"This is a huge industry however one wants to look at it. It is also very multi-faceted, involving a wide range of industries from hotels and restaurants, to airlines, to ground transportation, to cruise ships; let alone retail, marketing and advertising. Contrary to the stereotypes, the travel and tourism industry creates both labor intensive and knowledge intensive employment for millions. When managed correctly, the industry can also become a key driver in preserving the environment, and for protecting cultural and historical heritage and artifacts. It has the added benefit of simultaneously boosting domestic consumption (from the point of view of the originating countries) as well as boosting service exports (from the point of view of the destination countries). It is set to become a key component in global economic growth and prosperity in the 21st century."

These comments should silence those who equate tourism with such negative side effects as prostitution, environmental degradation and cultural contamination. Tourism, if properly managed, can be family-oriented, environment-friendly and culturally enriching for both hosts and visitors, and intellectually challenging to Filipino workers.

The Report has some very useful tips about tourists coming from China. Scrutinizing their behavior in Hong Kong, the Report can help us plan our own marketing program for Chinese tourists: "Hong Kong has benefited hugely in recent years from tourist arrivals from the mainland of China. Contrary to expectation, Chinese tourists have proved to be serious spenders, and, more importantly, they generate much higher economic impact due to their spending patterns. Specific estimates differ. They range from the low end of US$284 spent on shopping in Hong Kong per visit according to the government, to over US$800 in the high end according to a recent survey. Total spending on shopping by Chinese tourists in Hong Kong is estimated to be around US$3.5 billion in 2004.

"From the point of the local economy, however, spending by Chinese tourists has a much bigger bang for the buck. This is because they do not spend a lot on their hotel accommodation, reserving the lion’s share of their budget to spend on shopping and dining out. According to the Hong Kong government, tourists from the mainland spend on average only 10% of their budget on accommodation, but a whopping 69% on shopping. This compares with the average American tourist’s 45% on accommodation and 25% on shopping. The only other tourists that come close are those from Indonesia and Thailand, who spend 15 to 18% on accommodation and 55 to 58% on shopping.

"The net result is that spending by tourists from the mainland has a much larger income multiplier effect. The concept of ‘income multiplier’ refers to how much total economic activity could be generated in the local economy for each dollar spent. In the case of the Chinese tourists, we have estimated that their income multiplier is about 1.71, meaning that for every one dollar spent by a Chinese tourist, a total of 1.71 dollars of economic activity is generated in Hong Kong. This compares with the estimated income multiplier of 1.24 for the overall average of tourist spending."

Finally, there are important data on two types of tourists to which we can cater: High volume and low margin business (e.g. Ilocos Norte, Cebu, Bohol) and high margin, low volume business (e.g. El Nido, Amanpulo). As the Report suggests, "To succeed in the former, economies of scale are key. Profit margin will be low and there will be a lot of wear and tear to the business in order to earn that profit. But it is compensated for by the high volumes. Many travelers in this market will be first time travelers, and they will not be choosy; they will buy the tour package as long as the price is right. The traditional channel of travel agents will continue to be an effective way to reach these travelers.

"In contrast, in the low volume and high margin business, the travelers will be very seasoned, sophisticated, and discerning. They will be less and less interested in shopping and visiting theme parks, but will tend to seek authenticity in their travel. They will want to participate in genuine cultural and historical experiences, as opposed to watching a staged show of folk dancing. They will want to seek out unspoiled natural beauty, as opposed to being happy in a resort with 5,000 rooms. But, above all, they will want to be in control in terms of research, planning, and designing their travel. And, increasingly, empty nesters and the retired will dominate in this niche market. And, among the elderly, the vast majority will be women."

Thanks to MasterCard International and especially to my personal friend, Dr. Yuwa Hedrick-Wong, Secretary of Tourism Ace Durano and the top executives of our tourism industry can base their long-term plan for the Philippine industry on more solid data. For comments, my e-mail is bvillegas@uap.edu.ph.