How to Finance Community Projects: The View from an International institution An OAS/USAID Project May 24, 2003 The case of Caribbean Small Tourism Enterprises Project – STEP

Presentation Introduction – Creativity & enterprise – Quality, standards, value – Profitability and sustainability Sustainability – the case of STEP Program – Product improvement – Marketing – Finance What do Funding Institutions Expect ?

Creativity & Enterprise Building on community values – Pride of place – Key messages – historical & contemporary practices – People based Must know what the “new” customer is looking for Partnering is critical Involving the community at all levels Using your Jamaican creativity

Quality, Standards & Value Market expectations – Authentic experiences But – With quality in terms of hospitality, facilities and safe practices Travel trade demands it – Liability issues, value issues – They need a satisfied customer

Sustainability Always a Challenge Constraints to Sustainability – Standards, Training & HRD – Market access – Access to financing STEP Program one example - designed to overcome constraints

STEP Program Antigua & Barbuda Bahamas Barbados Belize Dominica Grenada Guyana Jamaica St. Lucia St. Kitts & Nevis St. Vincent & the Grenadines Suriname Trinidad & Tobago Dominican Republic (Observer)

Helping the Small Tourism Sector Who are they? Small hotels – 75 rooms or less – 1,500 properties in 14 countries with 36,000 rooms Other Small Tourism Enterprises – Sites, Attractions, Services and Community Tourism Products

Conceptual Approach Small Hotel Properties Sites, Attractions & Events Regional Brands (e.g. nature lodges, plantation inns) Package Experiences: (e.g. small hotel plus nature tours) Caribbeanexperiences.com (Reservations, Call Centre & Destination Information) Consumer and Travel Trade

How STEP is Delivered OAS offices in each country to support program 14 STEP Coordinators for program delivery National public/private sector working group.

STEP Programs & Tools Training to international standards – AH&LA, CESO & Net Corps Toolkits Environmental Walk- through program Resource centers

Resource Centres To Date – installed in Dominica, Barbados, Grenada, St. Lucia, St. Kitts, Trinidad & Tobago, St. Vincent, Belize, Jamaica and (Walk- About) Bahamas – Training materials, video library, TV/video facility, internet access, toolkits – Environmental management toolkits & CAST information In 2003 – 7 more centres including another two to be installed in Jamaica

Sites, Attractions, Services, and Community Tourism In 2003 STEP began its focus on Developing – Standards, – training (technology, Management, Guiding etc) – training materials (Tool kits, course Materials) – Certification Started in St. Lucia, Grenada and Barbados Will start soon in Jamaica with local partners

Integrating Sites, Attractions, Tourism Services & Community Tourism Identifying products that fit the small hotel market segments – Nature – Heritage – Culture – Communities – Events, Festivals, Music Marketing as part of Caribbean Experiences – Help with product upgrade – Packaged with small hotels – Bring customers, make sales

Marketing: The Caribbean Experiences

Caribbeanexperiences™ Brands & Standards Principles behind hotel branding – Quality standards – Market presence (no. of rooms in brand) Branding system for small hotels in Caribbean – Experience driven – Matched to market norms & expectations Examples – Bed & Breakfasts of the Caribbean – Plantation Inns of the Caribbean – Nature Lodges of the Caribbean

Corporate Structure Non-profit entity – Modeled generally on largest non-profit hotel brand – Best Western – Cooperative ownership by Members Start-up initially managed through STEP organization Viability based on member fees, commissions & training/services fees

Entry Requirements for Hotels Must meet the brands and standards requirements - Assessed and rated – Independent audit of CE ratings Agreement with hotelier on: – CE brand adherence – Allocation of rooms – EMS walkthrough – Training program participation – Maintenance of financial records – Reporting of performance

Entry Requirements for attractions Must meet the international physical and service standards – Must be licensed by local agency - TPDCO – Must be assessed and rated – Must be rated by Independent auditor Agreement with operator/community on: – Maintenance of quality standards – Health and hygiene and sanitation – Environmental Management System in Place – On-going training and certification for participants – Maintenance of financial records – Reporting of performance – Constant monitoring of satisfaction by visitors – Monitoring of impact on Communities and – timely feedback to operator/community

Caribbean Tourism Investment Facility – product development and upgrade of sites and communities – improving and expanding the properties – Marketing, promotions and training To meet the International Standards: Financing will be required for:

Two Product Upgrading Funds Proposed Micro-Enterprise/SME/Credit Union Facility – Estimated $5-7 million – Funding range: $10K-$75K per project – Includes environmental management upgrades – Incorporate USAID guarantee program as appropriate Long-term Debt & Equity Facility – Estimated $25-50 million – Funding range: $75K-$5 million per project

Accessing Funds – What do They Expect? It is not easy – Must depend on the creativity, partners and contacts you have nurtured A quality product – Matched to Market Feasibility assessment – Can it work & be profitable? Business Plan – Who owns and operates the business – How will it be marketed – Forecast of income & expenditures

Thank You