The tourism industry has undergone rapid growth of incomparable nature over the last several decades. This has mainly been due to the advent of a ‘borderless’ world and increased information distribution about the majestic sceneries throughout the world, with the Philippines being no exception. The boom in local travel was driven by expanding destinations offered by airlines, more convenient access to information about tourist spots shared on social media, and growth in government spending on transportation infrastructure has opened up more opportunities for travel agency businesses. Consequently, business travel agents often start their careers as leisure travel agents but are attracted to the prospect of something more specialized and challenging. Rather than working with random members of the general public, a business travel agent is more likely to have specific clients, which could be either representative from certain businesses, or the actual businesses themselves, depending on the operation. A business travel agent typically spends time sourcing new clients and servicing the clients they already have.
In the economy of the Philippines, tourism plays an important role. With many of its beautiful beaches, sunny weather, and rich biodiversity, the country boasts rich natural beauty. More than that, as exemplified by its people, cuisine, and lifestyle, the unique and complex culture of the Philippines attracts many people to visit the country (GOVPH, n.d). According to the Philippine Statistics Authority, domestic tourism expenditure in the Philippines has grown by 19.1% from 2015 to 2016. The tourism industry’s contribution to the Philippine economy has likewise increased from 6.8% in 2011 to 8.6% in 2016. Just as the Internet revolutionized how people shop, listen to music, and access film entertainment, the travel industry has also benefited in many ways. From selling destination packages, airline tickets, organizing local tours, and selling travel insurance, travel agencies have several ways to make money. Because of the warmth of its people and its natural wonders that are yet to be completely explored, the Philippines has a natural competitive advantage in tourism, the government recognizes tourism as a major contributor to the generation of foreign exchange earnings, investments, and revenues, and to the growth of country production. This recognition of the importance of tourism in the country is underlined by the objective of the Medium-Term Philippine Development Plan 2001-2004 (MTPDP) of completing, implementing, and establishing the Philippine Tourism Satellite Account (PTSA) at the end of the plan term. To this end, the National Statistical Coordination Board (NSCB) and the Department of Tourism (DOT) are taking the lead in carrying out activities to facilitate the development of the PTSA as an instrument designed to improve planning at sectoral and national levels and, eventually, to assess the effect of tourism on the economy in terms of validity and reliability (PTSA, n.d).
A travel agency is a company that helps between the travel industry (supplier) and the traveler as an intermediary (purchaser). Part of the travel agent's job is to sell to potential travelers prepackaged travel tours and holidays. Besides, the agency will serve as a broker between travelers and hotels, car rentals, and tour companies (Goeldner & Ritchie, 2003). Travel companies can be part of a larger corporation or small and privately owned. For a traveler who is studying and planning to buy packages and experiences through an organization, a travel agent is the direct point of contact. Travel agents, including specific destinations, may specialize in certain forms of travel; outdoor adventures; and, to name a few, backpacking, rail, cruise, cycling, or culinary tours. When they need guidance about their journeys, these specializations may assist travelers. Some travel agents work at a fixed address and others provide services both online and at a brick-and-mortar venue. Travelers will then have conversations with their agents face-to-face and even contact them by phone or email.
HOW THE POLITICAL ENVIRONMENT AFFECTS THE GLOBAL TRADING? (WTO, GATT, EU, NAFTA, AND ASIAN ORGANIZATION)
World Trade Organization (WTO)
Over the past years, global trade has grown considerably. A comprehensive range of factors are behind this trend, including the widening and deepening of the multilateral trading system. The World Trade Organization (WTO) is the international organization dealing with the global rules of trade between nations. Its main function is to ensure that trade flows as smoothly, predictably and freely as possible. At its heart are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations and ratified in their parliaments. According to UNWTO (2018), the World Tourism Organization (UNWTO), World Trade Organization (WTO), World Travel & Tourism Council (WTTC), and International Trade Centre (ITC) have issued the joint communication "Tourism, Trade and the WTO" affirming the importance of enhanced global cooperation on trade & tourism, and encouraging greater participation of the tourism sector in trade policy. As the third-largest sector in international trade, accounting for 10.4% of global gross domestic product (GDP) and supporting 313 million jobs worldwide, the tourism sector is making strong contributions towards achieving the Sustainable Development Goals (SDGs). Released to coincide with the 2018 WTO Public Forum, this joint communication aims to highlight the importance of tourism, while also emphasizing the crucial role of the WTO in ensuring the smooth and predictable functioning of trade, including for the tourism sector. Nearly all WTO members emphasize the importance of tourism, especially in terms of its contribution to employment and generating foreign exchange. Typically, one of the most dynamic economic sectors, tourism-related services are labor-intensive, with numerous links to other major segments of the economy. Tourism and travel-related services includes services provided by hotels and restaurants (including catering), travel agencies and tour operator services, tourist guide services and other related services.
According to UNWTO’s long-term forecast report Tourism Towards 2030, Under the main theme of “Trade 2030”, the WTO Public Forum's sub-themes for 2018 are sustainable trade, technology-enabled trade, and a more inclusive trading system. Projections extending to 2030 indicate that the tourism sector is expecting continued rapid growth, with international tourist arrivals worldwide expected to increase by 3.3% per year to reach 1.8 billion by 2030. At the same time, the market share of emerging economies, which has already increased from 30% in 1980 to 45% in 2016, is expected to reach 57% by 2030, equivalent to over 1 billion international tourist arrivals.
It must be further emphasized that the international trading system has enormous effects on international tourism, not only with regards to the transport of tourists across borders, but also the procurement of the multitude of goods and services– from safari jeeps to restaurant chefs to hotel accounting software – essential for the supply of international tourism.
General Agreement on Tariff and Trade (GATT)
One of the most crucial aspects of international tourism is the cross-border movement of consumers. This permits even unskilled workers in remote areas to become services exporters — for instance, by selling craft items, performing in cultural shows, or working in a tourism lodge. The significance of tourism as a source of income and employment, and as a major factor in the balance of payments for many countries, has been attracting increasing attention on the part of governments, private sector entities, regional and local authorities, and others with an interest in international trade and economic development. If the barriers to worldwide travel were eliminated or reduced substantially, international trade in tourism services is likely to increase significantly. One way of reducing trade barriers in international trade in tourism is the introduction of multilateral trade agreements, such as GATS. Though tourism has been undergoing a process of liberalization, GATS is the first multilateral, legally enforceable liberalization agreement covering trade in tourism services. GATS' could lead to the gradual elimination of some barriers to tourism growth, such as the restrictions of foreign personnel employment and establishment of foreign companies. Hence, suppliers of travel and tourism-related services in hotels, restaurants, transport, car rentals, cultural and other travel-related businesses can expect to benefit directly from the agreement. The General Agreement on Trade in Services (GATS) focuses on tourism as one of its prime components of international trade.
Contrary to popular belief GATS is not merely concerned with shifting service provision from public to private sector or simply allowing foreign providers and investors to bid and provide services in World Trade Organization member nations. This is a unique agreement, crafted to take into account, not only a new area of liberalization, but recognizing the importance of service trade (Qureshi 1996). The objective of GATS is to reduce and eliminate the obstacles and discriminatory barriers to trade in services, which in comparison to trade in other areas, such as goods, has been neglected or ignored. The main characteristics of GATS in tourism industry can be summarized thus:
Tourism Commitments: These are divided into four categories; Hotels and restaurants, travel agencies and tour operators’ services, tourist guide services and other. At first glance the GATS classification of tourism in the agreement appears quite narrow. However, it is worth noting that tourism services are not neatly confined to the tourism schedule of commitments. This is what is termed the tourism 'cluster'. To see how this effects tourism we can utilize the Standard International Classification of Tourism Activities (SICTA), which categorizes tourism activities. Accordingly, over 140 designated activities have been identified in other areas of commitment, example, tourism related services are included in commitments to Business services (tourism property management); Construction and engineering services (construction of hotels and recreational facilities); Educational services (from tourism degree programs to ski instruction); and Health-related and social services (physical fitness facilities). Tourism activities which are part of more general services activities -- most notably many transport services, but also including certain business services; distribution services; and recreational, cultural and sporting services – have typically been placed within those general services categories.
The GATS agreement is a long-term undertaking that is intended to attract the major trading countries. GATS set up a legal and operational framework for the liberalization of international trade in tourism as well as other services. The agreement deals with services supplied, such as the production, distribution, marketing, sales and the delivery of a service, by natural persons of individual services suppliers and juridical persons of established companies, also to travelers and tourism-related enterprises whenever such transactions are carried out between national and foreign persons. For the purpose of identifying commitments, GATS single out tourism and travel related services (TTRS), along with other service sectors equivalent to business, communication, construction, distribution, education, environment, finance, health, recreation, culture and sport, and transport. For the tourism sector, the GATS classification can be considered `open-ended' because distinct tourism-oriented services such as computer reservation system (CRS), travel assistance, car rental, tourist health services, convention centers, and many others are covered under various sectors (not included under the travel and tourism sector) or not specified at all (WTO, 1996).
European Union (EU)
Tourism is a sector of growing economic importance for the Philippines and in 2016, the Philippines recorded a 12% increase to more than 5.7 million in total foreign visitors to the country. EU remains the 5th source of tourism, totaling to more than half a million in the same year. Greater cooperation and coordination in transport policy is under way. Although this is not aimed specifically at the tourism sector, the improved situation increases the options open to tourism firms. The Commission's White Paper on the future development of the common transport policy of December 1992 aims at reducing the disparities which continue to exist between the different modes of transport, notably through a more equitable sharing of the costs and through other measures which will ensure healthy competition, better respect for the environment and greater complementarity between modes of transport.
As far as infrastructures are concerned, the Union has recognized the need to ensure that all parts of the territory are well-served, notably outlying and less developed regions. Union-funded investment programs are under way to help achieve this. Proposals on the creation of a trans-European road network, a trans-European combined transport network and a trans-European inland waterway network have been accepted and the principles outlined in them are being implemented. Plans for similar sets of guidelines for trans-European networks for airports, ports and conventional railways are being discussed. The overall aim of these initiatives is to ensure that capacity can meet future demand, that development continues to be compatible with environmental protection priorities and that interoperability and interconnection between networks is guaranteed. Take account of the social and economic benefits that such a network can bring for the Union in general. Thus, the impact of the EU-Philippines FTA on the outermost regions of the EU40 will most likely be minimal. Primarily because the regions are heavily reliant on the services sector, particularly tourism, which is not expected to be affected by the FTA.
North American Free Trade Agreement (NAFTA)
The North American Free Trade Agreement (NAFTA) was a three-country agreement entered into force in January 1994 and signed by the governments of Canada, Mexico, and the United States. Most tariffs on goods traded between the three countries were abolished by NAFTA, with a significant emphasis on liberalizing trade in agriculture, textiles, and car manufacturing. The agreement also aimed to protect intellectual property, set up dispute resolution processes and enforce labor and environmental protections through side agreements. NAFTA has fundamentally reshaped North American economic ties, fostering unparalleled convergence between Canada's developed economies and the U.S. and the emerging economies of Mexico. NAFTA originally enjoyed bipartisan backing in the United States; it was negotiated, approved by a Democratic-controlled Congress, by Republican President George H.W. Bush, and introduced under Democratic President Bill Clinton. Under the deal, international trade tripled, and cross-border investment between the three countries also grew substantially.
International tourist arrivals are generally rising in the Philippines. There are, however, instances of a decline in arrivals due to several factors, such as the economic crisis and the country's peace and order situation. In addition, the tourism industry continues to be a major contributor to the Philippine economy's growth. Indeed, Philippine tourism can be a strong economic growth equity driver for the country if built in a sustainable way. In addition, the government's policy measures to ensure the success of tourism and ecotourism in a country that supports the conservation of the environment and the preservation of indigenous cultural heritage, the most important assets of tourism in the Philippines, offer a positive view that the tourism sector will indeed fuel economic growth at both national and local levels. It is therefore concluded that the Philippine tourism industry is sustainable, based on the proper implementation of government policies and initiatives, and the capacity and positive attitude of all industry stakeholders. In order to achieve sustainable tourism in the Philippines, sustained integrated growth, taking into account the economic, political, institutional, social, legal and environmental aspects, should therefore be ensured.
Association of Southeast Asian Nations (ASEAN)
Tourism operations do not cover foreign travel by visitors to destinations since they are part of transport services. Domestic transport services used by international travellers are also not included in this category, even though they are usually considered part of travelers' expenses. Although travel spending is included in tourism statistics in full or in part (e.g. only the domestic part), transport services used by tourists, whether foreign or domestic, are not considered in this document. The WTO list is intended for the negotiation of the GATS and is not intended to act as a classification list on which data on services are obtained. There is a need for cooperative regional efforts to promote the ASEAN region as a single tourist destination. Tourism services are hospitality-oriented by nature; but, economically speaking, they contribute on a large scale to local employment and sustainability. The tourism sector is promoted by all ASEAN member states.
Foreign and domestic tourism services are offered by travel agencies in the Philippines. Some of their most common services include airline bookings, sightseeing tours, accommodation bookings, car rentals and tour guides. In addition, these agencies assist international tourists with bureaucratic activities such as passport renewal, visa application documents, travel insurance, exit permits and foreign exchange and traveller checks. Government campaigns to promote tourism in the Philippines, supported by the Department of Tourism, have been crucial to attracting international visitors. In comparison, domestic tourism has been spurred by the country's favorable economic conditions. Filipinos' increasing purchasing power has led to more domestic and international tours. In addition, when traveling in groups or planning foreign trips, travel agencies typically need a visa. This was another demand driver for travel agencies offering international tourism services to foreign travelers in the country.
