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Tourism Subsectors in Central Visayas Using the Value Chain Analysis Framework | October 2007 Responsible Rita Pilarca [email protected]

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Private Sector Promotion (SMEDSEP) Program Tourism Subsectors in Central Visayas Using the Value Chain Analysis Framework | October 2007 Responsible Rita Pilarca [email protected] Author Gottfried Hilz-Ward [email protected] Editor Leah Divina Siton Steigerwald [email protected] GFA Consultant Publisher The Small and Medium Enterprise Development for Sustainable Employment Program SMEDSEP smedsep.ph 10F German Development Center PDCP Bank Center Building V A Rufino St cor L P Leviste St Salcedo Village, Makati City 1227 PHILIPPINES Ms Anja Gomm, Program Manager [email protected] September 2007 Private Sector Promotion (SMEDSEP) Program Tourism Subsectors in Central Visayas Using the Value Chain Analysis Framework | October 2007 CONTENTS TABLES 3 FIGURES 3 ACRONYMS 4 EXECUTIVE SUMMARY 5 1 INTRODUCTION 9 1.1 The Small and Medium Enterprise Development for Sustainable Employment Program 9 1.2 Background of the Study 9 1.3 Scope of the Study 9 1.4 Methodology 10 1.5 Field data collection procedure 11 1.6 Analysis and recommendations 11 1.7 Limitations of the investigation 12 2 CEBU 13 2.1 Health Tourism in Cebu City 13 2.1.1 Value Chain Analysis Medical Tourism Cebu City 14 2.1.2 Conclusions and Further Recommendations 18 2.2 Spa and Wellness Tourism Cebu City 19 2.2.1 Conclusions and further recommendations 23 3 BOHOL PROVINCE 24 3.1 Value Chain Analysis Ecotourism 24 3.2 Conclusions and Further Recommendations 29 5 SIQUIJOR PROVINCE 32 5.1 Value Chain Analysis Ecotourism in Siquijor Province 32 5.2 Conclusions and Further Recommendations 33 1 6 NEGROS ORIENTAL 34 6.1 Education Tourism in Negros Oriental 34 6.2 Conclusions and Further Recommendations 39 7 SUMMARY OF MAIN CONCLUSIONS AND RECOMMENDATIONS 40 8 WORKSHOP IN CEBU CITY ON INITIAL FINDINGS OF THE MISSION 44 9 DTI’S ROLE IN THE VALUE CHAIN PROCESS 45 ANNEX 46 Annex 1: Mission Programme (as undertaken by the Consultant) 46 Annex 2: Contacts (Persons met by the Consultant) 48 Annex 3: References 50 2 Tables 1 Critical Issues Medical Tourism Cebu City 16 2 Critical Issues Spa and Wellness Tourism Cebu City 21 3 Critical Issues Ecotourism Bohol 27 4 Critical Issues Ecotourism Siquijor 31 5 Critical Issues Education Tourism Negros Oriental 37 Figures 1 Value Chain Medical Tourism, Cebu City 15 2 Value Chain Spa and Wellness Tourism, Cebu City 20 3 Value Chain Ecotourism Bohol 26 4 Value Chain Ecotourism Siquijor 30 5 Value Chain Education Tourism Negros Oriental 36 3 Acronyms CHENO Consortium of Higher Education in Negros Oriental DED Deutscher Entwicklungsdienst German Development Service DENR Department of Environment and Natural Resources DFA Department of Foreign Affairs DTI Department of Trade and Industry DOH Department of Health DOT Department of Tourism ESL English as a Second Language GTZ Deutsche Gesellschaft fuer Technische Zusammenarbeit German Technical Cooperation JCI Joint Commission International NCR National Capital Region NGO nongovernment organization NIPA National Park NITI Negros Island Tourism Inc SMEDSEP Small and Medium Enterprise Development for Sustainable Employment Program VC Value Chain VCA Value Chain Analysis 4 Executive Summary The tourism industry in the Visayas continues its course of dynamic growth. Around the central hub, the international airport in Mactan, leisure resorts and business hotels have turned Cebu into the second most important tourist destination in the Philippines. After in the past years, tourism interests and investments have been spreading from Cebu to other Visayan provinces, notably to Bohol, especially to Panglao. Recognizing the opportunities for tourism in this region, the Government intensifies its efforts to spur development, especially in the regions identified as future key tourism areas. The Small and Medium Enterprise Development for Sustainable Economic Employment Program (SMEDSEP) and the Department for Trade and Industry (DTI) recognize the growth potential of the tourism sector and plan to strengthen the competence of small and medium enterprises and to improve their business conditions. With the Value Chain Analysis (VCA) of selected tourism subsectors, SMEDSEP and DTI intend to scrutinize the performance and competitiveness of the following tourism subsectors o health tourism in Cebu o ecotourism in Bohol o ecotourism in Siquijor and o education tourism in Negros Oriental. This study presents the results and conclusions from a consultant mission to the four (4) provinces which took place from 20 August to 4 September 2007. The mission had as its main task the assessment of the priority sub-sectors and the formulation of recommendations towards the development of their competitiveness. Despite its short time, the mission visited Cebu, Bohol, Siquijor, Negros Oriental and Negros Occidental and met with tourism companies, public and private sector representatives. The main conclusions are summarized as follows Medical Tourism in Cebu1 A few years ago, the Philippine Government began propagating the commercial opportunities of medical tourism for the Philippines. In fact, international medical tourism registers considerable growth rates from which Philippine hospitals could benefit given their strong medical competence and their competitive cost 1 Health tourism was broken down into two categories: Medical Tourism and Medical Spa and Wellness Tourism. 5 structure. Three privately owned hospitals in Cebu consider entering the medical tourism market, but only the Cebu Doctor’s Hospital intends to aggressively offer its services to foreign patients on commercial basis. In preparation for this, it is suggested to clarify the type and scope of medical diagnosis and treatments which shall be put out on the market as well as the organizational and management requirements for handling patients. A cooperation of hospitals with hotels and tour operators could ensure a high quality travel package. The biggest challenge concerns the acquisition of customers or the successful marketing of medical services, especially accreditation. A marketing strategy should be the starting point for a time and cost efficient program to build up partnerships among the travel agencies, partner hospitals and doctors and other industry partners. Medical Spa and Wellness Tourism Cebu Wellness tourism is another global trend in the international tourism industry. A broad spectrum of wellness products and treatments is available. More and more specialized and differentiated wellness formulas are launched to attract customers. Some Cebu resorts run separate spa departments or villages and are highly competent in this market segment. Many day spas in Cebu City strive to attract tourists into their establishments. For tapping the excellent opportunities in medical tourism, resorts and spa operators need to expand their service portfolio and offer stand alone wellness packages. This strategy aims at attracting clients for a health and wellness holiday in Cebu and thus making Cebu a wellness destination. A concerted marketing effort in key source markets needs to complement the development of several day packages which should include innovative and signature treatments in order to gain a competitive advantage. Ecotourism in Bohol Bohol is often referred to as the ecotourism champion of the Philippines and the island possesses abundant resources for nature based tourism. Demand for ecotourism will grow strongly not only from European but more and more from Asian markets. But like in any other tourism segment, ecotourism needs products, trails, itineraries, packages, experiences to offer to customers. In a sustainable way, the natural environment needs to be prepared or at least opened and explained to visitors. 6 In Bohol, many more dive sites, species and nature attractions await the visitors providing a natural or cultural experience for them. Particular attention should be given to exploratory activities which allow visitors not only to consume but to actively learn. An ecotourism destination needs a strong communication mechanism to inform visitors of nature sites to visit. Bohol’s biggest market lies right next door in the resorts of Panglao. It is also recommended to actively encourage ecological resort and travel operations to further improve Bohol’s competitive position. Ecotourism in Siquijor For Siquijor, nature based tourism is virtually the only form of suitable tourism. For this, the island offers very good natural conditions. Its seclusion is both an advantage and a disadvantage. The number of travellers to Siquijor remains relatively low and is unlikely to rise significantly unless the island receives regular airline flights and accommodation capacity expands. Local government and tourism stakeholders need to agree on a common approach forward and the Master Plan which was prepared for Siquijor could help in this discussion. Similar to Bohol, the range of nature sites, activities and experiences need to increase if more visitors are to be attracted. The destination needs to find its niche and observe carefully the path other ecotourism destinations in the Philippines take. Education Tourism in Negros Oriental For some years, the Philippines have seized a market opportunity by offering English language courses to foreigners, usually Korean students. A first such attempt is now made also in Dumaguete City. The study concludes that Negros Oriental could forcefully build up a significant capacity for English language courses. A farsighted strategy should focus on establishing partnerships and networks in Korea and China in order to
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