After reading a article on a good friend,, Matt Wilkie website,, http://tropicalpenpals.com/blog/things-related-directly-about-the-philippines/would-reducingfixing-the-prices-on-hotelsresorts-and-rentals-help-the-philippines-to-boom/ , which by the way is a excellent website with lots of great information.. Plus he updates it daily.. He really works hard..
Now back to what I was saying.. I can not talk about the entire Philippines, but I can talk of my Experience here in Cebu and Especially on Mactan Island.. I would not be afraid to say most of the Rest of The Country is about the same.. Being in business here for long time, studying and watching most all business industry and tourism industry,,, I can say that the Philippines really lack a good base of business educated and lets say business smart people.. Now, most foreigners who come here to do business has somewhat of a excuse. They are trying to start a business in a strange culture, and do not understand the laws and do not study enough. Plus they come with the intention, even if they do not mean to,,, of running a business like are used to back in their home country.. Not realizing that is it NOTHING at all like that.. For Filipino business people, I really see a lack of business knowledge and business sense on basis skills.. These which they should know.. These lack in the local and tourism industry...
From my Almost 9 years living here, I can tell you for a fact,,, including some of my own,,,, 80% of business that starts here in Cebu, fails and closes within 3 years......
I am happy to say now,,, The Jungle Restaurant and Cultural Entertainment is doing Great. But through many trials and tribulations and after many failed attempts at other things...
Lets take this a problem at a time.. First lets Start with :
Pricing ---- I can see one major problem here is the major variation in pricing.. Its very rampant. You have Mactan Island Hotel's and Tourism related activity's priced almost as High as American standards.. Then you have Boracay even higher.. Then you have El Nido, where pricing is much different.. Even within one community you can find a guitar at one shop for P 1500. Then you can go down the road a few kilometers and find the same guitar at P 15,000. This is just one example, but they are many, many more.. You will find hotels priced way to high for the service and quality of the place.. Then you will find another not so high.. Some of the Problems I see here with pricing:
* Tourist numbers are low, so increase the pricing so you can make more. This should just be the opposite.
* Add on, add on.. Big Problem.. Example :: We sell our Dinner and Show Packages for P 600. Then the local street guys, or agencies, taxi drivers, ect... will add on a crazy amount such as P 1000. Selling it to tourist walking the street for P 1600. This just mostly turns tourist away because its too high.. Which in return hurts business , cause they will not go at all, which in turn hurts economy. All for just greed and trying to make a lot from one person... Bad, bad business ways...
* Knowing the merchandise you have is P 200 and you are making good profit.. THEN, seeing it is a Foreigner or White, you make the Price P 500. Which in turn, before its all over, you will not sell it at all, because most of the tourist will just walk away. When they could have sold it for the P 200 and still been ok.. So they just loose the sell all together.. BAD, BAD Business ways..
* Places already charging a over priced amount, and then hitting the customer at the end with cooking charges, corkage for bringing a bottle of water in the resort, charge for extra pillow, extra blanket.... on and on, they are many more.... Again bad business choices...
* Taxi's overpricing, No Posted Prices, and many others..
Now lets look at the other side of the coin :
Underpricing ----- You see this mostly with local Pinoy business... You see this with Sari Sari Stores, Road Side Shops, and you even see this with some upper scale business.. They make the price of things so cheap, in the end they can not even make enough profit to pay the rent, the electric, overhead... All in hopes of getting more customers.... This again is a recipe for disaster. I see this with a lot of Expat's.. They will want a P 200 meal, or they will want beer for P 30 to 35 a bottle... They want rooms for P 500 a night.... But at the same time, they want nice Air Conditioned place, with top notch waiters and waitress, with good tables and chairs, great decor, fancy surroundings. You would think, at least foreigners would be smarter than this.. But you will find many, many of them are NOT.. How can a business owner build a very nice building, pay rent, have great staffing, fancy decorations and all that when his prices are so low for that type of environment. Again bad business decisions.....
Now lets look at the next ::
Competition ----- This is another one that seems to lack good business sense, not to even say common sense.. This is done by Pinoy and Foreigners alike.. More with Pinoy... I see it everday, I am still amazed... A new BBQ Open's up in a area.. Only one there... Well in less than a few months they will be three or four more.... NOW here is where it gets even more crazy..... They will put them right beside each other... When you go to the Public Markets,,, Fruit Vendors all beside each other, BBQ all beside each other, Chicken..... Bad, bad business decisions.. For the foreigners... Bikini Bars --- One opens, soon someone will open another right beside it.. All this does is bring down the sales for everyone and cuts profits in half... The more doing the same thing in a small area, the more loss, which sooner or later causes most to close.... Same for tourism,,, If someone opens something tourism related, and its doing ok, just enough to survive, someone will come in and open the same thing very close, if not even beside... Then the one who was just making it then starts to fail, then the new one can not get enough to get started good..
Seems no one researches or does any kind of advisability studies, or market studies, or looks at any important factors when starting a business... They just do it... Then the government itself does nothing to help. Like putting limits on how many Resorts or Restaurants, or Dive Shops, or BBQ Houses, or Sari Sari Stores can be in one area... And lets not even get started on Multi Cab and Tri Bikes, Buses, Ect....... Bad Bad Business decisions...
Now lets talk about new industrial and foreign business that want to come in.......
Foreign Business and Industry---------- Here is another one... Although Cebu has a lot of Foreign companies and industry, how much more could they have.. Industry wants to open in PI.. Well lets see :::
* A foreigner can not own a business, has to let a Filipino hold at least 60% ownership.
* Have to spend a lot for back up electric system, because most of PI does not have enough electric to sustain.
* Have to put up a Large Concrete or Metal Security fence because not enough local police, or good enough security to keep out vandalism, theft, stand by .......
* Processing of documents and shipping is not computerized.. Government is so slow in processing and even doing simple documents that are needed regularly in industry...
* Corruption is so rampant, you have to figure in a budget to pay the Port Authority, Police, Mayors, Tax People, and many others..
* Over One Month a Year is Holiday or some kind of non working Holiday..... Which means your labor increases for workers to work those days......
* Have to have Security Force almost as large as the work force,,,, Just to keep the work force in line and make sure the factory does not take a loss......
* Have to Hire and Train most Top Management personnel, because they do not receive proper training here in PI, to run and operate a foreign company in the manner in which its required to run....
Now last but not least, lets look at ::
Service and Quality --------- This goes for tourism and local and well,,,, lets just say about everything here in PI..... Government offices run poorly, untrained staffing, not qualified staffing, no computers, no one in office during most part of the day..... One hand does not know what the other hand is doing.....
Then you have tourism, in which most places are not trained properly on how to handle foreign tourist.. How to treat them, what they expect, the conditions property and business needs to be kept in.. Keeping establishments up to Foreign standards, bad quality service... Taxi Drivers, overcharging, price differences, inflated prices,,, i could go on and on.....
These are all bad business decisions on the part of government and individuals here in PI.. Now if PI, could take just my simple list above, which I am sure is not complete with all the problems, and they could fix that.... WOW, how much more would industry, tourism, local economy improve and increase.. Isn't that really what we all want.. Those of us living and working here, and residents and citizens.. Is this what you want for you country and your lives... I sure know it is what I would love to see, for the country and the people... Well, I am not a Nobel Prize winner or claim to have the highest IQ in the World.. BUT, If you are one of the people who is doing something on the list mentioned above.... STOP IT... Then you will see you country get better, and your economy grow....
Now, if you are one of the people who are doing what is on the list above, and you continue to do it.. then you can credit yourself with the state of the country now.... No need to be a hypocrite and complain... If your doing those things, then you are part of the problem, not the solution.
Everyone might say,, We want to get our part, we can not stop doing those things mentioned above, we are poor and need to get as much as we can.. We want to open a BBQ next to that one, he is making money, we want to do that.... First watch and see how much he is making and the amount of business he is doing... Now cut that in half when you open yours beside his... Is that enough for you both to sustain ??????
When you see the tourist walking down the road.... Do not sell him the P 600 package for P 1600.. Sell it to him for P (900 ). You have give him a good deal, and you can see he will want to come back to visit you and your country again... You have still made P 300 for a few hours work, plus helped your country.. Tell the 3 extra friends who are walking with you, HOPING and Expecting to get a cut FOR WHAT>>> Just walking with you.... Tell them you do not need them.
Do Not Overcharge the foreigner, do not have the CR look like a piggery in your tourism business. Have all your staff trained to serve foreigners.. Have your cooks know how to cook for different cultures..
Government officials, stop making it so hard for foreign investors to come here. Stop lining you pockets with bribes and kickbacks... You are making a good living away. Start doing something that will not only help your children future, but the future of your community.. If we all do not stop trying to GET IT ALL FOR OURSELVES, and start learning how to do sustainable tourism, industry, and local economy... We are going to see ourselves in the same place, with the same problems, with the same life, still struggling, 10 years from now, while the rest of the World Pass US BY....
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