OVERVIEW OF PHILIPPINE TOURISM USEC OSCAR P PALABYAB

OVERVIEW OF PHILIPPINE TOURISM USEC. OSCAR P. PALABYAB Department of Tourism

The Growth of World Tourism growth over the past 50 years is dramatic- 25 Million in 1950 to 698 Million in 2000 l One of the most remarkable economic and social phenomena of that period l Forecasts indicate the trend will continue with 1. 5 Billion in 2020! l

The Unstoppable Expansion of International Tourism Average growth of 6. 5% a year 763 million 25 million

Worldwide Visitor Arrivals and Receipts 1996 - 2006 % Inc/Dec Visitor Receipts (In US$B) % Inc/Dec 575 6. 28 % 434. 0 5. 60 % 1997 599 4. 17 443. 0 2. 07 1998 617 3. 00 443. 0 0 1999 640 3. 73 455 2. 71 2000 687 7. 34 482 5. 93 2001 687 0 464. 0 -3. 73 2002 707 2. 91 474. 0 2. 16 2003 694 -1. 84 535 12. 87 2004 765 10. 23 635 18. 69 2005 806 5. 36 683 7. 56 2006 842 4. 47 Year Visitor Arrivals (In Millions) 1996

International Tourist Arrivals 2005 Country France Spain U. S. China Italy United Kingdom Mexico Germany Turkey Austria (In Millions) 76 55. 6 49. 4 46. 8 36. 5 30. 0 21. 9 21. 5 20. 3 20. 0

Factors in Tourism Growth l Increase in real income l Increase in life expectancy l Retiring baby boomers l Faster and cheaper air travel l Easier access and more destinations l Rapid developments in IT

Sampling of tourism expenditures International Visa Card holders spent P 37. 5 B in 2005 vs P 29 B in 2004 l Top 5 Visa spending countries in RP 1. U. S. A. 2. United Kingdom 3. Japan 4. South Korea 5. Australia l

Visa Card users l Korean card holders had highest average spending per transaction at US$175 l Metro Manila got 60% of total availments or P 22. 9 B l Luzon = P 72 B of which Mindoro got P 272 M and Palawan P 238 M l Visayas= P 6. 1 B (Cebu= P 4 B), others Negros, Leyte and Boracay

Spending pattern l Most popular are accommodation, retail goods, restaurants, transportation, sports and leisure l Largest retail market= department stores and duty free shops l In Metro Manila, hotels got P 1. 5 B, airlines P 420 M, groceries, supermarkets P 344 M

Trends in Asia Pacific Region l Japan’s economy is registering an upward trend of 2. 8% l Hongkong, China and Korea are predicted to grow by 5. 5% l South East Asian countries are expected to grow from 6 -7%, characterized by liberalization on outbound travel and increasing number of travel agencies l In China alone, there about 111 M internet users now

Visitor Arrivals to the Philippines Actual Arrivals (in Million) Year Projected 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Volume 2. 05 2. 22 2. 15 2. 17 1. 99 1. 80 1. 93 1. 90 2. 29 2. 60 Growth Rate 16. 4 % 8. 5 % (3. 3)% 1. 0 % (8. 2)% (9. 8)% 7. 6 % (1. 3)% 23. 0% 14. 5% 2006 2. 84 8. 4% Projected Arrivals (in Million) Year Actual Volume Growth Rate 2007 2008 2009 2010 3. 20 3. 65 4. 24 5. 00 12% 14% 16% 18%

Philippine Visitor Receipts Actual Tourism Receipts (in US$ Billion) Year Volume 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2. 70 2. 83 2. 41 2. 55 2. 13 1. 72 1. 74 1. 52 1. 99 2. 23 Growth Rate 10. 1% 4. 8% (14. 8)% 5. 8% (16. 4)% (19. 3)% 1. 0% (12. 5)% 30. 7% 12. 32% 2006 3. 46 54. 96% Projected Tourism Receipts (in US$ Billion) Year Volume 2006 2007 2008 2009 2010 2. 72 3. 12 3. 56 4. 06 4. 59 Growth Rate 16. 0% 15. 0% 14. 0% 13. 0% Projected Actual

Philippine Top 12 Markets, 2006 Country Volume % Share Growth Rate Ø Korea is the KOREA 572, 133 20. 1% 16. 9% USA 567, 355 20. 0 7. 4 number 1 tourist market in 2006 with a share of 20 percent and growth rate of 17 percent JAPAN 421, 808 14. 8 1. 5 CHINA 133, 585 4. 7 24. 3 Ø China continues TAIWAN 114, 955 4. 0 -6. 5 AUSTRALIA 101, 313 3. 6 5. 02 HONGKONG 96, 296 3. 4 -10. 2 SINGAPORE 81, 114 2. 9 16. 8 CANADA 80, 507 2. 8 10. 5 UNITED KINGDOM 68, 490 2. 4 8. 7 MALAYSIA 53, 279 1. 9 23. 7 GERMANY 51, 402 1. 8 2. 0 to demonstrate robust growth at 24 percent in 2006 after experiencing 171 percent increase in 2005. Ø Singapore and Malaysia visitors continued to increase with the proliferation of low cost carriers

Philippine Top 12 Markets, Jan –Sept 2007 Country Volume JAN-SEPT 2007 % Share Volume JAN-SEPT 2006 % Growth Rate KOREA 472, 711 20. 9% 406, 480 16. 3% USA 433, 425 19. 1 424, 494 2. 1 JAPAN 303, 420 13. 4 326, 219 -7. 0 CHINA 113, 593 5. 0 98, 136 15. 8 TAIWAN 85, 551 3. 8 87, 471 -2. 2 HONGKONG 84, 910 3. 7 70, 804 19. 9 AUSTRALIA 76, 048 3. 4 69, 341 9. 7 SINGAPORE 70, 054 3. 1 57, 827 21. 1 CANADA 60, 751 2. 7 54, 511 11. 4 UNITED KINGDOM 55, 564 2. 5 48, 824 13. 8 MALAYSIA 48, 735 2. 2 38, 060 28. 0 GERMANY 40, 211 1. 8 37, 165 8. 2

How Did Our Neighbors Do in 2006/2005? COUNTRY 2006 2005 Percentage Growth Malaysia 17, 500, 000 16, 431, 055 6. 51% Thailand 13, 650, 000 11, 516, 936 18. 52 Singapore 9, 673, 362 8, 875, 980 8. 98 Indonesia 4, 871, 351 5, 002, 101 (2. 61) Vietnam 3, 583, 486 3, 430, 000 4. 47 Philippines 2, 843, 345 2, 623, 084 8. 40 Cambodia 1, 700, 041 1, 421, 615 19. 59 Lao PDR 1, 200. 000 1, 081, 606 10. 95 Brunei 836, 435 815, 054 2. 62 Myanmar 630, 061 660, 206 (4. 57)

The Birth of the Super Regions North Luzon Agribusiness Quadrangle (NLAQ) l Luzon Urban Beltway l Central Philippines l Mindanao l Cyberservices Corridor l

The Central Philippines Super Region is composed of Regions 5, 6, 7, and 8 and the provinces of Palawan, Romblon and Camiguin as well as the island of Siargao and the City of Dapitan.

This Super region has 51 weekly flights with average seat capacity of 11, 045 from major tourist markets … International Flights to Central Philippines 16 Flights/Week From S. Korea 2 Flights/week From Taiwan 14 Flights/week From Hong Kong 12 Flights/week From Singapore 2 Flights/week From Malaysia 5 Flights/week from Japan

Central Philippines Super Region l Seven of the ten most visited beaches in the country are located in provinces in the Central Philippines Super Region namely: Cebu, Aklan, Negros Occidental, Bicol, Samar, Palawan and Romblon l Tourism revenues from Central Philippines reached P 83. 82 Billion in 2005, with Western and Central Visayas getting the lion’s share, raking in 38% and 35%, respectively POWDER FINE WHITE SAND BEACHES OF BORACAY

Visitors to Central Philippines reached 4. 64 million or 29 percent of total regional travelers in 2006 Western Visayas 1, 610, 677 Romblon 23, 780 Bicol Region 637, 127 Eastern Visayas 203, 569 Surigao City 58, 341 Palawan 189, 911 CENTRAL VISAYAS 1, 631, 445 Dapitan 47, 769 Camiguin 220, 062

Endorsed Tourism Development Projects in Central Philippines THE SUPERREGIONS North Luzon Metro Luzon Urban Beltway Year 2006 – September 2007 MACAGANG BUSINESS CENTER MPh 67. 917 – PEZA Central Philippines Super Region AVENUE PLAZA HOTEL (2007) Mph 324. 205 –BOI Tourism CLUB MISIBIS MPh 122. 817 - PEZA CAMARINES SUR TOURISM PARK (2007) MPh 1, 002. 93 - PEZA Camarines Mindanao Albay Masbate Sorsogon Romblon Samar BORACAY SHANGRI-LA HOTELS & RESORTS, INC. MPh 4, 030 – PEZA Locator Boracay Panay Leyte MICROTEL INNS & SUITES BORACAY MPh 128. 300 - BOI BORACAY SANDS HOTEL (2007) MPh 174. 60 - BOI Palawan Siargao Negros Cebu Bohol Camiguin Siquijor SHANGRI-LA MACTAN IS. RESORT MPh 310. 400 – BOI (Modernization) IMPERIAL PALACE WATER PARK MPh 3, 180. 00 – BOI WATERFRONT CEBU TOURISM ESTATE MPh 350. 00 - BOI THE BELLEVUE BOHOL MPh 334. 1360 – BOI ESKAYA BEACH RESORT MPh 815. 000 – BOI BLAUES MEER RESORT MPh 69. 700 - BOI Note: Total amount of ETDP in Central Philippines as of January 2006 – September 2007 MPh 10, 910. 005

SUMMARY OF MEDIUM TERM PUBLIC INVESTMENT PROGRAM FOR CENTRAL PHILIPPINES AMOUNT (IN BILLIONS) PERCENT SHARE AIRPORTS 30. 577 16. 02 SEAPORTS 0. 867 0. 45 ROADS 92. 973 48. 70 RAILWAY 40. 000 20. 95 FLOOD CONTROL 21. 978 11. 52 ENERGY 4. 500 2. 36 190. 895 100. 00 TYPE OF PROJECT TOTAL

Key Tourist Markets l Priority 1: China, Japan, Korea l Priority 2: Taiwan, Hong Kong, Australia l Priority 3: ASEAN, Europe, North America

Philippine Global Strategy Ø Accelerate demand in existing core markets such as China, Japan, Korea and Filipino Americans Ø Increase investment and focus promotion programs in strategic markets such as Australia, Russia, Germany and US/ Canada Ø Reinvigorate marketing efforts in traditional sources such as, UK, Italy, Spain and France

Building Sustainable Demand for the Future Ø Liberalize air access to and from major tourist markets either through direct flights or chartered services Ø Upgrade and modernize infrastructure and transport facilities to facilitate access in tourist destinations especially in the Central Philippines Ø Expand tourist accommodation and recreation facilities Ø Diversify tourist products and services such as medical and wellness tourism for an enhanced tourism experience

Hotel and Resorts – Investment Needs Additional 20, 000 to 30, 000 rooms are needed to meet the increased demand by 2010 Current supply Vs 2010 demand in accommodated tourist number 18. 5 22. 8 4. 3 # MM PAX Domestic tourist At least additional 20, 152 rooms to reach 85% occupancy rate** Or 38, 489 rooms to reach 70% occupancy rate** Foreign tourist Note: *Accommodated tourist number does not equals to total tourist number as some tourists may not choose to stay in hotels and resorts ** Assuming demand growth rate for non-accredited establishment rooms is 50% of that for accredited establishment rooms Source: DOT Hotel Census, August 2005, n=881; DOT Accreditation database as June 2005; Monitor estimation; Monitor analysis

RESULTS FROM 2005 HOUSEHOLD SURVEY ON DOMESTIC VISITORS, April – Sept 2005 l 43. 5% (23 Million) Filipinos, 15 years old and up traveled within this period EACH INDIVIDUAL MADE 2 TRIPS AND VISITED TWO PLACES IN THE COUNTRY FOR THE SIX MONTH PERIOD

RESULTS FROM 2005 HOUSEHOLD SURVEY ON DOMESTIC VISITORS, April – Sept 2005 l ALMOST 99% OR 23. 5 Million domestic travelers had independent domestic trips l 17. 5 Million spend an average of: 1. 2. 3. 4. 5. 6. 7. Accommodation P 1, 200. 00 Food and beverage P 400. 00 Sight seeing and guided tour P 600. 00 Entertainment & Recreation P 300. 00 Local transport (sea, air or land) P 400. 00 Shopping P 1, 100. 00 Others P 3, 200. 00

RESULTS FROM 2005 HOUSEHOLD SURVEY ON DOMESTIC VISITORS, April – Sept 2005 MOST FREQUENTLY VISITED PLACES: NCR 2. CAVITE 3. BATANGAS 4. LAGUNA 5. ILOILO 6. BULACAN 7. NUEVA ECIJA 8. PAMPANGA 9. CEBU 10. PANGASINAN 11. ALBAY 1.

Visitor Profile And Travel Characteristics, 2006 Mode of Travel l Air (98. 73%) l Sex l Male (61. 22%) l Sea (1. 27%) Female (37. 40%) l Average Age 38. 26 years old l Purpose of Visit l Holiday 46. 99% l VFR (Visit Friends / Relatives) 26. 66% l Business 13. 18% l Convention 1. 28% l Official Mission 0. 11%

Visitor Profile And Travel Characteristics, 2006 l Frequency Visit - First Visit - Repeat Visit (%) 31. 27 51. 30 l Overall Average Length of Stay ( Nights) 12. 06 - Foreign Visitors 10. 98 - Overseas Filipino 48. 02 l Travel Arrangement - Independent 61. 67 - Package Tour 18. 56 - Not Stated 19. 77 l Average Daily Expenditure (US$) 83. 91 Foreign Visitors 84. 70 Overseas Filipino 55. 78

Foreign Visitors Expenditure 2006 l Average Daily Expenditure US$ 83. 91 l Major Items of Expenditure Accommodation Shopping Food and Bev. Entertainment Local Transport Miscellaneous Guided Tour US$ 25. 72 22. 01 20. 39 7. 02 4. 71 2. 81 0. 36 l l l l

Regional Statistics

Regional Destinations of Foreign Tourists Jan -Dec 2006* 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. REGION VII REGION IV REGION VI NCR REGION III CAR REGION I REGION X REGION V REGION II REGION XIII REGION IX REGION VIII REGION XII * Preliminary - 542, 159 434, 530 266, 891 262, 364 155, 394 76, 812 52, 786 52, 756 46, 284 31, 153 24, 453 16, 200 13, 647 13, 329 4, 606

Regional Destinations of Domestic Tourists Jan-Dec 2006* 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. Region IV Region VII CAR Region XII Region V Region IX Region XIII Region VIII NCR * Preliminary - 5, 852, 860 1, 259, 332 1, 081, 903 902, 917 837, 851 699, 552 618, 077 610, 715 587, 823 480, 297 341, 844 281, 582 251, 634 189, 643 68, 694

CLARK INT’L AIRPORT VISITOR ARRIVALS, JAN – DEC 2006 REGION VOLUME EAST ASIA 37, 481 ASEAN 27, 093 AMERICA 8, 209 EUROPE 7, 046 AUSTRALASIA/PACIFIC 3, 057 AFRICA 238 MIDDLE EAST 128 UNSPECIFIED 8 FILIPINOS 151, 052 GRAND TOTAL FOR 2006 235, 004 GRAND TOTAL FOR 2005 114, 902 GROWTH RATE 104. 5%

CLARK INT’L AIRPORT International No of Flights, JAN - DEC 2006 AIRLINES TIGER AIRWAYS AIR ASIANA CR AIRWAYS/HONGKONG AIRLINES SHANGHAI AIRLINES CHINA SOUTHERN GRAND TOTAL NO. OF FLIGHTS 954 725 278 100 5 3 2, 065

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