Hotel and Restaurant Industry - Philippine Institute for ...

1 An In-depth Study on the Hotel and Restaurant Industry In the Philippines Submitted by: Dr. Divina M. Edralin Project Head and Ms. Paulynne Castillo Senior Researcher August 17, 2001 Table of Contents page List of Tables ii List of Appendices iii Executive Summary v Introduction 1 1.

2 The Industry 3 Definition 4 Contribution to the Economy 5 Structure 5 Seasonality of Demand 25 External Support Systems 26 2. Forward Linkage/Market 28 3. Backward Linkage/Suppliers 35 4. Laws Hindering/Facilitating 40 5. Market Potential/Foreign Market Demand and Competition 47 Entering Foreign Markets 47 Extent of Services Rendered Abroad 47 Foreign Market Demand and Competition 49 6. Supply Capability 59 Services Offered 59 Areas of Specialization 60 Expertise/Technical Competence of Manpower 61 7. Industry Training Needs 63 Quality and Quantity of Training 63 8.

3 Opportunities and Threats 65 Opportunities 65 Threats 69 9. Action Plan Enhancing Competitiveness Recommendations 72 Performance Monitoring Scheme 78 10. Directory 79 Bibliography 294 Appendices 106 List of Tables Page Table 1 Hotel and Restaurant Industry Definition Based on the PSIC 4 Table 2 The Hotel and

4 Restaurant Industry s Contribution to the Philippine Economy 5 Table 3 Hotel and Restaurant Industry Structure 6 Table 4 Hotel and Restaurant Industry Breakdown 6 Table 5 Regional Distribution of Hotel and Restaurant Establishments 7 Table 6 DOT Accredited Hotels Average Number of Rooms, 1995-1999 9 Table 7 DOT Accredited Hotels Average Occupancy Rates, 1995-1999 9 Table 8 Description of Selected Philippine Hotels 12 Table 9 Top 38 Hotels & Other Lodging Facilities Profile (in million PhP) 17 Table 10 Top 38 Hotels & Other Lodging Facilities Profile 17 Table 11 Top Hotels & Other Lodging Facilities 18 Table 12 Top DOT Accredited De Luxe Hotels Based on Occupancy Rates (in %) 18 Table 13 Top DOT Accredited First Class Hotels Based on Occupancy Rates (in %) 19 Table 14 Top DOT Accredited Standard Hotels Based on Occupancy Rates (in %) 19 Table 15 Top DOT Accredited Economy Hotels Based on Occupancy Rates (in %) 20 Table 16 Top 181 Restaurants Profile (in million PhP)

5 23 Table 17 Top 181 Restaurants Profile 23 Table 18 Top Ten Fastfood Restaurants 24 Table 19 Top Ten Fine Dining and Specialty Restaurants 25 Table 20 Weekly Seasonality 26 Table 21 No. of Visitor Arrivals & Amount of Visitor Receipts, 1994-1999 29 Table 22 Visitor Arrivals & Amount of Receipts, January to June 1999-2000 29 Table 23 Visitor Arrivals by Country of Origin, 1st Semester 1999-2000 30 Table 24 Average Foreign Visitor Daily Expenditure on Major Items (US$) 31 Table 25 Hotel and Other Lodging Facilities Sub-sector Forward Linkage 32 Table 26 Philippine Income Segments, 1991-1997 33 Table 27 Food Share to Total Family Expenditure, 1985-1997 33 Table 28 Restaurant Sub-sector Forward Linkage 34 Table 29 Hotel and Other Lodging Facilities Sub-sector Backward Linkage 35 Table 30 Hotel and Restaurant Equipment Market Size (in million US$)

6 36 Table 31 Restaurant Sub-sector Backward Linkage 39 Table 32 Domestic Capacity Before and After 219 40 Table 33 Roundtrip Ticket Prices Before and After 219 41 Table 34 Deployment of Filipino Hotel & Restaurant Industry Professionals, 1996-2000 48 Table 35 1998 Tourism Destinations in the World (in 000) 49 Table 36 1999 Visitor Arrivals to Asia from Within Asia-Pacific 51 Table 37 1999 Visitor Arrivals to Asia from Europe 51 Table 38 Foreign Visitors Ratings of Facilities/Services 52 Table 39 Expected Hotel Investments in China, 1998-2000 52 Table 40 Expected Hotel Investments in Indonesia, 1998-2000 53 Table 41 Expected Hotel Investment in India, 1998-2000 53 Table 42 Expected Hotel Investment in Malaysia, 1998-2000 53 Table 43 Expected Hotel Investment in Australia, 1998-2000 53 Table 44 Expected Hotel Investments in Philippines.

7 1998-2000 54 Table 45 Restaurant Industry Sales Performance in Major World Markets 54 Table 46 Restaurant Industry Performance in Major World Markets (in %) 55 Table 47 Number of Restaurant Outlets in Major World Markets, 1993-1997 55 Table 48 No. of Restaurant Outlets in Major World Markets Growth Rate (%) 56 Table 49 Restaurant Sales in Major World Markets 57 List of Appendices Page Appendix A SWOT Analysis 166 Appendix B Amending Part IX of The Integrated Reorganization Plan By Renaming the Department of Trade and Tourism as The Department of Tourism, and Creating the Department of Tourism With a Philippine Tourist Authority Attached to It In Lieu of Philippine Tourist Commission 170 Appendix C Department of Tourism Programs and Projects 179 Appendix D Industry Associations 193 Appendix E Trade Unions 208 Appendix F Investment Priorities Plan and Implementing Guidelines 210 Appendix G College of St.

8 Benilde Hotel and Science in Hotel , Restaurant , and Institution Management Curriculum and The Hotel and Tourism Institute of the Philippines (HTIP) 281 Appendix H The Asian Institute of Tourism 289 Appendix I Hotel and Restaurant Administration/Travel and Tourism OJT Program Profile 292 Appendix J Tourism Industry GDP, Visitors Exports and Employment in Selected Countries, 2000 294 Appendix K International Tourism Receipts by Region (US$ billion) 295 Appendix L Network Economy and Tourism Industry 296 Appendix M Technology utilized as a Competitive Method 298 Appendix N Changing Roles and Relationship in the Electronic Market Space 299 Appendix O Cost and Benefit Analysis for Developing Internet Presence for Small and Medium-sized Tourism Enterprises 300 Appendix P Obstacles to the Introduction of electronic Data Interchange (EDI) 301 Executive Summary In the Philippines, tourism is one of the major industries that the WTTC noted as positioned at the epicenter of global travel and tourism growth and development.

9 In 1997, tourism contributed of the country s GDP, generating million jobs (or one in every nine nationwide), and accounting for some of Philippine investments. According to the Department of Tourism, international arrivals in 1999 stood at million, a slight increase from the previous year s total of million visitors. Despite the economic crisis suffered by its Asian markets, the Philippines foreign exchange receipts from tourism went up by from $ billion in 1998 to $ billion in 1999. Moreover, the Philippines enjoyed the highest repeat visitors in Asia at percent, indicating that the tourism sector can survive external threats and competition in the region.

10 As tourism serves as the main market for Hotel and Restaurant services, increase in visitor traffic over the past ten years resulted in a corresponding boom in the Hotel and Restaurant Industry . During the last decade, the Hotel and Restaurant Industry has flourished even as it struggled to cope with difficult challenges. New hotels mushroomed in the capital while older hotels have done their best to spruce-up both their interiors and upgrade services. Likewise, the growth of the Restaurant sub-sector, the number of players and the variety of services offered, has been notable during the period. Invariably linked, increasing world tourism is expected to offer both opportunities and trials for the world s Hotel and Restaurant Industry .