The hospitality industry

According to IDEA’s latest Industry Trends, “the hotel and restaurant sectors are collectively dubbed as the hospitality industry. Broadly defined, the hotel sector includes hotels and motels, dormitories and boarding houses, pension houses, camping sites/facilities, and other provisions of short-stay accommodation. While the restaurant sector includes bars, fastfood and refreshments centers, bars and cocktail lounges, dining cars, catering and take-out services, and other eating and drinking places.”

Per same publication, it was reported that “in a span of a decade, the industry managed to keep a positive growth rate in terms of its gross value added (GVA) despite the recent setbacks in tourism, one of the major industries with which the hospitality industry maintains important linkages. The industry has been growing at an annual rate of 4.3% since 1997, when its annual GVA is only at P11.57 billion. In 2007, the industry’s GVA stood at P17.8 billion, growing by 10.76% from the preceding year. In terms of contribution to the country’s gross domestic product (GDP), the past decade saw the share of the hospitality industry averaging 1.3%, ranging from 1.26% for both 2005 and 2006 to 1.37% way back in 1999. The hotel and restaurant industry is part of the private services sector of the economy, alongside education, medical and health, business, recreational, personal, and other private services. The share of the hospitality industry to the private services sector’s output has declined over time from 18.95% in 1997 to 17.37% five years later in 2002, until finally settling at 15.25% in 2007. The other segments of the private services sector exhibit this same declining trend with the emergence of the private-business sub sector (under which various off shoring and outsourcing industries may be classified). In 2007, the hotel and restaurant sector ranked third in terms of share to total GVA in private services, after personal services and the top-ranking business services sector.”

Furthermore, based on the results of the 2005 Annual Survey of Philippine Business and Industry, the National Statistics Office reports that there are a total of 95,812 hotel and restaurant establishments in the country, 8,049 establishments more than in 2003. In 2005, 4,021 establishments belong to the hotel sector, while 91,791 belong to the restaurant sector. The total revenue generated by the hospitality industry is pegged at P186.03 billion, 80.14% of which came from the restaurant sector, with the balance coming from the hotel sector. Meanwhile, in terms of average total employment (ATE), 96.23% of the hotel and restaurant establishments have ATE of less than 20. Most of the hotel and restaurant establishments are situated in NCR, followed by Region IV-A (CALABARZON), Region III and Region VII. The rest of the regions maintain an average of 49 establishments, with Region XI recording the highest number (122) and ARMM the lowest (4) according to IDEA.

Incidentally, Industry Trends is a regular digest produced by the Institute for Development and Econometric Analysis, Inc. (IDEA) whose Chairman, Dr. Cayetano W. Paderanga Jr., is my former President/CEO. 

For credit & collection (C&C) questions, comments and rejoinders you want to share or inquire, you can reach him at 0917-7220521 or at [email protected]