tourism Enterprise Zones in
TDA 3: Southern Palawan Puerto Princesa, San Vicente and
El Nido
Theme:  Tourism roads with DPWH and
DBM in national budget
Coastal Island resort, ecotourism,  P1.38 B for 7 projects for 2012
sightseeing, MICE, adventure  Improvement to 6 heritage sites
(Php 140 Million)
 Linking communities to tourism
supply chain

 2010: 28,000 jobs

Western Visayas Tourism Cluster
Iloilo International Airport  Market Access and Connectivity
Kalibo International Airport  Complete Kalibo Airport upgrade
 Provide international terminal
Tourism Development Areas: service at Iloilo Airport
TDA 1: Bacolod-Silay  Destination and Product
TDA 2: Iloilo-Guimaras Development
TDA 3: Boracay-Northern Antique  Tourism Enterprise Zones in Iloilo,
Guimaras and Bacolod
Theme:  Tourism roads with DPWH and
DBM in national budget
Coastal and island resort,  P1.27 B for 11 projects for 2012
ecotourism, marine sports,  Improvement to 8 heritage sites
events, MICE (Php 179 Million)
supply chain
 4,504 additional rooms needed
(2011-2016)
 2010: 194,000 jobs

Central Visayas
Tourism Cluster  Market Access and Connectivity
 Cebu terminal expansion and runway improvement
Mactan - Cebu International  Gateway marketing program (e.g. World Routes)
Airport  Seamless connection from Mactan Airport to tourism
development areas
Tourism Development Areas
 Tourism roads with DPWH and DBM in national
budget
TDA 1: Northern Cebu-
Bantayan-  P2.86 billion for 24 projects for 2012
Malapascua  Tagbiliran terminal expansion
TDA 2: Metro Cebu-  Need for a Bohol gateway
Mactan-Olango
Island  Destination and Product Development
TDA 3: Southern Cebu  Tourism Enterprise Zones in Cebu and Panglao
TDA 4: Negros Oriental-  Improvement to 17 heritage sites (Php 500
Dumaguete-Siquijor Million)
TDA 5: Tagbilaran-Panglao  Linking communities to tourism supply chain
Island
 7,000 rooms needed (2011-2016)
Theme  5,000 rooms planned or under construction
(2011-2016)
MICE, Business, resort,
history, events, sightseeing,  Development Impact
entertainment, shopping,  2010: 287,500 jobs
ecotourism

Zamboanga Peninsula Tourism Cluster

Zamboanga International Airport  Destination and Product
Development
 Tourism Enterprise Zones in
TDA 1: Zamboanga Sibugay Dipolog and Dapitan
TDA 2: Zamboanga City-Sta.  Improvement to 11 heritage sites
Cruz-Isabela (Php 169 Million)
TDA 3: Pagadian City-Zamboanga
del Sur
supply chain
TDA 4: Dapitan-Dipolog

Theme:  Development Impact

Resort, marine sports, events,  2010: 61,000 jobs
sightseeing

Northern Mindanao Tourism Cluster
Cagayan de Oro International  Market Access and Connectivity
Airport  Laguindingan Airport PPP for O&M

Tourism Development Areas:  Destination and Product
Development
TDA 1: Camiguin Island  Tourism Enterprise Zone in
TDA 2: Cagayan de Oro City- Laguindingan
Misamis Oriental  Improvement to 8 heritage sites
TDA 3: Iligan City-Lanao del (Php 50 Million)
Norte
TDA 4: Misamis Occidental
supply chain
TDA 5: Bukidnon
Theme:  Development Impact
 2010: 188,000 jobs
Island resort, marine sports,
history, sightseeing, events,  2016: 78,000 additional jobs
ecotourism, adventure,
business, MICE,
entertainment

Davao Gulf and Coast Tourism Cluster
Davao International Airport  Market Access and Connectivity
Marketing of airport as
Tourism Development Areas: international gateway

TDA 1: Davao City-Samal  Destination and Product
Island-Davao del Norte Development
TDA 2: Davao del Sur Tourism Enterprise Zones in Sta
TDA 3: Compostela Valley- Ana Wharf and Samal Island
Davao Oriental Improvement to 2 heritage sites
(Php 20 Million)
Theme:
Linking communities to tourism
Island Resort, marine sports, supply chain
history, sightseeing, events,  Development Impact
ecotourism, adventure,
business, MICE, entertainment 2010: 113,000 jobs
2016: 38,000 additional jobs

Product Portfolio

Nature based Cultural Tourism Sun and Beach Shopping, Leisure
Tourism Tourism and Entertainment

MICE Health and Cruise Tourism Nautical Tourism
Wellness

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

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

Source: General Appropriations, DOT
Coverage: International and domestic

Foreign visitors will grow at 11% per
annum

NTDP Targets

2010 2016

3.5 M international 6.6 M international
arrivals arrivals

27.9 M domestic 34.8 M domestic
travelers travelers

PhP1,042 B in total PhP1,759 B in total
expenditure expenditure

5.76% of GDP 6.78% of GDP

3.6 M employment 6.5 M employment

Thank you for your
kind attention!

Philippines Tourism Overview and Directions 2011 - 2016

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