Prepared by: Infrastructure and Services Industries Service (ISIS) – BOI

As of December 2017

BASIC INDUSTRY INFORMATION

The Philippines is an archipelago of roughly 7,641 islands, naturally blessed with pristine sandy beaches of white, pink, gray and brown, and dappled with active volcanoes that are a sight to see. Located within the center of global marine biodiversity, these islands are home to exotic wildlife, colorful fauna and flora, parched with centuries-old churches, forts and walled cities that are testaments to the country’s long history, including UNESCO World Heritage Sites. Tourists enjoy vibrant fiestas, anywhere-bargain novelty and branded shopping, cosmopolitan and fine dining, and many more remarkably exciting attractions. And with good reason, The Philippines is now considered a favoured and emerging tourism destination, recently brought about with its successful hosting of APEC 2015, Miss Universe 2016 and the ASEAN 2017 - 50th Anniversary. TThhee TToouurriissmm AAccccoommmmooddaattiioonn ffaacciilliittiieess sseeggmmeenntt

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RReeggiioonn 44--BB 226677 220066,,005511 7711..1144%% 11

NNCCRR 115500 3322,,770088 1111..2299%% 22

RReeggiioonn 77 119977 1144,,110000 44..8877%% 33

RReeggiioonn 66 111155 55,,330088 11..8833%% 44

RReeggiioonn 44--AA 112222 55,,224488 11..8811%% 55

RReeggiioonn 99 8855 33,,441100 11..1177%% 66

RReeggiioonn 33 6611 33,,334477 11..1166%% 77

RReeggiioonn 1100 5566 33,,118855 11..1100%% 88

RReeggiioonn 11 220044 22,,996600 11..0022%% 99

RReeggiioonn 22 115599 22,,668877 00..9933%% 1100

RReeggiioonn 55 9966 22,,666611 00..9922%% 1111

RReeggiioonn 1111 4455 22,,661188 00..9900%% 1122

CCAARR 8866 22,,333300 00..8800%% 1133

RReeggiioonn 1122 5544 11,,775577 00..6611%% 1144

RReeggiioonn 1133 5566 11,,118811 00..4411%% 1155

RReeggiioonn 88 77 9988 00..0033%% 1166

TTOOTTAALL 11,,776600 228899,,664499 110000%%

Region 4-B11, majority in resorts, now provides the most in accredited absorptive capacity for overnight staying tourists. In 2016, it had 206,051 rooms (71.14%), followed by NCR11 with 32,708 rooms (11.29%), then Region 72 with 14,100 rooms (4.87%), Region 61 with 5,308 rooms (1.83%), and Region 4-A1 with 5,248 rooms (1.81%) complete the top 5 rankings. For the entire Philippines, of all types of accommodation facilities, the DOT has granted accreditations, renewed annually, to a total of 482 hotels (55,638 rooms)22.

11 Region 4-B : (MIMAROPA) Oriental & Occidental Mindoro, Marinduque, Romblon and

Palawan provinces; NCR : National Capital Region or Metro Manila; Region 7 : Cebu, Bohol and Negros Oriental provinces; Region 6 : Marinduque, Oriental Mindoro, Occidental Mindoro and Palawan provinces; Region 4-A : (CALABARZON) Cavite, Laguna, Batangas and Quezon provinces.

22 A new 5-star rating system project assisted by the Asian Development Bank and the

Government of Canada has been introduced. The same system is used by Belgium, Denmark, Greece, Italy, Malta, Netherlands, Portugal, Spain, Hungary, Germany, Austria, Switzerland, Great Britain and Ireland.

MAJOR PLAYERS

Hotel Chain 2015 Revenues (Php Million)

Rank

Sureste Properties, Inc. (Bloomberry Resorts / Solaire Resort & Casino)

10,527 212

Makati Shangri-La Hotel & Resort Inc. 4,694 464

EDSA Shangri-La Hotel & Resort Inc. 2,093 835

Manila Peninsula Hotel Inc. 1,677 994 Top Gross Revenue Earners in 2015 (Source: 2016 Top 1000 Corporations, BusinessWorld)

HOTEL ACCOMMODATIONS

PPEERRFFOORRMMAANNCCEE

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((++1133..77%%)) PPhhpp11,,009933..443333 BBiill..

((++1144..88%%))

TToopp FFoorreeiiggnn MMaarrkkeettss 22001166 TToopp SSppeennddeerrss 22001166

11.. KKoorreeaa 11,,447755,,008811 ((2244..7722%%)) 11.. KKoorreeaa PPhhpp7744,,009999..3344 MMiilllliioonn 22.. UU..SS..AA.. 886699,,446633 ((1144..5577%%)) 22.. UU..SS..AA.. PPhhpp3344,,335588..2200 MMiilllliioonn

33.. CChhiinnaa 667755,,666633 ((1111..3322%%)) 33.. JJaappaann PPhhpp1166,,338844..1100 MMiilllliioonn

44.. JJaappaann 553355,,223388 ((88..9977%%)) 44.. AAuussttrraalliiaa PPhhpp1122,,006622..5544 MMiilllliioonn

55.. AAuussttrraalliiaa 225511,,009988 ((44..2211%%)) 55.. CChhiinnaa PPhhpp1111,,663388..7711MMiilllliioonn

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11.. CCeebbuu 11,,887755,,5511

66

88.. DDaavvaaoo ddeell SSuurr 112255,,445555

22.. BBoorraaccaayy IIssllaanndd 886688,,776655 99.. LLaagguunnaa 9966,,770055

33.. PPaammppaannggaa ((++CCllaarrkk)) 771100,,664455 1100.. BBaattaannggaass 6600,,773355

44.. CCaammaarriinneess SSuurr 449955,,997788 1111.. BBeenngguueett ((++BBaagguuiioo)) 5599,,228866

55.. AAllbbaayy 444400,,779966 1122.. ZZaammbbaalleess ((++SSBBMMAA)) 4455,,882200

66.. PPaallaawwaann 338866,,008844 1133.. DDaavvaaoo ddeell NNoorrttee 4400,,445522

77.. BBoohhooll 226666,,331133 1144.. IIllooiilloo 3333,,886666

TToottaall ((TToopp 1155 DDeessttiinnaattiioonnss)) 55,,550044,,442299

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22.. CCaammaarriinneess SSuurr 11,,991155,,114488 99.. LLaagguunnaa 11,,220099,,224433

33.. ZZaammbbaalleess ((++SSBBMMAA)) 11,,881122,,666655 1100.. DDaavvaaoo ddeell NNoorrttee 997766,,661144

44.. DDaavvaaoo ddeell SSuurr 11,,775511,,556688 1111.. RRiizzaall 991199,,662255

55.. AAllbbaayy 11,,337766,,888811 1122.. PPaammppaannggaa ((++CCllaarrkk)) 990022,,221199

66.. BBeenngguueett 11,,333300,,660055 1133.. BBoorraaccaayy IIssllaanndd 881133,,330022

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TToottaall ((TToopp 1155 DDeessttiinnaattiioonnss)) 1199,,117733,,446611

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MMooddee ooff TTrraavveell 9988..7799%% ((aaiirr)) 11..2211%% ((sseeaa)) 9988..77%% ((aaiirr)) 11..33%% ((sseeaa))

AAvveerraaggee AAggee 3388..6644 yyeeaarrss 4411..6622 yyeeaarrss

AALLooSSbb ((nniigghhttss)) 99..2299 99..8899

AADDEEcc ((UUSS$$)) 110000..2233 110077..4444

PPuurrppoossee HHoolliiddaayy ((5577..99%%)) FFrriieenndd//KKiinn ((88..77%%)) HHoolliiddaayy ((5566..44%%)) FFrriieenndd//KKiinn ((88..88%%))

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* DOT-Accredited Accommodation Rooms ** in Metro Manila hotels only

a – January-to-October 2017 foreign arrivals increased 11.54% over the same period in 2016 from 4,908,017 to 5,474,310; BOI Tourism Investments : 2015 = PhP4,833.21 Million; 2016 = Php7,627.06 Million; Php6,302.92 Million

b – Average Length of Stay c – Average Daily Expenditure

Page 1 of 3

Prepared by: Infrastructure and Services Industries Service (ISIS) – BOI

As of December 2017

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From 2012 to 2016, foreign tourist arrivals have consistently registered highs during the peak months of January, February, July and December, with total annual growth at 9.07%, 9.56%, 3.25% and 11.31% Year-on-Year.

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Source : DOT

From 2006 to 2016, Metro Manila hotel guests chose to stay more in De Luxe hotels as shown with occupancy rates indicating a relatively flat & steady linear trend vis-à-vis the more downward-sloping trends for other hotel types.

Classification Metro Manila (Number of Rooms)

1988 2016 % Change

DDEE LLUUXXEE 33,,884411 77,,445588 ++9944..1177%%

FFiirrsstt CCllaassss 11,,004488 996644 --88..0022%%

SSttaannddaarrdd 886677 44,,559988 ++443300..3333%%

EEccoonnoommyy 11,,006688 444400 -- 114422..7733%%

TTOOTTAALL 66,,882244 1133,,446600 9977..2255%%

As a whole, hotel occupancy rates growth trend in Metro Manila had been in relative decline even with an increase of 6,636 rooms (+197.36.6%) by the end of 2016. Comparing globally, Metro Manila’s hotel occupancy of 66.1% in 2016 vis-à-vis the rest of the world33, can be described as “similar with the rest of the world”.

33 It is only 0.7% off from Asia-Pacific’s 67.8%, better than the Americas’ 65.8%, a mere 1.6%

below Europe’s 68.7%, and significantly better than the Middle East/Africa’s 60.27% level of occupancy; though just 0.5% below Southeast Asia’s 67.6% mark for the year 2016. ~~ Source : STR Global Limited – “Global Hotel Review (Media Version)” – Performance for the Month of July 2017.

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Of the Tourism Characteristic Products (TCP) defined in the Philippine Tourism Satellite Account (PTSA), for 2016, accommodations (23.1%) followed by shopping in general (11.3%), miscellaneous TCPs (11.2%), transport services (10.7%), entertainment and recreation (9.1%), travel agencies and other reservation services (7.1%) and food and beverage services (3.9%) provided the bulk of direct value-added contribution to the economy, producing over 70% of all TDGVA economic activities since 2011.

WWAAGGEESS

Accommodation and Food Service Activities, as of July 2016

Hotel Personnel Average Monthly Wage Rates Accountants and Auditors Php21,885.00 Accounting and Bookkeeping Clerks 13,705.00 Receptionist and Information Clerks 11,560.00 Service Crew 10,841.00 Housekeepers and Related Workers 10,906.00 Cooks 12,470.00 Waiters, Waitresses and Bartenders 10,953.00 Helpers and Cleaners 10,323.00 Unskilled Workers except Janitors,

Messengers and Freight Handlers 9,449.00

SOURCE : PSA Occupational Wages Survey 2016

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As of end 2017, 69 air services agreements were entered into by the Philippines. As of 2017, the country grew seat capacity 221% since 2010, as total entitlements reached 269,640,904 with Philippine carrier allocations growing to 141,648,832 seats from just 64,395,344 in 2010.

Page 2 of 3

Prepared by: Infrastructure and Services Industries Service (ISIS) – BOI

As of December 2017

INDUSTRY ROADMAP

The Philippine National Tourism Development Plan (NTDP) provides the strategic framework and action plans for the further development and growth of the industry. Vision, Goals, Targets

The DOT achieved its targets of 5-5.5 and 6 million foreign tourist arrivals in 2015 & 2016, exceeding average stay of 9.2 nights (actual=9.29), and surpassed spending Php4,383 or US$97 per day (actual=US$100.23). The updated NTDP 2016-2022 projects 12 million foreign tourists and 89 million domestic tourists by 2022. Philippine Advantages

Abundant natural resources / Diverse & unique tourism attractions

Diverse cultural heritage

Unparalleled hospitality and excellent customer service

Highly skilled and English-proficient manpower pool Government Support

Enabling laws/policies

Plans/Programs/Strategies – related to roadmap implementation

Market, technical and R&D support

Incentives

Tourism-Related PPP-Projects

Project Name Status

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DDeevv’’tt aanndd OO&&MM ooff DDaavvaaoo IInntteerrnnaattiioonnaall AAiirrppoorrtt ‘‘-- ddoo --

DDeevv’’tt aanndd OO&&MM ooff IIllooiilloo IInntteerrnnaattiioonnaall AAiirrppoorrtt ‘‘-- ddoo --

DDeevv’’tt aanndd OO&&MM ooff LLaagguuiinnddiinnggaann IInntt''ll AAiirrppoorrtt ‘‘-- ddoo --

LLaagguunnaa LLaakkeesshhoorree EExxpprreesssswwaayy--DDiikkee PPrroojjeecctt FFaaiilleedd BBiiddddiinngg // DDeeffeerrrreedd

LLRRTT LLiinnee 11 CCaavviittee EExxtteennssiioonn aanndd OO&&MM PPrree--CCoonnssttrruuccttiioonn AAccttiivviittiieess

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LLRRTT LLiinnee 22 OOppeerraattiioonn && MMaaiinntteennaannccee ((OO&&MM)) UUnnddeerr RReevviieeww bbyy NNGGAA

((OOrrttiiggaass--TTaayyttaayy)) LLRRTT LLiinnee 44 PPrroojjeecctt UUnnddeerr RReevviieeww bbyy NNGGAA

LLRRTT LLiinnee 66 DDeevveellooppmmeenntt aanndd OO&&MM UUnnddeerr RReevviieeww bbyy NNGGAA

MMaaccttaann--CCeebbuu IInntt’’ll AAiirrppoorrtt PPaasssseennggeerr TTeerrmmiinnaall 7755..5522%% aass ooff OOccttoobbeerr 22001177

MMeettrroo MMaanniillaa SSkkyywwaayy SSttaaggee 33 3311..5566%% aass ooff SSeepptteemmbbeerr 22001177

MMeettrroo RRaaiill TTrraannssiitt ((MMRRTT)) LLiinnee 77 1100..3355%% aass ooff OOccttoobbeerr 22001177

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NNAAIIAA EExxpprreesssswwaayy PPrroojjeecctt ((PPhhaassee IIII)) OOppeerraattiioonnaall ((DDeecceemmbbeerr 22001177))

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((55--NNoovveemmbbeerr--22001177))

Industry Associations

Tourism Congress of the Philippines

Philippine Hotel Owners Association Inc. (PHOAI)

Hotel & Restaurant Association of the Philippines (HRAP)

Hotel, Resort and Restaurant Association of Cebu Inc. (HRRAC)

Philippine Tour Operators Association of the Phils. (PHILTOA)

Philippine Travel Agencies Association Inc. (PTAA)

SECTORAL BINDING CONSTRAINTS • Infrastructure and logistics • Room gaps in identified tourism destinations

MAJOR PLAN OF ACTIONS

Among the major programs included in the NTDP are the following:

1. Improving 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

2. 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 and cultural heritage and vulnerable groups

• PPP-based marketing strategy and action plan

3. 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

Top Investment Opportunities:

The anticipated growth in international visitor arrivals and domestic travel movements is expected to create a corresponding increase in capacity requirements and demand for new products, facilities and services such as the following:

1. Tourist Accommodation Establishments 2. Tourist Enterprise Zones development 3. Health and wellness, and retirement facilities (e.g. spas, tertiary

hospitals, ambulatory clinics, villages) 4. Tourist transport services for land, sea and air travel 5. Convention and exhibition facilities or “Meetings, Incentives,

Conventions and Exhibition” (MICE) facilities

Niche Market Opportunities: 1. Nature-based tourism 2. Sun & Beach tourism 3. Cruise & Nautical tourism 4. Cultural and Education tourism 5. Leisure & Entertainment tourism 6. Diving and Marine Sports tourism

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