Tourism and Poverty

Reduction:
Good Practice and
Lessons from the GMS
Tara Gujadhur
10 May 2011

The views expressed in this paper are the views of the authors and do not necessarily reflect the views or policies of the Asian Development Bank (ADB), or its Board of
Governors, or the governments they represent. ADB does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequence of
their use. The countries listed in this paper do not imply any view on ADB's part as to sovereignty or independent status or necessarily conform to ADB's terminology.
• Tourism generated $1.7 trillion in output and sustained
96 million jobs worldwide in 2010
• 40% of tourists from middle and upper income
countries visited a developing country in 2008

In the GMS in 2010:

• 30 million international tourists
• $22.1 billion to country GDPs (5.47%)
• 4.5 million direct jobs

Tourism in the GMS

 International Tourism Arrivals to the GMS

Strong Growth
• Rise in intraregional travel
• 61% of international arrivals in the GMS originate in
Asia
• Strong potential for growth

• Sector that must be harnessed for poverty reduction

Tourism in the GMS

• Utilises “free” natural and cultural assets
• Labour-intensive
• Employs high proportion of women and disadvantaged
populations
• Can be viable in remote or resource-poor areas
• Consumers come to product, creating backwards
linkages

Tourism and Poverty

Reduction
• ADB
• SNV Netherlands Development Organisation
• European Commission
• UNWTO
• AECID
• Luxembourg Development
• JICA
• IFC/MPDF

• Targeting governments, NGOs, communities and the private

sector

Development Partners
Good Practice, Lessons
• Moving away from isolated, CBT product development to
market-driven destination-level interventions
• Value Chain Analysis applied to tourism for a broader
understanding of pro-poor opportunities
• Tourism value chain is complex
• Value chain analyses in GMS estimated poor income to
range from 7% - 27%

VCA and the Tourism

Economy
 Luang Prabang Tourism VCA

Consumer
Service Provider
Accommodation Food ($7m) Excursions and Curios and
($8.7m) transport ($1.8m) craft($4.4m)
Guest Rest- Snack Tour Local Craft Curio
Hotel House aurant stall Guide Operator Transport shop vendor

Com-

Owner
Com- Secure Secure Family/ pany Secure Family/
pany family family individual Free- Family/ family individual
lance individual
$150,000 $350,000+

Worker
Employed
Staff Staff Staff guide Worker
$150,000
$290,000 $260,000 $163,000 $582,000

Construction Fish and Meat suppliers Rural Wholesaler, Textile

workers, companies, $2,380,000 villages Weaver, Embroiderer
9
furniture makers Fruit, veg, and specialty food $100,000? Tailor, Paper-maker, Local
$200,000? transport

Supplie
suppliers
$882,000 $236,000
• Recognition of the important role of tourism businesses
• Previous focus on CBT
• Support to PS expand pro-poor tourism benefits:
• Creating an enabling environment through favourable
investment terms, incentives, and loans;
• Encouraging the development of SMMEs
• Providing business skill training
• Developing, strengthening business associations
• Mediating public-private partnerships
• Facilitating linkages to overseas market

Private Sector Engagement

• Founded by Asian Oasis in 1992
• 50km from Chiang Mai in an ethnic
minority community
• Four houses with six rooms each, hosting
about 10,000 clients a year
• Village visits, trekking, cultural
performances

Lisu Lodge
• Difficulty attracting investment and loans
• Land title risk
• Time to develop community relationship

Lisu Lodge
• Consultation of village leadership
when hiring
• Community handicraft market
• Local food and supplies
• 21 local staff earned US$100,000
• $80,000 to village for land rental,
guides, other activities

Lisu Lodge
• Similar types of investment can be facilitated through
loan provision, supportive policy, and mediation
• Governments can create more sophisticated incentives for
pro-poor private sector investment

Support Pro-Poor
Business
• Strong foundation of human resources important for long-
term growth of a destination
• Skills and competences to increase poor access to
employment and income-generating opportunities
• Lux Development and EC
• Upcoming HITT programme implemented by SNV
• Private sector an important provider of HRD

Human Resources
Development
Shinta Mani
• Since then, 161 students passed their training, using
$170,000 in support
• Raised exclusively from guest donations, with property
owner making up difference

Shinta Mani Development

Center
• 2 month intake, 200 applicants –
20/25 students
• Target disadvantaged, but need
basic education
• Study for free, receive a monthly
stipend, meals, weekly supply of
rice for families
• Combination of classroom and
life-skills training
• All graduates successfully placed

Shinta Mani Development

Center
• Development Center created a
strong Shinta Mani brand
• Provided a competitive advantage
• “Best for Poverty Reduction” WTM 2006
• “Socially Responsible Spa of the Year” 2008, 2009
• Renovation to 39 rooms to increase financial sustainability
• Expand Development Center and students

Shinta Mani Development

Center
• In the GMS, women represent over half of tourism
workforce, 70% in Thailand (though often in lower-skilled
and lower-waged jobs)
• Women active in informal sector
• Ethnic cultures major tourism draw of GMS
• Higher vulnerability to tourism downswings

Gender and
Social Inclusion
• Handicrafts have high rate of participation
of women and ethnic minorities
• Luang Prabang VCA indicated a $4.4
million market
• Strong growth prospects
• Number of social enterprises and
handicraft-based projects in the GMS

Handicrafts
• STWDC began in 2001 as a hospice – shifted to
providing alternatives to work in the sex trade
• Literacy, health, vocational education, and employment
programmes
• 2003 opened its first weaving centre
• Free training, employment opportunities

Mekong Blue
• Over 200 Mekong Blue products
• In 2009 launched in the US
• Turnover grew from US$3,244 in 2002
to US$115,000 in 2010
• Permanent employment for 84 people
• Cover 70% of STWDC’s operating
costs
• Keeps traditional skills alive, provides
income and subsidizes social services

Mekong Blue
• Policy must be operationalized into effective and
consistent pro-poor tourism
• Tourism needs to be prioritised and advocated by
governments in practice
• Build leadership among tourism decision-makers for
improved governance and organisational capacity
• Develop multi-stakeholder Destination Management
Organisations

Further Lessons
• Strengthen business associations
• Work with private sector frontrunners with a commitment
to poverty reduction
• Link rural excursions to emerging or established
destinations
• CBT can be used to create incentives for natural
resources management
• Build partnerships to develop impact measurement tools

Further Lessons
• Facilitate coordination and improved governance for
tourism and related authorities
• Expand private sector integration and development
• Target the poor explicitly
• Broaden interventions to the tourism economy
• Dedicate resources to demonstrating pro-poor impact

Future Priorities
Questions?
• Policy must be operationalized into effective and
consistent pro-poor tourism practice
• Tourism needs to be prioritised and advocated by
governments in practice
• Infrastructure requires improved management capacity of
government to ensure maintenance
• Tourism interventions have been disproportionately
focused on CBT – there are broader opportunities to scale
up tourism’s impact on poverty

Lessons
• Direct Effects
• Secondary Effects (indirect and induced)
• Dynamic Effects

• Better recognition of Secondary and Dynamic Effects

can expand the poverty impact of tourism interventions

Pathways to the Poor

 1

Income to Income to
the poor the poor
• GMS has established national and sub-national authorities
• Capacity still limited, by governance systems as well as
technical skills
• Need to improve coordination – commerce, public works,
land-use planning, transportation, etc.
• Interventions on the “destination level”

Pro-Poor Destination
Management
• SNV capacity-building for GMS tourism authorities
• Recognition of important role leadership plays in
improving organizational performance
• Leadership Programme
• Four modules, 3-5 days, over seven months
• Not tourism-specific, but address underlying governance
and management issues
• Improved communication, decision-making processes

Leadership Programme
• Improve governance through leadership

Northwest Vietnam
Destination Management
Organisation
• Private sector can:
• Invest in poor and remote areas
• Provide employment to the poor, fair wages, and training
• Source from pro-poor and local supply chains
• Educate clients on responsible tourism, adhering to
responsible and sustainable practices, and encouraging
tourist markets that value these practices
• Create CSR programmes

Private Sector Actions