The tourism industry in the Philippines is a thriving sector that offers excellent opportunities for entrepreneurs and investors. Setting up a tourism-related business, such as a hotel, resort, travel agency, restaurant, or tour operator, can be a lucrative venture, especially given the country’s popularity as a travel destination. However, establishing a tourism establishment requires compliance with various legal, regulatory, and procedural requirements.
This comprehensive guide outlines the key steps, procedures, costs, and examples involved in setting up a tourism establishment in the Philippines.
1. Types of Tourism Establishments
Before delving into the procedures, it’s essential to identify the types of tourism establishments one can establish in the Philippines. These can include:
- Hotels and Resorts: Accommodation services for travelers, offering rooms, facilities, and amenities for guests.
- Example: A mid-range boutique hotel in Palawan catering to international tourists.
- Restaurants and Cafes: Food and beverage establishments serving local or international cuisine to both locals and tourists.
- Example: A beachfront seafood restaurant in Boracay.
- Travel Agencies and Tour Operators: Businesses that offer travel planning, bookings, and guided tours.
- Example: A tour company that organizes day trips to popular destinations like Tagaytay, Baguio, or the Banaue Rice Terraces.
- Transportation Services: Services like shuttle buses, tourist vans, or boat tours that cater specifically to tourists.
- Example: A shuttle service that transports tourists from Ninoy Aquino International Airport (NAIA) to their hotels in Metro Manila.
- Souvenir Shops: Retail stores that sell local handicrafts, clothing, and souvenirs unique to specific Philippine destinations.
- Example: A souvenir shop in Cebu that sells local products like guitars, jewelry, and handwoven baskets.
2. Procedures for Establishing a Tourism Establishment
2.1 Business Registration
The first step in establishing any business, including tourism establishments, is business registration. In the Philippines, business registration depends on the type of business structure you choose (e.g., sole proprietorship, partnership, corporation).
- Sole Proprietorship: Registered with the Department of Trade and Industry (DTI).
- Procedure: Visit the DTI website and apply for a business name registration online.
- Cost: PHP 200 to PHP 2,000 depending on the scope (barangay, city, regional, or national).
- Partnership or Corporation: Registered with the Securities and Exchange Commission (SEC).
- Procedure: File incorporation documents (e.g., Articles of Incorporation) and register the business name.
- Cost: Incorporation fees depend on the authorized capital stock. For a minimum capital of PHP 5,000, the SEC fee is approximately PHP 2,000. Legal and notary fees may apply for preparing documents.
2.2 Local Government Unit (LGU) Requirements: Mayor’s Permit and Business Permit
Once registered with the DTI or SEC, the business must secure a Mayor’s Permit or Business Permit from the local government unit (LGU) where the establishment will operate.
- Procedure:
- Go to the City or Municipal Hall where your business will operate.
- Submit required documents: business registration (DTI or SEC), Barangay Clearance, lease contract (if renting space), and occupancy permit (for buildings).
- Pay applicable fees and wait for the inspection and approval of the business location.
- Cost: Fees vary depending on the LGU but typically range from PHP 5,000 to PHP 10,000 for small to mid-sized businesses.
2.3 Bureau of Internal Revenue (BIR) Registration
All businesses in the Philippines must register with the Bureau of Internal Revenue (BIR) to obtain a Tax Identification Number (TIN) and be authorized to issue official receipts.
- Procedure:
- Visit the nearest BIR office and submit the following: DTI or SEC registration, Mayor’s Permit, and lease contract.
- Pay the registration fee of PHP 500 and secure Authority to Print Receipts.
- Issue receipts and invoices to customers.
2.4 Department of Tourism (DOT) Accreditation
For tourism-related businesses, Department of Tourism (DOT) accreditation is essential. This accreditation ensures that tourism establishments meet national standards for service, safety, and quality. Accredited establishments are also eligible for DOT promotions and government support.
- Procedure:
- Submit an application to the DOT regional office.
- Provide required documents: business registration, Mayor’s Permit, list of facilities, and details of services offered.
- Undergo an inspection by the DOT to ensure compliance with standards.
- Cost: Application fees range from PHP 500 to PHP 10,000, depending on the type and size of the establishment (e.g., hotels, travel agencies, etc.).
2.5 Environmental Compliance Certificate (ECC)
For large-scale tourism businesses (e.g., resorts, eco-parks, or transportation services), securing an Environmental Compliance Certificate (ECC) from the Department of Environment and Natural Resources (DENR) is required to ensure that the business complies with environmental regulations.
- Procedure:
- Submit an Environmental Impact Statement (EIS) or Environmental Performance Report and Management Plan (EPRMP).
- DENR will review the application, conduct an environmental impact assessment, and issue the ECC if the business does not pose a significant environmental risk.
- Cost: Processing fees vary based on the size and environmental impact of the business but typically range from PHP 5,000 to PHP 50,000.
2.6 Fire Safety and Health Clearances
Depending on the nature of the business, certain clearances may also be required:
- Fire Safety Inspection Certificate from the Bureau of Fire Protection (BFP).
- Sanitary Permit from the City Health Office.
Both of these inspections are conducted by the local authorities to ensure that the business meets fire safety standards and health regulations, such as maintaining clean kitchens and sanitary facilities in hotels or restaurants.
3. Estimated Costs of Establishing a Tourism Business
The cost of setting up a tourism establishment varies depending on the scale and type of business. Below are approximate costs for setting up various types of tourism businesses:
Example 1: Setting up a Small Travel Agency
- Business Registration (DTI): PHP 1,000 (for city scope).
- Mayor’s Permit: PHP 5,000.
- BIR Registration: PHP 500 (plus printing costs for official receipts).
- DOT Accreditation: PHP 500 to PHP 5,000 (depending on the size and services of the agency).
- Office Rent and Setup: PHP 10,000 to PHP 50,000 (depending on location).
- Total Estimated Cost: PHP 20,000 to PHP 100,000 (not including staff salaries and ongoing operational expenses).
Example 2: Establishing a Mid-Range Boutique Hotel (20 rooms)
- Business Registration (SEC): PHP 5,000 to PHP 20,000 (depending on authorized capital stock).
- Mayor’s Permit: PHP 10,000.
- BIR Registration: PHP 500.
- DOT Accreditation: PHP 5,000 to PHP 10,000.
- Fire Safety, Health, and Sanitary Clearances: PHP 5,000 to PHP 10,000.
- Building Construction and Furnishing: PHP 2 million to PHP 10 million (depending on size, location, and amenities).
- Environmental Compliance Certificate (if required): PHP 5,000 to PHP 50,000.
- Total Estimated Cost: PHP 2.5 million to PHP 10 million+ (depending on size, location, and quality of facilities).
Example 3: Opening a Restaurant Near a Tourist Destination
- Business Registration (DTI): PHP 1,000.
- Mayor’s Permit: PHP 5,000.
- BIR Registration: PHP 500.
- Fire and Health Permits: PHP 3,000 to PHP 5,000.
- Lease of Commercial Space: PHP 20,000 to PHP 100,000 per month (depending on location and size).
- Equipment and Furnishings: PHP 100,000 to PHP 500,000.
- Total Estimated Cost: PHP 150,000 to PHP 700,000 (excluding monthly operational costs such as rent, salaries, and inventory).
4. Additional Considerations
4.1 Staffing and Labor Laws
Once the business is established, hiring staff will be an essential next step. Philippine labor laws protect workers’ rights, ensuring fair wages, working conditions, and benefits.
- Minimum Wage: The daily minimum wage varies depending on the region but ranges from PHP 350 to PHP 570 (as of 2023).
- Mandatory Benefits: Social Security System (SSS) contributions, PhilHealth, and Pag-IBIG Fund contributions are mandatory for all employees.
4.2 Marketing and Promotions
Marketing is a vital part of a successful tourism business. Establishing an online presence, building relationships with local travel agents, and participating in tourism fairs can increase visibility.
- Social Media Marketing: Facebook, Instagram, and Google ads are cost-effective ways to promote tourism establishments, targeting both local and international tourists.
- DOT Support: DOT-accredited businesses can benefit from government-led promotional activities, such as participation in international travel expos and inclusion in the official Philippine tourism website.
Conclusion
Establishing a tourism-related business in the Philippines requires careful planning, compliance with various regulatory requirements, and investment in infrastructure and staffing. By following the necessary steps—such as registering the business, obtaining the necessary permits and licenses, and securing DOT accreditation—entrepreneurs can successfully tap into the lucrative tourism sector. While initial costs can vary widely depending on the type and size of the business, the long-term potential for profit in a thriving industry like tourism is significant. By adhering to both national and local regulations and providing quality services, a tourism business can flourish in the competitive yet rewarding Philippine market.
