The Philippine Tourism Industry Analysis

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THE PHILIPPINE TOURISM
INDUSTRY ANALYSIS

I. SCANNING OF THE EXTERNAL ENVIRONMENT

A. OPERATING ENVIRONMENT
1. ECONOMIC INDICATORS
Income, employment, balance of payments and investments are all the positive impacts of the tourism industry. The industry generates income through salary, wages, loan and interest. The amount spent by tourists though their currency in the accommodation, food and beverage and other tourism services and products,once they visited in our country, becomes our tourist receipts. Tourism brings new money into the economy. Tourist money is returned to the local economy as it is spent over and over again. As shown in the multiplier effect, the salary that an employee receives from the business can be used for his daily expense, others will go to his savings, while part of his earnings will go to tax. The tax will go to the government to carry out its plan in developing and constructing infrastructures and superstructures beneficial for both the tourist and the residents. If service providers can provide a very satisfying experience for the tourist together with the help of other sectors indirectly providing the business, then we can expect more visitors to frequent our country. In any part of our country, once an area has become economically successful, more businessmen and government agencies may be influenced to invest in tourism and other industries, which is known as the accelerator concept. Because of this, we can expect more job opportunities in the sector. Balance of payment in the flow of services and funds in and out of the country for a given period of time is another economic impact. When a foreign tourist goes to our country and spends using his currency, we are creating export in our country. Similar when a Filipino spends his Peso in another country where he visits, we our creating import for our country. If our country pays more money than it receives, it has a deficit in its balance of payments. If it receives more money than it sends of exports, it has a surplus in its balance of payments.

The negative impacts of the tourism industry in the economy include inflation, high leakage, seasonality and overdependence on tourism. Inflation occurs when prices get high because local tourism establishments can compete with each other successfully. These establishments can pay for higher rent and expenses, thus enabling them to demand customers to pay for increased price. A leakage is another negative impact of tourism in the economy because this is the import that our country needs to outsource from other country for the reason that there are no available sources or supply in our country. Seasonality, as part of the negative impact, occurs when the industry experiences low business shown through occupancy rates and visitor arrivals called lean season. Likewise, it is when the industry experiences high business volume called peak season. When the industry is generating income, employment and development, the area in a region becomes over dependent for their livelihood on tourism which is a negative one because the residents have made themselves vulnerable to changes in tourism demand. As mentioned by Ms.Zenaida Cruz from his book Principles of Tourism, the decrease in demand for a destination results in under-utilization of services, unemployment, and loss of income. 2. SOCIAL AND CULTURAL SHIFTS

Tourism causes interaction between people of different culture with the host community. Social aspects of tourism would imply the change of the quality of life of the tourist destination due to the improvements undertaken in tourism. Developments both in urban and rural area for tourism purposes such as sewage system, transportation, medical centers, schools etc. benefit the community improving the quality of life as well of the residents. The desire of tourist for high quality public health facilities and contribute to the maintenance and improvement of those facilities in destination...
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