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THE APPLICATION OF VALUE CHAIN ANALYSIS TO MEASURE
ECONOMIC BENEFITS AT TANJONG PIAI, PONTIAN, JOHOR
Presenter:Nor Haniza
Binti Mohamad
10 July 2010
7/23/10
To show the importance to measure tourism economic benefits received by local people
To explain the application of value chain analysis in community based tourism context
7/23/10 Johor Map
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Tanjong Piai Site Map
TPRG, UTM (2009)
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Tanjong Piai Welcomes You
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With its ecotourism
site
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With its local products
TPRG, UTM (2009)
7/23/10 TPRG, UTM (2009)
7/23/10 TPRG, UTM (2009)
7/23/10 TPRG, UTM (2009)
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With its Kampung life
TPRG, UTM (2009)
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Which you can experience at
Tanjong Piai Homestay
TPRG, UTM (2009)
7/23/10 TPRG, UTM (2009)
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Many of its people earn a living through tourism
TPRG, UTM (2009)
7/23/10 TPRG, UTM (2009)
7/23/10 TPRG, UTM (2009)
7/23/10 TPRG, UTM (2009)
7/23/10 TPRG, UTM (2009)
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Number of Tourist Arrivals at Tanjung Piai Homestay
Source: TPRG, UTM (2009)
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Gross Income of Tanjung Piai Homestay from 2007 until October 2009
0
2
4
6
8
10
12
Year
No. of Total
Income (RM)
Source: TPRG, UTM (2009)
7/23/10
However, numbers can be deceiving…
In the end, who gets what really?
How much tourism income is received by the local people?
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It is important to correctly measure tourism economic benefits received by local people.
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RM25
Tourist
Homestay Provider(profit –RM125)
42%
Coconut Farm
(Profit – RM13)
4%
Local People(Profit – RM12)
4%
Bee Farm(Profit – RM13)
4%
Seafood Restaurant
(Profit – RM65.00)
22%
Local People(Profit – RM12)
4%
Local Fishermen
(Profit – RM60)
20%
RM300
RM60
RM12
RM12
RM125
RM25RM175
Accommodation Value Chain of Tanjong Piai – income distribution
Source: TPRG, UTM (2009)
7/23/10
Restaurant Value Chain
Tourist
Restaurant(Profit – RM800)
53%
Wholesaler (Profit –
RM400.00)
27%
Kampung People (Profit –
RM300.00)
20%
RM1500
RM700
RM300
Source: TPRG, UTM (2009)
7/23/10
Retail Value Chain
RM25
Tourist
Homestay Provider(profit –RM125)
42%
Coconut Farm
(Profit – RM13)
4%
Local People(Profit – RM12)
4%
Bee Farm(Profit – RM13)
4%
Seafood Restaurant
(Profit – RM65.00)
22%
Local People(Profit – RM12)
4%
Local Fishermen
(Profit – RM60)
20%
RM300
RM60
RM12
RM12
RM125
RM25RM175
Source: TPRG, UTM (2009)
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The Application of Value Chain Analysis in Community Based Tourism Context
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Value Chain Analysis
Source: Michael Porter (1985)
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Tourism Value Chain Analysis (including the tourist expenditure)
Source: International Finance Corporation – World Bank Group (2006)
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Pro Poor Income (PPI) from Tourism Activities in Tanjong Piai
Category Number of Enterprises
Total Tourist Expenditure (RM)
(a)
PPI Total (RM)
(b)
National Park 1 447060 (1) 172800
Homestay 54 146880 (4) 61615
Lekor Piai 1 142000 (5) 52800
Seafood Restaurant
3 211000 (2) 54000
Tanjong Piai Resort
1 170000 (3) 42000
Total 60 1116940 383215
(c)Source: TPRG, UTM (2009)
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The Strength of Pro Poor Income from Tourism Activities in Tanjong Piai
Category Number of Enterprises
Total Tourist
Expenditure (RM)
(a)
PPI Total (RM)
(b)
PPI Revenue Strength
(%)
(b ÷ a)
PPI Share (%)
(b ÷ c)
National Park
1 447060 (1) 172800 39 45
Homestay 54 146880 (4) 61615 42 16
Lekor Piai 1 142000 (5) 52800 37 14
Seafood Restaurant
3 211000 (2) 54000 26 14
Tanjong Piai Resort
1 170000 (3) 42000 25 11
Total 60 1116940 383215
(c)
Average 34%
100Source: TPRG, UTM (2009)
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Comparisons of PPI Revenue Strength and PPI Share
Source: TPRG, UTM (2009)
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DiscussionTanjong Piai Homestay has the strongest source of
PPI revenue strength with the highest percentage of 42 but its PPI share is only slightly higher than Lekor Piai, Seafood Restaurant and Tanjong Piai Resort which is 16 percent.
Possible explanation – it is the nature of a homestay programme to employ or involve a large number of locals in it operation.
Therefore, a large chunk of its income goes to the locals causing the PPI revenue strength to be high.
However, its total income is still fairly low thus causing the PPI share to be very small when compared to other sites in Tanjong Piai which means strategies are needed to increase profit.
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Although a tourist site may be getting substantial profits from tourism activities and seems to be having a strong PPI revenue strength it does not necessarily mean that the site is contributing equally substantially to the economy of the local people.
Nevertheless, a site like Tanjong Piai Homestay should be maintained and its products further developed because of its ability and potential to significantly return a large portion of what it earns to the poor locals.
Discussion
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Examine the homestay value chain to find out which players along the value chain have exactly benefitted the most from the homestay programme.
Examine the homestay value chain to find out which players along the value chain have exactly benefitted the most from the homestay programme.
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ConclusionValue Chain Analysis is an
appropriate tool to use in order to measure the economic benefits received by the local people.
VCA also reveal weak linkages and economic leakages.
Government and relevant authorities are able to craft strategic plans to increase tourism income for the locals.
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THANK YOU VERY MUCHTPRG, UTM (2009)