Value Creation of Tourism Sector: In the case of 10 ASEAN Economies, applies to Jamaica

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1 1 Value Creation of Tourism Sector: In the case of 10 ASEAN Economies, applies to Jamaica Apirada Chinprateep, School of Development Economics National Institute of Development Administration Bangkok, Thailand

2 2 Most-visited countries by international tourist arrivals in 2013 Source: WTO

3 3 Tourism Towards 2030: Actual trend and forecast source: WTO 2014

4 AEC 4 Strong point Well-established tourism in member countries: Singapore, Malaysia, and Thailand already have high annual visitor arrivals. Political awareness: The importance of tourism is well recognised among many ASEAN countries, as highlighted through ministerial ASEAN meetings and summits. A full-time ASEAN Secretariat already exists to coordinate cooperation and integration efforts. Safety: ASEAN member countries have traditionally been considered safe and visitor-friendly. Well-developed business sectors: e.g. Singapore, Malaysia, Thailand and Indonesia are also being joined by emerging economies, such as Vietnam, Lao PDR and Cambodia. Well-developed entertainment options: Countries already offer shopping, nightlife activities, etc. Well-developed linkages to external markets are in place. Greater Mekong Sub region (GMS) alliance: ASEAN integration should lead to synergistic effects. Access: e.g. GMS countries may not necessarily require air travel. Member countries have unique destination images. World-class airports facilitate travel: e.g. Singapore Changi and Kuala Lumpur International Airport, as well as the region s newest airport, Suvarnabhumi International Airport in Bangkok, set to open later in the year. Diverse tourism resources within the region range from nature to culture, religion, sports, and health and wellness. Seasonality patterns are similar for all ASEAN member countries, which is conducive to multi-country tour patterns. Some member countries have widespread English language capability. Well-developed intra-asean tourism already exists. Short-distance travel potential is well suited to the regional population s income. Weak point Countries are at different levels of inbound and outbound market maturity. Countries are at different levels of manpower standards. Possible competing strategies are in play: e.g. more than one country aspiring to be a strategic hub, or countries competing to be world leaders in particular attractions. Poor infrastructure in some countries. Progress may be slow due to extra levels of policy-making, i.e. ministries of tourism/commerce and ASEAN, which may also conflict. Most existing collaborative networks among countries are weak. Infrastructure improvements tend to fall outside of ASEAN initiatives. Under-developed market intelligence remains unresolved. Poor information and communications technologies (ICT) persist in some countries. Some member countries still focus on visitor arrival numbers, with less attention to tourism yields and dispersion. There is inactive collaboration with national flag carriers and discrepancies exist. Marketing campaigns are not integrated and lack a consistent message in building tourist destination images. Trade and investment need to be considered, as well as inter-firm linkages. Visas are required for travellers from outside the region. Some source markets are niche-oriented and do not align well with a multi-destination approach. Table 1: International visitor arrivals to 9 ASEAN member countries, Source:

5 WTO Define Sustainable Tourism Sustainable tourism development meets the needs of present tourists and host regions while protecting and enhancing opportunities for the future. It is envisaged as leading to management of all resources in such a way that economic, social and aesthetic needs can be fulfilled while maintaining cultural integrity, essential ecological processes, biological diversity and life support systems 5

6 6 A need for comprehensive methodology framework Problems Sustainable Tourism Studies: Diverse and Complex Due to this issue, a proposed unified methodology : Sustainable Tourism Benchmarking Tool-STBT (UNCTAD, 2007)

7 What do we have so far? Conventional studies often deal with one component of tourism such as estimation based on no. of arrival receipt per tourist or average length of stay Frechtling 1999: Tourism account methodology Miller 2000: Covering all aspects of sustainability Environment issue both physical and human Employment Financial leakages Consumer both satisfaction and role 7

8 8 Sustainable Tourism Benchmarking Tool(STBT) Objective Ability to detect the sustainability problems Ability to provide policymakers an proper information for a better decision and a better prospects for sustainable tourism development

9 9 Why do we need a methodology? Reason Growth in tourism expenditure: Especially in developing country,results in negative effect for local population; Shortage, Increase in food price, water supply, etc. For tourism sector; Loss in market shares, tourism expenditure declining over time Consequence A methodology that could cover the complex issues and provide benchmarks which allow developing country to improve the sustainability

10 10 Sustainable Tourism Benchmarking Tool(STBT) Define Key Dimensions Tourism assets Tourism activity Tourism-related linkages Tourism-related leakages Environmental and social sustainability Infrastructure Attractiveness

11 11 Sustainable Tourism Benchmarking Tool(STBT) Scale the indicators to allow cross-country comparisons Place indicators on a conceptual chart

12 Tourism of Brunei Darussalam 12 Strong points High economic and politics stability Encourage utilities infrastructure Encourage the development of tourism in the long term, campaign Vision Brunei Year 2035 Weak points Small country Small amount of population A few attraction places

13 Tourism of Kingdom of Cambodia 13 Strong points Weak points Cultural tourism destination Abundant natural resources in particular, the woodland Strong policy of tourism development like a concession to Russian investors to create a property for luxury travel including the building of a casino. Have relatively low domestic demand Problems with the ASEAN nations such as Thailand, Philippines, Vietnam and so on.

14 Tourism of Republic of Indonesia 14 Strong points Weak points The bilateral agreements with various countries helps Indonesia make airlines flying to Indonesia for 32 airlines. a lot of and cheaper labor Abundant natural resources islands and uncluttered. Infrastructure has not developed as expected.

15 Tourism of Lao People s Democratic Republic 15 Strong points Weak points The cultural and World Heritage Site There is a path linked Cambodia to Vietnam. With the opening of new routes from many destinations, including Singapore, China, Malaysia and South Korea flying to Laos. Land transportation is not convenient. Utilities are not covered and some cannot be developed under the World Heritage Site. The airport is appropriate for small planes.

16 Tourism of Malaysia 16 Strong points Health Tourism Integrated system of infrastructure High development of the Internet link Weak points Population is relatively small causing labor shortage Food produced in Malaysia are of limitations and lack of diversity

17 Tourism of Republic of the Union of Myanmar 17 Strong points Weak points Natural resources are abundant. Borders are linked to larger countries like China and India. There are attractions such as the Shwedagon Pagoda, etc. There are zones for military, agriculture, industry and services, including tourism zone clearly indicated. Infrastructure like electricity roads and ports are not on international standard No proactive development of high-speed rail network as well as roads and harbors. The political uncertainty

18 Tourism of Republic of the Philippines 18 Strong points Weak points Good English language communication Similar culture and religion to the western countries There are links from Metro Manila to provinces at affordable prices Are located far from the ASEAN countries Social welfare should be developed Problems of overpopulation due to religious beliefs about contraception

19 Tourism of Republic of Singapore 19 Strong points Weak points The transport infrastructure is ranked 2nd in the world Can communicate well in English Recreational attractions such as Universal studio. Unskilled labor shortages High cost of living

20 Tourism of Kingdom of Thailand 20 Strong point Weak point Wide range of travel products, both natural and cultural. Ability to compete on price, compared to neighboring countries. Geographical center of Southeast Asia. Skilled and talented tourism staff. Tourism management does not well regard of the quality of the tourist attractions in the long term. Law enforcement is not active in the industry, although it was announced in Business and Guide Act 1992 already. High price competition in the country. As a result, the quality of service sometimes is to levels below the standard.

21 Tourism of Socialist Republic of Vietnam 21 Strong points Weak points many famous prehistoric civilization. In particular, there is evidence of Neolithic civilization, bronze drums Mohratuek, and ancient Dong Son communities, south of the mouth of the Red River. Is rich in natural beauty Abundant with labor and low wages Infrastructure is still in the development stage. Traffic is known for having a lot of motorcycles on the road. Land rents are relatively high.

22 22 Data-Infrastructure Electricity usage Brunei Singapore Malaysia Thailand Country Brunei 33% Singapore 32% Malaysia 16% Thailand 9% Vietnam 4% Indonesia 3% Philippines 2% Cambodia 1% Myanmar 0% Lao N/A

23 23 Data-Infrastructure Air transport Indonesia Malaysia Thailand Philippines Country Indonesia 35% Malaysia 19% Thailand 13% Philippines 13% Singapore 8% Vietnam 8% Myanmar 2% Lao 1% Brunei 1% Cambodia 0%

24 24 Data-Infrastructure Improve in sanitation facilities Singapore Malaysia Thailand Myanmar Country Singapore 15% Malaysia 14% Thailand 14% Myanmar 11% Philippines 11% Vietnam 11% Lao 9% Indonesia 9% Cambodia 5% Brunei N/A

25 25 Data-Environmental and Social Travel & Tourism Total Contribution to Employment Philippines Myanmar Cambodia Singapore Country Philippines 41% Myanmar 29% Cambodia 25% Singapore 21% Thailand 6% Laos -1% Indonesia -2% Malaysia -3% Vietnam -3% Brunei -12%

26 26 Data-Environmental and Social CO 2 Emission Indonesia Thailand Malaysia Vietnam Country Indonesia 36% Thailand 24% Malaysia 18% Vietnam 12% Philippines 7% Singapore 1% Brunei 1% Myanmar 1% Cambodia 0% Lao 0%

27 27 Data- Tourism Activity Number of Arrivals Malaysia Thailand Singapore Indonesia Country Malaysia 32% Thailand 25% Singapore 13% Indonesia 10% Vietnam 8% Philippines 5% Cambodia 4% Lao 2% Myanmar 1% Brunei 0%

28 28 Data-Tourism Activity Receipts Thailand Malaysia Singapore Indonesia Country Thailand 34% Malaysia 22% Singapore 20% Indonesia 10% Vietnam 6% Philippines 4% Cambodia 2% Lao 0% Myanmar 0% Brunei 0%

29 29 Data-Tourism Asset Threatened Species Malaysia Indonesia Philippines Thailand Country Malaysia 24% Indonesia 23% Philippines 14% Thailand 10% Viet Nam 9% Singapore 6% Myanmar 5% Cambodia 4% Brunei 3% Lao 3%

30 30 Data-Tourism Asset Number of Heritage Site Viet Nam Indonesia Philippines Thailand Country Viet Nam 22% Indonesia 22% Philippines 17% Thailand 14% Malaysia 11% Lao 6% Cambodia 6% Myanmar 3% Brunei 0% Singapore 0%

31 31 Data-Tourism Asset Weighted Coastline Length Indonesia Malaysia Philippines Myanmar Country Indonesia 68% Malaysia 13% Philippines 10% Myanmar 3% Viet Nam 2% Thailand 2% Singapore 1% Cambodia 0% Brunei 0% Lao 0%

32 32 Data-Tourism Asset Forest Area Brunei Lao Malaysia Cambodia Country Brunei 15% Lao 14% Malaysia 13% Cambodia 12% Indonesia 11% Myanmar 10% Vietnam 10% Thailand 8% Philippines 6% Singapore 1%

33 Scale the indicators to allow cross-country comparisons Place indicators on a conceptual chart 33

34 34 Sustainable Tourism Benchmarking Tool(STBT) Brunei Tourism asset Attractiveness Activity Brunei Infrastructure Sustainability Leakages Linkages

35 35 Sustainable Tourism Benchmarking Tool(STBT) Cambodia Tourism asset Attractiveness Activity Cambodia Infrastructure Sustainability Leakages Linkages

36 36 Sustainable Tourism Benchmarking Tool(STBT) Indonesia Tourism asset Attractiveness Activity Indonesia Infrastructure Sustainability Leakages Linkages

37 37 Sustainable Tourism Benchmarking Tool(STBT) Attractiveness Tourism asset Laos Activity Laos Infrastructure Sustainability Leakages Linkages

38 38 Sustainable Tourism Benchmarking Tool(STBT) Malaysia Tourism asset Attractiveness Activity Malaysia Infrastructure Sustainability Leakages Linkages

39 39 Sustainable Tourism Benchmarking Tool(STBT) Attractiveness Tourism asset Myanmar Activity Myanmar Infrastructure Sustainability Leakages Linkages

40 40 Sustainable Tourism Benchmarking Tool(STBT) Philippines Tourism asset Attractiveness Activity Philippines Infrastructure Sustainability Leakages Linkages

41 41 Sustainable Tourism Benchmarking Tool(STBT) Attractiveness Tourism asset Singapore Activity Singapore Infrastructure Sustainability Leakages Linkages

42 42 Sustainable Tourism Benchmarking Tool(STBT) Thailand Tourism asset Attractiveness Activity Thailand Infrastructure Sustainability Leakages Linkages

43 43 Sustainable Tourism Benchmarking Tool(STBT) Viet nam Tourism asset Attractiveness Activity Viet nam Infrastructure Sustainability Leakages Linkages

44 44 Framework Some simulations

45 45

46 Note: Prelim. July 13, Apirada

47 47 Table 1 Income equation with pooled panel data regression for eco-friendly tourism data from variables coefficient coefficient coefficient I II III traveler *** *** (39.50) (39.91) (40.12) capita (-0.20) (-1.01) (-0.36) Agricultural land (0.42) (0.25) (0.25) ASEAN (0.79) China (-0.41) Hongkong (-0.09) Japan (-0.00) India variables Total Revenueit total revenue from (-0.45) rural tourism (unit of currency) Europe Travelerit number of tourists to rurals (persons) (-0.33) North America Capitait per capita income (unit of currency) Agricultural landit percentage of total agricultural area (%) (-0.20) Oceania (-0.30) _cons (-0.08) (0.83) (0.71) N R-squared Adj R-squared Source: Department of Agricultural Extension, Division of Community Enterprise Promotion *** statistically significant level of 99% ** statistical significance level of 95%. * statistically significant level of 90%

48 48 From Table 1, the results show the factors affecting the income from eco-friendly and rural tourism in one member country (Thailand as a case study) of ASEAN from It was found that the number of tourists and the population have a positive effect on the income from eco-friendly and rural tourism. Tourists are interested most in ASEAN region herself, then America and Europe. Local tourists are quite substantial.

49 Energy balance in 2030: 000 Tons of Oil Equivalent 49 As a result The tourism sector counts not only its own but also mingles in the economy and relates to many activities. A good planning should consider demand and supply, social aspects, natural resources, as well as international relationship. According to this study, international, as well, local tourists show a statistical correlation with sustainable aspects of tourism and this is the currently benevolent trend for enjoying our world and its natural beauty to be sustained for a long period of time.

50 Thank you

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