151119524 revised-tourism-policy-position-paper-11 feb2013gg

Position Paper – Developing Tourism Policy for KP Page 1 | 43
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Position Paper – Developing Tourism Policy for KP

DRAFT
January, 2013
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ContractNo.:
Task Order No.
Contractor Name: Chemonics International, Inc.
USAID TechnicalOffice: Officeof Economic Opportunities
USAID Pakistan
Date of Report: November,2012
Document Title: PositionPaper– DevelopingTourismPolicyforKP
Author’s Name: USAID Pakistan
Activity Title and Number:
Work Plan Action ID number:
The views expressed in this publication do not necessarily reflect the views of the United
States Agency for International Development, the United States Government or
Chemonics International Inc.

Data Page
Name of Component: Business Enabling
Environment
Author: USAID Pakistan
Practice Area: BEE
Tourism, policy Khyber Pakhtunkhwa, private sector,
economic growth
Abstract
Thisreport presents the position paper for developing tourism policy for KP,
identifying key issues that need to be addressed in the proposed policy and
initiates the discussion around these issues.

Table of Contents
DATAPAGE 4
ABSTRACT 5
LIST OF FIGURES 6
ACKNOWLEDGEMENTS 8
EXECUTIVE SUMMARY 9
1. BACKGROUND AND CONTEXT 10
2. EXISTING AND PREVIOUS POLICIES AND PLANS 15
2.1TOURISM POLICIES AND PLANS 15
2.2KP’S COMPREHENSIVE DEVELOPMENT STRATEGY 2010-17 16
2.3ECONOMIC GROWTH STRATEGYOF KP 18
2.4TOURISM VISION DOCUMENT OF KP 18
2.5SWOTANALYSIS 20
2.6REVIEW OF TOURISM LEGAL FRAMEWORK
LICENSING/REGISTRATIONAND REGULATIONOF SERVICE PROVIDERS IN THE
21
TOURISMINDUSTRY 21
LAWS AFFECTING ENVIRONMENT AND HERITAGE PROTECTION 23
POLICY MAKING AND FACILITATION 24
REFORM RECOMMENDATIONS 24
3. KEY ISSUES/CHALLENGESFORKP TOURISM SECTOR 26
3.1CROSS-CUTTINGISSUES 27
3.2SECTOR-SPECIFICISSUES 30
4. NEED FOR TOURISM POLICY – SOME KEY ISSUES 36
APPENDIXA - LIST OF PERSONS CONSULTED 40
APPENDIXB - DOCUMENTS REVIEWED 43
List of Figures
Figure 1: Tourism Receipts and Exports ............................................................................. 10
Figure 2: Domestic Tourism Volume 2009 ......................................................................... 11
Figure 3: Foreign Tourism in Pakistan ................................................................................. 11

Figure 4: Origin-wise Volume of Foreign Tourists........................................................... 12
Figure 6: Challenges Impeding Growth of Tourism Sector in KP ...............................
27
Figure 7: Developing Tourism Policy for KP ...................................................................... 36

ACKNOWLEDGEMENTS
This position paper has been developed through support from USAID and
presents findings evolved out of extensive consultations with stakeholders from
public and private sectors of KP from tourism and other allied sectors. The
document also extensively relies on the vision document for tourism sector
developed by USAID, besides an extensive literature review of various relevant
documents. Section 1 covering background and context has been mostly
captured from the Vision Document. The complete list of documents consulted is
also appended at the end. A number of stakeholders have provided useful
comments to develop this position paper. The list of all persons consulted is
appended at the end (Appendix A), whereas the key highlights of various
stakeholder consultations have been compiled separately and available with
FIRMS. The FIRMS team members, especially the BEE and Tourism Specialist
also gave extensive input to the team of consultants.

EXECUTIVE SUMMARY
Tourism sector of Pakistan in general, and KP in particular, has a high potential
to contribute in the economic development of the country. The tourism sector in
KP has been facing a host of challenges that have been impeding growth of the
sector in KP. A thorough understanding of these constraints is required to
develop strategies to address these bottlenecks. Some of these challenges are
cross-cutting, affecting the overall economy such as the sluggish economic
growth, unclear policy and institutional regime in the wake of 18th constitutional
amendment, poor law and order situation and low public sector capacity to
facilitate and regulate private sector. On the other hand, there are also some
serious sector-specific issues affecting tourism sector such as limited availability
of information to monitor travel and tourism trends preventing planning; low
quality of workforce; low level of private investments; absence of standards;
poor infrastructure; limited and sub-optimal marketing activities, etc. currently
the Govt. of KP does not have a clearly articulated formal tourism policy.
However, considering that the tourism sector requires coordinated efforts by a
number of departments and agencies such as environment, wild life, forestry,
etc. besides the Tourism Department itself, along with TCKP, the need for having
such a policy is critical. Moreover a well laid out tourism policy would
demonstrate long-term commitment of government in the sector and would
form the basis for shared understanding of and synergized actions and
coordinated planning by different stakeholders.
The proposed policy must focus on bringing clarity in government’s role at
various levels, in the wake of 18th constitutional amendment and should
delineate clearly the role of government vis-à-vis the private sector. Ideally the
government should adopt the role of a regulator as well as that of the facilitator,
whereas the private sector should come ahead for service provision. The policy
must also include a well laid out institutional structure to implement the policy
to supplement TCKP’s capacity. While there is a need to provide incentives to
private sector to invest, such a structure should take into account the cost
implications of these incentives and should evaluate the value for money
considerations. The incentives should also be closely tied with some well laid out
policy considerations. The policy framework should be based on and linked with
a clear resource framework, where the government can highlight the extent of its
contribution through various means/forms. In the absence of sufficient
resources, the government may consider mobilizing additional resources
through private participation, commercial lending or donors’ assistance. Last but
not the least, the policy must focus on sustainable tourism development,
capitalizing on country’s diverse geography and opportunities for ecotourism
development, community tourism and research.

1. Background and Context1
The tourism sector2 has gained significant importance over the past few decades
all over the world. Pakistan in general and KP in particular, blessed with
immense tourism potential, have also been endeavoring to fully capitalize on this
potential despite the security challenges faced by the country. While the province
of Khyber Pakhtunkhwa boasts having three fourth of the country’s tourism
assets, with sites representing archeological, cultural, historical and religious
significance and attractive natural and scenic beauty, the province has also been
facing severe conflict and security challenges. This calls for a renewed effort on
government’s part to come up with innovative solutions to promote tourism in
the province and facilitate investment in the sector.
Tourism Sector in Pakistan - Tourism sector of
Pakistan in general, and KP in particular, has a
high potential to contribute in the economic
development of the country. During the year
2008-09, total share of tourism
receipts in the GNP was only 0.3%;
while its share in exports was only
1.2%.
Source: StateBank of Pakistan
Figure1: Tourism Receipts and Exports
DomesticTourisminPakistan
In Pakistan, total number of domestic tourists during the year 2009 was 46.07
million.3 About half of these tourists were the people who travelled to meet their
social obligations (friends, relatives, etc.). About 14% travelled for recreation
purpose. Other important categories were of the people who travelled for
business, health or religious reasons.
1
Much of the content is this section has been taken from Tourism Vision Document developed by USAID.
2
The World Tourism Organization defines tourists as ‘peoplewho travel to and stay in places outside their usual
environment for more than twenty-four (24) hours and not more than one consecutive year for leisure, business
and other purposes not related to the exercise of an activity remunerated from within the place visited’.
3
Figure based on Domestic Tourism Survey – 2000 by Ministry of Tourism
Year Tourism Receipts
2006-07 PKR 16,906 Million
2007-08 PKR 16,486 Million
2008-09 PKR 17,392 Million

Figure2: Domestic Tourism Volume2009
International Toruism in Pakistan
In 2009, on a global basis, there were 880 million international tourists;
compared to a figure of 920 million during the previous year. Total number of
foreign tourists coming to Pakistan in 2009 were 0.873 million; compared to a
figure of 0.557 million in the year 2000. Pakistan’s share of the global tourism
market in 2009 was only 0.09%; which cannot be termed satisfactory. In South
Asia, Pakistan’s share from amongst the total 10 million foreign tourists was
8.7%; compared to India’s share of 50%.
Figure4: Origin-wiseVolumeof ForeignTourists
Holiday/
Recreation
14.7%
VFR
56.0%
Business
%21.4
Others
%7.9
Purpose wise Arrival ofForeign Tourists
Source: Ministry of Tourism)(
0
100
200
300
400
500
600
700
800
900
1,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
557
500 498 501
648
798
898
840 823
873No
.
of
To
uri
sts
(0
00
)
Pakistan Foriegn TouristsArrivalTrend
Source: Ministry of Toruism, via Ministry of Interior)(
Figure3: ForeignTourism inPakistan

Majority of the foreign tourists come to Pakistan from Europe. In 2009, 44% of
the total arrivals into Pakistan were from Europe; major share of which was
claimed by overseas Pakistanis coming from United Kingdom. South Asia was the
second largest origin for international tourists coming to Pakistan, accounting for
21% of the total. Of these tourists, a major share is contributed by the Sikhs
coming from India for visiting their holy places.
Toruism in KP
KP is a unique province of Pakistan where all the types of tourism attractions
exist. These include tourism sites with natural, scenic beauty, sites with unique
historical and/or religious significance, sites foe eco-tourism, winter tourism,
shopping, cuisines, sports and festivals. No other province of Pakistan can claim
to have such diversity of Tourism assets. Some more popular tourist locations in
KP include Swat Valley, Kaghan Valley, Chitral Valley, Dir Valley, Abbottabad and
Galliat, Peshawar and Khyber Pass and surroundings.
As per some estimates4, the total number of domestic tourists visiting Khyber
Pakhtunkhwa in a year is about 8.8 million; which account for about 19% share
of the total national domestic tourist traffic. A higher share of Khyber
Pakhtunkhwa in domestic tourism compared to its share in population is a clear
indicator of the competitive edge the province possesses over other
provinces/regions of the country. On the other hand, total number of foreign
tourists arriving in Khyber Pakhtunkhwa in 2009 was 47,900; which translated
into 5.6% share of the national foreign tourist traffic.
Tourism Institutional Structure at KP
In KP, Tourism Corporation Khyber Pakhtunkhwa (TCKP) and the Department of
Tourists Services (DTS) are two major entities responsible for tourism
organisation and management. In addition, Pak Austrian Institute of Tourism and
Hotel Management (PAITHM) also exists in the province which is responsible for
producing skilled human resources in the hospitality sector. All these
organisations are collectively working under the Department of Sports, Tourism,
Youth Affairs, Archaeology& Museum. A delegated Secretary performs the
responsibility of an official in-charge of the Department. After the devolution it
4
Figures for 2009; KP TourismVision Document

has been presumed that PTDC’s motels and asserts in KP will be handed over to
the same Secretariat. In order to compete in both the domestic and international
markets and also to efficiently perform the newly assigned responsibilities, it is
required that both TCKP and DTS should restructure their originations
accordingly.
Figure5: Organizational Structure of Department of Sports, Tourism, Youth Affairs, Archaeology& Museum
In order to promote the tourism potentials of Khyber Pakhtunkhwa, the Tourism
Corporation Khyber Pakhtunkhwa (TCKP) was established as public limited
company in 1991. TCKP is governed by Board of Directors, where the provincial
tourism minister serves as its chairman while the relevant secretaries perform
the responsibilities of the directors. It is headed by a Managing Director as it
chief executive. The main responsibilities of the Corporation are:
Promotion of tourism by exploiting the potential;
Produce publicity and promotional material for distribution at home and abroad;
Develop packages to attract domestic and international tourist by involving
private sector;
Organize tourism fairs at home and attend international tourism fairs to
introduce the tourist product of KP;
Build hotels and motels, where private sector is shy to invest;
Monitor and manage the tourism activities;
Protect the tourism assets by bringing the awareness in general public by holding
awareness campaigns;
Play the role of catalyst by providing level playing field for the private sector

Figure6: Organizational Structure of TCKP
Department of Tourist Services (DTS)
In KP, the office of Department of Tourist Services (DTS) was established by
Federal Government in 1988, however, in March, 2011 after the devolution this
Department came under the administrative control of government of Khyber
Pakhtunkhwa.The main role of the Department is to provide measures for
controlling and regulating the standard of service and amenities for tourists in
Hotels, Motels, Resorts and Restaurants.
The Department of Tourists Services has a mandate to implements the following three
acts.
1. The Pakistan Hotel and Restaurants Act 1976 & Rules 1977
2. The Travel Agencies Act 1976 & Rules 1977
3. The Pakistan Tourist Guides Act, 1976 and Rules, 1977

Figure7: Organizational Structure of DTS
Both the organization structure and the Acts implemented by DTS equally
require drastic amendments. The number of skilled human resources in the
Department should be increased on priority. It is also important to improve the
existing rating system of hotels and restaurants. In addition, standards specified
for Tourist Guides should be amended and properly categorized. It is also
recommended that an individual entity should be established within the
Department for regular evaluation of the tourists’ guides and the concerned
training providers.
2. Existing and Previous Policies and Plans
2.1 Tourism Policies and Plans
In Pakistan, the available literature on tourism planning and management reveals
that the country’s first master plan was conceived in 1967. The plan recognized
environmental issues in general terms, however, it did not emphasize
environmental conservation, urbanization and landscape preservation.
Resultantly, hotels and tourists resorts emerged close to natural attractions and
archaeological monuments. From 1967 till the formulation of National Tourism
Policy of 1990 some planning attempts were made for isolated projects such as
UNESCO’ Master Plan (1972) for the Preservation of MohenjoDaro and
compilation of tourists’ statistics in 1971 etc., however no comprehensive and
structured effort was undertaken to promote tourism in the country, In order to
control pollution in mountainous areas some environmental planning measures
were also introduced in 1983 and in 1988 by making mountaineering and
trekking expeditions responsible for leaving camping sites clean of garbage and
making contribution of $200 for clean -up operation. The Government of Pakistan
presented its’ first formal National Tourism Policy in 1990, however, due to some
fundamental issues this Policy has rarely been implemented. The major reasons
of this failure in implementation included absence of stakeholder involvement,
poorly defined responsibilities of various public and private sector actors,
financial limitations, institutional constraints and low capacity. In 2010, the
Tourism Ministry drafted a relatively more comprehensive National Tourism
Policy. The policy identified challenges and constraints for tourism industry in
Pakistan, followed by marketing and developmental strategies. The marketing
strategy emphasized on public private partnership, diversification of tourism
Assistant Controller
(B-17) Peshawar
Inspector (B-16)
Inspector Hotels & Restaurants
Inspector (B-16)
Inspector Travel Agencies
Superintendent
(BS-16)

products, information technologies, target markets for selling specific products,
whilst, the developmental strategy emphasized the role of public (Federal &
Provincial governments) and private sectors in tourism development. It also
proposed PPP opportunities in tourism sector of the Country. Furthermore, the
draft policy also recognized the importance of closer international cooperation,
joint marketing using international organizations, multi-country and bilateral
relations for tourism development.
Although, the draft tourism policy, 2010 is comparatively more comprehensive
than national tourism policy, 1990, however, it still paid negligible attention to
some issues of grave concern like:
The three major acts covering hotels, travel agents, and tourist guide, which
all are outdated, were presented as part of the draft policy without any
appreciable changes for tackling the current needs of the industry.
PPP opportunities in Pakistan’s tourism sector were presented more
generically without specifying areas for partnership and relevant investment
in each province.
Like tourism policy, 1990, the action plan of the draft tourism policy poorly defined
stakeholders’ responsibilities.
For the sake of policies integration between provinces and the Federation
“Pakistan National Tourism Council”, actually proposed in national tourism
policy, 1990, was reactivated without any structural or functional changes for
the sake of its more proactive role as compared to its dormant status in the
past.
Some of the unrealistic concessions and incentives mentioned in tourism
policy, 1990 were repeated in the draft policy, which needs careful
examination for on ground implementation.
The draft policy was presumed for achieving its strategic goals within the
next 10 years, but keeping in view the present political turmoil and financial
instability of the country the proposed time frame is still a debatable issue.
In order to maintain skilled staff complement in the tourism sector, Tourism
Master Plan (2000) estimated an average of 3000 additional staff need to be
upgraded each year. At present the total annual skilled staff output of the
tourism training institutes is approximately 515, which is clearly insufficient
to cope with the demand of the tourism industry. Although, the draft tourism
policy has only highlighted the training need issue of the sector, however, it
failed to present a robust action plan to overcome this shortcoming of the
industry.
Although, the draft policy exhibited glimpses of community importance in
tourism promotion, however, it neither included their exact views in the
formulation of the policy nor it describe their future role in sustainable
tourism development of the country.
2.2 KP’s Comprehensive Development Strategy 2010-17
The Comprehensive Development Strategy (CDS) of KP presents the provincial
government’s vision and strategic direction and provides a comprehensive

development plan. The CDS also presents short, medium and long term plans for
various sectors. CDS presented an overarching development strategy covering all
areas with priority policy and programs ranging from public finance, governance,
social development, food policy, Agriculture employment, Irrigation, Power and
Industrial development. CDS also extended the objectives laid out under the
national Poverty Reduction Strategy Paper (II). The CDS also recognized tourism
as province’s key strength and important means of livelihood to substantial
percentage of population in Swat, Chitral, Abbottabad and Mansehra. The key
priorities for tourism sector as listed in CDS are given below.
Tourism Sector Priorities and Allocations
Institutional strengthening and capacity building of the Department, including STC (now TCKP)
– PKR 450 Million;
Organization of sport events: national, provincial and regional events, including promotion
of traditional sports and games – PKR 200Million;
Construction of cultural exhibition halls at divisional level and art display galleries – PKR 330
Million;
Holding of cultural shows and activities, and display of handicrafts – PKR 50 Million;
Assistance to drama artists, poets, musicians, artists, printing publication of literary and artistic
works and allied activities – PKR 135 Million;
Installation of chairlifts in key tourist destinations – PKR 3,500 Million;
Commissioning and leasing of GoKP guest houses – PKR 450 Million;
Holding of festivals and tourism promotion events – PKR 600 Million;
Creation of transport fleet – PKR 470 Million;
Creation of tourists’ hostels and centers – PKR320 Million;
Development of publicity and promotional material – PKR 325 Million;
Operationalization and transfer of federal government properties in
KhyberPakhtunkhwa to STC (now TCKP) – PKR 400 Million;
Promotion of Khyber Pakhtunkhwa tourism abroad – PKR 178 Million;
Exploring virgin tourist sites in Khyber Pakhtunkhwa – PKR 125 Million;
Creation of water and air transportation – PKR 1,000 Million;
Subsidies in various heads for the private sector from the tourism and hotel sector, thus making
tourism an income-generating activity for the masses – PKR 320 Million;
Procurement of caravans/mobile homes and log cabins for installation and utilization at tourist
sites – PKR 800 Million;
Skiing facilities and water sports in feasible areas – PKR 1,000 Million;
Construction of youth development centers and hostels, and the purchase of land at divisional
level – PKR 200 Million;
Cash awards to talented youth, and youth exchange programmes – PKR 70 Million;
Conservation and rehabilitation of historical sites in Khyber Pakhtunkhwa – PKR 400 Million;
Upgrading and maintenance of existing museums, and the construction of new museums –
PKR 80 Million;

Promotion of cultural heritage, domestically and abroad – PKR 70 Million;and
Exploration and excavation and documentation of archeological sites, and publication of reports.
– PKR 28 Million
SOURCE: Comprehensive Development Strategy 2010-17
2.3 Economic Growth Strategy of KP
Economic Growth Strategy of KP reinforced the key priorities of CDS and
provided a framework to stimulate growth in potential ‘growth/priority sectors’
of the economy through enhanced public investments and complementary
sectoral policies. Tourism was one of the priority sectors highlighted in this
strategy.
The Economic Growth strategy recognized that abundance of natural tourism
potential in the province can potentially transform the sector into a major driver
of growth if security situation and internal conflicts settle down. The strategy
also highlighted that in areas with relatively better law and order situation,
domestic tourism can be promoted to provide sources of employment and
income for the population of these areas. In order to achieve these objectives, the
strategy considers private sector as taking the lead role through investments,
while TCKP contributing through monitoring and regulation. The strategy also
recognized the limitations in terms of absence of data availability on tourist
arrivals, spending and visits or assets to facilitate the priorities in different types
of tourism such as ecotourism, mountain climbing, cultural tourism etc. The
strategy also envisaged creation of a marketing department at TCKP for tourism
promotion.
2.4 Tourism Vision Document of KP
The tourism vision document recently developed with the technical assistance of
USAID Firms Project presented a long term approach in the form of a Vision
Statement which aimed to develop an international competitive tourism sector
which can act as the engine of economic growth for Khyber Pakhtunkhwa. The
document based its strategy on the key pillars of institutional & regulatory
reforms, infrastructure development, service quality assurance, human resource
development, aggressive marketing, investment promotion and environmental
conservation. The major recommendations of the vision document are outlined
below:
Institutional/Regulatory Reforms
Elevate Tourism to a high priority economic growth sector in the provincial
government.
Establish a Policy Think Tank on Tourism for broad based intellectual input on
policy and promotion of Tourism.
Facilitate improvement of security environment in Swat and other tourist places.
Transfer the control of tourism related commercial ventures to private sector.
Provide a sustainable framework for Public Private Partnership in KP.

Strengthen KP Tourism Corporation as a provincial regulator and facilitator.
Restructure PTDC as a sector development company for national branding and
international promotion.
Facilitate prompt issuance of Pakistani visa to aspiring visitors abroad. Ensure
environmental conservation of tourism assets.
Standards & Certifications
Upgrade the outdated and obsolete laws governing the tourism sector.
Entrust the enforcement of standards and certifications to TCKP.
Enforce standards and certifications for hotels, tourist guides, transporters and
tour operators.
Marketing & Promotion
Focus on domestic tourists in the first phase of strategy as a thrust area to revive
the tourism Sector.
Focus on Buddhist & adventure tourists in the international tourist segment to
revitalize the flow of tourists with new vigor and marketing.
Plan and execute the marketing the “Brand of Pakistan” and KP with target tourist
segments as part of a master plan.
Develop interesting and multilingual tourism information and promotion material
and ensure its wide distribution and regular update.
Develop a KP Tourism portal by TCKP as an interactive tool for promotion and
connectivity.
Promote and develop public private partnerships for tourism marketing.
Launch mass media campaign to promote tourism in domestic and international
markets.
Involve PIA and Pakistan Railways for an integrated role in tourism promotion.
Organize cultural and sports events for tourism promotion.
Mobilize community for strengthening tourist friendly environment.
Enhance participation in international tourism fairs and events.
Tourism Infrastructure Development
Improve/build access roads to tourist towns and tourist attraction places.
Improve electricity supply in tourist areas.
Improve transportation facilities to tourist places.
Make Saidu Sharif airport operational.
Provide/improve support for rehabilitation of tourism infrastructure.
Develop new tourist sites and attractions.
Strengthen the institution of museums for tourism promotion in KP.

Develop archives of tourism assets.
Improve tourist facilitation services.
Human Resource Development
Undertake a holistic view and develop baseline data for human resource development
needs in the sector.
Strengthen and upgrade the curriculum and facilities of the existing Tourism training
institutes.
Access to Finance
Improve the availability of commercial lending through a participatory approach by
SBP and commercial banks.
Ensure tourism specific prudential regulations and competitive cost of financing.
Facilitate the existing and new investors through investment guidance and
regulatory support.
Mobilize donor community to participate in tourism development projects in the
province.
2.5 SWOT Analysis
The following SWOT analysis lists down the overall situation of tourism sector in KP.
SWOT Analysis of Tourism Sector of KP
Strengths Weaknesses

Large number of Natural and cultural
tourism assets
Potential foradventure, culture
and nature tourism Sites for
winter tourism
Competitive rates
Extensive presence of
hotel clusters
Unique Buddha tourism sites for
religious tourism
Law and order situation
Weak government capacity Insufficient
public and private investments
Dilapidated tourism infrastructure
(roads, bridges, electricity)
Short tourist season in mountainous
areas
Substandard tourist facilitation
services
Hesitation of private sector to invest
High costof doing business
Lackof focused and proper
marketing
Low quality of workforce
Opportunities Threats
Greater provincial autonomy in the
wake of 18th amendment and KP
Government willingness
Increase of law and order crisis
Natural disaster-prone area
Limited availability of funds
to priorities tourism sector
Untapped tourism potential
Vast poolof domestic tourists
Focus on reconstruction
through donors support
Low public sector capacity and
change in leadership of
stakeholder departments Change
of political leadership and shifting
of priorities
2.6 Review of Tourism Legal Framework
This section looks at the legal and regulatory framework of the Tourism sector with a
view to:
a) Identify deficiencies in the legal framework
b) Whether the interest of the tourist is adequately protected by the legal
framework
c) Whether there are any legal barriers to robust and effective enforcement.
Licensing/Registration and Regulation of Service Providers in the tourism Industry

The Federal government regulated hotels, travel agencies and tourist guides
prior to the 18th amendment. However all these subjects are now devolved/or
belong to the provincial governments except carriage of passengers by air or sea,
which continues to be a federal subject5.
Licensing/registration and regulatory requirements of service providers in the Tourism
Industry are as follows:
Hotel and Restaurant Act, 1976
The Hotel and Restaurant Act, 1976 regulates the standards of service and
amenities for tourists in hotels and restaurants. The Act had been passed by
Parliament in pursuance of Article 144, which allows the Federation to legislate
on a subject when so requested by two or more provinces. The Act prescribes a
star system of classification of hotels. The system allows the Controller to grant
up to five stars to hotels depending on their services and comfort. The Act also
allows the Controller to fix the maximum number of guests, which may be
accommodated in each room and/or unit of accommodation. He may also fix
rates for board lodging and other charges6.
The Act provides for the offices of Controller, Deputy Controller and Assistant
Controller to administer the Act7. The Act also establishes a Hotel and
Restaurants Committee to advise the Federal Government in relation to matters
pertaining to the Act. The Act requires the following compliances:
i) Registration related compliances - Section 5(2) requires Hotels and
restaurants to render a certificate of medical fitness of staff prior to
registration. It also requires hotels and restaurants to comply with the
requisite standards of health and comfort and building safety prior to
obtaining registration.
ii) Information related compliances- Section 8(2)(e) requires owners to enter
the names of guests in a specified register. Section 9 new owners to report
change of ownership etc
Travel Agencies Act, 1976 and Rules, 1977
The Travel Agencies Act regulates both travel agencies and tour operators -this is
done by including tour operators in the definition of travel agencies8. The Act
does not apply to Government Enterprises, national carriers of Pakistan and
foreign airlines duly authorized to operate to and from Pakistan and travel
agencies allowed to perform Hajj and other pilgrim related work9.
The Act sets up a Travel Agencies Regulatory Committee to advise the federal
government in the implementation of the provisions of the Act and assist in the
5
See Item No 24, Federal Legislative List, Schedule IV, Constitution of Pakistan, 1973
6
Section 10, Hotel and Restaurants Act, 1976
7
Section 3, Hotel and Restaurants Act, 1976
8
See section 2(f)(ii), Travel Agencies Act, 1976
9
Section 5, Travel Agencies Act, 1976

preparation of a code of conduct for travel agencies. The Act requires the
following compliances:
i) Registration compliances - Section 4 requires travel agency operators to
apply for and obtain a license from the Federal Government.
ii) Maintenance of a Business Guarantee fund- Section 7 requires every travel
agency to maintain a business guarantee fund. Payment from the fund may
only be made on the orders of the Government and in the event of default of
payment to a tourist, carrier, or hotel.
Tourist Guides Act, 1976
Type Regulating statute and Compliances required Registration
registering body by the Act requirements
Hotels Hotel and Restaurants Registration related Confirmation of health Act,
1976 Information related of staff
Confirmation of
building and
equipment to health,
hygiene and safety
guides. The Act
establishes the
Tourist Guides
Regulatory
C10ommittee to advise
the federal
government with
regard to
implementation of the
Act and in preparation
of a code of conduct
for tourist guides11.
The Act allows the
Federal Government
to fix themaximum
charges to be paid to
tourist guides11. It
10
See section 4(2), Tourist Guides Act, 1976 11
Section 3(3), Tourist Guides Act, 1976
11

prohibits tourist
guides from charging
any fee including a
tipping fee by guides
employed by a travel
agency on a fixed
salary on a whole time
basis 12. The Act
requires the following
compliances:
i) Registration compliances - Section 7 requires tourist guides to obtain a license
prior to engaging in the business of provision of guide services.
ii) Information related compliances- Section 4(3) requires the Federal Government to
maintain a register of tourist guides.
Summary of requirements
Enforcement of licensing and registration requirements
The enforcement of the above-noted statutes in uneven and generally ineffective
Laws affecting Environment and Heritage Protection
12

Natural beauty, environment, cleanliness, historic buildings/areas, artifacts and
antiquities all attract tourists. Key laws, which regulate these Sectors, include the
Environmental Protection Act, the Antiquities Act, 1976, the Local Government Act, and
the Wildlife Act. While a detailed review of these laws is beyond the scope of this work it
is important to note that a high standard of enforcement of these Act will lead to
increased tourist activity in the country and ensure sustainable development of tourism
in the province.
Policy Making and Facilitation
All the above noted statutes provide for the establishment of Committees to advise
the federal/provincial government in the administration of the Act. However none
of the Committees are functional and/or have assisted the Federal/Provincial
Government in updating or revising rules.
Reform recommendations
While reform possibilities exist in every aspect of the legal and regulatory
framework, the following amendments will make the legal framework more effective
and facilitative:
Hotels and Restaurants Act
i) Detail of membership of the Advisory Committee
The Act and the Rules do not provide any detail regarding composition of the
Advisory committee. The Act should provide for balanced
representation including representative of the Hotel Industry
ii) Reduction and/or removal of minimum room criteria for registration Minimum
criteria for registration of establishments as hotels should be reduced to make the
Act more widely applicable. Small hotels provide the bulk of accommodation and
there standards need to be regulated more robustly as market forces have little
impact on them
iii) Making registration mandatory before start of business
Section 5(1) currently requires filing of registration application within two
months of the opening of the hotel or restaurant. It is not advisable for any
business entity to start its work first and then get registration. This also
deprives the registration authority from taking corrective action at the outset.
iv) Definition of businesses prohibited to operate in the vicinity of hotelsThe Act
and/or rules need to define the businesses that should not operate in the vicinity of
hotels
v) Definition of heath, safety and environment standards
The Act and/or rules do not define the standard of health and comfort. These
need to be defined to promote standardization of services
vi) Price fixation

While protection of interests of tourists is a fair objective, power to allow the
Controller to fix charges without consultation is unreasonable. A suggested
way is to allow the Controller to fix charges in consultation with the
Committee or to fix them where he finds charges excessive as compared to
services and/or finds the service provider abusing his position in the
market.
vii) Power of reservation
The power to reserve accommodation available to the Controller under
section 14 is excessive and should be qualified to make its use contingent on
an emergency.
viii) Provision of booking/payment through internet
A large number of bookings and payments in the international hotel industry
are now made through the Internet. Provisions promoting and regulating the
same should be included in the Hotel and Industries Act.
Travel Agencies Act
The Act and the Rules do not provide any detail regarding composition of
the Advisory committee 13 . The Act should provide for balanced
representation including representative of the Travel Industry
ii) Definition of Tourist
The Act excludes local tourists from the definition of tourists thereby
excluding them from safeguards provided by the law14. The definition
needs to be amended to make it more inclusive.
iii) Travel agencies and Tour Operators need to be separately regulated Travel
Agencies and Tour operators are separate entities with different scope of work and
they should be dealt with separately.
iv) Non-availability of information about Travel Agencies to touristsThe Data about
travel agencies need to be searchable and accessible to tourists15
v) Application of Act to Hajj operators and airlines
The Act needs to be more inclusive so as to ensure standardization of services. The
current non-applicability provisions needs to be omitted16.
Tourist Guides Act
13
See section 3(1), TravelAgencies Act, 1976
14
See section 2(g) read w ith 7(3) of the TravelAgencies, Act, 1976
15
16
But see proposed amendment bill in KP for restriction of exemption to national carrier only 18

The Act does not provide any detail regarding composition of the Advisory
committee18. The Act should provide for balanced representation including
representative of the Tourist Industry
ii) Non-availability of information about Guides to tourists
The Data about tourist guides need to be searchable and accessible to
tourists
iii) Price fixation
The Act allows the federal government to fix charges, which should not be
done. This in anti-market and leads to a stunted and non-progressive
sector
iv) Making enforcement effective
The provisions regarding fines and prosecution are ineffective and need to
be strengthened
3. Key Issues/Challenges for KP Tourism Sector
The tourism sector in KP has been facing a host of challenges that have been
impeding growth of the sector in KP. A thorough understanding of these
constraints is required to develop strategies to address these bottlenecks. Some
of these challenges are cross-cutting, affecting the overall economy such as the
sluggish economic growth, unclear policy and institutional regime in the wake of
18th constitutional amendment, poor law and order situation and low public
sector capacity to facilitate and regulate private sector. On the other hand, there
are also some serious sector-specific issues affecting tourism sector such as
limited availability of information to monitor travel and tourism trends
preventing planning; low quality of workforce; low level of private investments;
absence of standards; poor infrastructure; limited and sub-optimal marketing
activities, etc. Some of these issues are discussed in more detail below:

Figure8: Challenges Impeding Growth of Tourism Sector inKP
3.1 CROSS-CUTTING ISSUES
Sluggish Economic Growth – Over the last few years, Pakistan’s economy has
faced high inflation and low growth, resulting in an economic slowdown. This
economic slowdown has been further been compounded by low tax-to-GDP ratio,
high fiscal deficit, devaluing rupee, shaky law and order situation, huge energy
shortfall and widespread natural disasters. According to Economic Survey

201112, Pakistan’s GDP growth has been projected to grow at 3.7% in FY 2011-
12 against the target of 4.2%. As a result, Khyber Pakhtunkhwa continues to face
its share of sluggish economic growth, further exasperated by high load-shedding
of electricity in year 2011-12 creating operational problems for the existing
businesses in the province, discouraging new private investments and impeding
the process of new employment generation. Furthermore, the sluggish economic
growth has affected incomes of people, reducing their expenditure of leisurely
activities such as tourism.
Unclear Policy and
Institutional Regime -
Recently under the
18th constitutional
amendment, a number
of functions have been
devolved from the
federal level to
provinces. While the
devolution of power is
aimed at enhancing
provincial autonomy
and transferring
decision-making to
lower governance
tiers, this changed
paradigm has also
come with some new
challenges. The
provinces in most
cases were not ready
for this sudden
transfer of increased
responsibilities,
moreover many functions, which were
Bulgaria: National Tourist Council
Bulgaria established the National Tourist Council (NTC) in 1997
as a consultative body to assist the government implement its
national policy for tourism. Chaired by the Ministry of
Economy, the NTC representatives are from central
administration, state commissions, agencies dealing with
tourism, tourism associations, and chambers of commerce.
NTC’s functions include:
Presenting the annual state budget to the Minister of
Economy.  a Adopting a national tourism advertising
program before submitting it to the Minister of
Economy for approval.
Overseeing the implementation of the national tourism
advertising programme.
Submitting an annual report to the Executive Director of
the Executive Agency for National Tourist Advertising
and Information for approval.
Submitting concepts and programmes for tourism
development.  a Delivering its opinion on draft
normative acts and making proposals for their
amendment, supplementation, or repeal.
Discussing issues related to the construction and
maintenance of tourist infrastructure and attracting
foreign investments.
Coordinating and assisting in the implementation of
national and regional projects.
supposed to be performed by the national government are now subject to a lot of
confusion with unclear responsibilities. This change also has a lot of implications
for the tourism sector. With abolishing of the federal Ministry of Tourism, there
is no entity in the federal government responsible for managing this function at
the national level. While a lot of tourism activity happens at the provincial level,
there is a need for national government involvement in a number of functions
such as country’s image building, smoothening visa regimes, etc. Moreover, the
absence of a tourism policy in KP has also created a vacuum. While TCKP has
been endeavoring tourism sector in the province, the sector also requires
coordinated efforts by a number of other departments and agencies such as
environment, wild life, forestry, etc. This results in lack of synergy and
coordination.
Poor Law and Order Situation – The armed conflict in KP has taken its toll on the
tourism sector and the security crisis in Swat and other tourist areas in KP has

created unprecedented damage. While the situation has significantly improved in
the last year, there is still a lot of hesitation amongst tourists, especially the
international visitors, to visit tourism sites in KP. Furthermore, the heightened
security situation has also created procedural hassles in visa regimes, further
discouraging international tourists.
Tourism Infrastructure Damages Due to Conflict and Natural Disasters
The military operation in KP launched in early 2009 in particular in Swat valley and some tribal
areas has imposed an immense cost on the local economy as large number of people (an estimated
2 million individuals) has been forced to leave their homes and livelihood. In addition to the loss of
lives and injuries the ensuing fighting between the military and militants also caused damage to
health facilities, educational institutions, water supply, roads, electricity, gas supply, shops, hotels,
restaurants and businesses.
The World Bank survey report (2009) in KP estimated the damages incurred to tourism industry
was Rs. 180 million (US$ 2 million). According to this survey about 500 hotels have been operating
in the Malakand division, out of which some 60 units have been reported as damaged (12 % of total
hotels).
Swat Tourism Sector Census (2010) explicitly explored the impact of conflict on the hotel industry
of Swat in terms of capital, revenue, and employment losses. The largest category of capital losses
was recorded for building amounting to Rs. 72 million.
Pakistan Austrian Institute of Tourism and Hotel Management (PAITHOM) in Swat was established
in March 2001 at a cost of Rs140.50 million including foreign economic assistance of Rs. 64.262
Shillings. Regrettably, during the military operation in Swat this state of the art and purpose built
building is not only looted but declared by Pak Army as a temporary detention cell.
Followed by 2009 conflict, the 2010 flash floods and heavy torrential rains have surpassed the
physical destructions ever caused by all the disaster in Pakistan. The catastrophe has impacted a
wide population in Indus river basin starting from North in Gilgit-Baltistan crossing KP, and Punjab
and hitting down the Sindh province. The unprecedented natural disaster has severely hit the
human lives, livestock, infrastructure, crops, and livelihoods in KP. The dynamics of this disaster
was such that life losses were less but the damage to public and community infrastructure were
beyond imagination.
According to the KP, Provincial Disaster Management Authority (PDMA) about 2000 km of major
and link roads, 40 major bridges, 40 minor bridges, 150 health facilities beside 158 buildings
(including hotels, motels and restaurants) damaged due to flood. The tourists’ destination of Swat
and Chitral were declared among worst and medium affected areas respectively. In Swat valley
almost all the hotels along the bank of river Swat were either partly damaged or completely wiped
out.
At present USAID and World Bank are providing financial support through various grants program
for revival of tourism infrastructure in KP, in particular in Swat valley. However, in order to fully
restore the tourism infrastructure both the government and private sector participation will be of
immense value. Furthermore, serious interventions are required by KP government in order to
reinstate PAITHOM with respect to its objectives.
Low Public Sector Capacity - Weak administrative capacity forms one of the core
issues behind sub-optimal governance landscape in the province affecting a number
of sectors. The weak administrative capacity is manifested in overstaffing and skill
gaps, especially at the lower administrative tiers; high absenteeism; mis-
deployment and low productivity of key personnel; and dysfunctional oversight of

service providers by middle and senior managers. There are no clear performance
or appraisal standards and low compensation offered by the government prevents
attraction of talent. This situation also takes its toll on the overall government
functioning of the government. It is interesting to note that the situation is slightly
better in TCKP, being an autonomous organization, resulting in a number of notable
initiatives by the corporation. However, the current capacity at TCKP seems limited,
especially in the wake of increased responsibilities in post-18th amendment
scenario.
3.2 SECTOR-SPECIFIC ISSUES
Limited Availability of Information – The planning and management of any
sector and its activities depend upon effective evidence-based decision-making,
backed by flow of data and meaningful information. While the regular flow of
information is a cross-cutting problem, it becomes even a greater challenge for
tourism sector, where the sector definition is porous and a number of private
sector players such as hotels, restaurants, travel agencies, etc. are catering to
both tourism and non-tourism sectors. This prevents collection and use of
reliable data. In many countries, to address this problem, a technique called
Satellite Accounting System’ is used. However, in KP, or even in Pakistan, no such
method is being used.
Low Quality of Workforce – Availability of quality human resource has been a
significant challenge for the tourism sector. There are a few degree courses on
tourism sector offered by large universities of the province. Furthermore
Pakistan Austrian Institute of Tourism and Hotel Management (PAITHOM) in
Swat - the only notable training institute in the province for tourism-related
training - has been non-operational since the conflict in Swat and is still is use by
Pakistan Army. The workforce issue is further compounded by the fact that not
many officials available in the public sector have thorough understanding of the
sector. For private sector businesses, the reliance has mostly been on on-job
informal trainings, making a dent in the quality of services provided.
Educational Institutes of Tourism & Hospitality in KP
No Name of Institute Date of
establishment
Courses Offered
Course Duration
1. Department of
Tourism &
Hospitality, Hazara
University, KP
2006 BS in Tourism & Hospitality 2 years /4
Semester
MA in Tourism & Hospitality 4 Years/8
semesters
Certificate courses in:
Front OfficeManagement
Housekeeping Management.
Food & Beverage Service.
Food & Beverage Production
3 Months
2. Department of
Tourism &
Hospitality, Abdul
Wali Khan University,
Mardan, KP
2011 BS in Tourism & Hospitality 2 years /4
Semester
MA in Tourism & Hospitality 4 Years/8
semesters

3. Department of
Tourism & Hotel
Management,
University of
Malakand, KP
2011 MA in Tourism & Hotel
Management
2 years /4
Semester
4. Pakistan Austrian
Institute of Tourism
and Hotel
Management
(PAITHOM) Swat, KP
1999 Diploma in Hotel
Management
6 Months
Short/Certificate Courses:
Front office management
House keeping
Food & beverages
Porter trainings
Tour guide trainings
3 Months
5 Adventure
Foundation Pakistan
1981 Short/Certificate Courses:
Mountain Guides
Adventure Guides
21 days to 3
Months

DEGREE COURSES IN TOURISM
In Pakistan, formal educational in tourism and hospitality sector has comparatively a recent
phenomenon. With respect to the Cabinet decision in 1960, the country’s first cookery school
was established at Karachi. In 1967, the school was upgraded to the status of an institute,
which finally laid foundation for the establishment of the present Pakistan Institute of
Tourism & Hotel Management (PITHAM). The aim of this Institution is to impart Knowledge
by training manpower for the hospitality, travel, and tourism industry. The Institute offers
diplomas, certificates and short courses in the relevant discipline.
In KP, education in tourism & hospitality sector is still at its infancy. Pakistan Austrian
Institute of Tourism and Hotel Management (PAITHOM) was established in March 2001,
however, it became operational in 2006. The Institute offers 6 months diploma in Hotel
Management and 3 months short courses in: front office management, housekeeping, food &
beverages, porter trainings and tour guide trainings. According to the information collected,
the courses offered are mostly developed with respect to a standardized format of Austrian
institutes in hotel management.
In 2006, for the first time, degree programs i.e. BS (4 Years) and MA (2 Years) were initiated
in Tourism and Hospitality by the Department of Tourism and Hospitality, Hazara University.
In 2011, following almost similar course structure, the same programs have also been
introduced by the Department of Tourism & Hospitality, Abdul Wali Khan University, Mardan.
Department of Tourism & Hotel Management, University of Malakand, has also started MA
Program in Tourism & Hotel Management in 2011. Although, the mentioned departments
have their specific board of studies for courses development/evaluation, but, critical analysis
of the courses reveals that theoretical part of these courses is mostly adopted from other
relevant institutes, in particular from UK. However, the offered programs are unanimously
following the HEC standard criteria established for BS and MA degrees. The major issues of
concern with the degree programs are:
poorly develop universities-industry linkages, in terms of skills gaps and training needs;
relevant academics are rarely available;
lack of uniformity in the standards of
courses;
most of the courses are neither up-to date, nor formally recognized internationally,
therefore, it would be difficult for the graduates to compete in the international
market and finally,
Keeping in view the limited funds availability to the governments’ institutes, it is less likely
that they should effectively deliver the desired practical part of the programs.
Insufficient Private and Public Investments – Development of tourism
infrastructure requires influx of substantial funds; the provision of which is
difficult for the government. In terms of travel and tourism government
expenditure, Pakistan was ranked 101st in the World Travel and Tourism
Competitiveness Report. KP Tourism Department’s budget in 2011-12 stood
around PKR 10 million17, whereas in 2012-13, it is expected to be around PKR 11
million. In 2011-12, an amount of PKR 1391.698 million was allocated for
tourism (and sports) sector in Annual Development Program for 38 projects, out
of which 11 projects were completed. In 2012-13 ADP, an amount of PKR 685
million has been allocated for tourism, sports, culture and museums, covering 39
projects, out of which 27 are ongoing and 12 are new. The flow of private
investments in the tourism sector of KP has also been limited. In order to
promote private investments in the province, a regulatory framework is required
to empower government officials and also to provide opportunities for secure
17
Revised estimates

investments to private
sector investors.
Presently, in KP, there is
no such framework;
which limits the execution of
this option18.
Absence of Standards –
The enforcement of any
standards is
virtually absent in the
sector. The responsibility
of managing the laws
and standards of
hotels, tourist guides
and travel agencies
lies with
Department of
Tourist Services
(DTS). Before 18th
Amendment, DTS used to work under the federal Ministry of
Tourism. As per the mandate decided for DTS, it is responsible to ensure
the quality of tourist services through implementation
of
various enactments including: The Pakistan Hotels and Restaurants Act 1976;
The Pakistan Tourist Guides Act 1976; and The Travel Agencies Act 1976. This
absence of a robust standards regime has implications for services offered by
hotels and restaurants; licenses for tourist guides; fitness certification system
vehicles used by tourists; transportation rates, etc.
In KP the international certification will be equally beneficial for businesses,
consumers, government, local communities and not the least for the
environment. For businesses (e.g. hotels, restaurants, tour operators, travel
agencies etc.) it would help to improve their quality, reduce operating cost and
would also provide a marketing advantage. It will also provide tourists with
environmentally and socially responsible choices. In addition of providing
opportunities of economic benefits to local communities, it will also ensure
respect for local culture. For government the certification will raises industry
standards in health, safety, environment, social stability and will also lower the
regulatory cost. Although, international tourism certification systems are
voluntary, however, in order to compete in national, regional and international
tourism market the KP government can make a sensible choice of specific
certification programs and can establish it obligatory for different tourism
sectors.
Dilapidated Infrastructure – Due to a recent history of armed conflict and natural
disasters, the tourism sector in KP has suffered major losses, including physical
damages to buildings and equipment and lost
18
The USAID Firms project is providing technical assistance to KP Govt. for developing PPP framework for the
tourism sector.
Certification is defined as “a voluntary procedure that
assesses, audits and gives written assurance that a facility,
product, process or service meets specific standards. It
awards a marketable logo to those that meet or exceed
baseline standards” (Honey and Rome 2001) Certification
program in the tourism industry serve as an important tool
for distinguishing genuinely responsible companies,
products, or services from those that make empty claims.
In order to acquire competitive advantages in regional and
global tourism industry, different certification programs are
followed in Asia and the Pacific. Some of these certification
programs are: Decipher Portal (Australia), EccoCertification
(Australia), Green Leaf Foundation
Certificates (Thailand), Respecting Our Culture
ProgramROC (Australia) and Green Globe (China, Japan).
These programs are successfully employed by clients in
different tourism sector in regional countries like
Philippines, Indonesia, Malaysia, India, China and Japan etc,
so, there is a great scope for its application in Pakistan in
general and KP in particular.

businesses. This in turn has
taken its toll on availability of
tourist facilities in the province.
Damage caused to access roads,
unreliable supply of electricity
and closure of Saidu Sharif
airport have further worsened
the situation. The crisis damaged
roads and bridges in Swat valley,
especially the access roads
connecting Mingora to tourists’
destination of Kalam via Madian
and Bahrain. At present only four
wheel vehicles can only drive on
Mingora-Kalam road. Similarly, the road from Khwazakhela to Shangla has also
been partly damaged. Road connecting Chitral to the rest of the province also
need up-gradation. The Mansehra- Naran road also needs up-gradation. Access
roads should be constructed on priority basis to reach tourists’ destination of KP.
In addition, link roads should also be developed to reach scenic places in Swat,
Chitral and Kaghan valley. Keeping in view the touristic importance of the
mentioned roads/link roads it needs to be built and sustain as all weather roads.
Electricity is one of the basic infrastructures for tourism promotion. The poor
supply situation of electricity to the tourists’ destination in KP is further
devastated by the crisis. In order to encourage maximum tourists’ flow, the
government should ensure undisturbed supply of electricity to the tourists’
destination in the province.
Access to comfortable and reliable tourists’ transport facilities in Swat, Kaghan,
Naran and Chitral needs immediate attention. These transport facilities need to
be available from main cities of the country to major tourists’ town of KP and
from those towns to specific tourists’ attraction points.
Saidu Sharif airport in Swat used to have regular flights to and from Peshawar,
Islamabad and Chitral but due to the conflict in the area this airport is closed. In
order to encourage and promote tourism in Swat through air route the Saidu
Sharif airport need to be operational.
Archaeological museums preserve the history of nations. KP is the home to
Gandhara civilization, however, only nine museums in the province showcasing
the glimpses of the local history. Keeping in view the rich history and culture of
the province the number of museum needs to be increased. The conflict in Swat
valley also caused partial damage to the Swat museum, however, reconstruction
is in progress in support of foreign donor.
The state of the art MalamJaba Ski Resort and chair lifts have been damaged
during the conflict in Swat valley. Similarly, an important tourist attraction in KP
was Khyber Steam Safari, which used to travel from Peshawar to Landikotal
(border of Afghanistan). At present the train safari is not functioning due to the
damage caused by flood and militancy in the area. These facilities need revival for
tourism promotion in KP.
Trinidad & Tobago: Trinidad & Tobago Tourism
Industry Certification Programme
The Trinidad & Tobago Tourism Industry Certification
(TTTIC) programme was established in 2001 as a
mechanism to improve the quality of tourism products
and services. It is based on the tourism standards
developed by the Trinidad & Tobago Bureau of
Standards (TTBS) to ensure quality delivery. It is a joint
initiative of TTBS, the Tourism and Industrial
Development Company of Trinidad and Tobago
(TIDCO), and the Tobago House of Assembly (THA),
with the Trinidad & Tobago Hospitality and Tourism
Institute (TTHTI) as the recognized body for hospitality
and tourism training.

In addition to the reconstruction of damaged infrastructure, new tourism
products and relevant infrastructure need to be developed in the province like
establishment of culture tourism centers at potential sites; establishment of new
tourists town e.g. Cherat in district Nowshera andSuna in district Kohat;
construction of children and amusement park and adventure tourism facilities
(rafting, rock climbing, mountain biking, sport fishing and jeep safaris etc).
Finally, establishment of basic tourism infrastructure facilities like public toilets,
stop over points, information centers, fuel stations, police posts, first aid facilities,
children play areas, shelters with seating, telephone booths and parking areas
along the roadsides of the tourists destination will boost tourists’ flow to the
province.
Limited and Sub-optimal
Marketing
Activities – While the
poor law and order
situation has played its
role in discouraging
tourism in KP,
some responsibility
also has to be placed on
lack of an effective
and
wellcoordinated
image building and
marketing strategy
to promote
Pakistan and KP as preferred tourism
destinations. KP has been bestowed with valuable tourism assets and
unharnessed tourism potential in areas of natural, historic, archeological and
cultural tourism, however, the tourism officials, especially at the federal level,
have so far been unsuccessful in conveying this potential to the relevant audience
across the globe. According to World Travel and Tourism Competitiveness
Report, Pakistan has been ranked at 117th number in the world on effectiveness
of marketing and branding activity. Similarly as per Travel and Tourism
Competitive Index, Pakistan has been ranked at 125th, 127th and 62nd positions on
affinity of the local communities for tourists and tourism openness; attitude of
population towards foreign visitors; and participation in international fairs.
Absence of a Robust Legal Regime – As discussed above, the existing
tourismrelated laws in the province are outdated and need revision to facilitate a
robust regulatory role played by the public sector, facilitate investments by the
private sector and to promote small businesses to compete. There is no PPP law
in the province, under which TCKP can invite BOT/BOO type projects.
4. Need for Tourism Policy – Some Key Issues
As discussed earlier, currently the Govt. of KP does not have a clearly articulated
formal tourism policy. However, considering that the tourism sector requires
coordinated efforts by a number of departments and agencies such as P&D
Department, C&W Department, Finance, Excise and Taxation Department,
PHA/NHA, environment, wild life, forestry, etc. besides the Tourism Department
itself, along with TCKP, the need for having such a policy is critical. Moreover a
well laid out tourism policy would demonstrate long-term commitment of
The Bahamas: One-Stop Online Booking
and
Immigration Card
In designing a competitive tourism experience, the Bahamas
has focused on two areas that many developing countries
have overlooked – how tourists select and book
destinations, and how to collect critical market information
from visiting tourists. With the spread of the Internet,
tourists are increasingly comparison shopping and booking
online. The Bahamas’ website, <www.bahamas.com>,
allows the prospective tourist to create an online “account”
in which they can book and change reservations, e-mail
those plans to friends and family, and print out their own
vacation plan.

government in the sector and would form the basis for shared understanding of
and synergized actions and coordinated planning by different stakeholders.
Moreover, such a policy framework should ensure sustainable development of
tourism as most of the uncontrolled and haphazard development of tourism has
negatively impacted on the social, cultural, natural and economic environment of
tourist destinations in KP. Therefore, the proposed policy should be based on the
principles of sustainable development with recommendations on short, medium
and long term measures for its effective implementation to achieve some tangible
results. In particular, the proposed policy would address the following issues:
Figure9: Developing Tourism Policy for KP
Post-18th Amendment Scenario – As discussed earlier, after the passage of 18th
Amendment, there has been some lack of clarity on performing some of the
broader functions related to tourism sector. For effective tourism development,
the government must develop a sound and comprehensive policy framework at
the provincial level, clearly laying out the priorities of the government vis-à-vis
the federal governments. The provincial government can then pursue the federal
government to maintain its role for effective coordination across the provinces.
This would also result in optimal resource utilization and synergy of effort.
Role of the Government and Private Sector - The policy framework must
delineate clearly the role of government vis-à-vis the private sector. Ideally the
government should adopt the role of a regulator as well as that of the facilitator,

whereas the private sector should come ahead for service provision. As a
regulator, the government should act as the custodian for rights of tourists and
ensure that they are getting quality services, whereas as a facilitator, it can
provide well-targeted tax, policy and financial incentives to private sector players
to promote investment in the sector. These incentives however, should be tied up
with clearly laid out policy objectives, rather than being offered for everything
and anything related to tourism sector. The target areas/sub-sectors can be
refined through consultations and in line with broader government policy. Last
but not the least, the government should also coordinate and synergize the
tourism development efforts undertaken by various agencies, international
donors and other stakeholders. If there is an established need to develop tourism
infrastructure by the public sector, this responsibility should be entrusted to the
provincial agencies. For management of these facilities as well as for undertaking
other projects, various modalities can be considered including PPPs.
Institutional Framework - The policy must include a well laid out institutional
structure to implement the policy. Currently much of the activities are performed
by KPTD and TCKP, however, there is a need for involvement of other agencies as
well such as Environment, Archeology, Forestry, etc. Moreover, there is a need to
empower and strengthen TDKP and TCKP to drive the implementation of policy.
Policy Considerations and Incentives Structure - Due to limited resources and
increasingly constraining fiscal space, the government may not be realistically
able to offer all sorts of incentives to all the tourism related facilities. The
incentives therefore should be offered only under a well thought out incentive
structure. Such a structure should take into account the cost implications of these
incentives and should evaluate the value for money considerations. The
incentives should also be closely tied with some well laid out policy
considerations. These policy considerations would be answered through some of
the following questions:
Does the government envision taking a lead role in tourism
development or would rather act as a facilitator and take the private
sector take the lead?
Are there certain high priority and low interest areas, where
the government wants to enhance investment and activity?
Should the tourism sector focus on local tourism or
international visitors? Such a question must be answered considering
a pragmatic view of the current situation?
Are there any specific geographic regions or tourism sub-
sectors which the government wants to promote?
In the priority areas, what are the key impediments that
keep the tourists away? Is it the unavailability of infrastructure,
transport network inefficiency, high costs or merely a cultural issue?
What strategy can address the reputational loss of Pakistan
as a terrorism-affected country? Is provincial branding a better idea?
Should the government invest in improving the overall law and order
situation or should the government limit the tourist activities to relatively
peaceful areas? Still another consideration could be to focus on developing
secure zones.

Tourist Asset Mapping and Potential and Priority Areas - The government
must map the tourism assets and take an account of the existing situation of
these assets. After a comprehensive mapping exercise, an improvement plan can
be developed highlighting priority areas. The government can then also identify
those areas, where there is a lot of tourism potential such as recreational
tourism, religious tourism, cultural tourism, eco-tourism, adventure tourism etc.
Resource Considerations - The policy framework should be based on and linked
with a clear resource framework, where the government can highlight the extent
of its contribution through various means/forms. In the absence of sufficient
resources, the government may consider mobilizing additional resources through
private participation, commercial lending or donors’ assistance.
Focus on Sustainable Tourism Development:
development as “development which meets the needs of the present without
compromising the ability of future generations to meet their own needs”. The
sustainable activities take into account three main aspects including:
environmental; social & cultural and economic. When we take these three aspects
into account in our activities, this is called the “triple bottom line”. It means
running a business, an organisation, or a government in such a way that it
doesn’t destroy the resources- natural, cultural, or economic- on which it
depends. In fact a business that is run in this way can enhance all three aspects
and continue to operate profitability, while benefiting its surrounding natural
areas and communities. The principles of sustainability can be applied to any
type of tourism mass or speciality; city, beach or wilderness; large or small. They
can also be applied to all relevant sectors of the tourists industry: lodging, tours,
agencies, ground operators, guiding and transport. According to Agenda 21 for
the travel and tourism industry, “sustainable tourism products operate in
harmony with local environment, community and cultures, so that these can
become the permanent beneficiaries.”
Therefore, the focus of the proposed policy should be on sustainable tourism,
which can ensure sustainable development through fostering understanding
between people, to create employment opportunities and bring about
socioeconomic benefits to the local communities particularly in the remote areas.
It should also strive to preserve and promote KP’s rich cultural and natural
heritage.
The proposed
policy must
emphasize on
development of
sustainable
tourism in the
province.
The Brundtland
Report (UNWCED,
1987), “Our
Common Future”,
defines
sustainable
Three Pillars of Sustainable Development

APPENDIX A - List of Persons Consulted
USAID Firms:
1. Mr. Suleiman Ghani, Sr. Policy Advisor, USAID Firms
2. Mr. Aftab-ur-RehmanRana, Tourism Specialist, USAID Firms
3. Mr. Taimur Khan, Business Enabling Environment Specialist, USAID Firms
4. Ms. Asma Malik, Business Enabling Environment Specialist, USAID Firms
5. Dr. IhsanQazi, Office Director (Islamabad), USAID Firms
Tourism Department & Tourism Corporation, KP:
6. Syed Aqil Shah, Minister for Tourism, Khyber Pakhtunkhwa
7. Syed Jamaluddin Shah, Administrative Secretary, Tourism Department, KP
8. Mr. Hayat Ali Shah, GM, Special Projects, TDKP & TCKP
9. Mr. Muhammad Ali Sayed, GM Events & TICs, TCKP
10. Ms. Promila Isaacs, Consultant, TICs, TCKP
11. Mr. Iftikhar, Deputy Secretary, Tourism Promotion, Bahrain, Swat
12. Mr. Zarin Khan, Kalash Representative, TCKP
13. Mr. Nadeem Khan, Finance & Accounts, TCKP19
–for PPP
14. Ms. Zahra Alam, Tourism Department, KP
Allied departments, KP:
1. Dr. Muhammad Bashir Khan, Director General, EPA, KP
2. Mr. Safdar Ali Shah, Conservator, Wildlife Department, KP
3. Shah Nazar Khan, Director, Department of Archeology, KP
4. QaziIjaz, Deputy Director, Department of Archeology, KP
5. Mr. Muhammad Arabi, In-Charge, Department of Tourist Services (DTS), KP
6. Mr. Hurmat Khan, In-Charge, Pak Austrian Institute for Tourism & Hotel
Management (PAITHOM), Golibagh, Swat
7. Mr. Javaid Iqbal, Regional Director, NAVTEC, KP
8. Mr. Sajad Ali Shah, Director, NAVTEC, KP
9. Mr. Bashir Khan, Additional Secretary Development, Finance Department,
KP20
–PPP
10. Shahab Ali Shah, Chief Economist, Planning and Development Department,
KP21
–PPP
19
Met by Ali Rahman for PPP framework
20
Met by HasaanKhawar& Ali Murtazafor PPP framework
21
Ibid.

11. MianAsim Ismail, Chief Economic Analysis Section, Public Policy and Social
Reform Unit, Planning and Development Department, KP22
–PPP
12. Mr. JafferKohistani, Manager, Patriata chairlift/cable car, TDCP, Murree,
Punjab
FGD participants, mainly from the private sector:
13. Mr. ZahoorDurrani, Vice President PATO for KP, MD Sehrai Travel
14. Said Nawab, President Tourism Promotion Association, Madyan, Swat
15. MirajUd Din, President Hotel Association, Bahrain, Swat
16. BakhatBuland Khan, Sr. Vice President Hotel Association, Bahrain, Swat
17. Mr. Rasool Khan, General Secretary, IslampuraKhadi Association
18. Mr. WaliRehman, Vice president, IslampuraKhadi Association
19. Seth Matiullah, President, Tourism Promotion Association, Kaghan
20. Mr. Nawazish Khan, Sr. Vice President, Tourism Promotion Association,
Kaghan
21. Mr. Asad Shah, Managing Partner, Nature Tourism Services, & Executive
Member, PATO, Abbottabad
22. Col. Khalid Mahmood, Principal, Tourism Training Institute (NITHHMS),
Abbottabad
23. Mr. Hukum Dad, Vice President, Hotel Association, Nathiagali
24. Mr. M. Waseem, Coordinator, WWF Pakistan, Nathiagalli
25. IftikharHussain, Owner, Jewels Stone, Mingora, Swat
26. ShirinZadaDadar, GM, Hotel White Palace, Mingora, Swat
27. IkramUllah, GM Swat Tourism Shop, Mingora, Swat
28. Anwar Khan, GM Pameer Hotel, Mingora, Swat
29. Muhammad Humayun, Manager Holiday Hotel, Madyan, Swat
30. AmjadNoshad, Owner Muslim Hotel, Madyan, Swat
31. Shad Muhammad, Owner Jawad Hotel, Madyan, Swat
32. Abdul Rasheed, Owner Rasheed Hotel , Madyan, Swat
33. Muhammad Hayat, Journalist, Swat Press Club, Mingora
34. Dil Nawaz Khan, Manager Hotel Swat Valley, Bahrain, Swat
35. Ahmed Zaib, Hotel Owner 2 Star, Bahrain, Swat
36. Mumtaz Khan, Hotel Owner, Bahrain, Swat
37. SherBahudar, Owner Punjab Restaurant, Bahrain, Swat
38. Nasir Khan, Owner Marina Hotel, Bahrain, Swat
39. Amir Rasheed, Finance Secretary, IslampuraKhadi Association
40. AbdurRehman, Member, IslampuraKhadi Association
41. Mr. Anayatullah, Suvastu Gallery, Mingora, Swat
42. Mr. Abdullah, Handicrafts, Mingora, Swat
43. BakhtHussain, Handicrafts, Mingora, Swat
44. Attaullah Khan, Arts & Crafts, Mingora, Swat
22
Ibid.

45. Mr. Abdul Qudoos, Owner, Gateway Hotel, Mardan
46. Mr. Arif Swati, Managing Partner, Nature Tourism Services, Abbottabad
47. Mr. Asif Javed, CEO, Tourism Training Institute (NITHHMS), Abbottabad
48. Mr. Khurshid Ahmed, CEO, Hotel Demanchi, Naran
49. Engr. Mohsin Khan, Marketing Director, Hotel Demanchi, Naran
50. Mr. QamarulHaq, Advocate, Abbottabad
51. Mr. Noor Hussain Shah, Hotel construction contractor, Nathiagali
52. Mr. Asif Ali, local entrepreneur, Nathiagali
53. Mr. Hassan Awan, Veterinarian, WWF Pakistan, Nathiagali
54. Mr. Barkat, Manager, Afaq Hotel, Nathiagalli
55. Mr. YousafAkhar, CEO, SAIYAH Travel
56. Mr. EjazSohail, Manager, SAIYAH Travel
57. Mr. Naiknam Karim, MD, ATP
58. Mr. Ashraf Aman, Chairman, Adventure Tour
59. Mr. PaarchaShahid, CEO, City Express
60. Mr. FarhadMaqpoon, MD, Shikar Safari
61. Mr. Sultan Khan, Manager, NazirSabir Expeditions
62. Mr. Mubarak Hussain, CEO, Karakorum Explorers
63. Mr. IrfanUllahBaig, EM, Travel Waljis (Pvt) Ltd
64. Mr. JavedAwan, MD, Oriental Links
65. Mr. GN Raikoti, MD, FMT (Fairy Meadow Tours)
66. Mr. Liver Khan, MD, NPA (Nanga Parbat Adventure)
67. Mr. Hussain Ali Ghulam, Hunza Travel Services
68. Mr. Amir Ullah, MD, Hunza Guides Pakistan
_________________

Appendix B - Documents Reviewed
1. Pakistan National Tourism Policy 2010 (Draft)
2. Pakistan in the 21st
Century, Vision 2030 (PC)
3. Pakistan National Conservation Strategy
4. Khyber Pakhtunkhwa Provincial Conservation Strategy
5. The Pakistan Hotel and Restaurants Act 1976
6. The Travel Agencies Act 1976 and rules 1977
7. The Pakistan Tourism Guides Act and rules 1977
8. Khyber Pakhtunkhwa Tourism Vision Document
9. Tourism census report for Malakand, Swat
10. Tourism related laws of India, Nepal, Sri Lanka, Iran & Turkey
11. Sector recovery and development strategy for Swat tourism
12. Master Plan for Promotion & Development of Tourism in KP
13. Pakistan National Tourism Policy 1990 (Ch 5: Conclusions)
14. Best Practice Case Studies in Tourism
15. Tourism Management in Pakistan (Ch 5: Analysis)
16. Pakistan Tourism National Plan 2000
a) Final Report
b) Technical Vol.1: Medium Term Marketing Strategy
c) Technical Vol.2: Physical Planning & Environmental Considerations
d) Technical Vol.3: Economic & Investment Analysis
e) Technical Vol.4: Human Resource Development

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