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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 1

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Value Creation of Tourism

Sector:

In the case of 10 ASEAN

Economies, applies to Jamaica

Apirada Chinprateep,School of Development EconomicsNational Institute of Development AdministrationBangkok, Thailand

1

Most-visited countries by international tourist arrivals in 2013

2

Source: WTO

Tourism Towards 2030: Actual trend and

forecast 1950-2030

source: WTO 2014

3

AEC

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,2001–2005

Source: http://aseaneconomy.blogspot.com/

4

• 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

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)

6

• 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

x Environment issue both physical and humanx Employmentx Financial leakages x Consumer both satisfaction and role

7

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

8

Why do we need a methodology ?

• Reason▫ Growth in tourism expenditure: Especially in

developing country ,results in negative effect x for local population;

x Shortage, Increase in food price, water supply, etc.x For tourism sector;

x 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

9

Sustainable Tourism

Benchmarking Tool(STBT)

• Define Key Dimensions▫ Tourism assets▫ Tourism activity▫ Tourism-related linkages▫ Tourism-related leakages▫ Environmental and social sustainability▫ Infrastructure▫ Attractiveness

10

Sustainable Tourism

Benchmarking Tool(STBT)

• Scale the indicators to allow cross-country comparisons

• Place indicators on a conceptual chart

11

Tourism of Brunei Darussalam

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

12

Tourism of Kingdom of Cambodia

Strong 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.

Weak points

• Have relatively low domestic demand

• Problems with the ASEAN nations such as Thailand, Philippines, Vietnam and so on.

13

Tourism of Republic of Indonesia

Strong 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

Weak points

• islands and uncluttered.

• Infrastructure has not developed as expected.

14

Tourism of Lao People’s Democratic Republic

Strong 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.

Weak points

• 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.

15

Tourism of Malaysia

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

16

Tourism of Republic of the Union of Myanmar

Strong 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.

Weak points

• 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

17

Tourism of Republic of the Philippines

Strong points

• Good English language communication

• Similar culture and religion to the western countries

• There are links from Metro Manila to provinces at affordable prices

Weak points

• Are located far from the ASEAN countries

• Social welfare should be developed

• Problems of overpopulation due to religious beliefs about contraception

18

Tourism of Republic of Singapore

Strong points

• The transport infrastructure is ranked 2nd in the world

• Can communicate well in English

• Recreational attractions such as Universal studio.

Weak points

• Unskilled labor shortages

• High cost of living

19

Tourism of Kingdom of Thailand

Strong 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.

Weak point

• 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.

20

Tourism of Socialist Republic of Vietnam

Strong 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

Weak points

• Infrastructure is still in the development stage.

• Traffic is known for having a lot of motorcycles on the road.

• Land rents are relatively high.

21

Data-InfrastructureElectricity usage

BruneiSingaporeMalaysiaThailand

Country

Brunei 33%Singapore 32%Malaysia 16%Thailand 9%Vietnam 4%Indonesia 3%Philippines 2%Cambodia 1%Myanmar 0%Lao N/A

22

Data-InfrastructureAir transport

IndonesiaMalaysiaThailandPhilippines

Country

Indonesia 35%Malaysia 19%Thailand 13%Philippines 13%Singapore 8%Vietnam 8%Myanmar 2%Lao 1%Brunei 1%Cambodia 0%

23

Data-InfrastructureImprove in sanitation

facilities

SingaporeMalaysiaThailandMyanmar

Country

Singapore 15%Malaysia 14%Thailand 14%Myanmar 11%Philippines 11%Vietnam 11%Lao 9%Indonesia 9%Cambodia 5%Brunei N/A

24

Data-Environmental and Social

Travel & Tourism Total Contribution to

Employment

PhilippinesMyanmarCambodiaSingapore

Country

Philippines 41%Myanmar 29%Cambodia 25%Singapore 21%Thailand 6%Laos -1%Indonesia -2%Malaysia -3%Vietnam -3%Brunei -12%

25

Data-Environmental and Social

CO2 Emission

IndonesiaThailandMalaysiaVietnam

Country

Indonesia 36%Thailand 24%Malaysia 18%Vietnam 12%Philippines 7%Singapore 1%Brunei 1%Myanmar 1%Cambodia 0%Lao 0%

26

Data- Tourism Activity

Number of Arrivals

MalaysiaThailandSingaporeIndonesia

Country

Malaysia 32%Thailand 25%Singapore 13%Indonesia 10%Vietnam 8%Philippines 5%Cambodia 4%Lao 2%Myanmar 1%Brunei 0%

27

Data-Tourism Activity

Receipts

ThailandMalaysiaSingaporeIndonesia

Country

Thailand 34%Malaysia 22%Singapore 20%Indonesia 10%Vietnam 6%Philippines 4%Cambodia 2%Lao 0%Myanmar 0%Brunei 0%

28

Data-Tourism Asset

Threatened Species

MalaysiaIndonesiaPhilippinesThailand

Country

Malaysia 24%Indonesia 23%Philippines 14%Thailand 10%Viet Nam 9%Singapore 6%Myanmar 5%Cambodia 4%Brunei 3%Lao 3%

29

Data-Tourism AssetNumber of

Heritage Site

Viet NamIndonesiaPhilippinesThailand

Country

Viet Nam 22%Indonesia 22%Philippines 17%Thailand 14%Malaysia 11%Lao 6%Cambodia 6%Myanmar 3%Brunei 0%Singapore 0%

30

Data-Tourism AssetWeighted Coastline

Length

IndonesiaMalaysiaPhilippinesMyanmar

Country

Indonesia 68%Malaysia 13%Philippines 10%Myanmar 3%Viet Nam 2%Thailand 2%Singapore 1%Cambodia 0%Brunei 0%Lao 0%

31

Data-Tourism AssetForest Area

BruneiLaoMalaysiaCambodia

Country

Brunei 15%Lao 14%Malaysia 13%Cambodia 12%Indonesia 11%Myanmar 10%Vietnam 10%Thailand 8%Philippines 6%Singapore 1%

32

• Scale the indicators to allow cross-country comparisons

• Place indicators on a conceptual chart

33

Sustainable Tourism

Benchmarking Tool(STBT)

-10-5

05

10152025

30Tourism asset

Activity

Sustainability

LinkagesLeakages

Infrastructure

Attractiveness

Brunei

Brunei

34

Sustainable Tourism

Benchmarking Tool(STBT)

-10-5

05

10152025

30Tourism asset

Activity

Sustainability

LinkagesLeakages

Infrastructure

Attractiveness

Cambodia

Cambodia

35

Sustainable Tourism

Benchmarking Tool(STBT)

-10-5

05

10152025

30Tourism asset

Activity

Sustainability

LinkagesLeakages

Infrastructure

Attractiveness

Indonesia

Indonesia

36

Sustainable Tourism

Benchmarking Tool(STBT)

-10-5

05

10152025

30Tourism asset

Activity

Sustainability

LinkagesLeakages

Infrastructure

Attractiveness

Laos

Laos

37

Sustainable Tourism

Benchmarking Tool(STBT)

-10-5

05

10152025

30Tourism asset

Activity

Sustainability

LinkagesLeakages

Infrastructure

Attractiveness

Malaysia

Malaysia

38

Sustainable Tourism

Benchmarking Tool(STBT)

-10-5

05

10152025

30Tourism asset

Activity

Sustainability

LinkagesLeakages

Infrastructure

Attractiveness

Myanmar

Myanmar

39

Sustainable Tourism

Benchmarking Tool(STBT)

-10-5

05

10152025

30Tourism asset

Activity

Sustainability

LinkagesLeakages

Infrastructure

Attractiveness

Philippines

Philippines

40

Sustainable Tourism

Benchmarking Tool(STBT)

-10-5

05

10152025

30Tourism asset

Activity

Sustainability

LinkagesLeakages

Infrastructure

Attractiveness

Singapore

Singapore

41

Sustainable Tourism

Benchmarking Tool(STBT)

-10-5

05

10152025

30Tourism asset

Activity

Sustainability

LinkagesLeakages

Infrastructure

Attractiveness

Thailand

Thailand

42

Sustainable Tourism

Benchmarking Tool(STBT)

-10-5

05

10152025

30Tourism asset

Activity

Sustainability

LinkagesLeakages

Infrastructure

Attractiveness

Viet nam

Viet nam

43

Framework

Some simulations

44

45

46

Note: Prelim. July 13, 2015 @copyright Apirada 2015

Table 1 Income equation with pooled panel data regression for eco-friendly tourism data from 2002-2015.

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variablesTotal Revenueit total revenue from rural tourism (unit of

currency)Travelerit number of tourists to rurals (persons)Capitait per capita income (unit of currency)Agricultural landit percentage of total agricultural area (%)

variables coefficient coefficient coefficientI II III

traveler 82.2458*** 82.4260*** 82.5033(39.50) (39.91) (40.12)

capita -0.0601 -0.2519 -0.1197(-0.20) (-1.01) (-0.36)

Agricultural land 4064.007 2457.014 2464.334(0.42) (0.25) (0.25)

ASEAN 433138.4(0.79)

China -436733(-0.41)

Hongkong -89678(-0.09)

Japan -4311.59(-0.00)

India -492579(-0.45)

Europe-197739(-0.33)

North America -168789(-0.20)

Oceania -257582(-0.30)

_cons -49759.7 371491.1 306731.5(-0.08) (0.83) (0.71)

N 345 345 345R-squared 0.8356 0.8354 0.8353Adj R-squared 0.8337 0.8320 0.8324

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

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 2002-2015.

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.

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.

49Energy balance in 2030:’000 Tons of Oil EquivalentEnergy balance in 2030:’000 Tons of Oil Equivalent