Enabling Tourism Investment Climate in the COMCEC Region: Challenges and Prospects

Enabling Tourism Investment Climate in the COMCEC Region:

Challenges and Prospects

Challenges and Prospects for Tourism Investment in the COMCEC Region

Presented by: Scott Wayne and Manuel Knight,

SW Associates, LLC Washington, DC

Agenda

• Enabling Tourism Investment Climate in the COMCEC Region: Challenges, Prospects and Solutions

SW Associates, LLC - Enabling Tourism Investment in COMCEC Countries

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World vs COMCEC: Tourism Capital Investment (2012)


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Three other COMCEC members – Guyana, Suriname and Albania – accounted for an additional US$257 million in 2012 tourism investment.

US$ 97,192 million

Tourism Capital Investment: COMCEC Africa (2012)


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Data was unavailable for Djibouti, Guinea-Bissau, Mauritania, and Somalia.

US$ 14,235 million

International Tourism Arrivals: COMCEC Africa (‘000 - 2012)


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10

19

60

71

82

106

160

220

235

238

289

536

715

817

1001

1151

2113

2634

5950

9374

11196

0 2000 4000 6000 8000 10000 12000

Guinea-Bissau

Comoros

Sierra Leone

Chad

Niger

Gambia

Mali

Benin

Togo

Burkina-Faso

Cote d'Ivoire

Sudan

Nigeria

Cameroon

Senegal

Uganda

Mozambique

Algeria

Tunisia

Morocco

Egypt

Guinea-Bissau

Comoros

Sierra Leone

Chad

Niger

Gambia

Mali

Benin

Togo

Burkina-Faso

Cote d'Ivoire

Sudan

Nigeria

Cameroon

Senegal

Uganda

Mozambique

Algeria

Tunisia

Morocco

Egypt

No 2012 data available for Djibouti, Gabon, Libya, Mauritania, & Somalia

Tourism Capital Investment: COMCEC Middle East (2012)


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US$ 55,700 million

COMCEC Middle East Other Countries

International Tourism Arrivals: COMCEC Middle East (‘000 - 2012)


7 0 5000 10000 15000 20000 25000 30000 35000 40000

Kuwait

Palestine

Qatar

Yemen

Lebanon

Iraq

Oman

Iran

Jordan

Bahrain

Syria

UAE

Saudi Arabia

Turkey

300

490

1170

1174

1365

1518

1524

3834

4162

4935

5070

8977

14276

35698 Kuwait

Palestine

Qatar

Yemen

Lebanon

Iraq

Oman

Iran

Jordan

Bahrain

Syria

UAE

Saudi Arabia

Turkey

Tourism Capital Investment: COMCEC Asia (2012)


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US$ 27,000 million

International Tourism Arrivals: COMCEC Asia (‘000 – 2012)


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56 209 244 303 958 966 975 1986 2406

4438

8044

25033

0

5000

10000

15000

20000

25000

30000

2013 WEF TTCI Rankings: COMCEC Regions


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Region (# of countries)

Overall Average rank (/140) and Average Score (1-7)

Regulatory Framework Rankings/Avg. Score

Business Environment, Infrastructure Rankings/Avg. Score

Human, Cultural and Natural Resources Rankings/Avg. Score

World - 140

70.5/4 70.5 70.5 70.5 COMCEC – 41 countries 97.9/3.6 97.7/4 93.7/3.2 95.8/3.6 COMCEC Africa-17

119.7/3.2 118.5/3.6 118.8/2.75 113.6/3.3 COMCEC Middle East-11 68.2/4 77.6/4.4 55.6/4 77.4/3.8 COMCEC Asia-9

90.2/3.8 87.8/4.3 90.6/3.3 88.3/3.7

Best Performing COMCEC Countries (2013)


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Country Overall Index Ranking (/140)

UAE 28

Malaysia 34

Qatar 41

Turkey 46

Oman 57

Bahrain 55

Jordan 60

Saudi Arabia 62

Indonesia 70

Key reasons for best performance in COMCEC


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T&T Regulatory Business Environment T&T human, cultural and natural resources

Albania 63 63 Azerbaijan 46 Bahrain 32 Brunei 57 67 Indonesia 31 Jordan 37 69 Kazakhstan 62 Kuwait 62 Lebanon 65 70 Malaysia 55 41 17 Morocco 68 68 Oman 56 47 Qatar 48 31 Saudi Arabia 38 Turkey 64 52 27 UAE 45 9 35

Key Challenges for Tourism Investment

Governance

Regulatory aspects

Infrastructure

Investment Climate


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Approach: World Economic Forum Travel & Tourism Competitiveness Index

-140 countries ranked

(41 in OIC)

-3 key sub-indexes

–Regulatory framework

–Business environment and infrastructure

–Human, Cultural and Natural Resources

-14 pillars of key issues


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Approach: TTCI’s 14 pillars of Key Issues

Policies (7) and resources (7) measured


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Policy Rules & Regulations,

Prioritization, Price competitiveness,

Affinity for T&T, Sustainability,

Safety & Security Health & Hygiene

Human Natural & Cultural

Resources

Infrastructure: Air and Ground

Transport, Tourism, & ICT

Approach: World Travel & Tourism Council - Economic Impact

GDP, employment, investment, foreign currency

189 countries and 24 groupings


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Approach: World Bank’s Doing Business 2014

Understanding Regulations for SMEs

189 countries

Based on indicators in 11 areas


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Approach: Doing Business 2014 measuring 11 areas in the life of a business

Quantitative indicators

1. Starting a business

2. Dealing with construction permits

3. Getting electricity

4. Registering property

5. Getting credit

6. Protecting investors

7. Paying taxes

8. Trading across borders

9. Enforcing contracts

10.Resolving insolvency

11. Employing workers SW Associates, LLC - Enabling Tourism

Investment in COMCEC Countries 18

Challenges: How competitive is my country for tourism investment?

• Global ranking - Annex F

• Indicators for COMCEC countries -Annex A

• COMCEC and the world - Tables 13-15


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Governance Challenges 1: Tourism missing from plans?

Road/rail/air Infrastructure

networks

SME support Rural development

Environmental management

Long term 5 + year

Regional

Provincial Urban

Corridor


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Governance Challenges 2: Strategic framework for tourism?

New institution needed?

Which markets?

Scale and

cost?

Labor supply?

Locations?

SW Associates, LLC - Enabling Tourism Investment in COMCEC Countries 21

Governance Challenges 3: Most Common…

1. Lack of strategic framework

2. Lack of awareness of tourism

3. Low priority of tourism in institutions

4. Insufficient coordination among policy makers

5. Few industry statistics

6. Security worries scaring away tourists


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Investment Climate challenges

Laws & regulations

Investment opportunities

Taxes or incentives

Finance sources


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Inadequate information for investors

Regulatory challenges

Restrictive Visa

Regimes

Restrictions on foreign investment

Formalities for New Business

Formalities for new

construction

Incentives for Investment?

Limited information on VAT and Duties


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Infrastructure Challenges

• Poor public systems

• Costly private ones

Deficient utilities

• Duplicate power supplies

• Costly desalination High costs

• Short vehicle lifetime

• High operating costs Poor roads

• Factory next to hotel

• Market/shipping traffic

Conflicting Developments


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Additional Challenges

•Hospitality skills lacking

• Few or no training facilities

Workforce training

•Negative image

• Costly rebuilding

Post disaster &

conflict


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Targeting Prospects for

Tourism Investment

Recommended Solutions SW Associates, LLC - Enabling Tourism


Solutions for Tourism Investment

Governance

Regulatory aspects

Infrastructure

Investment Climate


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Governance Solutions 1: Lack of Tourism Strategy


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Policy

Prepare sector strategy

Launch Tourism Satellite Account

Process

Institutional

Create TSA Unit

Governance Solutions 2: Lack of Policy Coordination


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Policy

Raise profile of tourism

Use new research, TSA results for

project feasibility

Institutional

Inter-ministerial tourism commission

Include tourism business council

Governance Solutions 3: Lack of Data


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Policy

High priority to research, data collection and

analysis

Launch TSA Process

Institutional

Establish NTO market research to track industry performance

and maintain a tourism database.

Governance Solutions 4 Improved Security


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Policy

More collaboration

between tourism

ministry and security

authority

Institutional

Tourism training to police and immigration officials.

Create ‘tourism police’ with foreign language training

Investment Climate Solutions 1: Online Marketing and Market Research


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Institutional

Train NTO/IPA personnel to produce high quality market research and improve online

customer service and marketing.

Investment Climate Solutions 2: Clear information provided


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Policy

Laws & Regulations

Taxes & Incentives

Investment Climate Solution 3: Poor information on opportunities


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Policy

Promote high priority tourism

projects

Financing for studies & projects

Institutional

Training on promotion of

tourism projects

Training on financing

Regulatory Solutions 1: Restrictive visas, low openness


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Policy

Adopt visa-free procedures for

targeted nationalities

Adopt expedited systems for others

Regulatory Solutions 2: Reduce permits, formalities and visas


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Policy

Reduce barriers to establishing business and investment

Institutional

Create one-stop shop in the IPA

Regulatory Solutions 3: Information on incentives for tourism


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Policy

Provide information on key incentives for

tourism projects

Regulatory Solutions 4: Land tenancy problems


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Policy

Consider a land bank agency

policy for tourism

Institutional

Conduct a feasibility study on land banking

for tourism

Regulatory Solutions 5: Restrictions on Foreign Investment


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Policy

Reduced restrictions and barriers on

foreign investment

Infrastructure Solution 1: Inadequate utilities


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Policy

Link tourism to energy and

water policies

Promote sustainability

Institutional

Support privately owned

utilities and PPPs

Infrastructure Solution 2: Poor transportation networks


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Policy

Link tourism policy to

transportation policy: road, air,

sea and rail

Institutional

Inter-ministerial commission to

coordinate

Infrastructure Solution 3: Poor urban planning of destinations


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Policy

Support integrated destination

master planning

Institutional

NTO/IPA Capacity Building on

Master Planning

Additional Solution 1: Inadequate Workforce Preparation


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Policy

Link tourism to vocational

training

Institutional

Extend incentives to training institutions

Additional Challenges: Investment for recovery


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Policy

Contingency Planning and

Emergency Funds for rapid

reconstruction

Institutional

Government ready to activate policy

and provide reconstruction

plans and funding

Technical cooperation solutions Capacity

building for promotion

Improved Incentives

Visa Facilitation

Land Banking

Regional and Master Planning

Use of Cultural and

Natural Assets

Statistics & TSA


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Key Solution: Bring Investment Promotion to a Higher Level

Provide clear updated information

Offer responsive customer service

Conduct organizational assessment

Action Plan


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Pro-Nicaragua case study

Thank you for your attention and best regards from the SW Associates

team! * * *

Merci! شكرا Terima kasih! متشکرم Size teşekkür ederiz! Obrigado!

təşəkkür edirəm! Na gode!


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Discussion Questions

• How do you evaluate the role of government agencies

for attracting tourism investments? What is the situation in your country?

• What are the main challenges faced by your country in attracting tourism investments?

• How can these challenges be overcome and how can the cooperation among the Member States be constituted in order to handle these issues?

• How do you evaluate the impacts of tourism investments in your country on tourism development in general? SW Associates, LLC - Enabling Tourism


Enabling Tourism Investment Climate in the COMCEC Region: Challenges and Prospects

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