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UNITED NATIONS
ECONOMIC AND SOCIAL COMMISSION FOR ASIA AND THE PACIFIC
UNITED NATIONS
New York, 2007
ST/ESCAP/2478
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CONTENTS
Page
INTRODUCTION ………………………………………………………………
1
I. THE IMPORTANCE OF TOURISM IN THE ASIAN AND PACIFIC
REGION ………………………………………………………………………… 4
A. International tourism development ……………………………………… 4
B. Intra-regional travel ……………………………………………………….. 12
C. Importance of domestic tourism …………………………………………. 14
D. Tourism in least developed and island developing countries ………... 16
E. Summary observations ………………………………………………….. 18
II. THE ECONOMIC IMPACT OF TOURISM ………………………………….. 20
III. THE SOCIAL IMPACT OF TOURISM ……………………………………….. 32
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IMPLEMENTATION AND MONITORING OF THE PLAN OF ACTION
X.
FOR SUSTAINABLE TOURISM DEVELOPMENT IN ASIA AND THE
103
PACIFIC, PHASE II (2006-2012) ……………………………………………
XI. CONCLUSIONS AND RECOMMENDATIONS …………………………… 105
1. Tourism satellite account tables ……………………………….. 111
ANNEXES
2. Monitoring and evaluation elements …………………………… 116
3. Monitoring criteria ……………………………………………….. 118
List of boxes
List of figures
List of tables
-iii-
4. Comparing international and domestic tourism statistics in selected
Asian and Pacific countries ………………………………………………… 15
5. International tourism in selected least developed and island developing
countries of Asia and the Pacific ……………………………………………. 16
6. International tourism receipts in selected Asian and Pacific countries ….. 21
7. Economic contribution of tourism to GDP and total exports in selected
Asian and Pacific subregions and countries, 2006 ……………………….. 24
8. Economy contribution (direct and indirect) of travel and tourism to
employment in selected Asian and Pacific subregions and countries ……. 33
9. Summary of turnover and income estimates across four value chains of
the tourism economy in Luang Prabang, Lao PDR ………………………… 46
10. Examples of supply chain linkages within selected sectors of the tourism
industry …………………………………………………………………………. 49
11. Ranking and scores on the travel and tourism competitiveness index,
business environment and infrastructure, air and ground transport
infrastructure, selected Asian and Pacific countries ………………………. 60
12. Ranking and scores on quality of ground transport infrastructure
variables, selected Asian and Pacific countries ……………………………. 65
13. Comparing country scores on government priority given to travel and
tourism with selected infrastructure variables ………………………………. 67
14. Contribution of tourism to achieving the Millennium
Development Goals ……………………………………………………………. 77
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INTRODUCTION
ESCAP member countries have recognized the significant role of tourism in
the Asian and Pacific region as well as the various wide-ranging issues arising from
the impact of tourism on socio-economic development. Since the first Plan of Action
for Sustainable Tourism Development in Asia and the Pacific (PASTA Phase I)
covering 1999 to 2005 was adopted by the Commission, Asian and Pacific countries
and areas have devised strategies and plans designed to promote tourism by
tourism development and proposed actions at the national and regional levels.
regional, subregional and national activities that have assisted countries in the region
and enhanced regional cooperation. Most countries in the region have adopted the
plans and many countries developed programmes for human resources development
cooperation, strengthen institutional links among tourism training institutes and serve
implementation and lessons learned from PASTA Phase I and resolved to implement
1
There are 248 education and training institutes and national tourism organizations in 44 countries and
areas that participate in APETIT activities. Refer to www.apetit-network.org
PASTA Phase II covering the period from 2006 to 2012 in order to facilitate and
Before such action can be taken, however, there is an urgent need for all
and understanding of several important points. First, tourism has various wide-ranging
linkages throughout the economy and society at the macro, micro and institutional
preserving unique environments and cultural heritage for the benefit of future
A number of major issues have already been identified and new issues have
and poverty reduction. At the same time, there are new opportunities for increasing
the private sector and other stakeholders. In line with PASTA Phase II, policy-makers
able to identify areas for action along with approaches to monitor activities, assess
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“Implementation of the Plan of Action for Sustainable Tourism Development in Asia
and the Pacific (PASTA, Phase II, 2006-2012) and the Regional Programme for
requested the secretariat to prepare and conduct a regional study on the role of tourism
countries to consider various measures for developing tourism in line with the Plan of
Action. It provides information on the impact of the tourism industry on the region’s
economy and its social development. This study proposes a common approach to
poverty reduction.
The study is organized into eleven chapters. The first four chapters discuss
tourism in terms of its general economic and social aspects. Chapter I describes the
importance of tourism as a globalized industry and its significance for Asian and the
importance of domestic tourism and tourism with reference to least developed and
island developing countries. Chapter II considers the economic impact of tourism and
how this is measured and interpreted in macroeconomic terms. The use of the tourism
satellite account is presented. Chapter III presents the social impact of tourism in
approaches and methods, assessment of linkages, leakages and multiplier affects and
infrastructure in Asia and the Pacific. Chapter VI considers tourism and its linkage to
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the Millennium Development Goals, particularly with respect to how tourism might
be harnessed for poverty reduction. Chapter VII presents the main features concerning
the role of government with respect to enhancing the contribution of tourism to socio-
economic development and poverty reduction. Chapter VIII examines the role of the
for Sustainable tourism Development in Asia and the Pacific, Phase II (2006-2012).
1. Tourist arrivals
Tourism is a leading industry in the service sector at the global level as well as
national level. Tourism has become one of the largest and fastest growing industries
in the global economy. During the period between 1996 and 2006, international
tourist arrivals worldwide grew at an average annual rate of about 4.0 per cent. In
1996, there were 575 million tourists and in 2006, there were 846 million tourists, as
shown in table 1. During the ten-year period from 1996 to 2006, the Asian and Pacific
region was second only to the Middle East in outperforming the rest of the world,
with growth in tourist arrivals averaging 6.7 per cent a year. The global market share
of the Asian and Pacific region increased from 15.7 per cent in 1996 to 19.8 per cent
in 2006. Europe remained the top regional tourist destination, while the Americas
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moved from second to third place behind Asia and the Pacific. The global market
shares declined slightly from 57.8 per cent to 54.4 per cent for Europe and 19.9 per
cent to 16.1 per cent for the Americas over the decade from 1996 to 2006.
Sources: UNWTO, Tourism Market Trends: East Asia & Pacific (Madrid: UNWTO,
2000). UNWTO, Tourism Highlights, 2006. UNWTO, Tourism Highlights
2007 Edition.
North-East Asia has been the most dynamic subregion in Asia and the Pacific,
with an average growth rate in arrivals of 7.8 per cent over the decade, while its
global share grew from 8.3 per cent in 1996 to 11.1 per cent in 2006. China was the
strongest performer with an annual average growth of about 9 per cent over the ten-
year period. The number of international visitors to China more than doubled,
reaching 49.6 million in 2006, which was almost equivalent to the total number of
growing international and intraregional demand, reduced transport costs and the
Despite disasters and various crises, other subregions in Asia and the Pacific
succeeded in maintaining a positive trend in growth of annual tourist arrivals over the
decade, varying from 5.5 per cent in South-East Asia to 6.6 per cent in South Asia and
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2.1 per cent in Oceania (Australia, New Zealand and Pacific island countries and
territories). Cambodia had an average annual growth rate of 20.3 per cent in tourist
arrivals from 1996 to 2006; Viet Nam had 6.5 per cent; and Thailand had 13.0 per
cent. India had an average annual growth rate of 10.0 per cent; and Maldives had
The strong growth in tourism arrivals for Asia and the Pacific, particularly the
subregions of North-East Asia, South Asia and South-East Asia is one indicator of the
developing countries in terms of the rich cultural heritage and natural environment.
Many officials in these countries have seen that tourism can be part of their
In the last two years for which data are available, tourism has continued to
grow rapidly in Asia and the Pacific. While the world’s average annual growth rate
for international tourist arrivals was 5.4 per cent from 2005 to 2006, Asia and the
Pacific grew at 7.7 per cent, which was the third highest rate of growth for 2006,
behind Africa’s growth rate of 9.2 per cent and the Middle East at 8.9 per cent. A
break down of the regional figures for Asia and the Pacific shows major subregional
differences. That is, growth from 2005 to 2006 was 7.4 per cent in North-East Asia;
9.3 per cent in South-East Asia; 11.0 per cent in South Asia; and 0.2 per cent in
Oceania. 3 The strong growth in South-East Asia and South Asia was attributed in part
to the full recovery of Thailand and Maldives from the impact of the December 2004
2
UNWTO, Tourism Highlights (Madrid: UNWTO, 2006). Refer to
www.unwto.org/facts/eng/highlights.htm. UNWTO, Tourism Highlights 2007 Edition.
3
UNWTO, Tourism Highlights 2007 Edition.
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tsunami, as well as high growth rates for Cambodia; India; Macao, China; Malaysia;
the Philippines. 4
countries during the period from 1995 to 2004. Most noteworthy is the strong
Azerbaijan and Kyrgyzstan. Countries experiencing increases of over 100 per cent
include Cambodia, China, the Islamic Republic of Iran, Lao People’s Democratic
Republic, Malaysia, Mongolia, Myanmar, Turkey, Uzbekistan and Viet Nam. Almost
all of the countries showed increases, except for Kiribati and Singapore.
4
Ibid.
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Table 2. International tourism arrivals in selected Asian and Pacific countries
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International tourist arrivals
Percentage increase,
Thousands of persons 1995-2004
Uzbekistan 92 262 185
Vanuatu 44 61 39
Viet Nam 1 351 2 928 117
157
Total and regional average 84 267 273 87
Source: World Tourism Organization (UNWTO)
Note: a/ 3,726 is the figure for visitors.
.. indicates data are unavailable.
During the ten-year period of fast growth in tourist arrivals, several factors
contributed to the strong performance in most of the Asian and Pacific region. These
and the introduction of low-cost airline services; easier access from traditional source
markets and the emergence of new source markets, such as China and India.
Moreover, the creation of new market niches such as cultural tourism, ecotourism and
2. Tourism receipts
closely related to receipts and spending in the national economy. Table 3 presents the
international tourism receipts by regions of the world as well as Asian and Pacific
tourism reached US$ 733 billion in 2006, which was increase of 8.3 per cent over
2005 in current prices. 5 The tourism receipts in Asia and the Pacific made up 20.8 per
cent of all international tourism receipts in 2006, compared with arrivals of 19.8 per
5
Ibid.
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cent, suggesting that the Asian and Pacific region does slightly better on receipts from
Sources: UNWTO, Tourism Market Trends: East Asia & Pacific (Madrid: UNWTO,
2000). UNWTO, Tourism Market Trends: Asia (Madrid: WTO, 2004).
UNWTO, Tourism Highlights (Madrid: UNWTO, 2006). UNWTO, Tourism
Highlights 2007 Edition.
in 2006, a net increase since 1996 of US$ 296.5 billion, which was an average annual
increase of 5.5 per cent during the ten-year period. The Asian and Pacific region
growth rate of 6.6 per cent in line with growth in terms of arrivals over the last ten
years. This was higher than the global growth rate of 5.5 per cent, outpacing tourism
receipts for Europe and the Americas. As a result, the global share of tourism receipts
in the Asian and Pacific region increased from 19.7 per cent in 1996 to 20.8 per cent
in 2006, almost equivalent to the share of destinations in the Americas. By 2006, the
global share of the Asian and Pacific region (20.8 per cent) was about equal to the
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tourism receipts worldwide grew by 4.3 per cent in 2006, compared to 3.2 per cent in
2005. The relative growth in receipts for Asia and the Pacific from 2005 to 2006 was
8.9 per cent, which was second to Africa (10.2 per cent). The relative growth reached
double-digit rates in the subregions of South Asia (14 per cent) and North-East Asia
(11 per cent). Growth in South-East Asia was 9.5 per cent and in Oceania 1.7 per cent
For the decade from 1996 to 2006, South Asia emerged as the most dynamic
subregion, with an average percentage increase in double digits for tourism receipts,
followed by North-East Asia and Oceania. Despite recent disasters and crises, South-
East Asia managed to report positive annual average growth of 4.1 per cent during the
period from 1996 to 2006. Cambodia and Lao People’s Democratic Republic are two
countries in the greater Mekong Subregion, which had strong results. For Cambodia,
international tourism receipts had an average annual growth rate of 28.3 per cent and
10.8 per cent for Lao People’s Democratic Republic during the ten-year period.7 More
recently, international tourism receipts increased by 20.0 per cent between 2005 and
2006 for Cambodia. 8 However, each of the two Mekong subregion countries
accounted for less than one per cent share of international tourism receipts in Asia and
the Pacific during 2005, while Cambodia’s regional share was 0.6 per cent in 2006.
per cent and China’s by 15.9 per cent. At the same time, India accounted for 5.8 per
cent share of regional receipts while China accounted for 22.2 per cent in 2006. 9 Both
China and India were among the top 50 tourism destinations. Other countries in the
Asian and Pacific region among the top 50, which also had double-digit growth in
6
UNWTO, Tourism Highlights 2007 Edition.
7
UNWTO, Tourism Market Trends: Asia (Madrid: UNWTO, 2004).
8
UNWTO, Tourism Highlights (Madrid: UNWTO, 2006).
9
UNWTO, Tourism Highlights 2007 Edition.
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international tourism receipts between 2005 and 2006 included: Hong Kong, China
(12.9 per cent); Japan (34.8 per cent); Russian Federation (26.3 per cent); Singapore
(14.1 per cent); Thailand (22.0 per cent); and Viet Nam (71.7 per cent). 10
Destinations in Asia and the Pacific are expected to dominate global economic
growth in the travel and tourism industry in the years to come, even though they were
not very high on the list of top arrivals and earners in recent years. According to
UNWTO’s Tourism 2020 Vision, international arrivals have been forecast to reach
nearly 1.6 billion by the year 2020. Furthermore, the forecast for 2020 shows that
East Asia (comprising North-East Asia and South-East Asia) and the Pacific would
expect to receive about 397 million visitors. This long-term assessment includes an
average annual growth rate of 6.5 per cent for arrivals to East Asia and the Pacific and
6.2 per cent for South Asia during the period from 1995 to 2020, which exceeds the
B. Intra-regional travel
Growth of the tourism industry means that the Asian and Pacific region serves
as both an origin and a destination for international tourist arrivals. More people in the
region are able to travel due to easier access, rising levels of prosperity and increased
leisure time. Figure 1 shows that intraregional arrivals in Asia and the Pacific in 2003
accounted for 78 per cent of international travel in the region, amounting to 94 million
Asia, it accounted for about 36 percent. The average annual growth rate for
10
UNWTO, World Tourism Barometer, vol. 5, #2 (June 2007).
11
UNWTO, World Tourism Barometer, vol. 5, # 1 (January 2007).
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intraregional tourism from 1995 to 2000 was 6.2 percent, which compared to a rate of
5.9 percent in the growth of total outbound tourism in Asia and the Pacific. 12
Figure 1. Inbound tourism by region of origin, tourist arrivals 2003 (percentage share)
2%
1%
11%
7%
1%
78%
Source: UNWTO, Asia Tourism Market Trends, 2004 Edition (Madrid: WTO, 2004), p. 53.
It can be assumed that intraregional travel will continue to grow rapidly for the
foreseeable future and become a more significant part of the regional economy.
Increased intraregional travel has significant implications for mode of transport and
related infrastructure development. Arrival by air transport accounted for almost half
of all arrivals in 2003, but the number traveling over land had reached a share of about
40 percent. Between 1990 and 2000, arrivals by air grew at an average of 6 percent,
while arrivals by road increased by an average of 10 percent a year. It has been noted
12
UNWTO, Tourism Market Trends: Asia (Madrid: WTO, 2004), p. 56, 62.
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that arrivals by road as part of intraregional travel has become increasingly important
in North-East Asia and South-East Asia, particularly between China and Hong Kong,
China and between Singapore and Malaysia. 13 There is potential for increased
intraregional travel by road to South Asia. Clearly, however, island countries such as
Maldives and Sri Lanka, as well as the Oceania subregion must rely on air and sea
travel.
China and the Russian Federation were among the top ten in terms of international
tourism expenditure. The Republic of Korea; Hong Kong, China; Australia; and
Singapore were among the top twenty. Tourists from these seven countries spent
about US$ 116 billion on international travel and tourism in 2004. 14 More detailed
data and analysis are needed to assess the impact of expenditures due to intraregional
tourism.
tourists have emerged as a significant market, often using the same facilities as
international tourists. Table 4 provides relevant statistics for selected countries in the
region. In India, it has been estimated that there were more than 100 domestic tourists
for every international tourist in 2003. In China the ratio was 26:1, while in Thailand
it was 7:1, in Indonesia it was 7:1 and in Viet Nam it was 5:1. This type of tourism is
often overlooked, although it brings wealthier urban dwellers to rural areas. This
13
Ibid., p. 56.
14
UNWTO, Facts and Figures. http://www.unwto.org/statistics/index.htm
-14-
contributing to greater awareness about the culture and environment in one’s own
country.
Estimated
International Ratio of
Reference domestic
tourist arrivals international
year tourists
(million) to domestic
(million)
China 2005 46.8 1,212.0 b 1 : 26
India 2003 2.8 a 309.0 a 1 : 110
Indonesia 2005 5.0 31.3 d 1:6
Thailand 2005 11.6 79.5 c 1:7
Viet Nam 2003 2.4 a 13.0 a 1:5
than overseas travel. 15 Box 1 gives examples to show how domestic tourism can
15
K. B. Ghimire, ed. The Native Tourist: Mass Tourism within Developing Countries
(London: Earthscan, 2001). Includes case studies of China, India and Thailand.
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D. Tourism in least developed and island developing countries
many countries of the region, including some least developed countries (LDCs) and
for 12 LDCs and island developing countries in Asia and the Pacific. In most cases,
the data show that average annual growth in receipts has been somewhat faster than
growth in international tourist arrivals, particularly during the period from 1990 to
2000. This would tend to reinforce the attractiveness of the tourism industry as an
Table 5. International tourism in selected least developed and island developing countries
of Asia and the Pacific
Source: UNWTO
the overall economic contribution of tourism in Maldives was 66.6 per cent of gross
domestic product (GDP) and accounted for 65.9 per cent of exports. In Vanuatu, the
tourism sector contributed 47.0 per cent to GDP and 73.7 per cent to total export
earnings. In Cambodia, Lao People’s Democratic Republic and Nepal, tourism was
-16-
There are implications for LDCs and island developing countries when they
undiversified economy with significant negative side effects. This can create greater
risks when there are downturns in the international tourism market or unforeseen
economic development and well-being on the one hand and social and environmental
well-being on the other hand in countries where culture, heritage and the environment
More detailed information about two countries in Asia and the Pacific
highlight the situation of tourism as a development strategy for LDCs. The growing
16
David Harrison, ed., Tourism and the Less Developed World: Issues and Case Studies
(Wallingford, UK: CABI Publishing, 2004).
-17-
Box 3. Case study of tourism in Maldives
In Asia and the Pacific, Maldives has been the most successful LDC in attracting international
tourists, with about 600,000 international tourists in 2004, which was double the total resident
population. Maldives is one of five countries in Asia and the Pacific where tourism is the top
contributor to GDP. Fifty-seven per cent of total employment, or 1 in every 1.7 jobs, is created
by tourism. Tourism has been the major source of foreign exchange earnings and tax revenue
for many years. This has enabled the government to allocate financial resources for improving
education and health conditions. There is almost universal literacy and the infant mortality rate
went from 121 per thousand in 1977 to 35 per thousand in 2004. Over the same period,
average life expectancy at birth increased from 47 years to 67 years.
The dominance of tourism shows that the economy of Maldives is not very diversified,
however. The tsunami and seaquake of December 2004 underscored the country’s
vulnerability. International tourist arrivals dropped from 617,000 in 2004 to 395,000 in 2005.
Foreign exchange earnings also declined and the government faced a current account deficit as
well as a budget deficit. At the same time, the government faced supply constraints in its
reconstruction efforts.
Tourism arrivals recovered fairly quickly and grew by 70 per cent in the first eight months of
2006. The government had decided to add 35 uninhabited islands to its tourism portfolio in
order that foreign investors could gain leases to develop and build at least 20 new hotels and
15 new resorts, which would include shareholding by the Maldives government.
Sources: UNWTO, Tourism Highlights 2006. Asian Development Bank, Asian Development
Outlook 2006. Leisure Opportunties.com, November 2006,
http://www.leisureopportunities.co.uk/LOemail/wider_newsdetail.cfm?codeID=18577
E. Summary observations
Tourism continues to be important at the global level and the regional level of Asia
and the Pacific as tourism arrivals and receipts maintain or exceed growth expectations. This
indicates that the tourism industry is a major factor in globalization as well as resilient in the
face of natural disasters, health crises, oil price rises, exchange rate fluctuations and other
uncertainties.
The discussion in this chapter has underscored the importance of tourism in Asia and
the Pacific, while pointing out variation in some results and recent trends for the subregions
and various countries. Data about tourist arrivals and tourism receipts have been used to
describe the patterns and trends at global, regional, subregional and national levels.
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This chapter has also described patterns of interregional travel, domestic
tourism and the role of tourism for least developed and island developing countries.
Such descriptions provide the starting point for raising policy issues about the
Balancing economic well-being with social and environmental well-being has been
economic development.
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II. THE ECONOMIC IMPACT OF TOURISM
order to highlight the impact at the macroeconomic level. Trends for countries of Asia
and the Pacific are assessed by using several approaches to measuring impact,
contribution in the form of receipts; share of gross domestic product (GDP) and
exports; and growth rate patterns for the tourism industry, tourism economy,
macroeconomic level and can be measured in several different ways. The most
states in 1995 and 2004, where figures are available, and the percentage increases
over this period. The table also shows tourism receipts as a percentage of GDP for
2004. 17 The data generally indicate the performance of tourism at the national level,
but not in a systematic way due to use of estimates and different definitions of the
tourism industry.
17
UNWTO, UNWTO World Tourism Barometer, vol. 4, #2 (June 2006), p. 2. For destination
countries, receipts from international tourism count as exports and cover all transactions
related to the consumption by international visitors of, for instance, accommodation, food and
drink, transport in the country, fuel, entertainment, shopping, etc. It includes transactions
generated by same-day as well as overnight visitors. However, it does not include receipts
from international passenger transport contracted from companies outside the travelers'
countries of residence, which are reported in a separate category, international passenger
transport.
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Table 6. International tourism receipts in selected Asian and Pacific countries
International tourism receipts
Percentage increase, As % of
US$ million 1995-2004 GDP, 2004
1995 2004
Armenia 1 86 8 500 2.9
Australia 7 873 12 703 61 2.8
Azerbaijan 70 65 -7 0.9
Bangladesh 25 67 168 0.1
Bhutan .. 12 .. ..
Cambodia 53 604 1 040 14.7
China 8 730 25 739 195 1.7
Fiji 291 412 42 21.8
Georgia .. 177 .. 4.1
a/
India 2 582 3 887 51 0.7
Indonesia 5 229 4 798 -8 2.0
Islamic Republic of Iran 67 1 074 1 503 0.8
Japan 3 224 11 265 249 0.3
Kazakhstan 122 708 480 1.9
Republic of Korea 5 150 5 713 11 1.2
Kyrgyzstan 5 76 1 420 4.4
Lao P.D.R. 51 119 133 4.9
Malaysia 3 969 8 198 107 6.6
Maldives 211 471 123 62.5
Mongolia 21 185 781 13.4
Myanmar 151 84 -44 ..
Nepal 177 230 30 3.9
New Zealand 2 318 5 069 119 5.1
Pakistan 110 178 62 0.8
Papua New Guinea 25 .. .. ..
Philippines 1 136 2 012 77 2.8
Russian Federation 4 312 5 226 21 1.2
Samoa 35 71 103 ..
Singapore 7 646 5 093 -33 4.8
Solomon Islands 16 4 -75 ..
Sri Lanka 226 513 127 4.0
Tajikistan .. 1 .. 0.4
Thailand 8 035 10 043 25 8.0
Tonga 10 15 50 7.0
Turkey 4 957 15 888 221 5.3
Uzbekistan .. 28 .. 0.5
Vanuatu 45 52 16 25.7
66
Total 873 120 866 81 6.8
Source: UNWTO
Notes: a/ Figure is for 2003.
.. indicates data are unavailable.
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The United Nations Statistics Division and the World Tourism Organization
(now UNWTO) developed the tourism satellite account in 2001 as one of the most
national level. According to the World Travel & Tourism Council (WTTC), the TSA
does not produce or supply a homogeneous product or service like many traditional
industries. Instead, the travel and tourism industry is defined by a diverse collection of
food and beverage, entertainment, government services, etc) that are delivered to
visitors. It is important for policy-makers at national and local levels to see that this
diversity has many complex links to all parts of the economy. This is what makes the
There are two basic aggregates of demand: (1) travel and tourism consumption
and (2) total demand. Satellite accounting produces two different and complementary
separately with these two aggregates. The first aggregate is the travel and tourism
(the direct impact only), for comparison with all other industries. The second
aggregate is the travel and tourism economy, which captures the broader economy-
GDP have been in the island states of Fiji, Tonga and Vanuatu. Many small island
18
World Travel & Tourism Council.
http://www.wttc.org/eng/Research/Tourism_Satellite_Accounting/TSA_Definitions_and_Met
hodology/index.php
-22-
economies are highly dependent on tourism for export earnings as well. In 2006, the
tourism economy contributed 43.5 per cent of total export earnings of Fiji and one
third of GDP. The tourism economy generated about 66.0 per cent of total export
earnings and 66.6 per cent of GDP for Maldives. Other small island states, such as
Tonga and Vanuatu, depended on tourism for half to almost three-fourths of their
export earnings. 19
The tourism economy provided a contribution of 13.7 per cent to China’s GDP
in 2006. Countries in the Greater Mekong Subregion are also benefiting from the
tourism industry thereby taking full advantage of the potential of their natural and
cultural tourism resources. In 2006, tourism in Cambodia and the Lao People’s
Democratic Republic accounted respectively for 22.3 and 21.4 per cent of their total
export earnings and contributed 19.6 and 9.3 per cent respectively of their GDP.
averaged between 7.0 and 10.0 per cent, mainly because their economies are more
diversified. However, in light of the continuing growth expected for the region’s
tourism industry in the foreseeable future, it can be assumed that the share of tourism
19
WTTC, “WTTC 2006 Tourism Satellite Accounts: Regional Reports”.
www.wttc.org/frameset2.htm
-23-
Table 7. Economic contribution of tourism to GDP and total exports in selected
Asian and Pacific subregions and countries, 2006a/
a/
Note: Data used in the table refer to the travel and tourism economy (direct and indirect
impact) as this provides a more comprehensive account of the tourism sector.
macroeconomic variables that show the economic impact of tourism. This data can also be
relationships in order to strengthen tourism policies and plans of the government and the
private sector. Annex tables 1 and 2 are descriptive reports on the variable of growth rate and
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Annex table 1 presents the growth rate variable covering various years. The two
dimensions are: (1) the tourism industry, which shows the direct impact and (2) the tourism
economy, which includes the wider direct and indirect impact of tourism activities. There is
clearly a wide variety of results among the 33 countries and areas of Asia and the Pacific, as
well as fluctuations over time for each country. However, when there is strong annual growth
for the tourism industry, there is strong growth in the wider tourism economy for at least nine
countries (Azerbaijan; Cambodia; China; Lao PDR; Macao, China; Malaysia; Philippines;
Thailand; and Viet Nam). The charts in box 4 present the results for the nine selected
countries from 1995 to 2006. While the nature of this relationship needs more careful study,
this suggests that the links between the tourism industry and other industries in these national
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Box 4. Growth rate of the tourism industry (IND) and tourism economy (ECON) contribution to
GDP for selected Asian and Pacific countries, 1995-2006
Az e r b a ija n
5 0 .0 0
Percentage growth rate
4 0 .0 0
3 0 .0 0
2 0 .0 0
IND
1 0 .0 0
0 .0 0 ECO N
- 1 0 .0 0
95
96
97
98
99
00
01
02
03
04
05
06
19
19
19
19
19
20
20
20
20
20
20
20
- 2 0 .0 0
- 3 0 .0 0
C a m b o d ia
1 0 0 .0 0
Percentage growth rate
8 0 .0 0
6 0 .0 0
4 0 .0 0 IN D
2 0 .0 0 EC ON
0 .0 0
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
-2 0 .0 0 2006
-4 0 .0 0
Ch in a
20.00
Percentage growth rate
15.00
10.00 IND
5.00 ECON
0.00
95
96
97
98
99
00
01
02
03
04
05
06
-5.00
19
19
19
19
19
20
20
20
20
20
20
20
80.00
Percentage growth rate
60.00
40.00
IND
20.00
ECON
0.00
95
96
97
98
99
00
01
02
03
04
05
06
-20.00
19
19
19
19
19
20
20
20
20
20
20
20
-40.00
-26-
Percentage growth rate Percentage growth rate
Percentage growth rate Percentage growth rate Percentage growth rate
-10.00
0.00
10.00
20.00
30.00
40.00
19
-15.00
-10.00
0.00
5.00
10.00
15.00
20.00
25.00
30.00
-5.00
-10.00
-5.00
0.00
5.00
10.00
15.00
-30.00
-20.00
-10.00
0.00
10.00
20.00
30.00
40.00
-40.00
-30.00
-20.00
-10.00
0.00
10.00
20.00
30.00
40.00
19 19 19 19 95
95 95 95 95
19 19 19 19
19 96
96 96 96 96
19 19 19 19 19
97 97 97 97
97
19 19 19 19 19
98 98 98 98 98
19 19 19 19 19
99 99 99 99 99
20 20 20 20 20
00 00 00 00 00
20 20 20 20 20
01 01 01 01 01
20 20 20 20 20
02
Tha ila nd
M a la ys ia
02 02
Viet Nam
02 02
M aca o, China
P h ilipp in e s
-27-
20 20 20 20
03 03 03 03 20
03
Box 4. (continued)
20 20 20 20
04 04 04 04 20
04
20 20 20 20
05 05 05 05 20
05
20 20 20 20
06 06 06 06 20
06
IND
IND
IND
IND
IND
ECON
ECON
ECON
ECON
ECON
Annex table 1 also shows some distinctive patterns for island developing countries in
cases where there have been strong annual declines in the contribution of both the tourism
industry and the tourism economy to GDP. This appears to underscore the dependency of
some countries’ economies on tourism, although in subsequent years some recovery in the
growth rates was possible. It is important for policy-makers to know which factors are
influencing such declines and recoveries, including the role of government spending, the role
Annex table 2 presents data on the growth rate variable for various years along two
dimensions: (1) government expenditures (GOV) and (2) capital investment (CAP.INV) in the
travel and tourism industry. The descriptive statistics show a wide range of results among and
within the 33 Asian and Pacific countries and areas over time.
Box 5 shows two charts that give a general view of growth in government
The 1997 economic crisis in South-East Asia had a strong impact on government expenditure
quickly followed such declines in growth; although subsequent declines lead to questions
about sustainable support and investment in the tourist industry. The South Asian growth
pattern for government expenditure showed some fluctuation in the 1990s, but the pattern
since 2001 has been a fairly steady increase in the growth rate. Capital investment in South
Asian tourism had fairly strong fluctuations in the pattern of growth during the 1990s, and
like government expenditure, began to grow again at a steady pace from 2001.
In the case of North-East Asia, the growth rate of government expenditure on tourism
has generally been at a steady rate of close to 5 per cent, as shown in box 5 (chart A). Capital
investment in North-East Asia had declined from 1995 to slightly negative growth up to 1999
and then began a trend of strong positive growth until about 2004. For the subregion of
Oceania, government expenditure showed wide fluctuation over the period from 1995 to
2005, but this never declined into negative growth. From peaks in 1996 and 1999, the general
-28-
trend has been a slowdown in the growth rate of government expenditures on tourism in
Oceania. (See box 5, chart A.) The growth rate for capital expenditures on tourism in Oceania
showed the greatest fluctuations of all subregions during the period from 1999 to 2005. (See
The data and patterns suggest that the relationship between government spending and
capital investment to develop the tourism industry is complicated and in need of more detailed
study. Once again, statistical analysis can give an improved understanding about relationships
involving government expenditures, private investment and growth of the tourism industry,
among others, in order that tourism policies and plans of the government and business
-29-
Box 5. Growth rates of government expenditure and capital investment in tourism
Chart A. Growth rate of government expenditures on tourism by subregion of Asia and the Pacific, 1995-
2005
20.00
15.00
10.00
Percentage growth rate
5.00
South Asia
South-East Asia
North-East Asia
0.00 Oceania
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
-5.00
-10.00
-15.00
Chart B. Growth rate of capital investment in tourism by subregion of Asia and the Pacific, 1995-2005
30.00
20.00
10.00
Percentage growth rate
South Asia
0.00
South-East Asia
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 North-East Asia
Oceania
-10.00
-20.00
-30.00
-30-
Several important issues need to be taken into account when considering the
economic impact of tourism development. For example, policy-makers need to know whether
growth or decline in government expenditure leads or lags more general growth (or decline)
investment leads or lags behind general patterns of growth or decline in the tourism industry
or tourism economy. In countries that are dependent on the tourism industry, such as island
developing countries and some least developed countries, it is important to understand what
have been the reasons for declines in capital investment and what factors have helped to
Policy-makers and planners can make use of a wealth of data and information when
tourism satellite accounts are fully implemented. As noted by WTTC, the tourism satellite
account can help governments understand: (1) the economic dynamics of tourism beyond the
traditional scope of tourism expenditure research and travel service sector production when it
is narrowly defined; (2) the relationship between tourism and the durables sector of the
economy; (3) the relationship between tourism and government spending to help establish a
clear linkage between tourism results and government support for tourism; (4) the balance of
payments arising from the comprehensive flow of tourism goods and services necessary to
make tourism possible and the possible discovery of hidden trade surpluses or deficits; and (5)
the relationship between tourism and capital investment to assist in long-term planning for
-31-
III. THE SOCIAL IMPACT OF TOURISM
measure and understand the social impact. The main macro-level indicator is
employment created by the tourism economy for subregions and selected nations in
Asia and the Pacific. The discussions cover the gender aspects of employment
of economic and social progress. Employment is one of the most readily available
indicators to begin measuring the social impact of tourism, since job creation
generally helps create the opportunities for better standards of living and related
provided jobs for about 140 million people in the selected subregions and countries of
the Asian and Pacific region, representing an average of 8.9 per cent of total
estimated at 87.7 million jobs, which was 10.1 per cent of the total employment in the
subregion. This result can be attributed mainly to China, where 77.6 million people,
Oceania, the workforce in the tourism economy accounted for 14.5 per cent of total
employment in the subregion, which was 1 in every 6.9 jobs. The importance of
tourism becomes more significant when the workforce ratios in selected Pacific island
-32-
economies is analysed. For instance, 1 in every 3.2 persons in Fiji was employed in
the tourism economy, while in Vanuatu the ratio was 1 in every 2.4 jobs in 2006. By
economy.
tourism economy employment as part of total employment in 2006 varied from 5.4
per cent in India to more than 10 per cent in Cambodia, the Philippines and Thailand.
Table 8. Economy contribution (direct and indirect) of travel and tourism to employment in
selected Asian and Pacific subregions and countries
As percentage share of Ratio of tourism
Million of
total employment within employment to total
jobs
subregion and country employment
North-East Asia, of 1 : 9.9
87.58 10.1
which:
China 77.60 10.2 1 : 9.8
Republic of Korea 1.73 7.4 1 : 13.4
South-East Asia, of 1 : 11.7
21.74 8.6
which:
Cambodia 1.07 15.4 1 : 6.5
Indonesia 7.33 7.2 1 : 13.8
Lao PDR .20 7.3 1 : 13.7
Papua New Guinea .19 7.5 1 : 13.3
Philippines 3.34 10.8 1 : 9.2
Singapore 1.91 8.3 1 : 12.0
Thailand 3.82 10.7 1 : 9.4
Viet Nam 3.36 8.7 1 : 11.5
South Asia, of which: 30.89 5.2 1 : 19.4
India 24.35 5.4 1 : 18.4
Iran (Islamic Rep. of) 1.71 8.7 1 : 11.4
Maldives .69 57.6 1 : 1.7
Nepal .73 6.4 1 : 15.5
Sri Lanka .66 7.9 1 : 12.7
Oceania, of which: 1.91 14.5 1 : 6.9
Fiji .11 31.0 1 : 3.2
Tonga .01 15.2 1 : 6.6
Vanuatu .03 42.4 1 : 2.4
-33-
Additional information about employment using data from the WTTC’s
employment growth in the tourism industry and tourism economy for a number of
Asian and Pacific countries indicate significant fluctuations within many countries
over time as well as strong declines in employment for some countries in particular
2000, 2004 and 2005; China in 2000 and 2004; Hong Kong, China in 2000 and 2004;
Lao PDR in 1995 and 2000; Malaysia in 2000 and 2004; Maldives in 2004 and 2006;
Myanmar in 1995 and 2004; Nepal in 1995; Pakistan in 2005; Solomon Islands in
2004; Thailand in 2000 and 2004; Turkey in 2000; and Vanuatu in 2000 and 2006,
strong employment growth occurred simultaneously in both the tourism industry and
tourism economy. However, high employment growth in some years was followed by
In view of such fluctuations and wide variations within countries and among
countries, there is a compelling need to study and analyze further whether steep
declines mean jobs are lost or whether there is temporary unemployment followed by
rehiring. Detailed study would have to account for unique situations and factors
could account for large increases or declines over the short term, thus giving a more
complete overall picture. A look at annex table 3 seems to suggest that even as the
tourism industry and tourism economy grow, the link to direct and/or indirect
contribute to improved planning and policy making for job creation and human
-34-
and decline in the tourism industry and tourism economy have direct implications on
then possible to improve the social situation of people, often through Government
policies and programmes. In addition, revenue generated from tourism has enabled
the economic mainstay, almost 100 per cent of the population was literate by 2004.
The infant mortality rate declined from 121 per 1,000 in 1977 to 35 per 1,000 in 2004.
Over the same period, the average life expectancy at birth increased from 47 years to
67 years. 20
tourism is expected to give women more and better employment opportunities and
improve their well-being. There is a general lack of available quantitative data that
impressions, information from other sources and a few results from a limited survey
sector, the term used by ILO, was higher than in many other industries, in part
reflecting the high percentage of low skilled jobs in hotels and restaurants such as
-35-
male and female employees in the Asian and Pacific region was fairly equally split.
Among respondents to the ILO survey, there was no indication that recruitment of
women was more difficult than recruitment of men. In Thailand, it was reported that
the majority of people working in the tourism industry were 21 to 30 years old, and
there was a relatively even split between men and women. 22 However, it was
mentioned that in China there were legal regulations protecting female workers. 23
The ILO reported that the hospitality sector in Singapore attracted a relatively
high proportion of female workers. In 2000, there was an almost even ratio of females
to males working in the hotels and restaurants sector (that is, a gender ratio of
48.5:51.5). This is compared with a 39:61 gender ratio for the Singaporean workforce
as a whole. It was noted that there was a higher proportion of younger (15-19 year
olds) and older (50 years and over) workers, particularly women, in the hotels and
restaurants sector compared with all sectors generally. Average earnings in hotels and
According to the ILO study, the South Pacific Tourism Organization (SPTO)
stated that most small and medium enterprises (SMEs) in the Pacific island countries
are run as family operations. In that context, tourism offers opportunities to both male
and female entrepreneurs, especially in the case of ecotourism, when businesses are
established within their natural and cultural framework. In some cases, SPTO noted
that wives are operating and children are working in small family operations. In most
cases, rental cars, travel offices and booking agencies are dominated by female
entrepreneurs. 25
22
Ibid., p. 26.
23
Ibid., p. 11.
24
Ibid., p. 22.
25
Ibid., pp. 23-24.
-36-
More up-to-date, systematic statistics and general descriptions of gender
patterns in national tourism industries throughout Asia and the Pacific can help
strengthen the analysis about the social impact of tourism from a gender perspective.
This can help to improve the image of career opportunities for women and men in the
tourism can be assessed at the macro-level and the micro-level. Various techniques,
such as TSA, social accounting matrix, project level approaches, and value chain
analysis, are reviewed. The discussion also covers the assessment of linkages,
leakages and multiplier effects. The overall aim of the discussion is to emphasize the
tourism.
A full assessment of the socio-economic impacts of tourism requires that the linkages
established the linkages, policymakers are then in a better position to consider specific
interventions that can raise standards of living and reduce poverty. Techniques to assess such
impacts fall into two broad categories: “top-down”, aggregate or macrolevel approaches; and
-37-
1. Macro-level approaches
As an aggregate approach, data from TSAs were used in chapters II and III of
this document to show the importance and describe some features of the tourism
sector. The World Travel & Tourism Council (WTTC) is the leading organization,
which produces annual data and time series data on tourism’s contribution to GDP,
employment, exports, imports, taxes, among others. Since 1998, the Council has
developed tourism satellite accounts for 176 countries. At present, 33 are members or
In addition, India and the Philippines have produced their own tourism
satellite accounts. Thailand has begun its tourism satellite account project and has
reached the stage of approximating preliminary tables. Once constructed, TSAs can
help to answer questions about the direct (industry) and indirect (economy) impacts of
tourism on GDP and employment; the strength of linkages between tourism and other
sectors of the economy; the multipliers (changes in income and employment resulting
from a change in expenditure) and the leakages (proportion of tourist expenditure that
covering the period of 2002-2003. As a pilot study, the Indian TSA focused on
constructing seven TSA tables: three tables to identify tourism consumption (inbound,
26
During the first half of the 1990s, ESCAP undertook 11 country studies on the economic
impact of tourism using input-output table methodologies. Publications relating to these
studies can be found at www.unescap.org/ttdw/index.asp?menuname=PublicationArchives.
-38-
fifth table to show the production account of tourism industries in order to compare
with tourism consumption; a sixth table bringing together the demand and supply side
to evaluate aggregate tourism value added and GDP; and a seventh table for analyzing
employment.
In India, it was found that adjustment factors had to be applied since some
Overall, it was reported that the direct contribution of tourism accounted for 2.78 per
cent of GDP and when the indirect effects were added, the tourism share was 5.83 per
cent of GDP. The results for the total tourism output multiplier suggested that the
combined direct and indirect impact was 2.1 times the actual spending by tourists. The
tourism industry accounted for 4.59 per cent of employment and the tourism economy
accounted for 8.27 per cent of total employment in India, which was estimated to be
38.6 million jobs. Adjustment factors were applied to account for same-day tourism,
which was a large and growing segment of India’s tourism industry. After making
adjustments, it was found that the direct contribution increased from 2.78 per cent to
3.78 per cent and the tourism economy (direct and indirect) contribution went from
5.83 per cent to 6.83 per cent. The contribution to employment also went up from 8.27
TSA framework to data covering 1994 and 1998. The Philippine TSA consisted of ten
tables, which included: two types of tourism value added; tourism GDP; tourism
and tourism demand. A report in 2001 noted that the results were considered as
27
Ministry of Tourism, “Tourism Satellite Account for India” (New Delhi: National Council
of Applied Economic Research, January 2006), pp. 22, 30, 32 and 55.
-39-
preliminary with limited scope and coverage due to data constraints. Nevertheless, the
Philippine TSA report revealed significant features of tourism’s impact with a focus
on the link between tourism consumption and the supply of tourism goods and
services.
In the Philippines, the TSA framework showed that between 1994 and 1998
total tourism demand grew at an annual average of 11 per cent. Visitor consumption
expenditures accounted for more than 60 per cent of total tourism demand and grew at
about 20 per cent a year. Domestic tourism consumption expanded at an annual rate
33 per cent and inbound tourism grew at 13 per cent. Government consumption
expenditures had an average annual growth rate of 23 per cent and its share of total
tourism consumption was 22 per cent in 1994 and 26 per cent in 1998. The value
added of tourism industries was 12 per cent of GDP in 1994 and13 per cent 1998. On
the supply side, tourism generated 20 per cent of total employment in 1994 and 22 per
cent in 1998. It was found that 63 per cent of those employed in the tourism industry
were men and 37 per cent were women. This is in contrast to the general pattern
where women accounted for a larger share of total employment generated in the
economy. However, among all employed women, the proportion in tourism was 24
per cent in 1994 and 25 per cent in 1998. In comparison, among all employed men, 17
In Viet Nam, data was gathered in 1999 in order to prepare a social accounting
matrix (SAM) as an economy-wide simulation model. The aim was to develop SAM
multipliers to show which components of the tourism sector have the greatest impact
on the overall domestic economy, which have the strongest linkages with other sectors
28
Romulo Virola et al., “Measuring the Contribution of Tourism to the Economy: The
Philippine Tourism Satellite Account”, paper prepared for the Eight National Convention on
Statistics, Manila, October 2001, pp. 16.
-40-
and how much household income is induced for a given expansion in various sectors
of the economy. Issues about the impact of tourism on poverty could be addressed by
including data from the Vietnam Living Standards Survey which provided
information valid to the regional and provincial level. 29 Among 13 sectors with total
SAM multipliers ranging from 2.24 to 9.48, the tourism multiplier was 5.16. The
range of multipliers for linkages with other sectors was 0.63 to 4.11, with tourism
having a multiplier of 2.07. For induced household income, the multipliers for the 13
sectors ranged from 0.14 to 1.31 with the tourism multiplier being 0.53. 30
for tourism, but one developed by Adam Blake et al. for Brazil looked at the effects of
The results also show that tourism benefits the lowest income sections
of (the) Brazilian population and has the potential to reduce income
inequality. The lowest income households are not, however, the main
beneficiaries of tourism and we have also shown that alternative
revenue distribution by the government could double the benefits for
the poorest households and give them around one-third of all the
benefits from tourism. 31
2. Project-level approaches
Among the project-level approaches used to assess the impact of tourism are
and enterprise assessments, local economic mapping, tourism value chain analyses
29
Christopher Edmonds, “Economic Modeling and Measurement of the Effects of Tourism
Growth on the Well-Being of the Poor” presentation for the Asian Development Bank, 2001.
30
Ibid.
31
Adam Blake et al., Tourism and Poverty Alleviation in Brazil, (Brasilia: University of
Brasilia, October 2005), p. 34. Accessed at www.unb.br/cet/noticias/ Adam_Blake.pdf/ on 27
February 2007.
-41-
and test linkages between particular interventions and improved standards of living at
this level, because these types of analyses are done at the micro level.
how various project- level approaches could be applied more extensively and
Indonesia there was a joint venture project between the local government and Patra
Pala Foundation with support from the Japan International Cooperation Agency
(JICA) to provide alternative income for villagers living in the area surrounding the
Borobudur World Heritage site. The project was designed to provide agro-forestry
management, set up a training centre for villagers and establish a community forum
for networking and monitoring. Social impacts have been observed at the village level
and economic impacts still have to be analyzed quantitatively. More significantly, the
wider benefits have extended to the Borobudur World Heritage site since the villagers
Another example is in Nepal where the Ministry of Culture, Tourism and Civil
Aviation initiated the Tourism for Rural Poverty Alleviation Programme (TRPAP)
tourism development models, review and improve policy formulation and strategic
pro-rural communities and pro-women. 33 Six districts and 48 villages were involved
32
United Nations ESCAP, The Contribution of Tourism to Poverty Alleviation, Tourism
Review number 25 (New York: United Nations, 2005), p. 64. ST/ESCAP/2380.
33
Ibid., pp. 68-70.
-42-
in this pilot programme, which was supported by UNDP and the development
agencies of the United Kingdom and the Netherlands. According to one report,
regular monitoring and evaluation to assess the benefits was difficult at the field level
some districts. Similarly, frequent transfer of the government officers from the
tourism policies and strategies of TRPAP. Monitoring activities from the rural
community level to the central level in order to sustain the pilot rural tourism models
(APPA). The APPA methodology focuses on having local people identify plans and
activities that are positive, successful and strong so they can serve as a means to
the most effective participatory way to evaluate progress of TRPAP at the programme
sites. 34
One technique that has become increasingly popular in the current era of
34
Yogi Kayastha, “Monitoring and Evaluation of a Pro-Poor Tourism Project
in a Conflict Situation”, paper presented at the EASY–ECO 2005–2007
Conference Monitoring and Evaluation of Pro-Poor Tourism Policies for
Sustainable Development, Saarbrucken, Germany, 2006. www.wu-
wien.ac.at/inst/iuw/fsnu/saarbruecken/papers/abstracts/Kayastha.pdf
-43-
policymakers to consider each element of a tourist’s experience to see how the
product or service is produced, distributed and sold -- that is, the value added by each
element. This can help to identify where to make interventions that will increase
linkages with the local economy and create more opportunities for local people to gain
the benefits from tourism. In 2006, the technique was used in the city of Luang
and food. Key aspects included in any form of local assessment are local employment,
the earnings of sole traders, micro-enterprises and SMEs, ownership by the poor of
-44-
Figure 2. Types and number of enterprises in the Luang Prabang tourism economy
Source: C. Ashley, “Participation by the poor in Luang Prabang tourism economy: Current
earnings and opportunities for expansion”, ODI WP273, 2006.
www.odi.org.uk/publications/working_papers/wp273.pdf
The study estimated the expenditure per tourist, including their expenditure on
accommodation, restaurant food, drinks, crafts, transport and guides. For each
enterprise chain an assessment was made of which owners and workers would benefit
if the value chain were developed further. This enabled the identification of those
value chains most likely to benefit the poor, women and minorities. Table 9 presents
-45-
Table 9. Summary of turnover and income estimates across four value chains
of the tourism economy in Luang Prabang, Lao PDR
Source: C. Ashley, “Participation by the poor in Luang Prabang tourism economy: Current
earnings and opportunities for expansion”, ODI WP273, 2006.
www.odi.org.uk/publications/working_papers/wp273.pdf
increase the socio-economic impact of tourism. Table 9 suggests three areas for
priority action with the greatest potential for benefiting large numbers of poor people
by increasing the proportion of: (1) fruit and vegetables from Lao farmers; (2) types
of silk and products from Lao producers that are popular with tourists; and (3) tourism
developed in rural areas to provide a greater range of services and products for
tourists.
-46-
The methodology of VCA requires that the analysis starts with careful
definitions concerning the income levels and types of jobs used to categorize people
as poor, among other variables used to define poverty. The way in which data are
collected and the scope of its coverage, even at the local level, must be carefully
planned and implemented as well. It should be noted that VCA identifies existing
value chains that can be developed further. Gap analysis can be used to identify those
income-earning opportunities that have not yet been developed locally. This can help
to identify which goods and services are in demand with tourists, but are unavailable
from local supply sources. With these conditions in mind, VCA can provide policy
makers with information to help set priorities when considering the socio-economic
As the global tourism industry has grown and spread to more developing
country destinations, crucial issues about assessing the impact of tourism at the
national level concern how benefits are created and how they are distributed in the
host developing country. The concepts of linkages and leakages provide one way for
the national economy or whether the expenditures are for imported goods, thus
throughout the economy due to a process of spending and re-spending, the concept of
35
UNWTO, “Adapting the National Tourism Satellite Account (TSA) Project to Subnational
Levels”, Discussion Paper (Madrid: UNWTO, September 2005), p. 38.
-47-
multiplier effect is used as a measurement of economic impact. The multiplier effect
re-spent in the local economy. The multiplier effect arises because induced increases
from tourist spending affects consumer spending which occurs due to the increased
incomes and because of the feedback into increased business revenues, jobs, and
income. 36 The multiplier describes the final change in an economy’s output relative to
industry and local suppliers of goods and services through both the formal and
informal economy. Leakages refer to payments or financial flows made outside the
economy of the destination country. For companies in various sectors of the tourism
industry, linkages are seen in business terms as the supply chain. Linkages can
payments as local products replace imported ones. The positive impact of linkages
also relates to the capabilities and competitiveness of domestic firms. Among the
direct benefits from effective linkages are increased output of the linked enterprises,
capabilities and market penetration. Table 10 lists some of the main linkages in terms
of supply chains back to local producers and sellers to three sectors of the tourism
36
K. E. Case and R. C. Fair, Principles of Macroeconomics. (Englewood Cliffs, NJ: Prentice
Hall, 2006).
-48-
Table 10. Examples of supply chain linkages within selected sectors
of the tourism industry
Source: Eugenio Yunis, "Poverty-sensitive Value Chains in the Tourism Industry", (Madrid:
UNWTO, October 2006.
Other forms of linkages that create benefits at the local level include:
micro and small and medium enterprises, especially in the informal sector;
-49-
businesses is another linkage mechanism that helps to avoid marginalizing local
Linkages can involve complementary products, which are those that do not
directly compete with the goods and services sold by the established industry at a
in the local economy in order to create more linkages. Goods such as handicrafts, art
and local food and beverages or services such as guiding, massage, dance and music
add to the tourism experience and provide opportunities for local producers to create
linkages with the tourism industry. When TSA tables are compiled and analyzed, it is
products is one way to measure the informal sector of the tourism economy at the
local level.
Local authorities can facilitate linkages at the local level in ways that create
opportunities for the informal sector as well as micro, small and medium-sized
enterprises to sell to tourists and locals alike. One example is the creation of street
in box 6, the night market in Luang Prabang enhances tourism’s links to the local
economy.
-50-
Box 6. Lao People’s Democratic Republic: Linkages at the Luang Prabang Night Market
The night market, which started in 2002/2003, supports the craft industry and
provides many opportunities for linkages that increase incomes and well-being for
producers and sellers. A study in 2006 reported the following:
2. More than half of the total 400 stalls sell Hmong embroidery, woven silk and
textiles. Other craft products include mulberry paper products, cotton clothes
and T-shirts, jewellery, antiques and a few imports.
3. Semi-skilled and unskilled people earned about US$ 1.8 million a year from
crafts and curios, according to supply chain analysis. This was about 40
percent of total estimated turnover of US$ 4.4 million. This compares to total
estimated annual tourism receipts in Luang Prabang of US$ 22.5 million, of
which 27 per cent (US$ 6 million) went to semi-skilled and unskilled people.
4. Hmong embroidery plus silk and cotton weaving accounted for an estimated
US$3.0 million annual tourist expenditure, of which about US$1.1 million
(38 per cent) went to local producers, vendors and workers, with half of this
income going to weavers as both wage earners for shops and village weavers
selling direct or to vendors Many households could earn about US$ 30 per
month from weaving.
5. In terms of leakages, 100 per cent of cotton and about 50 per cent of silk was
imported, which means that about US$ 900,000 per year goes out of the
country to pay for imported inputs.
Source: C. Ashley, “Participation by the Poor in Luang Prabang Tourism Economy: Current Earnings
and Opportunities for Expansion”, ODI Working Paper 273 (London: ODI, 2006). Available at
www.odi.org.uk/publications/working_papers/wp273.pdf
-51-
One review observed that leakages in the tourism industry occur when revenue
country. Financial resources "leak away" from the destination country to another
country, particularly when the tourism company is based abroad and when tourism-
related goods and services are being imported to the destination country, thus limiting
the economic benefits of tourism development. Estimates are often cited saying that a
significant percentage of revenues from tourism leak from developing countries due to
foreign ownership in the industry, imported resources, foreign tour operators, foreign
airlines and other reasons. However, the extent of leakages depends on a number of
factors such as economic size, industrial structure, among others. Updated analysis
can support or refute the argument about whether the more established a country
becomes as a tourism destination, the greater the proportion of revenue which will
leak away. 37
impressions about the amounts and share of tourism revenue that leaks from tourist
into account as well. That is, some leakage occurs where tourists spend money at the
destination for imported goods and services; other leakages are external payments that
never make it to the destination country, such as travel agent commissions, tour
37
Minu Hemmati and Nina Koehler, “Financial Leakages in Tourism”, Sustainable Travel &
Tourism (2000), pp. 25-29.
38
Jonathan Mitchell and Sheila Page, “Linkages and Leakages, Local Supply and Imports”
id21 insights, number 62 (June 2006), p. 5. www.id21.org
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about leakages is in the form of general estimates and approximate shares, which
can be encouraged to buy supplies from people in the host country, recruit labour
locally, use locally-owned accommodation and work more with informal tourism
enterprises. Tourism destinations that integrate tourists into the local economy and
purchase local products can be encouraged, especially at resorts that employ local
Analysis of the multiplier effect leads to the understanding that the true impact
of tourism is not simply the actual expenditure by visitors since there are indirect and
induced effects that can be measured. Input-output (I-O) modelling has usually been
used to derive multipliers, although this approach consumes time and resources and
has significant limitations. 39 The multiplier effect provides one way to take account of
the interrelationships between the tourism industry and different sectors within an
economy. However, there has been little recent work or research to update the reports
A variety of techniques using data at the macro level can clearly show
time-series data available from TSA can show some of the complex interrelationships
and patterns involving the tourism economy and the tourism industry. When these
39
M. Thea Sinclair and Mike Stabler, The Economics of Tourism (London: Routledge, 1997).
See also C. Cooper, J. Fletcher, S. Wanhill, D. Gilbert and R. Shepherd, Tourism Principles
and Practice (Essex: Pearson Education, 1998). As noted above, ESCAP undertook
studies designed to consider the multiplier effect in the 1990s. See
www.unescap.org/ttdw/index.asp?menuname=PublicationArchives
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patterns are assessed, their relationship to important social indicators can be the
subject of in-depth research and analysis. In this way, the scope and extent of
base for policy formulation and related decisions, plans and programmes involving
tourism.
accounts. There is still a need for more analysis and assessment derived from TSAs in
researchers to report and evaluate TSA with examples of usability and analysis. 40
reduction. A search on the Internet using the words “poverty reduction tourism”, for
example, yields a vast amount of information on the subject. ESCAP has undertaken a
base.
40
Seventh International Forum on Tourism Statistics, Stockholm, S?weden, 9-11 June 2004.
www.tourismforum.scb.se/default.asp
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Box 7. Activities of ESCAP in the fields of tourism and poverty reduction
Publications
(a) Poverty Alleviation through Sustainable Tourism Development, August 2003
(ST/ESCAP/2265).
(b) The Contribution of Tourism to Poverty Alleviation, ESCAP Tourism Review
No. 25, December 2005 (ST/ESCAP/2380).
At the sub-national and local level, value chain and supply chain analysis as in
the case of Lao People’s Democratic Republic have given insights into who benefits
from tourism activities. In particular, such analysis can provide detailed information
to policymakers about the role of the formal and informal sectors, income groups and
gender distribution in the supply of tourism products and services. A briefing was
made recently to assess the key lessons from using tourism value chain analysis in six
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developing countries, including Lao People’s Democratic Republic, Sri Lanka and
Viet Nam. 41
infrastructure and services to support continued growth and development. At the same
time, transport policies and infrastructure development influence the quality, capacity,
transport systems, both within and between countries through networks of airports,
highways, railways and ports. Tourism will benefit from the work being done by
countries and areas of the region at the national and regional level to provide a
The various forms of transportation and related infrastructure play a vital role
centres for business, tourism, ordinary citizens and government. In countries where
safety, social and economic needs can be met along with the demands of the tourism
development would have to address: (1) constraints to sector development; (2) which
border linkages; and (4) the complexity of relations between tourism development,
41
C. Ashley et al., “Assessing how tourism revenues reach the poor”, ODI Briefing Paper 21
(June 2007). http://www.odi.org.uk/Publications/briefing/bp_june07_tourism_vca.pdf
-56-
environmental sustainability, geographic location of expanded infrastructure and
According to data gathered by the World Bank for 118 airport projects with
private sector participation worldwide between 1991 and 2006, a total of 25 airport
infrastructure projects were carried out in low and middle income countries of East
Asia and the Pacific and 8 projects in South Asia. The total value of private
investment was US$ 4,281 million in East Asia and the Pacific, of which US$ 3,130
was for projects involving runway and terminal construction, US$ 881 million for
terminal construction only and US$ 270 million for runway construction only. The
total value of private investment in South Asia was US$ 3,426 million for projects
that involved runway and terminal construction. The total value for 33 projects that
meet private sector participation criteria in both Asian subregions (US$ 7,707 million)
accounted for 30 per cent of total investment of US$ 25,552 million in low and
For about the past four years, the travel industry in Asia and the Pacific has
been undergoing a dynamic change, and the growth of low cost carriers has been cited
as the single most important factor currently shaping the region’s airline industry. In
2003, low cost carriers accounted for 5 per cent of the Asian and Pacific travel
market. 43 In January 2007, there were 342,000 low-fare flights offered around the
world, which was 15 per cent higher than in January 2006. According to the Official
Airline Guide (OAG), more than half of the world’s new low-cost flights were in Asia
and the Pacific. There were more than 22,000 additional low-fare services within the
42
World Bank, Private Participation in Infrastructure Database.
http://ppi.worldbank.org/explore/ppi_exploreSubSector.aspx?SubSectorID=5
43
MarketShare, “The Impact of Low Cost Airlines on the Asia Pacific Travel Sector” (Singapore:
MarketShare Pte Ltd, February 2005).
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region during January 2007, representing a 67 per cent increase year on year. 44 The
growth in low cost carriers has made international, regional and domestic travel
accessible to more people in the region. At the same time, the aviation industry has
had to adjust its strategic marketing and understanding of consumer behavior in the
region. For example, low cost domestic sector flights in India grew 62 per cent and
the number of seats grew 151 per cent between May 2006 and May 2007. In
Malaysia, 40 per cent of the flights and 59 per cent of the seats were on low cost
carriers. 45
Forum (WEF) developed the travel and tourism competitiveness index (TTCI) to
provide a fairly comprehensive tool for measuring the factors and policies that help in
assessing the comparative strengths and weaknesses of 124 countries and areas,
including 26 in Asia and the Pacific, in their ability to develop travel and tourism.
According to WEF, its assessments of the travel and tourism environments can be
The term national competitiveness must be used carefully, however, The notion of
the appropriate role and extent of government policy. Given that it is firms that
compete, according to the Asian Development Bank (ADB), from the national point
of view the real question would be about how government policies might ensure that
44
“January Flights Increase Marks Five Years of Aviation Growth-Global”, OAG Press Release, 29
January 2007.
www.oag.com/oag/website/com/OAG+Data/News/Press+Room/Press+Releases+2007/January+Flights
+increase+marks+five+years+of+aviation+growth+GLOBAL+2901071
45
“Aviation Growth Hits All-Time High”, OAG Press Release, 8 May 2007.
www.oag.com/oag/website/com/en/Press+Releases+2007.
46
World Economic Forum, Travel & Tourism Competitiveness Report 2007 (Geneva: World
Economic Forum, 2007), p. xi.
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firms are competitive. Despite arguments about whether or not nations compete,
governments play a critical role in shaping the competitive environment and behavior
Table 11 presents the ranking and scores (on a 7-point scale) for selected
Asian and Pacific countries as taken from the ranking of 124 countries and areas
worldwide. The overall rank is composed of three dimensions of travel and tourism:
(1) regulatory framework, (2) business environment and infrastructure and (3) human,
cultural and natural resources. Within each dimension there are several factors that are
measured by a number of variables. For the purpose of table 11, two out of five
infrastructure was scored and ranked based on six variables and ground transport
47
ADB, Asian Development Outlook 2003 (Manila, ADB, 2003), p. 59.
www.adb.org/Documents/Books/ADO/2003/part3_3-2.asp
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Table 11. Ranking and scores on the travel and tourism competitiveness index,
business environment and infrastructure, air and ground transport infrastructure,
selected Asian and Pacific countries a/
Source: World Economic Forum, The Travel & Tourism Competitiveness Report 2007 (Geneva:
World Economic Forum, 2007).
Note: a/Air transport infrastructure factor is comprised of six variables: (1) quality of air transport
infrastructure, (2) available seat kilometres, (3) departures per 1,000 population, (4) airport
density, (5) number of operating airlines and (6) international air transport network.
Ground transport infrastructure factor is comprised of four variables: (1) road infrastructure,
(2) railroad infrastructure, (3) port infrastructure and (4) domestic transport network.
b/
World Bank classification of countries by income group as of 2005, annual GNI per capita.
Low income (LI) is US$ 875 or less; lower middle income (LMI) is US$ 876 to US$ 3,465;
upper middle income (UMI) is US$ 3,466 to US$ 10,725; and high income (HI) is
US$ 10,726 or more.
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The business environment and infrastructure dimension showed one of the
highest positive correlations with the overall index by 96 per cent, according to
further analysis done for WEF. 48 This tends to confirm the argument that a country
seeking success with its tourism industry must give direct attention to the impact of
Several results for countries of Asia and the Pacific, as shown in table 11, are
its rank on the dimension of business environment and infrastructure. However, when
comparing the two component factors of air transport and ground transport
infrastructure is about the same as the two rankings already discussed. The relatively
factor for tourism accessibility. In the case of China, much higher rankings for air
transport (36) and ground transport (45) infrastructure when compared to the overall
competitiveness ranking suggests that these two transport factors generally contribute
to the strength of the national tourism industry. India achieved higher rankings for
both air (33) and ground (40) transport infrastructure factors relative to its rank for
environment and infrastructure dimension (27) outranked some high income countries
with major tourism industries. In fact, Malaysia jumps to the rank of 15 for the ground
transport infrastructure factor. This shows how the efficiency and accessibility of
48
Jurgen Ringbeck and Stephan Gross, “Taking Travel & Tourism to the Next Level: Shaping
the Government Agenda to Improve the Industry’s Competitiveness”, World Economic
Forum, Travel & Tourism Competitiveness Report 2007 p. 28.
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The rankings for Pakistan varied widely and showed a low rank of 103 out of
124 countries for overall travel and tourism competitiveness. However, on the
Within this dimension, Pakistan’s ranking on the ground transport infrastructure factor
moved up to 52.
For a country with a large geographic area such as the Russian Federation, a
high ranking on air transport infrastructure (21) contrasts with lower rankings for
ground transport infrastructure (65) and overall travel and tourism competitiveness
(68). This underscores the dominance of air transport in quantitative terms (such as
availability of seat kilometres, number of airlines and airport density) for the Russian
Federation. However, these rankings contrast with one of the lowest rankings (120 out
of 124) for the government of the Russian Federation giving priority to the travel and
to 25th for the air transport infrastructure factor and 28th for the ground transport
infrastructure factor. This was the best result among the seven Asian and Pacific
countries classified in the lower middle income group.Among the selected Asian and
Pacific countries and areas, Hong Kong, China was assessed as having the strongest
transport infrastructures, which were assessed as among the top three in the world,
and their air transport infrastructures, for which Singapore ranked 10 and Hong Kong,
When the Asian and Pacific countries and areas are assessed within groups
defined by the World Bank income categories, nine were found to have ranked in the
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top 10 of their respective groups. That is, Malaysia ranked third among the upper-
middle income group. Thailand ranked second and Indonesia ranked tenth within the
lower-middle income group. India ranked first, China second, Viet Nam fourth,
Mongolia fifth and Cambodia ninth within the low income group. 49
Table 12 presents details about three variables that are part of the ground
national transport network consisting of domestic flights, buses, trains, taxis and so
forth. Data about the selected Asian and Pacific countries as a group showed that their
average score on the quality of road infrastructure was 3.60 which was below the
average score of 3.70 for all countries surveyed worldwide. However, the averages of
the Asian and Pacific group for railroad infrastructure (3.47) and domestic transport
network (4.75) were considerably higher than the respective world averages (2.90 for
Results for the quality of road infrastructure highlight the fact that 10 of the 26
selected countries had scores higher than the world average. Six of these countries
were from the high income group; Malaysia and Turkey were from the upper middle
income group; and China and Thailand were from the lower middle income group.
This means that 16 countries, including ten low income countries, five lower middle
income countries and one upper middle income country had below-average scores,
which suggests that road infrastructure linked to tourism was not very extensive or
countries in Asia and the Pacific had scores above the world average of 2.90,
49
Ibid., p. 30.
50
Port infrastructure is a fourth variable of this factor, but data are not presented here.
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including all six high income countries, two upper middle income countries (Malaysia
and the Russian Federation), five lower middle income countries (Azerbaijan, China,
Georgia, Kazakhstan and Thailand) and two low income countries (India and
Pakistan). Such scores must be viewed in the context of how much railroad
infrastructure exists in the country and whether constraints of size, geography and
history, among others, influence the role of such infrastructure, especially for the
tourism industry.
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Table 12. Ranking and scores on quality of ground transport infrastructure variables,
selected Asian and Pacific countries a/
Source: World Economic Forum, The Travel & Tourism Competitiveness Report 2007
(Geneva:
World Economic Forum, 2007).
Note: Ranking covers a group of 124 countries, with 1 as the highest ranking. Scores for
each variable are based on a scale of 1 to 7 utilized in the WEF’s executive opinion
survey. 1 represents the lowest possible score and 7 is the highest possible score.
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Results for the quality of the domestic transport network show that 12
countries had scores above the world average of 4.60. This included all six of the high
income countries and three upper middle income countries (Malaysia, the Russian
Federation and Turkey), two lower middle income countries (Azerbaijan and
Thailand) and one low income country (India). For seven of the 12 countries, such
high scores may be connected to their above-average scores on the extent to which the
government prioritizes the travel and tourism industry, as shown in table 13.
However, five of the 12 countries had below average scores on the government
priority given to tourism (Azerbaijan, Japan, the Republic of Korea, the Russian
At the same time, eight countries with high scores for giving due consideration
and priority to the tourism industry had below average scores on the quality of their
domestic tourism network. Such results suggest that there may be a more complex
linkage and related conditions involving an efficient and accessible domestic transport
more carefully the role of transport infrastructure development in the overall context
planning. The results from the WEF survey can be considered as suggesting
perceptions about the quality of transport infrastructure in the selected countries that
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Table 13. Comparing country scores on government priority given to travel and
tourism with selected infrastructure variables
Government Quality of
prioritization Quality of air Quality of Quality of domestic
of travel and transport railroad road transport
tourism infrastructure infrastructure infrastructure network
Australia 5.30 6.00 4.60 5.20 5.80
Azerbaijan 3.90 5.10 3.80 3.30 4.80
Bangladesh 3.20 2.50 2.30 3.10 3.50
Cambodia 5.90 3.90 1.50 2.90 4.00
China 4.80 3.70 3.80 4.00 4.50
Georgia 4.80 3.40 3.00 2.89 3.20
Hong Kong,
China 6.00 6.70 6.30 6.30 6.70
India 4.70 5.10 4.70 3.20 5.30
Indonesia 5.10 4.10 2.40 2.10 4.20
Japan 3.60 6.40 6.60 6.10 6.60
Kazakhstan 3.90 4.10 3.30 2.30 4.50
Kyrgyzstan 4.60 3.10 2.00 1.90 4.30
Malaysia 5.90 6.00 5.00 5.70 5.80
Mongolia 4.50 2.80 2.50 1.80 3.50
Nepal 4.80 3.30 1.20 2.20 3.70
New Zealand 5.80 5.70 3.70 4.40 5.70
Pakistan 3.50 4.60 3.60 3.50 4.40
Philippines 4.50 4.00 1.70 2.60 3.80
Republic of Korea 3.90 5.50 5.20 5.20 5.60
Russian
Federation 4.30 3.90 2.20 4.60
Singapore 6.00 6.90 5.70 6.70 6.60
Sri Lanka 5.30 4.10 2.50 2.70 3.50
Tajikistan 4.50 2.90 2.80 2.10 3.80
Thailand 5.60 5.50 3.60 5.00 5.40
Turkey 4.40 4.70 2.30 3.70 5.50
Viet Nam 4.70 3.80 2.20 2.50 4.20
Average for
selected countries
of Asia and the
Pacific 5.08 4.55 3.47 3.60 4.75
Average for 124
countries 4.50 4.50 2.90 3.70 4.60
Source: World Economic Forum, The Travel & Tourism Competitiveness Report 2007
(Geneva:
World Economic Forum, 2007).
Note: Scores for each variable are based on a scale of 1 to 7 utilized in the WEF’s
executive opinion survey. 1 represents the lowest possible score and 7 is the highest
possible score.
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Developing routes by land and air in order to link existing tourism centres or
open new areas in less developed regions are important mechanisms for spreading
benefits to areas that might have not directly benefited from tourism development.
partners to create a network of tourist activities, attractions and support services that
way and seek appropriate marketing channels. It has been suggested that heritage and
contributes to longer stays, builds capacity and spreads the benefits of tourism and
shared benefits to the tourism industry at the regional and subregional level from
(ALTID) project with the aim of expanding and standardizing roadways in the region.
There are 55 Asian Highway routes, which have been identified among 32
51
“Tourism and Poverty Reduction – Making the Links”, Pro-Poor Tourism Info-Sheets,
Sheet Number 3, (London: Pro-Poor Tourism Partnership, 2004).
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investing about US$ 26 billion in the construction, rehabilitation and upgrading of
some 37, 000 km of the Asian Highway network. By 2005, China invested about US$
6.65 billion in the development of the Asian Highway network, followed by India at
US$ 3.64 billion and the Russian Federation at US$ 2.65 billion. Almost US$ 18
billion in investment was still required as of 2005 to implement 121 priority road
countries. Central and South-West Asia required about US$ 7.3 billion followed by
South-East Asia at US$ 4.6 billion. 52 At the same time, ESCAP has identified tourism
attractions and suggested various activities at the national and regional levels to
potential for sharing benefits from tourism. The Intergovernmental Agreement on the
Trans-Asian Railway Network was signed at Busan in November 2006. Along with
the Almaty Programme of Action of August 2003, which was designed to address the
special needs of landlocked developing countries within a new global framework for
Transport in November 2006 resolved that government authorities would develop and
implement transport policies at the national, subregional and regional levels that
would meet the challenges of globalization. Promoting the potential and opportunities
that such infrastructure implies for tourism development, especially in landlocked and
52
United Nations, Priority Investment Needs for the Development of the Asian Highway
Network (New York: United Nations ESCAP, 2006), pp. 26, 34. (ST/ESCAP/2424)
53
United Nations, Asian Highway Handbook (New York: United Nations ESCAP, 2003)
ST/ESCAP/2303. See also “Tourism Attractions along the Asian Highway.
http://www.unescap.org/ttdw/common/tis/ah/tourism%20attractions.asp
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In 2001, ESCAP organized the Seminar on the Promotion of Buddhist
and heritage tourism in nine countries in South and South-East Asia. Several countries
identified the importance of providing connections via air, rail and road infrastructure
Reports indicate that the cruise industry has emerged as one of the fastest growing and
popular segments of the worldwide travel and leisure industry. Between 1999 and
2005, passenger levels for conventional cruises have expanded from about 8.5 million
to 13.9 million. During the same period, the Asian and Pacific region accounted for
from 5 per cent to 8.6 per cent of the worldwide cruise market.55 Singapore; Hong
Kong, China; and Australia are well-established destinations, as well as home bases,
for cruise ships due to the capacity of their port infrastructure. Within the cruise
industry, Asia and the Pacific is seen as a region with great potential given the
opening of new routes and the diverse cultural attractions. Destinations that aim to
attract the cruise industry must focus on port facilities, and ancillary services,
according to cruise industry officials. 56 One cruise line has already added Cambodia
as a destination that involves travelling from Thailand to Hong Kong, China with
destinations in at least four ports in Viet Nam. Another cruise line starts in Bangkok,
Thailand and ends in Mumbai, India with stops in Cambodia, Viet Nam, Singapore,
Malaysia and Sri Lanka. India and China are considered as emerging destinations. A
54
ESCAP, “Promotion of Buddhist Tourism Circuits in Selected Asian Countries”, Tourism
Review Number 24 (New York: United Nations, 2003). ST/ESCAP/2310
55
Tourism Commission and Hong Kong Tourism Board, “Consultancy Studies on Cruise
Market Development” (Findings), no date. Refer to
www.info.gov.hk/gia/general/200610/24/P200610240216.htm
56
World Cruise Network, “A Taste of Eastern Promise” 3 April 2006.
http://www.worldcruise-network.com/features/feature110/
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new cruise ship terminal developed in Shanghai was expected to open in 2007 and
cover 160,000m² with a length of 850m, which would accommodate three large cruise
sustainable development of inland water transport in the Asian and Pacific region
adopted at the fifty-fifth session. 58 Navigable rivers run through large areas of the
country in many riparian Asian countries, including the Yangtze and Pearl Rivers in
China, the Greater Mekong River (including the Lancang River in China) in six
countries, the Buriganga River in Bangladesh, the Ganges River in India, the
Ayeyarwady River in Myanmar and the Chao Phraya River in Thailand, among
others.
along the Mekong River. In 1995, the Governments of Cambodia, the Lao People’s
Democratic Republic, Thailand and Viet Nam signed the Agreement on the
Cooperation for the Sustainable Development of the Mekong River Basin and
China, the Lao People’s Democratic Republic, Myanmar and Thailand signed the
financing from the Asian Development Bank (ADB) in 1992 among Cambodia, China
(Yunnan province), Lao People’s Democratic Republic, Myanmar, Thailand and Viet
57
Ibid.
58
United Nations ESCAP, Manual on Modernization of Inland Water Transport for
Integration within a Multimodal Transport System (New York: United Nations, 2004), pp.
105-106. ST/ESCAP/2285
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Nam with the aim of strengthening economic linkages, including tourism. In March
2005, it was reported that the ADB had appropriated $US28 million for infrastructure
Cambodia, Lao People’s Democratic Republic and Vietnam, which included, among
People’s Democratic Republic, Myanmar and Thailand has been taking shape. A
commercial navigation route from Simao in Yunnan Province to Luang Prabang, Lao
People’s Democratic Republic was officially opened in 2001. In 2006, the capacity
along the Lancang-Mekong River was upgraded so that ships with loading capacity
below 300 tonnes can cruise the river throughout the year. China established a regular
Chiang Saen port in September 2006. One tourism organization at the prefecture level
in Yunnan Province offers trips along the river that start from Xishuangbanna and
travel to Lao People’s Democratic Republic, Myanmar and Thailand via Jinghong. 60
that directly influences the competitiveness of a country’s travel and tourism industry.
For countries in Asia and the Pacific, this includes an accessible, high-quality air
factors and variables that make up travel and tourism competitiveness is likely to vary
59
Asian Development Bank, Sixteenth Meeting of the Working Group on the Greater
Mekong Subregion Tourism Sector, 25-27 March 2005.
www.adb.org/Documents/Events/Mekong/Proceedings/wgt16.asp
60
Government of China, web portal, 2 March 2007. http://english.gov.cn/2007-
03/02/content_539707.htm. See also, www.xsbnly.com/english/travel8.htm
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depending on each country’s stage of development. Determining the dynamics of
building up infrastructure as well as the air and ground transport network in different
and learning lessons that can be applied for particular groups of countries.61
61
Jurgen Ringbeck and Stephan Gross, “Taking Travel & Tourism to the Next Level: Shaping
the Government Agenda to Improve the Industry’s Competitiveness”, World Economic
Forum, Travel & Tourism Competitiveness Report 2007, p. 29.
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VI. TOURISM AND THE MILLENNIUM DEVELOPMENT GOALS
reduction, opportunities for education, better maternal health, gender equality, and
reducing child mortality, AIDS and other diseases. The MDGs are an agreed set of
goals to be achieved by 2015 based on all actors working together at global, regional
and national levels. Strategies based on working with a wide range of partners can
help create coalitions for change that support the MDGs at all levels; benchmark
progress; and help countries build the institutional capacity, policies and programmes
needed to achieve the MDGs. 62 It is generally assumed that international tourism can
generate benefits for poor people and poor communities in the context of sustainable
However, greater attention has been given to the argument that tourism could
be more effectively harnessed to address poverty reduction in ways that are more
economic benefits, there can also be social, environmental and cultural benefits.
Poverty can be reduced when tourism provides employment and diversified livelihood
opportunities, which provides additional income. This can contribute to reducing the
contribute through direct taxation and by generating taxable economic growth since
taxes can then be used to alleviate poverty through education, health and
62
UNDP, Millennium Development Goals. www.undp.org/mdg/
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infrastructure development. 63 These points refer to the general contribution of tourism
specific MDGs, then actions to make tourism contribute to poverty alleviation at local
and community levels needs to be considered. At the same time, however, it is equally
Development Goals require that the linkages between tourism and poverty be
63
WTO, Tourism and Poverty Alleviation, (Madrid: WTO, 2002), p. 31
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Figure 3. Linkages between tourism and poverty reduction
Table 14 develops the figure further and lists the potential contributions that
appropriate interventions in the tourism sector can make to the achievement of each of the
MDGs. As discussed in chapters II and III, the creation of income and employment in the
tourism industry and the tourism economy would contribute to reducing the proportion of
people living on less than a dollar a day (target for Goal 1).
Similarly, the provision of infrastructure facilities and services for tourists (roads,
communications, health and sanitation services) can be designed to benefit local communities
at the same time. Such facilities can contribute to the achievement of Goals 4, 5, 6 and 7. In
the area of gender equality and the empowerment of women (Goal 3), tourism is recognized
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as a sector that employs a high proportion of women. However, careful attention needs to be
given to gender patterns in tourism careers and employment should be carefully studied and
analyzed with particular attention to gender segregation by job category or wage gaps
according to gender.
4. Reduce child mortality (a) The construction of roads and tracks to remote areas for
tourists also improves access to health services;
5. Improve maternal health
(b) Revenues accruing to national and local governments
6. Combat HIV/AIDS,
through taxes on the tourism industry can be used to
malaria and other
improve health services and nutrition for young
diseases
children and their mothers;
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Goal Contribution of tourism
(c) Tourism raises awareness about HIV/AIDS issues and
supports HIV/AIDS-prevention campaigns;
(d) Tourism aggravates the spread of HIV/AIDS (negative
effect).
Source: United Nations ESCAP, Transport and Tourism Division, Transport Policy
and Tourism Section.
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The MDG agenda and the role of tourism in poverty alleviation converges
with recent efforts based on the concept of pro-poor tourism. Pro-poor tourism is an
benefits for poor people by enhancing linkages between tourism businesses and poor
people. Its strategies focus on the local or community level and aim at increasing
more effectively in tourism development. Among the many different types of poor
craft-makers, other users of tourism infrastructure and resources, and so forth. Types
strategies often begin by policies, processes and actions designed to reduce negative
An instructive example of taking action based on the MDGs and the Tenth
“Endogenous Tourism for Rural Livelihoods” being funded by UNDP. The project
coalitions for change in support of achieving the MDGs at the local level and build
linked to the concept of rural tourism. In India, 74 per cent of the population resides in
64
Pro-poor Tourism www.propoortourism.org.uk/strategies.html
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Urban-centric industrialization along with the stress of urban lifestyles has led
urbanization has contributed to falling income levels and fewer job opportunities in
rural areas, thus contributing to ongoing rural to urban migration. The Indian
government aims to identify and strengthen local resources (cultural heritage, local
traditions, art and crafts) and empower communities in rural areas through
migration.
for Rural Livelihoods in India, involving communities throughout the country. The
with common facility centres set up for craftspeople with local showcases for art and
craft wares, along with the history and traditions of each area. Communities manage
the project activities with partial financing from an incentive fund to encourage a
variety of rural tourism initiatives and the marketing of local craft products, as well as
65
Thomas Kontuly, “International Comparisons of Counter-Urbanization”, Geographical
Perspectives, vol. 61 (Spring 1988), pp. 1-5. David Plane, Christopher Henrie, and Marc
Perry, “Migration across the Micropolitan /Metropolitan Spectrum”, paper presented at the
41st Annual Meeting of the Western Regional Science Association, Monterey, California, 17-
20 February 2002.
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increased levels of awareness, growing interest in heritage and culture, improved
From 2003 to 2007, the Ministry of Tourism and Culture, Government of India, has been
working with 34 implementing agencies, 30 NGOs and 4 panchayats at 36 sites across 20 states
throughout the country. Alternative models of rural tourism are being developed across India,
since the government has identified tourism as a vehicle for generating employment and
promoting sustainable livelihoods. Micro-financing is included as part of the project.
Cultural heritage and indigenous tradition are the foundations of the project’s model of rural
tourism. Common facility centres for village craft persons and village art centres are set up at
the 36 project sites to showcase the culture and living heritage characteristic of each site.
Where appropriate, rest houses are built based on local skills and construction materials.
People in the communities are trained in different aspects of hospitality to provide services of
international standard.
Community ownership and management is central to the project’s strategy. At every stage in
the implementation, care is taken to ensure the participation of women, youth and other
disadvantaged groups.
In order to mainstream gender and HIV/AIDS concerns into the project, one of the partner
agencies is the Health Institute for Mother and Child.
By October 2006, most sites were ready to receive tourists and all implementing partners had
become sensitized to gender and HIV/AIDS concerns.
The project won a World Travel Award in the category of “World’s Leading Responsible
Tourism Project” in 2006.
Source: www.exploreruralindia.org
66
UNDP, “Endogenous Tourism for Rural Livelihoods”, Fact Sheet, May 2007.
http://data.undp.org.in/factsheets/hd-rl/may07/ETP.pdf
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It has been noted that results from such strategies could mean that low
numbers of people are employed and they might be concentrated in certain types of
jobs. However, the spread of earnings, collective income and other livelihood benefits
reduction. It is not always possible to say what contribution this makes to national
poverty reduction efforts, since that depends on the scale of tourism within the
economy and the degree of pro-poor change within the sector. However, such tourism
There are limits to using case studies for assessing the effectiveness of tourism
“Endogenous Tourism for Rural Livelihoods” suggests the possibility of learning and
then scaling up such a project for wider coverage. Consideration of the linkages
between tourism and the MDGs clearly illustrates the potential of tourism to have a
One effort to assess the effectiveness of tourism projects was a World Bank
study that examinined the role of tourism in the World Bank's development strategy
and its lending activities in order to estimate the impacts on the sustainable
development of Bank actions. While tourism has not played an important role in the
Bank's development strategy in the recent past, there are some signs that it is being
seen as more important. Of the 1,500 or so new projects in the Bank from 1998 to
2003, about 6 per cent in terms of number and 3 per cent in terms of value had some
67
Caroline Ashley et al., Pro-Poor Tourism Strategies: Making Tourism Work for the Poor,
Pro-Poor Tourism Report Number1 (Nottingham, United Kingdom: Overseas Development
Institute, 2001), p. 41.
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tourism dimension. In terms of lending, direct Bank operations have invested in
mitigate the negative impacts of tourism, such as the spread of diseases such as
HIV/AIDS. In terms of strategic and policy advice, the Bank has supported projects
that were environmentally and socially sustainable and that helped reduce poverty.
infrastructure provision. Among the 1,500 or so projects that were appraised, 32 had
tourism as a central or significant feature. Only eight of the 32 provided any real
quantification of the benefits of tourism. A careful look at these eight revealed that
technical assistance were more effective and yielded higher returns. Projects involving
cultural site development and promotion were also effective in yielding large benefits.
In terms of environmental impacts, the projects generally followed good practice and
roles of Governments is to set policy and legislative frameworks for tourism. Two
main reasons why governments should formulate tourism development strategy are:
68
Anil Markandya, Tim Taylor and Suzette Pedroso, “Tourism and Sustainable Development:
Lessons from Recent World Bank Experience”, (Washington, D.C.: IBRD, 2003), pp. 20-21.
http://info.worldbank.org/etools/docs/library/107771/SD_Communication/epublish/zip_files/b
iodiversity_russia2003/pdf/TourismSDMarkandya-Taylor.pdf
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(1) the tourist industry has many negative externalities, in particular negative social
and environmental impacts that need to be regulated and managed at national or local
levels, and (2) tourism can offer major opportunities for local economic development,
development and poverty reduction. In India, the Planning Commission has identified
tourism as one of the major vehicles for generating employment and promoting
sustainable livelihoods.
number of these have been identified by the World Tourism Organization and the
command and control instruments (legislation, regulation, rules and licensing; land-
use planning and development control), economic instruments (pricing, charges and
services). The precise mix of policies and instruments will vary depending on the
A. Tourism ministries
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tourism takes places in localities where tourists and host communities interact, while
regulations and incentives are applied within a framework laid down at the national
level.
financial incentives and taxation policy are often the responsibility of other ministries,
where there might not be enough awareness about the impact on tourism policies and
coordination.
For example, air transport has changed considerably in recent years due in part
of new routes and allowing operations by low-cost carriers; all of which would aim to
increase the number of tourists. While the economic benefits of tourism are now
ministries also have to consider the implications for tourism strategies, policies and
plans.
Tourism ministries can provide the government and its agencies with good
quality, systematic data, particularly about the effects of different types of tourism on
local socio-economic development. Provision of such data can help to substantiate the
B. Tourism plans
Tourism master plans are useful tools for identifying areas with tourism
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investment promotion and financial and other incentives. Governments need to ensure
that master plans and tourism development strategies address local economic
reduction.
Many governments have been increasing their efforts to identify and plan
tourism development located in areas that can help poor communities. In addition to
planning based on inventories of natural and cultural assets, information about the
infrastructure and related tourism development projects. Such information can help
with plans to develop clusters of activities and attractions and tourism routes, as well
as stimulate cooperation and partnerships within and between local areas. Plans based
include poor people. Engaging the poor is particularly important in order to identify
opportunities that fit their livelihood strategies and overcome barriers to employment
and enterprise. Policy makers need to consider the appropriate mix between
promoting the formal and informal sector as this is a key variable for maximizing
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part of the government’s Tourism for Rural Poverty Alleviation Programme
(TRPAP).
Source: SNV Nepal, ‘Lessons Learned on Pro Poor Sustainable Tourism in Nepal’, SNV Nepal, 2006.
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In Viet Nam, provincial and district-level governments have been given
greater responsibility for tourism planning and development in line with the overall
duty to consult and collaborate with other government agencies, as well as with other
towards enhancing opportunities for incorporating poverty reduction and other local
remunerated fairly and receive adequate social protection in areas such as the
employment.
In Viet Nam, for example, the Tourism Law was designed to create more
opportunities at the local level. Box 10 outlines some of the articles of the Tourism
Law, as well as the opportunities created and the expected results at the local level in
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Box 10. Viet Nam: Empowerment through tourism legislation
In 2003, the Vietnam National Administration of Tourism (VNAT) was given responsibility for
drafting the nation’s first law on tourism. VNAT received support from UNWTO and the
Netherlands in order to incorporate international best practices when drafting the law. As a
result the Law on Tourism reflects concerted efforts aimed at ensuring that future tourism
development addresses poverty reduction and sustainable development objectives. Some
important elements of the law are described in terms of the opportunity created and the expected
results.
Opportunity: Provide incentives and directives for developing tourism for poverty reduction
purposes
Article 6: Tourism Development Policy
6.2. The State shall undertake incentive and prioritized policies on land, finance, credits for
foreign and domestic individuals and organizations investing in the following fields:
g) Development of tourism whereby having potentials in remote and isolated areas,
and in areas with socio-economic difficulties so as to make use of the labour force,
consume goods and services on the spot, contributing to raising intellectual level of the
people, and to hunger elimination and poverty reduction.
Results: Incentives and directives are to be made available for developing tourism in
disadvantaged areas that address poverty reduction and hunger eradication. Further incentives
such as local hiring and training, purchasing from local suppliers could also be included in the
sub-decrees that guide implementation.
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E. Training, capacity-building and certification
The needs and existing capacity of local people have to be assessed to
certification of guides has been used in several places to control quality and supply,
and to ensure minimum standards of service and knowledge. In Viet Nam, a new
category of “narrator” has been introduced, which enables people without a formal
education to work as local guides. (See box 7.) At Keoladeo National Park, in India,
local rickshaw drivers are registered with the park to take tourists around the site.
The government is often required to play the lead role when issues of women’s
participation and empowerment in the tourism industry are involved. One example is
empowerment schemes for women and has emphasized their participation in various
tourism activities. The programme has given training to local women on craft skills to
make souvenir items. Women are also ready to be trained in order to provide several
tourism services, such as running a grocery store and serving as tour guides. In such a
case, TRPAP can help provide financing to increase capacity as well as training. 69
government at the local or national level can be used specifically to support either
poor communities or the environments that provide their livelihood. For instance,
69
Nepal Tourism Board, E-Newsletter, 18 February 2005, p. 5.
www.anmausa.org/tourism/2005_02_18.pdf
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Bhutan levies a high daily royalty on tourists, which is used to fund education and
ways that are comprehensive and integrated in order that the necessary revenues are
balanced against the affect on tourism markets and the profits of tourism businesses.
The poor have limited access to the tourism market for several reasons,
inability to escape severe poverty, poor health and social exclusion. Governments can
reduce the bureaucracy that small enterprises face, and create advisory services on
linkages with established operators, assist micro, small and medium-sized enterprises
Examples of linkages and cluster mechanisms described in box 11 can assist in market
access.
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Box 11. Nepal: Two examples of creating microenterprise opportunities for the poor
The Explore Nepal Group spent approximately US$ 57,000 on constructing and
furnishing the Koshi Tapu Wildlife Camp. All materials, except the toilet, were sourced
from local entrepreneurs of the Koshi Tapu area. Each year approximately US$ 5,700 is
spent for Bhojan Griha Restaurant in Kathmandu, another business of the Explore Nepal
Group, in order to renovate or replace the “soft furniture” of the restaurant, including
items such as candles, arts and crafts, tables and mats. This furniture is acquired only from
women’s handicraft associations such as Dhukuti and Sano Hastakala.
The Tiger Mountain Group supports local entrepreneurs while minimizing distortions in
the local market, such as price rises that would have an adverse impact on local people.
The Temple Tiger Jungle Lodges and Wildlife Camp in Pokhara buy supplies from local
markets but at established retail prices. Buying locally has the added benefit of
significantly reducing the company’s transport costs.
Ensuring that the sources of supply are diverse and the benefits within the community
widespread has proven to be a challenge because lodge employees tend to favour local
businesses with connections to their relatives. To overcome this tendency, the lodge
identifies services and supplies in an open, accountable and transparent manner. It
develops clear criteria for the supplies and services sought and ensures that the criteria are
widely disseminated among community members.
H. Marketing
Destination marketing is increasingly the remit of the private sector, private-
public sector partnerships or clusters. (See chapter VIII.) This means that micro,
small and medium-sized enterprises and poorer producers may be excluded from the
Governments can encourage discussions between national and regional tourist boards
promote responsible tourism practices and suppliers, and give preferential marketing
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Tourism market analysts have identified a number of market trends which
should inform the strategies and marketing decisions of policy-makers and investors
in Asia and the Pacific. One important trend is that tourists are increasingly willing to
travel long distances for longer periods and to take more frequent holidays. There is
growing demand for nature, adventure, activity and health-related holidays, with more
emphasis on individualism and flexibility. This leads to more independent travel and
knowledge or more interactions with other cultures. The market is becoming more
greater use of the internet for researching destinations and booking holiday travel and
impacts of tourism.
tourists and to spread the benefits of the industry. For instance, the Nepal Tourism
Board has given particular promotional emphasis to areas of the country that
traditionally receive fewer visitors, such as the Chitwan Hills. Promotion builds on
extensive product development, which has improved facilities and enhanced the
visitors’ experience, and has succeeded in extending the range of tourism products
and the tourism season in Nepal. In other countries, as shown in box 12, unique
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Box 12. Mongolia and the Islamic Republic of Iran: Nomadic tourism
Since 2005, Mongolia has adopted a new approach to community-based tourism, the
“ger-to-ger bottom-up approach”.a The country focuses particularly on promoting
appropriate socio-economic linkages between the rural nomadic groups in Mongolia, their
local communities and the public and private sectors.
This initiative has led to the establishment of 12 community routes over 3 regional
provinces and 5 community-based ticketing/information centres. Rural nomadic groups
and their communities are gaining valuable knowledge and skills that lead to greater local
ownership and management. Instead of competing with tour operators, communities are
learning how to cooperate and benefit from mobilizing “ethical” partnerships within the
private and public sectors, while maintaining their independence.
Such a regional development concept contributes to the empowerment of local
communities and their nomadic herders. Apart from the training they receive, the
partnerships also help in the development of economically viable travel routes. For
example, along the “Dundgovi travel route” the tourist is invited to share the harmonic
melodies and natural wonders of the Nobel Rock Palace or Fortress with nomadic herders,
while travelling by horseback, in a horse-drawn cart, riding a camel or trekking and
staying at one of the community’s ger. Of the revenues from tickets (trail passes), 55 per
cent goes directly to families and 10 per cent to their community environmental fund.
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VIII. THE ROLE OF THE PRIVATE SECTOR
A socio-economic climate characterized by increasing levels of corporate
manipulated for altruistic ends as well as commercial gain. The private sector can
contribute to local economic development and poverty reduction by changing the way
enhanced range of products, which adds market advantage, and improving the
business environment, which fosters favourable staff attitudes and morale. These
Particular areas where the private sector can foster local socio-economic
development are in recruiting and training local people, procuring goods and services
locally and shaping local infrastructure development to include benefits for the poor.
The private sector can also encourage tourists to purchase products that are
complementary to the core holiday, such as handicrafts, art and local food and
beverages, and services such as guide services, music and dance. These add to the
Complementary products often draw on local culture, including the way that the
people’s way of life has evolved in relation to their history and environment.
A number of examples from throughout the region can be cited. For example,
one tourism business enterprise in Nepal makes a special effort to recruit and train
local staff, as well as provide retirement and insurance benefits, as described in box
13. In Thailand, the private-sector business that created and operates the Rose Garden
as a cultural centre is an example of helping create opportunities for local people and
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their families. (See box 14.)
Box 13. Nepal: Tourism operators make a commitment to train local people
The Explore Nepal Group has a policy to hire only local people to work at their resorts located
close to national parks and wildlife reserves. In Chitwan, the group hired 82 local people from
surrounding communities to work at the Gaida Wildlife Camp in Chitwan. In Koshi Tapu, it hired
25 local people to work at the Koshi Tapu Wildlife Resort. “Learning by doing” has been the
method used by Explore Nepal to train new staff. Training is paid. Since 2001, there have been
fewer opportunities in Nepal due to the decrease in tourist numbers. In the past five years, however,
18 employees have left the company and migrated to the Middle East searching for new
employment opportunities.
The Tiger Mountain Group employs and trains members of community groups as staff in order to
support income generation opportunities in the areas where the group has business activities. The
following results have been reported:
• 34 per cent of Tiger Mountain Pokhara Lodge employees have been hired from
surrounding communities.
• 90 per cent of Tiger Tops Nepal employees have been hired from local groups (CFUGs,
Buffer Zone Groups and poor and excluded groups such as Dalit and Janajati).
The training approach is based on “one-on-one” learning in order to build capacities of new staff.
Each person trains another according to his or her specialty -- cooking/watering/gardening/guiding,
and so forth.
Source: ‘Lessons Learned on Pro Poor Sustainable Tourism in Nepal’, SNV Nepal, 2006
Instead of hiring professional performers, the Rose Garden created its own cultural troupe
for the Thai Village. With the help of the Department of Fine Arts and the Ministry of
Education, workers at the Rose Garden were trained as dancers and performers. It took them
almost a year to learn the intricacies of Thai dancing. Over time, the troupe became skilled
professionally that it was called upon when Thai Airways International Public Co., Ltd., and the
Tourism Authority of Thailand needed dancers to promote Thai culture abroad.
To encourage the workers’ children and local boys and girls to spend their leisure time
constructively, the Rose Garden also started a Sunday school which taught the youngsters Thai
folk dancing, music, martial arts, vegetable and fruit-carving, and handicraft-making. Today the
Rose Garden’s 150-strong cultural troupe comprises many of the original performers, their
children and grandchildren.
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IX. ALLIANCES AND PARTNERSHIPS
joint marketing and promotion, to liberalize trade in travel and tourism, to enhance
cooperation in raising the quality and sustainability of tourism in the region and to
capacity, and planning, marketing and managing the tourism sector on a sustainable
basis. In January 2007 Brunei Darussalam, Indonesia and Malaysia agreed to conserve
areas of high biodiversity along common frontiers on the island of Borneo based on a
Technical and Economic Cooperation, the South Asian Association for Regional
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Subregional cooperation can achieve efficiencies in marketing, information-
Networks clusters and ICT provide mechanisms by which the role of tourism in
sized enterprises unprecedented access to markets, and the Internet is being used to
70
ESCAP and Asian Institute of Transport Development, Towards an Asian Integrated
Transport Network (ST/ESCAP/2399), accessed from
<www.unescap.org/ttdw/PubsDetail.asp?IDNO=182>, on 28 February 2007.
71
Patrice Braun, “Creating value to tourism products through tourism networks and clusters:
Uncovering destination value chains”, paper presented at the Conference on Global Tourism
Growth: A Challenge for Small and Medium-sized Enterprises, in Gwangju, Republic of
Korea, 6-7 September 2005.
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Lao People’s Democratic Republic and Viet Nam) and independent travellers.
Asian Encounters combines a new style of tourism with a new style of community
development and poverty reduction by promoting community-based tourism (CBT) as
a way of generating incomes for poor people in Asia, not by acting as a travel agent or
tour operator. Instead, Asian Encounters specializes in empowering poor
communities with ICTs to help them promote local tourism that is sensitive to the
needs of the community, its culture and its environment by what is called electronic
commerce for Community Based Tourism, or e-CBT.
Asian Encounters provides shared computers and Internet access to local communities
for promoting and marketing their CBT products. Home stay operators and local
guides interact directly with distant clients without having to depend on intermediary
agents. Once communities become familiar with the technology, they can use it for
other development activities of their choice; improving health, education, agriculture,
enterprise development, employment and so on.
Partner communities include:
• Moon Hill Village (Gao Tian) in Guangxi Province located in southern China
• Bario in north-eastern Sarawak, Malaysia
• Ta Van, a small village at Lao Cai, Viet Nam
• Kampung Papaga in Sabah, Malaysia
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A cluster, as popularized by Michael Porter, is broadly defined as a geographic
One of the central propositions underlying the formation of clusters is that, while the
The cluster concept is being used widely in the tourism sector in both
developed and developing countries. For example, Sri Lanka has identified eight
spices, tea and tourism). Five sectors have been identified in Thailand: the automotive
industry, fashion, food, tourism and software. An example of the work of a cluster is,
in the jargon of the tourism industry, “destination marketing” whereby the various
Subject to the consensus of the members of a cluster, special emphasis can be placed
not only on supporting and promoting micro, small and medium-sized enterprises but
also on the special needs of poorer sectors of the community in providing tourism
services.
By drawing on the lessons and experiences in other sectors, ICT may provide
72
Michael Porter, The Competitive Advantages of Nations (New York, Free Press, 1990).
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local circumstances) the successful elements of particular interventions or pilot
standardization and the transfer of implicit and tacit knowledge. In this respect, ICT
may offer a way forward. One example from a different sector is the Prime Minister’s
Rural Road Project in India. The project is very large and aimed at providing all-
weather access for villages of more than 1,000 people (500 people in some tribal
areas) to the main road network. The project is being financed from the proceeds of a
federal tax on diesel sales and it is being implemented by individual states. ICT has
monitoring of project implementation and other governance matters. One of the key
elements in this application would appear to have been the ability to “standardize”
Another concept that has close tourism connections is the “one village, one
product” programme, which was started in Japan in 1979, and later introduced in
other countries, for example the “1K1P” programme in Malaysia and the “one tambon
was started in 1999 to promote entrepreneurs at the village level through the
manufacture of local specialty products based on the abundant native culture, tradition
and nature. 73 The OTOP type of programme has considerable potential for
developing the local economy and can also promote tourism. However, any
successful large-scale replication and upscaling of local initiatives requires that the
73
The programme has been recently renamed “local and community product”, but the
OTOP brand name has been retained.
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ICT can be an appropriate tool for providing these support services to
entrepreneurs and for the management of the programme, in a manner similar to that
of the Prime Minister’s Rural Road project in India. Through the use of
helping private organizations, can provide the services and manage the programme,
Internet site can be a resource and e-business centre for the local producers, and can
also help in fostering local tourism by providing tourists with the necessary
information on local tourism. Such efforts could be further extended to include other
services and could be used as a tool for management of the programme by the
Government.
distribution and marketing initiatives to enrich the destination for both local communities and
tourists alike. In order to be successful, the formal and informal sectors must develop mutual
cooperation.
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X. IMPLEMENTATION AND MONITORING OF THE PLAN
OF ACTION FOR SUSTAINABLE TOURISM DEVELOPMENT
IN ASIA AND THE PACIFIC, PHASE II (2006-2012)
The Commission at its sixty-second session requested that a common
Sustainable Tourism Development in the Asia and the Pacific Region be prepared. In
monitoring the implementation of a plan at the strategic level that can assess complex
breaking down of higher level objectives into lower level activities allows them to be
statistical technique to calculate the weighted score at each level of hierarchy. The
resource and data requirements and can be easily adapted to spreadsheet software.
Similar frameworks are already being used for strategic management in many
developing countries for programmes and projects and can service a wide range of
reformulation of the objectives and actions under each theme of the previously
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between the items in the monitoring system and the Plan of Action has been fully
retained. In addition, a fourth element labelled “activity” has been introduced into the
monitoring system.
namely the five themes of the Plan of Action; a number of objectives that contribute
collectively to the overall objective of the theme; a set of actions that broadly
correspond to the actions in the Plan of Action and contribute to the achievement of
the objective; and a set of activities that are required to be carried out in order to
In order to assess the extent to which the Plan of Action has been completed,
the extent to which each activity is completed. A set of weights, reflecting the level of
importance of the activity, action, objective and theme at the country level, are then
applied to ascertain the degree (in percentage terms) to which the Plan of Action is
software. Outputs include time-series graphs of planned versus actual completion for
each of the activities, actions, objectives and themes as well as radar (or spider)
diagrams for each action, objective and theme. Presentation of information in these
form with monitoring and evaluation elements has been developed for each action. A
copy of the suggested form with the example of Theme I is contained in Annex 2 of
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There may be two types of activities. Answers about the first type could be
either “yes” or “no” implying 100 per cent or 0 per cent achievement. For the second
type, a subjective assessment comparing progress against the actual condition would
be required. Assigning a value can range between 0 and 100 per cent, and thus a 10-
point interval scale from 0 to 100 per cent is proposed. The values could be assigned
by a group of knowledgeable people at the country level. They may come from a
simple format can be used to register the “consensus” scores given by group of
knowledgeable people for each action. A sample form of monitoring criteria for theme
I is presented in annex 3.
The foregoing study has clearly demonstrated that tourism is playing a major
can be used to measure and assess the impact of tourism at the macroeconomic level,
and the tourism satellite accounting framework, in particular, shows that its
Among other observations, the study has shown that, for many countries of the
region, the economic significance of tourism is very large when measured as a share
of GDP and exports. For many countries in general and the least developed countries
in particular, tourism is a sector in which they have comparative advantages for which
they can efficiently utilize domestic resources to earn foreign exchange. If used
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appropriately, such foreign exchange can purchase the investment goods necessary to
The study has demonstrated that the social significance of tourism, measured
in terms of employment is very large. It has also illustrated that appropriate tourism-
related interventions can play a role in raising the standard of living and reducing
some cases, this is simply a matter of increasing awareness so that the joint benefits to
tourists and local communities can be “factored-in” at the planning stage. In other
cases it may involve reducing leakages (or retaining tourist spending). In other cases,
economic development. Towards this end, the following recommendations have been
B. Recommendations
1. Planning
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Development in Asia and the Pacific, phase II (2006-2012) and the Regional Action
hindered by a lack of data on the scope and extent of tourism’s economic contribution
and impact. When such data is absent, it is likely that tourism will be given an unduly
low priority in the allocation of domestic resources and foreign assistance. Tourism
satellite accounts and other quantitative and qualitative analytical techniques help
issuance of visas, border formalities and customs regulation. Governments may also
wish to consider the common approach to the monitoring of the implementation of the
development and investment for the tourism sector, (iii) tourism promotion, marketing
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and product development, (iv) environmental management of tourism and
travel, (vii) risk management in tourism, (viii) pro-poor tourism initiatives, and (ix)
generation
to be better understood and its role further expanded. There is also a need to foster a
industry.
significantly to expansion of tourism. The public and private sectors should build-up
tourism.
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communities need to be strengthened through, among others, the abovementioned
7. Domestic tourism
policies and plans for tourism development. Collaborative approaches that include the
public sector, the private sector and stakeholders can internalize some of the external
costs of tourism thereby preserving cultural heritage and protecting the environment.
requirements by the demand for skill levels and current and future training
requirements in the tourism sector, and develop a national tourism training plan.
the tourism industry. At the regional level; the Network of Asia Pacific Education and
tourism. Overland travel has great potential for expanding in the region and can
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contribute to local economic development. Countries linked by the Asian Highway
and Trans-Asian Railway share a wealth of historical and cultural heritage as well as
unspoiled natural beauty. These countries could jointly promote tourism along the
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Annex 1
Tourism satellite account tables
Annex table 1. Annual growth rates of tourism industry (IND) and tourism economy
(ECON) contribution to GDP, various years (percentage)
IND ECON IND ECON IND ECON IND ECON IND ECON
Australia 5.98 7.17 3.47 0.57 -4.13 -6.31 14.87 15.77 0.41 3.16
Azerbaijan 29.71 14.46 -2.42 0.72 28.98 26.20 2.94 19.99 20.30 21.19
Bangladesh 4.93 4.97 6.84 10.17 9.59 9.64 4.61 7.41 3.29 6.02
Brunei
Darussalam 8.43 -0.72 -9.61 3.84 15.05 21.36 -9.64 -7.98 0.81 3.58
Cambodia 13.58 6.05 58.35 54.61 42.64 33.74 28.37 24.66 13.61 12.26
China 12.98 10.98 9.79 10.15 14.77 17.61 10.83 15.91 9.20 14.94
Fiji 8.13 -8.15 13.19 0.27 0.32 -9.96 -0.39 0.81 2.40 0.96
Hong Kong,
China 8.68 9.71 21.31 20.67 33.63 23.41 14.71 12.05 10.27 10.67
India 5.80 6.41 0.82 5.76 10.65 10.85 11.76 12.14 3.48 5.00
Indonesia 5.66 5.17 0.28 4.88 8.17 10.00 2.00 6.48 -2.61 -1.30
Islamic Republic
of Iran 8.13 -11.33 -1.22 1.03 4.75 4.49 5.59 6.59 3.77 2.97
Japan -0.84 -1.31 0.90 0.96 -2.64 1.63 10.67 8.12 4.60 5.24
Kiribati -43.50 -44.98 -55.56 -57.45 -21.39 -21.40 7.55 7.42 8.46 9.75
Republic of
Korea 10.25 10.94 2.33 6.31 4.13 8.68 2.73 4.00 9.24 3.39
Lao People's
Democratic
Republic 19.14 19.76 45.86 42.55 9.07 3.83 8.93 7.26 5.46 5.23
Macao, China 6.10 4.90 25.19 11.41 37.62 37.40 3.52 12.63 5.37 12.69
Malaysia 6.10 3.33 12.31 33.62 24.03 18.77 4.19 8.22 5.19 5.82
Maldives 21.95 7.98 1.38 -0.95 10.04 13.05 -42.12 -34.65 42.33 35.41
Myanmar 39.81 39.06 3.19 8.54 22.81 22.39 14.67 14.85 10.04 9.18
Nepal 16.12 22.13 2.18 0.34 3.53 3.30 -29.65 -21.63 0.96 1.53
New Zealand 7.94 8.86 4.86 2.60 -0.73 -0.57 4.44 5.36 4.92 3.97
Pakistan -1.74 -5.14 -2.84 4.84 7.32 6.80 13.85 14.89 9.23 9.07
Papua New
Guinea 0.25 7.95 -12.16 10.36 -0.20 -0.84 12.77 9.37 7.93 8.87
Philippines -5.66 2.42 -4.69 -1.29 22.03 16.35 8.47 5.14 16.37 12.98
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1995 2000 2004 2005 2006
Russian
Federation -6.57 -13.01 -5.86 9.22 0.96 1.75 5.83 7.19 3.19 -1.96
Singapore -0.80 -5.68 -1.63 -3.79 16.50 5.69 12.11 10.02 18.07 17.23
Solomon Islands -16.95 -7.09 -12.43 -17.63 16.40 11.08 -3.47 -3.97 14.10 8.90
IND ECON IND ECON IND ECON IND ECON IND ECON
Sri Lanka 13.82 6.81 -3.91 20.46 8.66 12.05 -8.28 -2.61 6.15 6.74
Thailand 11.31 12.86 12.38 11.08 11.23 10.96 -3.25 0.62 7.90 6.76
Tonga 19.01 -0.46 18.88 3.62 -5.30 -4.22 -20.15 -14.48 -1.69 -1.57
Turkey 9.74 9.53 28.10 44.50 4.11 -1.91 5.13 12.79 -4.62 -0.14
Vanuatu 14.27 2.56 34.08 23.28 5.12 5.45 15.47 9.57 16.85 12.30
Viet Nam 22.71 14.83 1.77 6.64 13.35 16.26 16.61 14.55 8.81 11.37
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Annex table 2. Annual growth rates of government expenditures (GOV) and capital investment
(CAP.INV) in the travel and tourism industry,
various years (percentage)
GOV CAP.INV GOV CAP.INV GOV CAP.INV GOV CAP.INV GOV CAP.INV
Australia 2.32 8.45 5.60 -11.19 2.33 -13.77 0.79 18.12 0.43 9.10
Azerbaijan 6.80 -7.13 -28.91 -26.15 15.14 20.55 -5.47 -1.72 24.64 13.49
Bangladesh 2.79 14.50 5.69 16.65 10.46 8.71 7.62 10.30 7.72 7.47
Brunei
Darussalam 68.23 22.76 13.58 -68.61 -11.52 94.84 -44.37 -43.88 2.69 5.93
Cambodia 5.92 1.38 15.83 31.09 -6.04 6.62 3.51 13.68 9.10 8.89
China -0.42 5.47 12.75 7.17 5.84 21.53 8.89 21.01 8.11 19.06
Fiji -1.72 -47.30 -0.53 -26.20 6.77 -52.97 6.27 4.82 1.98 -5.62
Hong Kong, China 10.39 32.13 6.15 5.87 1.39 9.24 -4.21 6.04 1.76 13.22
India 2.56 4.64 3.99 17.93 8.82 12.17 8.03 11.82 7.77 7.84
Indonesia 4.53 9.74 15.82 17.50 8.92 17.39 4.20 15.41 8.60 0.88
Islamic Republic
of Iran 4.14 -32.05 16.35 -1.34 -1.15 9.31 11.71 -2.97 7.63 3.07
Japan 4.18 0.47 5.59 0.52 2.78 20.68 3.42 -8.15 2.19 7.15
Kiribati 10.51 5.36 0.76 5.13 -0.42 -6.37 0.11 3.94 0.60 -5.65
Republic of Korea 6.19 9.68 7.61 21.21 7.73 8.73 9.38 5.22 9.63 -1.82
Lao People's
Democratic
Republic 75.66 -1.32 26.65 4.01 12.35 -9.09 7.31 -3.85 7.37 7.45
Macao, China 2.31 0.84 -11.75 -32.80 2.73 47.58 7.37 74.24 3.55 48.32
Malaysia 15.34 19.87 3.31 16.72 2.44 3.51 3.53 10.70 2.37 3.29
Maldives -12.05 -43.60 17.45 -18.55 17.34 34.26 7.01 3.31 19.00 13.90
Myanmar -1.08 0.87 8.06 41.52 11.66 19.12 14.56 14.48 7.41 7.05
Nepal 26.72 38.04 6.83 -8.80 3.70 2.81 2.90 4.62 3.22 3.16
New Zealand 3.58 8.32 -1.39 -8.89 1.13 -1.26 2.89 8.80 2.25 1.02
Pakistan -1.53 -15.52 -11.84 29.40 0.81 10.10 1.72 20.24 6.97 10.85
Papua New
Guinea 24.79 23.88 -4.24 63.24 -1.51 -5.54 2.85 3.78 3.65 7.00
Philippines 16.75 39.40 6.03 10.58 -2.65 1.52 1.13 -2.81 3.44 0.09
Russian
Federation -32.69 -18.53 15.34 9.00 2.22 3.60 7.31 28.07 5.51 -3.81
Singapore 10.96 0.46 21.47 -15.79 -1.73 -3.08 6.64 3.90 13.62 7.00
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1995 2000 2004 2005 2006
GOV CAP.INV GOV CAP.INV GOV CAP.INV GOV CAP.INV GOV CAP.INV
Solomon Islands 23.20 6.38 -14.97 -16.91 -5.07 9.27 11.95 2.54 8.30 7.71
Sri Lanka 17.54 -23.10 25.58 88.71 9.08 26.98 8.81 13.19 7.35 11.31
Thailand 17.38 22.55 3.09 -4.06 10.48 8.54 12.89 19.72 5.16 0.75
Tonga 3.82 -39.12 2.48 -35.32 -1.52 0.12 1.90 0.45 1.99 -0.24
Turkey 8.85 15.30 0.87 101.01 7.65 -26.32 8.39 55.05 2.13 12.92
Vanuatu -6.22 -20.06 -9.26 -10.13 4.26 6.16 5.79 -7.76 2.06 -3.41
Viet Nam -1.69 -16.10 1.20 14.52 9.77 10.07 4.93 3.40 7.77 9.79
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Annex table 3. Annual growth rates of employment in the tourism industry (IND) and
tourism economy (ECON), various years (percentage)
1995 1995 2000 2000 2004 2004 2005 2005 2006 2006
IND ECON IND ECON IND ECON IND ECON IND ECON
Australia 6.51 7.76 4.29 1.89 -5.09 -8.32 17.40 17.31 -1.35 0.25
Azerbaijan 48.41 30.50 -8.11 -5.08 18.94 16.34 -16.31 -2.22 -6.33 -5.63
Bangladesh 1.42 1.46 3.07 6.44 4.37 4.42 1.73 4.58 -0.05 2.71
Brunei Darusalam 0.36 -4.30 -2.99 2.34 -0.07 4.59 0.00 2.14 1.15 3.06
Cambodia 9.69 2.13 50.75 46.97 34.15 25.31 16.67 13.09 7.47 6.11
China 7.33 5.07 9.26 5.88 5.20 8.95 4.30 8.38 3.93 7.66
Fiji 13.97 2.17 6.21 -3.58 -2.15 -1.09 2.06 0.78 -4.15 -3.04
Hong Kong, China 8.44 -1.44 43.11 42.64 24.18 21.18 9.73 9.41 5.61 6.98
India 6.33 6.62 -10.86 -5.80 3.36 4.03 3.53 4.33 -1.78 -0.86
Indonesia -4.63 -5.08 -3.78 0.65 3.92 5.69 -2.14 2.17 -6.23 -4.97
Islamic Republic of
7.76 -10.66 -3.28 -1.24 2.17 1.94 3.70 4.62 0.99 0.26
Iran
Japan -2.38 -2.76 -0.75 -0.96 -4.91 -1.09 10.70 7.43 4.49 4.91
Kiribati -45.22 -46.67 -55.12 -57.04 -18.78 -18.76 8.53 8.39 9.44 10.72
Republic of Korea 3.90 4.40 -1.63 1.20 1.31 4.68 0.15 1.09 5.33 1.00
Lao People's
Democratic
Republic 14.41 15.04 41.64 38.26 5.26 -0.07 4.87 3.17 0.74 0.50
Macao, China 6.84 6.06 17.79 9.18 7.39 7.39 9.17 9.17 3.42 3.42
Malaysia -1.14 -4.69 12.12 31.55 22.09 15.57 0.59 3.24 3.67 3.27
Maldives 18.91 5.81 2.28 0.03 11.64 14.55 -36.88 -29.08 27.50 21.54
Myanmar 33.51 32.85 -0.84 3.78 11.37 11.02 2.50 2.65 4.94 4.20
Nepal 15.89 22.29 -1.01 -2.89 2.49 2.24 -29.43 -20.91 0.06 0.66
New Zealand 9.66 10.72 3.54 2.14 -2.50 -2.73 3.27 3.45 3.23 1.81
Pakistan -4.58 -7.98 -4.63 3.15 3.70 3.18 10.13 11.17 4.88 4.72
Papua New
Guinea 7.23 15.51 -7.20 16.72 0.17 -0.48 12.54 9.13 6.19 7.12
Philippines -1.97 5.30 8.95 6.62 14.21 8.59 4.49 1.66 10.35 6.62
Russian
-5.75 -12.08 -14.21 -0.82 -4.15 -3.41 0.74 2.01 -2.34 -7.11
Federation
Singapore 7.92 13.86 12.66 7.93 15.25 1.93 10.65 7.66 17.56 15.63
Solomon Islands -19.25 -9.55 5.67 -0.68 15.55 10.22 -5.18 -5.69 11.01 5.89
Sri Lanka 6.58 -0.07 -7.22 16.65 4.72 8.04 -12.66 -7.18 1.80 2.37
Thailand 5.85 7.77 13.32 12.34 8.61 8.58 -7.14 -3.21 5.35 4.26
Tonga 15.84 -2.45 13.79 -0.32 -6.63 -5.62 -21.65 -16.31 -3.19 -3.08
Turkey 7.24 8.36 19.37 35.23 -2.61 -8.24 -0.40 6.86 -7.95 -3.63
Vanuatu 18.16 6.77 33.12 23.16 2.94 3.23 9.94 4.73 16.05 11.88
Viet Nam 14.58 6.87 -2.56 2.31 7.58 10.44 9.55 7.55 4.11 6.65
Source: WTTC, Country TSA data files. www.wttc.org
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Annex 2. Monitoring and evaluation elements
Action: I.1.(a). Improve national tourism statistics and indicators, including indicators of the socio-
1. Activities to be implemented
(iv) Organize a seminar to consider additional data needs and their collection mechanism.
(v) Introduce the new data capturing mechanism and reporting system.
Lead organization
Cooperating organizations
3. Time frame
4. Monitoring indicators
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prepared by (date)
(iv) Recommendations of the seminar concerning additional data needs and their collection
(v) A national tourism statistics report prepared based on the recommendations of the
6. Results achieved
7. Evaluation of accomplishments
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Annex 3. Monitoring criteria (showing theme I only)
Theme I. Enhancing the role of tourism in socio-economic development and poverty reduction
2. To develop tourism in a
comprehensive and sustainable
manner
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(e) Expand the role of tourism 100 90 80 70 60 50 40 30 20 10 0
________________________
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