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Tourism

Tourism in emerging markets around the world is on the rise, with the share of international tourism receipts spent in developing countries reaching almost 40 percent, a figure which has doubled since 1980. With faster connections, a burgeoning middle class and a rapidly increasing array of options for travelers, it is likely these numbers will only continue to grow in the coming years.

In the face of this continued growth in the travel and tourism sector, the challenge for all governments – advanced and emerging alike – will be how to effectively capture this growth and manage it to drive prosperity. In the right circumstances, public-private partnerships (PPPs) can allow governments to lead the development of tourism assets in accordance with government priorities and high environmental and social standards, while harnessing the efficiency and creativity of the private sector.

Opportunities for PPPs in tourism can be applied across a huge span of activities, offering both public goods, like historical artifacts, natural parks, and museums, and private goods and services, like hotels, entertainment events, and theme parks.

While a PPP is not the best tool for every scenario, the strategic use of these partnerships can contribute significantly to the development of a sustainable tourism program, and can be a part of a broader strategy to facilitate tourist access, enhance quality and efficiency, and improve the destination experience.

Sub-sectors

  • Heritage Sites

    Not even the richest of countries has sufficient public sector financial resources to own, rehabilitate, and maintain all the heritage buildings worthy of preservation. While in many countries the non-for-profit sector has developed expertise in education and advocacy, rarely do these organizations possess the capital or the development expertise to undertake the rehabilitation of heritage buildings. As a result, the private sector often plays a leading role in redevelopment and ongoing...

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  • National Parks

    National parks around the world have long-permitted private companies to operate within in their boundaries, whether it be to run gift shops or rental concessions. However, as national parks confront challenges related to limited funding, mismanagement and the threat of budget cuts, in some cases national and state authorities are looking to the private sector to take on more of a managerial role.

    Under the right circumstances, public-private partnerships (PPPs) have been utilized as a...

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  • Urban Revitalization

    Urban Revitalization refers to a set of initiatives aimed at reorganizing an existing city structure, particularly in neighborhoods in decline due to economic or social reasons. Urban revitalization initiatives generally include improving features of the urban environment, such as the quality of pavement and the functionality of the sidewalks. Depending on the intended usage of the revitalized neighborhood, the projects can also address the need for improved community engagement and...

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Issues

  • Sustainability

    Sustainability is key to planning and manag­ing the growth in international tourism and its dramatic projected growth in the coming years. Sustainable tourism relies on the development and delivery of quality visi­tor experiences that do not...

    Sustainability is key to planning and manag­ing the growth in international tourism and its dramatic projected growth in the coming years. Sustainable tourism relies on the development and delivery of quality visi­tor experiences that do not degrade or damage natural or cultural values and visitor attractions. It requires effective, cooperative commitment and coordination among site management, the nearby com­munities and all relevant public agencies and private enterprises.

    It is equally important for both concessioner and concessionaire to protect the natural resources on which the tourism operation is based. If the natural or cultural asset is degraded through pollution, deforestation or over-exploitation, visitor demand and pricing are likely to decrease, hurting the businesses’ bottom line.

  • Asset management and start-up costs

    Alongside considerations regarding the supporting infrastructure within the region, particular thought should also be given to the conservation ‘product’ itself. For example, if you’re attracting a private operator to establish a lodge in...

    Alongside considerations regarding the supporting infrastructure within the region, particular thought should also be given to the conservation ‘product’ itself. For example, if you’re attracting a private operator to establish a lodge in a national park, the parks authority needs to ensure that the park is stocked with animals, fenced, and that the correct measures are in place to protect the animals, tourists and natural beauty assets. These steps may result in high start-up costs that must be considered when planning the project.

  • Stakeholder engagement

    A successful and sustainable concession process identifies and engages with stakeholders early on to understand their various concerns and expectations, and works with them to ensure a project’s success. Dialogue over environmental, social,...

    A successful and sustainable concession process identifies and engages with stakeholders early on to understand their various concerns and expectations, and works with them to ensure a project’s success. Dialogue over environmental, social, political and economic implications of the project can help avoid problems and delays later on. Because sites for tourism development like park lands and heritage buildings are valuable to different groups and individuals for different reasons, effective concessions are built on shared trust and understanding among many stakeholders.

  • Variability

    Tourism PPPs differ a great deal depending both on the local environment and the specific project. At the most basic level, the PPP approach to tourism varies from country to country because the structure of tourism administration and management...

    Tourism PPPs differ a great deal depending both on the local environment and the specific project. At the most basic level, the PPP approach to tourism varies from country to country because the structure of tourism administration and management at the national level is highly influenced by each nation’s historical, political and cultural circumstances. Furthermore, the response and support of the community greatly depends on that culture’s perceptions of private involvement in cultural heritage and natural resources.

    As a result, tourism PPPs are extremely context specific and what is successful in one area may be unproductive in another. What is needed for individual buildings or sites will be different from what is needed for an urban area or a large, complex, mixed-use site. Those engaging in PPPs for conservation and other tourism projects should look to similar projects to serve as models, but maintain flexibility to adapt and alter the project to the specific circumstances.

  • Supporting infrastructure

    Tourism PPPs, especially those that involve ecotourism sites and protected areas, are heavily reliant on a country’s supporting infrastructure. Visitors and vendors need to be able to travel to the location with relative ease, requiring an...

    Tourism PPPs, especially those that involve ecotourism sites and protected areas, are heavily reliant on a country’s supporting infrastructure. Visitors and vendors need to be able to travel to the location with relative ease, requiring an established road network and/or airport close by. The tourism PPP will require access to a reliable power network and water supply, as well as other infrastructure such as entry roads or airports, to keep the asset up and running. Governments and private partners entering into PPPs in tourism must evaluate and consider the necessary supporting infrastructure around the asset. 

Resources

    • 2013
    • International Finance Corporation (IFC)

    Handshake Issue #10: Tourism & PPPs

    Handshake Issue #10: Tourism & PPPs examines partnerships that have revitalized both natural and cultural heritage sites, along with the investment climate necessities to position these destinations for long-term success. Contributors also highlight the role of transport and access for developing economies with tourist offerings, focusing on the transformative role of low-cost carriers and pedestrian cities. Tourism does best when governments and private companies work closely together bringing in jobs, supports communities, and improves a country’s visibility on the global stage.

    • Arthur L. Smith
    • Inter-American Development Bank (IDB), Multilateral Investment Fund (MIF)

    Public-Private Partnerships for Sustainable Tourism

    The past two decades have seen a rapidly growing and global interest in sustainable tourism.   This new focus on sustainability is driving changes in both product development and tourism marketing and promotion, creating an additional challenge for national tourism agencies (NTAs) which are already struggling to maintain or increase market share in an ever more competitive global market.  Not surprisingly, both NTAs and subnational tourism agencies are turning to the private sector as a partner in creating and maintaining sustainable tourism programs.  Through relationships termed “public‐private partnerships” (PPPs), private entities and NGOs contribute financing, management expertise, technology, and other resources which can...

    • 2014
    • Susan Macdonald and Caroline Cheong

    The Role of Public-Private Partnerships and the Third Sector in Conserving Heritage Buildings, Sites, and Historic Urban Areas

    This publication is directed toward those working in the cultural heritage sector. While it is not a guide to the use of public-private partnerships (PPPs), it aims to foster an understanding of their underlying concepts and demonstrate how and where they have been used to create successful heritage conservation outcomes. Case studies are used to illustrate various PPP types, the roles and responsibilities of partners, and how PPPs have met conservation goals for a range of heritage places, from individual buildings to historic urban areas.   

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