Summary: Financing Sustainable Tourism (2002)
The Financing Sustainable Tourism (FST) Conference fostered
a global dialogue, organized by Planeta.com
with assistance and co-sponsorship from George
Washington University International Institute of Tourism Studies,
Centre for Ecotourism Research, The
Shores System and Sustainable
Sources. Follow-up work is being conducted with the Mexican
Conservation Learning Network (IMAC).
The FST Conference was Planeta.com's 10th original online
event and we would like to thank everyone who took part.
The online conference took place online in August and September,
2002. More than 200 people participated in a frank discussion
that yielded a myriad of ideas, most of which did not appear
to agree with each other!
Participants looked at timely issues -- the merits and limitations
of business plans, the importance of local consultation and
the inclusion of indigenous peoples and a review of how well
the Web is being utilized by institutions.
We present a mix of voices below. Their comments and introductory
statements are expanded in a 4-part dialogue: 1
as well as the Conference
Archive. Participants presented a number of case studies
from around the globe that will interest researchers, policy-makers
and entrepreneurs alike.
PROPOSAL FOR A SUSTAINABLE TOURISM INVESTMENT GUIDE
Ron has compiled a list
of resources for this conference, and I'm sure that they
will find their way into the permanent Planeta archives. But
perhaps there is room for something more systematic, perhaps
even an Ecotourism Investment Guide. Or maybe the ecotourism
financing gurus should just make more noise within the socially
responsible investment universe and coordinate more closely
with that movement.
It might be prudent to share a summary
report of the International Donor Agency Tourism Project
Database which we are currently working on at the George Washington
University. As I mentioned earlier in the conference, at present
we have collected information regarding approximately 220 projects
throughout the world that have been funded by donor agencies
that involve a tourism component.
Ana Garcia Pando
Most of us have many stories of unsuccessful initiatives which
started as good ideas promoted by deeply involved people, with
sound environmental principles. I think the road to sustainable
ecotourism SMEs is paved with many good failed intentions. Why
not create a database of failed projects? I am sure it would
be a helpful document.
We do need a directory, or a Sustainable Tourism Investment
Guide. Again, if I can imagine something that does not exist,
the Guide would be written for investors at global and local
levels. We ought to get away from writing one thing for NY investors
and Beltway consultants and providing glossy brochures and posters
for the locals. I'd like to use the conference center home page
-- as a starting point for a Sustainable Tourism Investment
My specific interests for this conference are to "listen and
learn" about various ways of financing sustainable tourism -
so that I can help communities, and our own province to explore
new and innovative ways of financing new tourism enterprises.
The agricultural economy which comprises a large
part of southern Manitoba's land and economic base, is going
through major transformations (lower yields, higher costs, health
concerns with use of chemicals, consolidation, turbulent and
unpredictable climatic conditions from year to year, and competing
subsidies in the US and in Europe). The rural land base has
the potential to generate unique and wonderful travel experiences
- if rural operators understand how to operate tourism businesses
in a business-like way.
I note a failed or at least imperfect direction we tended to
take concerning community involvement in tourism in early efforts
(my own experience with a community-based guide service in Rwenzori
Mountains National Park in Uganda). In our zeal to meaningfully
involve communities in tourism benefits we created unreasonably
high expectations of those benefits, helped create businesses
with externally-financed high-maintenance infrastructure, but
then provided inadequate management skills and little oversight,
and virtually ignored the realities of marketing. There was
no contribution from professionals in the private sector at
the national level. Lo and behold these activities were not
sustainable, cost donors large sums, disillusioned communities
and ultimately provided poor service to visitors -- the key
I would like to suggest that there are significant differences
between community-based tourism and entrepreneurial tourism,
and there are different approaches to financing each type. In
1981 I started working on a pilot project for community-based
tourism in a small Inuit community in Canada's Arctic - the
community of Pangnirtung. At that time community residents did
not even understand what tourism was. We embarked on an extensive
community consultation program over the following year with
a major education/awareness component.
Doing eco-tourism right takes time. Often, in an effort to show
the communities immediate, tangible results, the investor will
make a good faith donation and buy building supplies or schoolbooks
for the community. This raises expectations that most likely
will never be met -- local communities get used to the idea
that money will just keep coming in, regardless of how successful
the tourism enterprise is. Linking tangible benefits to the
success of the enterprise is extremely important, as is avoiding
I'm director of the Rethinking Tourism Project and participating
on behalf of approximately 200 Indigenous Peoples throughout
the Americas and other places who helped organize the first
International Forum on Indigenous Tourism. Of particular interest
is financing to support community-controlled, autonomous projects
and developing partnerships that are equitable. We are also
in the process of developing Indigenous technical assistance
teams to work with ecotourism developers, consultants and NGOs.
Financial assistance that helps protect community resources
(biodiversity and cultural diversity), and helps communities
continue to have access and management of those resources is
also very important. As has been pointed out earlier, some of
the basic skills (such as financial planning and business plans)
are important and often community representatives do not have
the needed skills.
Rick MacLeod Farley
I attended the World Ecotourism Summit in Quebec City, and had
the opportunity to view first-hand the efforts by Indigenous
leaders present to bring forward the concerns and perspectives
of Indigenous communities for the benefit of Indigenous peoples
and for the benefit of ecotourism and the planet. I came away
from the WES gathering excited by the positive energy and the
passion and commitment of countless people. However, I also
came away with the realization that there is a tremendous 'divide'
between the international agencies and the Indigenous leadership.
The buzzword in the research and at the conferences is that
'local people' need 'capacity building.' With all due sincere
respect, I would like to suggest that there is also a need for
'capacity building' within the international agencies themselves.
For a financing partner to jump on board, two things have to
be in place: - a good, conservative and realistic business plan
(or Master Plan) - a proven, reliable ability on the ground
to make the plan happen - and, even more importantly, to manage,
tweak, and re-create the plan as circumstances change. If I
were a donor, I would want proof that the actual ground implementers
not only understand the plan, but can also change it into other,
also feasible, plans, as things unfold.
Many an ecotourism venture was backed by wonderful business
plans, prepared by very good in-and-out specialists, and then
given to less able local business/project managers to implement,
with the consequence that, under the slightest changes (or upon
finding mistakes in the original assumptions, a very normal
occurrence in business plans), everything goes wrong. On the
other hand, I've seen lousy plans be approved because the investor
trusts the executing partner so much that anything would be
approved, and the venture turns out just fine because the ground
manager is good at adjusting strategies, making deals, managing
people, suppliers and customers, and just has the makings of
I wanted to add my support to the comments that the preparation
of business or master plans does not guarantee the success of
an ecotourism business. Although I believe planning is very
important, making sure you have the right people involved is
even more important. Many financiers will tell you that they
look as closely at the management team of any ecotourism endeavor
as the spreadsheets before making their decisions. I too have
seen cases where the personality and passion of key individuals
can carry the day.
Financiers will not come forward unless we show them a complete
master plan - the risk is too great. It is no good presenting
a product without a means of implementing it.
Ana Garcia Pando
I have dealt with business plans in which cash flow was measured
in "cows". But I do call that a business plan, for the person
sat down, foresaw when he/she would have the need for money
and when he would be able to sell that cow to cope with that
specific need of financial resource for his/her project. I have
also convinced bank managers to grant loans based on availability
of cows to be sold. But I have never ever seen a person trying
to start the most humble business without taking into account
how much money he/she would have to invest, where that money
would come from, and how much money he/she would need to get
as return to cope with debt and to feel the effort worthwhile.
I see at least four areas where government can play a role to
promote sustainable tourism:
(1) evening the playing field
(2) spreading the word
(3) education and training
Governments can reduce cost of capital by reducing
uncertainty about the future. A national ecotourism strategy
and regional tourism development plans can help to direct ecotourism
to appropriate areas and especially help to avoid investments
in places where subsequent development plans may make ecotourism
The fact is -- at least in third world countries -- initial
government investment plays a vital role, since private sector
won't build the park infrastructure. While the government can
do this, it needs to focus efforts on local ownership. Unfortunately,
we have seen the reverse. Government usually promotes expensive
eco lodges and resorts. At this top end we find "eco ghettos"
due the poor social and community involvement.
In Chile, public funding for tourism is scarce. My question
is how to convince authorities that public investment in small
and medium tourist enterprises pays off? It does, because it
allows the growth of a sort of economic tissue for disfavored
areas. Owning a small enterprise also gives self-confidence
and self-assurance to people, and tie them deeply to their roots,
their communities and their businesses, improving thus the social
tissue and the networking process. So what we are talking about
is how and why should public funding finance the sustainability
of small businesses in a world of mergers and acquisitions,
and why an entrepreneur would be satisfied with an investment
that would allow him or her to lead an easy, downsized life,
repay his or her investment, send his or her children to college
and have a decent fund for his or her retirement.
I'm afraid that I must admit to object to western-influenced
people in the 'business' of tourism, or even people hiding behind
a facade of a non-profit NGOs (while drawing fat salaries),
exploiting the concept of ecotourism. It is to me on the same
or perhaps a lower level as five star hotels saving on laundry
costs and claiming to be green. It is the eco, community, sustainable,
that comes first and not the 'tourism'. There are other yardsticks
by which to measure the success or sustainability of an ecotourism
program other than financial.
Rengyu Mru raises some very good questions about how we view
"sustainable" and "profit" in a nature-based tourism setting.
And I agree with Rengyu that it is possible to have a successful
operation without "a well-defined master plan, trained managers,
financing" -- but these examples often depend on one or two
very enlightened individuals. Counting on them as a model is
not very useful. But I think we need to keep in mind a few key
things about financial profitability. There is no free lunch.
If an operation is not profitable, it can only exist (once the
initial capital is exhausted) if it is being subsidized. We
need to be very careful where the subsidies are coming from
(or being extracted) because these are not always obvious.
I question whether 'luxury ecotourism' - which by definition
caters more to visitors' high standards of comforts than to
the local community's norms - isn't an oxymoron. If a fundamental
tenet of ecotourism is to really learn about and interact with
local community members, shouldn't 'eco-visitors' be ready to
adapt to the community, or at least meet them half-way in terms
of standards? In conventional tourism, the more a client spends,
the more luxuries they want -- but should that be the same in
ecotourism? How can an experience be authentic if visitors are
paying over a hundred dollars a day to enjoy gourmet meals served
up in the midst of a poor community where incomes may be only
a few dollars a day?
Having said all of this, and getting back to the small, community-run
ecotourism model, I think that this can be sustainable, and
also 'profitable' in the sense that Rengyu and others have pointed
out. Not necessarily by the measurements used by conventional
financing sources, but in terms of providing alternative incomes
for poor communities, which allows them to conserve rather than
use up their natural resources. I feel this has been the case
for the community of Santa Lucia in rural Ecuador.
By chance, I came across the website of a nonprofit called the
Social Investment Forum: http://www.socialinvest.org.
The site contains a wealth of information, including something
called a Community Investment Guide. I haven't had time to download
and scour the PDF files, but the concept of a guide for this
sort of thing seems very interesting. Ron compiled a list of
resources for this conference, and I'm sure that they will find
their way into the permanent Planeta archives. But perhaps there
is room for something more systematic, perhaps even an Ecotourism
Investment Guide. Or maybe the ecotourism financing gurus should
just make more noise within the socially responsible investment
universe and coordinate more closely with that movement.
On the conference center home page, you may have noticed a book
Understanding and Creating Alternatives to Legal Tender
published by Chelsea Green. It explores how communities can
create sophisticated bartering/exchange systems -- particularly
useful where access to loans and money is limited.
I have corresponded with author Thomas Greco who
wrote the following: "Private currencies have the potential
to empower, not only local communities, but also "communities"
that are not geographically defined. I can envision an association
of operators of ecotourism facilities and services (booking,
lodging, transportation, schools, parks, attractions) issuing
a common currency as a way of financing their development, improvement,
and expansion costs, as well as their working capital."
I have not seen any explicit discussion of the advantages and
disadvantages of community versus privately sponsored ecotourism
ventures in terms of financing (or other aspects). As a general
proposition (reinforced by experiences with a few Native American
tourism projects) community run ecotourism projects seems to
face some additional hurdles, especially in terms of financing,
when compared with private ventures. Part of the challenge is
that project management is often complicated by community/tribal
politics that can adversely affect decisions on where to place
facilities, how many people are involved in executive decisions,
who and how many people get hired, and the like. These considerations
not only affect potential project survivability but also the
willingness of traditional lenders and investors to get involved.
An important question that this conference has not really
been able to answer is how quickly alternative sources of financing
for community/tribal ecotourism projects have been developing
and how quantitatively significant they are.
A WORD ABOUT THE WEB
Trying to locate detailed information about specific tourism
projects, upcoming contracts or evaluations is next to impossible
on most finance institution, development agency and conservation
In the summer of 2002 I attended a review of a World-Bank
funded survey of ecotourism in Oaxaca, Mexico. I asked whether
or not I would be able to find details about the contract online
The WB anthropologist said probably not ... My opinion -- when
such important work is conducted in secrecy, the chances for
synergies, coordination and success diminish. We ought to be
building constituencies for sustainable tourism, and the only
way this will occur is by improving communication.
A good example is the Organization
of American States. A couple of years ago I was contracted
by the contractor to develop a website for Central American
tourism. It was to be part of a regional Destination
Management Service. The project failed.
It is easy to play the "what if" game, of course. But if the
Central America DMS has been developed from the ground-up, with
open communication the project would have been a great success.
Instead, it was developed (and funded) in a top-down manner
that could not engage the stakeholders.
The work of the Interamerican
Development Bank is notable, but articles about its ecotourism
projects do not link to any background documents, nor is there
a section about tourism. For those who pay, the bank provides
detailed information about upcoming
projects. Shouldn't this information be freely available?
Looking at foundations
we often see lists of projects that have been funded, but rarely
is this information posted in a timely or detailed manner. We
rarely find evaluations or even links to the grantees. We also
do not see long-term commitment to sustainable tourism financing.
Suggestions: Institutional websites need to learn to speak
the language of their visitors -- stakeholders who are not only
consultants but also those affected by policy. These websites
ought to provide more timely information and be more interactive.
I would love to see public forums based on topic or region.
And I have no doubt that big changes are under way. Frankly,
I could not be more optimistic. This year I have had more positive
contacts with executives and other top-level decision-makers
who are using the Web for the first time. We might also consider
forming a working group to provide a sounding board to evaluate
the websites and provide practical suggestions.
One response to Ron's evaluation of the inability of development
agency websites to share the experiencesis that, most often,
the agencies themselves do not coordinate (even among their
own program officers) in specific areas such as sustainable
Little wonder that the websites do not share information and
experience on sustainable tourism. The organizations themselves
do not do it, and websites can at their very best only be as
good as the institutions producing them.
On a scale of 1-10 (with "1" being the least and "10" being
the most), how useful was this conference?
- 1, 0 votes, 0.00%
- 2, 0 votes, 0.00%
- 3, 1 votes, 4.76%
- 4, 0 votes, 0.00%
- 5, 1 votes, 4.76%
- 6, 0 votes, 0.00%
- 7, 5 votes, 23.81%
- 8, 7 votes, 33.33%
- 9, 2 votes, 9.52%
- 10, 5 votes, 23.81%
Are you interested in reading a summary document from this
- Yes, 24 votes, 100.00%
- No, 0 votes, 0.00%
Was the Financing Sustainable Tourism Conference the first
time you participated in an online conference?
- Yes, 9 votes, 45.00%
- No, 11 votes, 55.00%
How did you learn about the Financing Sustainable Tourism
- Planeta.com, 14 votes, 70.00%
- Conference Co-sponsor, 1 votes, 5.00%
- Word of mouth, 4 votes, 20.00%
- Other, 1 votes, 5.00%
How often did you visit the conference center page -- http://www.planeta.com/ecotravel/tour/ecotourism_financing.html
-- during the event?
- Never, 3 votes, 15.79%
- Once or twice, 4 votes, 21.05%
- Weekly, 7 votes, 36.84%
- More than once a week, 5 votes, 26.32%
EXCERPTS FROM THE CONFERENCE, PART 1