Evolving thinking on tourism and poverty reduction Caroline Ashley, Overseas Development Institute

Agenda 1.Changing perceptions of pro poor tourism: – who, why, what 2.Conceptual framework – three different pathways of impact on the poor 3.Understanding the tourism value chain – what have we learnt so far? Photo copyright Flickr – FirstMichael, 2006

The emergence of ‘pro poor tourism’ Pre 1999: academic literature pro and anti tourism. 1992: sustainable tourism – mainly green 1999-: how could tourism help meet the Millennium Development Goals? –‘Pro Poor Tourism’ = increasing net benefits to the poor. Tourism can be pro-poor and can be made more so.

Since 1999 Positives –Many organisations and policies embrace PPT –We now know key ingredients for pro- poor destinations –Emerging work with businesses, destinations. Negatives –More policies than action –Excessive focus at micro level not the mainstream. –Inappropriate business models – ignore the market –Lack of rigorous data

Different ideas about tourism Signs of convergence?

Local economic development How to use tourism for linkages & enterprise? Local economic development Local linkages, enterprise development Pro-poor tourism practitioners Need to scale up effort & impact Link with private sector Tourism planners Arrivals, receipts, Marketing & statistics Pro-poor tourism practitioners Community tourism, micro business Conservation Livelihood impacts Economists development professionals Wary of tourism special-pleading Companies Profits Signs of convergence?

Local economic development Local linkages, enterprise development Tourism planners Arrivals, receipts, Marketing & statistics Pro-poor tourism practitioners Community tourism, micro business Conservation Livelihood impacts Economists development professionals Wary of tourism special-pleading Companies Profits Using core competencies for local impact Competitive advantage Signs of convergence?

The common question: how to harness tourism to reduce poverty at a significant scale? But… what do we actually know about how tourism affects poverty? –Less than you would think given all the PPT commitments –More than you would think given the usual PPT arguments (it’s big, it’s labour intensive, and micro projects can be good)

Conceptual framework: 3 pathways by which tourism affects different poor people

Markets, factor prices, infrastructure, natural resources, skills, growth problems Non- tourism sector (supply chains and wages spent by tourism staff) Dynamic changes in the economy Tourism sector Pathway 1: Direct effects Pathway 2: Indirect effects Pathway 3: Dynamic effects Earnings, income, livelihood impacts Incom e Poor Households Within destination Outside destination

3 pathways by which tourism affects different poor people 1.direct income from employment, small and informal sector, and non-labour income? 2.indirect income from supply chains, and from tourism staff spending their wages 3.dynamic effects on the local and national economy What is the evidence?

1. Direct income Formal sector jobs can be 10% to 80% of income of the poor Informal sector is where thousands of the poor gain access Joint ventures, donations, community tourism generate small income compared to others, but may be significant at local level. Livelihood impacts: very mixed Tourism is generally more labour-intensive than other non-agricultural sectors. Often includes more women and un-skilled workers.

2. Indirect income Supply chains boost economic impact of tourism by 50 to 80% Can involve farmers and workers in distant poorer areas Food chain may be 50% of tourism impact! Do not ignore! Focus on creating linkages, not blocking leakages

3. Dynamic impacts Positive and negative Key positives: infrastructure, market development, wage rates, tax revenue Potential big negative: higher exchange rate reduces farm exports Impacts on natural resources, mixed.

How to assess flows within a destination? Assessing the tourism value chain in Laos: Luang Prabang – a cultural heritage town in Laos (Asia) Where to the poor participate and where should pro poor intervention be targeted? 2006: analysis of the four sub-chains – accommodation, food, excursions, and shopping.

Consumer Service Provider Food ($7m)Accommodation ($8.7m) Excursions and transport ($1.8m) Curios and craft($4.4m)

Suppliers Service Provider Food ($7m)Accommodation ($8.7m) Excursions and transport ($1.8m) Curios and craft($4.4m) Hotel Guest House Rest- aurant Snack stallGuide Local Transport Tour Operator Craft shop Curio vendor Owner Com- pany Secure family Family/ individual Secure family Family/ individual Free- lance Com- pany

Suppliers Service Provider Food ($7m)Accommodation ($8.7m) Excursions and transport ($1.8m) Curios and craft($4.4m) Hotel Guest House Rest- aurant Snack stallGuide Local Transport Tour Operator Craft shop Curio vendor Owner Com- pany Secure family Family/ individual Secure family Family/ individual Free- lance Com- pany Worker Staff Worker Employed guide

Service Provider Food ($7m)Accommodation ($8.7m) Excursions and transport ($1.8m) Curios and craft($4.4m) Hotel Guest House Rest- aurant Snack stallGuide Local Transport Tour Operator Craft shop Curio vendor Owner Com- pany Secure family Family/ individual Secure family Family/ individual Free- lance Com- pany Worker Staff Worker Employed guide Suppliers Fruit, veg, and specialty food suppliers Silk producer, silver seller, material gatherer Imports – silk, cotton, silver Construction workers, companies, furniture makers Fish and Meat suppliersRural villages Wholesaler, Textile Weaver, Embroiderer Tailor, Paper-maker, Local transport

Service Provider Food ($7m)Accommodation ($8.7m) Excursions and transport ($1.8m) Curios and craft($4.4m) Hotel Guest House Rest- aurant Snack stallGuide Local Transport Tour Operator Craft shop Curio vendor Owner Com- pany Secure family Family/ individual Secure family Family/ individual Free- lance Com- pany Worker Staff Worker Employed guide Suppliers Fruit, veg, and specialty food suppliers Silk producer, silver seller, material gatherer Imports – silk, cotton, silver Poor or sufficient households Women are a significant proportion Women in the majority Ethnic minority group in the majority Poor or sufficient households Construction workers, companies, furniture makers Fish and Meat suppliersRural villages Wholesaler, Textile Weaver, Embroiderer Tailor, Paper-maker, Local transport

Service Provider Food ($7m)Accommodation ($8.7m) Excursions and transport ($1.8m) Curios and craft($4.4m) Hotel Guest House Rest- aurant Snack stallGuide Local Transport Tour Operator Craft shop Curio vendor Owner Com- pany Secure family Family/ individual Secure family Family/ individual Free- lance Com- pany Worker Staff Worker Employed guide Suppliers Fruit, veg, and specialty food suppliers Silk producer, silver seller, material gatherer Imports – silk, cotton, silver Poor or sufficient households Women are a significant proportion Construction workers, companies, furniture makers Fish and Meat suppliersRural villages Wholesaler, Textile Weaver, Embroiderer Tailor, Paper-maker, Local transport

Service Provider Food ($7m)Accommodation ($8.7m) Excursions and transport ($1.8m) Curios and craft($4.4m) Hotel Guest House Rest- aurant Snack stallGuide Local Transport Tour Operator Craft shop Curio vendor Owner Com- pany Secure family Family/ individual Secure family Family/ individual Free- lance Com- pany Worker Staff Worker Employed guide Suppliers Fruit, veg, and specialty food suppliers Silk producer, silver seller, material gatherer Imports – silk, cotton, silver Poor or sufficient households Women are a significant proportion Women in the majority Construction workers, companies, furniture makers Fish and Meat suppliersRural villages Wholesaler, Textile Weaver, Embroiderer Tailor, Paper-maker, Local transport

Service Provider Food ($7m)Accommodation ($8.7m) Excursions and transport ($1.8m) Curios and craft($4.4m) Hotel Guest House Rest- aurant Snack stallGuide Local Transport Tour Operator Craft shop Curio vendor Owner Com- pany Secure family Family/ individual Secure family Family/ individual Free- lance Com- pany Worker Staff Worker Employed guide Suppliers Fruit, veg, and specialty food suppliers Silk producer, silver seller, material gatherer Imports – silk, cotton, silver Poor or sufficient households Women are a significant proportion Women in the majority Ethnic minority group in the majority Construction workers, companies, furniture makers Fish and Meat suppliersRural villages Wholesaler, Textile Weaver, Embroiderer Tailor, Paper-maker, Local transport

Service Provider Food ($7m)Accommodation ($8.7m) Excursions and transport ($1.8m) Curios and craft($4.4m) Hotel Guest House Rest- aurant Snack stallGuide Local Transport Tour Operator Craft shop Curio vendor Owner Com- pany Secure family Family/ individual Secure family Family/ individual Free- lance Com- pany Worker Staff Worker Employed guide Suppliers Fruit, veg, and specialty food suppliers Silk producer, silver seller, material gatherer Imports – silk, cotton, silver Poor or sufficient households Women are a significant proportion Women in the majority Ethnic minority group in the majority Earnings to poor Construction workers, companies, furniture makers Fish and Meat suppliersRural villages Wholesaler, Textile Weaver, Embroiderer Tailor, Paper-maker, Local transport

Key findings Importance of supply chain – food, and also raw materials for crafts. Could increase local supplies. Out-of-pocket spending: need to keep shopping as ‘unique selling point’ of LPB Rural excursions – popular but generating tiny tiny income. Need overhaul.

Looking ahead Need a wide range of policy interventions: training, enterprise support, regulatory reform, land tenure.. Both growing the tourism cake and changing the slice accessible to the poor Must work with the private sector, Must look beyond the micro – but use local reality to inform the macro. Much more that we don’t know –e.g. poverty impacts of different sector –Impacts of pro-poor interventions.

tourism New publications from the ODI Tourism Programme Opinions Pro-poor tourism: what’s gone right and what’s gone wrong? Briefing Papers Can tourism offer pro-poor pathways to prosperity? Assessing how tourism revenues reach the poor.