Moscow, 15 th March 2010 PPP: future of tourism development - Best practice examples from Austria

PPP: future of tourism development - Best practice examples from Austria 2 Content About Kohl & Partner Public Private Partnership in tourism Best practice examples from Austria

PPP: future of tourism development - Best practice examples from Austria 3 About Kohl & Partner Independent and internationally operating consulting company specialized in the hotel and tourism industry Leading tourism consulting company in Austria with more than 30 years of experience Eight offices in six countries (Villach, Vienna, Munich, Stuttgart, South Tyrol, Sofia, Bucharest and Budapest) International team with more than 40 tourism experts 3

PPP: future of tourism development - Best practice examples from Austria 4 Core business areas Hospitality Industry Destination Development Tourism Infrastructure Feasibility Studies Hotel Valuations Operator Selection Strategic Concept Development Technical Service Agreements Destination Audits Tourism Master Plans Destination Assistant Program Hotel Master Plans Development of organizat. structures Aqua Parks/Thermal Spas Conference Centers Golf Courses Ropeways/Cable Cars Tourism Attractions/ Sights

PPP: future of tourism development - Best practice examples from Austria 5 Content About Kohl & Partner Public Private Partnership in tourism Best practice examples from Austria

PPP: future of tourism development - Best practice examples from Austria 6 “A contractual agreement between a public agency (federal, state or local) and a private sector entity. Through this agreement, the skills and assets of each sector are shared in delivering a service or facility for the use of the public.” Definition Public Private Partnership

PPP: future of tourism development - Best practice examples from Austria 7 Why do we need Public Private Partnership in tourism?

PPP: future of tourism development - Best practice examples from Austria 8 Why do we need PPP in tourism? PPP projects Lack of budget and Know-How in many municipalities Pressure by competitors requires new investment Faster imple- mentation of tourism projects is possible Tourism Infra- structure Develop- ment is expensive but vital

PPP: future of tourism development - Best practice examples from Austria 9 Picture Potential areas for PPP in tourism Tourism Infrastructure Aqua Parks, Ropeways, Golf Courses Leisure Infrastructure Theme Parks, Sport Complexes, Museums Events & Festivals Sport, music and cultural events Possible Public- Private Partnership

PPP: future of tourism development - Best practice examples from Austria 10 Content About Kohl & Partner Public Private Partnership in tourism Best practice examples from Austria

PPP: future of tourism development - Best practice examples from Austria 11 Four golden rules for Public Private Partnership 11 SUCCESSFUL PARTNERSHIP „Five drunks are not a team“ – a cooperation is NOT a rescue team The involved partners should define common goals Every unit needs its own business- plan and strategy Mature partners and a strong leadership are required

PPP: future of tourism development - Best practice examples from Austria 12 Most common PPP models in tourism Informal cooperation Operation model PPP models Cooperation model Associate model Concession model Sponsoring

PPP: future of tourism development - Best practice examples from Austria 13 Cooperation model 1/2 Main characteristics Best practice example Public & Private Sector agree to work together (usually Public Sector share is higher than 50 %) Public Sector has a contract with the Joint Venture Ideal model if nothing is built or the contributions cannot be measured DMC of the municipality Velden 600 hotels and pensions with a total room count of beds More than overnights per year Destination Management Companies Possible tourism example

PPP: future of tourism development - Best practice examples from Austria 14 Destination Management Company Velden Municipality Velden 34 % Casino Austria 5 % Cooperation model 2/2 Tourism Board Velden 49 % Golf Course 5 % Event Company 4 % T. support Associat. 4 %

PPP: future of tourism development - Best practice examples from Austria 15 Operation model 1/2 Main characteristics Best practice example Public Sector assigns a private company for planning, constructing, financing and/or operating Public Entity receives fixed annual amount of money An operator contract as the legal basis with detailed task description Operating company of Schönbrunn castle in Vienna Consists of castle, royal garden, Sisi museum, emperor appartments, etc. More than 3 million visitors annualy Leisure or cultural facilities or convention centres Possible tourism example

PPP: future of tourism development - Best practice examples from Austria 16 Operation model 2/2 Schloss Schönbrunn Kultur- und Betriebsges.m.b.H. (operating company) Castle & Royal Garden Emperor Appartm. & Silver Collection Sisi Museum Emperor furniture collection Republic of Austria (100 % owner) No public subsidies – operating company keeps operational revenue All investment and renovation financed by the operational revenue

PPP: future of tourism development - Best practice examples from Austria 17 Associate model 1/2 Main characteristics Best practice example Public Sector signs an equity participation for a tourism infrastructure project Investment as an impulse for regional tourism development Public sector often covers infrastructure development costs Development of a Spa Centre in Bad Hofgastein Surface of square metres divided into six different zones Total investment for renovation and enlargement EUR 25 million Golf Courses, Aqua Parks, Spa Centres, Ropeways Possible tourism example

PPP: future of tourism development - Best practice examples from Austria 18 Construction Company Spa Centre Gastein Municipality Bad Hofgastein 49 % Oberbank 19 % Associate model 2/2 Regional tourism organisation 24 % Brewing Union Austria 6 % Raiffeisen Bank 2 %

PPP: future of tourism development - Best practice examples from Austria 19 Concession model 1/2 Main characteristics Best practice example A concessionaire (private sector) is granted the right to use an existing facility The facility stays in the ownership of the public sector The concessionaire generates the revenues through direct selling of the services to customers Development of cable car near Innsbruck Connecting Innsbruck (560 m) with Nordkette (2.269 m) Total investment of around EUR 51 million Golf Courses, Aqua Parks, Spa Centres, Ropeways Possible tourism example

PPP: future of tourism development - Best practice examples from Austria 20 Concession contract for 30 years Investment Public share 73 % Concession model 2/2 Investment Private share 27 % Total investment of EUR 51 million

PPP: future of tourism development - Best practice examples from Austria 21 VIENNA VILLACH SOUTH TYROL MUNICH STUTTGART BUCHAREST SOFIA BUDAPEST