Sustainable Tourism and Poverty Elimination Study · Charlotte Boyd (ODI) Helen Connor (Deloitte...

Sustainable Tourism andPoverty Elimination Study

A report to the Department for International Development

April 1999

Sustainable Tourism and Poverty Elimination Study

STUDY TEAM

This report was compiled by a core team representing the three collaborating institutions

Deloitte & Touche: Oliver BennettInternational Institute for Environment and Development (IIED): Dilys RoeOverseas Development Institute (ODI): Caroline Ashley

A number of specialist consultants contributed to the research and to the final report:

Carmen Altes (Independent consultant, Brussels)Steve Bass (IIED)Stephen Brown (Deloitte & Touche, Windhoek)Charlotte Boyd (ODI)Helen Connor (Deloitte and Touche)Jerry Cripps (ODI)Doreen Crompton (Independent consultant, Washington D.C.)Liz Hall (Deloitte and Touche)Adrian Pryce (Independent consultant, Northampton)Franz Ziegler (Independent consultant, Utrecht)

The research was supported by a team of advisors comprising:

David Booth (ODI)Aidan Cox (ODI)Harold Goodwin (Durrell Institute for Conservation and Ecology)Lucia Hanmer (ODI)Rob Hitchins (Springfield Centre for Business in Development)Sheila Page (ODI)Dan Rees (VSO)

We would like to thank all the individuals in donor agencies and private business who supplied us withinformation for this study and who participated in interviews.

Deloitte & Touche, Stonecutter Court, 1 Stonecutter Street, London EC4A 4TRTelephone: +44 20 7936 3000 Facsimile: +44 20 7303 2180

International Institute for Environment and Development3 Endsleigh Street, London WC1H 0DDTelephone: +44 20 7388 2117 Facsimile: +44 20 7388 2826

Overseas Development Institute111 Westminster Bridge Road, London SE1 7JDTelephone: +44 20 7922 0300 Facsimile: +44 20 7922 0399

Please Note:


The opinions expressed in this document do not necessarily represent those of DFID.


TABLE OF CONTENTS

EXECUTIVE SUMMARY................................................................................................................. i

1. INTRODUCTION...................................................................................................................... 5

1.1 Objectives of the Study ................................................................................................................5

1.2 Our Methodology.........................................................................................................................5

2. DEFINITIONS........................................................................................................................... 6

2.1 Defining Tourism.........................................................................................................................6

2.2 The Poor and Poverty..................................................................................................................6

2.3 Pro-Poor Tourism........................................................................................................................6

3 BACKGROUND......................................................................................................................... 7

3.1 Structure of the International Tourism Industry...............................................................................7

3.2 Economic Significance of Tourism to Developing Countries............................................................8

3.3 Geographical Overlap Between Tourism and High Incidence of Poverty .........................................9

3.4 Impacts of Tourism on the Poor..................................................................................................10

3.5 Potential of tourism for pro-poor growth compared to other sectors...............................................11

4 DONORS AND TOURISM .................................................................................................... 13

4.1 Framework for Analysing Tourism Interventions..........................................................................13

4.2 Background and Trends .............................................................................................................13

4.3 Current Donor Activities ............................................................................................................14

4.4 Tourism Interventions Relevant to Poverty ..................................................................................15

4.5 Lessons Learned by Donors.......................................................................................................19

5. BUSINESS PARTNERSHIPS ................................................................................................ 21

5.1 Involving Business .....................................................................................................................21

5.2 Donor Experience in Business Partnerships .................................................................................21

5.3 Role for Business Partnerships: the Originating Markets...............................................................21

5.4 Role for Business Partnerships: the Destinations ..........................................................................22

5.5 Role for Business Partnerships – International Associations .........................................................24

6. STRATEGIES FOR PRO-POOR TOURISM........................................................................ 25

6.1 Donor Intervention in Tourism? ..................................................................................................25

6.2 Approaches to Pro-Poor Tourism ...............................................................................................25

6.3 Bilateral Interventions ................................................................................................................26

6.4 International interventions...........................................................................................................32

7 CONCLUSIONS AND RECOMMENDATIONS .................................................................. 35

7.1 Tourism and Poverty Elimination.................................................................................................35

7.2 Should Donors Invest in Tourism?...............................................................................................37

7.3 Ways Forward ..........................................................................................................................38


APPENDICES

Appendix I Economic Significance of TourismAppendix II Tourism and Poverty in DFID Partner CountriesAppendix III Differential Impacts of Tourism on the PoorAppendix IV General Lessons on Pro-Poor Growth and Poverty Reduction Approaches of DonorsAppendix V Strategies for Supporting Local Enterprises and Business Linkages in TourismAppendix VI Certification Schemes as a Tool for Mainstreaming Livelihood Concerns in TourismAppendix VII Summary of Donor Activity in TourismAppendix VIII Summarised Results of Interviews Relating to Business PartnershipsAppendix IX Selected BibliographyAppendix X Acronyms and Abbreviations

End piece Quotations

Sustainable Tourism and Poverty Elimination Study: Executive Summary i

EXECUTIVE SUMMARY

1. This Report

This report was produced for the UK Department for International Development (DFID). Thework was undertaken in relation to three broad issues being considered in DFID in relation tothe seventh Commission on Sustainable Development. These are:

(i) The potential to develop initiatives in the tourism sector to promote pro poor economicgrowth and contribute to poverty elimination;

(ii) How to ensure that the environmental and social costs of tourism initiatives are minimisedand that environmental, social, economic and overall net benefits are maximised;

(iii) The scope and mechanisms for working in partnership with the private sector in relation to(i) and (ii).

In our work we were asked to develop an overview of the current and planned activities of otherdevelopment organisations. We also considered the scope for working in partnership with theprivate sector. The opinions expressed are those of the consultants.

2. Tourism and the Poor

Tourism is an industry that currently affects the livelihoods of many of the world’s poor, bothpositively and negatively. Impacts vary between poor people, destinations, and types of tourism.Tourism is significant or growing in the majority of poor countries (and in 28 of the top 40recipients of DFID aid).

3. How tourism compares with other sectors

Tourism is not very different from other productive sectors, but it has four potential advantagesfor pro-poor growth:

• It has higher potential for linkage with other local enterprises because customers come tothe destination;

• It is relatively labour intensive and employs a high proportion of women;• It has potential in poor countries and areas with few other competitive exports;• Tourism products can be built on natural resources and culture which are assets that

some of the poor have.

Many disadvantages of tourism such as leakage and volatility of revenue are common to othereconomic sectors. But tourism may involve greater trade-offs with local livelihoods through morecompetition for natural resources, particularly in coastal areas.

4. What donors are doing in tourism

Over the last 20 years, governments and donors have mainly promoted international tourism tomaximise foreign exchange earnings. More recently, three trends have emerged: ‘green tourism’to minimise environmental damage; tourism as a conservation tool (including community-basedtourism); and preservation of cultural heritage.

Sustainable Tourism and Poverty Elimination Study: Executive Summary ii

Although poverty elimination is on the international development agenda, it is not yet drivingtourism interventions. There is enormous diversity in the rationale and type of donor tourisminterventions. Tourism strategy is changing in some donor agencies, including the EU – the largestdonor – and the World Bank, and interest is growing in promoting more broad-baseddevelopment. Some initiatives, such as in community-based tourism, will have benefited the poorwhile others will have disrupted livelihoods. However, projects have not been designed orevaluated according to poverty objectives.

We conclude that the conventional focus on international tourism and foreign exchange hasmissed the potential to enhance the benefits of tourism for the poor and failed to minimise costson the poor.

5. Business Partnerships

Partnerships with business are most likely to be in the tourism destination. Useful approachesare to:

• Facilitate partnerships between small business and the wider tourism industry;• Support micro finance aimed at promising small businesses which are without sufficient

collateral or track record to attract commercial finance and are beyond the scope ofdevelopment banks;

• Assist in the enhancement of linkages between tourism and other sectors;• Promote improved visitor awareness.

At the international level a number of private sector tourism bodies have embraced theenvironmental agenda but not focused on any social agenda in relation to poverty elimination.There is potential for partnerships to be established with one or more such associations topromote the social agenda in tourism. While no major British tour operator apparently sees theneed for action in this area, there are opportunities with continental European operators and withsmaller British companies.

6. Should donor agencies intervene in tourism and why?

There are six compelling reasons for focusing efforts on developing pro-poor tourism:

i Tourism is a massive and growing industry, already affecting millions of the poor. So amarginal improvement could generate substantial benefits;

ii Tourism has advantages over other economic sectors in relation to poverty elimination;iii Even if the poorest will not be direct beneficiaries of tourism, it is important to reduce the

costs they face. Benefits can be expanded for the ‘fairly poor,’ such as tea-sellers, casual andunskilled workers, artisans, and others;

iv As a poverty intervention, tourism probably does not compare with more direct tools, such asinvestment in health, education and agriculture. But as a strategy for promoting broad-basedgrowth (also essential for achieving poverty elimination), pro-poor tourism has goodpotential;

v Progress in placing environmental issues on the tourism agenda shows that concerted actioncan make a difference, even in such a diverse industry as tourism;

vi Limited evidence suggests a range of strategies can be used to develop pro-poor tourism, butlittle is being done in practice. So much remains to be done.

Sustainable Tourism and Poverty Elimination Study: Executive Summary iii

Whether to invest in tourism depends on the type of intervention and context:

• General tourism support is recommended only as a poverty eliminationstrategy, where links with poverty elimination are clearly identified, or it iscombined with pro-poor tourism measures.

• Investment in encouraging tourism that is more pro-poor is recommended as apoverty elimination strategy, so long as it complements a successfullydeveloping tourism industry and is not done in isolation of the bigger picture.

7. Strategies for Pro-Poor Tourism

Pro-poor tourism is tourism that generates net benefits for the poor (benefits greater thancosts). Strategies for pro-poor tourism focus specifically on unlocking opportunities for the poorwithin tourism, rather than expanding the overall size of the sector (‘tilting’ not expanding thecake).

Issues of overall approach include treating tourism like any other economic sector; collaboratingwith other donors where possible, recognising that pro-poor tourism is different from what hasgone before, drawing on lessons from other sectors; recognising that ‘the poor’ are nothomogeneous and will not benefit uniformly; and, learning by doing.

Recommended approach at the bilateral level:

• Pursue a ‘destination focus’ – do something practical to maximise benefits for the poorin an area. But integrate local measures with policy level support.

• Ensure a ‘balance’ between development of the overall industry and pro-poor tourism.• Assess which stakeholders to work with. Do not only work with tourism ministries or

be only reactive to their agenda.

Actions at both destination level and policy level should address five priority issues:

i Support to small and micro tourism enterprisesii Expansion of linkages between the tourism industry and local suppliersiii Improved employment of the pooriv Reduced competition for natural resources and livelihood trade-offsv Improved social and cultural impactsThree underlying issues influence all of the above and also need to be addressed: participation ofthe poor in decision-making; government commitment and capacity; business interest in pro-poortourism.

Recommended approaches at the international level:

• Promote poverty issues on the international tourism agenda• Encourage the incorporation of poverty issues into environmental codes run by business

associations• Promote ethical consumerism.• Document and disseminate examples of good practice in pro-poor tourism.• Stimulate co-ordinated action among like-minded donors (e.g. in EU, DAC) to

develop pro-poor approaches. Work with multilaterals in project design andevaluation.

Sustainable Tourism and Poverty Elimination Study: Executive Summary iv

8. Next steps: Piloting and Disseminating Pro-Poor Strategies

Simply being responsive to bilateral requests from tourism authorities would be unlikely to identifybest opportunities for pro-poor tourism. A proactive approach to test and pilot pro-poorstrategies with a few partner countries is suggested. Pro-poor tourism will only be an appropriateintervention in some countries, depending on an existing tourism base, government commitmentand interest in pro-poor tourism, high poverty or income disparity in tourism areas, what othersare doing, and opportunism.

Sustainable Tourism and Poverty Elimination Study 5

1. INTRODUCTION

1.1 Objectives of the Study

Deloitte & Touche, IIED and ODI were commissioned in January 1999 to undertake this studyof Sustainable Tourism and Poverty Elimination. The overall objective of the study, as specifiedin the Terms of Reference was “An overview of the current and planned activities,guidelines and policies of bilateral and multilateral development agencies anddevelopment banks that relate to the links between poverty and tourism in developingcountries.” Within this, the team was required to address three broad issues: the potential forinitiatives in the tourism sector to contribute to poverty elimination; strategies for maximising thepositive contribution of tourism development in terms of its overall net benefits and minimisingenvironmental and social costs; and, mechanisms for working with the private sector, given thattourism is primarily a private sector led activity.

1.2 Our Methodology

A series of activities were undertaken to fulfil the objectives above. Relevant donor and soft loanorganisations were identified and their activities explored though telephone and face to faceinterviews of appropriate individuals. A framework was developed to analyse the responses andto explore the links between tourism and poverty. A second round of discussions was held withrepresentatives of the tourism industry to determine the scope for establishing partnerships withthe private sector. These have been mainly in the UK, but we have also explored theopportunities in a destination country using Namibia as a case study. These discussions andinterviews were supplemented with some key literature, and internal discussions including aprogress review with an advisory panel.

In this report we summarise our findings and conclusions. More detailed information is given inthe Appendices. The views expressed to us of individuals in the organisations we have contactedduring the Study are not attributed unless derived from formal reports or statements. A list ofdonor organisations consulted is included in Appendix VII and business organisations inAppendix VIII.


2. DEFINITIONS

2.1 Defining Tourism

In this report we use the World Tourism Organisation (WTO) definition of tourism as travel thatinvolves a stay of at least one night but less than a year away from home. It therefore includestravel for business as well as for holidays/leisure (including visiting friends and relations) anddomestic tourism as well as international tourism.

2.2 The Poor and Poverty

For the purposes of the OECD poverty elimination targets for 2015, the poor are defined asthose living on less than a dollar a day. We follow this definition where possible, but often it isonly possible to consider tourism’s impact on the ‘poor majority’ without distinguishing betweenthose above and below a dollar a day. The ‘poor’ include urban poor, rural poor, men andwomen. Where possible we note heterogeneity and different perspectives among the poor, but itis in the nature of such a broad study that generalisations are made. Recognising the multi-dimensional nature of poverty, the report considers a range of livelihood impacts of tourism, andnot just income generation.

2.3 Pro-Poor Tourism

We have defined pro-poor tourism (PPT) in very general terms as tourism that generates netbenefits to the poor. Economic benefits are only one (though a very important) component ofthis, as social, environmental and cultural costs and benefits also need to be taken into account.

Net benefits to the poor are measured in absolute not relative terms: i.e. non-poor people mayalso benefit as much or more from pro-poor tourism development. A stronger definition of pro-poor growth would be growth that disproportionately benefits the poor, but this would excludemany tourism initiatives that can usefully contribute to poverty elimination.

Strategies for pro-poor tourism focus specifically on unlocking opportunities for the poorwithin tourism, rather than expanding the overall size of the sector (‘tilting’ not expanding thecake). They can be applied within any segment of tourism. They are distinguished from – butusually need to be combined with – general tourism development strategies which aim todevelop the sector as a whole.


3 BACKGROUND

3.1 Structure of the International Tourism Industry

The diagram above illustrates the structure of the international tourism industry; the make up ofdomestic tourism is very similar. The role of intermediaries between the customer in theoriginating market and the supplier of the various products and services in the destination is ofsignificance for both independent and packaged travel.

Tourism is often seen as an industry where foreign interests dominate. Yet this is amisrepresentation in many ways. Overall tourism is characterised by small and medium sizedbusinesses. The major players are typically:

• tour operators in originating markets. This applies to Europe, Canada and Japan.Large companies are less characteristic of other outbound markets. These tour operatorswill work with ground handling companies in the destination, who may devise and set upall the details of the package and the foreign company’s role may be only to market thatproduct in the originating market. Such ground handling companies are typically small andare often locally owned;

• international transport companies, primarily airlines, cruise companies and car rental.In Europe and Canada airlines are often linked with the tour operator, with the touroperator owning an airline and frequently travel agencies as well, the latter in order tosecure distribution for their products. Car rental companies are normally franchisearrangements with the actual business being locally owned and operated;

• international hotel companies. However, these chains are relatively poorly representedin developing countries and even when they are, the hotel is commonly owned by localinterests. The role of the international hotel company is limited to management, typicallyon a 10 to 25 year management agreement which allows the management company to exite.g. if losses are being incurred. There are locally owned regional and national hotelgroups including in India, East and Southern Africa.

Perhaps the greatest element of foreign influence is customer requirements (the tourism producthas to be one that the customer wishes to buy) combined with regulations such as the EuropeanPackage Travel Regulations. These place the onus on the tour operator for all elements of apackage irrespective of the supplier. As a result the foreign tour operator seeks reliablesuppliers in the destination who will take a share of the liability for delivering a holiday as

Airlines, cruise lines,other means ofaccess

Touroperators

TravelagenciesORIGIN-

ATINGMARKET

SUPPORTSERVICESInfrastructureUtilitiesHealthEducation &TrainingBanks/finance

TOURISM DESTINATIONTourist BoardsGround handlersAccommodationRestaurantsTransport operatorsAttractions


advertised. This engenders a reluctance to deal with new enterprises with no track record, orwithout an appreciation of customer requirements. Indeed it is the geographical separationbetween a local supplier and an often-distant purchaser who will subsequently visit and use theservices of the local supplier which distinguishes tourism from other export activities. It isbecause of market failure that governments intervene by establishing tourist boards and othermechanisms for bridging the gap between a small or medium sized business in the destination andthe intermediary and/or ultimate customer in the originating market.

Holiday tourism is almost universally an activity of tight margins; it is in business travel that bettermargins are to be found. These low margins have encouraged outbound tour operators to be riskaverse and to avoid long-term investments in destinations. The most significant tour operatorinvestments in destination countries have been by German tour operators in places such asKenya and the Maldives where relatively high volumes are anticipated on a continuing basis.There has been almost no investment by major UK tour operators in developing countries andwhere such properties have been acquired, e.g. by acquisition, efforts have been made todispose of them. A number of major airlines have sought to reduce costs by locating a portion oftheir accounting functions in India, British Airways among them.

There are numerous trade associations within tourism representing different components of theindustry, mainly national or local in character. Among the international bodies are the:

• World Tourism Organisation (WTO). Based in Madrid, the WTO is a United Nationsagency which has governments as members. The membership is biased towards thedeveloping world. The WTO has a Business Council with a modest private sectormembership.

• World Travel and Tourism Council (WTTC), an organisation of Chief Executives oflarge travel related multi-national companies which has been active in promotingenvironmental responsibility via Green Globe. This is now a separate for profitorganisation.

• International Hotel and Restaurant Association (IHRA) based in Paris with amembership of national associations, individual operators and hotel schools, and theInternational Hotels Environment Initiative (IEHI), a non profit programme of thePrince of Wales Business Leaders Forum, headquartered in London.

• Pacific Asia Travel Association (PATA) which is a distinctive body in that it is aregional organisation with an extensive membership drawn from both the public andprivate sectors. There are other regional organisations such as the Caribbean TourismOrganisation and the Regional Tourism Organisation of Southern Africa, but these tend todriven more by the public sector rather than the private sector.

3.2 Economic Significance of Tourism to Developing Countries

Developing countries currently have only a minority share of the international tourism market(approximately 30 per cent) but their share is growing. International tourism arrivals indeveloping countries have grown by an average of 9.5 per cent per year since 1990, inaggregate across developing countries, compared to a growth of 4.6 per cent in arrivals world-wide (see Appendix I).


The tourism industry makes important contributions to the economies of developing countries,particularly to foreign exchange earnings, employment, and Gross Domestic Product (GDP).This is shown in Table 3.1 below and Appendix I. On average international tourism receiptsaccount for around 10 per cent of export revenues of developing countries. Tourism’scontribution to GDP varies from 3–5 per cent in Nepal and Kenya to 25 per cent in Jamaica;contribution to employment is estimated at 6–7 per cent in India and South Africa.

The economic significance of tourism varies greatly from country to country, with thoseeconomies most highly dependent on tourism tending to be small island states. In Fiji, forexample, tourism is the largest source of foreign exchange and the most important commercialsource of employment, providing over 26 per cent of export revenue and some 16 per cent ofGDP.

Tourism data does not provide the full picture of its economic significance. Statistics cover thecontribution of international tourism to national GDP. They hide the significance of domestictourism (and may under-estimate regional tourists travelling by land), and the importance oftourism to a local economy. For example, tourism accounts for approximately 0.8 per cent ofGDP in India, but it has been estimated that tourism (domestic and international) accounts forapproximately half of economic activity in the hill region of Uttar Pradesh, popular for pilgrimtrails.

3.3 Geographical Overlap Between Tourism and High Incidence of Poverty

Tourism is clearly of great significance to developing countries. But is it important in thosecountries with the highest proportion of poor people? The small island economies which are mostdependent on tourism tend to be middle income and contain few of the worlds’ poor.Nevertheless, analysis of tourism data shows that in most countries with high levels of poverty,tourism is significant (contributing over 2 per cent of GDP or 5 per cent of exports) or growing(aggregate growth of over 50 per cent between 1990 and 1997):

• 12 countries account for 80 per cent of the world’s poor that live on less than a dollar aday. In 11 of these, each with over 10 million poor people, tourism is significant tothe economy and/or is growing, as shown in Table 3.1.

• Across the poorest hundred countries or so, tourism is significant in almost half of thelow income countries, and virtually all the lower-middle income countries.

• Among the top 40 recipients of DFID bilateral aid, tourism is significant and/orgrowing in at least 28. These include half a dozen countries where the majority fall belowthe international poverty line (India, Kenya, Lesotho, Nepal, Uganda and Tanzania) and atleast as many again where substantial minority (15–50 per cent) fall below it (seeAppendix II).

• The top 15 tourism destinations in the developing world (in terms of absolute numbers ofarrivals or receipts) are mainly populous lower-middle income and upper middle-incomecountries. Nevertheless, 5 of these 15 have a population of over 10 million livingbelow a dollar a day.


Table 3.1: Significance of international tourism and travel to countries with 80 per cent ofworld’s poor

Country (a) Is ITT an importanteconomic sector?(b)

Have ITT arrivalsgrown significantly?

(1990-1997) (c)

Percentage ofpopulation living on under

1US$ a day. (d)

India* √ 53China* √ √ 22Bangladesh* √ naKenya* √ Na 50Pakistan* na 12Indonesia* √ √ 15Nepal* √ √ 53Nigeria* √ 29Ethiopia* √ 34Brazil* √ √ 29Peru √ √ 49Philippines √ √ 28Mexico √ 15

ITT = International travel and tourism.n/a = data not available(a) Countries identified by the World Bank – 1993 data (World Development Indices 1998). Listed according to theirranking as DFID bilateral aid recipients (largest first).(b) ITT receipts more than 5 per cent of exports or 2 per cent of GDP for 1996 – adapted from data from WTO 1998 andWorld Development Indices 1998.(c) Percentage change between ITT arrivals for 1990 and 1997 – adapted from data from WTO 1997. InternationalTourism (e) Arrivals for 1997; WTO 1998.(d) Percentage of population living under US$1/day – UNICEF 1999, World Development Indices 1998.

3.4 Impacts of Tourism on the Poor

Tourism’s strong contribution to economic growth is evident. But development thinkingincreasingly recognises that growth is necessary but not sufficient to ensure poverty elimination.Tourism affects the livelihoods of the poor in multiple ways – economically, environmentally,socially and culturally (see Appendix III). Impacts on livelihoods and not just income need to beassessed along with the variety of positive and negative affects.

Differential impacts between poor groups, particularly the fairly poor and the poorest, can beexpected. The poor are more vulnerable to the main negative impacts, such as conflicts withother livelihood strategies through loss of natural resources, and vulnerability due to localinflation. They face the greatest barriers to seizing economic opportunities created by tourism.Therefore net direct gains are more likely to be experienced by ‘the masses’ than the poorest.However, in several countries and tourism areas, the masses fall below a dollar a day. Wherethey don’t, poverty elimination according to international definitions will depend on economiclinks between the ‘masses’ and the ‘poor.’ Few analyses assess the poverty status of thoseaffected by tourism, the impacts of tourism on poverty, or the distribution of impacts betweenpoor and less-poor local residents.

Different segments and types of tourism can have substantially different impacts. Limitedevidence suggests that domestic/regional tourism and independent travel can createproportionately more local economic opportunities than international packaged tourism.


However, the latter can be economically significant because of its large scale. Cruises, all-inclusives and enclave tourism tend to generate fewest economic linkages, but can also limit thespread of unwanted environmental and social impacts. ‘Ecotourism’ and nature-based tourismare often promoted as a solution to sustainable development. While they bring development tomore remote and hence poorer regions, it is not proven that they generate less damage and morebenefits than mass tourism. Within the tourism industry, the informal sector is often where thepoor and women can maximise benefits.

3.5 Potential of tourism for pro-poor growth compared to other sectors

Proponents argue that tourism has a number of advantages over other economic sectors in termsof its potential to generate pro-poor growth, in particular its size, labour intensity, potential forcross-sectoral linkages, and potential in countries with few other competitive exports. On theother hand, sceptics argue that tourism, driven by foreign private sector interests is not an activitysuited to poverty elimination, that economic benefits are not maximised due to high level offoreign ownership, high leakages and few linkages, and that it imposes substantial non-economiccosts on the poor, in terms of displacement, lost access to resources, and cultural and socialdisruption.

Many of the disadvantages associated with tourism are actually characteristics of growth andglobalisation. Many of the negative impacts that arise as a result of tourism development wouldalso occur with development in other sectors. For example, it is not clear from the data whetherthe leakage effect and the supposed high level of foreign ownership, are greater problems intourism than in other sectors. (As regards ownership there can be confusion betweenmanagement companies for hotels and the actual ownership of those properties, so that is it is notnecessarily appreciated that the hotel is locally owned. Similar confusion can occur for franchisearrangements e.g. of airlines, car rental and restaurants, where an international brand name isused but ownership is within the country concerned.)

Similarly, while there is no doubt that tourism is vulnerable to swings in demand at country level(due to insecurity, recession or hurricanes), it is not clear that volatility is any greater thanvolatility in prices and demand in other exports, particularly commodity exports.

It would seem therefore that many of the difference between tourism and other sectors might beperceived rather than real. Tourism can be perceived as a frivolous or elitist industry and hence istreated less seriously than other primary industries by governments and donors. The classicstereotype of tourism – the juxtaposition between the rich tourist and the poor local person –reinforces this perception.

Nevertheless, there are some characteristics which do seem particularly strong, if not unique, intourism. Among the disadvantages, tourism requires highly sophisticated marketing, which isparticularly difficult for poor producers, often involves more haphazard development than othersectors and intense competition for natural resources with local residents (particularly in coastalzones). Among the advantages:

• Tourism is consumed at the point of production. Because the customer comes to theproduct, opportunities for entrepreneurs to capitalise on linkages (e.g. tea selling)can be greater.


• Most export industries depend on financial, productive and human capital. Tourismdepends on these but also on natural capital (e.g. wildlife) and culture, which areassets that some of the poor have, or are gaining increasing control over wheredecentralisation and devolution of tenure are occurring.

• Tourism is often reported to be more labour intensive than other productivesectors. Data from six countries with satellite tourism accounts does indicate that it ismore labour intensive than non-agricultural activities, particularly manufacturing,although less labour intensive than agriculture (see Appendix I).

• There is a greater uptake of jobs by women than in other sectors although it is notknown if more jobs are taken by the poor and unskilled. (The percentage of femaleemployment varies enormously by country, ranging from over 60 per cent such as inBolivia to under 10 per cent in some Muslim countries.

• Tourism is a much more diverse industry than many others and can build upon awide resource base. Diversity makes it difficult to deal with a government or donor,but increases the scope for wide participation, and for the informal sector.

The potential of tourism compared to other sectors should be considered in the light of thealternative opportunities available in any location. Tourism is a traded-good, and whether it isappropriate to develop it in a particular country depends on its comparative advantage.

The debate about whether tourism is or isn’t pro-poor cannot be decided here. The answerclearly depends on circumstance, so needs to be assessed on a case by case basis beforetourism is promoted for poverty objectives. A more useful question is: how can tourism becomemore pro-poor? Given that tourism is already a fact of life for many of the world’s poor, thechallenge is to enhance the many positive impacts and reduce costs to the poor.


4 DONORS AND TOURISM

4.1 Framework for Analysing Tourism Interventions

To analyse donor activity in tourism we identified each donor’s overall approach to tourism andspecifically the types of intervention relevant to poverty reduction (whether driven primarily bypoverty objectives or not). In assessing what counts as ‘pro-poor’ we focus mainly oninterventions that appear to ‘tilt the tourism cake.’ Such strategies could be at the grassroots,national policy or international levels.

4.2 Background and Trends

Donors have influenced the way in which the industry has developed in the last 20 years, withsupport traditionally focussed on macro-economic objectives – particularly maximising foreignexchange earnings through international tourism.

Recently, environmental and social issues have received increasing attention and three trendshave emerged:

1. Since the 1992 Earth Summit there has been an enormous amount of activity focussed on‘greening’ the tourism industry (e.g. through waste management, energy efficiency) andpromoting more environmentally-sustainable tourism (e.g. Beyond the Green Horizonand Agenda 21 for the Travel and Tourism Industry).

2. At the same time, the failure of top-down, preservationist attitudes to wildlife, the needfor wildlife to ‘pay its way’ and for local communities to be involved in conservation, hasled to an increase in nature-based tourism in and around protected areas as amechanism for biodiversity conservation. This in turn spawned a broader interest incommunity-based tourism, often as a component of community-based naturalresource management (CBNRM) strategies. Obligations of donors and governmentsunder the Convention on Biological Diversity (CBD) with its emphasis on sustainable useand benefit sharing have served to reinforce this trend.

3. Cultural heritage initiatives such as those initiated by the World Bank, have increased,both in response to concerns about the threat which globalisation poses to communitieswho place a high value on their local and cultural identity and as part of programmes forbroadly-defined environmental and social sustainability. Often these have tended to focuson the restoration of the physical fabric rather than living culture.

The concept of ‘sustainable tourism’ now combines elements of all three of the above. However, none ofthese are the same as pro-poor tourism (see box).

To date donor interventions in tourism have not been driven by a poverty agenda. The main interest andprogress in pro-poor tourism has come from conservationists involved in community tourism andecotourism, but inevitably, conservation remains their priority goal.


Differences Between Pro-Poor Tourism, Sustainable Tourism and Community-Based Tourism

Calls for sustainable tourism have tended to focus on environmental concerns. However the concept is nowbroadening to include social, economic and cultural aspects. It is recognised that host communities mustbenefit if tourism is to be viable in the long term. However, benefits to local people are generally of secondaryimportance – a means to the end of sustainability – and are usually expressed in a protectionist/defensiveway: preserving local culture, minimising costs. In contrast, pro-poor tourism aims to expand opportunities,and places net benefits to the poor as a goal in itself, to which environmental concerns should contribute.

Community-based tourism initiatives usually seek to expand tourism enterprises run by local communities orindividuals, and sometimes to enhance local involvement in planning. These are important, but not the sole,components of pro-poor tourism which also includes maximising use of local labour, goods and serviceswithin the formal sector – particularly in high-density (urban/coastal) environments; expanding informalsector linkages; ensuring infrastructural development and environmental strategies benefit the poor; andcreating a supportive policy framework and planning context that addresses needs of poor producers andresidents within tourism.

4.3 Current Donor Activities

While many donors are involved in tourism activities, few see it as a key development sector.The EU is the largest donor in tourism, Lomé IV recognising the importance of tourism to ACPcountries. Few other donors have clear policies or strategies, although some are in the process ofdeveloping or revising strategies (EU, CIDA, World Bank).

Only some donors specifically address (or label) tourism projects and programmes – includingthe EU, private finance institutions and others with specific mandates that can be linked totourism. In most cases, support to the tourism sector is integrated within broader programmes(e.g. as a component of a conservation project, SMME support, or an indirect beneficiary of aninfrastructure project). As a result, many agencies claim that they ‘do not do tourism’ (e.g.World Bank, SIDA) when in fact they are providing considerable support. There is anenormous diversity in the rationale for, and type of, donor tourism interventions in tourism (seeTable 4.1) which may be broadly classified under the following objectives:

• economic growth;• employment;• cultural heritage (including protection);• conservation;• greening the industry;• sector planning;• product development;• broadening the benefits of growth.

As a broad generalisation, infrastructure development, private sector growth and tourism masterplans are supported mainly by multilateral agencies. Bilateral donors do more in conservation-based and community-based tourism (though so does GEF). Green tourism and cultural tourismare promoted by both multilaterals and bilaterals. Development banks focus on loans forinfrastructure and resort development.


Table 4.1 Donor Interventions in Tourism

Objective Intervention Examples

Economic growth Infrastructure DBSA, WB, CIDA, CDBEmployment Lobbying for improved working conditions ILO

Training CIDA, EU, IrishAid, ILO,MIF

Cultural Destination management. FINNIDA, WB, IADBConservation Community-based natural resource management NORAD, GEF, USAID, WB

Destination management FINNIDA, WBProtected area management & buffer zones GEF , GTZ, UNEP, UNDP

Greening Greening tourism UNEPImproved environmental management NORAD, UNEP, USAID,

WBNational/regionalplanning

Planning studies and tourism policies ComSec, EU, JICA, UNDPvia WTO

Product & marketing Product development EU, JICA, CDBMarket development ComSec, EUResearch and statistics EUHotels CDC, Development Banks

Broadening benefits Expanding SME opportunities DBSA, SIDA, IADBRural development UNDPIntegrated coastal management WBEncouraging equity sharing options and leasingarrangements and partnerships

DBSA, USAID, IFC

Note:1. For a number of agencies with decentralised programme development processes, some/all tourism interventions donot fit neatly within the above table. For example, integrated coastal management projects, financed by the WorldBank and others, combine environmental and economic objectives. In particular, support at the policy, strategy andplanning level (e.g. European Commission, DG Development, OAS) may cut across a number of objectives.2. Research and analysis cut across a number of these objectives. Donor research activities identified include: impactsof tourism (WB); tourism sector issues and opportunities (CIDA); maximising economic benefits from tourism (forSouth Africa – DBSA); economics of nature based tourism and conservation through tourism (USAID, BMZ, WorldBank); emerging national and regional mass tourism in the south (UNRISD); synthesis of evaluations of tourismprojects and programmes (EU); policy, regulatory and institutional framework for sustainable tourism (World BankAfrica Dept Private Sector Finance Group).

4.4 Tourism Interventions Relevant to Poverty

4.4.1 Donor Attitudes

There are two contrasting views on the relevance of tourism to poverty elimination. Anumber of donors whose overall aim is poverty alleviation do not consider that tourismcompetes with sectors such as agriculture, primary health and education as a means forpoverty alleviation (e.g. DANIDA, NEDA).


A contrasting position is adopted by some donors who argue that tourism will have amajor impact on the livelihoods of poor people and that intervention is essential tomaximise the benefits and minimise the costs for poor people (e.g. UNDP, EU,FINNIDA), or even that tourism has substantial potential to contribute to broad basedgrowth, which will not be realised without intervention (DBSA).

Some individuals within agencies argue that currently tourism does not compete withother sectors as a development strategy because it is “not done well”. Done properly,they argue, tourism has the potential to contribute far more than other sectors.

Although tourism interventions have not, to date, been driven by a poverty agenda, thereare nevertheless several donor interventions that can be considered relevant in reducingpoverty. We focus here on interventions that appear to shift the balance of benefitstowards the poor (‘tilt the tourism cake’). Interventions that expand or improve tourismper se may or may not be pro-poor depending on the context and links between tourismand poverty, but are not covered here. In most cases there was little to suggest that linksbetween tourism expansion and poverty reduction had been assessed. In a few cases,the links were stated to exist based on apparently superficial and uncritical analysis.

4.4.2 Interventions at Local/Destination Level

Five types of pro-poor interventions at the local or destination level can be identified:

1: Support to Small and Micro Enterprises

Several donors support community tourism initiatives through SME support (credit,training, non-financial services). This is a strong element of several communityconservation programmes (e.g. USAID in Southern Africa, NORAD in Tanzania andCentral America); and hence occurs mainly in rural areas with biodiversity assets. Somedonors support community-based organisations that strengthen micro enterprise. Forexample, SIDA has supported the Namibian Community Based Tourism Associationwhich in turn seeks to assist community enterprises.

2: Rural Tourism

Several donors are supporting tourism development in rural areas, through technicalassistance, funding local programmes, or infrastructure. In many cases this support isdriven by conservation objectives – a focus on protected areas and biodiversityinevitably leads to a rural focus. In other cases, support for rural tourism developmenthas been driven by poverty objectives. For example, UNDP in Nepal is investing in‘village tourism for poverty elimination’ in order for tourism to bring benefits to moreremote and poor areas. Practical strategies (not yet defined) are likely to overlap withSME support.


3: Joint Ventures Between Communities and Private Operators

Several donors are supporting tourism partnerships between communities and privateinvestors in areas where communities have strong tourism assets (e.g. tenure rights overwildlife). This is explored further in Section 5 (Business Partnerships).

4: Community Participation, Pro-Poor Planning

Austria is supporting regional tourism planning in north-west Namibia with a strongelement of community participation. Several CBNRM initiatives seek to enhance localparticipation in decision-making in tourism, usually at local or park level.

5: Tourism Improvements with Clear Potential Benefits for the Poor

There are several donor interventions that aim to improve tourism which are notspecifically targeted at the poor, but which have strong potential for benefiting them(inclusive actions). These include:

• improvement of working conditions (if targeted at the unskilled) –promoted by ILO;

• protected area management and park-based tourism (because many arein economically depressed regions) – supported by GEF and a numberof bilaterals;

• training and human resource development (if targeted at unskilled andsemi-skilled trades) – supported by CIDA and Irish Aid;

• greening the industry (if the poor benefit from improved environmentalstandards) – UNEP, FINNIDA and others.

4.4.3 Interventions at National/Policy Level

While the local level interventions described above are the most common, a few donorsintervene in tourism at the national level – or more specifically, at the policy level. Someinterventions at local level do not appear to be linked to the national level. In certaincases, however, the links have been successfully made. For example, some donor-supported CBNRM initiatives are addressing policy issues, (particularly in Africa) suchas the need for devolution of tenure rights. In Tanzania, NORAD has promotedcommunity tourism through policy dialogue as well as through specific interventions inand around the protected areas.

The Development Bank of Southern Africa, through its contributions to the SpatialDevelopment Initiatives, focuses explicitly on creating a policy framework for private-sector-driven tourism development which is broad-based, creating employment andempowerment in depressed regions. Key policy elements include: the use of planninggain to encourage private investors to expand linkages (i.e. using this as a criteria whenjudging bids for concessions); granting tenure over land to communities via land claimsor leases; and, close integration with other sectors such as infrastructure. UNRISD’swork on the importance of domestic tourism aims to influence national policy and helpdevelop policies to promote this sector which they identify as important for the poor.


4.4.4 Interventions at International Level

We found relatively little evidence of donor interventions with consumers and business,or of bilateral donors being pro-active in the international tourism agenda. GTZ/BMZsupports consumer awareness of ethical tourism through a travel magazine. TheCaribbean Environment Programme of UNEP has worked with the tourism industry inthe region to produce awareness materials. Most international action focuses on greentourism or sustainable tourism.

4.4.5 Internal Agency Changes

The EU has produced a new strategy for tourism, which seeks to lay out a substantialshift in emphasis from marketing to focusing on sustainable development aspects oftourism. The World Bank and CIDA are also working on new policies.

4.4.6 What Donors are NOT Doing in Tourism

Although several donors now have poverty elimination as their overall goal, tourisminterventions are mainly driven by other sub-objectives (private sector growth,conservation, etc) rather than seen as a poverty-focused activity. Although some currentinterventions do have poverty reduction elements (e.g. community-based tourism), noone is actively pursuing the poverty agenda through tourism, nor has there beensignificant analysis by donors of how tourism could contribute to poverty elimination1.

While potential for linkages is seen as a key advantage of tourism, there is little evidenceof efforts to maximise potential economic linkages, other than through small enterprisesupport. Exceptions are probably the Annapurna Conservation Area Project (supportedby a number of donors over the years) and DBSA’s work to encourage linkages throughworking with the private sector and using planning gain. Donor interventions have tendedto be either at a local level, or at a policy level, with little attention paid to the need forlinkages between the local, micro and macro level.

Donors seem to be doing little at international level – especially in terms of working withbusiness and consumers. This role has been very much taken up by NGOs andparticularly in the UK by Tourism Concern (work on Fair Trade in Tourism with theUniversity of North London) and by Voluntary Service Overseas (VSO).

1 The nearest approximation is probably the DBSA work to establishing a policy framework for tourism with explicit objectives ofbroad-based growth in terms of employment, local enterprise, and empowerment – but not specifically poverty reduction.


4.5 Lessons Learned by Donors

As few donors have evaluated their own experience of tourism projects in-depth, the lessonslearned by donors are weak. An exception is a review of several evaluations of tourism projectscarried out for the EU in 1996. However, a number of lessons have been learned about tourisminterventions in general.

4.5.1 Key Ingredients for Success

A number of donors have highlighted key ingredients for successful tourism interventions.These include:

• a coherent policy framework in therecipient country;

• proper planning;• accurate sector analysis;• private sector involvement;• local community involvement;• involvement of a range of government

stakeholders;• ongoing dialogue between all

stakeholders – government, private andcivil society;

• clear donor strategy.

4.5.2 Types of Interventions and Effectiveness

A number of lessons have been learned bydonors about the types of interventions thathave been most successful in the past, andthose that should be emphasised in the future:

• Training has been a very useful activity, especiallywhere the private sector has been involved;

• Short term marketing interventions, such as inestablishing a tourist board separate of governmenthave been successful, but continued marketing support has encouraged donordependency and has proved to be unsustainable;

• Tourism master plans have tended to be excessive in length and therefore be leftunread while giving inadequate attention to implementation;

• Projects focused on a single component or geographical area seem to be the mosteffective;

• A specific focus is required on SMMEs and on the domestic private sector if theyare to benefit, although in some cases (more particularly for NGOs) there has beeninsufficient attention to marketing and enterprise viability or to training required forsustainability;

Importance of planning framework

‘Donors have a key role to play intourism because planning cannot bedone by the private sector. Planning isessential for sustainability and there is acrucial role for public sector support.

(A European tourism adviser).

“Completed tourismprojects which havebeen evaluated have, onthe whole, not lived upto expectations” (Poon1996 on EUevaluations)


• Interventions in tourism are context specific. What is appropriate depends on thetourism potential of a destination and the economic importance of tourism – locallyand nationally

Many similar lessons have been learnt in other sectors.

4.5.3 Making Tourism More Pro-Poor

Views expressed to us include:

• A balanced approach is essential – support at the local level must be combinedwith an enabling environment and support for a quality industry (EU);

• The policy framework needs to be researched and changed (DBSA);

• It takes time! (several bilaterals involved in community-based tourism);

• PPT is difficult too early or too late in the tourism cycle. There needs to be a viabletourism product on which to build pro-poor elements. But interventions to reshapetourism development are easier at a stage when the sector is growing. In a matureindustry the status quo may be more entrenched;

• It is important to develop economic linkages between tourism and other sectors,but this needs to be addressed at the planning and design stage.

4.5.4 Constraints to Success

A number of donors have identified specific limitations to successful intervention intourism which need to be addressed:

• The effectiveness of many tourism interventions has been affected by the limitationsof counterpart agencies, which are usually tourism ministries/boards. Other parts ofgovernment perhaps take tourism less seriously than other productive sectors yetinter-governmental co-operation is especially important for tourism;

• Sustainability of tourism interventions has been affected by a lack of focus onenvironmental and socio-cultural issues and lack of meaningful participation bylocal communities;

• The lack of expertise on tourism within donor agencies has constrained projectdesign, implementation and evaluation.


5. BUSINESS PARTNERSHIPS

5.1 Involving Business

Tourism is in some quarters viewed solely as a private sector activity. Yet experience suggeststhat successful sustainable development requires close collaboration between government andthe private sector as well as between different arms of government. Governments need to workwith the private sector in establishing national and regional parameters for the industry (e.g.policy objectives), supporting the industry (e.g. via tourist boards, service provision) andcontrolling it (e.g. via land use planning). Efforts to promote pro-poor tourism need to involvebusiness so as to establish strong links between small enterprise and the rest of the industry, andavoid failure due to lack of commercial realism.

We have interpreted business partnerships as per the definition used by DFID, namely ‘anagreement to work together to fulfil an obligation or undertake a specific task bycommitting resources and sharing the risks as well as the benefits’. We discussed severalexamples of possible partnerships with businesses, such as outsourcing services, establishingagreed ethical standards, and providing training placements.

5.2 Donor Experience in Business Partnerships

Donor experience, reported more fully in Appendix VII, covers:

• Marketing support to the private sector, largely on the part of the EU. Althoughcontinuing EU support is coming to an end, both the European Commission and otherdonor agencies are seeking to establish partnerships with the private sector including intourism;

• Partnerships between communities and private sector operators . Donorinvolvement has to date not been as a partner per se, but there is an opportunity toprovide technical assistance in assisting collaboration between the two sides;

• Working with trade bodies. Such limited work as has been done has been by NGOssuch as VSO rather than by donors.

• General partnership schemes are being developed by the World Bank, the EU andothers but with limited application to tourism so far.

Other recent initiatives include support and partnerships by the South Pacific Project Facilityand the African Management Services Company, both of which fall under the IFC, including intraining. Other donor agencies are involved in promoting public-private sector partnerships.VSO has endeavoured to work with smaller UK tour operators who are members of theAssociation of Independent Tour Operators (AITO), aiming to help them incorporate povertyconsiderations.

5.3 Role for Business Partnerships: the Originating Markets

In the UK the level of interest among larger companies in establishing business partnerships withdonor organisations such as DFID is low. Of the major tour operators there is limited interest inworking with developing countries to any end except direct commercial gain. Where there isinterest, such as in British Airways Holidays, there is a feeling that they already have substantial


environmental programmes and projects underway and there is little scope for extending theexisting portfolio of activities. The one major tour operator that stands out is TUI, the largest touroperator in Germany, which does have an expressed interest in partnerships which incorporate asocial agenda, as reported in Appendix VIII. This could impact in the UK following the purchaseof Thomson by Preussag.

The conclusions of our research is that there is:

• very limited potential for establishing business partnerships with the majorplayers in tourism. While they have a high turnover they have a low level ofcommitment to any one destination. For any partnership to get off the ground a specificproposal would have to be framed and one or more target companies pursued;

• some scope for extensions to existing programmes. For example, there may bescope for extending the Tourism for Tomorrow Awards run by British Airways. Thisscheme, which currently has an environmental focus, could be developed to increase theemphasis given to poverty elimination;

• some potential with smaller companies which have destination commitment i.e. thosesmall tour operators who often feature a relatively limited range of destinations. TheAssociation of Independent Tour Operators (AITO) has expressed an interest inworking with donors such as DFID.

5.4 Role for Business Partnerships: the Destinations

We conclude that the destinations offer the best prospects of business partnerships, albeit atrelatively high inputs in terms of donor management time. Among relevant approaches are:

• Facilitating partnerships between small and micro enterprises (including communitybased tourism projects) and the wider tourism industry;

• Improving financial support to small and medium businesses;

• Substantial enhancement of linkages between tourism and other sectors;

• Enabling training partnerships to develop;

• Improved visitor awareness.

Facilitating partnerships between small business and the wider tourism industry

Many efforts are made to develop small businesses and community-based tourism enterprises,most commonly by NGOs. These efforts are often seen as something apart from the mainstreamtourism industry and can fail commercially because, for example, they are weak in management,marketing and appreciation of travel industry requirements. Such efforts could be significantlystrengthened by bringing in some form of expertise and partnership with mainstream tourismbusinesses.

A partnership with larger businesses could take many forms: business advice, assistance withmarketing, commitments to bring clients, shared use of equipment (e.g. for road clearing, waterpumping), training placements, or a contractual partnership for a shared investment.


Our piece of sample research in Namibia shows that donors are agreed that in the case ofcommunity based tourism, there is more hope for an enterprise which involves a partnership witha private investor than one in which the community tries to ‘go it alone’. A number of privatesector companies have indicated an interest and a willingness to form partnerships, for examplein extending their tour product offer into community areas, in agreement with the communitiesand in conjunction with a donor organisation.

A potential role for a donor organisation is to provide technical assistance, which may beobtained locally, functioning in partnership between an established business and the new entity.This may include an NGO, or umbrella assistance to NGOs in support of their own activities byadding a business ingredient. It may require intensive work with businesses to explore whatcontributions they can make to local enterprise. In the case of community based tourism atransfer of expertise in successful enterprises in the South Pacific, where there is nowconsiderable experience of community involvement in tourism, to Southern Africa could form apart of this activity (bringing in business expertise should complement other strategies to supportlocal tourism enterprises, which are discussed in Section 6).

Where communities decide to enter a joint venture with a private investor instead of setting uptheir own small-scale enterprise, a donor can support facilitation to help overcome the mistrust,lack of understanding, and high transaction costs involved (see also Appendix V).

If this kind of partnership was to be pursued, experience in Namibia suggests that donor co-ordination is vital with discussion at field level between the various donors – otherwise all eachdoes is confuse the situation, and the end result is a lack of realisation of some very nobleobjectives.

Substantial enhancement of linkages between tourism and other sectors

The concept of improving linkages between tourism and other economic activities is by no meansnew. Previous efforts tend to have been somewhat half-hearted and have often either failed ormore often not got very far. To establish such linkages on the part of hotels, lodges or resortsrequires a three-way partnership between a donor, the tourist operator and the local business.We think there is scope for tackling these kind of partnerships in a new and innovative way butcases would need to be chosen with care, so as to link an entrepreneurial business with a goodchance of success with the potential customer. General strategies for expanding linkages arecovered in Appendix V.

Improving financial support to small business

New entrants without adequate collateral and/or track record normally experience difficulty insecuring financing. Local development banks can be moribund, unwilling to lend in the tourismsector, or subject to political influence. If some form of guarantee scheme can be devised viacommercial banks, this would help address these constraints. The size of the commitment wouldneed to be carefully considered.

Enabling training partnerships to develop

Many developing countries have a hotel training school, albeit of varying standards, and somemobile training. However, there is often a lack of training that allows local people to participate in


the formal tourism industry. For example, during our enquiries, a potential training partnershipwas identified with Block Hotels for Masai and Samburu people in Kenya. As the managementof Block Hotels has since been taken over by Sheraton (a part of Starwood Hotels & Resorts),that particular opportunity may no longer apply, but other opportunities can be developed.

Visitor awareness

Visitors are often unaware of local circumstances and of development efforts which are beingmade, efforts which some would be interested to support if they were known. In this area donororganisations could work with local trade associations to develop innovative approaches tovisitor education. Again significant management time would be required.

5.5 Role for Business Partnerships – International Associations

International associations in tourism have been active in promoting the environmental agenda.Examples are:

• Green Globe established originally under the aegis of the World Travel and TourismCouncil but now operated separately as a for profit body which extends to a certificationscheme run via a commercial company, SGS. The Green Leaf environmentalprogramme previously operated by the Pacific Asia Travel Association (PATA) hasbeen integrated into Green Globe;

• the International Hotels Environmental Initiative.

These are promoted by trade membership organisations and are at a minimum self-funding.PATA is also active in cultural heritage rehabilitation and other support to tourism destinations.

At present, none of these organisations address poverty elimination. There is a clear opportunityfor partnerships to be developed with one or more of these bodies to raise awareness of povertyelimination as an objective and the role of the tourism industry in achieving it. This partnershipmight embrace a small number of UK and continental tour operators, including TUI, the largest inGermany, to act in spurring on British operators and hoteliers to put poverty elimination viatourism on their agenda. There may in addition be an opportunity to work with AITO inestablishing a new scheme which incorporates the social agenda.

With the international associations an objective should be for the extension of their currentenvironmental programmes and certification schemes to address poverty issues or to incorporateethical trading practices such as conditions of employment. This might even extend to ethics inthe payment of tax, with a responsibility on the part of local and foreign firms to meet taxobligations in destination countries.

Donor organisations can also help ensure that certification schemes do not exclude poorerproducers and destinations. Experience in forestry and agriculture shows that certification canwork against poorer countries and companies who cannot meet high standards immediately orlack management, monitoring and recording systems needed to qualify. To prevent this, helpcould be given to ensure that tourism certification schemes are based on wide consultation,'translate' performance standards to local situations, and allow for 'group schemes' or 'destinationcertification', whereby small producers are certified as a group (see details in Appendix VI).


6. STRATEGIES FOR PRO-POOR TOURISM

6.1 Donor Intervention in Tourism?

Before considering strategies that can be employed to make tourism more pro-poor, thequestion should first be asked: Should donors intervene in tourism at all? On this, we concurwith those donors who argue that tourism is a major economic activity, is one of the fewdevelopment options in many poor places, and cannot be avoided by donors interested inpoverty. However, we add one reason and one caveat:

Not only does tourism already have a large impact on the poor today, but there appears to behigh potential for improving its impact on the poor (expanding benefits and reducing costs).Relatively little effort has been paid to this to date. On this basis, we recommend a strong focuson interventions that make tourism more pro-poor – that seek to tilt the cake, not just expand it.

General tourism support (for expansion/improvement of the industry) will be pro-poor in somedestinations – whether tourism is pro-poor or not varies, therefore it needs to be assessed on acase-by-case basis. General tourism support is also essential to complement PPT measures, aspro-poor tourism cannot thrive if the wider industry does not. Furthermore, it can provide anideal entry point to support the development of pro-poor approaches. So general tourismsupport is recommended as a poverty elimination strategy where the existing links with povertyreduction are clearly identified, or it is combined with pro-poor tourism. Useful lessonsconcerning general tourism support by donors were presented in Section 4, and are notdiscussed further here.

6.2 Approaches to Pro-Poor Tourism

Suggested strategies for promoting pro-poor tourism are divided into those appropriate withinbilateral country programmes and those at international level. The bilateral strategies includemeasures at destination level and national/policy level.

Some issues of overall approach should be noted first:

• Learn by doing. Effectiveness of these strategies is not yet proven.• Focus on expanding benefits for the poor and participation of the poor – not just on

minimising negative impacts.• Recognise that ‘the poor’ consists of many diverse groups and will not benefit uniformly

– some may suffer or not be reached while others gain. The poorest 10 per cent areunlikely to gain directly from tourism. Implementation of PPT strategies should becoupled with poverty analysis to see who can be reached and how.

• Collaborate with other donors where possible, drawing on growing interest in povertyand human development issues within tourism, but recognise that PPT is a differentapproach to what has gone before.

• Draw on lessons from other sectors of development, as most are equally relevant withintourism (e.g. on SMEs, policy framework, good governance, poverty analysis,participation).

• Treat tourism like any other economic sector: knee-jerk reactions against rich hedonistictourists are not helpful, nor are over-optimistic expectations of a panacea.


• Recognise the constraints on pro-poor tourism. Benefiting the poor is a political process,dealing with issues of power and redistribution. However, commercial reality dictatesthat encouraging pro-poor activity cannot go so far as to undermine competitiveness.Some governments might be happy to make short-term trade-offs between what is mostprofitable and what is pro-poor, but strategies are needed that in the long-term benefitthe poor and tourism business.

6.3 Bilateral Interventions

6.3.1 General Approach

Pro-poor tourism will only be an appropriate intervention in some countries, soselectivity is needed. It is most likely to be appropriate and feasible where there is:

• an existing and growing tourism product (but not so well-established that thestatus quo is entrenched);

• government commitment to pro-poor growth, or specifically to pro-poor tourism(or at least passive acceptance of efforts by others within a destination);

• a large number of poor people, in areas with tourism assets;

• an opportunity for intervention which would complement not duplicate activitiesof others .

The most appropriate opportunities may not be identified and suggested by tourismboards/ministries, who tend to focus on product growth, so being reactive to theiragenda is unlikely to be sufficient. This suggests that it is necessary to be pro-active inidentifying options, and also to assess carefully which stakeholders to work with. As wellas tourism bodies, it may often be appropriate to work with other arms of government,as well as NGOs and business partners.

It is also important to be context specific. Our recommendations necessarily includegeneralisations, but a key finding from donors is the need to design programmesaccording to local circumstance. Strategies will also need to be adapted for differentsegments of the industry, though most of the principles apply generally.

It is essential that there should be a balance between developing the sector as a wholeand developing pro-poor tourism. If competitive products, transport systems andmarketing are inadequate, the industry will decline and any pro-poor tourism strategywith it. However, if general tourism sector support is done by others (government, theprivate sector and/or other donors), donors such as DFID can focus on the latter.

It is also essential that pro-poor strategies are integrated to mainstream tourismactivities. Grass-roots initiatives with poor people are useful but totally insufficient.Sector-wide policies and activities, concerning siting, infrastructure development,planning, business regulation, institutional roles, training and much more need to bepermeated with pro-poor perspectives, i.e. they need to be ‘inclusive’ of the poor andnot exclude them by default. Focused, inclusive and enabling actions are all needed.


Simply avoiding mistakes made in the past by donors would be a big stepforward. Many initiatives proceed without any assessment of negative impacts on thepoor. Ensuring these are assessed and mitigated can be as important as opening up newopportunities.

The Need for Balance

Among EU interventions, the newly commenced Namibian programme is seen as a goodexample of pro-poor tourism. While this has a substantial ‘community tourism’ component,other measures to enhance institutional effectiveness and human resources are also criticalcomponents, without which the community based tourism elements will fail.

Another example comes from Nepal, where the first phase of UNDP’s programme focused onestablishment of the Nepal Tourism Board (private-sector and government), with small scalepiloting of rural tourism. In the emerging second phase the balance will be reversed, with themain focus on rural tourism for poverty elimination, with some support to the now establishedNTB.

6.3.2 Level of Intervention

To be effective bilateral interventions should occur at two levels: the local/destinationlevel and the national/policy level – with clear links between the two.

A destination focus is urged by a number of practitioners to maximise benefits for thepoor within a specific area. This means pro-active intervention with stakeholders ina given area to create economic linkages, increase participation and reducecosts. The ‘destination’ could be a coastal zone, a rural district/region, amountain/valley, an island, a city, or a small country.

Why it is important: This is the level at which practical action and genuinepartnerships are possible. It moves the focus away from national benefits to localbenefits, and deals with the diversity of the industry and poverty by addressing location-specific actions. At this level smaller operators, who are more willing to engage inpartnerships, become more significant. Donors such as DFID may be able to buildstrategic alliances between communities, governmental authorities, business and NGOs,and support processes that enable institutions to work together. Interventions should notbe limited to ‘poverty focused’ interventions targeted specifically at the poor. It is asimportant to ensure that the needs and views of the poor are integrated into widerdevelopments, dealing with planning systems, business, training, infrastructure etc. Themain limitation of the destination focus is that practical action at destination level generallyneeds to be accompanied by a supportive government policy and planning frameworktoo.

Policy-level interventions could cover a range of policy issues, such as governmenttourism objectives, planning criteria, tenure laws, training and registration rules, red tapeon business, investment incentives, and any of the myriad of policies that can significantlyenhance or constrain PPT.

Why it is important: Another area of consensus reached during the study is thateffectiveness of pro-poor strategies depends enormously on the hostgovernment, that successful tourism development requires a strong planning framework,


and that this is an area where donors can help. It also requires strong co-operationbetween government and the private sector. Small changes in the policy and planningcontext of tourism development can have significant effects on implementation at themargin. However, if the tourism agencies or wider government are not interested inmaking tourism more pro-poor, or implementation capacity is simply too weak, donorinterventions will have limited effect. The case for going ahead to do what is practical atdestination level then has to be considered.

We identify five priority issues to address at destination and policy level within bilateralPPT programmes:

1. Small and micro-tourism enterprises

2. Linkages between tourism industry and local suppliers

3. Employment of the poor

4. Competition for natural resources – livelihood trade-offs

5. Social and cultural impacts

1: Supporting Small and Micro Tourism Enterprises

The Issue: Small-scale, locally-run tourism enterprises can give the poor a direct stakein the industry. However there are many barriers to participation in the industry,particularly lack of credit, skills and marketing links, red tape and marginalisation bygovernment. Numerous projects that have tried to develop local tourism enterprises havefailed due to, for example, short-term approaches, insufficient attention to productviability and marketing, and internal community divisions.

Donors Can: Target support at overcoming these constraints e.g. through directprovision of support such as credit, training and marketing support; through policyreform and planning mechanisms ; or by supporting partnerships with the privatesector (see Appendix V for details).


2: Linkages between the Tourism Industry and Local Suppliers

The Issue: Tourism is often praised for its potential to link with other sectors in the localeconomy. Yet in innumerable cases, food and most other supplies and services arebrought in from outside (from distant cities or from overseas). Efforts to promotelinkages have either not been made or have failed.

Lessons from South Africa on Expanding Linkages

• Strategies to enhance linkages must be incorporated into projects right from thestart. Many projects have expected linkages to emerge, but failed to create them.

‘Specific opportunities for SMMEs need to be identified as part of theprocess of designing developments and of allocating concessions’. (DBSA)

• Planning gain can be used to create incentives for business. Within the SouthAfrican Spatial Development Initiative, when investors bid for new leases orconcessions, they are asked to submit their plans for boosting local development.This is one of the criteria on which bids are judged by government and communityrepresentatives. The advantage of this approach is that it avoids regulation, asbusiness is free to decide their own strategy, while providing strong incentives. Thelimitation is that it is only possible where there is competition between investors forleases, and a lessor willing to prioritise linkages as a selection criteria.

• Setting up the linkages can help develop the local products. In a South Africanforestry-tourism project, the fact that a large company guaranteed to purchaselocally-cut timber for a number years gave loggers sufficient collateral to get acommercial bank loan for the necessary equipment.

• Linkages require time consuming and detailed facilitation. Within the SDI initiative,facilitating dialogue between formal sector tourism and local suppliers is regardedas critical. Detail needs to be addressed – those facilitating linkages go throughcompany accounts in detail to spot opportunities for out-sourcing supplies.

• Be commercially realistic. A DBSA tourism expert emphasised that encouragingprivate sector change requires recognition as well as incentives. Be careful anddon’t put so much on them that they can no longer run the operation. Change hasto be gradual. Accept commitments to do more later.

Donors Can: Support work with local suppliers to develop the quality, reliabilityand competitiveness of local products while supporting actions that changeincentives and attitudes in the business sector (see Appendix V for details). Thereis an emerging consensus that linkages can not be assumed but must be facilitated.Donors can also provide support to facilitate the process of making linkages andreduce transaction costs. This requires long-term commitment and an unusualcombination of business and community expertise to work with both sides. However,before any intervention, it is important to identify why linkages do not currentlyexist. Is it because transaction costs of change are too high? In which case donors canfacilitate change. Or is local supply simply not feasible? In which case intervention isinappropriate.


3: Employment of the Poor

The Issue: The number of tourism jobs available to the poor is limited by their lack ofskills, with the result that many jobs are taken by better-skilled outsiders. There are alsoa number of problems associated with the quality of employment in the industry, includinglow pay, poor working conditions, insecurity, seasonality, a high percentage of childrenin the workforce (10-15 per cent according to ILO), and exploitation of workers,particularly women, children and young men within sex tourism.

Donors Can: Support training in hospitality skills, targeted at poor people, sothey can compete for jobs; promote the development and implementation of labourstandards (e.g. ILO standards) within tourism; and support initiatives aiming toreverse the growth of sex tourism and child-labour (although note there is a difficultbalance between reducing exploitation and maintaining economic opportunities that areneeded and wanted by the poor).

4: Competition for Natural Resources – Livelihood Trade-offs

The Issue: It can well be argued that those who lose most from tourism are those thatare displaced from their land. Many others suffer reduced access to naturalresources and/or degradation of natural resources on which they depend.Environmental mitigation measures do not necessarily identify the most important trade-offs with livelihoods, and how to minimise livelihood damage. Indeed someenvironmental measures can conflict with livelihoods (e.g. regulating visitor pressure inKeoladeo National Park, India, though increased entry fees would mainlydis

Sustainable Tourism and Poverty Elimination Study · Charlotte Boyd (ODI) Helen Connor (Deloitte...

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