CHAPTER1

Philippine Tourism Industry "

The tourism industry has considerable potential to be a sustainability role model

in its role as a buyer of goods and other services, from building materials and green
construction standards to farm produce." Arancha Gonzalez

Traveling is one of the social activities that many people would love to do. For tourists,
traveling exposes them to different cultures and history, and at the same time provides
them relaxation and leisure. The tourism industry in the Philippines has come a long
way. According to Statista, foreign tourist arrivals back in 2008 were only about 2.9
million, and ten years later, it reached 6.5 million arrivals in 2017. With these events, the
gross value added generated from the industry is one of the key figures that determine
the Philippine economy. Expenditures for internal tourism was valued at approximately
3.6 trillion Philippine pesos in 2018.
This chapter will give you broad details regarding:
Travel Agency
Industry Business Operators
Industry Supplies
1.1. Origin of Travel Agency
-The British company Cox & Kings is sometimes said to be the oldest travel agency in
the world, but this rests upon the services that the original back, established in 1758,
supplied to its wealthy clients.
-The modern travel agency first appeared in the second half of the 19th century.
Thomas Cook, in addition to developing the package tour, established a chain of
agencies in the last quarter of the 19th century, in association with the Midland Railway.
-They not only sold their own tours to the public, but in addition, represented other tour
companies.
-Other British pioneer travel agencies were Dean & Dawson, the Polytechnic Touring
Association and the Co-operative Wholesale Society.
-The oldest travel agency in North America is Brownell Travel; on July 4, 1887, Walter
T. Brownell led ten travelers on a European tour, setting sail from New York on the SS
1.1.1 Operations of Travel Agency
- A travel agency's main function is to act as an agent, selling travel products and
services on behalf of a supplier.
-Consequently, unlike other retail businesses, they do not keep a stock in hand. A
package holiday or a ticket is not purchased from a supplier unless a customer requests
that purchase.
-The holiday or ticket is supplied to them at a discount. The profit is therefore the
difference between the advertised price which the customer pays and the discounted
price at which it is supplied to the agent. This is known as the commission.
In many countries, all individuals or companies that sell tickets are required to be
licensed as a travel agent. In some countries, airlines have stopped giving commission
to travel agencies. Therefore, travel agencies are now forced to charge a percentage
premium or a standard flat fee, per sale.
-However, some companies still give them a set percentage for selling their product.
Major tour companies can afford to do this, because if they were to sell a thousand trips
at a cheaper rate, they still come out better than if they sell a hundred trips at a higher
rate.
1.1.2. Organization of Travel Agents ?
11. Travel Agents - is a person whose job it is to arrange travel for clients (individuals,
groups, and corporations) on behalf of suppliers (hotels, airlines, car rentals, cruise
lines, railways, travel insurance, package tours). His task is to simplify the travel
planning process for their customers in addition to providing consultation services and
entire travel packages.
- An Agent can be self-employed, work for an independent travel agency, or be part of a
Travel Agency Consortia. Travel agents may specialize in leisure, business and/ or
other travel markets. They may be generalists or specialists (i.e. specialize in cruises,
adventure travel, conventions and meetings). The agents typically receive a 10 to 15%
commission from accommodations, transportation companies and attractions for
coordinating the booking of travel.
-Although booking a hotel or trip through a Travel Agent saves time, nowadays the
number of Travel Agencies is decreasing due to the strong online presence of the
suppliers (hotels, airlines) themselves. OTAs are the (new) online form of a Travel
Agency.
- Using a Travel Agent is beneficial for customers who plan multi-destination and/ or
international trips. Booking through an agent saves time and 'headaches'. The
experience and consultancy comes from 'one hand' - the agent who combines all the
travel components and services for the client/ traveler. Often agents also dispose of
unpublished deals and activities which is beneficial for the traveler.
-The businesses in this sector can be broadly split into the independent travel agencies
and the multiples that are owned and operated by tour operators and other tourism
concerns.
Four basic principles characterize success in each:
1. good quality customer service
2. good management.
3. In terms of management, controlling costs, ensuring highly motivated staff are
employed and building upon a customer base through word of mouth are all critical. 4.
4. The independent agencies, which are manager-owned and typically employ fewer
than five staff, contrast with the larger chain agencies, located in prominent high street
or shopping mall locations, which have high passer-by traffic. Fortify your Knowledge
"The Professional Pool is Growing"
Travel agencies are hiring both employees and independent contractors to fill the
increased demand for skilled travel planners. There are 64,750 full-time travel advisors
in the U.S ., according to the Bureau of Labor Statistics, and they predict that number
to grow by 10%. (Travel Maestro )
Industry Business Operators
Tourism Industry- is a composite industry and entities, both public and private, involved
in planning, development, marketing, sales, operation and evaluation of destinations,
products and services that cater the needs of the travelers both foreign and domestic.
 Planning and development of destinations, in its broadest sense, such as
planning and development of a specific tour product, it is often undertaken by individual
private sector entities.
Enter

The Marketing of the Philippines and it's various destinations is primarily

undertaken by the government sector, while private entities undertake the marketing
and sale of specific products and services.
The Operation of tour products is primarily the role of the private sector, while the
delivery of tourism services is a joint function of both the government and private sector.
Both the government and the private sector undertake the evaluation of tourism
results vis-a-vas predetermined specific objectives.
Philippine Tourism industry caters to the needs of foreign and domestic
travelers. (overnight stay, tourists, pilgrims, delegates, students etc.)

Republic Act 9593 Known as Tourism Act of 2009 Implementing Rules and
Regulations.

The Government Sector The Private Sector

Department of Tourism Transportation Companies
Philippines Tourism Promotions Board Lodging Industries
Tourism Infrastructure Industries and Food and Beverage
Enterprise Zone Authority
Duty Free Philippines Corporation Attraction & Activities Industry
Local Government Units The Travel Trade
Other Local Gov't Units Other Private Sector entities
Education Training Institutions

The Department of Tourism (Kagawaran ng Turismo) is the executive

department of the Philippine government responsible for the regulation of the Philippine
tourism industry and the promotion of the Philippines as a tourist destination.
 1.2.1. Government Sectors
Its primary function is to impose allocation of resources that will help in making
effective economic decisions.

The primary planning, programming, coordinating implementing and regulatory and

regulatory government agency in the development and promotion of the tourism
industry both domestic and international in coordination with its attached agencies and
other government instrumentalist.
Summarized stated power and functions of DOT
A. Formulate, coordinate, implement and supervise tourism policies, plans and projects
for the development of tourism as an engine of socioeconomic and cultural growth; and
in consultation with LGU's, the private sector industries and other industry stakeholders,
rules and regulations governing the operation and activities of all tourism enterprise. B.
B. Support, advance and promote the protection, maintenance and reservations of
historical, cultural and natural endowments in cooperation with the appropriate govt
agencies and private sector; and take appropriate measures against acts or omissions
contrary to these objectives.
B. Provide an integral marketing program and represent the government in all tourism
conferences and enduring the govt compliance and obligations arising from these.
D.Evaluate tourism development projects for the issuance of permits and the granting of
incentives by the appropriate government agencies; and encourage private sector
investments and participation in tourism-related projects.
E. Provide technical issuance to the LGU's in destination development,standards
setting and regulatory enforcement; and monitor the LGU's compliance to national
standards in the licensing of tourism enterprises; and
F. Perform other public sector services to the tourism industry such as: tourism
research and studies, compilation and integration of data, facilitate the process of
obtaining travel documentation and monitor conditions on any destinations and issue
timely advisories on the safety or viability of travel. Department of Tourism
Organizational Structure.
1.2.1.2. Philippine Tourism Promotion Board (TPB)

- Mandate The TPB shall be responsible for marketing and promoting the Philippines
domestically and internationally as a major global tourism destination, highlighting the
uniqueness and assisting the development of its tourism products and services, with the
end in view of increasing tourist arrivals and tourism investment. Specifically, it shall
market the Philippines as a major convention destination in Asia.
-To this end, it shall take charge of attracting, promoting, facilitating, and servicing large
scale events, international fairs and conventions, congresses, sports competitions,
expositions and the like. It shall likewise ensure the regular advertisement abroad of the
country's major tourism destinations and other tourism products, not limited to TEZs. It
may also provide incentives to travel agencies abroad which are able to draw tourists
and tourism investments to the country.
Functions
A.The Tourism Board shall have the following powers and duties:
B.Organize the PTPB in a manner most efficient and economical for the conduct of its
business and the implementation of its mandate.
C.Develop and implement a plan to market the Philippines as a premier tourist
destination.
D. Direct and coordinate the resources and efforts of the government and the private
sector in the tourism and allied fields for the full realization of the tourism marketing
plans and programs.
E. Develop and promote the Philippines as a center for international meetings, incentive
programs, conventions, exhibitions, sports and wellness, medical tourism and other
special events.
F. Engage in the business of tourism and perform acts in consonance therewith, such
as, but not limited to, creating subsidiaries in support of its marketing functions in
partnership with the private sector; as well as attending conventions and other events
abroad in representation of the country, encouraging sales promotions and advertising,
and implementing programs and projects with the objective of promoting the country
and enticing tourists to visit its tourism destinations and to enjoy its tourism products;
G Contract loans, indebtedness and credit, and issue commercial papers and bonds, in
any local or convertible foreign currency from international financial institutions, foreign
government entities, and local or foreign private commercial banks or similar institutions
under terms and conditions prescribed by law, rules and regulations;
G. Execute any deed of guarantee, mortgage, pledge, trust or assignment of any
property for the purpose of financing the programs and projects deemed vital for the
early attainment of its goals and objectives, subject to the provisions of the Constitution
(Article VII, Section 20 and Article XII, Section 2, paragraphs (4) and (5));

H.Receive donations, grants, bequests and assistance of all kinds from local and
foreign governments and private sectors and utilize the same
I. Extend loans through government banks and financial assistance for manpower
training heritage preservation, infrastructure development and other programs of the
Department
J.Obtain the services of local and foreign consultants and enter into contracts locally
and abroad in the performance of its functions; and .
Perform al other powers and functions of a corporation.

1.2.1.3. Tourism Promotions Board (TPB) Marketing & Promotions Branding Campaign
The operation of Philippine tourism's new marketing branding campaign "it's More Fun
in the Philippines" led TPB's fagship projects during the period. This branding exercise
marked the start of a more focused and cohesive approach to the promotion of
Philippine tourism, internationally and domestically. In the succeeding months following
the launch January 2012. DOT-TB, along with BBDO Guerrero as creative agency,
BBDO Proximity as website social media developer. CTV as production company and
Dentsu Philippines as Media Planning and Placement Agency. produced generic
advertising materials such as 5 versions each of 15s and 30s TVC's (including CNN), 7
versions of 3-minute AVP's, 12 photo layouts for print and OOH options and, Radio Ads.
The ASEAN Tourism Forum (ATF) in Manado, Indonesia and the International
Tourismus Borse (ITB) in Frankfurt served as the launching pads of the Philippine
tourism branding campaign for the Asia and European markets, respectively.
Media Planning . Transmiting the messages to the various target public's entails the
review of the available distribution channels. The following project proposals were
evaluated based on TPB's mandate, Corporate plan/Strategic map, Market brief and the
Media plan:
Digital Campaign With BBDO Proximity, in September 2012, the TPB launched the
website www.itsmorefuninthephilippines.com. The TPB's intention is to develop this
website into a dynamic and fun site that will not only provide information on destinations
but will also be a site for Business to Business (B2B) and Business to Consumers (B2C)
transactions, social networking platforms such as Facebook, Twitter and YouTube as
well as fun-filled web-based promotional activities. This project has a budget of 18
million pesos.

Special Promotions Projects

TPB implemented nine (9) major programs and projects such as the Pinoy Homecoming
Program, Calendar of Events and the Philippine Heritage Capital. The Philippines'
hosting of the PATA Travel Mart 2012 was one of the major international events held in
Manila that TPB handled.
The Tourism Infrastructure and Enterprise Zone Authority
Republic Act No. 9593 or "The Tourism Act of 2009" declares a national policy for
tourism as an engine of investment, employment, growth and national development,
and strengthening the Department of Tourism and its attached agencies to effectively
and efficiently implement that policy, and appropriating fund thereof. The Act supports
the establishment of Tourism Enterprise Zones (TEZs) which will contribute to the
accelerated creation of employment opportunities by encouraging and supporting
investments in the development and operation of these zones.
The Tourism Infrastructure and Enterprise Zone Authority or TIEZA (formerly
Philippine Tourism Authority), an attached agency to the Department of Tourism, is
mandated to:
 To designate, regulate, and supervise tourism enterprise zones established
under R A 9593
To develop, manage and supervise tourism infrastructure projects nationwide To
provide technical and financial assistance to qualified tourism projects, investors and
proponents (both government and private)
To generate revenues to fund both national and corporate developmental needs
and/or undertakings
To exercise PTA functions under P.D. 564.
The TIEZA is governed and its powers exercised by a Board of Directors (TIEZA Board
composed of The Department Secretary, The TIEZA Chief Operating Officer, The
Tourism Promotion Board Chief Operating Officer, the Department of Public Work and
Highways Secretary, the Department of Environmental and Natural Resources
Secretary, the Department of Internal and Local Government Secretary, and five (5)
representative directors that will be recommended by the Tourism Congress.
1.2.1.4. Duty Free Philippines Corporation
Duty Free Philippines Corporation is a government corporation that operates the duty
tax-free merchandising system in the Philippines to augment the service facilities for
tourist and returning Filipino travelers to generate foreign exchange and revenues for
the government.
Enter

Power and Function of Duty Free:

Exclusive authority to operate and/or franchise out the operation of stores and shops
the sell duty and tax items in international air and seaports and in TEZ.
Authority to operate stores within the international air and seaports Operate without any
prejudice to any privatization in the future.
Tourism Coordinating Council
Serves as the coordinating body for national tourism development effort.
Function of Tourism Coordinating Council
 -Prepare a five-year (5) strategic plan to develop and enhance a culture of tourism
Approve the annual tourism infrastructure programs that shall promote access to and
from air and seaports, and TEZ and other tourism destinations
- Create committees and technical working groups in pursuit of its functions.
The Local Governments Units
The LGU is empowered to regulate the establishment and operation of travel agencies
in : context of the stated paragraph: "Regulate the establishment, operation and
maintenance of cafes, restaurants, beerhous hotels, motels, inns, pension houses,
lodging houses, and other similar establishmer including tourist guides and transports"

Summary of Powers of LGU in Tourism

Establishment of Tourism development and All municipality and Tourism facilities

promotion programs province powers Development of Tourist attractions Acquisition of
Tourism equipment and facilities Regulation of Tourism business concessions and
security services

Responsibility of LGU Tourism Officers

-Preparing, implementing. coordinating, monitoring and up-dating local tourism and

development plans
-Ensuring the enforcement of tourism standards, laws, rules and regulations
-Submission of regular tourism-related reports
-Coordination with the department and its attached agencies in the development and
promotions of tourism in the locality

Six Principal Industries directly involved in Tourism:

1. The Transportation Industry (air, sea, land)
2. The Lodging Industry or hostelry industry (hotels, resort, inns, motels, lodging
pension houses, apartment-hotels)
3. Food & Beverage (restaurants, disco, travel food service (in hotels/motels
roadscesin airplanes/ships/trains) and institutional food service)
4. The Activities and Attractions Industry or Entertainment Industry (museum, theaters
theme parks, adventure clubs, dive shops, casinos)- natural or man made attractions 5.
5. The Travel Trade (travel agents, tour operators and tour guides)
6. Other Private Sector Entities (publishing companies, ITC service, Marketing & Public
relations, event organizers, social media site, miscellaneous services, education and
training institutions

1.2. Industry Suppliers

Lodging Industry
It features various kinds of luxurious hotels to lavish resorts and campgrounds
Examples:
Hotels Motels Convention
Resorts All suite Hotels Spa Space hotel
Other lodging types: home stays, hostels, boarding house hunting and skiing lodges,
condominium hotels and casino hotels.

1.3.2. Food and Beverage Industry

This sector reigns supreme in the industry. It can range from something as simple as a
bistro all the way to a high-end restaurant.
Examples:
Restaurants
Travel Food service (in airplane, ships, trains)
Institutional Food Service (in hospitals, nursing homes and so is not considered part of
tourism industry

Form of service to the way food and beverage is presented to the guests
Table Service Cafeteria Service Take out service
Buffet Service (Catered) Room Service Delivery services
Banquet Table service Quick counter service "meals on wheels"
1.3.3. Attraction and Activities Industry
Also referred to as the entertainment, recreation and leisure sector.
This industry includes natural and developed (man-made) attractions that drives much
of humanity to travel.

Natural Attractions - botanical, zoological, mountain, seaside parks are wonders that
lure travelers to enjoy the natural beauty and the inspiration they provide. Example:
Pangasinan's Hundred Islands, Albay's Mayon Volcano, Bohol's Chocolate Hills,
Palawan's Underground River.
Man-made Attractions - Historic sites, prehistory, archeological sites, cultural,
religious festivals inspired to learn more about contemporary and long vanished
civilizations. Palawan's UndergroundRiver Photo courtesy of Hotel Fleuris Palawan
Example: The Walled City of Intramuros, Ifugao's Rice Terraces, Cebu Sto. Nino
Cathedral, Iloilo's Jaro Cathedral

Activities (Recreation and Entertainment) Industry

Shopping Recreation Leisure Entertainment

such as Amusement Parks, Theme Parks, Resorts, Casinos, Cruise, Dinner Theaters,
Spas (resort spa & amenities sap), Fitness and club centers.

Hospitality Vocabulary

Identify the term describe in each statement

1. It is said to be the oldest travel agency in the world
2. A person whose job it is to arrange travel for clients (individuals, groups,
corporations) on behalf of suppliers (hotels, airlines, car rentals, cruise lines, railways,
travel insurance, package tours).
3. It caters to the needs of foreign and domestic travelers
4. Its primary function is to impose allocation of resources that will help in making
effective economic decisions.
5. A national policy for tourism as an engine of investment employment, growth and
national development, and strengthening the Department of Tourism.
6. It is empowered to regulate the establishment and operation of travel agencies
7. It features various kinds of luxurious hotels to lavish resorts and campgrounds
8. This sector reigns supreme in the industry
9. These wonders lure travelers to enjoy the natural beauty and the inspiration they
provide
10. Its main function is to act as an agent, sell travel products and services on behalf of
a supplier Fit into the Industry Answer briefly the following questions. What is travel
agency? Enumerate 6 (six) Public sectors and six (6) Private sectors inn tourism
industry.

Activity 2

Pick one local Government unit and analyze their strategies on promoting their city in
terms on the Tourism industry.

Activity 3.

Research about the department of tourism and make an outline of its importance, role in
the Philippine economy and ts regulations.