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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.

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Presentation on theme: "THE APPLICATION OF VALUE CHAIN ANALYSIS TO MEASURE ECONOMIC BENEFITS AT TANJONG PIAI, PONTIAN, JOHOR Presenter: Nor Haniza Binti Mohamad 10 July 2010."— Presentation transcript:

1 THE APPLICATION OF VALUE CHAIN ANALYSIS TO MEASURE ECONOMIC BENEFITS AT TANJONG PIAI, PONTIAN, JOHOR Presenter: Nor Haniza Binti Mohamad 10 July 2010

2 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

3 7/23/10 Johor Map

4 7/23/10 Tanjong Piai Site Map TPRG, UTM (2009)

5 7/23/10

6 Tanjong Piai Welcomes You

7 7/23/10 With its ecotourism site

8 7/23/10

9

10

11 With its local products TPRG, UTM (2009)

12 7/23/10 TPRG, UTM (2009)

13 7/23/10 TPRG, UTM (2009)

14 7/23/10 TPRG, UTM (2009)

15 7/23/10 With its Kampung life TPRG, UTM (2009)

16 7/23/10 Which you can experience at Tanjong Piai Homestay TPRG, UTM (2009)

17 7/23/10 TPRG, UTM (2009)

18 7/23/10 Many of its people earn a living through tourism TPRG, UTM (2009)

19 7/23/10 TPRG, UTM (2009)

20 7/23/10 TPRG, UTM (2009)

21 7/23/10 TPRG, UTM (2009)

22 7/23/10 TPRG, UTM (2009)

23 7/23/10 Number of Tourist Arrivals at Tanjung Piai Homestay Source: TPRG, UTM (2009)

24 7/23/10 Gross Income of Tanjung Piai Homestay from 2007 until October 2009 Source: TPRG, UTM (2009)

25 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?

26 7/23/10 It is important to correctly measure tourism economic benefits received by local people.

27 7/23/10 RM2 5 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% RM3 0 0 RM60 RM12 RM12 5 RM25 RM17 5 Accommodation Value Chain of Tanjong Piai – income distribution Source: TPRG, UTM (2009)

28 7/23/10 Restaurant Value Chain Tourist Restaurant (Profit – RM800) 53% Wholesale r (Profit – RM400.00) 27% Kampung People (Profit – RM300.00) 20% RM150 0 RM70 0 RM30 0 Source: TPRG, UTM (2009)

29 7/23/10 Retail Value Chain RM2 5 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% RM3 0 0 RM60 RM12 RM12 5 RM25 RM17 5 Source: TPRG, UTM (2009)

30 7/23/10 The Application of Value Chain Analysis in Community Based Tourism Context

31 7/23/10 Value Chain Analysis Source: Michael Porter (1985)

32 7/23/10 Tourism Value Chain Analysis (including the tourist expenditure) Source: International Finance Corporation – World Bank Group (2006)

33 7/23/10 Pro Poor Income (PPI) from Tourism Activities in Tanjong Piai CategoryNumber of Enterprises Total Tourist Expenditure (RM) (a) PPI Total (RM) (b) National Park (1) Homestay (4)61615 Lekor Piai (5)52800 Seafood Restaurant (2)54000 Tanjong Piai Resort (3)42000 Total (c) Source: TPRG, UTM (2009)

34 7/23/10 The Strength of Pro Poor Income from Tourism Activities in Tanjong Piai CategoryNumber of Enterprises Total Tourist Expenditure (RM) (a) PPI Total (RM) (b) PPI Revenue Strength (%) (b ÷ a) PPI Share (%) (b ÷ c) National Park (1) Homestay (4) Lekor Piai (5) Seafood Restaurant (2) Tanjong Piai Resort (3) Total (c) Average 34% 100 Source: TPRG, UTM (2009)

35 7/23/10 Comparisons of PPI Revenue Strength and PPI Share Source: TPRG, UTM (2009)

36 7/23/10 Discussion Tanjong 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.

37 7/23/10 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

38 7/23/10 Examine the homestay value chain to find out which players along the value chain have exactly benefitted the most from the homestay programme.

39 7/23/10 Conclusion Value 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.

40 7/23/10 THANK YOU VERY MUCH TPRG, UTM (2009)


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