Friday, January 05, 2007

Breakthrough in Philippine Tourism

For the year 2006, the Department of Tourism (DOT) had integrated insights on how to win in core markets and how to maintain interest and awareness in investment markets.

DOT Secretary Joseph “Ace” Durano said, “We are now in the process of realigning the organization’s set-up redeploying resources across the globe, and building the organizational capabilities necessary.”

”We continue to lay the foundation of a healthy development of the tourism sector over the long-term, to foster greater collaborative coordination between the public and private sector and ensure that tourism contributes disproportionately to the Philippine economic development.”

In 2006, the DOT laid new groundwork to expand its focus. It is now investing across a broader portfolio of markets in a measured, disciplined and systematic way to yield growth today and tomorrow, through the following:

*Accelerate demand in existing core markets (China, Japan, Korea, Filipino-Americans) by developing the lion’s share of resources and people;

*Increase investment and focus on strategic markets (Australia, Russia, Germany, US/Canada);

*Reinvigorate investment markets (Hong Kong, Taiwan, Singapore) by focusing efforts on addressing key barriers to growth and improving our effectiveness with the trade; and

*Monitor other markets on an annual basis for low-hanging fruit (Scuba diving market of UK, Italy, Spain and France).

”Through improved use of online assets, we can drive awareness, preference and closure among international travelers, provide differentiated services to travelers and the trade, and meet requirements for the media,” Durano said.

Driving Growth in Arrivals

Based on unique insight on the markets, the DOT would spend on marketing and trade activities most likely to convince travelers to visit the Philippines. For example, the DOT has prioritized China because of its untapped potential, robust growth in travelers, and the proximity to the Philippines.

China has now become the Philippines’ fourth largest market, up from the 11th in 2004.

Through 2006, the DOT continued to see strong growth in the number of arrivals from China, which is double the overall rate for other countries. To further engage and excite the trade and consumers in China, a combination of both offline support and online programs will be implemented.

The DOT will continue to work on evaluating and addressing unmet needs, such as improving Chinese language capabilities, increasing direct air access to key tourist locations, and enhancing the overall quality of tourism infrastructure to support continued growth in the China market.

Another major initiative centers on Japan, which is the third most important tourist market after the United States. The DOT is now focusing its attention and offering to activate these segments and its Japan team on investing in appropriate trade channels.

As a result, the H.I.S., a travel wholesaler in Japan, reported that January to May 2006 sales of Philippine package increased by 117 percent compared to the same period in 2005.

Over the last four years, the USA remained as the major tourists source-market for the Philippines, with 467,066 (January to October 2006) followed by Korea, 452,839: Japan, 357,743; China, 110,525; Taiwan, 98,180; Hong Kong, 79,557; Australia, 77,015; Singapore, 69,948; Canada, 60,271; and United Kingdom, 54,127.

Visitor Arrivals to the Philippines

Visitor arrivals to the Philippines grew at an average of 4.9 percent per annum during the last 10 years. After experiencing turbulent times from 1998-2003, the tourism industry was able to show substantial growth in 2004 as arrivals grew by 20 percent.

During the period 2004-2005, tourist inflow grew at an average of 17 percent per annum way above the growth projected by the United Nations World Tourism Organizations (UNWTO) for the Asia Pacific region by seven percent.

With the continuing growth in intra-regional travel and projected increase in outbound travel from long-haul markets to the Asia Pacific, visitor arrivals to the Philippines is projected to grow at an average of 14 percent per annum to reach five million in 2010.

The breakdown is as follows: 2007, 3,206,731 with a growth rate of 12 percent; 2008 -- 3,655,673 with a growth rate of 14 percent; 2009 -- 4,240,580 with a growth rate of 16 percent; and 2010 -- 5,003,884 with a growth rate of 18 percent.

Occupancy Rates in Metro Manila and selected Regional Destinations:

Average occupancy rate of classified hotels in Metro Manila continued to grow during the period 2001 to 2006. De Luxe and First Class hotels hit as high as 70 percent occupancy while the standard and economy accommodation facilities reached more than 60 percent.

On the other hand, occupancy rates of hotels in selected regional tourists destination grew from 2001 to 2005.

Region VII, most especially Cebu consistently experienced high percent occupancy rate. The total for 2006 are as follows: De Luxe, 69.99 percent; First Class, 70.04 percent; Standard, 69.63 percent; and economy, 62.61 percent.

International Flights to the Philippines.

At present, there are 556 weekly flights to the Philippines with 142,354 available seats.

Hong Kong accounts for the biggest bulk at 17 percent, followed by Singapore at 17 percent for 97 and 75 weekly flights, respectively. Flights to Korea and Japan have a share of 10 percent while Taiwan and the USA accounted for seven percent.

Long haul traffic to Europe from Amsterdam and Frankfurt provide a combined share of three percent to the total weekly seat capacity.

As of October 2006, major airlines servicing the Korean, Japan, China, Hong Kong and Singapore have experienced load factor of more than 70 percent, Korean Air and Asiana have full flights reaching as high as 89 and 88 percent load factor.

China Airlines and China Southern, on the other hand, which have flights from Beijing, Xiamen, Shanghai and Guangzhou to Manila and Laoag are also full with load factor of 81 and 70 percent, respectively.

Accommodation Capacity:

The robust growth in occupancy levels in the last five years have encouraged more investments in the accommodation sector. In addition, expansion and rehabilitation of existing hotels are underway to provide more sophisticated environment and amenities suitable to the demand of diversifying tourist markets.

The DOT has endorsed a total of 44 accommodation projects amounting to P25.7 billion during the last four years. The bulk or 59 percent were hotel projects amounting to P18.6 billion. The operations of these projects will increase total room supply by 5,780 rooms.

In October 2006, hotels/resorts in selected destinations were expanded. In Boracay alone, there are 4,077 existing facilities with the expansion of 344 and the construction of 1,002 more bringing the total to 5,423.

In Cebu City, existing ones totaled 5,859, with the expansion of 32 and the construction of 435 more for a total of 6,327 facilities; In Mactan (Cebu City) existing ones totaled 2,536; expansion, 38; under construction, 758 for a total of 3,332; and Palawan, 2,394 existing; 249, expansion and 161 under construction bringing the total to 2,804.

Building Sustainable demand for the Future:

The DOT will continue the momentum of the past two years by building sustainable demand, by strengthening the tourism cluster, and by building organizational and leadership capabilities.

Performance across a broader portfolio of markets will be ensured -– reaping growth today, but also investing for future growth. Continued effort will be pursued to deepen credibility with the domestic and international trade as well as the broader business community by communicating a clear tourism vision for the Philippines and by strengthening the Philippines brand with the targeted travelers.

The DOT will continue to address supply constraints around accommodation and aviation capacity through specific investment projects -– new resorts, internationalization of airports, new air routes and frequencies, improving tourism experience -– to pave the way for continued growth.

The department will remain focused on performance, achieving the highest return with its available resources. (PNA)

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