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ALIDE – ASOCIACION DE INSTITUCIONES FINANCIERAS PARA EL DESARROLLO DE LATINO AMERICANA Y EL CARIBBEAN 52 UNWTO Commission - Technical Seminar on Tourism Investments in the Americas Asuncion, Paraguay 17 – 18 May 2011
AN INTEGRATED APPROACH TO BUILDING A SUSTAINABLE FUTURE FOR GENERATIONS TO COME! Presented by Donald O. Charles General Manager – ABDB Chairman, ALIDE Tourism Technical Committee
- 2004 to 2007 - 2000 - 1996 1995 2008 & 2009 - 2001 to 2003 - 1997 to 1999 - -
Key Tourism Highlights – UNWTO Report Tourism Receipts - USD 2000 2008 2009 2009 – per arrival Americas 188.1 B 165.2 B 1,170.00 North America 138.9 B 118.9 B 1,290.00 Caribbean 23.6 B 22.2 B 1,140.00 Central America 6.4 B 5.9 B 770.00 South America 19.2 B 18.2 B 850.00
Key Tourism Highlights – UNWTO Report Arrivals 1990 2000 2008 2009 Americas 92,804 M 128,120 M 147,830 M 140,679 M Argentine 1.93 M 2.91 M 4.70 M 4.33 M Brazil 1.09 M 5.31 M 5.05 M 4.81 M Colombia 813 K 557 K 2.17 M - Costa Rica 435 K 1.09 M 2.09 M 1.92 M Cuba 327 K 1.74 M 2.32 M 2.41 M El Salvador 194 K 795 K 1.39 M 1.09 M Mexico 17,172 M 20, 641 M 22,637 M 21,454 M Venezuela 525 K 469 K 744 K - Jamaica 989 K 1.32 M 1.77 M 1.83 M
OPENING COMMENTS BY MEETING CHAIRMAN – DONALD CHARLES
Acts as the financial agent for the BNDES - FINEM program. Also, manages the Constitutional Financing Fund of the North East. Offers the PROATUR program, which is a line of dedicated funding for tourism aimed at the private sector in touristic designated towns that have been certified by MINISTRY OF TOURISM and for the following purposes:-
implementation, expansion, modernization and reform of
enterprises in the tourism industry.
finance new investments in fixed assets & for working
Supports the building of sustainable tourism business’ within the region to boost the economy. Also, facilitates the integration of the policies of federal & state governments for the Amazon as it relates to the Tourism Incentive program that encourage social sectors to explore the potential of the tourist routes of the Amazon.
Provides loans for Amazon Tourism development to
individual borrowers of up to 36 months
Provides business loans for working capital and rotating
lines of credit to enterprises & travel agencies up 360 days
Has a division specializing in tourism and there is a direct relationship with tourism enterprises; regional & community development agencies; associations, chambers of commerce and tourism institutions; and MSMEs. It has been established that there is the priority need to create & improve infrastructure
Tourism Banking: provides funding for recreation& leisure,
lodging, food and equipment
Tourism Micro-enterprises: provides funding for similar
purposes as stated about plus for investments, working
There are many international development finance institutions that provide funding for a variety of purposes within the LAC Region. In recent years, there has been an attempt by these institutions to take a harmonized approach to the mobilization and channeling of funds through the most effect distribution system, which is in most cases the development banks especially for projects that involve MSMEs and poverty reduction
The Inter-American Development Bank has a specific Tourism Development program that offers loans and technical cooperation to finance studies and investment projects. Related requests for funding should have any of the following objectives:-
To attract international tourism as well as promoting and facilitating national tourism
Developing areas with tourism potential that are not yet developed economically
To create new employment opportunities
To contribute to Latin American regional integration
The Bank’s main areas of activity related to tourism are for INFRASTRUCTURE WORKS and for BASIC FACILITIES , including HOTELS and DEVELOPMENT OF CULTURAL TOURIST ATTRACTIONS.
However, the bank is guided by its policies related to providing financing.
While, the Bank expects that the public and private sector agencies and financial institutions with provide the financing for BASIC FACILITIES it can relax its policy in exceptional circumstances such as:-
The creation of overlooks, bicycle paths, pedestrian walks along scenic routes
The sustainable management of tourist areas such as:- the adapting to climate change; implementation of natural disaster risk management and mitigation procedures in coastal areas; management of beaches; use of renewable energy
Developing systems for the regulation, rating, control and inspection of tourism businesses
In Brazil, the Bank has played an important role in providing funding for Tourism Development Program in the North East of Brazil (PRODETUR) that is executed by BNB. The program is aimed at social and economic development brought about by developing the tourist activity and resulting in the improvement of life conditions of the inhabitants by creating basic infrastructure; attracting investments, and institutional development. The first phase of PRODETUR was carried out between 1995 and 2004 with a total investment of US$736 million (US$400 million were contributed by IDB) directed at investments in airports, basic sanitation and transport
The International Finance Corporation is an affiliate of the World Bank Group whose vision is to assist people to escape poverty and improve their lives. It is the largest multilateral developmental financing institution investing in private enterprises in emerging markets.
It provides investment and advisory support to private sector clients and works in “additionality” to existing sources of financing
There are many local, regional and international commercial financial institutions providing support for the sector. However, based on the risk adverse nature of these institutions many don’t provide funding for early stage projects that have inadequate equity investments and or tangible assets to pledge as collateral. These institutions tend to finance the larger upscale projects and provide very little support to the MSME sector
Need for a coordinated approach between Councils of Tourism to expand market share
Need to determine and prioritize the key development challenges of the tourism sector related to investment and develop a specific plan with precise targets for tourism development
Need for tourism programs to be developed from the perspective of the demand requirements as determined by market research; and the supply markets should be from diversified destinations with future growth potential
The Brazilian government initiated as part of its National Tourism Policy, a Tourism Development Program named PRODETUR. This program of action for Integrated Development of Tourism called for the financing and implementation of tourism infrastructure in locations considered potential inducers of private investment. This program was implemented primarily in the Northeast with a total of US736 million being invested in phase I.
Need to provide support to the tourism enterprises & entrepreneurs for the strengthening of their management processes, enhancement skills and to improve capacities to identify and access new opportunities
Need to establish region wide certification standards for quality and the criteria for the classification of products offered in the sector
Facilitating the access to financing and technical assistance to MSMEs
Based on the need to provide technical training and business assistance to many of the MSME business enterprises and entrepreneurs, a unique opportunity exists for the use of volunteers to provide the required services at a fraction of the cost of contract industry professionals at market costs.
CDC Development Solutions of Washington, DC leverages public, private, and volunteer resources to strengthen MSMEs and the institutions, governments, and industries that drive economic growth in emerging markets.
CDS applies unique methods to create opportunities for small businesses and entrepreneurs working within the tourism supply chains. They identify “value gaps” where opportunities for local development through jobs creation, new business planning, and supplier relationships have not yet been realized
Two unique MBA Volunteer programs are accessible, which utilize the cutting-edge expertise of these young professionals for either 1-6 month or year long assignments
There is another volunteer organization, GNTP that intends to focus on leveraging existing efforts to help build a large network of destinations in South and Central America with various degrees of needs
Additionally, this volunteer network would collect extremely important information about the various destinations that they visit and feed this information through the network and beyond that would impact positively on future visitor travel to the region
To utilize these volunteer networks to direct contributions for social and environmental development projects to a “Trust Fund” that would be administered through the vast banking network of ALIDE member banking institutions
Create a Tourism Development Fund that would have tax-exempt status granted by all participating countries. The Fund would be underwritten by the Development Banks and allocations to DBs would be approved by a Tourism Investment Committee
Create a Vacation Debit/Credit Card to be marketed around the world. Credit portion to be financed over 24 months
Marketing of the Region to generate increased tourism arrivals with the related growth in revenue that will ensure debt repayments and profits for owners / investors as well as increased public sector income
Need to promote the uniqueness of the region and offer combined destinations tour packages
Need to brand the region as a premier & exquisite vacation destination
Need to develop strategies to engender greater public awareness as to the importance and benefits of tourism for economic growth and establish an incentive system to improve customer service and productivity