Promoting Services Trade in ASEAN PAPER 7
Trade in Tourism Services

M A R C H

2018

For inquiries, contact ASEAN-Japan Centre(ASEAN Promotion Centre on Trade, Investment and Tourism)
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Paper 7 / March 2018 / Trade in Tourism Services

Promoting Services Trade in ASEAN PAPER 7
Trade in Tourism Services

M A R C H

2018

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NOTES
The terms country and/or economy as used in this study also refer, as appropriate, to territories orareas; the designations employed and the presentation of the material do not imply the expressionof any opinion whatsoever on the part of the ASEAN-Japan Centre concerning the legal status of any
country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers orboundaries.

The following symbols have been used in the tables:• Two dots (..) indicate that data are not available or are not separately reported.
• A dash (-) indicates that the item is equal to zero or its value is negligible.
• Use of a dash (-) between dates representing years, e.g., 2015–2016, signifies the full period
involved, including the beginning and end years.
Reference to “dollars” ($) means United States dollars, unless otherwise indicated.

There are seven papers in total. The other six papers cover professional services; R&D
services; telecommunication services; computer and related services; courier services; andmaritime, air, rail and road transport services.

Prepared by Hikari Ishido (Chiba University, Japan) and Masataka Fujita (ASEAN-Japan
Centre). The authors wish to thank the staff members of the AJC and Richard Liang for theirresearch and statistical assistance. Errors and omissions are only those of the authors andshould not be attributed to their respective organizations.

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CONTENTS
I. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
II. An overview of the tourism services sector. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1. Hotel services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2. Travel agencies and tour operators services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3. Tourist guide services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  14
III. Ascendancy of trade in tourism services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  15
1. Competitiveness of ASEAN tourism . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  15
2. Tourism by mode of supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  19
IV. T
 rade agreements and regulations among and in the

ASEAN Member States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

V. Impacts of further liberalization of tourism serviceson the economy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

VI. P
 olicy recommendations and promotion measures for

trade in tourism services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

1. General policy suggestions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
2. Workable policy suggestions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Annexes
Annex A. A detailed value chain of the tourism industry. . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Annex B. Large foreign affiliates engaged in tourism services
in ASEAN 2015. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Annex C. L arge ASEAN affiliates abroad engaged in tourism
services, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Annex D. Specific schedule of commitments for tourism services
under the AFAS (9th package, signed in November 2015)
by ASEAN Member States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Annex E. W orkable policy suggestions for promoting trade
in tourism services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

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1I. INTRODUCTION
Tourism services is a service sector for all and promoted by all Member States of the Association ofSoutheast Asian Nations (ASEAN). In the sector the General Agreement on Trade in Services (GATS),administered by the World Trade Organization (WTO), lists1 the following four job categories:• 09A Hotels and restaurants (including catering)• 09B Travel agencies and tour operators services• 09C Tourist guides services• 09D Other.
On this list no transport services are included. International travels of tourists to destinations are
not covered under tourism activities as they are part of transport services. Domestic transportation
services used by foreign travellers are not on this list, either, even though they are normally consideredpart of expenditures by travelers. In this paper, although travelers’ expenditures are included fullyor partially (e.g. only the domestic part) in tourism statistics, transport services used by travelers,
whether international or domestic, are not considered.2 The WTO list is for GATS negotiation and notintended to serve as a classification list by which services statistics are collected.
Out of the “three sources of value added”, i.e. provision of (1) tangible products, (2) information and(3) amenities, tourism services tend to be amenities. Under the concept of “travel trade”, tourism
itself is seen as an important type of trade for ASEAN. The provision of tourism services tends
to grow with economic development. In the ASEAN region, which records consistently vigorous
economic advancement, the role of tourism services is becoming larger year after year. ASEAN(2015: 3) states that consumer demand for services has high-income elasticity: “as incomes rise,
demand by consumers for services rises more than proportionately for tourism services”.
Cooperative regional efforts to promote the ASEAN region as a single tourist destination are needed.
Tourism services are by nature hospitality-oriented; however, economically speaking, they contributeto local employment and sustainability on a large scale. All ASEAN Member States promote thetourism sector.
The 19th ASEAN Tourism Ministers Meeting (M-ATM), held in January 2016, launched the ASEAN
Tourism Strategic Plan 2016–2025, which states:“By 2025, ASEAN will be a quality tourism
destination offering a unique, diverse ASEAN experience, and will be committed to responsible,
sustainable, inclusive and balanced tourism development, so as to contribute significantly to thesocioeconomic well-being of ASEAN people”. The tourism ministers also took note of ASEAN’s 50th
anniversary in 2017 by agreeing to develop “Visit ASEAN@50: Golden Celebration”, a collaborative
tourism campaign to promote and showcase ASEAN as a single tourism destination. The campaign
is to target major regional and long-haul source markets, such as China, Japan, the Republic ofKorea, India, Australia, the United Kingdom, Germany, the Russian Federation, the United ArabEmirates, the United States and Canada, with three purposes:3¹²
3

WTO, “Services Sectoral Classification List” (MTN.GNS/W/120, released on 10 July 1991).
The ASEAN-Japan Centre has issued another paper on tourism analyzed in terms of global value chains. In that
paper, tourism expenditures include those by domestic transport services [AJC 2018].
Source: ASEAN Secretariat. http://www.aseantourism.travel.

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P R O M O T I N G S E R V I C E S T R A D E I N A S E A N – M A R C H 2 018• Achieving 121 million international visitor arrivals to the region by the end of 2017;• Increasing tourism receipts to $83 billion; and• Extending tourist visitations’ average length of stay to 6–7 days, and to more than two ASEAN
countries.
Many international organizations, including the ASEAN-Japan Centre, are providing full support tothis initiative.
From the perspective of “tourism as trade in services”, the WTO defines four types, or modes:
Mode 1 (cross-border supply of services, mainly through the use of the internet), is used especiallyfor online booking for tourism services. Mode 2 (consumption abroad, i.e. consumers moving toservice suppliers’ countries to purchase a service), most importantly foreign tourists using local
restaurants and hotels, is a dominant form. Statistics on this mode, however, are limited as local
restaurants seldom require customers to identify their nationality for statistical data collection.
(Mode 2 statistics are typically collected through a travel expenditure survey at the entry or exit
point of the country.) Mode 3 (supply of services through commercial presence) is a dominant formof tourism service, although this mode is not recognized as trade under the balance of payments(BOP) since the commercial presence is considered to be that of local companies. Mode 4 (supplyof services through movement of natural persons from their home country to the country where
consumers reside) is the least open mode of service supply. Foreign tour guides, for example, remain
limited in their movement. Other tourism professionals, such as hotel managers, may receive wages
and salaries when they move to other countries, which constitute Mode 4 payments. Thus, there is aneed to promote tourism from the perspective of trade in services, with the trade-related conceptsof Modes 1–4 in view.
Figure 1 presents a simplified view of tourism value chains.4 As shown, travel operations and thebooking of transportation and accommodation initiate value chains in tourism services. Then theuse of transportation and accommodation takes place, followed by travel-related activities, i.e.
consumption of food and beverages, visits to tourism assets at destinations, purchase of handicrafts,
and the experience of leisure, excursion and tours.
Travels vary by purpose: pleasure, business, medical treatment, education and so on. Recently, newmethods of tourism promotion including meetings, incentive travel, conventions and exhibitions(MICE); community-based tourism (CBT); long stays; gastronomic tours; and the like are emerging
as key factors to which ASEAN Member States pay particular attention (box 1). In terms of promoting
trade in tourism services, destination management organizations (DMOs) are also an important
aspect of creating tourism services in an area in order to enhance inbound tourism through thecooperation of the private sector and organizations in the area.

4

A more detailed value chain of the tourism industry is provided in annex A.

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3Figure 1. Tourism value chains: a simplified view

Traveloperation andbookingMovingand lodging

Transportation

Food andbeverage

Accommodation

Handicrafts
Undertaking
Activities

Tourism assets
in destinations

Support services(including tour guides andtouris information centers)

Leisure,excursionand tours

Source: Adapted from the WTO “Tourism Value Chain”.

Box 1. Trend keywords
MICE
Meetings, incentives, conventions and exhibitions (MICE) is a kind of tourism concept for promoting
business meetings, incentive tours, conferences and exhibitions as a total package for businesstravelers. The ASEAN Secretariat sets the ASEAN MICE Venue Standards and manages certification
for the venues that achieve a score of at least 75 per cent on all the criteria.
CBT
Community-based tourism (CBT) is a form of responsible and sustainable tourism that supports
local communities and improves their livelihoods. CBT is expected to contribute its direct profit tolocal and ethnic communities.
DMO
A destination management organization (DMO) is a tourism promotion strategy using one entity
to coordinate all the elements that make up a travel destination (e.g., entertainment, accessibility,
branding, human resource training and pricing).

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4

II. AN OVERVIEW OF THE TOURISMSERVICES SECTOR
The tourism industry is mainly represented by travel agency services and by hotel and restaurant
services; domestic transport services and retail shops can be added. However, for the latter group ofindustries, it is difficult to discuss the activities that are related only to tourism. For the former, thefocus is on hotels and travel agencies as they essentially serve only travelers.
With this in mind, hotel services (09A) and travel agency services (09B) are considered first in thissection, and tourist guide services (09C) second, as the market openness of the sub-component
remains limited.

1. Hotel services
Brunei Darussalam. The total number of hotels, resorts and apartments is 50, followed by homestays
at 16, guesthouses and lodging at 15 and government guesthouses at 3. The total number of rooms
and beds available are 4,317 and 6,079, respectively. The average length of stay for hotels in Q2
2017 was 2.2 days (Ministry of Primary Resources and Tourism of Brunei Darussalam). The country
promotes the tourism industry in part to diversify the economy. However, its lower numbers of
tourists and hotel rooms are due to inadequate infrastructure for the tourism sector and a lack ofhuman resources in labour-intensive industries such as hotels and other hospitality businesses.
Improvements in infrastructure play a key role in driving the tourism industry forward in the country,
which affects the hotel industry. Generally speaking, Brunei Darussalam needs private sector input
in its efforts to cultivate places of interest.
Cambodia. The country’s overall policy encourages business initiative and local investment in lowerend hotels and guesthouses, which provide important employment and business opportunities tolocals. However, there is no restriction on foreigners engaging in three-star or higher-rated hotelbusinesses, other than that the number of foreign employees working in a firm is subject to thelabour law.
According to the Annual Tourism Statistics Report of the Ministry of Tourism of Cambodia, during
1997–2016 the numbers of hotels and guesthouses increased dramatically. The number of hotels
in 2016 was 760 with 40,160 rooms, whereas in 1997 there were only 179 with 6,989 rooms. In
2016, the number of guesthouses was 2,170 with 32,463 rooms whereas in 1997 there were only 60
guesthouses with 477 rooms. These figures reflect the growth of the tourism industry, which also
necessitates the establishment of more restaurants, particularly for the up-market consumer class.
Many hotels and restaurants prefer to use local products, depending on their availability and thecompetitive price of local food and beverage products. However, local production of processedfood products is limited. Furthermore, as imported foods and beverages are needed for high-classconsumers, local production of high value added products should be expanded in order to meet thedemand and foster the healthy growth of the hotel industry.
Indonesia.5 In terms of facilities, Indonesia has varieties of hotels catering to travelers. Hotels are
categorized into two main segments based on their star rating: classified (one to five stars) hotels

5

Summary information based on SPEEDA (online database) and the site of the Indonesian Ministry of Tourism(http://www.visitindonesia.co.in/index.php/en/about-indonesia).

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5and non-classified (no star rating). The non-classified segment, i.e. hotels that are low-priced andless furnished, accounts for some 90 per cent of the hotels in Indonesia. Domestic tourists who
typically prefer staying at non-classified hotels dominate tourism, leading to development of thesegment.
International tourists tend to prefer classified hotels. International hotel chains have traditionallyfocused on upscale or luxury hotels, whereas local hotels dominate the low-price segment.
International groups are also penetrating into the growing mid-scale hotel segment, catering to therapidly growing number of domestic and business travelers.
The hotel industry is marked by the presence of several international hotel chain giants such as
Accor Group (France), Holiday Inn (United States), Sheraton (United States), Four Seasons (Canada),
Kempinski (Germany), InterContinental (United Kingdom), Hilton International (United States), RitzCarlton (a subsidiary of Marriott International from the United States), Mandarin Oriental (HongKong), and Ramada Inn (operated by Wyndham Worldwide from the United States), as well as
regional leaders such as Aston International. In addition, local players such as Santika Indonesia
Hotels & Resorts, Tauzia Hotel Management, Hotel Sahid Jaya International and Aryaduta HotelGroup are aggressively increasing their market shares.
Lao People’s Democratic Republic. The hotel and restaurant industry is the most substantial sector
contributing to Lao tourism. According to the Ministry of Information, Culture and Tourism, thenumber of establishments has expanded constantly, with an average annual growth rate of 8–9 per
cent. Today there are 2,527 establishments (545 hotels, 1,982 guesthouses) and 2,969 restaurants,
which employ more than 167,800 people. The average room occupancy rate has remained more than
50 per cent in recent years: 54 per cent in 2014, 57 per cent in 2015 and 51 per cent in 2016.
Of the more than $700 million revenue for the tourism industry in 2016, the accommodation sector
accounted for 39 per cent (food and beverage accounted for 22 per cent). More than 60 per cent ofinternational visitors stayed at a hotel, whereas 39 per cent stayed at a guesthouse or other lodging.
About 85 per cent of these hotels are owned by domestic private entrepreneurs. Foreign investors
own about 11 per cent of the total, while the rest is in the form of joint venture. About 40 per centof hotels in the country concentrate in the capital, Vientiane. Foreign investment and joint ventures
show more rapid growth than domestic investment.
Both foreign companies (hotels and restaurants) and domestic hotels use about 80 per centforeign products for inputs to provide services, whereas domestic restaurants use 95 per cent local
products. The industry employs 2–3 per cent foreign workers, mostly at management level. However,many establishments lack an effective workforce and human resource management system. The
hotel and restaurants industry in the Lao People’s Democratic Republic is dominated by small
and medium enterprises (SMEs), which make them very important to the Lao organizational andeconomic landscape. Yet these SMEs seem to underperform in their capacity and capability tooperate effective business systems, including those related to training and development – the key toproviding good-quality services.
Malaysia.6 The hotel market is characterized by the presence of local and international hotel chains.
The environment is conducive to investments in the hotel industry due to the country’s growing
tourism industry, favourable government policies, and government initiatives to promote tourism,
such as international business and leisure tourism events. Rather liberal ownership opportunities
for foreign investment in the country’s hotel industry have attracted several international players,

6

Analysis based on the site of the Malaysian Ministry of Tourism and Culture (http://www.motac.gov.my/en/) andSPEEDA (online database).

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including Hilton Worldwide (United States), Hyatt Hotels (United States), Four Seasons Hotels(Canada), and Nikko Hotels International (Japan). In addition, large local hotel operators suchas Berjaya Hotels & Resorts (Malaysia), Grand Central Enterprises (Malaysia) and YTL Hotels &Properties (Malaysia), which also have a widespread presence across many regions in the country.
Malaysia offers a wide range of accommodation facilities for tourists, from luxury resorts to budget
hotels. The Ministry of Tourism and Culture assigns “star” and “orchid” ratings to hotels. The“orchid” category is designed specifically for classifying hotels that do not qualify for a star rating.
“Orchid” hotels are required to meet the basic standards of accommodation, including clean andsafe premises and hospitable staff workers. Conversely, the minimum requirements for a hotel toobtain a “star” rating not only cover the basic standards of cleanliness, safety and professionalismof staff, but also take into consideration the aesthetics of hotel premises and rooms; availability;
and the variety and quality of facilities and services provided, including restaurants, swimming
pools, laundry facilities and convenience stores. Orchid hotels are primarily managed by local
entrepreneurs, whereas three-, four- and five-star hotels are operated by multinational companies.
In an effort to standardize the rating of hotels to align with current trends and innovations intourist accommodation services, the Ministry introduced the Tourist Accommodation Premises
Classification and Rating System, which consists of six categories, namely city hotels, highland
hotels, island/beach/lake/river resorts, innovative hotels and boutique hotels.
In 2009, the Government liberalized its foreign direct investment (FDI) policy for four- and fivestar hotels, allowing up to 100 per cent foreign equity, to increase foreign investment in the hotelindustry. In response to this policy change, major players entered the hotel market in 2010–2012.
Other international players are expected to enter the market in the foreseeable future. The Malaysia
Tourism Transformation Plan 2020, which is part of Vision 2020, the plan to transform Malaysia intoa high-income country, is expected to boost the tourism industry.
Myanmar. According to the Ministry of Hotels and Tourism, the country had 1,575 hotels with 63,336
bedrooms in 2017. In addition, 64 properties financed by FDI are in the development pipeline; they
will have 12,194 rooms. Although hotel services have been developed mainly by the Government,
private suppliers currently serve foreign tourists by providing a variety of accommodations. Myanmar
possesses great tourist potential and attractive sightseeing spots, yet much of the industry remains
to be developed. In 2012, tourist arrivals surpassed the 1 million mark for the first time, creating
demand for hotel services. In 2013, the Myanmar Tourism Master Plan was launched; it aims for 7.5
million annual tourist arrivals by 2020.
Philippines.7 The hotel industry is attracting international tourist arrivals. The industry’s performance
depends on better air access and better accommodation facilities as well as increased marketingand promotional activities. The hotel industry has witnessed several acquisitions by large hotel
groups and the entry of foreign players. Local players continue to develop new properties at both
leading and developing tourist locations in the country. The National Capital Region (NCR-Manila)
and the Central Visayas (Cebu) form the largest markets in the Filipino hotel industry.
The hotel industry is fragmented, with a mix of local and international players such as Ayala Land
Hotels and Resorts (local), Starwood Hotels and Resorts (United States), Mariott Hotels and Resorts(United States) Vanguard Hotels (Singapore), Shangri-la Hotels and Resorts (Singapore) and The
Ascott (Singapore). The luxury boutique hotel space is primarily dominated by international chains,
whereas the mid-segment and budget hotel space is the domain of domestic brands.

7

Analysis based on “VisitMyPhilippines” (http://www.visitmyphilippines.com) and SPEEDA (online database).

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7Singapore.8 Singapore is consistently ranked as one of Asia’s premier tourist destinations. As such,it is no surprise that the Lion City offers a diverse range of hotels, from luxury affairs to chic boutiquespaces, as well as no frills, budget establishments.
According to the Singapore Tourism Board (STB), under the Ministry of Trade and Industry ofSingapore, at the end of 2016, there were 413 hotels with nearly 64,000 rooms (hotels with morethan four rooms). Another 5,500 rooms were in the pipeline. The average occupancy rate was 84.2
per cent, and daily revenue per available room was about US$147 in 2016.
The Singapore hotel industry initiated the Hotel Industry Transformation Map in 2016. It aims toaccelerate business transformation and create a competitive industry by driving labour-leanbusiness models; developing new solutions through innovation; growing businesses throughinternationalization; and building a strong pipeline of quality talent.
Thailand.9 The hotel industry is an important part of the economy and has a symbiotic relationshipwith the development of tourism industry. The Ministry of Tourism and Sports (MOTS) is responsible
for the tourism industry, while the Tourism Authority of Thailand (TAT), under the MOTS, is responsible
for tourism promotion, to encourage both Thai and international tourists to travel in and around
Thailand.
Thailand supplies various types of hotels to cater to diverse demands by tourists: luxury five-star
hotels (mostly run by foreign suppliers), premium four-star hotels (often owned by Thai companies
in the form of chain hotels and business hotels), medium-price three-star hotels (mostly smallscale, domestically owned hotels), and budget one- to two-star hotels (predominantly in the formof guesthouses with basic amenities). Accommodation fees fluctuate in response to seasonal
demands: the lowest hotel prices are observed during the off-peak season, i.e. between May andAugust. Hotel prices tend to be higher during December and February when the weather is cooler,
attracting higher numbers of domestic as well as international tourist arrivals.
The expansion of hotels is expected in key international tourist destinations including Bangkok, Phuket,
Hua Hin, Cha Am, Pattaya, Phuket and Krabi. Potential locations currently receiving local tourists
yet open for foreign tourists include the Khao Yai and Suan Pheng districts in Ratchaburi province.
Viet Nam.10 The hotel industry in Viet Nam has been growing in recent years due to an increase in
the number of tourists. This growth can be attributed to Viet Nam’s emergence as a popular tourist
destination with the rising income levels of residents, and overall improvements in the country’s
tourism and travel infrastructure. Furthermore, Viet Nam’s hotel industry provides attractive FDI
opportunities. Since 2015, foreign-owned enterprises have been allowed to provide services in hotels
and restaurants with no limitation on invested capital or market access.
The hotel industry in Vietnam is, as in other ASEAN Member States, characterized by the presenceof both domestic and international firms, of which the latter are heavily investing in this sector to
expand their presence in the country. Serval domestic prominent investors are Sungroup, Vingroup,
FLC, and Muong Thanh corporations. By the end of 2016, the total number of tourist accommodation
establishments was 21,000, with 420,000 rooms. The number of three- to five-star and high-end
tourist accommodation establishments was recorded as 784, with 91,250 rooms, accounting for 5.4
per cent and 28.7 per cent, respectively. There have been 545 FDI projects with registered capitalof $11.5 billion from economies that include Taiwan Province of China, Hong Kong (China), Japan,

8
9

10

Analysis based on the site of the STB (https://www.stb.gov.sg) and SPEEDA (online database).
Analysis based on the site of the Thai Ministry of Tourism and Sports (http://www.mots.go.th/mots_en57/main.
php?filename=index) and SPEEDA (online database).
Information based on the site of the Viet Nam National Administration of Tourism (http://www.vietnamtourism.gov.
vn/english/) and SPEEDA (online database).

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8Singapore, Thailand, Indonesia, Malaysia, the Republic of Korea, the United Kingdom, France,
Switzerland, Germany, and the United States.
The Viet Nam National Administration of Tourism (VNAT), under the Ministry of Culture, Sports andTourism, is responsible for tourism-related policymaking. The Government undertakes initiatives
to develop a skilled workforce for the hotel industry. It plans to develop the quality of labour in theindustry to better assist visitors and improve service standards, encouraging revisits by tourists.

2. Travel agencies and tour operators services
Travel agencies. The role of travel agencies is mainly to plan package tours, customize group or
private tours, and sell the tour products, as distinguished from tour operators, which conduct ordeliver the tour products (see below). Recently, the role of travel agencies has been changing withthe rapid expansion of internet access and use of mobile devices. Online travel agents, or travelbooking sites, such as Amadeus, TripAdvisor, Expedia, Agoda and Airbnb, accounted for one-quarterof international travel trade in 2016, according to Phocuswright, a major travel trade research firm.
Travel fairs such as the Malaysian Association of Tour & Travel Agents Fair and the Travel Fair by
Garuda Indonesia are other major channels for buying package tours or booking airlines, especiallyfor individual and/or independent travelers in ASEAN.
The ASEAN Tourism Association (ASEANTA), formed in 1971, is a non-profit group of public andprivate tourism sector organizations from ASEAN. ASEANTA has grown to become an associationof influence in the ASEAN tourism landscape, playing an integral role in shaping both the growth of
tourism development and policies in the region.11
Tour operators (or land operators). From a business perspective, tour operators (or land operators)
play an essential role in tourism. No package tour, customized group tour or even foreign independent
tour can be arranged concretely without tour operators’ involvement (figure 2), as they are familiar
with local conditions. Tour operators play an important role in the travel trade in maintaining thesecurity and comfort of foreign travelers:12• Arrangement of transport and pick-up services at the destination• Booking of hotels, including assistance with check-in and communication with hotel staff workers• Arrangement of transport and tour guides for sightseeing• Arrangement and booking of local tours• Booking of restaurants• Accompaniment and assistance with airline check-in at airports• Other bookings and arrangements (i.e. sports, entertainments, concerts and other events)
In the Overseas Tour Operator Association of Japan (OTOA), 187 registered companies form abroad network of 811 offices in 245 cities in 80 countries (as of 1 June 2017). In order to expand

11

12

ASEANTA has the following objectives: Unite members in a common purpose, working in a close bond of cooperation,
fellowship and assistance in furthering and protecting the interests of the members; strive towards the attainment of thehighest standards of service and facilities for travelers and tourists; uphold the dignity and ethics of the tourism businessand to strive towards its professionalism; foster and maintain the best of relationships among the ASEAN countries andtheir people; encourage, support and help develop tourism into and within the ASEAN region; act as negotiating bodyfor members of the association and to make recommendations to government departments or agencies or other bodies
in relation to any measure which may be taken involving members and/or the travel industry in ASEAN countries; andserve on or offer assistance to any government, statutory or International body in connection with tourism matters.
Information from the site of the Overseas Tour Operator Association of Japan (http://www.otoa.com/english/).

PA P E R 7 T R A D E I N TO U R I S M S E R V I C E S

9Figure 2. Roles of travel agents and tour operators

JAPAN

Consultation /arrangement
requestCUSTOMER

Survey - Check
Arrangement
requestTRAVEL
AGENT

Survey response
Reservation
receptionTOUR
OPERATOR

Survey response
Reservation
response

Travel agent’s job

Survey conducted
Reservation
procedure

OVERSEAS

HOTEL
GUIDE
CAR (BUS)

Survey response
Reservation
response

Tour operator’s job

Source: Overseas Tour Operator Association of Japan.

ASEAN-wide trade in tourism services, an organizational body that coordinates and promotes tour
operators’ services would be helpful.
Brunei Darussalam.13 Tourism is governed by the Ministry of Primary Resources and Tourism(MPRT), which is planning to diversify the country’s tourism sector to include adventure tourism,
ecotourism and Islamic tourism. The Government prioritized tourism in 2015, and provisions fortourism were made in the country’s National Development Plan. The MPRT has this vision: “towards
a sustainable growth and increase of tourists that would contribute significantly to the growth of
economic activities related to tourism”, and the mission: “to increase growth in the number of tourists
by focusing on strengthening the attractiveness and diversity of tourism products and improving thequality of tourism services”.14 Under this umbrella plan, vision and mission, Brunei Darussalam isseeking inward foreign investment in tourism. The National Development Plan emphasizes the needto help develop new and downstream industries, including tourism.
The Association of Travel Agents Brunei (ATAB) is the officially recognized travel industry professionalorganization. It works closely with the Brunei Tourism Board and the Brunei Tourism Department in
the development of strategies and the implementation of procedures aimed at enhancing the qualityand diversity of travel-related services available in the country. The ATAB aims to promote, facilitateand develop high standards of quality and professionalism in the provision of inbound and outboundtravel and tour services.15 There are 67 travel agencies in the country.

13

14

15

Information based on the Ministry of Primary Resources and Tourism of Brunei Darussalam (http://www.
bruneitourism.travel/).
Based on the Tenth National Development Plan of Brunei Darrusalam (http://depd.gov.bn/DEPD%20Documents%20
Library/NDP/RKN%20English%20as%20of%2011.12.12.pdf).
The ATAB wants to be a respected voice in Brunei for the common needs and operating standards of licensed
tour and travel businesses; to facilitate public recognition of operating standards, training and professionalism
in licensed tour and travel businesses, thereby increasing the service quality and contribution of the industry toBrunei’s future, and simultaneously creating sustainable business benefits for ATAB members; and to work cooperatively with key stakeholders related to the industry – including government departments and related services
and suppliers – to voice industry needs and develop mutually workable strategies. Source: https://www.facebook.
com/bruneitravelagents/about.

10

P R O M O T I N G S E R V I C E S T R A D E I N A S E A N – M A R C H 2 018

Cambodia: In January 2016, the Ministry of Tourism issued promulgation No. 041, providing tourism
licenses to tour operators and travel agents as follows:16• For outbound services, tourism licenses are provided only to Khmer operators.
• For inbound services, tourism licenses are provided to both Khmer and foreign tour operators andtravel agents.
Cambodia has 665 travel agents and tour operators that are officially registered. The companies
operate tours in all the major tourist cities, offering personal attention and a wide range of travel,
tour and visitor services.
It is possible to simply walk into a travel agent to arrange all bookings. Walk-in services usually
include services such as air ticketing, tours and guides, bus and boat tickets, car and motorcycle
rental, hotel reservations, passport services, visa extensions and foreign visas. Many upscale
overseas tour operators now offer itineraries in Cambodia, teaming up with local ground operators
to provide high-quality tours for discerning customers. They provide unique room and board options
as well as adventures and exotic methods of transportation such as riding an elephant or an allterrain vehicle through the jungle.
Indonesia.17 The Association of Indonesia Tours & Travel Agencies (ASITA) was established in
Jakarta in 1971 as a non-profit alliance operating under RI Law No. 9/1990 regarding tourism. ASITA
spearheads the joint efforts of Indonesian travel agencies. All facets of travel agency operation are
represented within ASITA’s partnership, which provides a number of services to the tourism andtravel industry, to achieve the following:• To preserve the harmonious relationship and cooperation within its membership and externally,
with both tourism-related and non-tourism-related parties and• To improve the image of the Indonesian tourism industry by ensuring satisfaction and security,
while also protecting and guaranteeing the interests of customers and other parties that are
involved within the Association, without sacrificing the needs of its members.
Lao People’s Democratic Republic. Out of 4.2 million travelers to the country in 2016, only 0.4
million or 9 per cent used the service of Lao travel agents, a big drop from 0.9 million or 19 percent in 2015. Most international travelers to the country make their own trip arrangements or use
different services, including online travel agencies, over local travel agents or tour operators. As of
2016, there were 381 local travel agents and 51 branches of foreign companies. They provided 12,960
job opportunities, including jobs indirectly supported by the industry.
According to the Lao Association of Travel Agents, in 2016 most travel agents experienced a dropin customer numbers. Lower use of local travel agent services is due to the fact that using a tour
operator is more expensive (up to 20 per cent) than travelling independently. The ASEAN Community
also poses challenges for Lao tour companies because tour operators in other countries can bring
their own customers and tour guides into the country. For instance, buses from neighbouring
countries bring tourists in. Changing business dynamics are slowing the growth of packaged travel.
Therefore, travel agents should look to another tour segment for possible growth.
Malaysia.18 The Malaysian travel industry includes companies involved in providing tourismrelated services such as ticket booking, transportation, accommodation and other services. Larger

16
17

18

Information based on annual tourism statistics report of the Ministry of Tourism of Cambodia 2016.
Summary information based on SPEEDA (online database) and the site of the Indonesian Ministry of Tourism(http://www.visitindonesia.co.in/index.php/en/about-indonesia) .
Analysis based on the site of the Malaysian Ministry of Tourism and Culture (http://www.motac.gov.my/en/) andSPEEDA (online database).

PA P E R 7 T R A D E I N TO U R I S M S E R V I C E S

11travel agencies combine multiple components of travel (e.g. airline tickets, hotel accommodation,transportation) from suppliers to create package tours or “series” that are sold to travelers. To
procure these individual components, agents make an upfront payment to suppliers. However,revenue from customers joining a tour is not received until much later. Therefore only large travel
agencies with sufficient resources can grow in this industry, especially those engaging in long-haul
tours, for which air ticket costs are higher.
Smaller agencies, which do not have the capacity to create their own packaged tours, sell theepre-arranged tour packages of larger companies for a commission. They also tend to focus on
smaller customized tours, where they do not have the burden of prepayment to suppliers. Sometravel agencies focus mainly on corporate clients, arranging business trips and company tours.
Several large multinationals have their own travel agency subsidiaries to arrange for their group’s
travel needs.
Travel agencies and tour operators in Malaysia require a business license from the Ministry of
Tourism and Culture to operate in the country. They receive a commission for selling airline tickets
or arranging accommodation for inbound and outbound travelers. Some travel agencies act as tour
operators as well, arranging tour packages in addition to making airline and hotel bookings.
Myanmar. In 2017, there were 2,551 tour companies licensed for domestic services in Myanmar(2,510 local companies, 40 joint ventures and 1 foreign company). In 2016, the Government started toallow tourism companies to apply for a license to conduct outbound operations, and 429 companies
now have permits to do so. Most of the companies expanding into the outbound market alreadyhave their inbound licenses and have a solid track record in tourism services. Very few start-up
companies go into outbound travel on an exclusive basis, as the market is too small. Under the new
regulations, local operators can partner with foreign companies.
Although local travel and tour companies have generally kept their domestic market shares, a risein online holiday bookings has changed the local business model, as foreigners often prefer to travel
individually and book their own holidays through the web rather than relying on local agents. Thesewebsites – usually foreign-owned – are undercutting local companies, as they are often able to offer
discounts below what local operators can offer.
Philippines.19 Travel agencies in the Philippines provide services for international as well as
domestic tourism. Some of their most common services include airline bookings, sightseeing
tours, accommodation reservations, car rentals and tour guides. In addition, these agencies assist
international tourists with bureaucratic activities such as passport renewal, documentation for visa
applications, travel insurance, exit permits, and foreign exchange and travelers’ checks. Althoughmost agencies primarily serve individuals and families, several work with corporate clients andthose in the MICE category.
The Government campaigns that promote tourism in the Philippines, supported by the Departmentof Tourism, have been crucial in attracting international visitors. Domestic tourism, in contrast, hasbeen spurred by the favorable economic conditions in the country. The growing spending power ofFilipinos has prompted them to embark on more domestic and international tours. In addition, theytend to use travel agencies when travelling in groups or when planning international trips, whichusually require a visa. This has been another demand driver for travel agencies that offer international
tourism services for foreign travelers in the country. In the future, the country’s continued economic
development – resulting in a growing middle- and upper-income populace – will support the tourism
sector. Travel agencies in the country are thus poised to grow.

19

Analysis based on “VisitMyPhilippines” (http://www.visitmyphilippines.com) and SPEEDA (online database).

12

P R O M O T I N G S E R V I C E S T R A D E I N A S E A N – M A R C H 2 018

Singapore.20 Operating a travel agency requires a license from the STB, which defines a travel agent
as one that is in the business of supplying travel out of, into or outside Singapore on any conveyance,transport or accommodation, as well as tour services and other similar activities prescribed by
the board. The National Association of Travel Agents Singapore (NATAS) represents a significant
portion of the licensed travel agents in the country. The association acts in the interest of its member
travel agents, especially when approaching government bodies or furthering industry development
efforts. Travel agents play a key role in promoting Singapore as an attractive destination for local andinternational visitors by developing tour products and packages, facilitating travel arrangements,and supporting the efforts of the STB to market Singapore.
The travel agent industry is highly varied, with a growing number of large and small agencies catering
to different interest groups. The number of new licensed travel agents in Singapore increased from
130 in 2009 to 163 in 2013 before declining to 145 in 2015.
Singapore is home to more than 1,000 licensed travel agents who offer unique travel experiences
for local visitors and foreign tourists. Industry leaders have been operating for more than a decadeand have diversified their businesses to keep up with the changing market structure. One of the vastchanges in the travel agency industry has been the extension of services through online platforms,
as consumers now primarily use the internet to gather travel information. This characteristic isdriven by the high rate of internet penetration in Singapore (82.2 per cent as of 2015), as well as theimmense popularity of “smart” devices and the social-media-savvy population. Many consumers
make travel decisions on the basis of information available on the internet, such as through agents’websites, apps or blogs. It is thus imperative for travel agencies to have an online presence, as thishelps disseminate information to prospective customers and also create a brand presence.
In August 2015, the STB and NATAS launched the Travel Agent Road Map. With a vision of enabling
travel agents to go beyond ticketing and order-taking to become designers of travel experiences,
the Road Map seeks to enhance the capability and sustainability of the travel agent industry. This isdone through three main focus areas – business transformation, technology and manpower – andsupported by tailored initiatives.
Thailand.21 The travel and tour guide business is a restricted activity under the Foreign Business Act.
Foreign workers wishing to get involved in the tourist business must incorporate a juristic person inorder to apply for the license. The country is well endowed with travel agencies (2,642 in 2013) andtour operators (2,964), generating altogether $24 billion in receipts ($7 billion for the former and $17
billion for the latter), according to the National Statistical Office.
The travel agency industry is dominated by local players who have been in the business for years andhave constantly altered and expanded operations to adapt to the changing market structure. Someof the basic services provided by travel agents include designing and managing tours for individuals,
couples and families, as well as groups: local sightseeing trips, flight and hotel bookings, and coachand private car transfers.
Following region-specific trends, Thai travel agents provide special services such as booking
cruises, organizing weddings of international clients, setting up and managing office trips, offering
support to medical tourists, and so on. Travel agencies function as facilitators for customers’ travel
requirements. They are associated with service providers, also known as suppliers, for bookings
related to hotels, sightseeing, transport, food, and the like. Travel agents work on commission,
charged to customers on the cost provided by the supplier.

20
21

Analysis based on the STB site (https://www.stb.gov.sg/) and SPEEDA (online database).
Analysis based on the MOTS site (http://www.mots.go.th/mots_en57/main.php?filename=index) and SPEEDA(online database).

PA P E R 7 T R A D E I N TO U R I S M S E R V I C E S

13To start a travel agency, an individual or company needs a license from the MOTS. It is mandatory
for travel agents to display their license number publicly, which helps earn customers’ trust. Similar
regulations apply for foreigners who wish to set up a travel and tour business in the country.
The long existence of a travel agency further boosts the trust factor for a potential customer; hence,customers prefer a retail travel agency over a new market entrant that offers only online travel
services. That said, retail travel agencies are extending their services on the internet in order tobenefit in terms of customer retention through both a retail and an online presence. Some of themedia extensively used by travel agencies include their own websites and social media tools. It is
important for travel agencies to ensure high visibility on social media platforms, as this would help
them attract new customers through reviews, posted for free, from satisfied customers.
Viet Nam.22 Travel agencies have been aided by the strong growth in the tourism industry in the
country. According to the ongoing revised Tourism Development Plan 2015–2030, the Government
aims to receive 17–18 million international tourists by 2020 and 28–30 million tourists by 2030,
with tourism’s contribution to GDP estimated to be 10 per cent and 12 per cent respectively. The
presence of internationally known tourist destinations such as Ha Noi, Da Nang, Ho Chi Minh City,Ha Long Bay, Sa Pa, Hue, Hoi An, Nha Trang, the Mekong Delta, Phu Quoc Island and others as wellas promotional activities by government agencies such as the Vietnam National Administration of
Tourism (VNAT) are likely also to boost the growth prospects of travel agencies in the country.
To start a tour operator and/or travel agency, a company needs a license from a designated tourism
authority. According to Viet Nam Tourism Law 2016, which took effect on 1 January 2017, a travel
agent that conducts domestic tourism business applies for the licence at a provincial tourism
authority whereas a travel agent that conducts international tourism business applies at the VNAT.
The travel industry is highly fragmented, with a large number of players. By the end of 2016, thenumber of international tour operators had reached 1,600. Of that, limited and joint stock operators
continued to account for the largest proportions, 67.6 per cent and 30.6 per cent respectively. The
number of state, joint-venture and private operators had seen a slight growth but maintained a small
share (less than 1 per cent). The travel and tour guide business is a restricted activity under Viet
Nam Tourism Law 2016. Foreign-owned enterprises wishing to get involved in the tourist businesshave to incorporate a juristic person in the form of a joint venture to apply for the license without
limitations on capital.
Industry players offer varieties of services including customized package tours. The boom in Viet
Nam’s tourism industry has been facilitated by the growth of several agencies that make extensive
travel arrangements by offering services such as airline booking, sightseeing tours, accommodation
reservations, car rentals and tour guides. These agencies sell packages to tourists and businesstravelers.
Under the country’s National Tourism Promotion Program over 2013–2020, the tourism industry is
to be promoted on the internet through social networking media and through campaigns delivered
through smartphones. Vietnamese tourism authorities and travel agencies are engaging in online
marketing to introduce and promote the nation’s major tourist attractions in a bid to increase thenumber of visitors and duration of visits and the consequent spending.

22

Information based on the VNAT site (http://www.vietnamtourism.gov.vn/english/) and SPEEDA (online database).

P R O M O T I N G S E R V I C E S T R A D E I N A S E A N – M A R C H 2 018

14

3. Tourist guide services
As the front line in tourism services, tourist guide services take on the important role of promoting
a positive image of tourism attractions through guides’ language skills and extensive knowledge ofcultural heritage, nature tourism, community-based tourism, religious sites, food tourism, and river
tourism. The European Committee for Standardization defines tourist guides as described in table
1; as it shows, tour managers and tour escorts are distinct from tourist guides.
In ASEAN, there are more than 125,000 licensed tourist guides (table 2). The Southeast Asia Tourist
Guides Association (SEATGA) is the largest ASEAN association of tourist guide companies andindividual licensed guides in ASEAN Member States. Mostly the tourist guide associations are under
the responsibility of the ministry of tourism or national tourism organizations, which manage thelicensing for guides.

Table 1. Job categories under tourist guide services
Job category

Definition

Tourist Guide

A person who guides visitors in the language of their choice and interprets the cultural andnatural heritage of an area; the person normally possesses an area-specific qualification,
usually issued and/or recognized by the appropriate authority.

Tour Manager

A person who manages an itinerary on behalf of the tour operator, ensuring the program iscarried out as described in the tour operator’s literature and sold to the traveler consumer,
and also gives practical local information.

Tour Escort

Representative of a tour operator providing basic assistance to travelers.

Source: European Committee for Standardization.
Note:	Tour managers may or may not be tourist guides as well. They are not trained or licensed to work in specific areas unlessthey have met the proper requirements or have the legal right, depending on the region.

Table 2. Number of licensed tourist guides in ASEAN, end 2016
Brunei Darussalam

48

Cambodia

4,923

Indonesia

13,650Lao People’s Democratic Republic

1,275

a

Malaysia

13,976

Myanmar6,949

Philippinesc

550

Singapore

2,500

Thailand

65,000bViet Nam

18,391

Total

127,262d

Source: SEATGA and various resources from ASEAN National Tourism Organizations, tourist guide associations and the Member
States.
aTotal number of tourist guides licensed by the Ministry of Tourism and Culture Malaysia, as of 2016 (source: Ministry of Tourism
and Culture, Malaysia).
bIncluding Regional Tourist Guide 2939.
c
Of the 550 licensed tour guides, only 255 are accredited by the Department of Tourism.
d7,801 domestic licensed tourist guides and 10,590 international ones.

PA P E R 7 T R A D E I N TO U R I S M S E R V I C E S

15When considering a strategy to promote trade in tourism services, it is necessary to recognize theissues that tourist guides face: e.g. irregular guides, language barriers, connectivity, customs issues,visa problems and preservation of heritages. Among the subcategories of tourism services, tourist
guide service is the least-liberalized area; they are not covered in the ASEAN Mutual Recognition
Arrangement on Tourism Professionals (MRA-TP). The Common ASEAN Tourism Curriculum andthe Regional Qualifications Framework and Skills Recognitions System consist of 52 qualifications,which include 242 competency units and 32 job titles across five levels and six work divisions. Yet
tourist guide services have high growth potential: inbound tourism catalyzed through foreign tourist
guide services can potentially create further demand as a multiplier effect, e.g. purchase of local
crafts and other merchandise is expected as a result of promotion through social networking.

III. ASCENDANCY OF TRADEIN TOURISM SERVICES
1. Competitiveness of ASEAN tourism
The Travel and Tourism Competitiveness Index developed by the World Economic Forum23 showsthat there is a divergence across the ASEAN Member States in terms of scores and ranks: Singapore
ranks 13th in the world, whereas Cambodia ranks 101st (table 3). It is therefore imperative for each of
the ASEAN Member States to focus on upgrading the sub-components of the index values.
Scores on the index give an indication of the number of tourists attracted to a country. Table 4 shows
tourist arrivals in ASEAN by country (2011–2015). With the economic growth of ASEAN at large, thenumber of tourist arrivals has been on a steadily increasing trend. The share of intra-ASEAN tourist
arrivals is rather stable at 45 per cent of all arrivals. The balanced growth of the number of tourists
from ASEAN Member States and from other countries suggests that the region continues to be
attractive for all. This is also a good sign from the economic viewpoint, since tourism services need
to be open to extra-ASEAN tourists in order to sustain growth.
Personal holiday dominates the main purposes of travel in ASEAN, with the average expenditure
per day at about $100 (with some cross-country variations). The main mode of transport for visitors
is air; for land-connected countries (Cambodia) and sea-connected countries (Indonesia), landtransport and sea transport respectively are also much used. Each of the ASEAN Member Statesshould fine-tune its policy focus on the basis of these and other cross-country observations.

23

The Index scores the following four major components and their several sub-components:(1) an enabling environment (with the following five sub-components: business environment, safety and security,
health and hygiene, human resources and labour market, and information and communication technology
readiness);(2) travel and tourism policy and enabling conditions (with the following four sub-components: prioritization of
travel and tourism, international openness, price competitiveness and environmental sustainability);(3) infrastructure (with the following three sub-components: air transport infrastructure, ground and port
infrastructure, and tourist service infrastructure); and(4) natural and cultural resources (with the following two sub-components: natural resources and cultural
resources and business travel).

P R O M O T I N G S E R V I C E S T R A D E I N A S E A N – M A R C H 2 018

16

Table 3. World Economic Forum’s Travel & Tourism Competitiveness Index
Score on Enabling
Environment (rank)

Country

Score on Travel& Tourism
CompetitivenessIndex (rank)

Business
Environment

Safety andSecurity

Health andHygieneHuman
Resourcesand Labor
MarketICT ReadinessPrioritizationof Travel &Tourism

ASEAN Member States
Brunei
Darussalam

..

..

..

..

..

..

..

Cambodia

3.3 (101)

3.7 (125)

5.5 (88)

4.0 (109)

4.1 (110)

3.6 (101)

5.1 (29)

Indonesia

4.2 (42)4.5 (60)

5.1 (91)

4.3 (108)

4.6 (64)

3.8 (91)

5.6 (12)

Lao People’s
Democratic
Republic

3.4 (94)

4.7 (47)

5.4 (66)

4.3 (106)

4.6 (65)

3.1 (115)

4.7 (54)

Malaysia

4.5 (26)

5.4 (17)5.8 (41)

5.2 (77)

5.2 (22)5.2 (39)

4.7 (55)

Myanmar

..

..

..

..

..

..

..

Philippines

3.6 (79)

4.3 (82)

3.6 (126)

4.8 (92)

4.8 (50)

4.0 (86)

4.8 (53)

Singapore

4.9 (13)6.1 (2)

6.5 (6)

5.5 (62)

5.6 (5)6.1 (14)

6.0 (2)Thailand4.4 (34)

4.7 (45)

4.0 (118)

4.9 (90)

4.9 (40)

4.8 (58)

5.0 (34)

Viet Nam

3.8 (67)

4.5 (68)

5.6 (57)

5.0 (82)

4.9 (37)

4.2 (80)

4.0 (101)

Spain

5.43 (1)4.39 (75)

6.2 (18)

6.3 (24)

4.9 (34)

5.5 (29)

5.9 (5)Japan

5.26 (4)5.31 (20)

6.1 (26)

6.4 (17)5.2 (20)

6.1 (10)5.4 (18)

United States

5.20 (5)5.44 (16)

5.2 (84)

5.7 (56)

5.5 (13)

6.0 (19)

5.3 (20)

Republic of
Korea

4.6 (19)

4.7 (44)

5.8 (37)

6.4 (20)

4.9 (43)

6.2 (8)4.6 (63)China

4.7 (15)

4.2 (92)

5.0 (95)

5.4 (67)

5.2 (25)

4.6 (64)

4.8 (50)

Memorandum

Source: World Economic Forum (2017), Travel & Tourism Competitiveness Report 2017.
Note:	ICT = information and communication technology. The index ranges from 1 (lowest) to 7 (highest).
Due to rounding, ranks with the same score may not match.

PA P E R 7 T R A D E I N TO U R I S M S E R V I C E S

Score on Travel & Tourism
Policy and Enabling
Conditions (rank)

17

Score on Nature
and Cultural
Resources (rank)

Score onInfrastructure (rank)

International
Openness

Price
Competitiveness

Environmenal
Sustainability

Air Transport
Infrastructure

Groundand Port
Infrastructure

TouristService
Infrastructure

NaturalResources

CulturalResourcesandBusiness
Travel

..

..

..

..

..

..

..

..

3.5 (58)

5.1 (51)

3.3 (130)

2.1 (96)

2.4 (108)

2.9 (102)

3.2 (62)

1.6 (76)

4.3 (17)

6.0 (5)3.2 (131)

3.8 (36)

3.2 (69)

3.1 (96)

4.7 (14)

3.3 (23)

3.0 (71)

5.7 (14)

3.8 (98)

2.1 (97)

2.4 (111)

3.5 (86)

3.0 (71)

1.3 (107)

4.1 (35)

6.1 (3)3.5 (123)

4.5 (21)

4.4 (34)

4.7 (46)

4.1 (28)

2.9 (34)

..

..

..

..

..

..

..

..

3.4 (60)

5.5 (22)

3.6 (118)

2.7 (65)

2.5 (107)

3.4 (87)

4.0 (37)

1.9 (60)

5.2 (1)4.7 (91)

4.3 (51)

5.3 (6)6.3 (2)5.4 (24)

2.4 (103)

3.1 (28)

3.8 (52)

5.6 (18)

3.6 (122)

4.6 (20)

3.1 (72)

5.8 (16)4.9 (7)2.8 (37)

3.0 (73)

5.3 (35)

3.4 (129)

2.8 (61)

3.1 (71)

2.6 (113)

4.0 (34)

3.0 (30)

4.0 (43)

4.5 (98)

4.6 (31)5.0 (9)5.2 (15)

6.7 (2)4.9 (9)6.8 (2)4.4 (10)

4.6 (94)

4.4 (45)

4.6 (18)

5.4 (10)5.3 (29)

4.3 (26)

6.5 (4)4.0 (38)

4.4 (106)

3.6 (115)

6.0 (2)4.6 (26)

6.6 (3)4.9 (10)4.8 (13)

4.3 (14)4.7 (88)

4.2 (63)

4.3 (27)

5.0 (17)4.6 (50)

2.3 (114)

4.9 (12)3.0 (72)

5.3 (38)

3.2 (132)

4.3 (24)

4.0 (44)

3.2 (92)

5.3 (5)6.9 (1)

2 19118 885

100

332

5 372

5 530

838

Lao People's
Democratic
Republic

Malaysia

MyanmarPhilippines

Singapore

Thailand

Viet Nam

2 724

7 650

2 882

242

3 917

816

6 014

43 496 81 229

5 176

13 568 19 098

7 799 13 171

3 586

716

5 829 24 714

532

4 391

1 781

118

ExtraTotal
ASEAN

39 845

1 364

6 463

5 733

375

151

18 810

2 712

2 608

1 514

116

IntraASEAN

3 330

8 044

3 584

209

4 273

1 059

6 848

49 380 89 225

5 484

15 891 22 354

8 758 14 491

3 898

908

6 223 25 033

618

5 437

2 070

93

ExtraTotal
ASEAN

2012

46 154

1 440

7 410

6 115

422

219

19 106

3 041

3 516

1 832

3 054

IntraASEAN

56 0456 132

19 136

9 453

4 259

1 826

6 610

738

5 286

2 379

226

ExtraASEAN

Source: ASEAN Secretariat.
Note: Details may not sum to totals due to rounding errors.
aExcept in 2013 and 2014, data for Brunei Darussalam cover only visitor arrivals by air transport.

37 733

3 258

Indonesia

ASEAN total

1 101

124

IntraASEAN

Cambodia

Brunei
DarussalamaCountry

2011

Table 4. Tourist arrivals in ASEAN (2011–2016)

102 199

7 572

26 54715 568

4 681

2 044

25 716

3 779

8 802

4 210

3 279

Total

2013

49 223

1 495

6 620

6 113

461

1 598

20 373

3 224

3 684

1 992

3 662

IntraASEAN

7 874

24 780

15 095

4 833

3 081

27 437

4 159

9 435

4 503

3 886

Total

55 861 105 084

6 379

18 160

8 982

4 372

1 483

7 064

935

5 752

2 511

223

ExtraASEAN

2014

45 992

1 301

7 886

5 748

482

1 763

19 147

3 589

3 861

2 098

119

IntraASEAN

7 944

29 88115 231

5 361

4 681

25 721

4 684

10 407

4 775

218

Total

1 461

8 897

5 936

462

403

20 271

3 083

3 818

2 121

118

8 552

23 63210 467

5 505

2 504

6 486

1 156

7 702

2 890

101

Intra- ExtraASEAN ASEAN

2016

62 912 108 904 46 570 68 996

6 643

21 995

9 483

4 879

2 918

6 575

1 096

6 546

2 677

99

ExtraASEAN

2015

115 566

10 01332 53016 404

5 967

2 907

26 7574 239

11 519

5 012

219

Total

18

P R O M O T I N G S E R V I C E S T R A D E I N A S E A N – M A R C H 2 018

PA P E R 7 T R A D E I N TO U R I S M S E R V I C E S

19

2. Tourism by mode of supply
Tourism services are essentially provided through Mode 2 (consumption abroad), as the service is
supplied in one country to serve consumers from other countries. Tourism services suppliers may
not be aware of their supply mode and in fact hardly recognize it as an international one. However,this mode of services supply affects the country’s BOP through earning foreign exchange and is defacto equivalent to trade businesses.
The other relevant mode for tourism services is Mode 4 (movement of natural persons), in thesense that tourism professionals such as hoteliers move to provide services directly to consumers(travelers). Although the movement of this particular professional group and seven others isguaranteed under ASEAN’s MRA, the movement of guides is still considerably restricted (section IV).
Goods and services consumed by foreign travelers are offered by both domestic and foreign entities
in a country. When foreign companies provide goods and services for travelers, both resident andnon-resident, that is considered supply of services through commercial presence (Mode 3). Thus,
only part of Mode 3 supply (i.e. provision of goods and services for foreign travelers by foreigncompanies in the reporting economy) appears in tourism statistics.
This section examines travel expenditures. Although expenditures through different modes, inparticular Mode 2 and Mode 3, are conceptually distinguishable, in reality, available statistics do notallow a clear-cut distinction. These statistics are partly derived from the BOP.
Travel expenditures that are captured in the BOP statistics (called “travel” in the services
components) can be further broken down in accordance with the Extended Balance of Payments
Services Classification as follows: goods, local transport services, accommodation services, foodserving services and other services (including health services and education services). These BOPbased travel statistics are somewhat different from travel expenditures, as recommended in theInternational Recommendations for Tourism Statistics 2008, developed by the WTO and the United
Nations. For example, expenditures for international transport services are not included in travel inthe BOP (instead being included under transport services), but are included in tourism statistics.24
By definition, travel in the BOP includes also goods and services provided by foreign companies, aslong as they are targeted at non-resident travelers.
In 2016, travelers from outside ASEAN spent $117 billion in the region (table 5), while ASEAN travelers
spent at least $66 billion (table 6). On the export side, Thailand accounted for two-fifths of the ASEAN
market, at $50 billion, followed by Malaysia and Singapore with $18 billion each. Generally speaking,the rise in travel expenditures in ASEAN has been gradual, reflecting a moderate rise in thenumber of tourist arrivals (table 4). In certain countries, however, particularly the CLMV countries,25
expenditures have risen faster, as has the number of foreign tourists. In Myanmar, tourism is growing
dynamically. These BOP-based data are considered as indicators of supply through Mode 2.

24

25

For a detailed discussion on travel or tourism expenditures as used in the BOP statistics and tourism statistics
in International Recommendations for Tourism Statistics 2008 and Tourism Satellite Account: Recommended
Methodological Framework 2008, see UN, Eurostat, IMF, OECD, UNCTAD, UNWTO and WTO, Manual on Statistics
of International Trade in Services 2010.
Cambodia, the Lao People’s Democratic Republic, Myanmar and Viet Nam.

P R O M O T I N G S E R V I C E S T R A D E I N A S E A N – M A R C H 2 018

20

Table 5. E xports of tourism services and its share in total exports of services
and goods and services, 2005−2016 (Millions of dollars and per cent)Country

Annual average
2005−2010

2011

2012

2013

2014

2015

2016

Tourism services export
Brunei Darussalam

270

80

92

96

79

140

144

Cambodia

1 134

2 084

2 463

2 660

2 953

3 131

3 212

Indonesia

5 708

7 997

8 324

9 119

10 261

10 654

11 349Lao People's
Democratic Republic

235

406

451

596

642

679

712

Malaysia

13 761

19 64920 25121 50022 60017 68018 084Myanmar

66

325

539

959

1 612

2 101

2 177

Philippines

3 026

3 190

4 014

4 690

5 030

5 276

5 139

Singapore

9 471

17 93018 79619 20919 13416 74318 386

Thailand15 66327 18433 85541 78038 42344 55349 871

Viet Nam

3 388

5 710

6 850

7 250

7 330

7 350

8 250

ASEAN total

52 72384 55695 634107 858

108 063

108 309

117 325

Share in total exports of services
Brunei Darussalam

36.6

16.0

19.0

19.4

14.2

21.9

29.9

Cambodia

73.6

76.3

77.2

76.3

77.5

79.4

79.6

Indonesia

41.4

36.5

35.2

39.7

43.6

47.9

47.0

Lao People's
Democratic Republic

70.0

73.9

78.1

76.3

83.9

85.0

85.7

Malaysia

50.5

50.6

49.9

51.1

53.7

51.0

53.3

Myanmar

19.6

42.9

43.8

34.9

51.4

54.5

57.6

Philippines

23.3

16.9

19.6

20.1

19.7

18.2

16.4

Singapore

12.6

15.0

14.8

13.8

12.5

11.3

12.3

Thailand

54.5

65.4

68.1

71.1

69.2

72.1

75.1

Viet Nam

57.1

65.7

71.2

67.7

66.3

65.3

66.6

ASEAN total

43.9

45.9

47.7

47.0

49.2

50.7

52.3

Share in total exports of goods and services
Brunei Darussalam

2.8

0.6

0.7

0.8

0.7

2.1

2.6

Cambodia

14.6

26.8

27.9

26.5

26.3

25.2

24.2

Indonesia

3.6

3.8

3.9

4.4

5.2

6.2

6.8

Lao People's
Democratic Republic

10.2

16.9

15.8

19.6

18.7

18.8

17.0

Malaysia

6.4

7.7

8.1

8.8

9.1

8.4

9.0

Myanmar

0.8

3.8

5.7

7.9

12.3

15.2

16.9

Philippines

5.1

5.6

6.0

6.9

6.7

7.3

6.9

Singapore

2.0

3.2

3.3

3.3

3.2

3.2

3.6

Thailand

6.6

10.3

12.2

14.6

13.6

16.2

17.8

Viet Nam

3.3

5.4

5.5

5.1

4.5

4.2

4.4

ASEAN total

5.5

8.4

8.9

9.8

10.0

10.7

10.9

Source: AJC, based on data from ITC, UNCTAD, WTO and ASEAN Stats.

PA P E R 7 T R A D E I N TO U R I S M S E R V I C E S

21Table 6. I mports of tourism services and its share in total exports of services and goods
and services, 2005−2016 (Millions of dollars and per cent)Country

Annual average
2005−2010

2011

2012

2013

2014

2015

2016

Tourism services import
Brunei Darussalam

503

605

571

530

583

459

500

Cambodia

124

264

314

355

401

491

497

Indonesia

4 964

6 255

6 771

7 675

7 682

7 299

7 739

58

237

232

398

414

524

540

Malaysia

5 852

10 18012 217

12 236

12 36910 507

10 468Myanmar

43

123

257

115

121

25

37

Philippines

2 058

5 368

6 247

7 833

10 598

11 660

11 274Singapore

14 26421 50523 14724 50624 36022 05622 102Thailand

4 769

5 717

6 248

6 481

7 072

7 592

8 336

Lao People's
Democratic Republic

Viet Nam

1 173

1 710

1 856

2 050

2 150

3 500

4 560

ASEAN total

33 80751 96557 86062 17865 74964 11366 053

Share in total imports of services
Brunei Darussalam

38.9

33.3

21.6

18.5

26.7

27.8

22.9

Cambodia

14.9

20.1

20.5

20.2

21.3

25.7

25.2

Indonesia

20.3

19.7

19.8

21.9

22.9

23.6

25.3

Lao People's
Democratic Republic

55.6

71.7

68.4

74.6

83.2

89.5

87.1

Malaysia

21.3

26.5

28.2

27.1

27.3

26.3

26.6

Myanmar

6.9

11.3

17.6

5.2

5.3

1.0

1.3

Philippines

23.3

43.6

43.8

48.0

50.7

49.4

46.5

Singapore

18.0

18.2

17.7

16.7

15.3

14.3

14.2

Thailand

13.1

12.4

13.7

13.7

15.6

17.9

19.8

Viet Nam

16.4

14.4

16.8

14.8

14.3

21.2

24.6

ASEAN total

22.9

27.1

26.8

26.1

28.3

29.7

29.4

Share in total imports of goods and services
Brunei Darussalam

10.9

10.9

8.5

6.8

10.0

9.4

11.6

Cambodia

10.9

3.1

3.2

3.1

3.2

3.5

3.4

Indonesia

3.3

3.3

3.2

3.6

3.8

4.4

4.9

Lao People's
Democratic Republic

2.0

8.6

6.8

11.0

8.7

8.9

10.1

Malaysia

3.2

4.9

5.7

5.6

5.7

5.6

5.8

Myanmar

0.5

1.4

2.8

1.0

0.9

0.2

0.2

Philippines

2.8

7.6

7.9

10.0

12.0

12.9

11.0

Singapore

3.5

4.4

4.6

4.7

4.7

4.9

5.1

Thailand

2.2

2.2

2.3

2.4

2.8

3.3

3.8

Viet Nam

1.1

1.6

1.6

1.5

1.4

2.1

2.5

ASEAN total

3.1

5

4.7

5.0

5.3

5.5

5.8

Source: AJC, based on data from ITC, UNCTAD, WTO and ASEAN Stats.

P R O M O T I N G S E R V I C E S T R A D E I N A S E A N – M A R C H 2 018

22

ASEAN expenditures abroad on tourism (that is, imports), which amount to half of foreign
expenditures on tourism in ASEAN, are led by Singapore, followed by Malaysia and the Philippines.
Unlike in exports, Thailand does not figure strongly. The outward orientation of tourism reflects thedevelopment stage of each country, but country characteristics may also play a role. For example,
Filipinos’ outgoing nature, as seen in overseas workers, seems to work also in tourism, in which thecountry is ranked second in ASEAN.
Foreign companies provide goods and services used for tourism through Mode 3. In 2015, thisamount ($12 billion) was larger than that provided by ASEAN firms abroad ($8 billion) (table 7). The
majority of expenditures for goods and services provided by foreign tourism services companies are
in Singapore, which accounts for four-fifths of total expenditures, followed by Thailand, another big
tourist destination. These two countries host almost all tourism activities by foreign companies in
ASEAN. In contrast, in the supply of tourism services to the world by ASEAN firms (that is, exports),
Malaysian companies sell the majority of such services, followed by Singapore. The presence of
foreign firms is related to the existence of FDI.

Table 7. E stimated sales of tourism services through foreign presence, 2015
(Number and millions of dollars)

Receipts from abroad
Country
Brunei Darussalam
Cambodia
Indonesia
Lao People’s
Democratic epublic
Malaysia
MyanmarPhilippines
Singapore
Thailand
Viet Nam
ASEAN total

Supply to the world

Number of
foreign entities

Estimated
sales

Number of ASEAN
entities abroad

Estimated
sales

0
11
36

..
0
460

0
0
4

..
..
56

0

..

0

..

45
4
25
83
82
29
315

421
1
606
8 368
1 890
133
11 879

48
0
3
151
14
1
221

7 275
..
10
749
208
0
8 298

Source: AJC, based on data from Toyo Keizai Shimposha, UNCTAD, Thomson Reuters and Orbis.
Note:	For estimated sales, see the estimation procedure in the main text.
Includes affiliates whose sales cannot be estimated (two for the Philippines, for supply to the world).

By source country, ASEAN is the largest home region for established tourism services companies
in ASEAN, accounting for one-third of identified foreign affiliates in tourism in ASEAN (table 8, left
column: 113 of 315). In terms of sales, however, United States affiliates sell the largest amount of
tourism services – that is, about 40 per cent of total sales by tourism foreign affiliates in ASEAN –followed by Malaysian, European and Japanese firms. Foreign tourism firms operating in ASEAN
include H.I.S. (Japan), JTB (Japan), Standard Chartered Plc (United Kingdom), Carlson Holdings Inc.
(United States), American Express (United States) and Marriott International Inc. (United States).
From ASEAN, large companies include Genting Berhad (Malaysia), TA Enterprise (Malaysia),
Reliance Pacific Berhad (Malaysia), Berjaya Corporation Berhad (Malaysia), CDL Hospitality Real
Estate Investment Trust (Singapore), Banyan Tree Holdings Limited (Singapore) and Hotel Grand
Central Limited (Singapore). They also operate within ASEAN. In fact, one-third of tourism affiliates

PA P E R 7 T R A D E I N TO U R I S M S E R V I C E S

23established by ASEAN tourism firms are located in ASEAN (table 8, right column). The second largest
host region for ASEAN tourism firms is Australia.
Malaysia is particularly outstanding as both a host country invested in by foreign tourism services
companies and a home country investing abroad in tourism. Because of the country’s early opening
to FDI; its business environment, which is conducive to tourism operations; and government
assistance, including in license issuance and renewal, competition works well to bring favorable
impacts and strengthens both foreign and domestic tourism firms.

Table 8. F oreign affiliates in ASEAN and ASEAN affiliates abroad in tourism services, by
source and destination economy (Number and millions of dollars)
Foreign affiliates in ASEAN
Number ofaffiliates

Estimated
sales

Number ofaffiliates

Estimatedsales

United States

19

4 657

15

6 825

Europe

45

1 782

14

147

Australia

8

98

47

363

Japan

65

1 280

14

56

Othersb

0

0

3

1

Subtotal

137

7 817

93

7 391

ASEAN

CountryaDeveloped
countries

Developing
countries

ASEAN affiliates abroad

113

3 173

78

853

Malaysia

26

2 064

23

291

Singapore

62

849

13

377

Thailand

12

260

22

181

Other ASEANc

13

0

20

4

China

0

0

17

41

Othersd

48

888

33

14

Subtotal

161

4 061

128

908

Unspecified / Supernational

17

0

0

0

World

315

11 878221

8 299

Source: AJC, based on data from Toyo Keizai Shimposha, UNCTAD, Thomson Reuters and Orbis.
aG ermany, Italy, France, United Kingdom, the Netherlands, Switzerland, Spain, Denmark and Luxembourg.		
bCanada and New Zealand							cCambodia, Indonesia, the Philippines and Viet Nam.							dC yprus, Bhutan, Brazil, the Republic of Korea, Hong Kong (China), Cayman Islands, India, Sri Lanka, Morocco, Mauritius,
Maldives, Russian Federation, Turkey, and South Africa.

Sales of tourism services through foreign companies is Mode 3 supply.26 Supplies through Mode
2 and Mode 3 are not necessarily exclusive mutually. As noted, Mode 2 sales as reported in the
BOP statistics includes services provided by foreign firms for non-residents. This portion of tourism
sales is also included in Mode 3, or supply through commercial presence. Knowing that the double
counting exists between Mode 2 and Mode 3 and assuming that there is very little for Mode 4 (due26

See annex B for a list of large foreign affiliates engaged in tourism services in ASEAN, and annex C for a list oflarge ASEAN affiliates engaged in tourism services abroad. Note that sales figures are subject to overstatement or
understatement, owing to the difficulty of standardizing data collection.

P R O M O T I N G S E R V I C E S T R A D E I N A S E A N – M A R C H 2 018

24

to, e.g. current prohibition of cross-border movement of tour guides), the total supply of tourism
services by foreign firms in ASEAN and by ASEAN firms abroad is estimated as the sum of Mode 2
and Mode 3 (table 9). In 2015, the former reached $76 billion and the latter $117 billion.

Table 9. S upply of tourism services through Mode 2 and Mode 3, 2015
(Millions of dollars)

Receipts of ASEAN from abroad

Country

Mode 2(consumptionof foreign
tourists in
ASEAN)

Mode 3(sales offoreigncompanies in
ASEAN)

Supply from ASEAN to the world

Mode 2+Mode 3Mode 2(consumptionof ASEAN
tourists
abroad)Mode 3(sales of
ASEAN
companies
abroad)Mode 2+Mode 3

Brunei
Darussalam

459

..

459

140

..

140

Cambodia

491

..

491

3 131

..

3 131

Indonesia

7299

460

7 759

10 65456

10 710Lao People's
Democratic
Republic

524

..

524

679

..

679

10507

421

10 927

17 680

7 278

24 958

Malaysia
Myanmar

25

1

27

2 101

..

2 101

Philippines

11660

606

12 266

5 276

10

5 286

Singapore

22056

8 368

30 42416 743

1 041

17 784Thailand

7592

1 890

9 482

44 553208

44 761

Viet Nam

3 500

133

3 633

7 350

..

7 350

ASEAN total

64 113

11 87975 992

108 3098 592

116 901

Source: Table 7 and table 8 of this paper.

Because of the sector’s significant potential for income generation, all ASEAN Member States
promote tourism, both collectively at the ASEAN level and individually at the country level. These
efforts are partly reflected in a projection of the growth in travel and tourism investment (figure 3).
According to the World Travel and Tourism Council (WTTC), ASEAN is the region projected to record
the fastest expansion (6.3 per cent per year on average) of travel and tourism investment over theperiod 2016–2026 (figure 3). This expansion would be strengthened by institutional policy supports,
including service trade liberalization (discussed in section III).
Tourism requires not only culture and sites to see and visit but also infrastructure for travelling. The
World Economic Forum’s Travel & Transport infrastructure scores and ranks provide a quick review
of how the quality of such infrastructure in ASEAN Member States compares with that of othercountries (table 10). Government policies should be made with consideration of how the various
sub-components rank within the country.
Cambodia: Mobile phone penetration ranks high; the ranks for air transport infrastructure, groundtransport infrastructure and health and hygiene could be improved.
Indonesia: Mobile phone penetration ranks highest; health and hygiene needs improvement.
Lao People’s Democratic Republic: Safety and security ranks highest; mobile phone penetrationneeds improvement.

PA P E R 7 T R A D E I N TO U R I S M S E R V I C E S

25Figure 3. Annual average growth rates in travel and tourism investment, 2016−2026(Per cent)
7
6
5
4
3
2
1
0
ASEAN-10

Asia

MiddleEast

World(average)

AfricaAmericas Europe

Source: World Travel & Tourism Council (2016).

Malaysia: Mobile phone penetration ranks highest; health and hygiene needs improvement, as in
the case of Indonesia. This may reflect the geographical proximity of the two countries.
Myanmar: Health and hygiene ranks the highest; the ranks of tourism infrastructure, air transport
infrastructure, ground transport infrastructure and mobile phone penetration need improvement.
Philippines: Tourism infrastructure ranks the highest; the ranks of ground transport infrastructureand safety and security need improvement.
Singapore: Ground transport infrastructure and safety and security rank the highest; tourism
infrastructure needs improvement.
Thailand: Tourism infrastructure ranks the highest; safety and security needs improvement.
Viet Nam: Mobile phone penetration ranks the highest; tourism infrastructure needs improvement.

..

15

11

16

7

18

13

3

9

12

10

1

6

4

14

Brunei Darussalam

Cambodia

Indonesia

Lao People's
Democratic Republic

Malaysia

MyanmarPhilippines

Singapore

Thailand

Viet Nam

China

Hong Kong, China

Japan

Australia

India

3,5

5,1

5

5,9

4,1

3,8

4,4

5,6

3,5

2,5

4,8

3,4

3,9

3,4

..

Composite
Score (0-7)

Source: World Travel & Tourism Council (2016), Table 2-2.

Composite

Country

17

5

8

9

14

15

2

6

10

18

7

12

13

16

..

Tourism
Infrastructure

10

2

6

3

9

14

5

4

13

18

7

16

11

17

..

Air Transport
Infrastructure

8

10

3

1

9

14

11

2

15

18

7

16

13

17

..

Ground Transport
Infrastructure

Rank

Table 10. W
 orld Economic Forum’s Travel & Transport Infrastructure scores and ranks, 2015

14

3

1

2

7

10

11

5

12

13

9

15

16

17

..

Health andHygiene

16

4

5

3

9

10

18

2

15

14

7

8

11

13

..

Safety andSecurity

16

12

11

1

14

8

6

3

13

18

5

17

9

7

..

Mobile Phone
Penetration

26

P R O M O T I N G S E R V I C E S T R A D E I N A S E A N – M A R C H 2 018

PA P E R 7 T R A D E I N TO U R I S M S E R V I C E S

27IV. TRADE AGREEMENTS AND REGULATIONSAMONG AND IN THE ASEAN MEMBER STATESTourism is one of ASEAN’s priority sectors for integration, in the context of liberalizing trade inservices.27 The tourism industry is likely to continue to be one of the leading sectors in ASEAN owing
to continuing significant improvements in the quality of infrastructure and hotels, and the growing
tourism industry. However, the industry faces significant risks with regard to aligning demand andsupply, and is highly dependent on the high influx of tourists from countries such as China.
Table 11 shows the Hoekman Index28 for the degree of liberalization of tourism services in each of
the ASEAN Member States by mode.29 As shown, there is a diversity in terms of commitments. As
liberalization as a single market is desirable for the overall promotion of the tourism industry in
ASEAN, harmonization efforts are needed through further commitments in countries where theindex values are zero or small.
As mentioned in the previous section, Mode 4 (supply of services through the movement of natural
persons) is administered separately under the MRA; however, the actual movement of professionals
in tourism remains restricted because of the lack of coordination among domestic agencies. Under
the MRA on Tourism Professionals (MRA-TP), ASEAN Common Competency Standards for Tourism
Professionals are organized as follows: hotel services: front office, housekeeping, food production;
food and beverage services; travel services; travel agencies; and tour operation.
As noted, tour guide services are excluded. However, through a regional agreement, ASEAN Member
States have each sent a list of professionals to be registered at the ASEAN headquarters to be able
to work in the ASEAN region. Cambodia,30 for example, has registered 500 tourism professionals.

27

28

29

30

The Coordinating Committee on Services (CCS), established in January 1996 subsequent to the signing of theASEAN Framework Agreement on Services (AFAS), was tasked to undertake services integration initiatives underthe AFAS with emphasis on seven priority sectors: air transport, business services, construction, financial services,maritime transport, telecommunication, and tourism (Bangkok Declaration, 1995). The CCS comprises officials
responsible for coordinating the liberalization of trade in services and are typically represented by officials from theministry of trade or commerce or from an economic planning agency.
Hoekman (1995) proposes an indexation method for measuring the GATS-style degree of commitment in theservices sector. This method assigns values to each of 8 cells (4 modes and 2 aspects – market access (MA) or
national treatment (NT)), as follows: first assign the value 1 when the sector at issue is “fully liberalized”; 0.5 when“limited (but bound)”; 0 when unbound” (where a government has not committed to liberalize) by subsector, bymode and by aspect (MA or NT), and take the simple average for aggregation; then calculate the average value byservices sector and by country. The higher the figure, the more liberal the country’s service trade commitments
are to the FTA members. Using the database we constructed, we derived the “Hoekman Index” for each of the 155
subsectors. Then, the simple average at the level of the 11 sectors is calculated. The Hoekman Index takes a value
between 0 and 1, with 0 referring to the most restricted and 1 being the most open.
Mode 4 is not committed under the AFAS 9th package; however, policy options for promoting trade in tourism
services in Mode 4 exist.
http://www.akp.gov.kh/?p=105965.

P R O M O T I N G S E R V I C E S T R A D E I N A S E A N – M A R C H 2 018

28

Table 11. T able 11. Hoekman Index for tourism services (average by mode)
under AFAS 9th package
ASEAN
MemberState

Brunei
Darussalam

Cambodia

Indonesia

Lao PDR

Malaysia

MyanmarPhilippines

Singapore

Thailand

Viet Nam

Mode

09A
Hotels andrestaurants(incuding catering)

09B
Travel agencies
and tour operators
services

09C
Touristguide
services

09D
Other

Mode 1

1

1

0

0.5

Mode 2

1

1

0

0.5

Mode 3

0.75

0.75

0

0

Mode 11110Mode 21110Mode 3

0.5

0.75

1

0

Mode 1

1

1

0

0.5

Mode 2

1

1

0

0.5

Mode 3

0.5

0.5

0

0.5

Mode 1

1

0.5

0

0.5

Mode 2

1

0.5

0

0.5

Mode 3

1

0.5

0

0.5

Mode 11110Mode 21110Mode 3

0.75

0.75

0

0

Mode 11100Mode 21100Mode 3

0.75

1

0

0

Mode 1

1

1

0

0.5

Mode 2

1

1

0

0.5

Mode 3

1

0.75

0

0.5

Mode 1

1

1

1

0.5

Mode 2

1

1

1

0.5

Mode 3

1

1

1

0.5

Mode 1

1

0

0

0.5

Mode 2

1

1

0

0.5

Mode 3

0.75

0.75

0

0.5

Mode 1

1

1

0

0.5

Mode 2

1

1

0

0.5

Mode 3

1

0.5

0

0.5

Source: Calculated from the specific commitment tables of the AFAS (9th package).
Notes:	Compared with other services industries, the tourism sector is liberalized to a large extent for Modes 1–3 (see table 11 inthis paper). However, because of the industry’s characteristics and broad relationships with other industries, a number ofhindrances can be identified in ASEAN.
	Where sector headings differ from but are somewhat similar to the standard commitment table (as a template), the sector
at issue is counted as committed; hence the index values are subject to interpretation. As for “09D. Others”, committed
subsectors differ across Member States. In this case, the index values assigned are 0.5 for all the (partial) commitments.
For “09C. Tourist guides services”, only the commitments in “Tourist Guide Services” (CPC 7472) are considered.

PA P E R 7 T R A D E I N TO U R I S M S E R V I C E S

29• As part of the Trans-Pacific Partnership negotiations, Brunei Darussalam will have to undertake
specific labour reforms such as the creation of a worker’s union and procedures for collective
bargaining, prohibition of discrimination, enactment of minimum wage laws and creation of amechanism for anonymous reporting of labour violations. Because of the labour intensity of the
tourism sector, these reforms should be made a priority. In addition, the country lags severely interms of its competition policy.
• Foreign equity participation for hotels and travel agencies in Cambodia is limited to 51 per cent.
• In Indonesia, the current regulatory concern is the difficult labour market. Because tourism
businesses are people-oriented, the requirement that foreign employees pass an Indonesianlanguage test before they can work in the country constitutes a problem in the tourism sector.
Foreign equity participation was raised in 2016 (for travel agencies from 49 per cent to 67 per cent;for hotels of up to two stars from 51 per cent to 67 per cent; and for restaurants from 51 per centto 100 per cent).
• In the Lao People’s Democratic Republic, there is some restriction on the provision of services
by travel agents through Mode 3, commercial presence. Many foreign business owners, including
branches of foreign tour companies in the country, claim that the process is overly complex andthe regulations are applied unpredictably. Foreign companies also describe confusion of roles
between the ministries, with multiple ministries unexpectedly involved in the approval process.
This encourages the illegal operation of foreign travel companies or individuals in the country.
• In Malaysia, tourism is an important earning industry. The Government has been playing a leadingrole in promoting tourism. Although the industry has generally been faring well, the geographicalseparation of the peninsular and island parts of the country necessitates “increased coverage andquality of telecommunications network, supply of electricity and water as well as transportation
connectivity” in Sabah and Sarawak (Eleventh Malaysia Plan). The dominant contribution of Johor
could be shared by the island destinations.
• In Myanmar, recent market liberalization initiatives have spawned an influx of international
restaurant franchises from Asian countries in the past four years, followed by those from theUnited States starting in 2015.
• In the Philippines, foreigners can own 100 per cent of a restaurant, but only if they fully invest morethan $2.5 million. For foreign projects involving investments of $5 million or more, the Government
promotes four locations as special economic zones for tourism development: Metro Manila, Boracay,
Cebu City and Mactan Island. All four locations are already the principal areas where international
hotel brands have properties. The incentives for tourist-oriented enterprises to invest in these zones
include income tax holidays, resident visas and 100 per cent foreign ownership.
• Singapore has no limitations in the tourism sector, except in beverage-serving services, which isunbound (70 per cent equity participation is permitted).
• The travel and tour guide business in Thailand is regulated by the Tourist Business and Guide Act.
Businesses must apply for a TAT (Tourism Authority of Thailand) license with the Tourist Businessand Guide Registration Office. As the travel and tour guide business is a restricted activity under
the Foreign Business Act, a foreigner who wants to get involved in the tourist business must
incorporate a juristic person in order to apply for the TAT license.
• In Viet Nam, foreign investors must pay particular attention to a number of areas. In accordancewith the Tourism Law just passed by the National Assembly, only foreign tourism companies (notindividuals) can collaborate with Vietnamese tourism companies to establish a joint-venturecompany that provides tourism services in the country. The same law requires travel services
managers to have formal degrees, by reason of which thousands of them may have to attend
school again to meet the higher requirements.

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P R O M O T I N G S E R V I C E S T R A D E I N A S E A N – M A R C H 2 018

V. IMPACTS OF FURTHER LIBERALIZATIONOF TOURISM SERVICES ON THE ECONOMY
Promotion of tourism services can bring about positive economic impacts through two channels:(1) direct effects, e.g. purchases of tourism packages and air tickets, transportation services, andpayments to hotels, all of which contribute directly to the tourism sector, and (2) indirect effects, e.g.
tourism suppliers’ purchases of intermediate goods and services (e.g. office renting) and tourists’purchases of handicrafts and visits to restaurants and entertainment service facilities not directly
covered in tourism packages. Liberalization of trade in services would create at least some of these
impacts, through greater service variety and enhanced productivity. Also, opening the market forforeign tourism suppliers would lead to foreign exchange generation (because of the capital thatcomes with foreign suppliers) and employment creation (because of the labour intensity of tourism
services), which translate into income generation in the host country.
The tourism sector has direct as well as indirect multiplier effects (ASEAN and World Bank, 2015;
Konishi, 2017): during a trip, tourists use transportation, accommodations, food and beverages,
retail shops and entertainment facilities. After a tourism service is provided, additional tourists,
as well as inward company investment, can be triggered through social networking promotion andconversations between those who consume tourism services and potential tourists and investors. To
enable this favorable multiplier effect through these various channels, government policies should
be formulated from an all-encompassing point of view.
Tourism linkages with other sectors go beyond those industries mentioned above to reach the whole
economy. For example, economic sectors and development issues such as agriculture and natural
resources, education, energy, environment, gender, private sector development, regional cooperationand integration, transport, and water and other urban infrastructure and services are all related totourism and expected to derive synergies from each other (ADB, 2017: 22–23).
Thus, the tourism sector exhibits larger multiplier effects than the all-industry average. The hotel
and restaurant industry, for example, shows larger linkage effects with other industries than the allindustry average in all ASEAN countries except Singapore (figure 4). In many ASEAN countries, one
unit increase in demand for hotels and restaurants brings out 1.5 to 2 times more output increasein other industries, with Malaysia seeing the greatest effect. Therefore, further development of the
tourism sector through further liberalization to allow foreign companies to work with local tourism
firms, or to develop new tourism sites, is an important consideration.
In terms of the foreign equity participation rate, a major form of market entry by foreign service
suppliers, majority foreign ownership (more than 50 per cent) is allowed in each of the ASEAN
Member States in tourism services under the AFAS 9th package (table 12). What could be done tocapture further positive economic impact is concerted ASEAN-wide institutional efforts. The “Visit
ASEAN@50” campaign (see section I) is a good case in point.

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31Figure 4. Multiplier effects of hotels and restaurants and all industries in ASEAN, 2011

Malaysia
ThailandIndonesia
Philippines
Viet Nam
Cambodia
Brunei Darussalam
Singapore
0

0.5

1

Hotels and restaurants

1.5

2

2.5

All industries

Source: OECD Input-Output table database (http://www.oecd.org/trade/input-outputtables.htm).
Note
The Lao People's Democratic Republic and Myanmar are not covered in the OECD database.

Table 12. F oreign ownership allowed in tourism services under AFAS 9th package
Country

Foreign ownership allowed in tourism services (per cent)Brunei Darussalam

70

Cambodia

100

Indonesia

70

Lao People’s Democratic Republic.

70

Malaysia

70

Myanmar100

Philippines

70

Singapore

70

Thailand70

Viet Nam

100

Source: Specific commitment tables of each ASEAN Member State under the AFAS (9th package).
Note:	Singapore’s 70 per cent upper bound is under the unbound section for “Beverage serving services for consumption on thepremises” (the original text states “Unbound, except up to 70% equity participation permitted”; see the relevant section in
Annex D).

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P R O M O T I N G S E R V I C E S T R A D E I N A S E A N – M A R C H 2 018

Liberalization in the tourism sector and its related industries disturbs competition, particularly
among travel agents, in part because of the emergence of web-based reservation and operation,
which can undercut the prices of local travel agents. In Cambodia, the Lao People’s Democratic
Republic, and Myanmar such imbalanced competition is taking place.
Singapore and Thailand have been moving beyond liberalization towards integration of the tourism
sector in the overall development of the economy. In Singapore, the Hotel Industry Transformation
Map was launched in 2016 to transform the hotel industry for sustainable growth through establishinglabour-lean business models, developing new solutions through innovation, growing businesses
through internationalization and building a strong pipeline of quality talent.31 The Transformation
Map helps the hotel industry stay abreast of consumers’ changing needs and thrive despite thecountry’s labour-constrained landscape. “Passion made possible”, a slogan launched in 2017 by
the STB with the Economic Development Board, suggests a new direction for the tourism sector
towards its greater integration in overall development.
In Thailand, the Government has been supporting the tourism industry mainly through measures
aimed at promoting international and domestic tourism. These measures include the following: in
2014, visa fees were waived for Chinese and Taiwanese tourists for three months during the highseason (August to November), and this type of promotion is expected to continue; in 2015, tourism
tax rebates up to B 15,000 were allowed for Thai citizens if the expenditure was for a domestic
package tour or accommodation; and in 2015 Thai corporations could claim as a tax deduction up to
twice the cost of seminars and training.
All ASEAN Member States require accurate information in order to fully understand and capture
the economic phenomenon of tourism in its entirety and to effectively formulate public policies forbusinesses and consumers. In every country, the dearth of economic data in the tourism sector
hinders policymakers and business strategists in making decisions on policies and trade andinvestment. At the regional level, such data are also required for negotiations.

VI. POLICY RECOMMENDATIONS AND PROMOTION
MEASURES FOR TRADE IN TOURISM SERVICES
1. General policy suggestions
Liberalization of the tourism sector alone is not effective enough. As mentioned in the previous
section, related industries such as transport services, retail stores and restaurant services should
also be opened up. In those sectors where trade liberalization is fully attained, there should be
a careful balance between community development and foreign investment promotion: althoughforeign suppliers of tourism services tend to use foreign intermediate inputs (e.g. computerized
online systems developed by foreign IT suppliers), foreign investment in tourism should also
contribute to community development, in the form of utilizing local resources (e.g., procurement ofhandicrafts).

31

The STB developed and will implement the Hotel Industry Transformation Map, in partnership with the Singapore
Hotel Association; the Food, Drinks and Allied Workers Union; and the Hotel Sectoral Tripartite Committee, as wellas other agencies such as Workforce Singapore, SkillsFuture Singapore and International Enterprise Singapore.

PA P E R 7 T R A D E I N TO U R I S M S E R V I C E S

33Given that hotel and restaurant services are already liberalized, the limited movement of natural
persons as service suppliers is a bottleneck. Implementation of the MRA on tourism professionals
would thus be crucial, as these related services are covered.32
Figure 5 shows the general framework of the ASEAN Tourism Strategic Plan 2016–2025. As the Planputs it:Given that the strategic programs and projects are fully resourced and implemented, it is anticipatedthat by 2025:• The GDP contribution of ASEAN tourism could increase from 12 per cent to 15 per cent.
• Tourism’s share of total employment could increase from 3.7 per cent to 7 per cent.
• Per capita spending by international tourists could increase from $877 to $1,500.
• The average length of stay of international tourist arrivals could increase from 6.3 nights to 8
nights.
• The number of accommodation units could increase from 0.51 units per 100 people to 0.60 units
per 100.
• The number of awardees for the ASEAN Tourism Standards33 could increase from 86 to 300.
• The number of project interventions in the community-based tourism value chain could increase
from 43 to over 300.34
The ASEAN Tourism Strategic Plan has two strategic directions: “To enhance the competitivenessof ASEAN as a single tourism destination” and “To ensure that ASEAN tourism is sustainable andinclusive”. Workable policy suggestions could be made in these directions.

32

33

34

The handbook on the ASEAN MRA-TP released in 2013 by the ASEAN Secretariat states that the MRA-TP will provide
a mechanism for agreement on the equivalence of tourism certification procedures and qualifications across
ASEAN (ASEAN, 2013). Once this is achieved, ASEAN nations will mutually recognize each other’s qualifications fortourism. According to the handbook, the eligibility to work in a host country will be subjected to prevailing domestic
laws and regulations of the host country. It seems that the “domestic laws and regulations” mentioned are actuallyrather difficult to comply with in a smooth manner.
ASEAN Tourism Standards are the criteria and requirements agreed upon by the ASEAN national tourism
organizations in the following seven documents:
1. ASEAN Clean Tourist City Standard
2. ASEAN Community Based Tourism Standard
3. ASEAN Green Hotel Standard
4. ASEAN Homestay Standard
5. ASEAN MICE Venue Standard
6. ASEAN Public Toilet Standard
7. ASEAN Spa Services Standard
The outcome will be measured by the ASEAN Secretariat (Tourism Unit – Infrastructure Division).

P R O M O T I N G S E R V I C E S T R A D E I N A S E A N – M A R C H 2 018

34

Figure 5. General framework of ASEAN Tourism Strategic Plan 2016–2025

Strategic
Directions"By 2025, ASEAN will be a quality tourism destination offering a unique,diverse ASEAN experience, and will be committed to responsible, sustainable,
inclusive and balanced tourism development, so as to contribute significantly
to the socio-economic well-being of ASEAN people"

SD 1
Enhance competitivenessof ASEAN as a single
tourism destination

SD 2
Ensure that ASEAN
tourism is sustainable
and inclusive

1.1 Intensify Promotionand Marketing

Strategic Action Programs

1.2 Diversify Tourism
Product

2.1 Upgrade Local Communities
and Public-Private Sector
Participation in the Tourism
Value Chain

1.3 Attract Tourism
Investments

1.4 Raise Capacity and Capabilityof Human Capital

2.2 Ensure Safety and Security,
Prioritize Protection
and Management of Heritage Sites

1.5 Implement and Expand ASEAN
Tourism Standards for Facilities,
Services and Destinations
1.6 Implement and Expand
Connectivity and Destination
Infrastructure

1.7 Enhance Travel
Facilitation

Source: ASEAN Tourism Strategic Plan 2016–2025(http://www.asean.org/storage/2012/05/ATSP-2016-2025.pdf).

2.3 Increase Responsivenessto Environmental Protection
and Climate Change

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35

2. Workable policy suggestions
Where the ASEAN Tourism Strategic Plan 2016–2025 identifies two strategic directions, the World
Tourism Organization identifies four factors as indispensable for promoting tourism services:(1) E nabling environment (with five sub-components: business environment, safety and security,
health and hygiene, human resources and labour market, and ICT readiness)(2) T ravel and tourism policy and enabling conditions (with four sub-components: prioritizationof travel and tourism, international openness, price competitiveness and environmental
sustainability)(3) Infrastructure (with three sub-components: air transport infrastructure, ground and port
infrastructure, and tourist service infrastructure)(4) N atural and cultural resources (with two sub-components: natural resources and cultural
resources and business travel)
Table 13 matches concrete activities under the ASEAN Tourism Strategic Plan 2016–2025 and theWorld Tourism Organization’s four factors. International organizations (including the ASEAN-Japan
Centre) are encouraged to identify and propose concrete projects promoting trade in tourism,
possibly linking more than one ASEAN Member State.

Table 13. M
 atching of activities under the ASEAN Tourism Strategic Plan 2016–2025
and World Tourism Organization’s four factors
Strategic direction
and activity(1) Enabling
Environment(2) Travel and Tourism
Policy and Enabling
Conditions(3) Infrastructure(4) Natural andCultural Resources

Strategic Direction 1: To Enhance the Competitiveness of ASEAN as a Single Tourism Destination
Strategic Action 1.1
Intensify Promotionand Marketing

Activity 1.1.2
Expand the ASEAN
regional destinationmarketing program

Strategic Action 1.2
Diversify Tourism
Products

Activity 1.2.2
Support thedevelopment of
ASEAN sub-regional
destinations/corridors
targeting more
inclusive tourism
outcomes

Strategic Action 1.3
Attract Tourism
Investments

Activity 1.1.1
Enhance the ASEAN
tourism statisticalframework
Activity 1.2.1
Complete the ongoingand identify new
product development
and marketing
approaches

Activity 1.3.2
Promote further
liberalization of
tourism services

Activity 1.3.1
Prepare an ASEAN
tourism investment
program that
identifies investment
corridors where theconvergence andconsolidation of
investments in tourism
infrastructure andproducts will takeplace

P R O M O T I N G S E R V I C E S T R A D E I N A S E A N – M A R C H 2 018

36

Table 13. M
 atching of activities under the ASEAN Tourism Strategic Plan 2016–2025
and World Tourism Organization’s four factors (continued)
Strategic direction
and activity(1) Enabling
Environment

Strategic Action 1.4
Raise Capacity andCapability of Tourism
Human Capital

Strategic Action 1.5
Implement andExpand ASEAN
Tourism Standards for
Facilities, Services And
Destinations

Strategic Action 1.6
Implement andExpand Connectivity
and Destination
Infrastructure(2) Travel and Tourism
Policy and Enabling
Conditions(3) Infrastructure

Activity 1.4.1
Continue theimplementationof the ASEAN
mutual recognition
arrangement on
tourism professionals(MRA-TP)

Activity 1.5.2
Identify and implement
new ASEAN tourism
standards
Activity 1.5.3
Develop ASEAN tourist
protection guidelines(4) Natural andCultural Resources
Activity 1.4.2
Prepare andimplement the ASEAN
tourism humanresources development
plan in coordination
with the ASEAN
tourism resourcesmanagement anddevelopment network(ATRM)

Activity 1.5.1
Promote the adoption
and implementationof the ASEAN tourism
standards certification
system into thepolicy and regulatory
and tourism HRD
framework of theMember States

Activity 1.6.1
Enhance ASEAN
air connectivity
by supporting
implementation of theASEAN Single Aviation
Market (ASAM)
Activity 1.6.2
Promote thedevelopment of
cruise and river
tourism, including its
infrastructure for sea
and river cruise
Activity 1.6.3
Implement theAgreement on the
Recognition ofDomestic Driving
Licenses issued by
ASEAN countries topromote drive/overland
tourism across ASEAN
Activity 1.6.4
Promote thedevelopment ofroad connectivity
along major tourism
corridors

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37Table 13. M
 atching of activities under the ASEAN Tourism Strategic Plan 2016–2025
and World Tourism Organization’s four factors (conclued)
Strategic direction
and activity(1) Enabling
Environment(2) Travel and Tourism
Policy and Enabling
Conditions

Strategic Action 1.7
Enhance Travel
Facilitation(3) Infrastructure(4) Natural andCultural Resources

Activity 1.7.1
Prepare white paper
to implement thefacilitation of
intra-ASEAN andinternational travel(Article 2 of ASEAN
Tourism Agreement
2002)

Strategic Direction 2: To Ensure That ASEAN Tourism Is Sustainable And Inclusive
Strategic Action 2.1
Upgrade Local
Communities andPublic-Private Sector
Participation in the
Tourism Value Chain
Strategic Action 2.2
Ensure Safety andSecurity, Prioritize
Protection andManagement of
Heritage Sites

Activity 2.1.1
Develop andimplement the strategy
on participation of
local communities
and private sectors intourism development
Activity 2.2.1
Work with official
bodies andorganizations in
support of safety,
security and protectionof key destinations in
ASEAN

Strategic Action 2.3
Increase
Responsivenessto Environmental
Protection and Climate
ChangeActivity 2.2.2
Work with official
bodies andorganizations in
support of theprotection andmanagement of
heritage sites
Activity 2.3.2
Prepare a manualof guidelines forincorporating
environment andclimate change
mitigation, adaptation,and resilience

Activity 2.3.1
Work with official
bodies andorganizations toaddress environmental(protection), andenhance climatechange responsivenessSource: AJC, based on ASEAN Secretariat (2015).
Note: A best-match attempt is made.

Tourism-related policy areas identified in table 13 should pay close attention to the following threeparameters: (1) the value chain of direct and indirect impacts, (2) value composition, and (3) demandand supply creation, while tapping foreign as well as domestic people and resources.
The typical policy objective of tourism is to increase the value added that accrue to the economy.
There are three important factors to consider in generating value added from tourism activities:• n: number of foreign visitors• u: unit (per-person) consumption• r: local procurement rate or the rate of domestic value added (assumed to be the same across all
the sectors listed in the table)
For any activity, including tourism, not all values used in the industry necessarily belong to thecountry where such activities take place. For example, in hotels and restaurants in ASEAN, 17 perP R O M O T I N G S E R V I C E S T R A D E I N A S E A N – M A R C H 2 018

38

cent of exports are imported inputs from abroad (AJC, 2018). In this case the local procurement
rate or the rate of domestic value added is 87 per cent. Therefore, the total value created within theeconomy is

Direct value created in tourism = n * u * r . . . . . . (1)This is the direct value derived from the tourism sector. However, as noted, the activities of the
tourism sector affect other industries through a multiplier effect. This effect is between 1.5 and 2.0(figure 4). In other words, one unit increase in demand for tourism activities brings out a 1.5–2 times
increase in activities throughout the economy. This is indirect value added created in the economy
because of tourism activities.

Indirect value created in tourism = (n * u * r)m . . . . . . (2)wherem: multiplier effects of tourism sector
Therefore, the total value added created (direct and indirect) is as follows:

Total value added created in tourism within the country = n * u * r (1 + m) . . . . . . (3)From the demand-side perspective, the number of visitors (n) as well as their unit consumption (u)can be enhanced through “local story-making”. However, since demand (or consumption) of services
and supply of services are usually made simultaneously, the supply capacity has to be generated. In
this respect, the extent to which the tourism sector has to rely on imports for its goods and services
provided (1 – r) raises another important consideration related to the capacity of the domestic firms.
Therefore, a policy evaluation simulation was conducted with these two aspects (demand and supply)and four modes of service trade clearly in view.35
When the local procurement rate (r) comes closer to the maximum value of 1.0, the value added fallingon a country becomes larger and larger. In calculating (u), a country needs detailed expenditures
on tourism by non-residents for accommodation, food, (domestic) transport, and various tourism
activities (culture, entertainment, sports). At this moment, not many countries can provide data insuch detail. The tourism multiplier effect (m) is known, but the question is how to leverage this effectthroughout an economy, as it is larger than the all-industry average of a country (figure 4).
Since tourism services have a unique feature known as high tradability and affect multiple industries(e.g., transport, retail, wholesale and restaurant services, agricultural production, cleaning,
information communication), information on the four parameters was collected with country- andlocation-specific conditions in view.36

35
36

At a seminar held in Hua Hin, Thailand, on 30 November–2 December, 2017.
The detailed information and discussion, including the results of the policy evaluation, are also available at
http://www.asean.or.jp/en/trade-info/report-the-4th-seminar-on-promoting-services2.

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39

By and large, the commitments in tourism by the ASEAN Member States on trade liberalization underthe AFAS (9th package) are rather modest or cautious, in the sense that neither Mode 2 nor Mode 4
is liberalized fully, although they are somewhat liberalized in practical terms (i.e. “consumption” by
ASEAN tourists of tourist guide services in other ASEAN Member States is observed widely). This
sort of barrier should be removed by raising the commitment levels under AFAS.
Table 14 shows a subjective policy evaluation of the trade in tourism services provided by the ASEAN
Member States, which shows a wide disparity in scores. The ASEAN average score of 6.53 shows
there is much scope for policy improvement.
By average score, the three highest-ranked policy components are• Increase u (unit consumption) in Mode 4 (score of 7.33)• Increase r (local procurement rate/ rate of domestic value added) in Mode 4 (score of 7.22)• Increase n (number of foreign visitors) in Mode 4 (score of 6.89)
The five lowest-ranked policy components are• Leverage m (multiplier effects of tourism sector) in Mode 3 (score of 6.00)• Increase r (local procurement rate or rate of domestic value added) in Mode 3 (score of 6.10)• Increase n (number of foreign visitors) (score of 6.20)• Increase r (local procurement rate or rate of domestic value added) (score of 6.20)• Leverage m (multiplier effects of the tourism sector) in Mode 1 (score of 6.20)

Supply-Side
PolicyDemand-Side
PolicySupply-Side
PolicyDemand-Side
PolicySupply-Side
PolicyDemand-Side
PolicySupply-Side
PolicyDemand-Side
Policy70

74 Leverage m (multiplier effect of tourism sector)
Total score (out of 160)

7

3 Increase r (local procurement rate or rate of domestic value added)

7

1 Increase n (number of foreign visitors)
8

4

4 Leverage m (multiplier effects of tourism sector)

2 Increase u (unit (per person) consumption)

2

3 Increase r (local procurement rate or rate of domestic value added)

4

1 Increase n (number of foreign visitors)
1

4

4 Leverage m (multiplier effects of tourism sector)

2 Increase u (unit (per person) consumption)

6

7

1 Increase n (number of foreign visitors)

3 Increase r (local procurement rate or rate of domestic value added)

1

4 Leverage m (multiplier effects of tourism sector)

33

3 Increase r (local procurement rate or rate of domestic value added)

2 Increase u (unit (per person) consumption)

3

3

2 Increase u (unit (per person) consumption)

1 Increase n (number of foreign visitors)

B

116

6

7

7

8

7

7

8

6

7

7

7

9

7

8

8

7

C

110

2

9

9

8

3

8

8

8

6

9

8

8

5

7

8

4

I

127

8

8

8

8

8

8

8

7

8

8

8

9

8

8

7

8

L

133

8

8

9

7

8

8

9

9

9

7

9

9

8

8

8

9

My

22

..

..

..

..

1

1

1

1

1

1

2

1

3

3

3

4

Mm

6.78

7.22

7.33

6.89

6

6.1

6.56

6.3

6.4

6.8

6.5

6.6

6.2

6.2

6.4

6.2

Average

6.53

7

6

6

6

5

7

-

4

6

5

3

3

6

4

4

4

V

Average of all averages

100

8

5

4

6

8

4

8

8

6

8

8

3

8

4

6

6

T

101

128

8

8

8

5

8

8

8

8

8

8

8

8

8

9

9

9

S

76

128

7

7

7

7

8

8

8

8

9

9

9

9

8

8

8

8

P

Source: Based on the questionnaire survey conducted on 30 December 2017 at the “4th Seminar on Promoting Services Trade in ASEAN – Tourism Services” (29 November–2 December 2017, in Hua Hin,
Thailand).
Notes: B = Brunei Darussalam; C = Cambodia; I = Indonesia; L = Lao People’s Democratic Republic; My = Malaysia; Mm = Myanmar; P = Philippines; S = Singapore; T = Thailand; V = Viet Nam.

Mode 4(Movementof natural
persons)

Mode 3(Commercial
presence)

Mode 2(Consumption
abroad)Mode 1(Cross-border
supply ofservices)

Table 14. S ubjective policy evaluation of trade in tourism services

40

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PA P E R 7 T R A D E I N TO U R I S M S E R V I C E S

41Workable policy suggestions are listed in annex E. Some highlights of policy suggestions are as
follows. In order to increase the number of foreign visitors (table E1) at the local or community
level, amenity-related improvements (including standards for hotels and for public toilets), as wellas human resource development are important. At the country level, training programs for humanresource development are crucial. At the ASEAN level, visa-free entry into ASEAN countries by nonASEAN citizens is high on the agenda.
In order to increase the per person spending (table E2), an important step could be location-specificstory-making (where there has been no local story to be shared by foreign visitors) and storytelling(where there are already local stories to share with tourists). In this connection, innovative typesof tourism promotion (e.g., hotels under water or in trees, buses or trains converted into hotels)
would also be an important consideration. How to legalize such new-style accommodations would
be an important consideration, as conventional types of “positive-list” regulations do not work forthem. Therefore, “negative list” regulations (e.g., regulations based on whether basic human healthstandards are not violated, rather than whether fire-safe facilities as well as evacuation areas areequipped with current technology) would be needed.
As for increasing the local procurement rate or the rate of domestic value added (table E3), thepromotion of tourism-related SMEs is crucial. For leveraging the multiplier effects of the tourism
sector (table E4), ASEAN-level support for developing regulations and standards in line with all the
ASEAN members is needed; which aspect of the tourism-related value chain to focus on is up toeach Member State.
Consideration of “competence”, or the suitable level of policy implementation, is also important.
There are two important parameters, scale economy and local diversity. The former concerns
ASEAN-wide benefits deriving from a larger market size, most importantly enhancing ASEAN’s
degree of attractiveness as a single tourist destination through policy coordination. Local diversity
concerns the uniqueness of each tourist spot in the locality. To promote local tourism assets, thebest and natural approach is through local-level decision making. Depending on which of the twoparameters becomes more important for the policy area at issue, the tourism subsectors shouldmake mixed use of local, national and ASEAN-wide competencies for promoting trade in tourism
services.
Another important aspect to note for tourism promotion is that “a single area cannot supply every
service”. In this connection, the “long tail” or “fat tail” is an important consideration. This concept
recognizes the importance of demand for non-core parts of tourism services (e.g., imports of “noncore” flour for food-making, while “core” local foods are being emphasized): even though a local
area prioritizes its own location-specific tourism assets, it will inevitably have to use inputs fromother regions or countries. Rules of origin under free trade agreements (FTAs) are a useful reference
point. Value added criteria involving ASEAN usually require 35–40 per cent of local value added.
The concrete policy suggestions discussed above are expected to facilitate not just the ASEAN-wide
promotion of tourism services but also the ongoing negotiation for the Regional Comprehensive
Economic Partnership (RCEP) involving ASEAN Member States and their dialogue partners (namely,
Australia, China, India, Japan, the Republic of Korea and New Zealand). In view of the Initiative for
ASEAN Integration, which was launched in November 2000 and has been spearheading regional
integration with tourism being treated as a priority area,37 the promotion of trade in tourism services
in the ASEAN region through RCEP should move to a new dimension of catalyzing the establishmentof “global hospitality chains”.

37

Based on “The Regional Comprehensive Economic Partnership (RCEP): An assessment of the negotiations”(http://www.bilaterals.org/?the-regional-comprehensive&lang=en, posted on 10 January 2017).

P R O M O T I N G S E R V I C E S T R A D E I N A S E A N – M A R C H 2 018

42

Figure 6. Framework for workable policy suggestions for tourism services

DIRECT IMPACT

Demandcreating
policies

Tourism
services

Supplycreating
policies

INDIRECT IMPACTS

Transportation

HotelsActivities

Retailandwholesaleservices

Restaurants…

VALUE COMPOSITION

Labourcosts

Source: ASEAN-Japan Centre

Operatingcosts (e.g., foradvertisement
and utility
fees)Profits

PA P E R 7 T R A D E I N TO U R I S M S E R V I C E S

43REFERENCESASEAN-Japan Centre (2018). “Global Value Chains in ASEAN: Tourism”, Paper 16, March.
ASEAN Secretariat (2013). Handbook of ASEAN Mutual Recognition Arrangement (MRA) on Tourism
Professionals (http://www.asean.org/storage/images/2013/economic/handbook%20mra%20
tourism_opt.pdf).
ASEAN Secretariat (2015). ASEAN Tourism Strategic Plan 2016–2025 (http://www.asean.org/
storage/2012/05/ATSP-2016-2025.pdf).
ASEAN and World Bank (2015). “ASEAN Services Integration Report: A Joint Report by the ASEAN
Secretariat and the World Bank”, World Bank.
Asian Development Bank. (2017). “Tourism sector assessment, strategy, and road map for Cambodia,
Lao People’s Democratic Republic, Myanmar, and Viet Nam (2016–2018)” (https://www.adb.
org/sites/default/files/institutional-document/227186/clmv-tourism-sector-assessment.
pdf)
Hoekman, Bernard (1995). “Assessing the General Agreement on Trade in Services”, World Bank
Discussion Paper No. 307, World Bank.
Konishi, Yoko (2017). “Global Service Value Chain in Japan: Inbound Tourism Cases”, RIETI Policy
Discussion Paper Series 17-P-011 (http://www.rieti.go.jp/jp/publications/pdp/17p011.pdf).
OECD, UNWTO and WTO (2013), “Aid for Trade and Value Chains in Tourism” (https://www.wto.org/
english/tratop_e/devel_e/a4t_e/global_review13prog_e/tourism_28june.pdf).
World Economic Forum (2017). The Travel & Tourism Competitiveness Report 2017 (https://www.
weforum.org/reports/the-travel-tourism-competitiveness-report-2017).
World Travel & Tourism Council (2016). “Travel & Tourism Investment in ASEAN” (https://www.wttc.
org/research/policy-research/trade-and-investment/travel-and-tourism-investment-inasean/).

P R O M O T I N G S E R V I C E S T R A D E I N A S E A N – M A R C H 2 018

44

ANNEXES
Annex A. A detailed value chain of the tourism industry
Support Institutions: Ministry of Tourism and Culture, Chamber of Commerce, Ministryof Interior, banks, etc.

Indirect impacts

Construction
materials

Water

Waste

Manufacturer

Constructors and real estate
Furniture and equipment
Customs Office

Goods and service suppliers

Ministry of Tourism andCulturePort authority

Shops inaccommodation

Food factories

Promotional activities

Ministry oftransport

Maintenance

Storage and distribution

Communication, press
and media

Immigration
agencyMarketing andsales

Food suppliers

Travel organizationand online booking

Direct impacts

EnergyTransportation

Accommodations

Foods andbeverage

Creativeindustries

Car rental

HotelsBars and
restaurants

Handicrafts shops

Bus

Apartments

Night clubs

Craftsmen
Handicrafts
workshops

Travelfacilities

In-transit
facilities

Internet

Travelagent

Taxi

Guesthouses

Fast foodCallcenters

Airlinecompanies

Ferry

Youth hostels

Itinerant foodshops

Tour operators andwholesalers

Handcrafts
suppliers

Informaltransportation

KiosksFood souvenirs

OriginPolicies, Planning

Tourism industries

Source: Authors, based on UNWTO’s “Tourism Value Chain”.

Goods and services suppliers

Utility suppliersPA P E R 7 T R A D E I N TO U R I S M S E R V I C E S

Education

Communications

45

Public security and health

Infrastructure Support

Trade companies
Site signals

Wholesalers

Restoration

Technology shops

Comments on
official SNS

Factories

Word of mouth

ICT equipment
Management
MaintenanceBrochure producers
Leisure, excursions
and tours

Tourism assets
Cultural assets:archaeology communities,
ethnics, museums,
tourism attractions,intangible

Natural assets: lakes,
rivers, reefs and mountains,forests, species of flora andfauna, etc.

Oil stations

Support services

After tour

Shops

Information centers

Tourguides organizations

Grocery shops/retail outlets

Independent tour guides

Laundry

Comments on
official SNS

Transports guides/escorts

Security and bank services

Comments on
guide books

Spas

Internet café

Wellness

In destination

Consumers

OriginP R O M O T I N G S E R V I C E S T R A D E I N A S E A N – M A R C H 2 018

46

Annex B. Large foreign affiliates engaged in tourism services in ASEAN 2015
Name of foreign affiliate

Host country

Estimated sales($ million)

Name ofparent firmHome country

1

Agoda Company Pte Ltd

Singapore

3 342

Priceline Group Inc

United States

2

Resorts World At Sentosa Pte Ltd

Singapore

1 696

Genting Bhd

Malaysia

3

Republic Hotels & Resorts Ltd

Singapore

535

Millennium & Copthorne
Hotels Plc

United Kingdom

4

Philippine Seven Corp

Philippines

476

UNI-President
Enterprises Corp

Taiwan5Hotel Properties Ltd

Singapore

410

Standard Chartered Plc

United Kingdom

6Mcdonald's Restaurants Pte Ltd

Singapore

408

Mcdonalds Corp

United States

7

Nippon Tei Sato Co, Ltd

Thailand374

Nippon-Teia

Japan

8

Carlson Wagonlit Singapore Pte Ltd

Singapore309

Carlson Holdings Inc

United States9

Yum! Asia Franchise Pte Ltd

Singapore223

Yum Brands Inc

United States

10

Starwood Asia Pacific Hotels &Resorts Pte Ltd

Singapore

183

Starwood Hotels &Resorts Worldwide

United States

11

Hotel Properties Ltd

Singapore

183

Wheelock Properties(Singapore) Ltd

Singapore

12

Hogg Robinson Singapore Pte Ltd

Singapore

180

Hogg Robinson Group Plc

United Kingdom

13

Laguna Resorts & Hotels PublicCompany Ltd

Thailand154

Banyan Tree Holdings Ltd

Singapore

14

Shangri-La Hotels (Malaysia) Bhd

Myanmar154

Kuok Brothers Sdn Bhd

Malaysia

15

Central Plaza Hotel Pcl

Thailand150

Thailand Equity Fund

Thailand16

Kentucky Fried Chicken
Management Pte Ltd

Singapore130

Triple Platform Sdn BHD

Malaysia

17

Shangri-La Hotels (Malaysia) Bhd

Myanmar124

Aberdeen AssetManagement Asia Ltd

Singapore18

Starbucks Coffee (Thailand) Co Ltd

Thailand123

Starbuck Corp

United States

19

Eastern Food Co

Thailand

120

--

Japan

20

PT Bayu Buana TBK

Indonesia

114

Oversea-Chinese Banking
Corp LtdSingapore21

Mos Foods (Thailand) Co, Ltd

Thailand108

MOS Food Services Inc

Japan

22

Sona Topas Tourism Industry TBKIndonesia

104

Christian Dior SE

France23

Champion Foods Co, Ltd

Thailand98

Ringer Hut (Thailand)
Co LtdJapan

24

Ichibanya Midwest Asia Co, Ltd

Thailand98

Ichibanya Co, Ltd

Japan

25

Minor Food Group (Singapore) Pte
LtdSingapore

84

Minor International Pcl

Thailand26

Sona Topas Tourism Industry Tbk PT

Indonesia

84

DFS Hong Kong Ltd

Hong Kong, China

27

Holiday Tours & Travel Pte Ltd

Singapore76

Qantas Airways Ltd

Australia

28

Hotelbeds (Thailand) Ltd

Thailand75

TUI AG

Germany

29

City Hotels Pte Ltd

Singapore

67

Millennium & Copthorne
Hotels Plc

United Kingdom

PA P E R 7 T R A D E I N TO U R I S M S E R V I C E S

47Annex B. Large foreign affiliates engaged in tourism services in ASEAN 2015
Name of foreign affiliate

Host country

Estimated sales($ million)

Name ofparent firmHome country

30

Asiatravel.com Holdings Ltd

Singapore66

Beijing Toread Outdoor
Product Co Ltd

Switzerland

31

Dusit Thani Pcl

Thailand63

Pioneer iNetwork Ltd

Hong Kong, China

32

Grande Asset Development Pcl

Thailand62

Investor Group

Mauritius

33

Genting Integrated Resorts
Operations Management Pte Ltd

Singapore

61

Genting Bhd

Malaysia

34

AAPC Singapore Pte Ltd

Singapore

56

Accor SAFrance35

JTB Pte Ltd

Singapore56

JTB Corp

Japan

36

Food Junction Holdings Ltd

Singapore47

Citigroup Inc

United States

37

President Hotel and Tower Co Ltd

Thailand41

Intercontinental Hotels GroupIntercontinental Hotel

Singapore

38

S.E.M. Thong Nhat Metropole Hotel
Company Ltd

Vietnam39

Indotel Ltd

Singapore

39

Bonheure (Thailand) Co, Ltd

Thailand37

Uchiyama Holdings

Japan

40

Manila Peninsula Hotel, Inc

Philippines

36

The Hongkong and Shanghai
Hotels, Ltd

Hong Kong, China

41

H.I.S. Tours Company Ltd

Thailand35

H.I.S. Co Ltd

Japan

42

Turismo Asia Co Ltd

Thailand34

TUI AG

Germany43

Laguna Banyan Tree Ltd

Thailand32

Banyan Tree Holdings Ltd

Singapore44

ISS Facility Services Phils Inc

Philippines

31

ISS A/S

Denmark45

JBB Hotels Sdn Bhd

Myanmar

30

Frasers Hospitality Ml Pte Ltd

Singapore46

PT Pioneerindo Gourmet
International TBK

Indonesia

29

Oversea-Chinese Banking
Corp LtdSingapore

47

Harbour View Hotel Pte Ltd

Singapore

29

Millennium & Copthorne
Hotels Plc

United Kingdom

48

New Sai Travel Service Co, Ltd

Thailand26

SAI Travel Service Co Ltd

Japan

49

MOS Foods Singapore Ptd Ltd

Singapore26

MOS Food Services, IncJapan

Source: AJC, based on data from Toyo Keizai Shimposha, UNCTAD, Thomson Reuters and fDiMarkets.
Notes:	These 48 firms are not necessarily the largest. They are provided for illustrative purposes. Sales are estimated in thefollowing manner: First, the ratio of sales to size of foreign affiliates (investment value, capital size, employment size, etc.)
is calculated for available foreign affiliates in each ASEAN host economy; second, the ratio is applied to the affiliates whose
size is available from the sources given; and third, some adjustment was made to eliminate unreasonable estimates bysearching information on the affiliates in question. Nevertheless there are likely to be some, sometimes large, errors, andreaders should use these data with utmost caution.
aName of parent firm “Nippon-Tei” from Bloomberg.

P R O M O T I N G S E R V I C E S T R A D E I N A S E A N – M A R C H 2 018

48

Annex C. Large ASEAN affiliates abroad engaged in tourism services, 2015
Name of ASEAN affiliate abroad

Host country

Estimated sales($ million)

Name of ASEAN
investing company

ASEAN homecountry

1

MGM Mirage Inc

United States

6 824

Genting Bhd

Malaysia

2

Hotel Properties Ltd

Singapore

183

Wheelock Properties(Singapore) Ltd

Singapore

3

Resorts World at Sentosa Pte Ltd

Singapore

170

Genting Bhd

Malaysia

4

Shangri-La Hotels (Malaysia) Bhd

Malaysia

154

Kuok Brothers Sdn Bhd

Malaysia

5

Central Plaza Hotel Pcl

Thailand150

Thailand Equity Fund

Thailand6

Millennium & Copthorne Hotels Plc

United Kingdom

126

Singapura Developments(Private) Ltd

Singapore

7

Shangri-La Hotels (Malaysia) Bhd

Malaysia

124

Aberdeen AssetManagement Asia Ltd

Singapore

8

Tuan Sing Holdings Ltd

Australia

110Grand Hotel Group Ltd

Singapore

Lodging Management(Labuan) Ltd

Malaysia

Delicious Food Holdings(Singapore) Pte Ltd

Singapore9

Oaks Hotels & Resorts Ltd

Australia

10410

Garuda Orient Holidays Japan Inc

Japan

49

Aero Wisata, PT

Indonesia

11

Destination Asiaa

China

41

Destination Asia

Thailand

12

Tutt Bryant Group Ltd

Australia

18

TAT Hong Holdings Ltd

Singapore

13

Laguna Resorts & Hotels Pcl

Thailand16

Banyan Tree Holdings Ltd

Singapore

14

Kentucky Fried Chicken
Management Pte Ltd

Singapore

12

QSR Brands Bhd

Malaysia

15

Freight Management Holdings Bhd

Malaysia

11

Vibrant Group Ltd

Singapore

16

Acesite (Philippines) Hotel Corp

Philippines

10

Waterfront Philippines Inc

Philippines

17

Billionaire Srl

Italy

8

Far East LeisureSingapore

18

Garuda Indonesia Holiday France

France7

Garuda Indonesia(Persero) Tbk, PT

Indonesia

19

City Hotels Pte Ltd

Singapore7

Republic Hotels &Resorts Ltd

Thailand20

The Westin Tokyo

Japan

5

The Westin Singapore

Singapore

21

Royal Garden Hotel Ltd

United Kingdom

5

Goodwood Park Hotel Ltd

Singapore

22

Rendezvous Hotels (Australia)
Pty Ltd

Australia

5

Rendezvous Hotels
International Private Ltd

Singapore

23

Thai Airasia X Co Ltd

Thailand5

Airasia X Bhd

Malaysia

24

Pojuca SA

Brazil5

Minor International Public
ThailandCompany Ltd

25International SOS (Australasia)
Pty Ltd

Australia

4International SOS Pte Ltd

Singapore26

TAJ SATS Air Catering Ltd

India

4

SATS LtdSingapore27

Pacnet Services (A) Pty Ltd

Australia

4Pacnet Global
Corporation (S) Pte Ltd

Singapore28

Laguna Banyan Tree Ltd

Thailand3

Banyan Tree Holdings Ltd

SingaporePA P E R 7 T R A D E I N TO U R I S M S E R V I C E S

49Annex C. Large ASEAN affiliates abroad engaged in tourism services, 2015
Name of ASEAN affiliate abroad

Host country

Estimated sales($ million)

Name of ASEAN
investing company

ASEAN homecountry

29

Harbour View Hotel Pte Ltd

Singapore3

Republic Hotels &Resorts Ltd

Thailand

30

Ascents Hotel Pty Ltd

Australia

3

TA Enterprise Bhd

Malaysia

31

Wales House Hotel Ltd

Australia

3

TA Enterprise Bhd

Malaysia

32

Thai Wah Plaza Ltd

Thailand3

Banyan Tree Holdings Ltd

Singapore

33

Bangtao Grande Ltd

Thailand2

Banyan Tree Holdings Ltd

Singapore

34

Interglobe Hotels Pte Ltd

India

2

Aapc Singapore Pte Ltd

Singapore

35

Macroasia Catering Services, Inc

Philippines

2

Sats LtdSingapore

36

Copthorne Orchid Hotel Singapore
Pte Ltd

Singapore2

Republic Hotels & Resorts Ltd

Thailand37

JTB-TNT Co Ltd

Vietnam2

JTB Pte Ltd

Singapore

38

Seaside Hotel (Thailand) Co Ltd

Thailand1

Hotel Properties Ltd

Singapore

39

Hotel Grand Chancellor (Surfers
Paradise) Pty Ltd

Australia

1

Hotel Grand Central Ltd

Singapore40

Ascott Japan Inc

Japan

1

The Ascott Ltd

Singapore

41

Marque Hotels International Pty Ltd

Australia

1

Rendezvous Hotels
International Private Ltd

Singapore42

Success City Pty Ltd

Australia

1

Pan Pacific Hotels Group Ltd

Singapore

43

Hotel Grand Chancellor (Adelaide)
Pty Ltd

Australia

1

Hotel Grand Central Ltd

Singapore

44

Hotel Grand Chancellor (Melbourne)
Pty Ltd

Australia

1

Hotel Grand Central Ltd

Singapore

45

Hotel Grand Chancellor (Brisbane)
Pty Ltd

Australia

1

Hotel Grand Central Ltd

Singapore46

Grand Central Enterprises Bhd

Malaysia

1

Hotel Grand Central Ltd

Singapore

47

Hotel Grand Chancellor (Launceston)Australia
Pty Ltd1

Hotel Grand Central Ltd

Singapore48

Seaside Properties (Thailand) Co Ltd

Thailand1

Hotel Properties Ltd

Singapore49

Q's Dining Inc

Japan

1

Food Capitals Public Company
Ltd

ThailandSource: AJC, based on data from Toyo Keizai Shimposha, UNCTAD, Thomson Reuters and FDI Markets.
Notes:	These 49 firms are not necessarily the largest. They are provided for illustrative purposes. Sales are estimated in thefollowing manner: First, the ratio of sales to size of ASEAN affiliates (investment value, capital size, employment size, etc.)
is calculated for available ASEAN affiliates in each host economy; second, the ratio is applied to the affiliates whose size isavailable from the sources given; and third, some adjustment is made to eliminate unreasonable estimates by searching
information on the affiliates in question. Nevertheless there are likely to be some, sometimes large, errors, and readers
should use these data with utmost caution.

P R O M O T I N G S E R V I C E S T R A D E I N A S E A N – M A R C H 2 018

50

ANNEX D.
SPECIFIC SCHEDULE OF COMMITMENTS
FOR TOURISM SERVICES UNDER THE AFAS
(9TH PACKAGE, SIGNED IN NOVEMBER 2015)
BY ASEAN MEMBER STATESLegend for this Annex:(1) means Mode 1 (cross-border supply of services); (2) means Mode 2 (consumption abroad); (3)means Mode 3 (commercial presence); (4) means Mode 4 (movement of natural persons).
The meaning of the alphabetical classification in the right hand column of each specific commitment
table is as follows.
N: none (no restriction)
U: unbound (no mention or no promise of liberalization)
A: limitations on the number of service suppliers whether in the form of numerical quotas,
monopolies, exclusive service suppliers or the requirements of an economic needs test;
B: limitations on the total value of service transactions or assets in the form of numerical quotas or
the requirement of an economic needs test;
C: limitations on the total number of service operations or on the total quantity of service output
expressed in terms of designated numerical units in the form of quotas or the requirement of an
economic needs test;38
D: limitations on the total number of natural persons that may be employed in a particular service
sector or that a service supplier may employ and who are necessary for, and directly related to,the supply of a specific service in the form of numerical quotas or the requirement of an economic
needs test;
E: measures which restrict or require specific types of legal entity or joint venture through which a
service supplier may supply a service; andF: limitations on the participation of foreign capital in terms of maximum percentage limit on foreign
shareholding or the total value of individual or aggregate foreign investment” (Part III: SpecificCommitments, Article XVI: Market Access, subparagraph 2).

Under AFAS, the restriction types A, B and C are actually not used by the ASEAN Member States inthe sector “Professional Services”. In addition to these six types of market-access restrictions, thefollowing two restrictions are observed.
G: Government approval requirement; and
H: Tax or fee payment requirement.

38

Subparagraph 2(c) does not cover measures of a Member which limit inputs for the supply of services.

PA P E R 7 T R A D E I N TO U R I S M S E R V I C E S

51Hotels and restaurants (including catering)
Brunei Darussalam
Sector or Subsector

Limitation on Market Access

A-H
classification of MA

Limitation on National
Treatment

A-H
classificationof NT

Hotel Lodging
Services(CPC 64110)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Joint-venture corporation with
Bruneian individuals or Bruneiancontrolled corporations or both theaggregate foreign shareholding in
the joint-venture corporation shallnot exceed 70% foreign equity.

(3) EF70(3) None(3) N

Restaurants(CPC 642,643)(1) None*(no alcoholic drinks and beverage isallowed)(1) N(1) None*(no alcoholic drinks andbeverage is allowed)(1) N(2) None(2) N(3) EF70(3) Joint-venture corporation with
Bruneian individuals or Bruneiancontrolled corporations or both theaggregate foreign shareholding in
the joint-venture corporation shallnot exceed 70% foreign equity.
Other Tourism
Services- Youth Hostel- Golf Courses- Marina Facilities(2) None

(2) N
(3) N

(3) None(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Joint-venture corporation with
Bruneian individuals or Bruneiancontrolled corporations or both theaggregate foreign shareholding in
the joint-venture corporation shallnot exceed 70% foreign equity.

(3) EF70(3) None(3) N

A-H classification of MA

Limitation on National
Treatment

A-H
classificationof NT(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None for hotel three stars or
higher3(3) N(3) None(3) N(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Permit is granted taking into
account characteristics of the area4(3) N(3) Unbound(3) U

Travel agencies andtour operators
services(CPC 7471)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None, except foreign equity
participation limited to 51% for travel
agencies(3) N,EF51(3) None(3) N

Tourist guides
services(CPC 7472)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N(3) None(3) N

Cambodia
Sector or Subsector
Hotels(CPC 64110)

Restaurants(CPC 642, 643)

Limitation on Market AccessP R O M O T I N G S E R V I C E S T R A D E I N A S E A N – M A R C H 2 018

52

Indonesia
Sector or Subsector

Limitation on Market Access

A-H classification of MA

Limitation on National
Treatment

A-H
classificationof NT

Hotels(CPC 64110)(3, 4, 5 starredhotels)(1) None(1) N(1) None(1) None(2) None(2) N(2) None(2) None(3) In Eastern Part of Indonesia,
Kalimantan, Bengkulu, Jambi,
Sulawesi and East Nusa Tenggara(NTT), 100% of capital share can beowned by foreign investor, however,joint venture up to 70% in all otherareas.

(3) EF70(3) Higher paid-up capitalis required of foreign
services suppliers thanof domestic services
suppliers.
This measures will beeliminated in the year
2020.

(3) E

Hotels(CPC 64110)(1 or 2 starredhotels)(1) None(1) N(1) None(1) None(2) None(2) N(2) None(2) None(3) In certain parts of East Indonesia(Sulawesi, Papua, Moluccas, Nusa
Tenggara) joint venture with foreign
equity participation up to 70% is
permitted. For other areas, it isclosed for foreign investment.

(3) EF70(3) As indicated in the
Horizontal Section(3) E

Motel Lodging
Services (CPC6412/64120)(1) None(1) N(1) None(1) None(2) None(2) N(2) None(2) None(3) In certain parts of East Indonesia(Sulawesi, Papua, Moluccas, Nusa
Tenggara) joint venture with foreign
equity participation up to 70%
is permitted in partnership withIndonesian Small and Medium
Enterprises (SME’s). For other areas,
it is closed for foreign investment.

(3) EF70(3) As indicated in the
Horizontal Measures(3) E

Letting services
of furnishedaccommodations(CPC 64193)(1) None(1) N(1) None(1) None(2) None(2) N(2) None(2) None(3) In certain parts of East Indonesia(Sulawesi, Papua, Moluccas, Nusa
Tenggara) joint venture with foreign
equity participation up to 49%. For
other areas, it is closed for foreign
investment.

(3) EF49(3) As indicated in the
Horizontal Measures(3) E

Meal-Serving
Services with Full
Restaurant Services(CPC 64210)(1) None(1) N(1) None(1) None(2) None(2) N(2) None(2) None(3) In certain parts of East Indonesia(Sulawesi, Papua, Moluccas, Nusa
Tenggara) joint venture with foreign
equity participation up to 70% is
permitted. For other areas, it isclosed for foreign investment.

(3) EF70(3) Subject to prevailing
local government’s
laws regarding to themoral or public orderin accordance with thearticle XIV a) of the GATS

(3) G

Beverage-Serving
Services without
Entertainment(CPC 64310)(1) None(1) N(1) None(1) None(2) None(2) N(2) None(2) None(3) In certain parts of East Indonesia(Sulawesi, Papua, Moluccas, Nusa
Tenggara) joint venture with foreign
equity participation up to 49% ispermitted. For other areas, it isclosed for foreign investment.

(3) EF49(3) Subject to prevailing
local government’s
laws regarding to themoral or public orderin accordance with thearticle XIV a. of the GATS

(3) G

PA P E R 7 T R A D E I N TO U R I S M S E R V I C E S

Sector or Subsector
Beverage-serving
services withentertainment(CPC 6432/64320)

53

A-H classification of MA

Limitation on National
Treatment

A-H
classificationof NT(1) None(1) N(1) None(1) None(2) None(2) N(2) None(2) None(3) In certain parts of East Indonesia(Sulawesi, Papua, Moluccas, Nusa
Tenggara) joint venture with foreign
equity participation up to 51% ispermitted. For other areas, it isclosed for foreign investment.

(3) EF51(3) Subject to prevailing
local government’s
laws regarding to themoral and public orderin accordance with the
Article XIV a) of the GATS

(3) G

Limitation on Market Access

Lao People’s Democratic Republic
Sector or Subsector
Hotel lodging
services,with 3 stars or more(Part of CPC 641)
Meal-serving
serviceswith full restaurant
service(CPC 64210)
Beverage-serving
services without
entertainment(CPC 64310)

A-H classification of MA

Limitation on National
Treatment

A-H
classificationof NT(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N(3) None(3) N

A-H classification of MA

Limitation on National
Treatment

A-H
classificationof NT(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Joint venture corporation with
Malaysia individuals or Malaysia –controlled corporations or both andaggregate foreign shareholding in
the joint-venture corporation shallnot exceed 70 per cent foreign equity(for 4&5 star hotel)(3) EF70(3) None(3) N

Limitation on Market Access

Malaysia
Sector or Subsector
Hotel and restaurant
services (CPC 64110)
covering only:(i) Hotel Lodging
Services(CPC 64110)(ii) Holiday Centre
and Holiday Home
Services(CPC 64192)(iii) Letting Servicesof Furnished
Accommodation(CPC 64193)
Covering themanagement andoperational of hotels
or resorts including,outlet which may notnecessarily include
ownership of suchproperties

Limitation on Market AccessP R O M O T I N G S E R V I C E S T R A D E I N A S E A N – M A R C H 2 018

54

Sector or Subsector

Limitation on Market Access

A-H classification of MA

Limitation on National
Treatment

A-H
classificationof NT

Food-serving
services(CPC 642)
Beverage serving
services for
consumption on thepremises(CPC 643)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Joint-venture corporation with
Malaysian individuals or Malaysiancontrolled corporations or both andaggregate foreign
shareholding in the joint-venturecorporation shallnot exceed 70 per centforeign equity.

(3) EF70(3) None(3) N

Travel Agencies
and Tour Operators
Services(CPC 7471)(For inbound travel
only)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Through joint venture with
Malaysian individuals or Malaysiancontrolled corporations or both andaggregate foreign shareholding in
the joint- venture corporation shallnot exceed 70 per cent.

(3) EF70(3) None(3) N

Tourist Guide
Services(CPC 7472)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Unbound*(3) U(3) Unbound*(3) U

A-H classification of MA

Limitation on National
Treatment

A-H
classificationof NT

Myanmar
Sector or Subsector

Limitation on Market Access

A. Hotel andRestaurant Services
Hotel and otherlodging services(CPC6411 / 64110)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N(3) Entitled to enjoy the
exemptions under theForeign Investment Law(2012) Chapter - XII,Article 27(3) E

Motel lodging
services(CPC 64120)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N(3) If it is permitted by
the Myanmar Investment
Commission, the foreign
investors shall be entitledto enjoy the exemptions
and relief under theRepublic of the Unionof Myanmar Foreign
Investment Law, Chapter
XII Article 27.

(3) E

Meal serving
services with fullrestaurant service(CPC6421 / 64210(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N(3) Entitled to enjoy the
exemptions under theForeign Investment Law
Chapter XII, Article 27(3) E

PA P E R 7 T R A D E I N TO U R I S M S E R V I C E S

Sector or Sub-sector
Beverage serving
services without
entertainment(CPC 64310)

55

A-H classification of MA

Limitation on National
Treatment

A-H
classificationof NT(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N(3) If it is permitted by(3) E
the Myanmar Investment
Commission, foreign
experts and technicians
shall have the right to pay
income tax payable to theState in Foreign Currency
at the rates applicable tothe citizens residing within
the country, according to
the Republic of the Unionof Myanmar Foreign
Investment Law (2012),
Chapter XII Article 27.

Limitation on Market AccessPhilippines
Sector or Subsector

Limitation on Market Access

A-H classification of MA

Limitation on National
Treatment

A-H
classificationof NT

Hotel, resort,pension houses,
tourist inns
apartelles lodging
services(CPC 64110)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N(3) None(3) N

Meal Serving
Services with Full
Restaurant Service(CPC 64210)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N(3) None(3) N

Beverage Serving
Services for
consumption on thepremises(CPC 6431 - 6431(2)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N(3) None(3) N

Limitation on National
Treatment

A-H
classificationof NT

Singapore
Sector or Subsector

Limitation on Market Access

A-H classification ofMA

Hotel Lodging
Services(CPC 64110)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N(3) None(3) N

Restaurant andCatering Services(CPC 64210/64230)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N(3) None(3) N

Beverage serving
services for
consumption on thepremises(CPC 643)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Unbound, except up to 70% equity
participation permitted.

(3) U(3) None(3) NP R O M O T I N G S E R V I C E S T R A D E I N A S E A N – M A R C H 2 018

56

Thailand
Sector or Subsector

Limitation on Market Access

A-H classification of MA

Limitation on National
Treatment

A-H
classificationof NT

A. Hotel andRestaurants (incl.
catering):- Hotel Lodging
Services(CPC 6411)- Motel lodging
services(CPC 6412)- Holiday centre
and holiday home
services(CPC 64192)- Camping andCaravan site
Services(CPC 64195)- Meal serving
services with fullrestaurant services(CPC 64210)- Catering services(CPC 64230)- Beverage Serving
Services without
Entertainment(CPC 64310)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) As indicated in 3.3 of thehorizontal section(3) EF70(3) None(3) N- Superior Deluxe or
Six-star plus rated
hotel(CPC Version 1.1:
part of 63110)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) As indicated in 3.1 of thehorizontal section(3) EF70(3) None(3) N

A-H classification of MA

Limitation on National
Treatment

A-H
classificationof NT(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N(3) None(3) N

Viet Nam
Sector or Subsector
Hotel Lodging
Services(CPC 64110)
Food serving
services(CPC 642)
Beverage serving
services for
consumption on thepremises(CPC 643)

Limitation on Market AccessPA P E R 7 T R A D E I N TO U R I S M S E R V I C E S

57Travel agencies and tour operators services
Brunei Darussalam
Sector or Subsector
Travel agencies
and tour operators
services(CPC7471)

A-H classification of MA

Limitation on National
Treatment

A-H
classificationof NT(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Foreign equity participation
should not exceed 70%(3) EF70(3) None(3) N

A-H classification of MA

Limitation on National
Treatment

A-H
classificationof NT

Limitation on Market AccessCambodia
Sector or Subsector

Limitation on Market AccessTravel agencies
and tour operators
services(CPC 7471)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None, except foreign equity
participa- tion limited to 51% fortravel agencies(3) N(3) None(3) N

Tourist guides
services(CPC 7472)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N(3) None(3) N

A-H classification of MA

Limitation on National
Treatment

A-H
classificationof NT(1) None(1) None(1) None(1) None(2) None(2) None(2) None(2) None(3) Maximum services providers
55 TA &TO. There should belicense from Regional Investment
Coordinating Body to establish
TA&TO in Badung and Denpasar
districts (Bali), except for special TA& TO i.e. ones which manage tourist
demo a certain country(3) Maximum services
providers 55 TA &TO
There should be licensefrom Regional Investment
Coordinating Body toestablish TA&TO in
Badung and Denpasar
districts (Bali), except for
special TA & TO i.e. ones
which manage tourist
demo a certain country(3) Tour operator must be
inbound tour operator in
Jakarta and Bali

(3) E

(1) N

(1) None

(1) N

(2) N

(2) None(2) N(3) Unbound(3) U(3) Unbound(3) U(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Must be registered to Indonesian
Ministry of Justice as Indonesiancompany. In the case of cooperation
with a national company, it isrequired, to do; Joint venture,joint operation and Contract
management. Foreign equity
participation is permitted up to 70%.

(3) EF70(3) Unbound(3) UIndonesia
Sector or Subsector
Travel Agent andTour Operator
Services (TA&TO)(CPC 7471)

Limitation on Market AccessTour Leader Services (1) None
(CPC 74710)(2) None
Tourism Consultancy
Services(CPC 91136)

P R O M O T I N G S E R V I C E S T R A D E I N A S E A N – M A R C H 2 018

58

Sector or Subsector
International Hotel
Operator(CPC 91135)

A-H classification of MA

Limitation on National
Treatment

A-H
classificationof NT(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Joint venture with foreign equity
participation up to 70%(3) EF70(3) As indicated in
Horizontal commitment
a. Only in certain parts ofEast Indonesia (Sulawesi,
Papua, Moluccas, Nusa
Tenggara), while in otherareas, it is closed forforeign investment.
b. Joint Venture withlocal Small and Medium
Enterprises (SME’s)(3) EF

Limitation on Market Access

Lao People’s Democratic Republic
Sector or Subsector

Limitation on Market Access

A-H classification of MA

Limitation on National
Treatment

A-H
classificationof NT

B. Travel agencies
and tour operators
services(CPC 7471)
Travel agencies
services, inboundservices only(Part of CPC 74710)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Foreign equity participation
limited to 70%;(3) EF70(3) None(3) N

Other:
Tourism consulting
services(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None. Subject to economic needtests.

(3) N(3) None(3) N

A-H classification of MA

Limitation on National
Treatment

A-H
classificationof NT

Malaysia
Sector or Subsector

Limitation on Market AccessTravel Agencies
and Tour Operators
Services(CPC 7471)(For inbound travel
only)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Through joint venture with
Malaysian individuals or Malaysiancontrolled corporations or both andaggregate foreign shareholding in
the joint-venture corporation shallnot exceed 70 per cent.

(3) EF70(3) None(3) N

Tourist Guide
Services(CPC 7472)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Unbound*(3) U(3) Unbound*(3) UPA P E R 7 T R A D E I N TO U R I S M S E R V I C E S

59Myanmar
Sector or Subsector

Limitation on Market Access

A-H classification of MA

Limitation on National
Treatment

A-H
classificationof NT

B. Travel Agencies
and Tour Operators
Services
Travel Agencies
and Tour Operators
Services(CPC 7471)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N(3) None(3) N

Tourist transport
operation:
exclusively operatinga tourist business by
motor vehicle, water
craft or both(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N(3) None(3) N

A-H classification of MA

Limitation on National
Treatment

A-H
classificationof NT

Philippines
Sector or Subsector

Limitation on Market Access

B. Travel agencies
and tour operators
services
Travel Agencies andTour Operator(CPC 7471)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Up to 70% foreign equity isallowed(3) EF70(3) None(3) N

D. Other:Hotel management
services for all hotel
categories including
boutique andspecialty hotels(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Up to 70% foreign equity isallowed(3) EF70(3) None(3) N

Limitation on National
Treatment

A-H
classificationof NT

Singapore
Sector or Subsector

Limitation on Market Access

A-H classification ofMA

Travel Agencies andTour Operators(CPC 7471)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N(3) None(3) N

Tourist Guide
Services(CPC 7472)(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N(3) None(3) NP R O M O T I N G S E R V I C E S T R A D E I N A S E A N – M A R C H 2 018

60

Other Tourism
Services- International hotel
operator,- Tourism
consultancy
services,- Convention centre,- Tourist resorts
include hotel,- Marinas, golfcourse and other- Sport facilities- Hotel management- Professional
Congress Organizers(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N(3) None(3) N

A-H classification of MA

Limitation on National
Treatment

A-H
classification
of NT

Thailand
Sector or Subsector

Limitation on Market Access

B. Travel agency
and tour operator
services(CPC 74710)(1) Unbound(1) Unbound(1) Unbound(1) U(2) None(2) None(2) None(2) N(3) As indicated in 3.3 of thehorizontal section and not less thanhalf of the board of directors of thecompany must be Thai nationality(3) EF70(3) None(3) N

Outbound travel
information
services (excluding
accommodation andtravel reservation
services)(CPC Version 1.1 :part of 67813)(1) None(1) Unbound(1) None(1) N(2) None(2) None(2) None(2) N(3) Foreign equity participationmust not exceed 70 per cent of
the registered capital and shall
only operate in the form of limited
partnership(3) EF70(3) None(3) N

A-H classification of \MA

Limitation on National
Treatment

A-H
classificationof NT(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None, except that:
Foreign service supplying companies
are permitted to provide services
in the form of joint venture with
Vietnamese partners with nolimitation on foreign capital
contribution.

(3) N(3) None, except tourist
guides in foreign-invested
enterprises shall beVietnamese citizens.
Foreign service supplying
enterprises can only
do inbound services
and domestic travel for
inbound tourists as anintegral part of inboundservices.

(3) N

Viet Nam
Sector or Subsector
Travel agencies
and tour operator
services(CPC 7471)

Limitation on Market AccessPA P E R 7 T R A D E I N TO U R I S M S E R V I C E SOthersTourist theme park

61

(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Foreign service supplying
companies are permitted to provide
services in the form of joint venturewith Vietnamese partners
The capital contributions of theforeign side shall not exceed 70% of
the legal capital of the joint venture.

(3) EF70(3) Unbound(3) U

A-H classification of MA

Limitation on National
Treatment

A-H
classificationof NT(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N(3) None(3) N

A-H classification of MA

Limitation on National
Treatment

A-H
classification
of NT

(1) N

(1) None

(1) N

(2) N

(2) None

(2) N

(3) U

(3) Unbound(3) U

A-H classification of MA

Limitation on National
Treatment

A-H
classificationof NT(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Unbound*(3) U(3) Unbound*(3) U

A-H classification of MA

Limitation on National
Treatment

A-H
classificationof NT(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N(3) None(3) N

Tourist guides service
Cambodia
Sector or Subsector
Tourist guides
services(CPC 7472)

Limitation on Market AccessIndonesia
Sector or Subsector

Limitation on Market AccessTour Leader Services (1) None
(CPC 74710)(2) None(3) Unbound

Malaysia
Sector or Subsector
Tourist Guide
Services(CPC 7472)

Limitation on Market AccessSingapore
Sector or Subsector
Tourist Guide
Services(CPC 7472)

Limitation on Market AccessP R O M O T I N G S E R V I C E S T R A D E I N A S E A N – M A R C H 2 018

62

ThailandA-H classification of MA

Limitation on National
Treatment

A-H
classificationof NT(1) None(1) Unbound(1) None(1) N(2) None(2) None(2) None(2) N(3) Foreign equity participationmust not exceed 70 per cent of
the registered capital and shall
only operate in the form of limited
partnership(3) EF70(3) None(3) N

A-H classification of MA

Limitation on National
Treatment

A-H
classificationof NT(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Joint-venture corporation with
Bruneian individuals or Bruneiancontrolled corporations or both theaggregate foreign shareholding in
the joint-venture corporation shallnot exceed 70% foreign equity.

(3) EF70(3) None(3) N

A-H classification of MA

Limitation on National
Treatment

A-H
classificationof NT

Sector or Subsector
Outbound travel
information
services (excluding
accommodation andtravel reservation
services)(CPC Version 1.1 :part of 67813)

Limitation on Market Access

Other tourism services
Brunei Darussalam
Sector or Subsector
Other Tourism
Services- Youth Hostel- Golf Courses- Marina Facilities

Limitation on Market AccessIndonesia
Sector or Subsector

Limitation on Market Access

D. Other(1) None(1) N(1) None(1) N

Tourism Consultancy
Services(CPC 91136)(2) None(2) N(2) None(2) N(3) Must be registered to Indonesian
Ministry of Justice as Indonesiancompany. In the case of cooperation
with a national company, it isrequired, to do; Joint venture,joint operation and Contract
management. Foreign equity
participation is permitted up to 70%(3) EF70(3) Unbound(3) UInternational Hotel
Operator(1) None(1) N(1) None(1) N(CPC 91135)(2) None(2) N(2) None(2) N(3) Joint venture with foreign equity
participation up to 70%(3) EF70(3) As indicated in
Horizontal commitment
a. Only in certain parts ofEast Indonesia (Sulawesi,
Papua, Moluccas, Nusa
Tenggara), while in otherareas, it is closed forforeign investment.
b. Joint Venture withlocal Small and Medium
Enterprises (SME’s)(3) EF

PA P E R 7 T R A D E I N TO U R I S M S E R V I C E S

63Lao People’s Democratic Republic
Sector or Subsector
Other:
Tourism consulting
services

A-H classification of MA

Limitation on National
Treatment

A-H
classificationof NT(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None. Subject to economic needtests.

(3) N(3) None(3) N

A-H classification of MA

Limitation on National
Treatment

A-H
classificationof NT(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Up to 70% foreign equity isallowed(3) EF70(3) None(3) N

A-H classification of MA

Limitation on National
Treatment

A-H
classificationof NT(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) None(3) N(3) None(3) N

Limitation on National
Treatment

A-H
classificationof NT

Limitation on Market AccessPhilippines
Sector or Subsector
D. Other:Hotel management
services for all hotel
categories including
boutique andspecialty hotels

Limitation on Market AccessSingapore
Sector or Subsector
Other Tourism
Services- International hotel
operator,- Tourism
consultancy
services,- Convention centre,- Tourist resorts
include hotel,- Marinas, golfcourse and other- Sport facilities- Hotel management- Professional
Congress
Organizers

Limitation on Market Access

Thailand
Sector or Subsector
D. Other:Hotel management
services(CPC Version 1.1:
part of 63110)

Limitation on Market Access

A-H classification of
MA(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) As indicated in 3.1 of thehorizontal section(3) EF70(3) None(3) NP R O M O T I N G S E R V I C E S T R A D E I N A S E A N – M A R C H 2 018

64

Viet Nam
Sector or Subsector
OthersTourist theme park

Limitation on Market Access

A-H classification ofMA

Limitation on National
Treatment

A-H
classificationof NT(1) None(1) N(1) None(1) N(2) None(2) N(2) None(2) N(3) Foreign service supplying
companies are permitted to provide
services in the form of joint venturewith Vietnamese partners
The capital contributions of theforeign side shall not exceed 70% of
the legal capital of the joint venture.

(3) EF70(3) Unbound(3) U

Sources: http://myservices.miti.gov.my/widget/web/guest/protocol/-/56_INSTANCE_cxTW8VKZiDDDFor Brunei Darussalam, http://www.miti.gov.my/miti/resources/AFAS_9_Consolidated_Schedule_-_BD_SOC_(CCS_78).pdf
For Cambodia, http://www.miti.gov.my/miti/resources/AFAS_9_Consolidated_Schedule_-_CA_HC_(AFAS__5).pdf
For Indonesia, http://www.miti.gov.my/miti/resources/AFAS_9_Consolidated_Schedule_-_ID_SOC_(CCS_78).pdf
For Lao People’s Democratic Republic, http://www.miti.gov.my/miti/resources/AFAS_9_Consolidated_Schedule_-_LA_SOC_(CCS_78).pdf
For Malaysia, http://www.miti.gov.my/miti/resources/AFAS_9_Consolidated_Schedule_-_MY_SOC_(CCS_78).pdf
For Myanmar, http://www.miti.gov.my/miti/resources/AFAS_9_Consolidated_Schedule_-_MM_SOC_(20140312).pdf
For Philippines, http://www.miti.gov.my/miti/resources/AFAS_9_Consolidated_Schedule_-_PH_SOC_(21Aug2015).pdf
For Thailand http://myservices.miti.gov.my/documents/10180/f0c1be7c-124f-47bf-b4f9-2fd6300ab7d1
For Singapore, http://www.miti.gov.my/miti/resources/AFAS_9_Consolidated_Schedule_-_SG_SOC_(20130509).pdf
For Viet Nam, http://www.miti.gov.my/miti/resources/AFAS_9_Consolidated_Schedule_-_VN_SOC_(20150911).pdf

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65

ANNEX E.
WORKABLE POLICY SUGGESTIONS FORPROMOTING TRADE IN TOURISM SERVICES
In the “4th Seminar on Promoting Services Trade in ASEAN – Tourism Services” (held 30 November–2
December 2017, in Hua Hin, Thailand), subjective policy evaluations were made. The final reported
results are covered in the following tables (the original memorandum form is retained in the answer
texts provided by the ASEAN Member States).

Table E1. Policy suggestions for increasing n (number of foreign visitors)
Country

Local and community-level
policy suggestions

Country-level policy
suggestions

ASEAN-level policy
suggestions

Brunei
Darussalam

Facilitation of travel (e.g. visa,
airport procedures)

Improve connectivity
infrastructure

Promote visa waiverarrangements and allow for
the 5th freedom rights

Cambodia• The new product of eachtourist destinations andtour itinerary should be
developed,• Tourism productdiversification• Cambodia Community-BasedTourism Standard• Cambodia Public Toilet
Standard• Cambodia Homestay
Standard• Cambodia Green HotelStandard• Travel and tour code of
conduct• The transparency ofcompetition between local andinternational tour organizing.
• The implementing of tourism
law and legislations.
• The policy of government incharge of tourism in order tosupport and allocate fund fortour subsidy.
• Raising awareness andconducting training as well tobe professional.
• The participation of 4Ps(Public, Private, Partnershipand People)• Strengthening good
cooperation with ASEAN
Member States• Following the ASEAN’
structure in order to improveskills and knowledge.
• Working closely ASEAN
Tourism Marketing
Coordinator, and ASEAN
Travel Association for
Tourism Package Tours andPromotion• Review the ASEAN
Standards (CBT, Homestay,
Public Toilet, Green Hotel…)

Indonesia• Create a new tourism
destination like nature,
heritage, and culture• Development of humanresource (foreign language,
hospitality)• Digital tourism, such as
development through digitalmedia• Development of infrastructure

Free visa to enter the ASEAN
countries.

Lao People’s
Democratic
Republic

Emphasize on the improvementof existing tourism destinationthat already have some
services, but need up grading.
Encourage and support theprovincial tourism authorities
to complete tourism site
development and management
plans as well as zoning in order
to attract suitable investments
for each site.

Promote the development of
infrastructure that is beneficial
to the tourism industry that
supports convenient accessand services for all market
age groups. At the same time,standards, quality, safety andhygiene are highly important
agendas.

Expand international
cooperation with countries,
which are the target markets.

/…

P R O M O T I N G S E R V I C E S T R A D E I N A S E A N – M A R C H 2 018

66

Local and community-level
policy suggestions

Country-level policy
suggestions

ASEAN-level policy
suggestions

Malaysia• To build capacity for local
tourism stakeholders to
be more competitive in theindustry.
• To provide enabling businessenvironment to easeprocedures in operating
tourism-related enterprises.
• To promote communitybased tourism• To promote sustainable
tourism practices.

• To intensify promotion.
• To facilitate tourist travel suchas connectivity and visa.
• To continuously improve andmaintain tourism products,
infrastructure and facilities.
• To encourage innovation in theindustry.
• To reduce red tape andsimplify the procedures.

• To promote ASEAN as asingle destination.
• To promote Intra-ASEAN
travel.
• To promote quality products
and services by adopting theASEAN Tourism Standards(i.e. MICE, Hotels, Homestay,Spa & Wellness).

MyanmarStill need to develop andstrengthen

Short term and long term policy
and effective implementation,
funding and capacity-building
need to educate people, forsocial connectivity.

Harmonize tourism
qualification, and MRA
implementation.

Philippines• Expand present tourist
destinations• Develop, promote and market
emerging destinations• Strengthen partnershipwith local government
units, communities, private
stakeholders for communitybased tourism• Utilizing new platforms fortourism promotion such as
collaboration with travel
bloggers, social media, chatroom etc.
• Rebranding campaign to instill
country’s tourism identity suchas Amazing Thailand, Uniquely
Singapore and Exciting Bicol(Philippines), among others.
• While increasing the numberof foreign visitors is important,
it is also important to focus
on the type of visitors thata country would want to
attract. Retirees may havehigher spending power thanmillennial tourists as theyusually stay longer and preferhigh-end tourism services.
• Portability of health/retirement insurance. This
policy is specifically targeted
towards retirees who would
want to stay longer in the
ASEAN region.
• Support the developmentof infrastructure (seamless
multimodal transport) tofacilitate movement of people• Policies towards improving
connectivity within the
ASEAN region should be
implemented to promoteseamless transportation• A regional air services
agreement that will grant
air traffic rights between
Member States to facilitate
movement of goods, services
and people• Promote cruise tourism in
the region (to be studied
carefully)• Develop one ASEAN
branding campaign• Develop promotion
strategies that willencourage tourists to visit
more than one ASEAN
country• Tap ASEAN market• Active involvement/
participation in policymaking
activities within the ASEAN• Promote openness toinvestments and implement
strategies to attract foreign
direct investments in the
tourism sector

Singapore

Increase capacity-buildingof tourism professionals andservice delivery• Ease of travel facilitation suchas Visa• Increase connectivity points
via different transportation
channels

Same as country-level policy
suggestions

ThailandInvestment in human capital in
local community• Invest in tourist infrastructure.
• Create new tourism products.

• Create new ASEAN tourism
products such as cruise
tourism, overland travel.
• Reduce visa application
procedure for non-ASEAN
visitors.

Viet Nam• Develop local attractions,environment• Create “discoveries” within
destinations (create curiosity)

Promote short stay, single entry
visa entrance

Promote “ASEAN” together as
a destination attraction (manyplaces to visit within one trip)

CountryPA P E R 7 T R A D E I N TO U R I S M S E R V I C E S

67Table E2. Policy suggestions for increasing u (unit or per-person consumption)
Country

Local or community-level
policy suggestions

Country-level policy
suggestions

ASEAN-level policy
suggestions

Brunei
Darussalam

Establishment of tourism
business related enterprises

Ease of establishing MSMEs bylocal communities

Promote ASEAN as a single
destination and encourage
multiple ASEAN country
visitations

Cambodia

Diversify and improve quality of
products and services to meet
quality standard and the needof foreign visitors.

Government agencies tointroduce policies that could
encourage people creating
new type of business bothproducts and services suchas using Khmer traditional
hospitality and re-producing
the traditional craft art/
antique products which usedin ancient time by Khmer
people in previous centuries
etc. Clustering tourism amongprovincial tourism agencies
would also attract longer stayand so could trigger moremoney spending.

More activities for the exchange
and cooperate in tourism
promotion for ASEAN as awhole.

Indonesia

Create the attractions orcalendar of events: monthly or
annually

Collaboration with associations
and airlines to make travel
packages.

Joint travel package between
ASEAN countries.

Lao People’s
Democratic
Republic

Raise awareness of local
people in heritage conservation
especially to know theimportance and significancesof their culture and traditions.

Encourage local tour operators
to development tourism
programs that are linked
nationally, regionally andinternationally.

Free visa

Malaysia• To diversify of products andservices’ offering.
• To encourage local
community to involve in thecreative industry such as
handicraft productions inorder to support core tourism
activities (spillover effects).
• To provide attractive
incentives in order toencourage innovation andvalue added activities.

• To promote high-yieldsegments such as shoppingand MICE as the main
tourism products.
• To promote smart payment toeasy purchasing transactionof products and services
procured in the country.
• To attract high-spending
tourists for countries such as
China, Germany, India, Japan,
the Republic of Korea, etc.

• To establish one-stop centres
in all ASEAN countries thatsell iconic ASEAN products
and services.
• To further liberalize tourism
services in ASEAN byproviding a variety of products
and services.
• To improve ICT infrastructureby promoting onlinetransactions in products andservices.

MyanmarNeed quality product andquality services, to educate
people, share knowledge andtraining.

Review the related sectors.

To adjust the imbalance
in development and thedevelopment gap of thecountries in the tourism sector.

/…

P R O M O T I N G S E R V I C E S T R A D E I N A S E A N – M A R C H 2 018

68

Local or community-level
policy suggestions

Country-level policy
suggestions

ASEAN-level policy
suggestions

Philippines• Tie up tourism promotion
campaign with the onetown-one product program
as tourists are likely to bringhome unique souvenir items/
food products• “Let them stay longer” bydiversifying destinations in
the different regions of thecountry, as seen in the Bicol
region of the Philippines• Quality over quantity of
tourist. Also Promote quality
standards in tourism services
and products.

• Diversification of tourism
products and services toaddress the different needsof every type of tourist should
be promoted. There arenine tourism portfolios in
the Philippines, focusing oneach region’s strengths andcore value and matching itwith what the tourist market
wants. An example: matchingregions known with culinary
tourism with Chinese tourists
who are known for spending
on food and culinary
experience on their holidays• Liberalization of financial
services in the region.
Although a single currency
may not be possible in
the near future, access todifferent financial services
in the region would help
improve the overall
experience of foreign tourists.
Aside from the availabilityof ATMs that cater tointernational debit cards,
cashless transactions using
electronic payment systems
should be promoted.
• Tourism activities shouldbe theme based rather thanactivity based. For example,
in the Philippines there is an
island, Catanduanes which
we would like to focus on as
an ecotourism destinationand promote and market it assuch for the entire island. The
island has diversified tourist
destinations, including scenic
spots, falls, sun and beach,historical sites, culinary etc.

Singapore

Promote local products andartisans, as well as help
develop effective packaging andstorytelling to entice purchase,since travelers prefer to buy
local products when at thedestination.

• Ease of tax refund procedures Same as the left
and processes• More infrastructuredevelopment to ease travel
domestically, as well as
develop more integrated
development to encourage
spend (beyond tourist
attractions, etc).

Thailand• Develop more hi-end local
products.
• Promote the lessen-known
tourist destinations focusing
on hi-end segments.

• Develop all- inclusive healthand wellness resorts.
• Develop anti-aging products.
• Promote tourism for all, longstay tourism

Viet Nam• Promote local products atinternational standard• Develop exclusive products
and services

Envision long term policies
and at national level for
consumption

Country

Promote long-stay tourists.

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69Table E3. Policy suggestions for increasing r (local procurement rate or the rate of domestic value added)
Country

Local and community-level
policy suggestions

Country-level policy
suggestions

ASEAN-level policy
suggestions

Brunei
Darussalam

Encourage hotels to locallysource materials

Support local MSMEs todevelop and meet demands
from the tourism sector,
through financial, legislationand capacity-building.

Encourage cross-bordersources of materials needed by
the ASEAN tourism industry.

Cambodia

Need contract with local
farmers/producers to supply
the local products and services
to tourism industry. To achievethat training is needed to makesure that they products andservices supplied is met thestandard and requirement of
tourism industry.

Government should intervene
to bring together the Industry
and local farmer/producers
and enforce a policy which
encourage the buying of local
products/services.

ASEAN should promote
tourism by promoting theusing of ASEAN products andservices.

Indonesia

Develop the community for a
traditional food management.
Related to SMEs.

Sell the products during on
festivals or events or introduce
it through a festivals or events.

Reduce the import tariff
or ease doing business(deregulation in ASEAN
countries)

Lao People’s
Democratic
Republic

Provide continuous support oncommunity-based ecotourism
development for poverty
reduction and sustainability.
Support tourism developmentthat is inclusive andparticipatory.

Open and promote domestic
and foreign investment intourism projects.

Encourage and promote
tourism investment by ASEAN
member and private sectors in
ASEAN cooperation.

Malaysia• To build capacity of the local
community in enhancing
the quality of products andservices.
• To provide attractive
incentives to local
community.
• To eliminate third party
interferences in the supply
chain of tourism products.

• To promote Buy Local
Products campaign.
• To impose special criteria
for hotel in adapting local
elements produced locally (i.einterior design, decoration,
toiletries).

To organize trade fairs/
expos and business meetings
between buyers and sellers
among ASEAN countries.

MyanmarNeed to innovate, creative
thinking effective utilize of theexciting resources.

Supported policy and adapt
clear guideline.

ASEAN need to recognize therelation between goods andservices.

Philippines•P ursue eco, nature based
tourism as well as communitybased tourism in the region• Encourage more MSMEs in
the locality and help them
become competitive in terms
of pricing and packaging(designs), among others

Convergence of different
government agencies
responsible for tourism
development from transportministries, investment
promotion agencies and tradeministry, among others.

Continue to implement
preferential treatment for tariffon goods within the region andpromote liberalization of trade
in services

Singapore• Provide value added services
to stay competitive• Improve service delivery

Encourage innovation and useof technology

Same as left

Thailand• Reduce obstacles for tourism
SMEs

Set up a national agency
to enhance the capacity of
tourism-related products andservices.

Tax incentive for non-ASEAN
members to Invest in hi-end
tourism products.

Viet Nam

Develop technology to increasevalue added products andservices

Purchase/learn from foreign‘value added’ strategies

ASEAN countries cooperate
at each countries strength toincrease value for ASEAN area
as a whole

P R O M O T I N G S E R V I C E S T R A D E I N A S E A N – M A R C H 2 018

70

Table E4. Policy suggestions for leveraging m (multiplier effects of tourism sector)
Country

Local or community-level
policy suggestions

Country-level policy
suggestions

ASEAN-level policy
suggestions

Brunei
Darussalam

Encourage local business andcommunity participation

Create national policies
or legislation that support
the active participation andfacilitation of local businessdevelopment

Ensure related sub-sectors
will support the ASEAN
tourism goals (communication,transport, health, immigration)

Cambodia

Government should invest in
local community to encourage
local creativity to create
more value added products
and services to attract moreinvestors and to make themspend more money for local
community

Better policy coordination at
the government level to makesure that income from tourism
sector would be used todevelop country’s economy andhelp reduce poverty.

ASEAN needs to make more
efforts in mainstreaming
money received from Tourism
to fuel economic growth andto investment in tourism andother sectors of economy

Indonesia

Select the priority destination.

Joint promotion with a business • Development of ASEAN
partner for transportation andTourism website more
accommodation.
attractive to make it easy
for foreign people travel to
ASEAN.
• Budget allocation for tourism
in each ASEAN countries.

Lao People’s
Democratic
Republic

Promote human resources
development at all levels tostrengthen capacities and skills
in tourism market research.

Promote tourism business
management for stronger
and sustainable growth of theprivate sector that is in linewith the government’s policy
at national and provincial
levels. Establish a systematicmanagement mechanismthat is applicable nationwide.
Increase law enforcements andstrict implementation of rules
and regulations set forth.

Support the development ofregulations and standards thatis in line with the ASEAN scopeof work.

Malaysia

To encourage more people toinvolve in the industry.

• To introduce newdestinations, products andservices in the country.
• To revitalize/rebrand theaging products and services.

 o further promoteTliberalization of products andservices.

Myanmar

Adopt local community
development policy.

Hard and soft infrastructuredevelopment policy need tosupport.

Expectation of the ASEAN
connectivity.

Philippines

Maintain the local identity andculture of each community,
hence a foreign tourist will havea different experience visiting
each region of a particularcountry. An example of this is
the tourism campaign of the
Bicol Region in the Philippines,
Exciting Bicol. Exciting isfrom the following concepts:
Excellent, Competitive,
Inclusive, Tourism andEnvironmentally Sustainable(EXCITES). This concept willanswer maximizing revenues
while minimizing impact on the
tourist destination.

Local tourism plan should bealigned with national tourism
development plan and should
also be aligned with ASEAN
and UNTWO initiatives

Implement complementary andnot competing policies/…

PA P E R 7 T R A D E I N TO U R I S M S E R V I C E S

71Local or community-level
policy suggestions

Country-level policy
suggestions

ASEAN-level policy
suggestions

Singapore• Encourage innovation andvariety of goods and services• Encourage community
involvement for interaction
with tourists, cultural
exchanges

Encourage integrated
developments – beyond tourist
attractions, to upgrade retail,accommodation, transport
options – online and offline• Increase trade networks
among ASEAN Member
States• Expand infrastructuredevelopment to ease crossborder transportation of
goods, people and services.

Thailand• Enhance competitiveness of
local guides.
• Encourage local people touse hi-technology in tourismrelated industries• Allow foreign tourist guides
to work in Thailand on thecondition that they arecertified by ASEAN standards.
• Give more incentives
for digitalized tourist
information.

• Promote high-techcompanies to establish in
ASEAN.

Viet Nam

Promote recruitment of foreign
professional to manage andshare experience with local
tourism-related professionals

Apply comprehensive tourism
policies throughout all areas(not only big main cities)

CountryASEAN Promotion Centre on Trade, Investment and Tourism
www://asean.or.jp