TOURISM Industry SITUATIONER

TOURISM INDUSTRY SITUATIONERCONTENTSI. Executive SummaryII. IntroductionIII. Role of Tourism in the EconomyA. Participation in the National Economy 1. National visitor arrivals (foreign and domestic) 2. Regional visitor arrivals (foreign and domestic) 3. Revenue generationB. Industry Situation in the Region1. Data from DOT and other Government Agencies a. Establishments per Province; Geographic Concentration b. Cost of Accommodations c. Facilities and their Amenities2. Sampling/Survey Data a. Capital Structure b. Market Access (local, foreign, both) c. Advertising Tool d. Customers’ Mode of Payment e. Supplies f. Employment Profile g. Problems/Difficulties Encountered by Respondents3. Other data acquired through internet and other media a. Number of Travel Agencies per Province b. On-going Infrastructure Projects IV. Analysis of the Strengths, Weaknesses, Opportunities and Threats (SWOT) V. Issues and Challenges Facing the IndustryA. Internal B. ExternalVI. Recommendation and Plan of Action1 TOURISM INDUSTRY SITUATIONERI. EXECUTIVE SUMMARYTourism is one of the promising industries in the Philippines. This is evident from the increasing trend of tourist arrivals from 2.84 million in year 2006 to 4.88 million by yearend 2011, with Central Luzon ranked 6th among the regions. Tourism development and promotion are made easier through integrated efforts from the provinces, tourism organizations, and the advancements in technology. More health and wellness facilities were opened and improved in the last decade. The presence of freeport zones in Clark and Subic have also been significant in providing a vigorous tourism industry. These zones have developed Central Luzon into a destination for investment and tourists. The construction of the Subic-Clark- Tarlac Expressway (SCTEx) has provided better access to the rest of the region, North and South Luzon. These, among others, account for the increasing tourism performance in the region.This industry situation report presents an analysis through the 361 tourism establishments surveyed. Majority of the facilities are owned by single proprietors who invested in micro to small scale tourism businesses which use radio, television, internet and brochures as their advertising tools. Hotel guests are mostly local tourists, representing 76% of the total. Employment in the industry is male dominated from top management, to rank and file.Top concerns include the limitations on advertising tools, the lack of funds for expansion, inadequate assistance from the government, lack of licensed/trained workers and the unbalanced number of personnel (top-heavy ratio of management to rank and file) within the organization. This situation report recommends the implementation of synchronized advertisements, strengthening of the supply chain, strict compliance to staff trainings, certifications and to hotel rules and regulations, strengthening of tourism organizations, and better access to financing. 2 II. INTRODUCTIONTourism has notably played a major role in the economy of Region III, a decade or so after the Mt. Pinatubo eruption. The provinces of Pampanga, Bataan and Zambales, which were devastated by the flow of lahar, have transformed mainly from agricultural to mixed-use business industries. Meanwhile, the governments of Tarlac and Nueva Ecija have shifted their economic strategy, giving emphasis to tourism. The creation of the Aurora Pacific Economic Zone and Freeport focuses, among others, on the province’s tourism potential. Bulacan is now becoming a haven for resorts, capitalizing on its various historical and cultural attractions.Hotels and resorts mushroomed in the region, with concentrations in Clark and Subic. Meanwhile, businessmen in the neighboring provinces of Zambales, Bataan, Nueva Ecija, Tarlac, Bulacan and Aurora have engaged in the establishment of hotels and resorts, though smaller in scale in terms of facilities and investments.This study, therefore, determines the industry situation in terms of number of hotels and resort businesses per province, sizes in terms of investment, employment, market and facilities, including related amenities. It identifies the multiplier effects on other industry players such as suppliers and service providers. It also mentions how government’s infrastructure projects impact, even if indirectly, on the influx of visitors.The study was conducted during the third and fourth quarters of 2012, through data collection via samplings, interviews, internet and print media, and information from government and private institutions. Importantly, it presents the analysis of the strengths, weaknesses, opportunities and threats (SWOT) of the industry, discusses the issues and concerns affecting the business, plus recommendations and action plans that will help develop it further.III. The Role Of Tourism in the Philippine Economy State of Tourism in the PhilippinesA 2008 Department of Tourism article entitled “The Philippine Tourism Industry” states:“ After a series of declines in tourist arrivals from 2000 to 2003, the Philippines bounced back in 2004. That year demonstrated the industry’s resilience against debilitating internal and external pressures as it reached 2.3 million international visitors, a 21.9% leap from 1.9 million in 2003. This record- breaking ascent propelled the industry to a stable growth momentum in 2005, generating 2.6 million tourists, a 14.5% increase from 2004 and yielding receipts of US$2.19 billion, a 6.36% increase over the previous year.3 The industry continued its growth in 2006, attracting 2.8 million tourists, 8.5% higher than the previous year. For January to June 2007, visitor arrivals to the Philippines increased by 7.6% compared to the previous year, drawing 1.5 million visitors. Given the stable social and political environment, the government continues to intensify its marketing efforts in collaboration with the various sectors to attain its visitor targets.…Tourism has been a top foreign exchange generator. Investments endorsed by the Department to concerned agencies, i.e. the Board of Investments, Philippine Economic Zone Authority (PEZA), and Land Transportation Franchising Regulatory Board (LTFRB) reached over Php11.94 billion in 2005, with projects in land transport and hotel development. Meanwhile, a total of Php 93.76 billion in tourism accommodation projects in 2006 and Php 17.34 billion for the first half of 2007 were recorded. These figures could easily go higher if we include investment projects that did not go through the Department of Tourism.” (DOT, 2008)Based on the data gathered from the Department of Tourism (DOT), the tourism industry in the country plays a very significant role in the economy. Records reveal the following facts:Table 1. Foreign Tourist Arrivals (2006 to 2011)Year Foreign Tourists 2006 2,843,335 2007 3,091,993 2008 3,139,422 2009 3,017,099 2010 3,520,471 2011 4,883,895 (source: DOT)Table 2. Top Ten Visiting Nationalities (Year-end 2011)1 South Korea 2 United States 3 Japan 4 China 5 Taiwan 6 Australia 7 Singapore 8 Canada 9 Hong Kong 10 United Kingdom (source DOT)4 Table 3. Travelers By Region (Year-end 2011)REGION FOREIGN LOCAL OVERSEAS TOTAL % % % TOTAL FIL. RES. FOREIGN LOCAL OFR NCR 1,704,600 997,595 25,262 2,727,457 0.35 0.05 0.09 0.10 CAR 85,085 862,908 7,14 955,133 0.02 0 0.04 0.03 0.04 I 21,832 488,191 - 510,023 0.00 0.02 0.00 0.02 II 33,737 685,688 - 719,425 0.01 0.03 0.00 0.03 III 147,170 1,557,746 12,411 1,717,32 0.03 7 0.07 0.04 0.07 IV 498,655 5,767,442 14,898 6,280,99 0.10 5 0.27 0.05 0.24 V 675,387 2,671,572 66,651 3,413,61 0.14 0 0.13 0.24 0.13 VI 510,692 1,888,237 71,279 2,470,20 0.10 8 0.09 0.26 0.09 VII 989,104 1,543,099 16,773 2,548,97 0.20 6 0.07 0.06 0.10 VIII 24,048 338,099 3,320 365,467 0.00 0.02 0.01 0.01 IX 5,566 447,013 1,132 453,711 0.00 0.02 0.00 0.02 X 86,089 1,579,227 44,436 1,709,75 0.02 2 0.08 0.16 0.07 XI 59,859 889,645 7,360 956,864 0.01 0.04 0.03 0.04 XII 3,998 674,940 3,536 682,474 0.00 0.03 0.01 0.03 XIII 38,073 635,607 2,028 675,708 0.01 0.03 0.01 0.03 276,22 TOTAL 4,883,895 21,027,009 6 26,187,130 1 1 1 1 (source – DOT)A. Participation in the National Economy in terms of:1. National visitor arrivals (foreign and domestic)There was a gradual increase in the number of tourists to the country from the year 2006 to 2011. Korean nationals recorded the highest number of visitors, followed by those from the USA, then Japan, China and Taiwan. Forces coming in through the Philippines-US Joint Military Exercise or the Visiting Forces Agreement (VFA), fall under the number of visitors for USA. Americans also record the most spending in the country, compared to other nationalities. 2. Regional visitor arrivals (foreign and domestic)Region III garners 7% of the total number of travelers, sixth in rank after Regions 4, 5, NCR, 7 and 6, in that order. The number of visits is attributed to places of interest to locals and foreign tourists. Far flung areas and places declared as security risks had very minimal foreign visitors.The same article posits: “ ...the industry is recognized by the government as an important contributor to the generation of foreign exchange earnings, investments,5 revenue, employment, and to the growth of the country’s output. The inclusion of tourism as a major pillar in the Medium Term Philippine Development Plan (MTPDP) has given priority to the tourism sector by promoting the Philippines as a premier tourist destination and investment site. If developed in a sustainable manner, indeed it can be a powerful economic growth engine for the country. It deserves to be a top priority for national development because of the following reasons: It is a powerful and efficient industry;  Its impacts on social development are broad and deep;  It creates strong peripheral benefits;  The Philippines can compete and win; and  It helps maintain cultural integrity, essential ecological processes, biological diversity and life support systems.The industry is powerful and efficient because: It is global in size;  It has a strong potential for growth;  It can accommodate large levels of investments  It has a very high value retention rate, i.e., relatively low import component;  It generates direct and indirect jobs;  It generates huge foreign exchange movements; and  It can be developed quickly;  Its impacts on social development are broad and deep because:  It is both labor and capital intensive;  It promotes skills and vocational development that can be exported; and  It promotes a ‘culture of tourism’ through a safer and cleaner environment that benefits not only tourists but also the entire community.It promotes and creates strong peripheral benefits to other economic sectors and society as a whole through: Tourism infrastructure spending;  Catalyzing entrepreneurship; and  Improving the image of the country in international trade and investmentThe Philippines can compete and win in developing its tourism sector because: It possesses the “timeless” competitive advantage of proximity to North- East Asia, especially China, Japan, and Korea, and it also has world class natural attractions;  It is relatively free of restrictions unlike the other sectors of the economy; and  It can create sizeable niche markets to harness growth in the tourism industry; to do this, focus, execution and coordinated leadership towards priority tourist markets and destinations are required.”6 3. Revenue generationFurther, said DOT article states:“ Among the largest tourism investments over the past few years were the Php 3.984 billion Hyatt Hotel and Casino Manila…, the Php 1.637 billion Hilton Cebu Resort and Towers in Mactan Island, Lapu-Lapu City; the Php 1.348 billion Eastbay Resorts Inc. at East Ridge Golf Club in Binangonan, Rizal; the Php 1.008 billion Manila Ocean Park at Rizal Park, Manila; and the Php1 billion modernization of the Island Cove Resort and Leisure Park in Kawit, Cavite. New investments in tourism-related facilities and the expected increase in tourist arrivals would generate thousands of new jobs for Filipinos. By and large, the tourism industry continues to be a major contributor to the growth of the Philippine economy.” (DOT, 2008)IV. Industry Situation in the RegionThe regional profile was determined through data gathered from 1) the DOT and other government agencies; 2) samplings/surveys; and. 3) through internet and print media.A. Data Acquired from the DOT and Other Government Agencies1. Establishments per Province/Geographic ConcentrationThe DOT, through an accredited travel guide catalog company, records the following number of hotels and resorts in the region. Zambales (118), having the Subic Bay Freeport as its major destination, posted the highest number of facilities; it is followed by Pampanga (71), where Clark and Angeles City are located. The cities of Angeles (57), Olongapo (48) and the Subic Freeport Zone (48) top the list. This is attributed to the former facilities of the American military and the conversion of Subic Naval Base and Clark Airbase into special economic zones. The lowest number of hotels in the region is found in Tarlac.Table 4. Number of Hotel/Resort Establishments per Province; Geographic Concentration7 No of Top 3 Municipalities/Cities No of Hotels and with the most number of Province Hotels/Resorts Resorts Hotels/Resorts Baler 32 Aurora 56 Casiguran 8 Dipaculao 8 Morong 14 Bataan 33 Balanga 6 Bagac 5 San Rafael 5 Bulacan 37 Malolos 5 Bulacan 4 Cabanatuan 8 Nueva Ecija 37 Sta. Rosa 3 Guimba 3 Angeles City 57 Pampanga 71 San Fernando 6 Mabalacat 5 Tarlac 9 Tarlac 9 Subic Bay Freeport Zone 48 Zambales 118 Olongapo City 48 Iba 26 Total 361 300 (source: DOT)2. Cost of Room AccommodationsRoom rates in the rural areas are cheaper or less than Php2,000 per unit, unlike in the National Capital Region and other major cities,. However, in Zambales and Pampanga (particularly in Subic Bay Freeport and Clark Special Economic Zone), units with rates ranging between Php2,000 to Php5,000 have increased, or are almost equal in number to the lower room rate hotels. Above that, a few hotels offer very high room rates (over Php5,000) and usually have large units and amenities that cater either to families or VIP customers. 8 Table 5. Number of Hotels/Resorts According to Room Rates (based only on respondents)Aurora 16 0 0 Bataan 21 21 9 Bulacan 25 19 3 Nueva Ecija 8 2 0 Pampanga 48 40 16 Tarlac 6 4 0 Zambales 60 49 22 Total 184 135 50(source: DOT)3. Facilities and their Amenities Hotels and resorts in Zambales and Pampanga record the most in terms of restaurant, swimming pool and conference hall amenities. The inclusion of the swimming pool as an amenity may be attributed to the hot climate in the area and its popularity among target customers from Class B citizens and corporate sponsored clientele. Hotels in rural areas are normally cheaper, have lesser amenities, and oftentimes, have only sleeping accommodations. Notably, Pampanga and Zambales recorded a significant number of spas. This may be due to the growing number of Korean tourists in the areas of Clark and the Subic Bay Freeport. Table 6. Number of Hotels/Resorts Based on AmenitiesSwimming Conference Province Restaurant Spa Pool Halls Aurora 5 1 2 1 Bataan 3 0 6 3 Bulacan 11 2 28 6 Nueva Ecija 4 2 6 3 Pampanga 48 30 48 56 Tarlac 4 0 4 2 Zambales 61 14 51 31 Total 136 49 145 102 (source: DOT)B. Sampling/Survey DataThe survey was conducted among at least 20% of the total number of hotels and resorts in the respective provinces. 1. Capital Structure9 Capital structure determines the establishment’s growth from its conception to present, through investments that are in place. It also shows the ownership of the business, signifying how the company performs in terms of ownership structure.Table 7. Capital Structure, Part ITotal No. of Hotel and Province Years operating Resort Facilities Facilities Surveyed 5-10 >10 <5 years years years Aurora 56 27 22 5 Bataan 33 35 6 6 23 Bulacan 37 7 1 1 5 N Ecija 37 23 4 2 17Pampanga 71 16 8 2 6Tarlac 9 9 7 0 2 Zambales 118 20 7 7 6 Total 361 137 55 18 64Table 8. Capital Structure, Part IIOwnership Initial Capital Present Investment Province S C P Mi S M L Mi S M L Aurora 26 1 0 9 15 0 3 9 13 1 4 Bataan 28 6 1 14 15 2 2 6 19 3 5 Bulacan 1 6 0 0 2 1 1 0 1 1 2 Nueva Ecija 20 2 1 12 11 0 0 12 11 0 0 Pampanga 10 6 0 4 7 1 3 1 8 0 4 Tarlac 1 8 0 0 2 2 5 0 1 2 6 Zambales 12 8 0 5 6 5 4 1 11 3 5 Total 98 37 2 44 58 11 18 29 64 10 26 Legend: (S) - Single ownership (Mi) – Micro/ ≤ 500 K (C) - Corporation (S) – Small / ≤ P5 M (P) - Partnership (M) – Medium ≤ P10 M (L) – Large > P10 MAurora province’s record signifies the fastest growth in the number of hotels and resorts – from five established a decade ago, compared to 22 that started operating five years back. Almost all are single proprietorships, with only one of the surveyed owned by a corporation. Its micro businesses did not grow, while small and large business establishments grew by 20 percent.Of the 35 hotels in Bataan listed by the DOT, 33 were surveyed by the DTI’s provincial office. Bataan facilities increased in the past decade, with most of them registered under single proprietorships. In terms of investments, Bataan posted an10 increasing trend from its inception to present status. Table 8 shows that at first there were 14 micro-sized hotels, with this number later whittled down to 6; and there were formerly 15 small sized hotels which later rose in number to a total of 19 small hotels. This indicates that most of the micro hotels moved up to the bigger categories of operation, signifying good growth in Bataan’s tourism industry. One of the seven companies surveyed in Bulacan was established recently, while another one started operating within the period of 6 to 10 years. The remaining five (5) facilities were already in business for over a decade. This is probably because Bulacan is more focused on agricultural and industrial businesses. Most of the surveyed establishments are owned by corporations and spring from medium to large scale investments. There is also an indication that the investments grew from small to medium and large. There is no record of any micro-business in the province.Nueva Ecija’s 23 respondents to the survey comprise around 62% of the total hotels and resorts in the province. Based on the survey, the industry grew by 35% in 10 years, most of which were established in the last 5 years. Despite this, there was no indication of growth in size of investment, with hotels and resorts belong to micro and small scale businesses. Most are single proprietorships, with only two facilities operated by a corporation, and one by a partnership.Pampanga’s record also indicates a gradually growing industry. The number of facilities increased from 6 to 10 in ten years among 22% of the respondents. Corporations own 60% of the facilities, also signifying an increase in the size of investment. This survey, however, did not include those facilities inside the Clark Economic Zone.Tarlac records the lowest number, at nine (9) hotels, in the region. This may owe to the focus of the government on agri-business. It may be noted that from two (2) hotels a decade ago, seven (7) new facilities started operation within the last five years. Eight (8) out of nine (9) are owned by corporations. No facilities belong to micro business; instead, two small, two medium and five large scale facilities were recorded. These businesses also grew; thus, at present, the sizes are: one (1) small, two (2) medium and six (6) large. Zambales declared the most favorable growth in the region, with over 200% growth in the number of facilities in the past decade. In addition, there was a significant increase in the investment portfolio. From five (5) micro, six (6) small, five (5) medium, four (4) large; to one (1) micro, 11 small, three (3) medium sized, and five (5) large businesses at present. This indicates that micro businesses grew to small scale, while medium sized ones grew to large scale businesses. This however, does not represent the real situation in Subic Bay Freeport, as there were only two respondents from the area from around 40 operating establishments.In summary, the concentration of hotels and resorts is in Zambales and Pampanga. Sizes of investment therein are significantly higher than in other provinces. Despite significant developments, the facilities in other provinces remain small compared to the above two provinces. Ownership in the two areas is mostly11 by corporations, while those in other provinces are mostly single proprietorships. Obviously, corporations have bigger capital and easier access to financial support.2. Market AccessMarket access determines whether the facility caters to foreign and/or local or purely locals only. The table shows the most visited places of overseas Filipino residents or the balikbayans. Table 9. Market AccessOverseas Province Local Foreign Fil. Total Residents Aurora 43,870 204 500 44,574 Bataan 465,311 91,607 52,042 608,960 Bulacan 266,150 31,075 21,170 318,395 Nueva Ecija - - - 0 Pampanga 23,855 3,862 623 28,340 Tarlac 45,980 72,764 828 119,572 Zambales 112,164 11,682 7,495 131,341 Total 957,330 211,194 82,658 1,251,182Interestingly, locals spend vacations in the region; in fact, their consumption dominates the market. Within this, OFRs or balikbayans record significant figures, and are thus a potential market segment. Meanwhile, the number of foreign visitors in Aurora is very insignificant – registering only 204. This may be due to its distance from Manila, where the international airport is located. Bataan and Bulacan record the highest number of visitors in the region. Zambales follows rank at more than 100,000 visitors. Pampanga, apparently, because of the exclusion of Clark, yields a considerably low result. 3. Advertising ToolsAdvertising tools refer to the marketing facilities employed by the operators. It also indicates the extent of the company’s marketing efforts. Indirectly, this also reflects the presence or absence of other ways of marketing (e.g. the internet, and/or marketing agent/s).Table 10. Advertising Tools12 Province Brochures Internet Agent TV/Radio Aurora 4 12 0 20 Bataan 16 16 6 13 Bulacan 5 7 2 6 Nueva Ecija - - - - Pampanga 11 6 2 47 Tarlac - - - - Zambales - - - - Total 36 41 10 86Only four (4) of the seven (7) provinces responded to the survey on the tools used for advertising. They all seldom use (human) agents to promote their facilities. Brochures are the dominant, though very traditional, advertising tools of choice for marketing their hotels, products and services. The internet is also becoming a common and ideal medium, due to minimal outlay for its use, yet having the widest reach. Local TVs and radio stations are still common tools for advertisers. 4. Modes of PaymentThe acceptance of credit/debit cards indicates how modern the facilities are. Checks are normally paid by corporate visitors. Hence, this parameter may determine the market segment, whether they are Class AB or CD.Table 11. Customers’ Mode of PaymentCredit/debit Province Cash Check Card Aurora 24 6 4 Bataan 33 12 6 Bulacan 7 4 1 Nueva Ecija - - - Pampanga 16 9 6 Tarlac - - - Zambales - - - Total 80 31 17Most hotels still have not allowed for checks and/or credit cards as modes of payment for their products and services, which is indicative of the target markets of the operators. This is attributed to the size of facilities and their available amenities. The class C market normally pays in cash while those from class B pay through checks or credit cards, as do corporate customers. Pampanga has the most facilities that accept credit cards and checks as payments. In contrast, most hotels and resorts in Aurora accept only cash payments. 13 5. Source of SuppliesSupplies origin refers to the sources of supplies and materials for hotels and resorts. This aspect merits further study as it can point to specific items for selling that local manufacturers and traders may engage in.Table 12. Supplies OriginsFood Toiletries/Cleaning mat’ls Province P R M I P R M I Aurora ------Bataan 26 4 5 2 22 1 18 4 Bulacan - - - - 2 1 8 0 Nueva Ecija Pampanga 30 0 6 1 6 1Tarlac 9 0 0 0 6 1 10 2Zambales 8 1 1 1 5 0 3 1Total 73 5 12 4 41 3 39 8 Legend P - w/in the Province M - w/in Metro Manila, etc. R - w/in the Region I - importedSince Region 3’s main industry is agricultural, almost 100% of the food is sourced within its locality. Cleaning materials, meanwhile, are available and bought from the area, but toiletries are purchased from Metro Manila. Few are even imported from abroad, as these may not be available locally. Better quality is among the reasons as to why such materials are purchased from abroad.. 6. Employment ProfileEmployment profile shows the number of employees and helps determine the quality of service provided to customers, as well as the quality of facility management/owners.Table 13. Employment Profile14 Without With License Top Middle License or Province Rank & File or Training Management Management Training Certificate Certificate M F M F M F M/F M/F Aurora 35 37 7 11 61 31 - - Bataan 88 76 36 19 223 95 42 207 Bulacan 84 36 20 21 121 82 65 0 Nueva Ecija 8 11 4 3 41 28 0 0 Pampanga 25 16 35 14 174 130 4 0 Tarlac 8 8 5 12 96 66 6 105 Zambales 47 19 10 15 121 83 1 0 Total 295 203 117 95 837 515 118 312A disturbing trend in management composition and practice reveals itself from the data derived from Aurora and Zambales provinces. There is a very disproportionate number of too many managers in ratio to the rank and file. In Aurora, concretely, there are 72 people in top management, over only 92 workers to supervise. Only Tarlac and Nueva Ecija recorded a significantly low ratio of top management to the number of rank and file employees. This may be due to the cultural practices of “utang-na-loob” (debt of gratitude) and “pakikisama” (getting along to preserve harmony in relationships), where Filipinos’ accommodation of relationships could stretch too far and negatively. Patronage and nepotism may creep into the arrangements. Another alarming fact is that many personnel are not qualified for the jobs, or at least do not possess proper training and/or skills. Tarlac recorded the worst: only six were licensed/trained, as compared to 105 untrained/licensed personnel. Bataan falls in the same category, with 207 untrained/unlicensed personnel compared to 42 qualified individuals. Bulacan, on the other hand, records the best employment practice in terms of qualification standards. 7. Problems Encountered A collective problem is the limitation on funds and personnel. This inadequacy results in inefficiency of service, lack of advertisement/marketing strategies, and lack of facility maintenance, all of which are important in hotel/resort operations. In addition, Bataan and Pampanga reported low collections on receivables. Other concerns include salary advances, family conflicts among the owners, prohibitive government regulations and projects that hamper daily operations. Table 14 shows the specific problems gathered per category in the provinces:Table 14. Problems Encountered by Respondents15 Province Problems Encountered by Survey Respondents Marketing Operations Financial Manage Others ment Aurora  No respondents Bataan  Mktg officer’s  Dela  Accounts  Restrictive disadvantageous y in receivables LGU Rules on deals the  Lack of capital setting up of  Lack of mktg deliv for maintenance tarpaulins staff ery  Lack of  Limited  Lack of mktg of operating capital parking fund servi space  Lack of ces promotion  Lack of pers onne lBulacan  Quotation  Defects  No customers  Salary  Demand  No funds advances N. Ecija  No respondents Pampanga  Need for more Lack of  Low/no budgets  Family  Parking on promotion to manpower for advertisement problems main entrance  Flooding different sectors  Minimal income  Lack of along Lazatin due to low prices Blvd continuous mktg  Road  demanding and of rooms  Slow collection construction rowdy guests of the nearby of accounts flyover receivables Tarlac  No respondents Zambales  No respondentsC. Other Data Acquired through Internet and Other MediaTable 14. On-going and planned infrastructure projects per province (such as roads and bridges) 16 Total No. of Province Total Area Completed On-Going Project s Aurora 48 3,147.32 km2 31 17 Bataan 32 1,372.98 km2 16 12 Bulacan 81 2,774.85 km2 53 14 Nueva 91 5,751.3 km2 76 15 Ecija Pampanga 53 1,984.7 km2 25 8 Tarlac 41 2,736.6 km2 20 11 Zambales 19 3,529.4 km2 12 7 Total 233 84 (source: DPWH)Access to tourist destinations plays a very important role in the hotel and resort industry. An excellent tourist attraction becomes less enticing due to poor roads and bridges. Central Luzon has been known for typhoons and flooding. At least 20 typhoons pass through the country each year and more than half of these cross the region. In addition, lahar from Mt. Pinatubo’s eruption continues to bring floods after more than 20 years, damaging houses, crops, plus roads and bridges, too. Data reflects infrastructure projects that were started and finished in 2012. These include road improvements for inter-municipalities and provinces in Central Luzon and nearby regions. These road projects will promote tourism, improve trade and commerce of farm products, and entice the influx of business enterprises.V. Analysis of the Strengths, Weaknesses, Opportunities and Threats (SWOT)STRENGTHS WEAKNESSES OPPORTUNITIES THREATS Presence of many Limited advertising Can shift to foreign Cut-throat tourist attractions in tools target market competition due to the region mushrooming hotels in a cluster Cheaper room rates Limited funds for Can avail of loan Extreme weather expansion grants from the conditions that may government and cause closure of private institutions business Available food and Limited assistance Can avail of trainings LGU rules adversely non-food supplies from the gov’t for and workshops affecting marketing within the province advertisement conducted by the and operations DTI Established industry Lack of professional Identification of for more than a license and/or sources of supplies decade. trained workers from the nearby provinces for cheaper prices English-speaking Unbalanced number Can capitalize on the workers of personnel within growing tourist 17 the organization attractions within or nearby province Beaches are High employee turn- added-amenities at over due to low no cost to the salaries caused by owners. seasonal businessVI. Issues And Challenges Facing The IndustryWhile the national government focuses itself on promoting prime destinations in the country, the fact is that far flung and small areas with great tourism potentials are often neglected, if not under-promoted. Government can otherwise play a very important role in marketing/advertising, for which many of the tourism facilities have very limited funds. Secondly, the supply chain should be given more emphasis. A significant number of hotel facilities in the region need basic materials such as daily toiletries and cleaning agents, as well as other services like laundry, repair and maintenance, and similar services. Locals could tap and coordinate with each other to make such product and service businesses thrive, thus providing more income and livelihood to the region.Thirdly, many employees have little or no training relevant to the businesses. This obviously results in the rendering of unprofessional services. The hotels and resorts under single proprietorships also produce the top-heavy management complements. This situation incurs unnecessary costs, results in inefficiency, and accounts for employees who are non-performing assets.Finally, LGUs’ stringent rules and regulations, particularly about the placement of tarpaulins for advertisement, have become counter-productive. While strict enforcement of rules is commendable, flexibility needs to be employed to allow for tourism advertising that would aid business growth. Add to the lot, the crucial lack of parking space, which has always been a problem for hoteliers.There are other issues that government cannot address only by itself, as observed in the study. These include the following: a. Cutthroat competition due to mushrooming of hotels in a small locality. The hoteliers bring their prices down to capture more customers. In the end, profitability suffers severely. b. Absence of collaborative marketing efforts to promote the locality as opposed to individual advertisement. c. Limited growth in business, due to limited funds/capital and other factors.VII. Recommendation/Plan of Action18 At least four factors contribute to making a certain locality into a successful tourist destination: 1) presence of tourist attractions; 2) affordable costs; 3) very good access; and, 4) assured safety and security. If one of these is absent or lacking, there will be a great negative impact on tourist arrivals. These four factors heavily rely on how private owners, local and national governments collaborate. Thus, it is highly recommended that another study be pushed to zero in on the above factors.Meanwhile, the following action plans are hereby submitted for further discussion:Activity Term Implementatio Responsibility n Implementation of synchronized Short 2013 DTI, LGU, advertisement/promotion hoteliers Strengthen the supply chain to Short 2013 DTI, suppliers, local producers, traders and service service providers providers, hoteliers Strictly impose trainings on Short 2013 DTI, DOLE, employees as needed TESDA, hoteliers Review and rationalize rules on the Medium 2013 LGU, DTI hotel industry, such as posting of signage, provision of parking lots, building codes, etc. Strictly impose the rules to improve the quality and safety features of the facilities Organize and/or strengthen hotel Medium 2013 hoteliers organizations to let them self- regulate, have better-collaborated marketing efforts, etc. Provide assistance, information Medium 2013 DTI, financial drives about fund outsourcing from institutions, government and non-government hoteliers outfits19

TOURISM Industry SITUATIONER

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