Tag: infrastructure

Tourism is a global business: last year, global capital investment in travel and tourism totaled $856 billion. Governmental and non-governmental stakeholders invest not only domestically, but also abroad. This article highlights some reasons why private, governmental, and Intergovernmental Organization (IGO) stakeholders invest in foreign tourism projects.

Private and Governmental Investment in Foreign Tourism Projects

Investment in foreign tourism is a form of Foreign Direct Investment (FDI). In FDI, a corporate or governmental stakeholder makes substantial, lasting investments in a foreign country. In the case of tourism, many developing countries are rich in scenery and culture but lack the capital to develop their tourism. FDI can foster and maintain economic growth in those countries and expand the recipient countries’ job market.

Chain hotels are a classic example of private-sector FDI in tourism. In the second quarter of 2023, Marriott International, Inc. earned 61% of its revenue from managed hotels in the international market. The multinational corporation just announced its plan to open three luxury hotels in Vietnam on October 26, 2023. Such projects in developing countries can improve the overall attractiveness of the destinations, strengthen the local workforce, and help the countries gain access to the global market.

A representative governmental agency that invests in foreign tourism projects is the United States Agency for International Development (USAID). USAID has implemented multiple large-scale projects to coordinate FDI in countries like the Republic of Georgia and Bangladesh. In 2023, it disbursed $65 million and $320 million to the two countries respectively. In the case of Bangladesh, specifically, the US hopes to help the country become a middle-income country by 2030 and harvest a strong partner in the Indo-Pacific through FDI.

Tourism is an important part of USAID projects, contributing to their overall economic growth, biodiversity conservation, and climate resilience objectives. USAID not only invests in tourism but also conducts capacity-building to help Bangladesh develop tourism practices. USAID has evaluated the current tourism market of Bangladesh. It identified poor certification policy, the lack of promotion, and the lack of skilled workforce as areas of improvement.

On-the-ground Impact of Foreign Investment in less-Developed Countries

Less developed countries are often aware of the benefits of FDI. Bangladesh categorizes tourism as a “thrust sector”, that is, a high-priority sector for investment. In early 2023, the Bangladesh Tourism Board (BTB) formulated ten development project proposals (DPPs). In the next fifteen years, these DPPs will require around $1.18 billion investment, mostly private. The investment will be used to upgrade the tourism infrastructure of ten regions, including the Sundarbans, and construct more infrastructure including accomodations. 

The Sundarbans EcoGuide Training, which took place between September 14-21 (photo source: BECA) 

As the world is recovering from the pandemic, tourism FDI is returning to its pre-pandemic level. According to UNWTO and fDi Intelligence’s 2023 report, foreign investors announced 352 tourism projects in 2022. That is an increase of 23% from the previous year.

However, despite FDI’s positive impact in developing countries, high-profile foreign direct investment historically still cluster in developed countries. The UK, home of many globalized tourism corporations, devoted only about 6% of its outward tourism FDI to developing countries.

The environmental sustainability of private-sector tourism FDI is also questionable. While Vietnam welcomes Marriott’s investment, it has experienced the negative ecological impact of FDI. Between 1991 and 1995, 24% of FDI in Vietnam entered the tourism sector, especially the construction of hotels. The investment helped Vietnam increase its international arrivals by fiftyfold. However, resort development strained Vietnam’s natural resource: by 1994, the country’s forest coverage dropped from 43.7% in 1943 to 26.1%. Such examples highlight the necessity for investors to be environmentally conscious.

 

The pristine natural scene of Nhị Bình, Vietnam

IGO Funding Foreign Tourism Projects for Sustainability and International Development 

Inter-governmental agencies like the UN and World Bank also invest extensively in foreign tourism projects. They emphasize World Heritage preservation and economic sustainability. 

UNESCO: Foreign Investment Benefits Environmental and Cultural Conservation 

According to UNESCO’s policy guideline, tourism has a two-way connection with World Heritage Sites. World Heritage Sites offer tourism destinations, and tourism presents the sites’ outstanding value to a broader public.

Tourism, however, must be sustainable. Climate issues like erosion, rising sea levels, and deforestation threaten World Heritage Sites on all continents. Because tourism will contribute over 10% of the world’s carbon emissions by 2035, it could exacerbate the challenges facing our World Heritage.

To protect World Heritage Sites from the negative impact of tourism, UNESCO operates the UNESCO World Heritage and Sustainable Tourism Program. The program administers two million euros funded by the German government to support sustainable tourism development. Such support is especially important as tourism recovers from the pandemic.

In Angkor, Cambodia, the program launched a “Cash for Work” Scheme. In this program, unemployed tourism workers earn a wage while building a new footpaths in Angkor Wat that regulate the flow of tourists and protect the green areas around the temple. UNESCO also enhances the economic sustainability of Cambodia’s tourism. Workshops are held for vulnerable groups in local communities – particularly women artisans.

In Bosnia and Herzegovina, UNESCO funds the municipality of Mostar to implement a tourism tax. The tax is be collected from vehicles with more than six passengers. The municipality’s funds will likely gain an additional €2.5 million through the tax.

World Bank:  Foreign Investment Benefits Global Economic Development 

The World Bank regards tourism as a key economic driver of growth and one of the primary employers. It partners with governments and the private sector to develop tourism in less developed countries.

Between 2018 and 2023, the World Bank invested $40 million in Ghana to boost the country’s tourism industry. The project took place when Ghana’s economy suffered. In 2016, Ghana’s economic growth slowed down significantly. The fall in gold price, decline in oil price, and shortage of energy rationing caused the country’s GDP growth to fall from 7.3% in 2013 to about 4% between 2014 and 2016. Amid the recession, however, the election in 2016 led to a peaceful transition to a government keen to diversify its economy.

Due to Ghana’s relative political stability and rich natural resources, the World Bank identifies tourism development as a feasible means for Ghana to gain more international exchange revenue. The World Bank aims to attract $10 million in private investment in tourism-related activities in project areas. The development activities will achieve a 5% annual growth rate in international tourist arrivals in Ghana.

Angkor Wat, Cambodia’s UNESCO World Heritage Site 

Community-based Foreign Tourism Investment

Admittedly, some grand-scale tourism investment projects do not directly benefit the locals. According to a 2019 survey by Booking.com, 68% of global travelers would like the money they spend on travel to go to the local community.

Several micro modes of foreign tourism investment focus on empowering the local community. Community investment and microfinance are two examples.

Community Investment

Community investment means that investors provide economically disadvantaged communities in the recipient country with financial resources. In tourism, community investments typically focus on micro- and small enterprises and infrastructure-related projects. These projects can serve both local residents and visitors.

The collaboration of UNEP’s Small Grants Program and ACTUAR (Costa Rican Association of Rural and Community Tourism) is an excellent community investment initiative. ACTUAR strengthens community-based rural tourism throughout Costa Rica. UNEP supported ACTUAR’s work in Los Campesinos Reserve by funding the upgrading of the local lodge. ACTUAR Received a small grant of $2500 to construct a small tourist receiving area and restrooms. The new infrastructure enhanced the experience of both the visitors and the locals.

Microfinance 

Microfinance is a form of banking service provided to low-income individuals or groups who don’t have access to financial services. it provides credit to entrepreneurs with little or no collateral in amounts considered far too small (typically between $100 and $1,000) to interest commercial lenders.

OneSeed Expedition, for example, is an international tour operator that uses microfinance to uplift the local communities at its destinations. The agency prioritizes underrepresented groups and independent business owners when selecting local suppliers. To support community entrepreneurship, OneSeed partners with local microfinance institutions (MFI), donating 10 percent of all revenue to local microfinance since its first trip in 2011. The local microfinance institutions then approve funding allocation to entrepreneurs, who repay the loan when their businesses grow. As of 2021, OneSeed has invested $376, 884 in 841 loans.

Women have been the main target audience of microfinance programs—out of the 20 million people benefiting from microfinance globally, 74% are women. Since women make up 54% of the tourism workforce but hold only 23% of leadership roles, Microfinance in tourism contributes to female empowerment. 90% of the recipients of OneSeed’s loans are female. En Via, another tourism organization based in Mexico, uses 100% of the tour fee to provide interest-free loans and educational programs for entrepreneurial women in one of the six communities where they work.

The Journey Forward: Sustainable Investment and Community Empowerment 

The stunning natural scenery of the Sundarbans should be protected by sustainable tourism development 

Tourism investment is a thriving business. As the world recovers from the pandemic, global investment in tourism is gradually recovering from its lows. World Travel & Tourism Council forecasts robust 11.5% growth in investment in 2023, amounting to $955 billion, with a return to pre-pandemic levels anticipated by 2025.

While stakeholders’ investments in foreign tourism projects strengthen the recipient country’s economy, investments must be beneficial to the environment and local communities. The following approaches would contribute to this goal:

Conduct Comprehensive Environmental Impact Assessments (EIAs): Before funding international tourism projects, stakeholders should thoroughly assess the potential environmental consequences of the project. The assessment should identify potential risks and propose mitigation measures to protect fragile ecosystems, wildlife, and natural resources.

Implement Sustainable Tourism Practices: Sustainable tourism should be at the core of tourism projects. Stakeholders should invest in tourism activities that reduce energy and water consumption, minimize waste, and support eco-friendly accommodations.

Foster Community Engagement and Benefits: local communities should participate in the decision-making process of tourism investment projects. International stakeholders should collaborate with local stakeholders, such as indigenous groups and local businesses, to create opportunities for local employment and infrastructure enhancement. Stakeholders should encourage community-based tourism initiatives that allow locals to showcase their culture and traditions.

To learn more about how Solimar is meaningfully involved in foreign investment projects and making a positive impact, please visit Solimar’s website

 

A scuba diver explores ocean ecosystems off the coast of Saudi Arabia

We all know the age-old story of mass tourism. You know, the one where hordes of camera-clad tourists descend upon breathtaking destinations, casting a shadow over the authenticity of this once-hidden gem. While Instagram content flourishes, breathtaking locations are reduced to mere backdrops. Even worse, local communities often miss out on the benefits of the quick stop-in of the hordes. In this all-too-familiar tale, the negative impacts of tourism become evident. 

However, amidst this sea of tourists, a new tide is rising in the world of travel. In a refreshing trend, many tourists are shifting perspectives and prioritizing more sustainable and regenerative experiences. Travelers now yearn to learn about the diverse cultures they encounter and forge genuine connections with the places they explore. 

While we can’t ignore the potential drawbacks of tourism, we aim to provide readers with hope. This new wave of sustainable tourism has the power to change destinations’ environment, economy, infrastructure, and cultural heritage.

To shed more light on this transformative movement, we will quote insights from Solimar International’s Senior Project Manager, Micah Sorum. Sorum has been at the forefront of pioneering sustainable tourism initiatives. 

So, buckle up as we explore the multidimensional impacts of sustainable tourism beyond the surface-level figures. Stick around and learn how mindful travel can transform not only destinations but also our own perspectives and lives. 

The Impacts of Sustainable Tourism

Prioritizing Environmental Sustainability in the Tourism Industry: Strategies for a Greener Future

Breathtaking photo of a snorkeler exploring the crystal-clear, turquoise blue waters of Mahdia, Tunisia.
Mahdia, Tunisia (Photo by Mohamed Ben Zineb on Unsplash)

In a world grappling with global warming, it is imperative to prioritize environmental health. Incorporating environmental sustainability will be crucial for the future of tourism businesses: one of the top five most valuable exports in over 150 countries. This entails utilizing resources to meet the needs of the present generation while conserving the world for future generations. Let’s delve into the key impacts that responsible practices can have on the environment:

  1. Conservation and preservation of natural resources: Tourism can help protect valuable ecosystems and biodiversity by actively conserving and preserving natural resources.
  2. Responsible tourism practices, respecting wildlife and ecosystems: Encouraging responsible behavior among tourists, such as observing wildlife from a safe distance and following guidelines to minimize disturbance, helps protect and respect the natural environment.
  3. Collaboration and stakeholder engagement, supporting local communities: By collaborating with local communities, tourism can support their economic development while ensuring that the benefits of tourism reach the local population. This fosters a sense of ownership and encourages the preservation of cultural heritage.
  4. Education: Tourism provides a unique opportunity to educate travelers about environmental wellness. By raising awareness and promoting sustainable practices, tourists can become advocates for environmental conservation in their communities.

When successfully implemented, these aspects of sustainable tourism positively impact the environment. For instance, tourism can help support and preserve iconic nature, generating revenue that incentivizes its conservation. Micah emphasizes that “if the environment is an attraction, then it encourages the preservation of it. It can change the community’s perspective and how they see their own resources. If tourism is set up to benefit community members, then it’s an asset to them” (Sorum, 2023).

It is essential to recognize that mass tourism has the potential to be damaging to the environment. Visitors use strains of natural resources when it exceeds the environment’s coping ability. This is where ecotourism becomes essential for ensuring the sustainability of the industry. By balancing business interests and environmental concerns, ecotourism minimizes the negative impacts of visitor use on natural resources. The tourism industry holds a unique position to educate people worldwide about environmental protection. Through responsible practices, tourism can extend its reach and inspire individuals to take action to safeguard the environment.

When considering climate change, creative endeavors to mitigate tourism’s contribution will be essential to move forward in the industry. Sustainable transportation and energy-efficient accommodations are a couple of emerging practices that will be crucial to the future of this industry. An example of sustainable tourism’s impact is in the Caribbean nations, where the renewable energy infrastructure is underdeveloped and threatened by extreme weather events related to climate change.  Solimar International worked alongside the Inter-American Development Bank to design the “Caribbean Climate Smart Islands Program,” encouraging a transition to lower carbon emissions and create a climate-resilient community.

The tourism industry has a lot of influence and opportunities to positively impact the environment. Environmental sustainability and tourism go hand in hand; one will only succeed with the support of the other. Read more here about how Solimar’s mission is to do just that.  

Empowering Communities: The Transformative Power of Sustainable Tourism

Vibrant woven baskets from Gabes, Tunisia showcasing colorful decorations, traditional patterns, and a Hand of Fatima (Hamza) pendant.
Woven Baskets (Gabes, Tunisia – Photo by Yassine Khalfalli on Unsplash)

Sustainable tourism goes beyond short-term economic stimulation. It creates a positive ripple effect, transforming the economy and the lives of those directly impacted. By embracing ecotourism practices, we can unlock possibilities for communities worldwide.

At the heart of sustainable tourism impacts lies the power to offer employment opportunities. Micah notes the most impactful aspect of tourism is its ability to create jobs, “not just any job, but jobs that give people autonomy and control over the business and their lives” (2023). It’s not just about numbers; it’s about empowering individuals and families who may otherwise struggle to make ends meet. From tour operators to local suppliers, sustainable tourism creates a web of jobs that uplift communities from poverty.

Take this remarkable example in Jamaica, where Solimar developed a groundbreaking communication tool for businesses to connect with markets, funders, and stakeholders. By establishing a brand platform, creating an online training platform, and crafting business plans, Solimar raised awareness of community tourism and ensured its long-term sustainability. Through education and empowerment, the economic benefits flourished while the vibrant local culture took center stage. Solimar helped to establish and launch the Jamaica Community Experiences Brand in a way that ensures its longevity. Teaching the local community how to market themselves improves the economic benefits and culture. 

Sustainable tourism’s impact goes beyond economic empowerment. It also plays a crucial role in conservation funding. By generating revenue through responsible tourism practices, we can channel resources toward preserving the environments that attract visitors. This delicate balance between people and nature is vital for the future. Read more here about how Solimar’s work in the Cayman Islands creates a plan that bridges the gap between challenges.

The success of ecotourism in benefiting the economy depends on sustainable and responsible practices – cultural heritage and environmental health must be constantly ranked equal to economic means. Micah says this has everything to do with organization, stating that “so much of [balancing the economic benefits of tourism with the preservation of a destination’s natural and cultural heritage] is in the way that a destination has set itself up to be managed. Through DMO development, we ensure that someone is there to take over, representing local guides and gathering stakeholders for support on larger projects. We have to have an organizing unit to make it happen” (2023).

By maintaining a balance between economic development and environmental conservation, ecotourism can contribute to the overall sustainability of a destination. 

Building Communities: Tourism as a Tool for Infrastructure Development

Breathtaking winter view of the picturesque coastline in Hawaria, Tunisia, showcasing four majestic windmills standing against the lush green hills.
(Hawaria, Tunisia – Photo by Haythem Gataa on Unsplash)

When tourists visit a destination, they bring more than just their backpacks and cameras. The influx of visitors can put considerable strain on a location’s infrastructure. However, this influx of visitors can also motivate investment in a destination’s infrastructure. From a policy perspective, Micah Sorum of Solimar International says we can “look at the infrastructure to ensure tourism can grow in a sustainable way” (2023).  Here are a few aspects of infrastructure that tourism can impact:

  1. Roads: As tourist numbers rise, transportation demand increases. Local roads now serve both tourists and residents, leading to wear and tear, higher maintenance costs, and budget strains. However, this also presents an opportunity for job creation and improved infrastructure if development is responsible, benefiting tourists and the local community. In Tunisia, an emerging destination, tourists and locals alike can benefit from the Cap Bon touristic road that connects several popular destinations along a scenic route.
  2. Accommodation: The tourism boom demands new hotels and resorts but often neglects small businesses. However, staying in locally owned guest houses can support the community. Tunisia has seen a rise in guesthouses as local entrepreneurs transform unused spaces into beautiful, bookable rooms. In contrast to giant seaside resorts, these guesthouses offer locally sourced dishes and connect guests to other local experiences, ensuring that tourists’ money reaches more of the community. For example, look at Dar Ben Gacem, whose owner, Leila Ben Gacem, helps preserve cultural heritage and revitalize Tunis’s medina (traditional city) in addition to hosting guests.
  3. Utilities & Services: As tourism grows in an area, the demand for utilities such as water, electricity, and waste management also increases. Local authorities may invest in improving and expanding these services to cater to the needs of tourists and residents alike. A tourist in Tunisia would surely recognize the need for this improvement. With record-breaking heat surges, Tunisia saw its hottest summer yet. Efforts to beat the heat resulted in frequent power outages across the country from energy overconsumption.
  4. Communication: Tourism can drive the need for better communication infrastructure, including internet and mobile networks, ensuring that tourists stay connected during their travels and benefiting residents.
  5. Urban Renewal: To attract tourists, destinations may invest in urban renewal projects and beautification initiatives, making their appearance more appealing to visitors and residents alike. While these initiatives walk the delicate line between restoration and gentrification, careful and considerate planning from local leaders can ensure that communities maintain authenticity amidst renewal projects.

Preserving Communities: How Tourism Can Protect Cultural Heritage 

Traditional Tunisian woman wearing stunning gold pendant and bead necklace, vibrant top with traditional patterns, intricate henna designs on hands, matching beaded belt with gold pendants, and rings.
(Traditional Accessories in Tunisia – Photo by Seif Eddin Khayat on Unsplash)

According to Solimar International’s Micah Sorum, tourism can be “a way to preserve cultural heritage” (2023). Citing immersive experiences like artisan workshops and dance classes, Sorum argues that “tourism that’s well designed and well implemented” can be a valuable tool for cultural preservation (2023).  Tourism allows visitors to celebrate and learn about local traditions while supporting the livelihoods of artisans and performers. By visiting an emerging destination like Tunisia, travelers can engage in these preservation experiences. The options are limitless from traditional date product workshops in Kebili to tasting couscous in Tozeur. 

Additionally, Sorum explained how tourism “can fund the preservation of ruins and historical sites” (2023). Tourists’ entrance fees and contributions in a well-managed destination fund site maintenance and conservation efforts. In Tunisia, the UNESCO world heritage town of Kairouan is a testament to how tourism sustains cultural heritage. When guests explore massive historical mosques and the many other notable sites, they help contribute to their preservation, while local guides simultaneously ensure the stories of the ancient, holy city endure. 

Rooftop view of Mosque Okba (Great Mosque of Kairouan) in Kairoan, Tunisia during the enchanting golden hour of late afternoon.
(Mosque Okba, Photo by Haythem Gataa on Unsplash)

Cultural exchange opportunities foster mutual understanding between tourists and locals. As travelers immerse themselves in destinations’ customs and traditions, they gain an appreciation for their cultural heritage. Conversely, local communities benefit by fostering pride in their heritage. Finally, in the modern economy, mass production dominates the market. However, the economic benefits of cultural tourism help artisans continue their traditional practices without losing profits.

While sustainable tourism’s positive impacts on cultural preservation are evident, responsible practices must address challenges like over-commercialization. By embracing sustainable tourism, tourists can help safeguard the authenticity of cultural heritage in destinations like Tunisia. Mindful travel empowers communities, celebrates tradition, and ensures that these valuable treasures endure for generations to come.

Embracing the New Wave of Impactful, Sustainable Tourism

So, are you ready to be part of the new wave of tourism? Every member of the tourism industry, from travelers to tour operators, has a part to play in sustainable tourism impacts. It’s our shared responsibility to ensure these beautiful destinations remain beautiful for generations to come. 

Liked learning about sustainable travel and want to hear more? Take one of our courses or read more on our website today. Visit our Institute for Sustainable Destinations website here.

Blog by Isabella Hunt and Kat Selfe

“We rely confidently on Solimar's deep technical experience and professionalism as tourism consultants. You always are exceeding our expectations.”
Leila Calnan, Senior Manager, Tourism Services Cardno Emerging Markets

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