ASIA PACIFIC WORKSHOP ON TOURISM DEVELOPMENT AND POVERTY REDUCTION SYDNEY, AUSTRALIA 27 SEPTEMBER – 1 OCTOBER 2010 INCLUSIVE TOURISM: OPPORTUNITY GUIDELINES FOR THE TOURISM-LED POVERTY REDUCTION PROGRAMME Trevor Sofield Professor of Tourism University of Tasmania Australia. Consultant for the ITC

Principles of the Tourism-led Poverty Reduction Programme Export-led Poverty Reduction Programme: Acknowledgements: This presentation has been drawn in large part from working with the ITC for five years, material provided by the ITC including a Manual prepared for the ITC entitled: Tourism-led poverty reduction programme Opportunity study guidelines Caroline Ashley, Jonathan Mitchell and Anna Spenceley ITC 2009 and ODI material prepared for a joint workshop with ITC, the Commonwealth Secretariat and SNV Rwanda on Tourism Value Chain Analysis held in Kigali, Rwanda in January 2010.

In order to contribute to the Millennium Development Goal of reducing by half the proportion of people living in extreme poverty by 2015, the mission of the International Trade Centre’s (ITC) Tourism-led Poverty Reduction Programme (TPRP) is: “To link poor communities with promising products and services to markets using technical support, in order to achieve a direct impact on their economic development.” Principles of the Tourism-led Poverty Reduction Programme

The programme aims to match the demand for particular labour- intensive products and services with the capacities of poor communities, by creating new job and income generation opportunities. Responding to formal requests from countries for technical assistance, the TPRP operates through pilot projects in countries in sectors that offer the best leverage for poverty reduction, including tourism (ITC, 2005). $1/$10/$100 Tourism-led Poverty Reduction Programme

Poverty and Tourism Tourism as a system has extensive linkages into other sectors and it can generate substantial inflows of foreign exchange and contribute to general economic development with potential for improving the livelihood of impoverished communities. Tourism can stimulate a wide range of economic opportunities in and across sectors including transport, communications, infrastructure, education, security, health, immigration, customs, accommodation, agriculture and culture. (OMT/UNWTO Secretariat, 2002) Erakor Island Resort, Vanuatu

Many organisations have been seeking ways to enhance the impacts of tourism on poor people in recent years. Specific impetus was given to this objective with the formulation of “Pro Poor Tourism” in 1999 by a research group from DFID (Department for International Development (1999) Tourism and poverty elimination: untapped potential, DFID). The UN World Tourism Organization embraced the concept of tourism and poverty alleviation in 2002 and launched its program at the UN World Development Conference in Johannesburg in 2002, which it called STEP (Sofield, De Lacy, Lipman, and Daugherty, Sustainable Tourism ~ Eliminating Poverty (STEP). An Overview. Brisbane: CRC for Sustainable Tourism). Poverty and Tourism

The TPRP is a further advance in ways to tackle poverty alleviation through tourism. While the initial focus tended to be on micro level community projects, our understanding of the opportunity provided by mainstream tourism to benefit the poor has grown (Mitchell and Ashley, 2008). Poverty and Tourism Where local supply chains and indigenous enterprise are strong, and out-of-pocket tourism expenditure high, incomes to the poor can equate to as much as 1/4 to 1/3 of destination-level tourist expenditure (Mitchell and Ashley, 2007). Strong pro-poor impact is not automatic; the ‘trickle-down effect’ may have little impact on the poorest and most vulnerable members of a community.

Positive and deliberate interventions are necessary and they can significantly enhance the impact of tourism on poor people. Achievements in community-based tourism enterprises (CBTE) have often been disappointing. In order to achieve poverty impacts at scale, development practitioners need to engage with mainstream tourism and this is a key principle of the approach by ITC to tourism development and poverty reduction. Poverty and Tourism

TPRP OPPORTUNITY GUIDELINES As Fabrice Leclercq noted, the TPRP Guidelines are structured around three different phases. Phase 1. Diagnosis of current situation and context: This phase includes tools to map the tourism value chain (or economy of the destination), and the participation of the poor within it. The purpose here is to understand financial flows and how the tourism sector currently works. This phase also helps to understand the policy and regulatory context and the existing tourism market.

The TPRP Guidelines are structured around three different phases. Phase 2. Project opportunities, prioritisation and feasibility: This phase includes a systematic approach to develop a ‘long list’ of project options. It then guides the move towards a ‘short list’ of high priority interventions that should be implemented, by applying specific criteria that include the likely impact of the intervention on poverty. TPRP OPPORTUNITY GUIDELINES

The TPRP Guidelines are structured around three different phases. “Phase 3. Project planning: This phase is used to package proposed interventions into bankable projects that can be assessed by potential financiers. It provides a structure for reports, and tools to assist in developing institutional arrangements, targets and indicators for monitoring, and also project budgets.

TPRP OPPORTUNITY GUIDELINES Experience over a number of years by the ITC in implementing tourism-oriented poverty reduction projects has revealed the power of tourism value chain analysis in identifying optimum situations and conditions in which to intervene. Definition: What is a value chain? ‘The value chain describes the full range of activities which are required to bring a product or service from conception, through the different phases of production (involving a combination of physical transformation and the input of various producer services), delivery to final consumers, and final disposal after use.’ Source: Kaplinsky & Morris 2004

What is a value chain? Value chain mapping as a participatory exercise Good way of organising a chaotic reality; Means something to real people in tourist sector; Gives us the tools to engage with real tourist destinations; Useful institutional model (governance & power relations); Enables comparisons with different products (fair trade coffee anyone?); and Useful economic model for development practitioners (to illustrate opportunities to make pro-poor interventions).

Transport to site Provide accomo- dation, food etc. organize experience, event Transport from site Travel agent Air, Bus company Hotel Site operator, Cultural group Bus company Tour operator Local tourism board Coordination of services: Source: from GTZ Advising tourist on product, contract What is a value chain?

Identification of Partners, contracts investment Product design / plan Provide Service Tourism Service Providers Clients Service capacity Capacity & skills service providers Product development Creating Service capacity Individual tourism service provision Package Providers / Tour Operators Provide Service Tourism Service Providers Clients Service capacity Capacity & skills service providers Provide Service Tourism Service Providers Clients Service capacity Capacity & skills service providers What is a value chain? Source: GTZ

The important parts… The tourist; Different nodes (accommodation, excursions, etc); Direct service providers (tour operators, taxis, etc); Supply chains & related industries (food, craft, etc); and Supporting institutions. What is a value chain?

Tourism sub-chains or Nodes The 4 main Tourism sub-chains or Nodes are: i.Accommodation (Hotels) ii.Food (Restaurants, intermediaries, farmers) iii.Excursions (Tour operators, transports, communities) iv.Handicraft (producers, vendors) Photos: Trevor Sofield

A supply chain for craft production This diagram shows the links in the supply chain that allow a tourist to purchase a wooden sculpture from a local artisan. Source: Spenceley, Ashley & de Kock (2009) Tourism-Led Poverty Reduction Programme: Core Training Module. Geneva: ITC., figure 8, p.29). Photo: Trevor Sofield

TRAINING MODULES In order to disseminate the expertise and body of knowledge accumulated by the ITC through its inclusive tourism approach to reducing poverty it has produced a series of Train-the-Trainer Handbooks which set out frameworks and operational guidelines for these undertaking pro poor tourism interventions in these nodes and several others as well.

“The Core Manual on Enhancing Local Community Involvement in the Tourism Sector provides an introduction to the tourism sector, and how it can contribute to poverty reduction; an overview of potential involvement of local people and ways to expand the tourism supply chains, while recognising socially and environmentally sustainable practices; and the potential linkages that can be created between local people and the tourism sector, and potential costs and benefits: (Spenceley, Ashley & de Kock, 2009, ITC).

The aim of the TPRP handicraft module is: To show ways how handicraft producers in developing countries can be better integrated in the tourism value chain in order to increase their income; and To provide facilitators with the know-how to develop sustainable business linkages between handicraft producers and tourism markets.

The “Hospitality Management” manual is intended to be a tool to teach trainers on how to train hospitality employees. Trainers will need to communicate how the hospitality and catering industry operates optimally while fulfilling guest expectations and needs. The main objective is to establish a teaching method which is suited to tourist establishments in developing countries and allow trainers to focus on gaps existing in the development of the tourist sector of developing countries (Ecole Hôtelière de Lausanne, Switzerland, & Daniel Charbonnier, ITC, 2009)

“The agricultural training module aims to impart an understanding of the agricultural sector as a whole, as well as the potential linkages that can be created between poor farmers and the tourism sector, with their prospective costs and benefits. The target audience includes representatives of community institutions, potential and existing private sector partners, government representatives involved in the tourism sector or other related industries, and local support organisations (NGOs)” (Andrew Rylance, Anna Spenceley, Jonathan Mitchell, & Henri Leturque, ITC 2009).

Through the TPRP the ITC has formulated world class opportunity study guidelines which use the value chain approach as the basis for interventions that have a strong probability of sustainability as measured by a range of indicators – economic, social, environmental, commercial. There are nine steps in the TVCA as refined by the TPRP, and over the next two and a half days the Workshop will proceed to familiarize participants with these steps. The nine steps of tourism value chain analysis

PhaseStepWhat to do?Why? Phase 1: Diagnosis Step 1Preparation To define the destination, target group of poor, and the project team Step 2 Map the big picture: enterprises and other actors in the tourism sector, links between them, demand and supply data, and the pertinent context To organise a chaotic reality, understand the overall system Step 3Map where the poor participate To avoid erroneous assumptions about poor actors To take account of the less visible suppliers Step 4 Conduct fieldwork interviews in each node of the chain, with tourists and service providers To provide data and insights for Steps 5 to 8 Step 5 Track revenue flows and pro-poor income Estimate how expenditure flows through the chain and how much accrues to the poor Consider their returns and factors that enable or inhibit earnings To follow the dollar through the chain down to the poor, and how assess how returns can be increased Phase 2: Opportunities Step 6 Identify where in the tourism value chain to seek change: which node or nodes? To use Steps 1 to 5 to select areas ripe for change To focus Steps 6 to 8 down to specific areas Step 7 Analyse blockages, options, and partners in the nodes selected, to generate a long list of possible interventions To think laterally and rationally in generating the range of possible projects Step 8 Prioritise projects on the basis of their impact and feasibility To generate a project shortlist, comprising projects most likely to deliver impact Phase 3: Planning Step 9Project planningHow to package selected projects for funders THANKYOU !