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

2

World vs COMCEC:
Tourism Capital Investment (2012)
US$ 97,192 million

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

3

Tourism Capital Investment:
COMCEC Africa (2012)
US$ 14,235 million

Data was unavailable
for Djibouti, GuineaBissau, Mauritania, and
Somalia.

4

International Tourism Arrivals:
COMCEC Africa (‘000 - 2012)
Egypt
Morocco
Tunisia
Algeria
Mozambique
Uganda
Senegal
Cameroon
Nigeria
Sudan
Cote d'Ivoire
Burkina-Faso
Togo
Benin
Mali
Gambia
Niger
Chad
Sierra Leone
Comoros
Guinea-Bissau

11196
9374
5950
2634
2113
1151
1001
817
715
536
289
238
235
220
160
106
82
71
60
19
10
0

2000

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

SW
4000 Associates, LLC - Enabling Tourism
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
5

COMCEC Middle East (2012)
US$ 55,700 million
COMCEC Middle East Other
Countries


6

COMCEC Middle East (‘000 - 2012)
35698

Turkey

Palestine

14276

Saudi Arabia

8977

UAE

Kuwait

Qatar

Syria

5070

Yemen

Bahrain

4935

Lebanon

4162

Jordan

Iraq

3834

Iran

Oman

Oman

1524

Iran

Iraq

1518

Jordan

Lebanon

1365

Yemen

1174

Qatar

1170

Palestine

Syria
UAE

490

Kuwait

Bahrain

300
0

Saudi Arabia
5000

10000

SW Associates, LLC - Enabling Tourism 30000
15000
20000
25000

Turkey
35000

40000

7

COMCEC Asia (2012)
US$ 27,000 million


8

COMCEC Asia (‘000 – 2012)
30000

25033
25000

20000

15000

10000

8044
4438

5000

56

209

244

303

958

966

975

1986

2406

0


9

2013 WEF TTCI Rankings:
COMCEC Regions
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

70.5/4

70.5

70.5

70.5

97.9/3.6

97.7/4

93.7/3.2

95.8/3.6

119.7/3.2

118.5/3.6

118.8/2.75

113.6/3.3

68.2/4

77.6/4.4

55.6/4

77.4/3.8

90.2/3.8

87.8/4.3

90.6/3.3

88.3/3.7

World - 140
COMCEC – 41
countries
COMCEC Africa-17
COMCEC Middle East11
COMCEC Asia-9


10

Best Performing
COMCEC Countries (2013)
Country

Overall Index Ranking (/140)

UAE

28

Malaysia

34

Qatar

41

Turkey

46

Oman

57

Bahrain

55

Jordan

60

Saudi Arabia

62

Indonesia

70

11

Key reasons for best
performance in COMCEC
T&T Regulatory
Albania
Azerbaijan
Bahrain
Brunei
Indonesia
Jordan
Kazakhstan
Kuwait
Lebanon
Malaysia
Morocco
Oman
Qatar
Saudi Arabia
Turkey
UAE

63
46

37
62
55
68
56
48
64
45

Business Environment

32
57
69
62
65
41
47
31
38
52
9


T&T human, cultural
and natural
resources
63
67
31

70
17
68

27
35
12

Key Challenges for
Tourism Investment
Governance

Investment
Climate

Regulatory
aspects

Infrastructure

13

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

14

Approach: TTCI’s 14 pillars of Key Issues
Policies (7) and resources (7) measured

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


15

Approach: World Travel & Tourism
Council - Economic Impact
 GDP, employment,
investment,
foreign currency
 189 countries and
24 groupings


16

Approach: World Bank’s
Doing Business 2014
Understanding
Regulations for SMEs
 189 countries
 Based on indicators
in 11 areas


17

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


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

19

Governance Challenges 1:
Tourism missing from plans?
Long term
5 + year

Corridor
Urban


Regional

Provincial

Road/rail/air
Infrastructure
networks

SME support
Rural development
Environmental
management
20

Strategic framework for tourism?
Which
markets?

Locations?

New
institution
needed?

Scale
and
cost?

Labor
supply?

21

Most Common…
1.
2.
3.
4.

Lack of strategic framework
Lack of awareness of tourism
Low priority of tourism in institutions
Insufficient coordination among policy
makers
5. Few industry statistics
6. Security worries scaring away tourists

22

Investment Climate challenges
Laws & regulations

Inadequate
information
for investors

Investment
opportunities

Taxes or
incentives
Finance sources

23

Regulatory challenges
Restrictive
Visa
Regimes

Formalities for
New Business

Restrictions
on foreign
investment

Formalities for
new
construction

Incentives for
Investment?

Limited
information on
VAT and Duties


24

Infrastructure Challenges
Deficient
utilities

• Poor public systems
• Costly private ones

High costs

• Duplicate power supplies
• Costly desalination

Poor roads

• Short vehicle lifetime
• High operating costs

• Factory next to hotel
Conflicting
Developments • Market/shipping traffic

25

Additional Challenges
Workforce
training

• Hospitality skills lacking
• Few or no training
facilities

Post
• Negative image
disaster &
• Costly rebuilding
conflict

26

Targeting Prospects for
Tourism Investment
Recommended
Solutions

27

Solutions for Tourism Investment
Governance

Investment
Climate

Regulatory
aspects

Infrastructure

28

Governance Solutions 1:
Lack of Tourism Strategy

Institutional

Policy
Prepare sector
strategy

Create TSA Unit

Launch Tourism
Satellite Account
Process

29

Lack of Policy Coordination
Institutional

Policy
Raise profile of
tourism
Use new research,
TSA results for
project feasibility

Inter-ministerial
tourism commission
Include tourism
business council


30

Lack of Data

Institutional

Policy
High priority to
research, data
collection and
analysis

Establish NTO market research
to track industry performance
and maintain a tourism
database.

Launch TSA
Process


31

Governance Solutions 4
Improved Security

Policy
More
collaboration
between
tourism
ministry and
security
authority

Institutional
Tourism training to police
and immigration officials.
Create ‘tourism police’ with
foreign language training


32

Investment Climate Solutions 1:
Online Marketing and Market Research

Institutional
Train NTO/IPA personnel to
produce high quality market
research and improve online
customer service and marketing.


33

Investment Climate Solutions 2:
Clear information provided

Policy
Laws & Regulations

Taxes & Incentives


34

Investment Climate Solution 3: Poor
information on opportunities

Institutional

Policy
Promote high
priority tourism
projects

Training on
promotion of
tourism projects

Financing for studies
& projects

Training on
financing
35

Regulatory Solutions 1:
Restrictive visas, low openness

Policy
Adopt visa-free
procedures for
targeted nationalities
Adopt expedited systems
for others

36

Reduce permits, formalities and visas

Policy

Reduce barriers to
establishing
business and
investment

Institutional

Create one-stop
shop in the IPA


37

Information on incentives for tourism

Policy

Provide information
on key incentives for
tourism projects

38

Land tenancy problems

Policy

Institutional

Consider a land
bank agency
policy for tourism


Conduct a
feasibility study
on land banking
for tourism
39

Restrictions on Foreign Investment

Policy

Reduced restrictions
and barriers on
foreign investment

40

Infrastructure Solution 1:
Inadequate utilities

Policy

Institutional

Link tourism
to energy and
water
policies

Support
privately owned
utilities and
PPPs

Promote
sustainability

41

Poor transportation networks

Policy

Institutional

Link tourism
policy to
transportation
policy: road, air,
sea and rail


Inter-ministerial
commission to
coordinate

42

Poor urban planning of destinations

Policy

Institutional

Support
integrated
destination
master planning

NTO/IPA Capacity
Building on
Master Planning


43

Additional Solution 1:
Inadequate Workforce Preparation

Policy

Institutional

Link tourism to
vocational
training

Extend incentives
to training
institutions


44

Additional Challenges:
Investment for recovery

Policy

Institutional

Contingency
Planning and
Emergency Funds
for rapid
reconstruction

Government ready
to activate policy
and provide
reconstruction
plans and funding


45

Technical cooperation solutions
Capacity
building for
promotion
Statistics &
TSA
Use of
Cultural and
Natural
Assets

Improved
Incentives

Visa
Facilitation

Regional and
Master Planning

Land
Banking
46

Key Solution: Bring Investment
Promotion to a Higher Level
Pro-Nicaragua
case study

Provide clear updated
information
Offer responsive
customer service

Conduct organizational
assessment
Action Plan

47

Thank you for your attention and
best regards from the SW Associates
team!
***
Merci! ‫ شكرا‬Terima kasih! ‫ متشکرم‬Size teşekkür
ederiz! Obrigado!
təşəkkür edirəm! Na gode!


48

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?

49

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

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