Alegre, Rodney Ariba De Leon, Samantha Marielli U.

Quinto, Quenny Joy Galleta

Alonzo, Kim Benedick Eugenio, Joewin Manding Quinto, Randell
Arcenal, Charie Kaye Ramos Gajultos, Lorrence Bonn Riambon, Rovin Galanote
Pamittan
Bagasin, Janna Ibe, Aloha B. Roque, Rose Zaida T.
Balaan, Faith Genevive Lagante, Jane D. Rosales, Jero Bregan Gorospe
Addep
Baligad, Zyrah Mae Gatcho Lagura, Clarinette Angeles Sagario, Sean Clifford
Villanueva
Balog, Antonnette Ballit Leal, Nicole Yacap Salino, Joan Kaye Castillo
Bersabe, Ivan Rhal G. Malabo, Jefferson V. Salvador, Marwiglein Daguio
Biscaro, Charles Jemuel Ibe Malapira, Yzel Kate Faylogna Samsam, Mary Venus Herbie
Balintec
Blanco, Ruffa Mae Ambrocio Mallabo Jr., Robin Subad Solero, Jesieca Ancheta
Cabuyadao, Jerick John Mangoba, Regie Jade Tadlas, Eva Lisly Baya
Pascua Ancheta
Cancejo, Joshua Mikhail Mayo, Alexandra Espejo Tamayo, Aiza Rivera
Carlos, Ethel Cariaga Osorio, Glenifel Jane Tumaneng, Alyssa Galicto
Cenal, Karen Joy Jamilla Padios, Huishan Aggang Tunac, Biverlyn Calpes
Cornejo, Christina Gie F. Piawan, Kriska Mae Villanueva, Katlyn Grace E.
Dalipe, Sheina Inofinada Queja, Chaliza Marie S. Villanueva, Maybel Buenavista
Dayaca, Princess Dianne Quines, Remalyn Manera Yago, Eden Solante
Ambala
Yague, Rica Angela Pablo

GROUP I GROUP II GROUP III

DIRECTIONS: “ACT YOUR ROLE”. Act the history of tourism and hospitality
industry by a role playing. Be creative and make an efforts. You can use props
or any material related to the scenario. Act at your best!

THE HISTORY OF TOURISM AND HOSPITALITY

LEARNING OBJECTIVES:

1. Understand the history of tourism and hospitality industry.

2. Distinguish the origins of the tourism and hospitality industry in the
Philippines.

GROUP 1
1.1 History of Tourism industry

We can trace the origin of the modern concept of tourism back to the 17th
century, when young nobles from western and northern European countries
made what was called the Grand Tour: a trip around Europe (usually covering
France, Germany, Italy and Greece) with the main purpose of soaking up
history, art and cultural heritage. It was considered a perfect way to be
educated.

By the 18th century, this custom was widespread among wealthier classes and
it spread to other parts of the world, such as America. Similarly, religious
pilgrimages that were already popular during the Middle Ages continued during
this period.

The Industrial Revolution, which began in the second half of the 18th century,
produced a major economic, social and technological transformation that
would spread to the rest of the world. As a result of these changes, there was
an exodus from rural regions to growing big cities, which needed labour for the
new industry.

Therefore, new social classes appeared. Developments in transport were also

key. The improvements in freight and passenger transport contributed to the
birth of leisure, new forms of entertainment and travel. People travelled mainly
by train, taking advantage of the fact that railway networks connected the
destinations in Europe and other parts of the world.

The 19th century saw the creation of the first travel agencies. One of the
pioneers was Thomas Cook & Son, which was the first to offer excursions and
holidays for groups, which included transport, accommodation and food
tickets, thus making costs cheaper. This would be the origin of what we now
know as package holidays.

In the first half of the 20th century, the tourism industry continued to grow
thanks to the mass production of buses and cars. Coastal tourism began to
gain importance and, after World War II, the Mediterranean coast quickly grew
in

popularity. Also, improvements in air transport (charter flights) as well as

progress in labour legislation and a growth in social welfare led to a boom in
tourism.

The tourism sector suffered a recession during the 1970s, mainly due to the
energy crisis, leading to lower costs and prices. That's when mass tourism
emerged. Travelling went from being something only for an exclusive group to
become a leisure activity within the reach of many.

In the following decades, there was a progressive internationalisation of hotel

companies, travel agencies and airlines. New products and new leisure
activities were also offered, revolving around sports and health, among others.

Today, the tourism sector has become one of the great economic engines in
many countries, forming part of the international political agenda. In recent
years, with low-cost flights and the existence of alternative accommodations,
managed by online companies, it is much easier for tourists to afford to travel
and they can design their itinerary and experiences to their liking.

Tourism not only impacts the local economy, but it is also starting to affect the
social structures, culture and lifestyle of the destinations visited. Therefore, the
challenge now is to provide solutions by developing a tourism awareness that is
respectful with the environment and the local way of living of its inhabitants.

GROUP II

1.2 HISTORY OF HOSPITALITY INDUSTRY

History of the Hospitality Industry: Real Estate Moguls

When I entered hospitality I believed that development was the primary driver
of value in our industry and my background was in finance. Just look at the
wealth created by the Marriott, Hilton and Pritzker families during the 20th
century. Undoubtedly these fortunes were created through savvy real estate
strategies, financings and M&A. Real estate is what I call the first paradigm of
hospitality – it’s what created the vast majority of wealth from Hilton’s founding
in 1919 until the 1960s.

The 1st Revolution: Luxury and Service (1961 – 1980)

This is what many refer to as the Golden Age of hospitality where

organizational culture and value creation were driven by luxury and
service. This paradigm was catalyzed by wealth increases amongst the richest
families in America post World

War II. From 1963-1983 the wealth of the top 10% rose from $231k to $503k
(in 2013 dollars). This meant more money to spend on luxury goods (and
travel). It’s

no accident that ITT (Sheraton) purchased the St. Regis New York to bulk up
its luxury division in 1960. Enter Isadore Sharp, founder of Four Seasons
Hotels in 1961 with the vision to found a company on his Golden Rule: “Treat
guests the way you wish to be treated.” While Four Seasons didn’t start as a
luxury product, Sharpe quickly pivoted upscale to chase the opportunity (and
because, well luxury is just more fun, isn’t it?). Then, in 1983, Ritz Carlton was
founded and carved out its own niche in the segment. The leaders of this era
were experts in customer service (and operations); consequently, people like
Sharpe were handsomely rewarded with vast wealth.

The 2nd Revolution: Market Segmentation (1981 – 2000)

The chart above shows the incredible growth of airline passenger travel from
1950-2014. As more and more travelers traversed the U.S. (and globe)
incredible entrepreneurs like Bill Kimpton (Kimpton Hotels), Chip Conley (Joie
de Vivre) and Ian Shrager (Morgans Hotels) saw an opportunity to segment the
market and target very specific customers with a unique and differentiated
offering – the design-led boutique hotel was born.
It’s now 1991; enter Barry Sternlicht and Starwood Capital Partners. He starts
off like the others buying one-off properties but then in 1997 executes a game
changing move where he magically outbids Hilton for ITT Corp (Sheraton) at a
whopping $14.3B.
Ok, it wasn’t exactly magic. Sternlicht leveraged a tax loophole called “paired-
shares” where two stocks can trade together. Essentially, he separated hotel
operations (Starwood Lodging Corp) from the Real Estate (Starwood Lodging
Trust) so that he could avoid corporate taxation on income from the real estate
(REIT) by agreeing to pass 95% of rental income back to shareholders. Less
taxes meant more projected income, more projected income meant higher
valuation and higher valuation meant – well – sorry Hilton, higher purchase
price.
That was his first stroke of genius and what actually lead to the next revolution
(to be discussed shortly). The next stroke of genius was taking market
segmentation insights from the likes of Ian Shrager and placing them on
steroids with his newly found real estate empire – the first W Hotel was born
(December 1998).
“W is a very polarizing brand, it’s not meant for everyone and we’ve tapped into
a market segment that really aligns with our brand in a way that they can’t
with most other hotels,” Anthony Ingham (Global Brand Leader, W Hotels) once
told me. There are now more than 13,000 W Hotel rooms globally and almost
8,000 in the development pipeline.

The 3rd Revolution: Digital Distribution (1995 – Present)

Expedia was founded from within Microsoft in 1996. Back then the company
charged a nominal 5% fee to help hotels fill rooms. Today those fees can be up
to 25% for independent hoteliers. This massive shift has largely resulted from
consolidation. Today, Expedia and Priceline have approximately 76% market
share. By 2020 experts predict that market share will be up to 94% -wake up,
FTC! I digress. What Expedia and Priceline realized is that you don’t need to
own hotels or even brands to sell hotel rooms. Air BnB took this one step
further and commercialized the less spoken of couch surfing
movement. Having said that I group Air BnB with the OTAs since all three are
digital distribution channels that market lodging based on state of the art e-
commerce best practices. The only difference is that Air BnB’s inventory is
owned by homeowners rather than professional investors and high net worth’s.

GROUP III
1.3 ORIGINS OF THE HOSPITALITY AND TOURISM INDUSTRY IN THE
PHILIPPINES
Tourism in the Philippines traces its origins during the ancient times when the
first set of people chose to migrate through land bridges, followed by the other
sets of migrations from the Malayan archipelago in the south and Taiwan in
the north. Trade also became part of the tourism
as Arabs, Indians, Japanese, Chinese, Malays, and other ethnic groups in
mainland Southeast Asia, Taiwan, and Ryukyu traded goods with the natives.
When the islands became part of the territory of Spain, an influx of Spanish
people migrated into the country, though still few compared to the Spanish
migrations in South America as the Philippines was farther from Spain.
The tourism industry first truly flourished during the late 19th to early 20th
century due to the influx of immigrants from Europe and the United States. It
was listed as one of the best countries to visit in Asia aside from Hong
Kong and Japan, earning the nickname "Pearl of the Orient Seas". The tourism
declined during and after the World War II, leaving the country with a
completely devastated economy, and a landscape filled with destroyed heritage
towns. The second wave of tourist influx flourished in the 1950s but declined
drastically during the dictatorship era. After the People Power Revolution, the
tourism industry continued to decline due to the domino effect caused by
the Marcos dictatorship. The industry only managed to cope in 1991 and 1992,
where 1.2 million tourists visited the Philippines. It afterwards waned again
after a decade due to corrupt practices in government.
The tourism industry flourished again at the early part of the 2010s under the
"It's More Fun in the Philippines" slogan, which was regarded as an international
success. The country saw an influx of foreign tourists, with the aid of social
media and the creative tagline. Tourism reached its peak in 2015 with
5,360,682

foreign tourists arrivals recorded. The industry continued to grow in 2017, but
the growth rate from Western tourists drastically decreased due to the drug
war and the declaration of martial law in Mindanao. Nonetheless, the growth
continued due to an influx of Asian and Russian tourists.
8,260,913 international visitors arrived from January to December 2019, up by
15.24% for the same period in 2018. 58.62% (4,842,774) of these came from
East Asia, 15.84% (1,308,444) came from North America, and 6.38% (526,832)
came from other ASEAN countries.
The tourism industry was severely affected during the COVID-19 pandemic,
when tourist arrivals dropped to only 1.48 million in 2020 due to government
pandemic-related lockdowns to control the spread of the virus, and
when Super Typhoon Odette ravaged tourism-dependent remote islands,
including Siargao, in central and southern Philippines in December 2021.
The country was reopened to international tourists starting February 10, 2022,
after nearly two years of border closure due to the COVID-19 pandemic.