Development in the Supply Chain of the Philippine Agri-tourism Industry: An Assessment Presented by Elmer R. Esplana [email protected] Socio-economist & Interdisciplinary Researcher National Secretariat Coordinator, Price and Volume Watch, Bureau of Animal Industry Department of Agriculture Presented at the 1st International Agriculture and Tourism Expo, World Trade Center, Pasay City July 1, 2011 Objectives of the Presentation • The main objective of the study is to document and assess the developments in the Philippine agri-tourism industry supply chain. • Specifically, the study aims to: 1) provide a situation on the tourism industry both in local and international situation; 2) provide a baseline information on the developments in the Philippine agri-tourism industry from input supply, production, processing, marketing and demand/consumption; 3) identify the best practices along the supply chain approach; 4) provide the baseline tourism competitiveness of agri-tourism with some ASEAN countries; 5) suggest solutions for the gaps and problems encountered by the industry along the supply chain; and 5) recommend strategic directions for the Philippine agri-tourism industry. Figure 1. Conceptual Framework for the Agri-tourism Industry Supply Chain and Development Assessment Results of the Study • Supply Chain -the core business process in any organization that creates and delivers a product or service, from concept through development and manufacturing or conversion, and into a market for consumption. It is called as the “seed to shelf” or “breed to plate” or “farm to spoon” approach. Mission of Supply Chain • The mission of supply chain, as a management approach, is the ability of individual agribusiness firm/agri-tourism establishment or an industry “to enhance the customer’s experience through excellence in delivering the right products, services, resources and information seamlessly to the right place at the right time.” Industry Focus of Supply Chain Management • The industry focus of supply chain management includes activities such as 1) integrated behavior, 2) mutual sharing of information, 3) mutual sharing of risk and rewards, 4) cooperation, 5) same goal and same focus on serving customers, 6) integration of processes, 7) partnership in building and maintaining long-term relationships among each industry stakeholder. Figure 2. Agri-tourism Industry Supply Chain Framework Input Supply Production Processing Marketing Consumption Source: Esplana, Abao, Vasquez, 2007 World Tourism Situation • In 2010, international tourism receipts are estimated at $919 billion worldwide higher than the $851 billion in 2009 (UNWTO, May 2011) . • No. of tourist worldwide was recorded at 880 million in 2009. • Top three international tourist destinations in 2010 are France (79 M), China (56 M) and United States (61 M). No. of Arrivals and Receipts of the Tourism Industry and its contribution to GDP Percent No. of Arrivals and Receipts from GR(2006- 2006 2007 2008 2009 2010 Change 2010) Tourism Industry 2010/2009 Total Arrivals 2,843,345 6,080,591 3,139,422 3,017,099 3,520,471 (2.70) 16.68 Total Receipts (In $ Million) 3,465 4,622 2,429 2,236 2,490 (12.95) 11.36 Converted to PhP (In PhP Million) 177,803.01 213,275.75 108,029.78 106,516.33 112,323.90 (14.90) 5.45 GDP 6,031,164 6,648,619 7,409,371 7,678,917 8,513,037 8.69 10.86 % Share to GDP 2.95 3.21 1.46 1.39 1.32 (21.70) (4.88) In general, during the last five years for the no. of arrivals and total receipts of tourist industry in the Philippines, it has been in decreasing trends. The average contribution of the tourism industry in the last five years was posted at two percent of the gross domestic product. Visitors Arrivals by Country of Residence (Subcontinent) from 2006-2010 and Average Growth Rates Vistor Arrivals by Percent GR(2006- Country of Residence 2006 2007 2008 2009 2010 Change 2010) (Subcontinent) 2010/2009 Grand Total 2,843,335 3,091,993 3,139,422 3,017,099 3,520,471 4.11 16.68 Foreigners 2,696,970 2,911,254 2,939,999 2,819,178 3,292,026 3.73 16.77 ASEAN 202,886 235,615 254,077 255,586 298,176 8.89 16.66 East Asia 1,338,777 1,430,077 1,370,059 1,202,995 1,563,013 1.38 29.93 South Asia 31,975 37,596 43,662 46,960 50,914 12.22 8.42 Middle East 31,503 35,688 36,615 46,811 48,716 12.11 4.07 North America 648,929 671,744 681,922 682,696 707,705 1.91 3.66 Central America - - - - South America 2,776 3,177 3,505 3,597 3,650 6.95 1.47 Western Europe 117,167 128,199 134,663 138,946 149,193 5.80 7.37 Northern Europe 106,088 124,684 136,260 138,950 150,178 8.37 8.08 Southern Europe 23,097 28,961 30,986 29,281 32,388 7.11 10.61 Eastern Europe 14,042 14,599 16,819 16,522 21,821 10.58 32.07 Eastern Mediterranean - - - 6,141 7,411 n/a 20.68 Europe * Oceania 149,276 163,403 174,583 185,014 203,211 7.69 9.84 Africa 2,246 3,090 3,317 3,082 3,584 9.77 16.29 Others and Unspecified 28,208 34,421 53,531 62,597 52,066 20.01 (16.82) Residences Overseas Filipinos ** 146,365 180,739 195,287 197,921 228,445 10.31 15.42 Source of Basic Data: DOT No. of Foreign Tourists Arrivals in 2010 from country of residences (subcontinent) 7,411, 0% 3,584, 52,066, 2% ASEAN 0% 21,821, 1% East Asia 32,388, 1% 203,211, 6% 298,176, 9% South Asia 150,178, Middle East 5% North America 3,650, 0% 149,193, 5% Central America South America Western Europe Northern Europe 707,705, 21% 1,563,013, 47% Southern Europe Eastern Europe Eastern Mediterranean Europe* Oceania 48,716, 1% Africa 50,914, 2% Others and Unspecified Residences The biggest arrivals came from East Asia, North America and ASEAN Source: DOT South Korea is the country with the highest no. of tourist arrivals (740,622 or 21%) or source of market, followed by United States 600,165 or 17%, Japan (12%), China (7%) and Australia (3%). Comparative Foreign and Domestic Tourists from 2009 to 2010 2010 2009 Growth Rate Destinations Foreign Domestic Total Foreign Domestic Total Foreign Domestic Total Camarines Sur 310,063 1,569,109 1,879,172 206,937 1,022,092 1,229,029 49.83% 53.52% 52.90% Metro Manila 1,111,152 576,680 1,687,832 879,577 516,168 1,395,745 26.33% 11.72% 20.93% Cebu 528,145 784,790 1,312,935 484,341 749,361 1,233,702 9.04% 4.73% 6.42% Boracay Island 230,459 377,078 607,537 163,820 343,076 506,896 40.68% 9.91% 19.85% Davao City 46,084 462,668 508,752 55,090 614,774 669,864 -16.35% -24.74% -24.05% Baguio City* 22,672 412,527 435,199 30,194 501,229 531,423 -24.91% -17.70% -18.11% Bohol 79,584 170,561 250,145 73,660 167,010 240,670 8.04% 2.13% 3.94% Zambales** 49,781 197,794 247,575 57,146 189,283 246,429 -12.89% 4.50% 0.47% Cagayan Valley 10,793 218,968 229,761 10,709 214,904 225,613 0.78% 1.89% 1.84% Puerto Princesa City** 24,440 189,378 213,818 18,328 178,418 196,746 33.35% 6.14% 8.68% Camiguin Island 5,650 172,178 177,828 5,792 152,087 157,879 -2.45% 13.21% 12.64% Negros Oriental 36,088 139,310 175,398 34,838 143,727 178,565 3.59% -3.07% -1.77% Ilocos Norte 13,067 126,918 139,985 10,279 128,844 139,123 27.12% -1.49% 0.62% TOTAL 2,467,978 5,397,959 7,865,937 2,030,711 4,920,973 6,951,684 21.53% 9.69% 13.15% *January-August only **partial report as of September 2010 Sources of Data: DOT Regional Offices/ Local Tourism Offices/ Accommodation Establishments The top five tourists destinations in 2010 are: Metro Manila with 21-percent growth, Camarines Sur, 53%; Cebu, 6.42%; Boracay Island, 19.85%; and Davao City (-24%). Occupancy Rates and Length of Stay of Guests (in nights) for the different type of accommodations in Metro Manila by classified hotels Type of Accomodations Occupancy Rates (%) Length of Stay of Guests (in nights) De Luxe 64.58 2.63 First Class 60.34 2.47 Standard 67.35 2.39 Economy 64.63 1.98 Source : DOT The Standard Room (67.35%) accommodations had the highest occupancy rate while the De Luxe Room (2.63) had highest length of stay for guests. What is Agri-tourism? • Agri-tourism is a form of niche tourism that is considered a growth industry in many parts of the world, including Australia, Canada, US, and the Philippines (Wikipedia). • It is sometimes called as “farm or rural tourism” which is a fast expanding tourism product that acts as a supplemental activity to the main activity of farming. This is characterized by a link between travel and products, services and experiences of the agriculture and food systems. (http://www.gov.nf.ca). Agri-tourism Industry in the Philippines • Agri-tourism concept in the Philippines involve activities which maximizes the potential of income generation of existing farms in the country through tourism related activities.