Project No. 01.2467.7-001.00 Small and Medium Enterprise Development for Sustainable Employment Program (SMEDSEP) COOPERATION Republic of the Philippines Federal Republic of Germany Subsector Analysis of the Tourism Industry in Negros Occidental February 2005 Prepared/ Written by: Marian Boquiren, Ivan Idrovo and Helen Valdez, SDCAsia, Inc. Consultants [email protected]| www.sdcasia.ph Published by: The Small and Medium Enterprise Development for Sustainable Employment Program (SMEDSEP) A DTI-TESDA-GTZ Program 10th Floor, German Development Center, PDCP Bank Centre Building, V.A. Rufino cor. L.P. Leviste Streets, Salcedo Village, Makati City www.smedsep.ph | [email protected] Ms. Martina Vahlhaus, Program Manager Printed on: March 2005 - Makati City, Philippines Subsector Analysis of the Tourism Industry in Negros Occidental February 2005 Table of Contents Page Acronyms 2 Executive Summary 3 Section 1: Introduction 6 A. Objectives of the Study 6 B. Scope of Work 6 Section 2. Beginnings of the Focus on Tourism Development 8 Section 3. Industry Structure 10 A. Overview 10 B. Primary and Secondary Resource Bases 13 C. Tourism Services and Facilities 17 D. Enabling Support Environment: BDS/TVET 20 Section 4. Industry Performance 21 A. Tourist Arrivals 21 B. Tourism Receipts 22 C. Employment 22 Section 5. Proposed Fields of Change 23 A. Product and Infrastructure Development 23 B. Promotion and Market Development 25 C. Quality and Competitiveness Improvement 26 Section 6. Proposed Program Interventions 29 A. Institutional Development/Planning 29 B. Product and Infrastructure Development 29 C. Promotion and Market Development 30 D. Quality and Competitiveness Improvement 30 ANNEXES A Food Services B Travel and Tour Operators C Accommodation Services D Resorts E Transport Operators F Validation Workshop Summary Results G List of Key Informants H Accreditation I Classification and Standards: Hotels BIBLIOGRAPHY 1 Acronyms ANP Association of Negros Producers BDS Business Development Services CDs Compact discs COMELEC Commission of Elections CPQI Continuous Productivity and Quality Improvement CRS Customer Reservation System DA Department of Agriculture DDTVET Demand driven Technical and Vocational Education and Training DMO Destination Marketing Organization DOT Department of Tourism FGD Focus group discussion GDS Global Distribution System GMP Good Manufacturing Practices GTZ Deutsche Gesellschaft fur Technische Zusammenarbeit (GTZ) GmbH HRANO Hotel and Restaurant Association of Negros Occidental HRM Hotel and Restaurant Management IATA International Air Transport Association ICT Information and Communications Technology ISO International Organization for Standardization IT Information Technology LGU Local Government Unit LTFRB Land Transportation and Franchising Regulatory Board MICE Meetings, Incentives, Conferences, and Exhibition NAIA Ninoy Aquino International Airport NAITAS National Association of Independent Travel Agencies NATTO Negros Association of Travel & Tours Organization PAGCOR Philippine Amusement and Gaming Corporation PAL Philippine Airlines PCCI Philippine Chamber of Commerce and Industry PCVC Philippine Convention and Visitors Corporation RANI Resort Association of Negros Island SA8000 Social Accountability 8000 SBS Subsector Business Service SDCAsia Strategic Development Cooperation Asia SME Small and Medium Enterprises TCDC Tourism and Cultural Development Committee TDC Tourism Development Council TESDA Technical Education and Skills Development Authority TVET Technical & Vocational Education and Training 2 Executive Summary • The tourism development agenda of Negros Occidental had its roots during a period of socio- economic crisis resulting from adverse conditions of the world sugar trade. Among the early tourism related efforts and which has become an annual traditional event is the Masskara Festival. This annual event is popular to local and foreign tourists and has helped place Bacolod, the City of Smiles, in the tourism map. • Primary and secondary tourism resources of Negros Occidental consist of the following: - Marine-based resources: Negros Occidental has a long coastline and boast of several natural attractions such as white sand beaches, diving sites, and marine sanctuaries. - Land-based resources including flora and fauna: The northern and western parts are largely level plains and gently rolling slopes while the remaining portion is a land of sierras of varying elevations. - Cultural-heritage resources: Rich culture and history of province are captured and preserved in ancestral mansions, historical monuments, buildings and churches built during the Spanish era. - Festivals/Events: Negros Occidental is said to have the most number of festivals in the Philippines depicting certain cultures in each of its 19 towns and 13 cities. - Entertainment: There are a number of bars with live entertainment, video, karaoke, game rooms and discos, with majority located in the Goldenfields Commercial Complex. - Sports: Bacolod, the province's capital city has three challenging and world class golf courses, making it the golfing center in the Visayas. - Shopping: Negros Occidental is known for its innovative gifts and houseware and food products. • Tourism services and facilities in Negros Occidental consist of the following: Accommodation 86 establishments with 10 first class and standard hotels; 23% are DOT accredited Food Service 1,104 food establishments in the province as of June 2004, with majority falling under the micro scale category. Only 5 establishments are DOT accredited. Travel and tour 48 establishments with 3 accredited by DOT; 30+ tour guides operators Resorts 65 resorts --- beach, mountain, agriculture, and inland Transport 3 airlines and 4 inter-island shipping companies servicing Bacolod route; inland transportation consisting of buses, jeepneys, taxis, and car rentals • Main issues and challenges facing the industry are the following: - Current downward trend in average expenditure per visitor - The need for more effective and cohesive image, market positioning, and promotion - The need to expand tourist season and reduce seasonality 3 - Wide variances in quality of products and services as well as the need to align these to market requirements and standards - Weak demand and supply of support services and technical and vocational training needed to improve performance of tourism enterprises and their workforce - The need to create industry synergy and higher level of cooperation between and among public and private stakeholders within and outside the province (especially with neighboring tourism destinations). - The need to strengthen environmental management to conserve and enhance the vital natural and heritage of the province, and that sustainable tourism development practices are observed. • Building on current public and private sector tourism development initiatives, the following are the proposed fields of change and strategies to address the above challenges: Product and Infrastructure Development Development of a compelling brand and product portfolio, which meet the desire for a distinctive, authentic and uniquely Negros Occidental experience Development of cultural, sporting, and social events that would contribute to the extension of the tourist season and the achievement of higher yields, improved profitability, and increased employment in the industry. Improvement of tourism related infrastructure Improvement of waste management Promotion and Market Development Improvement of destination marketing of Negros Occidental Availability of tourism information at major gateway points (e.g., airports in key cities in the Philippines, international airports in other countries) and in strategic locations within Negros Occidental. Development of tourism internet portal for Negros Occidental --- a well-designed full concept one-stop tourism virtual mall that provides visitors access to information and reservation as well as links to various tourism intermediaries. Better use of travel agencies, tour operators, and other local/regional/international tourism intermediaries to promote and distribute Negros Occidental tourism products complemented by publicity in appropriate media to create awareness and establish credibility within the segments. Quality and Competitiveness Improvement Upgrading of existing management, marketing, and general administration courses to international standards and re-alignment of requirements of the everyday operations of the tourism trade. Development and/or strengthening of local capability to deliver dualized training programs of international standards and with balanced emphasis on operational and people skills for various competencies required in the hospitality, travel, tour, and transport segments. Promotion among enterprises of the implementation of a Continuous Productivity and Quality Improvement (CPQI) Program Promotion of the effective use of information technology in improving business operations and marketing Promotion and development of a tourism-friendly culture across all sectors of the community through public awareness and education programs Establishment of a province-wide industry led quality seal program • It is proposed that program interventions be directed towards the following: 4 Institutional Development/Planning Initiate the re-organization of the Tourism and Cultural Development Committee (TCDC) or a similar body composed of representatives of key players in the tourism sector such as ATANO and provide organizational development assistance.