THE PHILIPPINE NATIONAL TOURISM DEVELOPMENT PLAN 2011-2016 DEPARTMENT OF TOURISM THE PHILIPPINE NATIONAL TOURISM DEVELOPMENT PLAN 2011-2016 Draft Action Plan (for discussion purposes only) June 2011

The Philippine Tourism –Diagnosis Suboptimal socioeconomic development contribution EFFECT Inconsistent quality of tourist facilities and services Highly concentrated pattern of tourism with limited local community participation Insufficient tourist facilities and services Low tourism growth volumes Inadequate public and private sector investment Low budgets for marketing and promotions FOCAL PROBLEM Underdeveloped tourism sector relative to its market and product development potential Inadequate international airport infrastructure Limited number of competitive destinations Cumbersome business operating environment Perception of the Philippines as an unsafe destination Inadequate air, sea, and road connectivity to destinations Inadequate destination/site infrastructure Discriminatory tax regime for hotels and carriers Poor compliance with safety standards Destination/site security CAUSE Overlapping institutional regulatory functions between the national government and LGUs Inability to develop and expand air accessibility to key growth markets Weak LGU tourism development capacities

INCLUSIVE DESTINATION CONCEPT NP-1 A B C D E F A International Airport Principal Airport - Class 1 Principal Airport – Class 2 Community Airport - Sea Port Tourism Cluster Tourism Development Area NP-2 Tourism Cluster NP-3 NP-4 Gateway to Tourism Cluster NP-5 International Gateway Strategic Destination Clusters Tourism Development Area NP-6 NP-7 CP-1 Tourism Site CP-2 CP-3 21 strategic thematic tourism destination clusters covering 77 Tourism Devt Areas) 7 strategic clusters in Northern Philippines (North Luzon, CAR, CALABARZON, NCR) covering 27 tourism development areas 7 strategic clusters in Central Philippines (MIMAROPA, Bicol, The Visayas) covering 24 tourism development areas 7 strategic clusters in the Southern Philippines (Mindanao) covering 26 tourism development areas. CP-7 CP-5 CP-6 SP-1 CP-4 SP-2 SP-3 SP-4 SP-7 SP-5 SP-6 A

“TO BECOME THE “MUST EXPERIENCE” DESTINATION IN ASIA.” Strategic Vision: “TO BECOME THE “MUST EXPERIENCE” DESTINATION IN ASIA.” Improving market access and connectivity Rapidly expand capacity of secondary international airports Expand connectivity between Philippines and its key growth markets Implement a strategic access infrastructure program between secondary international airports and strategic destinations GOAL: “An environmentally and socially responsible tourism that delivers more widely distributed income and employment opportunities as indicated by 6.6 M international arrivals and 34.8 M domestic travelers generating PhP1,759 billion in total expenditure, contributing 6.78% to GDP and employing 6.5 million people by 2016.” Developing and marketing competitive tourist destinations and products Implement a sustainable tourism destination infrastructure program Develop diversified tourism products that engage local communities Implement a PPP-based mandatory tourism enterprise accreditation system and facilitate tourism investment and lower cost of business Safeguarding natural & cultural heritage and vulnerable groups PPP-based marketing strategy and action plan Improving tourism institutional, governance and human resource capacities Institutionalize roles and responsibilities of DOT and LGUs Develop a competent well motivated and productive tourism workforce Improve governance in the area of safety, security, and in dealing with tourists

Rapidly expand capacity of secondary international airports Reduce congestion to improve visitor’s impression Increase passenger handling capacities Prioritize: NAIA, Mactan-Cebu, Clark and Davao (2011-2012) Puerto Prinsesa, Iloilo (2012-2013) Laoag and Zamboanga (2013-2014)

Expand connectivity between Philippines and its key growth markets Renegotiate Air Service Agreements with Key Growth Market Countries Reduce Air International Air Operations Cost in the Philippines Simplify border formalities/procedures for key growth markets

NP-1 NP-3 NP-5 CP-1 CP-3 CP-2 CP-7 SP-1 SP-2 SP-6 NP-4 SP-7 NP-2 NP-6 NP-7 CP-5 SP-4 CP-4 CP-6 SP-5 SP-3 A B C D E F A International Airport Principal Airport - Class 1 Principal Airport – Class 2 Community Airport - Sea Port Tourism Cluster Tourism Development Area Implement a strategic access infrastructure program between secondary international airports and strategic destinations International Gateway Strategic Destination Clusters Improve, rehabilitate, and expand 23 domestic airports Improve, rehabilitate, and expand 21 seaports Improve, rehabilitate, and upgrade 28 strategic connecting roads with total distance of approximately 850kms Strategic Links A

Implement a sustainable tourism destination infrastructure program Provision of water and water treatment (6 locations), power (4 locations), and solid waste management in (27 locations) Design and construction of tourism information centers and support infrastructure (26 tourism development areas) Design and construction of transport terminals and services in (26 tourism development areas) Tourism sites access and visitor improvements

Develop diversified tourism products that engage local communities Developing Major Mixed-use Tourism complexes in the vicinity of the International Airports Linking local communities to the tourism value chain created by the major mix use tourism complexes upgraded tourist sites in their vicinity Review regulations that impede new product development. (e.g. retiree, medical tourism) and amend accordingly

Simple Tourism Value Chain Advising tourist on product, contract Providing accommodation food, etc. Transport to the destination Transport from the destination Organise event, experience Travel Agent Transport Company Hotel, Restaurant Site Operator, Cultural Group Transport Company CO-ORDINATION OF SERVICES Tour Operator Tourism Authority

Tourism Value Chain at work

Implement a PPP-based mandatory tourism enterprise accreditation system and facilitate tourism investment and lower cost of business Design and implementation of a PPP-based mandatory tourism enterprise accreditation system Facilitating business investment and simplifying business set-up and licensing procedures and cost

Proposed Framework of the DOT Accreditation Process Primary Tourism Enterprises 2012 – 2016

Safeguarding natural & cultural heritage and vulnerable groups Developing uniquely Filipino destinations and products Increasing number of heritage sites for international recognition Advocating the sustainable use of heritage sites Providing a professional interface between sustainable heritage and tourism

Marketing strategy and action plan Consolidate present product offering and develop highly-focused new products Design TPB as a product marketing oriented organization Define new target markets and undertake market penetration. Set up a unique market positioning that boosts and differentiates the Philippines as a tourism destination. Establishing customized promotional initiatives to source markets

Market Positioning Approach

Product-Market Mix Approach

Shopping, Leisure & Entertainment Health and Wellness tourism Nature-based tourism Sun & Beach Cultural tourism Shopping, Leisure & Entertainment Health and Wellness tourism MICE Educational Tourism Key growth markets Domestic Market Japan South Korea USA China Strategic markets Australia Singapore Malaysia Canada Opportunity markets India Hong Kong Taiwan Russia Niche markets UK Germany Very High High Medium Low Very Low 100% - Full potential 75% - potential 50% - potential 25% - potential 0% - potential Source: T&L research,

Special Interest Segments Divers Typically: young, male, single, regular travelers Diving is the main motivation for travelling to the destination. The fame of the under water world and the pristine biodiversity are the reasons for travelling to the Philippines Adventure Experiences Adventure tourists want to experience remote and unexplored areas while undertaking soft or hard adventure activities. Shopping, Leisure and Entertainment Tourists Shopping, Leisure & Entertainment Tourism is a relatively young breed of tourist, who is seeking escapism, entertainment and fun. Time may be limited, but disposable income levels are high. Honey Mooners Newly weds on their honey moon spend an important amount of money on a dream destination. Residing in luxury resorts. The trend goes from only passive holidays to active experiences. MICE Meeting, Incentives, Congress and Events. The tourists consuming this tourism product travel with their company to the Philippines or are there for business issues. They expect and demand perfect services. Educational Tourism Regional pupils from all ages come to the Philippines in order to learn and improve their English language skills Bird Watchers Bird watchers are passionate about birds and wish to experience them in their natural habitat. Mostly, Bird Watchers are driven by the wish to see specific and rare birds. For this they are willing to travel around the world. Health and Wellness Tourism Due to the high costs of medical care in the tourists home country . This type of consumer seeks to look and feel better, to lose weight, to slow the effects of aging, to relieve pain or discomfort, to manage stress, or to partake in the use of natural supplements like vitamins and minerals to improve their health.. Culture Explorers Search for participation in new cultural experiences, whether they are aesthetic, intellectual, or emotional. They find satisfaction in visiting museums, archeological sites and experience living culture traditions and festivals Beach Relaxation Tourists that seek for relaxation and sun along the Philippines beaches. In addition, activities mostly undertaken are: fishing, scuba diving, sailing, golf, water skiing, whale watching, windsurf, relaxation therapies, spa, etc. Golf Tourists Golf Tourists are passionate about Golf. Their main motivation is to play Golf all year round and travel to the destination that entitle them to do so. Source: T&L research,

National Tourism Marketing Program Strategic Marketing Branding Product Development Clubs Marketing Intelligence International Marketing Network Adapting DOT marketing & representation offices to market priorities Create DOT regional market offices and use local market representatives at country level Operational Marketing Commercialization Promotion Communication Public relations

Marketing Action Plan Budget 2012-2016 (USD)   2012 2013 2014 2015 2016 TOTAL 1. Strategic Marketing Program 795,000 50,000 390,000 300,000 1,925,000 Sub-porgram 1: Philippine's Tourism Positioning Management 355,000 555,000 Sub-porgram 2: Tourism Product Clubs Development Franework 190,000 - 100,000 670,000 Sub-program 3: Marketing Intelligence Management 250,000 150,000 700,000 2. Tourism Marketing Network Program 750,000 3,041,068 3,087,759 3,140,841 3,201,190 13,220,859 Sub-program 1: International Network Offices 450,000 2,700,000 11,250,000 Sub-program 2: Fostering National Tourism 341,068 387,759 440,841 501,190 1,970,859 3. Operational Marketing Program 9,477,000 13,050,547 15,195,698 17,305,945 20,837,995 75,867,184 Sub-program1: Commercialization 960,000 1,877,613 2,127,219 2,665,461 3,669,206 11,299,499 Sub-Program 2: Promotion 4,265,000 6,138,857 7,322,641 8,092,293 9,715,254 35,534,044 Sub-program 3: Communication 2,334,000 2,853,513 3,266,765 3,729,745 4,249,260 16,433,282 Sub-program 4: Public Relations 1,148,000 1,305,155 1,483,825 1,686,953 1,917,888 7,541,820 Sub-program 5: Market Intelligence 770,000 875,409 995,248 1,131,493 1,286,388 5,058,538 TOTAL BUDGET MARKETING MACRO PROGRAM 11,022,000 16,141,615 18,673,457 20,746,786 24,429,185 91,013,043

Forecast arrivals per country of origin 2011 - 2016 2012 2013 2014 2015 2016 CAGR Korea 792.466 855.863 941.449 1.082.666 1.245.066 1.469.178 11% USA 636.175 687.069 755.776 846.469 931.116 1.024.227 8% Japan 286.995 295.605 304.473 319.697 335.682 3% China 215.563 254.364 305.237 381.546 496.010 669.614 21% Australia 165.165 184.985 203.484 234.006 269.107 312.164 Taiwan 149.008 156.458 164.751 175.459 188.180 203.235 5% Hong Kong 143.108 153.555 165.225 178.856 195.848 216.412 7% Singapore 135.613 151.887 179.226 211.487 253.784 317.230 15% Canada 111.131 116.243 121.706 129.617 139.338 151.182 United Kingdom 101.771 106.860 112.203 117.813 125.471 136.763 Malaysia 89.257 99.968 114.963 132.208 153.361 180.966 13% Germany 60.487 62.301 64.793 68.033 72.115 77.884 4% India 38.039 42.604 48.994 57.813 68.220 78.453 Russia 15.521 16.607 17.936 20.088 23.101 26.335 9% Scandinavia 51.237 55.080 59.486 64.536 70.990 78.089 Others 727.937 815.290 913.125 1.031.831 1.176.287 1.340.967 TOTAL 3.719.473 4.046.128 4.463.959 5.036.903 5.727.691 6.618.381

Institutionalize roles and responsibilities of DOT and LGUs Clarify the institutional role and responsibility of DOT and LGU’s in key areas Strengthening tourism governance and policy formulation in the DOT Strengthening DOT support for Local Government Units (LGU’s) by establishing DOT provincial units LGU Awareness and capacity building

Tourism Governance and Management Model for the Philippines Proposed Philippine Tourism Governnance & Management Framework National Level Regional Level Local Level Tourism Advisory and Consultative Bodies (Tourism Coordination Council-Tourism Congress-Regional Tourism Congresses) Regional Tourism Councils/ Congresses (DOT-Tourism Congress-Civil Society) Provincial Tourism Councils Local Tourism Councils and Action Groups Department of Tourism Tourism Promotion Board TIEZA Regional Tourism Offices Regional & Provincial Level Tourism Units City and Municipality Tourism Units Strategic level Tactical Level

Develop a competent well motivated and productive tourism workforce Skills capability building Improving labor relations Professional Tourism Training and Education HR Recognition, Networking, and Development

Proposed Tourism and Hospitality Management Education System (2012 – 2016)

Human Capital Development Philippine Tourism Industry 2011 - 2016

“Mabuhay! Tuloy Po Kayo” Program for CIQS at International Ports Improve governance in the area of safety, security, and in dealing with tourists “Mabuhay! Tuloy Po Kayo” Program for CIQS at International Ports Expanded DOT TOP-COP Program Tourism Front-Liners Awareness and Values Training Program Establish Tourism Crisis Management Unit Pilot PPP based local tourism civil order programs in each region targeting reduced Criminality and lawlessness Traffic congestion Littering and waste

Provisional Cost Estimates of NTDP in (PhP ‘000s) 2011 2012 2013 2014 2015 2016 Total Improving market access and connectivity 5,000 3,787,320 3,798,600 1,760,950 1,416,185 339,685 11,107,740 Developing and marketing competitive tourist destinations and products 3,957,811 6,747,997 7,279,105 4,607,570 1,448,838 24,041,322 Improving tourism institutional, governance and human resource capacities 171,194 170,399 69,961 64,340 540,233 Grand Total 7,916,325 10,716,995 9,110,016 6,088,095 1,852,863 35,689,295

NTDP Implementation Approach Full time coordination and supervision of the implementation of the strategic programs will be required at the national, regional, and local level Overall implementation to be coordinated through: National Tourism Coordinating Council DOT NTDP Program Implementation Coordination & Monitoring and Evaluation Unit Infrastructure programs and projects to be implemented by related agency project management and implementation units

Project Implementation Organization Arrangement

Infrastructure - Implementation, Financing and Operations and Maintenance Arrangements Type of Infrastructure Lead Agency Mode of Financing Capex and O&M Possible Financing Partners Project Implmentation 1. Secondary International Airport Infrastructure Upgrading Program DOTC Annual Budgets Project Loans User fees and charges Public sector lenders Private Sector as providers and O&M DOTC Project Management and Implementation Units 2. Air, sea and land connectivity to strategic cluster destination entry points improvement program DOTC/ DPWH Program/Project Loans As above DOTC/DPWH Project Management and Implementation Units 3. Tourist development area utility destination infrastucture program DPWH/ LGUs DPWH/LGU Internal Project Management and Implementation Units 4. Tourist center support and site visitor infrastructure program DOT/DENR/NCCA/ LGUs Program Loans LGU Counterpart Specially created Project management and Implemetation Units