“Despite of growing evidence of the beneficial impacts of tourism in developing countries and good...

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“Despite of growing evidence of the beneficial impacts of tourism in developing countries and good practices in some individual firms, critics still question whether the overall balance of impacts is positive, particular as regards large holiday complexes and international hotel chains.” “As it has been the c ase of many other industries , tourism companies thus have so far focused most of their corporate responsibility effor ts on environmental issues and philanthropic contr ibutions to social programs. Much less attention has been p aid to managing their econo mic multipliers and impacts along local and global value chains.” “The potential for innovative business practices that deliberately expand economic opportunities for the disadvantaged has not been fully realized.” Source: Harvard University-John F. Kennedy School of Government & ODI & IBLF/Ash et al, 2007 On CSR: “…shows tourism lagging behind other industries.”

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Transcript of “Despite of growing evidence of the beneficial impacts of tourism in developing countries and good...

Page 1: “Despite of growing evidence of the beneficial impacts of tourism in developing countries and good practices in some individual firms, critics still question.

“Despite of growing evidence of the beneficial impacts of

tourism in developing countries and good practices in

some individual firms, critics still question whether the

overall balance of impacts is positive, particular as

regards large holiday complexes and international hotel

chains.”

“As it has been the case of many other industries, tourism companies thus have so far focused most of their corporate responsibility efforts on environmental issues and philanthropic contributions to social programs.Much less attention has been paid to managing their economic multipliers and impacts along local and global value chains.”

“The potential for innovative business practices that deliberately

expand economic opportunities for the disadvantaged has not been

fully realized.”Source: Harvard University-John F. Kennedy School of Government & ODI & IBLF/Ashley et al, 2007

On CSR: “…shows tourism lagging behind other industries.”

Page 2: “Despite of growing evidence of the beneficial impacts of tourism in developing countries and good practices in some individual firms, critics still question.
Page 3: “Despite of growing evidence of the beneficial impacts of tourism in developing countries and good practices in some individual firms, critics still question.

B4D - THE BEGINNING

SADC Conference on Poverty and Development in Mauritius (2008)

B4D Pathfinder = most appropriate project

Partnership for poverty reduction

B

CG

Jointly with SADC Employer Group

Inclusive Business

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THE DEFINITION

Inclusive business aims to overcome poverty by incorporating low income communitiesinto a company's value chain…

…while maintaining profitability and upholding the principles of Corporate Social Responsibility (CSR).

…sound environmental, health and safety management, fair labour conditions, good governance preservation of human rights.

Inclusiv

e Busines

s

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THE APPROACH

It’s not “another problem”.

It’s about profits of companies!

Financial benefits

How can business practices of tourism companies be adapted to achieve long-term commercial profit and deliver greater benefits to the poor?

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MODEL OF THE B4D PROJECT

Uses knowledge, skills, resources and strengths of the private sector

Charter Barometer Toolkit

Focuses on ‘inclusive business’

Core Business

Including low income communities into a company’s value chain

Profitability

Contains mechanisms for self assessment

People-centred, home grown

Certification

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BENEFITS

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POOR PEOPLE AS…

Workers

DistributorsRetailers

Suppliers

Consumers

SMEs

Page 9: “Despite of growing evidence of the beneficial impacts of tourism in developing countries and good practices in some individual firms, critics still question.

BUSINESS MODEL

Page 10: “Despite of growing evidence of the beneficial impacts of tourism in developing countries and good practices in some individual firms, critics still question.

Manual Distribution CentersFoto: HarvardKennedySchool & IFC

Second largest beer brand in Africa

Over 10 000 farmers involved

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INCLUSIVE BUSINESS & SUSTAINABLE TOURISM

Inclusive business aims at overcoming poverty.

In general, sustainable tourism focuses on environmental sustainability.

Environment = important component of inclusive business as being the resource base for the poor.

Inclusive business also covers large-scale forms of tourism & mass tourism: it is neither equivalent only to ecotourism, nor to rural tourism, nor to community based tourism etc.

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STRUCTURE OF TOURISM INDUSTRY

Africa’s tourism industry = mainly SMEs lacking financial and human resources

Divers range of actors involved in the tourism industry = no model solution

Government: infrastructure, marketing, licensing and regulation

Aspects of governance, labour, health, climate change, safety

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OBSTACLESGeneral obstacles:

1. (International) Verticalisation

2. Seasonality3. Dependency from

origination markets4. Market trends5. Effects of instability6. Low linkages7. Lack of infrastructure8. Lack of skills

Leakages: Repatriation of profits, import of skills, commodities, technology...

Bookings abroad, big int. hotel chains, airlines: frequency & routes, etc.

Source: Economic Commission for Africa & Economic Policy Research Centre/V. Gerosa, 2003

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POLICIES

At national level, tourism has been scarcely included in poverty reduction policies in Africa

Source: Economic Commission for Africa & Economic Policy Research Centre /V. Gerosa, 2003

Lack of consideration and information about how tourism could contribute to produce outcomes that directly benefit the poor, (focus is on growth of the industry or its contribution to macroeconomic indicators.)

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EXAMPLES OF GIVEN POLICIES

Source: Economic Commission for Africa & Economic Policy Research Centre /V. Gerosa, 2003

South Africa:White Paper, Poverty Relief Programme, TEP, NQ, FTTSA, CPPP, etc.

In addition, Zambia, Malawi, Lesotho, Tanzania give relevance to tourism in their PRSPs

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TOURISM OVERCOMING POVERTY

Labor-intensive, esp. in low labour cost countries

Less vulnerable than traditional sectors

Non-cyclical and resiliency

Catalytic effect on other economies

Creates better & more gender concerned jobs

Lower barriers to entry (e.g. tariff barriers)

Built on natural & cultural assets and consumed onsite

Source: Economic Commission for Africa & Economic Policy Research Centre/V. Gerosa, 2003

Great potentialities

Outsourcing of services (e.g. food, transport, handy-crafts)

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THE STARTING POINT

Best case: Direct earnings of unskilled/semi-skilled workers = 25% of the tourist spending at destination level

Indirect earnings (supply chain) adds an extra 60-70% on top of the direct effects of tourism.

Source: Harvard University-John F. Kennedy School of Government & ODI & IBLF/Ashley et al, 2007

Dynamic effects of tourism have to be taken into account

Livehood strategies of local households

Business climate for SME development

Patterns of growth of local/national economy

Infrastructure

Natural resource base

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THE BUSINESS CASE

Source: Harvard University-John F. Kennedy School of Government & ODI & IBLF/Ashley et al, 2007

Business benefits center around:

1) mitigating risks (security, reputation, policy, regulatory risks)

2) building opportunityEnhancing customer satisfaction

Improving staff morale & service quality

Offering a more diverse range of unique productsImproving community attitudes and interactions with guests

Building the brand and improving marketing capacityDecreasing operating costs (sourcing locally)

Increasing access to finance (e.g. IFC)

Collaborating more effectively with governments

FTTSA

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REQUIREMENTS

High knowledge and understanding of local employment practices

Willingness to e.g. link hotels and local SMEs

Collaborate with other markets (formal and informal)

•Policy•Innovation•Patience•Resources

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Examples

Mt. Plaisir Estate Hotel, Trinidad

Siwa Oasis and Example of Traditional Siwan Architecture

Source:UNDP

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OPTIONS

•Training/mentoring (staff, locals, SMEs)•New employees•Procurement•(New) products•(New) services•Marketing•Transport•Quality insurance•Packaging•Microfinance systems/incentives•Community revenue/profit sharing schemes•Industry-wide training centers (talent pool)•Building up institutional capacities•Think tanks on joint development•etc.

(TEP)

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B4D BAROMETER

BUSINESS FOR DEVELOPMENT VALUE CHAINPRO-POORSUPPLY CHAIN Inbound

logistics OperationsOutbound

logisticsMarketing

& sales Services

Suppliers

Manufacturers

Distributors

Retailers

Customers

Roadmap journey

3 421 3 421 3 421 3 421 3 421

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©B4D Southern Africa Trust

BUSINESS FOR DEVELOPMENT VALUE CHAINPRO-POORSUPPLY CHAIN Inbound

logistics OperationsOutbound

logisticsMarketing

& sales Services

Suppliers

Manufacturers

Distributors

Retailers

Customers

Roadmap journey

3 421 3 421 3 421 3 421 3 421

3 421 3 421 3 421 3 421 3 421

3 421 3 421 3 421 3 421 3 421

3 421 3 421 3 421 3 421 3 421

3 421 3 421 3 421 3 421 3 421

©B4D Southern Africa Trust

Procurement InfrastructureHR ITInbound logistics Operations Outbound logistics

Marketing& sales

Services

VALUE CHAIN CORE BUSINESS FUNCTIONS SUPPORT FUNCTIONS IN A BUSINESS

Supply

Production

Distribution

Retail

Customers

Roadmap

© B4D Southern Africa Trust

ToolkitCharter

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ROAD MAP

Page 24: “Despite of growing evidence of the beneficial impacts of tourism in developing countries and good practices in some individual firms, critics still question.

ODI (Overseas Development Institute), IIED (International Institute for Environment and Development)

ICRT (International Center for Responsible Tourism).

SNV

Page 25: “Despite of growing evidence of the beneficial impacts of tourism in developing countries and good practices in some individual firms, critics still question.

“Tourism’s current role in expanding economic

opportunity in developing countries presents a

paradox. Resolving this paradox offers tourism

companies the potential to play a leadership role

within the industry and the business community

as a whole.”

Source: Harvard University-John F. Kennedy School of Government & ODI & IBLF/Ashley et al, 2007


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