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

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Investor Relations

Published on March 5, 2014

Author: SWAssociatesDC

Source: slideshare.net

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Part 2 of the SW Associates presentation to the Tourism Working Group of COMCEC of the newly released report "Enabling Tourism Investment Climate:Challenges and Prospects for Tourism Investments in the COMCEC Region." This presentation was made by SW Associates Consultant Manuel Knight and Scott Wayne, President of SW Associates.

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. SW Associates, LLC - Enabling Tourism Investment in COMCEC Countries 3

Tourism Capital Investment: COMCEC Africa (2012) US$ 14,235 million Data was unavailable for Djibouti, GuineaBissau, Mauritania, and Somalia. SW Associates, LLC - Enabling Tourism Investment in COMCEC Countries 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 Investment in COMCEC Countries 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

Tourism Capital Investment: COMCEC Middle East (2012) US$ 55,700 million COMCEC Middle East Other Countries SW Associates, LLC - Enabling Tourism Investment in COMCEC Countries 6

International Tourism Arrivals: 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 Investment in COMCEC Countries Turkey 35000 40000 7

Tourism Capital Investment: COMCEC Asia (2012) US$ 27,000 million SW Associates, LLC - Enabling Tourism Investment in COMCEC Countries 8

International Tourism Arrivals: COMCEC Asia (‘000 – 2012) 30000 25033 25000 20000 15000 10000 8044 4438 5000 56 209 244 303 958 966 975 1986 2406 0 SW Associates, LLC - Enabling Tourism Investment in COMCEC Countries 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 SW Associates, LLC - Enabling Tourism Investment in COMCEC Countries 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 SW Associates, LLC - Enabling Tourism Investment in COMCEC Countries 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 SW Associates, LLC - Enabling Tourism Investment in COMCEC Countries 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 SW Associates, LLC - Enabling Tourism Investment in COMCEC Countries 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 SW Associates, LLC - Enabling Tourism Investment in COMCEC Countries 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 SW Associates, LLC - Enabling Tourism Investment in COMCEC Countries 15

Approach: World Travel & Tourism Council - Economic Impact  GDP, employment, investment, foreign currency  189 countries and 24 groupings SW Associates, LLC - Enabling Tourism Investment in COMCEC Countries 16

Approach: World Bank’s Doing Business 2014 Understanding Regulations for SMEs  189 countries  Based on indicators in 11 areas SW Associates, LLC - Enabling Tourism Investment in COMCEC Countries 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 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 SW Associates, LLC - Enabling Tourism Investment in COMCEC Countries 19

Governance Challenges 1: Tourism missing from plans? Long term 5 + year Corridor Urban SW Associates, LLC - Enabling Tourism Investment in COMCEC Countries Regional Provincial Road/rail/air Infrastructure networks SME support Rural development Environmental management 20

Governance Challenges 2: Strategic framework for tourism? Which markets? Locations? New institution needed? Scale and cost? Labor supply? SW Associates, LLC - Enabling Tourism Investment in COMCEC Countries 21

Governance Challenges 3: 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 SW Associates, LLC - Enabling Tourism Investment in COMCEC Countries 22

Investment Climate challenges Laws & regulations Inadequate information for investors Investment opportunities Taxes or incentives Finance sources SW Associates, LLC - Enabling Tourism Investment in COMCEC Countries 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 SW Associates, LLC - Enabling Tourism Investment in COMCEC Countries 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 SW Associates, LLC - Enabling Tourism Investment in COMCEC Countries 25

Additional Challenges Workforce training • Hospitality skills lacking • Few or no training facilities Post • Negative image disaster & • Costly rebuilding conflict SW Associates, LLC - Enabling Tourism Investment in COMCEC Countries 26

Targeting Prospects for Tourism Investment Recommended Solutions SW Associates, LLC - Enabling Tourism Investment in COMCEC Countries 27

Solutions for Tourism Investment Governance Investment Climate Regulatory aspects Infrastructure SW Associates, LLC - Enabling Tourism Investment in COMCEC Countries 28

Governance Solutions 1: Lack of Tourism Strategy Institutional Policy Prepare sector strategy Create TSA Unit Launch Tourism Satellite Account Process SW Associates, LLC - Enabling Tourism Investment in COMCEC Countries 29

Governance Solutions 2: 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 SW Associates, LLC - Enabling Tourism Investment in COMCEC Countries 30

Governance Solutions 3: 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 SW Associates, LLC - Enabling Tourism Investment in COMCEC Countries 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 SW Associates, LLC - Enabling Tourism Investment in COMCEC Countries 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. SW Associates, LLC - Enabling Tourism Investment in COMCEC Countries 33

Investment Climate Solutions 2: Clear information provided Policy Laws & Regulations Taxes & Incentives SW Associates, LLC - Enabling Tourism Investment in COMCEC Countries 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 SW Associates, LLC - Enabling Tourism Investment in COMCEC Countries Training on financing 35

Regulatory Solutions 1: Restrictive visas, low openness Policy Adopt visa-free procedures for targeted nationalities Adopt expedited systems for others SW Associates, LLC - Enabling Tourism Investment in COMCEC Countries 36

Regulatory Solutions 2: Reduce permits, formalities and visas Policy Reduce barriers to establishing business and investment Institutional Create one-stop shop in the IPA SW Associates, LLC - Enabling Tourism Investment in COMCEC Countries 37

Regulatory Solutions 3: Information on incentives for tourism Policy Provide information on key incentives for tourism projects SW Associates, LLC - Enabling Tourism Investment in COMCEC Countries 38

Regulatory Solutions 4: Land tenancy problems Policy Institutional Consider a land bank agency policy for tourism SW Associates, LLC - Enabling Tourism Investment in COMCEC Countries Conduct a feasibility study on land banking for tourism 39

Regulatory Solutions 5: Restrictions on Foreign Investment Policy Reduced restrictions and barriers on foreign investment SW Associates, LLC - Enabling Tourism Investment in COMCEC Countries 40

Infrastructure Solution 1: Inadequate utilities Policy Institutional Link tourism to energy and water policies Support privately owned utilities and PPPs Promote sustainability SW Associates, LLC - Enabling Tourism Investment in COMCEC Countries 41

Infrastructure Solution 2: Poor transportation networks Policy Institutional Link tourism policy to transportation policy: road, air, sea and rail SW Associates, LLC - Enabling Tourism Investment in COMCEC Countries Inter-ministerial commission to coordinate 42

Infrastructure Solution 3: Poor urban planning of destinations Policy Institutional Support integrated destination master planning NTO/IPA Capacity Building on Master Planning SW Associates, LLC - Enabling Tourism Investment in COMCEC Countries 43

Additional Solution 1: Inadequate Workforce Preparation Policy Institutional Link tourism to vocational training Extend incentives to training institutions SW Associates, LLC - Enabling Tourism Investment in COMCEC Countries 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 SW Associates, LLC - Enabling Tourism Investment in COMCEC Countries 45

Technical cooperation solutions Capacity building for promotion Statistics & TSA Use of Cultural and Natural Assets Improved Incentives Visa Facilitation Regional and Master Planning SW Associates, LLC - Enabling Tourism Investment in COMCEC Countries 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 SW Associates, LLC - Enabling Tourism Investment in COMCEC Countries 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! SW Associates, LLC - Enabling Tourism Investment in COMCEC Countries 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? SW Associates, LLC - Enabling Tourism Investment in COMCEC Countries 49

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