I. Industry Analysis
Political & Governmental Factors
• International Political Stability: The good performance and growth of the Philippine Tourism industry depends a lot on Political stability in other countries. A stable peaceful global environment helps in the growth of tourism whereas the impact on tourism is negative at times of unstable political situation such as during the terrorist attacks in the past.
• Emphasis on Growth without damaging the Environment: The Government wants the tourism industry to grow and prosper but without damaging the natural environment.
• Formation of Super-Tourism Philippines: How Undersecretary Phineas Alburo defines the Department of Tourism’s strategy to develop the Tourism Super Region defined in President GMA’s 2006 SONA. Comprising Regions 5,6,7,8 and Palawan, the Super Region includes the country’s most popular tourist destinations. Going beyond the traditional approach of simply marketing the Philippines as a tourist destination, the DOT’s holistic strategy incorporates the whole spectrum of tourism-related issues. The Government’s emphasis on growth of tourism is also reflected by the recent formation of Super-Tourism Philippines which responsible for international and domestic tourism marketing.
• Procedures for Getting Tourist Visa: Due to the increasing fear of possible terrorist attacks and immigration, the visa procedures have become strict in countries all over the world. This also is an issue of concern for the tourism industry. The necessary documents required even for a tourist visa have increased. This can be a hassle for interested travellers e.g. people in Europe may optioned to go for holiday to another European country to avoid the increasing formalities and documentation required in obtaining a visa.
• Environmental Laws and Regulations: There are already concerns that the tourism industry is damaging the environment and therefore a big challenge for the tourism industry is to attain growth without adversely affecting the environment.
• Global Economic Prosperity: The tourism industry in the Philippines is influenced by economic prosperity in other countries. This is because good economic conditions in other countries mean that people in general will have higher spending power and therefore they are more likely to come to Philippines. The reason why growth in tourism industry in Philippines has slowed down in recent years is because of general recession in world economy over the past few years. Thus people in other countries have been under more economic pressure and so have spent less on travelling and holidays. Also the countries like Hong Kong, Singapore and South Korea are gaining more popularity as tourist destinations. This is due to the economic global recession and also because of the geographic location of these countries. Travelling to these countries from most Asian and European countries is cheaper and takes less time as compared to travelling to Philippines.
• Current Economic Condition in the Philippines: Despite of the general recession in global economy, a number of moves have been made by national government in order to improve economic conditions of Philippines. It has increased amount of expenditures to a significant extent and has been outsourcing its business activities. Amount of mining and construction for residential purposes has gone up in Philippines as well. 2009 fiscal is expected to bring not much of turbulence as far as economic conditions in Philippines are concerned. It is expected that there would be an increase of 4.1 percent in gross domestic product for 2009 fiscal. However, our country incurs -47.95 % percent changes in 2009 from having 7.30 % GDP - real growth rate in 2008 to 3.80 % GDP on 2009.Despite of that we are seeing a deep downturn in global economic conditions with sharp fall in demand, tourist arrivals in the top sixteen tourism destinations went up by 16.5 percent, reaching close to 4 million in the first semester of 2009. The Department of Tourism’s (DOT) efforts to maximize opportunities in international markets and encourage greater domestic travel movement in the first six months provided the impetus to sustain tourism growth in the midst of challenges brought by the global financial crisis and Influenza A (H1N1). This feat is attributed to the substantial increase in domestic tourism by 20 percent in the second quarter of 2009, which enhanced the business and investment confidence in the sector during the period January to June 2009. Likewise, the changing lifestyle and travel pattern of more Filipinos and Philippine residents to spend their Holy Week, long weekends, and summer/ holiday vacation in the various tourist areas of the country boosted tourist flow. Foreign arrivals in key destinations also increased by 6 percent in the first half of the year, despite a decrease of 6 percent in inbound visitors into East Asia and the Pacific. Therefore Philippines is in a strong position to invest more in promoting the tourism industry to international tourists.
Social, Cultural & Demographic Factors
• Type of Tourists and Holidays Preferred: Philippine tourism never had it so good in 2009. According to the 2009 year-end report by Department of Tourism (DOT) stated that the total tourist traffic in the top 14 destinations last year reached 8.9 million for a 14 %growth. Cebu is the top destination with tourist traffic increasing by 1.2 % to 1.61 million. Korea remained the top tourist market for Cebu accounting for 29 % share of total foreign tourists. Notably, Chinese tourists to Cebu remarkably grew by 70 % as more charter flights were mounted between Cebu and Shanghai, as well as to Guangzhou. Tourists to Camarines Sur increased by 117.2 % to 1.57 million vis-à-vis, the previous year volume of 721,024 visitors. International and local events such as the First Aqua Fest Celebrity Challenge, Ironman 70.3 Triathlon, International Dragon Boat Competition and Bagasbas Summer Surf, boosted domestic visitors to Camarines Sur by 140 % to 1.3 million, while foreign tourists went up by 56.1 %. Tourists from Australia and the United Kingdom to Camarines Sur substantially increased by 235 % and 170 % respectively, as wakeboarding attracted group tours from these markets. The USA remained the major source market for Camarines Sur with 14 % share. Metro Manila is the third most visited destination with tourist volume of 1.4 million, accounting for 16 % of the total tourist count. In terms of the purpose of visit, 54% came for holidays, 21% for visiting friends and relatives, 15% for business purposes and the rest 10% for education, employment and other purposes. The average duration of stay of a visitor was 27 nights in Philippines in 2010.
• Cultural Mix and Origin of Domestic Population: The population in the Philippines is quite diverse. Wide ranges of people of different cultures and from different countries have now settled in Philippines permanently. These people have a lot of contacts, friends and relatives in countries all over the world. This helps the tourism industry in attracting even more tourists from abroad because people often do come to visit their friends and relatives.
• Festive Seasons and Special Occasions: This is another important factor that influences the tourism industry. The Chinese New year has quite a significance impact on the number of tourists coming to the Philippines in January and February. Similarly during Christmas holidays and Easter and summer breaks, the number of tourists visiting Philippines increases considerably.
• Maintaining the Rich Biodiversity: Philippines is known for its rich biodiversity but many plants and animal species are now in danger of getting extinct due to habitat alteration and loss or competition and predation from introduced species. Global Warming to Cripple Philippines: The study of the Asian Development Bank states that Southeast Asia is particularly susceptible to extreme weather, higher temperatures, and rising sea levels due to it extensive coastlines, economies dependent on agriculture, and rampant large-scale deforestation. Annual mean temperatures are expected to rise an average of 4.8 degrees Celsius in the region by century’s end, if greenhouse gas emissions are not regulated.
• Suffers Major Human-caused Environmental Degradation: The Philippines also suffers major human-caused environmental degradation aggravated by a high annual population growth rate, including loss of agricultural lands, deforestation, soil erosion, air and water pollution, improper disposal of solid and toxic wastes, loss of coral reefs, mismanagement and abuse of coastal resources, and overfishing.
• Prone to Natural Disasters: The Philippines are prone to natural disasters, particularly typhoons, floods, landslides, volcanic eruptions, earthquakes, and tsunamis, lying as it does astride the typhoon belt, in the active volcanic region known as the “Pacific Ring of Fire,” and in the geologically unstable region between the Pacific and Eurasian tectonic plates.
• Internet and E-Commerce: Like all other industries, the tourism industry is also influenced by the growth in popularity of the internet and e-commerce. These technologies are helping the tourism industry in promoting Philippines as a key tourist destination to people all over the world. 40% of visitors used the internet to get information about Philippines in 2009 as compared to 33% in 2008 – (Department of Tourism, December 2009). Interested travelers were able to find the relevant information related to popular destinations, accommodation, available flights etc. without much hassle. Further e-commerce has enabled easy online payment and tourists can book for holiday packages and arrange everything using the internet from their homes.
• Increase in Alternative Leisure Options: The technological advancement and developments have also lead to the availability of high-tech multimedia leisure and entertainment devices. This is having a negative impact on the tourism industry and the domestic tourism industry in the Philippines is believed to be losing out to alternative leisure pursuits by people.