TOURISM INDUSTRY IN PALAWAN

Chapter 12

Region 4B: Tourism Industry Cluster

12.1 Overview of the Industry

12.1.1 Situationer

12.1.1.1 The tourism industry in the PhilippinesThe tourism industry is among the sectors that have the potential to boost the Philippine economy, if developed in a sustainable manner. This view is further emphasized in the 2010 National Tourism Strategy where the focus of the strategy for the industry is in two areas: (1) Market-Product and (2) Destination.

Table 12.1 2010 National Tourism Strategy Focus

Strategy AreaFocus

Market-ProductSegments

Sightseeing & shopping

Mass comfort

Backpacker

Niche beach

Domestic ecotourism

Beach lover

Recreation

MICE (meetings, incentives, conventions and exhibitions

Balikbayan

DestinationMajor destinations comprising of Cebu/Bohol/Camiguin, Palawan, Manila plus Tagaytay and Davao as potential major destinations.

Minor destinations comprising of Vigan/Laoag and Clark/Subic

Special interest destinations comprising of Baguio/Banaue, and Boracay

Source: DOTPriority actions in each set of destinations are as follows. Major destinations- priority shall be given to major infrastructure improvement, aggressively closing gaps, and promoting these destinations.

For special interest destinations, the priority shall be to increase accessibility, and improve the existing tourism products being offered;

For minor destinations, the priority shall be to build more attractions, and promote these as secondary options.

The year before in 2009, the Philippines experienced a 16.6 percent increase in tourist arrivals in the top sixteen tourism destinations in the country, reaching close to 4 million in the first semester of that year. The changing lifestyle and travel pattern of more Filipinos and Philippine residents to spend their holidays in various tourist areas in the country contributed to the increased tourist flow.

That same year, ecotourism, bird watching, adventure and incentive tourism products were jointly launched by the DOT, LGUs and other private sectors. Table 12.2 Tourist Volume in the Top Sixteen Destinations, January to June 2009

DestinationsForeignDomesticTotalGrowth Rate

Camarines Sur147,504754,698902,202194.0%

Cebu321,116509,433830,599 2.3%

Boracay112,315271,498383,813 6.0%

Baguio* 20,677350,528371,205 -14.5%

Davao 29,691300,556330,247 2.7%

Puerto Galera**215,755 20.2%

Bohol 45,995114,619160,614 15.6%

Negros Occidental* 32,780113,724146,504-55.2%

Negros Oriental 22,729 95,069117,798 11.1%

Ilocos Norte 8,088 91,659 99,747 6.5%

Masbate* 10,257 71,630 81,887 -7.5%

Camarines Norte 1,711 79,466 81,177 63.9%

Puerto Princesa 11,380 69,376 80,756 63.0%

Legaspi 7,892 59,732 67,624 10.9%

Catanduanes 9,953 55,188 65,141115.0%

Sorsogon* 26,251 27,951 54,203-14.0%

Total 808,3892,965,1283,989,271 16.5%

Source: DOT Regional Office *Partial Data** No breakdown

12.1.1.2 The tourism industry in Region 4B (MIMAROPA)MIMAROPA is one of the busiest regions in terms of tourism, cornering more than its fair share of the total number of tourists that visit the country. The region is home to Palawans two World Heritage Sites, the Underground River and the Tubattaha Reef as well as Puerto Galeras tropical beauty. Tourists who are looking for a rich dose of history and religion flock to Marinduque, the countrys Lenten capital, where the famous Moriones festival is held every year. Divers from all over the world seek the marine wonders of Occidental Mindoros Apo Reef. Moutain climbers will delight in exploring the challenging terrians of Romblons Mt. Guiting-Guiting, as well as the provinces unexplored and unspoiled beaches.

MIMAROPAs economy relies mostly on agriculture, fishing and ecotourism, making it one of the strongest in the country. Different product focus are being done to attract the market where the primary market focus are China, Korea, and Japan. Nationals from these countries and in the ASEAN are emerging as the new major tourists in Southeast Asia, in addition to the Europeans and Americans. Tourism promotion for 2010, however, will be increased in HongKong, Taiwan, ASEAN, Australia, North America and Europe.

Significance of tourism in PalawanTourism in Palawan is viewed by many of the industry players as highly significant, primarily because of its contribution to employment and revenue generation; employment for those directly engaged in the service industry in Palawan and revenue generation even to nearby provinces where those in the hotel business get their supply of some agricultural produce. In the words of DTI Regional Director for Region IV-B Joel Valera the tourism industry in the region is rated as significant in the downstream where it is found to be contributing significantly to transportation, employment generation, hotel and restaurant business.

The growth rate of 63.0 percent from 2008 to 2009 (Table 1) ushered the conception of more community-based tourism products that increased the availability of product offering and livelihood for local residents. Notable among these community-based tourism in Puerto Princesa are the ones being operated by the Honda Bay Boat Operators Association, Inc, Bacungan Community Development Residents Association, Inc. (BCDRAI)- floating restaurant tour of mangrove area in Sitio San Carlos.

Major tourist attractions in Palawan can be divided into:

Historical

Sta. Isabel Fort in Taytay Built in 1667 under the Augustinian Recollect Fathers, this fort was used as a military station during that period. The chapel and cannon are still intact to this day.

Cuyo Fort in Cuyo- Built during the early Spanish period to protect the people from their enemies, this is considered as one of the most ancient and unique forts in the Philippines.

Port Miller & Light House Tower- A historical landmark in Brookes Point, Port Miller is a cemented water tank constructed as a source of potable water for the natives and settlers of the municipality.

Melville Light House in Balabac A century-old facility which used to guide ancient marine vessels landward is still glowing after a hundred years. The Lighthouse has become a familiar landmark to the local folks.

Cultural

Batac Tribal Community- One of Palawans indigenous groups, the Bataks are mountain people who dwell in the river valleys north of the provincial capital. They are Negrito stock and since, only less than 500 of them thrive today, they are considered a disappearing people.

Natural

Calauit Island Wildlife Sanctuary in Busuanga - Its 3,700 hectare area is devoted to a wildlife preserve of African animals from Kenya such as giraffes and elands, zebra gazelles co-exist with endemic Philippine animals like the Palawan bearcat, mousedeer and peacock pheasant. Coron Reefs in Busuanga Seven enchanting lakes surrounded by craggy limestone cliffs attract hundreds of nature lovers to the Coron Reefs. The place offers exciting wreck explorations from enthusiasts, novice divers and snorkelers and recreational divers.

El Nido Marine Reserve in Miniloc Island Occupying an area of 96,000 hectares, this popular nature boasts of diverse ecosystems such as rainforest, mangroves, white sand beaches, coral reefs, and limestone cliffs. It is now one of the countrys premier destinations. El Nido is the sanctuary for various forms of wildlife.

Underground River in Bahile, Puerto Princesa City- A world heritage site, this natural wonder features and 8.2 km. navigable underground river, reputed to be the worlds longest that winds through a spectacular cave before emptying out to the China Sea.

Honda Bay The bay consists of several islets with shallow reefs bordering fabulous beaches which have become the favorite swimming, snorkeling, and diving desitnations of local residents and tourists. These islets are Cowrie Island, Bat Island, Lu-li (derived from lulubog-lilitaw, meaning floating and sinking island that is visible only during low tide), Meara Marina, Starfish Island known for its fine white sand clear water that teems with starfish, Snake Island- an island with long stretch of of fine white sand shaped like a snake, Pandan Island and Senorita Island (the breeding site of Lapu-Lapu fish).

Tubattaha Reefs National Marine Park Reputed as the countrys best dive spot. The park was named a World Heritage Site because of its abundant marine life.

Ursula Island Game Refuge and Bird Sanctuary- This island is the heaven for birds that converge in the island two hour before sunset to take their rest after a days long flight. Man-made Irawan Crocodile Farming Institute This institute aims to preserve and further research studies on endangered species of crocodiles.

Iwahig Penal Farm The colony encompasses a 37 hectare scenic farm planted with coconut palm trees, rice and other crops cultivated by the prisoners and their families. Many of the inmates lives with their families in so-called rehabilitation areas.

Special interest

Tabon Cave in Quezon- Known as the Cradle of Philippine Civilization Tabon Caves consist of a series of chambers where anthropologists discovered the remains of crude man and his tools. Anthropological significance came to the fore with the discovery of the 22,000 year old Tabon Man in its interior decades ago, along with other artifacts.

12.1.2 Value chain and sub-sectors

12.1.2.1 General value chain of the tourism industry Figure 12.1 shows the value chain for eco-tourism in Palawan. This value chain is no different from the value chain for eco-tourism in other regions. Figure 12.1 Value Chain for Eco-Tourism in Palawan.

12.1.2.2 Support Industries A formal tourism industry cluster, however, does not exist in the region, although in Palawan, there are different support industries that have formed their own associations. Some of these are shown in Table 12.4.Table 12.4 Travel and Tour Associations in Puerto Princesa, PalawanAssociationNumber of Members

ATTOPPAssociation of Travel and Tour Operators of Puerto Princesa 40

ATTSOPPAssociation of Tourist Transport Services of Puerto Princesa 200

AROMAAssociation of Restaurant Owners & Managers70

ATEPPAssociation of Tourism Educators of Puerto Princesa

AIRTODA Airport Tricycle Drivers Association

HOBBAIHonda Bay Boat Association, Inc . 46

Sabang Ferry Association

BCDRAIBacungan Community Developmetn Residents Assocation, Inc.

TASS Tourist Association of Souvernir Shops 32

ATAPPAssociation of Tourist Accommodation of Puerto Princesa 63

PATGAPalawan Tour Guide Association 75-100 are active

Source: Interview with the President of the City Tourism Council12.1.2.3 Support Agencies/Organizations The Provincial Tourism Office of Palawan in the Office of the Governor plays a key role in the development of the provinces tourism potentials. Through this office, the provincial government aggressively pursues tourism since it provides funds for projects supportive of the industry in the province. In recognition of what the council has been doing for tourism in the province, it received a DOT award in 2001 and 2002 as Best Tourism Council.

Of late, however, the City Tourism Office which is under the Office of the Mayor is selling Puerto Princesa as a separate destination for Palawan. The advantage it sees in doing so is that Puerto Princesa alone already offers diverse attractions. There is medical tourism where there are hot springs near Honda Bay frequented by Koreans. There is even a Korean hot spring run by Koreans since at the present time the facilities of the city-run hot spring are being renovated. There is the Balon Pari in Barangay Inagawan where miraculous water is said to exist, the Honda Bay island hopping since it is composed of 13 chartered islands/islets notable of which is Snake Island, a DENR protected area where one can swim and snorkel with fish and the Pambato Reef.The City Tourism Office has also developed its own tourist programs in support of the industry like its no tree-cutting program and just rely on neighboring provinces for its source of wood and its Strategic Environment Plan where every February 14, there is their Love Affair with Nature Festival where people are encouraged to plant mangrove and during the third Saturday of June, there is the Feast of the Forest, where people are encouraged to go to balding mountains to plant trees. A private organization that is also in the forefront in tourism activities in the city is the

City Tourism Office which is linked to several industry players.

Figure 12.2 City Tourism in Puerto Princesa

12.1.3 Demand/users and markets Records from the City Tourism Office of Puerto Princesa show that the top ten nationalities visiting Palawan in 2009 are the following: (1) Americans (2) Koreans (3) Canadians (4) Japanese (5) Chinese (6) French (7) Germans (8) Australians (9) British and (10) Swiss. There are more domestic tourists, however, than there are foreign tourists. Table 12.5 Tourist Arrivals in Puerto Princesa City, 2009MonthDomesticForeignTotal

January15,3621,81517,177

February15,9481,97417,922

March17,4432,21219,655

April23,3452,55125,896

May22,6442,33624,980

June21,5632,333 23,896

July19,8961,86221,758

August20,6631,63322,296

September21,5541,61223,166

October19,8932,84522,738

November20,7422,96123,703

December22,8632,89225,755

Total241,91627,026268,942

Source: City Tourism Office, Puerto PrincesaThe market is a mixture of high end tourists and backpackers. Since there are high end tourists, like the Europeans, the need for high end facility beckons. There are more puti or Caucasians than the other nationalities. When the Underground River, which is a protected environment was promoted nation-wide so it can be included in the New Wonders of Nature, however, more Filipinos and residents have also frequented the place. Another reason for the increase in Filipino tourists is the Lakbay Aral or Study Tour participated in by the Local Government Units ((LGU) and State University and Colleges (SUC) where the best practices of the LGUs and SUCs are shared with others.

The peak tourist season is October/November February/March for Caucasians. Normally, foreign tourists come to escape the cold winter months. More Filipino tourists come during the months of April to September. There are more local tourists (70 percent) , as compared with foreign tourists (30 percent). In the Underground River alone, around 600 tourists a day go to the Underground River, but during the peak season, this increases to about 700 tourists a day. Since 2009, the industry which was ruined by the Abu Sayyaf kidnapping in 2000 in Dos Palmas, has not experienced too much seasonality in this service industry sector. There seems to be a continuous flow of tourists, which to a great extent, is attributed to the promotional fares done by airlines and the direct flights to the northern part of Palawan due to the newly inaugurated airport in Coron.

Table 12.6 shows the tourist arrivals in Palawan from 1992-2008.Table 12.6 Tourist Arrivals in Palawan, 1992-2008YearDomesticForeignTotal%Change

2008224,31835,915260,233 20%

2007181,04343,953224,996 8%

2006149,27642,978192,254 -4%

2005130,53169,865200,396 -2%

2004163,11941,715204,834 44%

2003108,21834,020142,244 25%

2002 93,14020,555113,829 -3%

2001 86,70830,808117,516 -8%

2000 96,59831,772128,370 8%

1999 80,94538,255119,200 41%

1998 57,85726,451 84,308-15%

1997 64,36134,251 98,612 8%

1996 57,30834,295 91,603 48%

1995 19,14342,753 61,896 81%

1994 37133,816 34,187 34%

1993 17,002 8,512 25,514 74%

1992 6,982 7,282 14,642 -

Source: Office of the Governor Tourism Division

Local tourists using boats account for 70 percent of the market while foreign tourists account for 30 percent. The daily net income of the boat owners on the average ranges from P500 to P1,500. During the peak months, the daily net income is P1,500.The transport service rates are regulated by the City Tourism Office. Drivers are also paid based on minimum wage plus commission at P250/day.

The sales volume and sales value of some of the members of the different associations are reflected in the table below:

Table 12.7 Sales Volume and Sales Value of Different Industry AssociationsDomestic MarketHOBBAIATAPPTASSPATGA

Sales Volume 2009Sales Value 2009Sales Value 2009Sales Value 2009Sales Value

Local 363P90,650179,200600,000235,200

Foreign155P38,86176,800400,000100,800

12.1.4 Raw Materials Supply Raw materials in this service industry, whether major or minor raw materials, used in or by the industry itself, are usually sourced internally or within the province and the region. Raw materials that are sourced outside the region include the hotels and restaurants reliance on Bacolod and Iloilo for their chicken and Manila for Baguio vegetables. Furniture, furnishings and toiletry are also sourced within the province.Bancas and materials used to make them come from within the province. This is true also for gasoline, life vests and crude oil.

None of the members of the different associations bulk-buy their raw materials so they could save on cost. Rather, raw materials are sourced individually. Though the ATAPP members are not into bulk buying of raw materials, they, however, share plumbers and other maintenance crew.

12.1.5 Productivity Productivity of the tourism industry in MIMAROPA, specifically in Palawan, is comparable to identical industries in the country. Trainings are regularly conducted for boatmen, tour guides by the City Tourism Office and the City Tourism Council. In hotels, specifically, the Legend, there is the practice of keeping its personnel to a minimum and once there is a need for more, like when there are conventions, then additional personnel are supplied by an agency. This way, it is ensured that the productivity of its staff is maintained at the highest level. 12.1.6 Price Competitiveness The price of industry players are generally at par with similar industries outside the region. Rates for transport services are shown in the table below:Table 12.8 Transport Service and Driver Rates in PalawanTour TrailTransport ServiceDriver Rate

Underground River3,500700

City Tour1,500300

Honda Bay1,500300

Roxas4,0001,000

In the hotel business, accommodation is in fact even lower compared with other regions. Transport service rate for vans, tricycle and boats, are comparable with those outside the region. Prices in fact are regulated by the City Tourism Office.

12.2 Potentials and Issues in View of Cluster Development

12.2.1 General issues

12.2.1.1 Competitive Advantage All the industry players interviewed mentioned as a competitive advantage nature and biodiversity. There are 1,700+ islands and each island offer a different type of fun and excitement. Natural park, idyllic beaches, lagoons, caves, eco-tourism, varied packages or products like dolphin watching, fireflies watching, island hopping, diving, snorkeling, among others.

Another competitive advantage frequently mentioned is the Underground River which is a world heritage site and an entry to the New Wonders of the World in 2011 and the Tubattaha Reef.

Given all the natural endowments, and being known as the Philippines last ecological frontier, the strong support of the City Government of Puerto Princesa as well as NGOs in Palawan like the ABS-CBN Bayan Foundation and the Environmental Legal Assistance Center (ELAC) and the Palawan Network of NGOs, Inc. (PNNI) complete the competitive advantage of Palawan.

12.2.2 Technology Depending on the industry players, the degree of the state of technology varies from manual to mechanized.

Table 12.9 State of Technology in AssociationsStateAssociations

TASS

(souvenir shops)HOBBAI

(boat)ATTSOPP

(transport)ATAPP

(accommodation)ATTOPP

(travel operatorsAROMA

(restaurants)

Manual90%--40%40%70%

Mechanized10%100%100%60%60%30%

Others

Technological development that has helped the industry a lot revolve around information and communication technology. Thus, the connection to the internet where the players can be connected to the rest of the world is viewed by many as the most important technological development. Others, like the boat associations and the transport association consider the cell phone as a very potent, especially considering that landline connection is not that reliable in certain municipalities in Palawan.

12.2.3 Marketing and distribution Marketing is generally done through the internet if the members of the different associations have their websites as in the case of accommodations/hotels. For big hotels, like the Legend, there is even the Sales Blitz in the USA and London for balikbayans where the top brass of the hotel visit travel agencies abroad and host dinner or lunch for tourist associations of Filipinos staying abroad. Advertising through the newspapers is also resorted to. Others rely on the assistance they get from the City Tourism Council which they are a member of. The Council refers the accommodations/inns to the LGU (for Lakbay Aral) and includes them also in the annual expositions and exhibits conducted by the Council. During these exhibits, the ATTAPP members promote their services to the crowd. In the case of boat operators, they are allowed to display their brochures in places (hotels, inns, restaurants, etc) where they have tie up with.

For its part, the City Tourism Office (CTO) participates in media blitz and Travel Mart Caravan to promote tourism in the Puerto Princesa City. The Office also participates in the annual convention of tourism officers of the Philippines. Recently and with the attention given to the Underground River to be included in the Seven New Wonders of Nature, the head of the office even went to Marawi City to promote the on-line voting. The Mayor also makes TV appearances and during these TV appearances, makes a pitch for Puerto Princesa. It is also a common practice of the Mayor to tender dinner or lunch with cultural show afterwards where tribal songs and dances are commonly featured. Before renewal of license of business permit, Gabay sa Turismo van drivers can not drive without a training certificate issued by the CTO.

12.2.4 Financing facilities Commercial banks proliferate in the region and have windows for the industry. For example, one key player availed of the Land Banks Sulong Turismo that has an easy loan for working capital and construction of building payable in 1-2 years.

Many of the small industry players, however, prefer to conduct business with smaller banks and NGOs that give financing. The Honda Bay Boat Owners Association, Inc. sources for financing include the Palawan NGO Network, Inc. (PNNI) which give P50,000 per association; the ABS-CBN Bayan Foundation which gives P50,000 per individual; the National Confederation of Credit Cooperatives P100,000 per individual and the Greenbank which gives P30,000-P50,000 per individual.

In turn, HOBBAI, provides microloans of P5,000 to P20,000 to members. Payment is daily collected for every trip made by the boat until the loan has been fully paid.

The common use for the borrowed funds is for working capital. The different associations and the use of their borrowed funds are shown in the table below:Table 12.10 Associations and Use of Borrowed FundsFinancing FacilitiesAssociations and Use of Borrowed Funds

TASSHOBBAIATTSOPPATAPPCTC

Working capital (

12.2.5 Skilled labor development Adequate labor supply for the tourism industry in the province is available and does not pose any problem should there be resignations except for the hotel business where regular employees are kept to a minimum. There are times when there is again need for the services of personnel they have trained and laid off temporarily (during conventions), some of them have already gone abroad . In cases like, additional personnel are taken from an agency and training is done again. Save for this, for the rest of the industry players, appropriate supply of labor is adequate all-year round. Skilled personnel required include tour guides (who are licensed and certified by the City Tourism Office), van drivers, diesel mechanics of boats, hotel frontliners and sewers for the souvenir item makers. Included among the semi-skilled personnel are the boat captain, the crew, and finisher of souvenir items.

Skills development programs are regularly held and the industry players avail of these programs for their personnel. These programs and providers are shown in the table below:

Table 12.11 Programs and Skills ProvidersProgramProvider

Tour Guiding TechniqueCity Tourism Office

Mabuhay Hosting Technique

Guest Management

Mock Tour Training

Trekking/Snorkeling

Handling ComplaintsHotels central agency in Manila

Customer Service TrainingPalawan State University

Maintaining BoatsCity Tourism Council

Dyeing TechniquesDOST

Leadership, Bookkeeping, Business Management, Life-saving techniques Environmental Legal Assistance Center (ELAC)

Coral ManagementAGS-CBN Bayan Foundation

First AidRed Cross

Housekeeping, Waitering, Restaurant Management TESDA

12.2.6 Infrastructure From interviews with different industry players, the following were viewed as concerns as far as infrastructure is concerned: Electricity A big problem facing the industry is the adequate supply of electricity. The province is experiencing power outages and this is not good for tourists and business although most of the hotels and restaurant have generators. Neither do all the municipalities have 24 hours of electricity service, even the tourist sites. There are plans, however, of putting up solar windmills in Sabang. Pier With the construction of the PNP Maritime built in the Honda Bay area, the area where boats could be berthed has become limited and narrower. The PNP doesnt want the boats used for tourism to be in front of the Maritime, and because of this only a small number of boats could be berthed in the area. Owners have to berth their boats elsewhere in the bay area. AirportThere is a need to expand the airport and make it an international airport to assure continuous influx of foreign tourists. Tourists do not like the hassle of stopping in Manila just to get a flight for Palawan. Likewise, there is a need to have a direct ferrying of tourists from Puerto Princesa to Coron. An international airport, though, is set to be constructed in 2010.

Roads and Bridges The concreting of roads aside from the national highway is a major concern. The Puerto Pincesa City road network (which include Sabang) to El Nido has to be improved. In going to El Nido, tourists experience only two hours of good roads and then another four hours of dirt road. As such, tourists have to travel more than six hours from Puerto Pincesa to El Nido because of bad road condition. Since there are narrow roads which cant be extended anymore, the government is now looking for possible alternate roads.

Water During the summer months, NAWASA water is not sufficient.

Telecommunication This is viewed as not adequate since not all municipalities have access to internet.

12.2.7 Other issuesATAPP (tourist accommodation) is advertised through the internet and as member of the City Tourism Council, members are referred to visitors of the LGU. ATAPP members are likewise included in the annual expos and exhibits to promote its services. The view of some, however, is that since some officers of the Council also own hotels and accommodation, it is but natural that preference is given to their hotels and inns. This leaves those who are not officers to fend for themselves.

ATTSOPP (tourist transport services) considers competition as a problem. It feels that there must be a covenant so prices will be standard. There are many fly by night operators especially of vans used by tourists. What must be done is to monitor and report problems to the city administrator and legal.

The problem of the HOBBAI , which was formed as an association in 1997, is the land where the boat owners are residing since it is owned by the city government and the City Mayor calls it a city reserve and does not want to give it to the community. In 1998, Honda Bay was declared by the City Government as a Tourism Zone and allowed only 83 out of 300 families to settle in said area. To this date, the fate of these residents is still on hold and that includes the boat operators of HOBBAI. What is feared is a relocation site that is far from the wharf. This will be a problem since it will be hard for the owners to safeguard their boats.

The City Government of Puerto Princesa should already decide which part of the Honda Bay area will be the residential portion for the boat operators. This is the uncertainty being faced by the boat operators/owners.

The community has already gone to the Philippine Congress so that the land could be given to them. This was endorsed by the provincial government but the endorsement of the city government is needed and naturally, this was not given to them. Their stay, therefore in the area is precarious since if they will be located outside of the Honda Bay, it will be expensive for them to travel to Honda Bay for their business. Another problem is the PNP Maritime Office which was built when some of the homeowners were transferred. The presence of the PNP Maritime in the area has diminished the bay area where their boats could be berthed. The Mayor has asked HOBBAI members to look for an area where the boat owners could transfer residence with the site being paid for by the city government. The available land seen as a possible relocation area is in the mountain, far from their source of livelihood.

Another problem of the HOBBAI members is the upgrading and maintenance of their boat. The life span of a boat which if big, costs around P300,000 and if small costs around P150,000 is just five years. Much as they would like to earn as much as they could during the life span of their boats, they cant dictate prices without the ordinance coming from the City Government. They have to lobby to the city government. They were able to increase their rates twice already but this was done through an ordinance issued by the city government.

The City Tourism Council yearly trains their boatmen as well as the boat owners on how to maintain their boats.

The Palawan Tour Guide Association (PTGA) was registered with the SEC in 1992. It has 100 members but only 75 are active. Seventy percent of the members are full time tour guide operators while 30 percent are part-timers. Several benefits accrue to the members of the association. PTGA acts as a support group in case of problems; (2) PTGA lobbies for its members and serves as a voice of the industry; (3) members can use the boats (bancas) owned by the association, which came from a P65,000 grant given by the DOT, and supported by counterpart funds of the association in the amount of P100,000; and (4) earnings from the dolphin watching is equally divided among members. Members pay an annual fee of P500 and a monthly fee of P100. Each tour guide pays P3,00 for the renewal of license.

Unfortunately, PTGA is confronted with several problems.

The association is not generating income right now. The association, it turns out, is not allowed to own a boat and operate it for tourism purposes. The action is to put the boat under the Presidents name in the meantime. Third, there is an absence of a clearing house for tour guides. The City Tourism Office is in direct competition with the private sector; some of the CTOs staff own tourist agencies, restaurants, vans, and hotels. And they have their own tour guides. If there are sectoral meetings, tour guides are not invited. Competition is cutthroat and the CTO is unable to address this problem. There is a lack of agreed rates among tour guides. For example: if a guide is servicing two vans, the tour operator normally should pay him on a per van basis which is P1,000 per van. The tour guide could lower his or her rate so that next time he or she can have a repeat service.

The anticipated growth in international visitor arrivals and domestic travel movements is expected to bring about a corresponding increase in capacity requirements and demand for new products, facilities and services, thus paving the way for local and foreign investment opportunities. In line with this is the improvement and upgrading of quality, skills and competencies of the required frontliners.Hotels, resorts and other types of accommodation facilities especially in the regions will have to be built to address the lodging requirements of both foreign and domestic tourists. The need for improved accessibility will likewise open investment opportunities in air, water and land transport operations. In response to worldwide demand for integrated tourism development, the Department of Tourism (DOT) likewise encourages investments in tourism estates and ecozones, historico-cultural heritage projects, as well as ecotourism, agritourism, and health and wellness projects12.3 Cluster Structure

12.3.1 Lead government agencies The City Government of Puerto Princesa is very actively promoting tourism and the support it has given the industry in all aspects overshadows the activities being done by other agencies. The Department of Trade and Industry, for instance, is viewed by TASS as not considering tourism as a priority though it gives booth subsidy during fairs and exhibits,

12.3.2 Relevant industry/trade associationsIn Palawan, the Provincial Tourism Council and the City Tourism Office are both active in the City Tourism Council, a private sector organization.

The members of the City Tourism Council are: (1) AROMA, (2) TASS, (3) AIRTODA, (4) ATSOPP, (5) HOBBAI, (6) Sabang Seafarers, (7) Association of Pearl Vendors, (8) Palawan Association of Tour Guides, (9) Tour Guide Association of Puerto Princesa, and (10) Association of Tourism Educators of Puerto Princesa.

Members of the Association of Pearl Vendors are given tourism awareness seminars, provided with appropriate IDs, and regulated by the City Tourism Office. They are also required to secure/renew their business permits yearly.

The Association of Tourism Educators of Puerto Princesa includes schools offering tourism, HRM, and related courses. Active members are the Palawan State University (PSU), Western Philippine University (WPU), Holy Trinity, and Palawan Technical College.

12.3.3 Support from research institutes/universitiesThe Holy Trinity College in Puerto Princesa, a private school established in 1940, is one of the first schools to offer the course on Hotel and Restaurant Management. In the public schools, the Palawan State University is also one of the first to recognize the importance of HRM in the tourism industry and also offered it as a course. Being a private school, Holy Trinity HRM course costs P10,000 to P12,000 per semester while at PSU, the cost is only approximately P1,500. Holy Trinity started offering HRM in 1995 and there are now approximately 300 HRM graduates. No tracer study has been done on its graduates although the head of the HRM department says that based on talks with former students, there are some 60 percent who are employed in related fields. At Holy Trinity, most students have part time jobs in tourism-related fields. The curriculum includes practicum for the students and this is conducted in hotels. There is a Memorandum of Agreement with hotels regarding the practicum where the students work in the hotel for the duration of the practicum and they are given free meals by the hotel for the service rendered. Some hotels, though, even give the students daily allowances.

Besides the formal course in HRM, Holy Trinity also has extension service the Tulay sa Kabataan, where Out of School Youths are trained in hotel servicing and housekeeping. Being an extension service of the school, this is for free and a batch in a year graduates 35-40 out of school youths. The criteria used by the school in choosing those who will be enrolled are the following: income level, OSY, high school level, geographic area representation and pleasing personality.

This year, its culinary school is to be opened in Tinigaban with 150 rooms. The Western Philippine University for its part, taught the boatmen of the HOBBAI on how to be frontliners. The boatmen were taught on the importance of the corals and marine life so that in turn they could forewarn tourists to also treat nature and marine life with respect.

In turn, the Palawan State University conducts psychological examination for tourist guide applicants in the City Tourism Office. Last year, out of 152 applicants for tour guides in the seminar conducted, only 50 were taken to undergo training.

Other academic institutions that have limited collaboration with the industry are the Palawan Technology College, Inc., Palawan Hope Christian School, and TESDA which used to offer skills training for the hotels and restaurants in Palawan. There are no consultancy services, laboratory facilities or testing facilities to speak of, however.

12.4 Development Policies and Activities

12.4.1 Expectations for cluster development, existing support programs and aggressiveness towards the cluster approach

12.4.1.1 Lead government agenciesThe Department of Tourism allows the City Tourism Office under the Office of the Mayor to issue license to tour guides, renewable every year for a fee. The fee collected, in turn, is being used to upgrade the skills of the other stakeholders in the industry.

Programs being implemented by the City Government of PPC include the following:

Travel and Tour Expo- Palawan

Travel and Tour Expo Cebu

Travel and Tour Expo- Manila

12.4.1.2 Local government unitsThe Annual Investment Program CY 2010 of the Province of Palawan spells out the support programs it is doing for the industry.

The specific objectives of these programs are as follows.

To promote the province as a tourist destination and investment area

To increase tourist arrivals, length of stay an spending

To accelerate the development of infrastructure support in identified tourism hubs

To construct and/or rehabilitate roads and bridges leading to existing and target tourist destinations and attractions to make transport of visitors by land faster and more convenient

To provide the enabling environment to further attract and expand private sector investments, especially in the identified tourism hubs and in potential tourism destinations.

To develop affordable tour packages and programs that will link tourism hubs with their local destinations/attractions as well as provide a diverse mix of products for the enjoyment of tourists

To develop the human resource to respond to the ever-changing needs of tourism industry

To advocate a culture of tourism through information campaigns

To showcase the ingenuity and entrepreneurship of the Palawenos and continually provide alternative livelihood and employment to host residents through community-based tourism.

Other economic services provided by the provincial government in support of the industry are the following.

To improve transportation linkages between and among municipalities province wide and enhance linkages with major urban centers outside of the province.

To rehabilitate at least 2 percent of existing provincial roads and bridges

To increase road density of the province form 0.387 to 0.372 kilometer per square kilometer

To upgrade at least 4 municipal port facilities province wide

To construct and/or upgrade other government ports and boat landings in strategic areas

To upgrade at least 4 terminal sea port facilities in the province

To upgrade at least 2 airport facilities in the province

To establish and/or construct at least 1 airport in Northern Palawan and 1 in Southern Palawan.The City Tourism Council of Puerto Princesa, on the other hand, conducts two-day enhancement seminars for tour guides. A budget of P100,000 coming from the city government is appropriated for this. Likewise, the office is active in recognizing the PATGA and links it with other tourism associations in Puerto Princesa.

Programs in support of the industry being implemented by the provincial government include the following: Travelmart ( a national gathering of those in business) where the provincial government share its booths with tourism stakeholders who are encouraged to put on display their brochures and flyers.

Specific projects being implemented and/or planned by the Local Government Units are the following:

Table 12.12 LGU ProjectsLGUPrograms Implemented

City Government of Puerto Princesa and the Philippine National Police Scubasurero Program (2009) a clean up drive of the waters and corals.

City Government of Puerto Princesa Enhanced Integrated Tourism Program

Also, the city government of Puerto Princesa through its CTO has five projects with ABS CBN Foundation. These are the Fireflies watching in Inagawan, Ugong Rock tour for spelunking, River cruise in Bacungan, Pambato Reef and Dolphin Watching. In the latter project there are four boats,( 1 ABS CBN, 1 DOT, and 2 private-owned). The City Government bears some expenses as counterpart while ABS CBN is in charge of promotion. This is in line with ABS-CBNs Bayan in Juan project where local community people are trained as community guides.

Another project of the city government through the City Tourism Council is in opening a Batas Center. Batas is a native tribe. This project involves putting on display cultural items made by the tribe. Besides putting them on display, there will be an activity center that can be shown to tourists. The tourists can even try their hands in doing some of the items. Cultural presentations will also be regularly shown.

Through Ordinance 171, which is the tourism code of Puerto Princesa, not just anybody could put up a travel agency. Requirements are spelled out in the code. Tour guides are licensed, standards for hotels and accommodations have to be maintained and grounds for penalties for violators are identified. The city government is ISO-certified since three years ago.

12.4.1.3 Industry associations Table 12.13 summarizes the policies/support programs/interventions/projects being implemented and/or planned by industry/trade associations.Table 12.13 Interventions of Industry/Trade AssociationsIndustry/Trade AssociationPrograms Implemented

HOBBAIJoint project to eliminate starfish- crown of thorns which are disastrous to corals.

Palawan Geographic Society (members are divers)Coordinate diving tours with them.

Association of Tourist Accommodation of Puerto Princesa Pooling together of manpower (plumbers,

handyman); lobby with the mayor when there are problems with travel and tour operators; airport billboard information are provided to tourists at the airport; conflict resolution; promotion of members during expos and fairs.

City Tourism Council Training of boatmen and boat owners on the maintenance of boats.

There are two boat associations in province. These are the HOBBAI, and the Sabang Ferry Association. HOBBAI looks with pride its recognition by the Puerto Princesa City Government as the only authorized association to ferry tourists in the Honda Bay Area. HOBBAI is linked to tour operators, which means that the Honda Bay area becomes a part of tour itinerary. Because of this, boat operators are doing their best to protect the environment. In this regard, the boat operators even hire personnel to watch over the coral sanctuary so that they could be protected from possible damage and harm that could be done by tourists. The boatmen and operators are also trained to impress on the tourists the importance of not touching the corals or taking from their natural environment. Among the future plans of the HOBBAI is to put up a TV in the waiting area for the boat ride and show some informational materials on TV on how corals live, and how they could be protected. This was then a plan of the ABS-CBN Bayan Foundation but for some reason, this did not materialize. The association is however, bent on pursuing this plan.

Aside from the plan previously mentioned, the association plans to continue and even pursue with much vigor its business where it has invested in mask and snorkeling equipment for rental of divers. Interviewees1. Felisa Torres, president, City Tourism Council ; owner- Bulwagang Princesa Tourist Inn and Restaurant, 04 February 20102. Joel Valera, regional director, DTI Region IV-B MIMAROPA, 28 January 20103. Myrna Rosco, president, HOBBAI, 03 February 20104. Christian Cuvinar, van owner: Gabay sa Turismo sa Palawan, Member, Association of Transport Service Operators of Puerto Princesa (ATSOPP), 05 February 20105. Normie Moreno, boat owner/operator and Vice-President, HOBBAI, 03 February 20106. Ligaya Austria, owner, Lola Itang Restaurant and Pension Inn; president, Association of Tourist Accommodation of Puerto Princesa, 05 February 20107. Pacifico Lumauag, owner/manager, Island Paradise Tours and Convention, 2009 President, Palawan Chamber of Commerce and Industry, 04 February 2010

8. Eva Valledor, owner/manager Binuatan Creations; president, Tourist Association of Souvenir Shops, 02 February 2010 9. Mida Mahilom, head, Hotel and Restaurant Management Department, Holy Trinity College, 05 February 2010

10. Janrex Lorilla, licensed tour guide and president, Tour Guide Operators of Puerto Princesa, 05 February 2010 11. Corazon Timones, city tourism officer, City Tourism Office, City Hall, Puerto Princesa City, 04 February 2010

12. Maribel Bui, chief tourism officer, Provincial Tourism Office, Palawan, 01 February 201013. Melanie Mariano, hotel property manager, Legend Hotel, 04 February 2010 14. Rosenda Fortunado, provincial director, Department of Trade and Industry Palawan, 02 February 2010

15. Ada Mae Jayme, trade and industry specialist, Department of Trade and Industry Palawan, 02 February 201016. Oscar M. Agbay, provincial director, Oriental Mindoro, Department of Trade and Industry Oriental Mindoro, 28 January 2010 References1. Provincial Planning Development Office, Annual Investment Program, CY 2010

2. City Tourism Office, Puerto Princesa3. Provincial Development Investment Program, 2009-2014

4. www.dot.gov.ph5. www.visitmyphilippines.com6. www.wowphilippines.com.phCity Tourism Council

Private

City Tourism Office

Government

AROMA

ATTSOPP

ATTOPP

Palawan Tour Guide Association

Association of Tourist Accommodation

of Puerto Princesa

Tourist Association of Souvenir Shops

Honda Bay Boat Association, Inc.

Airport Tricycle Drivers Association

Association of Tourism Educators

of Puerto Princesa

ATAPP

PATGA

TASS

HOBBAI

AIRTODA

ATEPP

Association of Tourist Transport

Services of Puerto Princesa

Association of Restaurant

Owners & Managers

Association of Travel and Tour

Operators of Puerto Princesa

12-1