FINANCING SUSTAINABLE TOURISM

Conference Summary: Part 3

BUSINESS FORUM

Excerpts: 1 | 2 | 3 | 4

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Editor's Note -- Following are excerpts from the Financing Sustainable Tourism Conference which took place in August and September, 2002. Statements have been edited.

Role of the Government
John Shores

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
(4) financing

(1) By "evening the playing field," I mean removing the bumps and bottlenecks in the laws and regulations that make ecotourism a more difficult enterprise than other tourist enterprises and other industries. Getting an ecotourism enterprise licensed and inspected should be no more difficult or expensive than any other, and special attention should be given to the (often) small size and seasonal nature of the enterprises. The cost and effort to gain admission to the club should not keep the small and seasonal enterprises from joining. Laws, rules, and regulations should not make it harder to be green. I recognize that a lot of the licensing and inspection occurs at the county and municipal level, but national and state government can encourage particular policies and wording.

(2) "Spreading the word" should be obvious. Ecotourism needs to be a part of every tourism department's marketing effort. The word "ecotourism" needs to be visible and prominent. The tourism department needs to know how to explain and promote it. The state can also play a role in lowering the threshold for participating in state-led publicity efforts. I like to promote the idea of state or provincial registries of nature-friendly tourism facilities and services. Again, the government departments need to take into account that many ecotourism enterprises are small and seasonal.

(3) Each situation will be different, but state schools (highschool, vocational, community college, and universities) can play a role in offering programs that promote sustainable tourism. Often the Extension Services connected with state universities can play part of this role.

(4) Government development funds could be made available to support ecotourism. Three kinds of efforts come to mind: establishing and protecting natural areas, bringing together interested parties in regional and thematic associations, and direct funding to enterprises, taking into account the peculiarities of ecotourism enterprises (size and seasonality, but especially the concept that sustainable tourism may be more expensive to get started, and recognizing the broader public good because many of the benefits are externalities).

Depending on the country, there may already be taxes in place on property, income, sales, and tourism-specific elements such as a bed tax. So we need to encourage spending by the state on the infrastructure that supports ecotourism (natural areas, roads and highways, water and sanitation, etc.) as an opportunity for the state to invest in tax-generating enterprises.

We probably all agree that two crucial elements for success in ecotourism are: (1) having a clear business plan, and (2) demonstrating adequate managerial expertise. But for many of the most innovative ecotourism ideas, there may be no prior experience to draw on. The business plan may be realistic but still largely conjecture. No manager may have attempted the innovative idea before. So there will be some additional risks involved that go beyond the risks of conventional tourism. This will often scare away the sources of conventional financing.

The "Plan B" for many ecotourism enterprises seems to be self-financing. For this to succeed, the initial design has to be small enough to be within the capabilities of the individual or family's own finances (usually the savings accounts of family and friends), and the enterprise must be able to grow incrementally as it generates its own net revenues. A rafting company adds additional rafts and guides as the income stream permits. A destination adds cabins as income allows. What this "Plan B" does not permit very easily is any enterprise that requires a significant initial capital investment (a tree-top aerial tram, for example).

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 impossible.

Public Funding for Ecotourism
Ana Garcia

While rural tourism was considered an "Innovative action", it used to take long discussions to convince owners of small houses or ruined buildings to invest their scarce resources and become kind of "innkeepers" or guest attendants. It used to be kind of brain washing, taking advantage of the most innovation prone sectors of the rural population: women and young people. Grants covered up to 50% of private investment (in the most disfavored regions) and up to 80% of public investments.

We started the program by establishing strict criteria that would meet any accommodation standard, in order to ensure the mean tourist that he or she would enjoy a standard sojourn, in an unusual environment. Our strategy was to give rural people the same market tools and advantages their competitors in the sun and beach or urban destinations were using. In this, we faced a lot of criticism, because we were supposedly compelling people to acquire higher standards, with higher investments, and thus "devaluating" or corrupting the meaning of "rural".

Let me point out that our standards aimed at preserving local architectural features, the use of traditional building techniques and local materials and prevailing of rehabilitation against new constructions, The only " devaluation" that I admit is compelling people to have bathrooms inside their own houses, prior to lodging tourists. Yes, by 1991 there were still places in Europe where peasants had their bathrooms outside their houses.

We tried to balance those investments by upgrading the percentage of grant awarded to the projects that fully met our standards. (the mean grant in that period for tourism investments was about 25 -- 30%. In the area of study it was 35%, provided the project fulfilled the standards) We understood that the sustainability of these enterprises would lie on their ability and capacity to attract affluent tourists (or tourists with high expenditure habits) throughout the year, so we gave our entrepreneurs a sight of what people would expect of an accommodation, and then taught them how to operate and how to market their products, and how to take advantage of the resources that were at their hands (nature, environment, tradition, gastronomy, handcrafts, and so on).

Compulsory training was a must: every entrepreneur with a grant, was obliged, by contract, to attend at least 200 hours of training in rural tourism management issues: feasibility studies, pricing, operation, marketing and promotion, and how to build up tourist products, as well as gastronomy, costing, and customer service. It turned out that by 1995, the area had passed from 130-140 unclassified bed capacity, to 600 accommodation posts in a range varying from classified rural camping site, and two star hotels and Rural Guest houses. Most important, the average price and services were more or less the same, (excluding the camping site) offering a wide range of accommodation, from fully equipped houses, to bed and breakfast accommodation or agritourism accommodation, to small, "boutique style" hotels in manor houses. We tried to avoid price segmentations, searching for a "supply segmentation", which means that families with children and groups of friends would choose fully equipped houses, and young couples or elder ones choosing among a variety of hotel or hotel style accommodation.

By 1998 rural tourism was almost a "mass product", and unrestrictive policies in public financing of these initiatives meant that the supply side grew faster than the demand side, compelling many destinations throughout Europe to start pricing policies, with dramatic discounts and offers, which are a very dangerous policy to such fragile enterprises.

The area of study, though, was able to maintain its occupancy rates and an average price which was higher than the rest of the areas in the region.

Our conclusion is that quality pays off. Tourism has not saved the economy of this area, but population is steady, diversification means that service sector and agriculture are more balanced now (and there are young entrepreneurs from the area investing there, instead of going to urban areas.) Moreover, people coming from big cities have bought a house and started tourism businesses. Maybe these communities have received some more years of life -- span thanks to this public and private investment (the area is Oscos Eo, in Asturias, Spain). By 2001, the massification of the area was about to happen, due to no restrictions in the number of beds granted in the same area. The success was so big that everybody wanted to invest there. The problem was, the local council continued to encourage the investment through public funding, resulting on an excess of tourist beds. The reaction of local entrepreneurs was to create a local committee to set up standards for bed density and accommodation quality, as well as a set of recommendations to the local government including the need to direct investment to public infrastructures that would complement the local tourist product.

So one of the questions which have comer often to my mind for the last years is this one: How do we know when to stop funding? In short, right when the activity has proved itself as viable in the long or medium run.

I now find myself working in a totally different environment, in a country -- Chile , in which public funding for tourism is scarce, and the opportunities for starting new businesses are less attractive that the ones detailed before. And now 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 ties them deeply to their roots, their communities and their businesses, improving thus the social tissue and the networking process on a devaluated area. But to understand this, first we all have to assume that this is not a problem of eco, rural, ethno, bla-bla tourism, but a question of financial structure and the capacity of SME's to reach financial sustainability.

These types of tourism enterprises agree with small facilities, family run and with a lot of personal commitment on the projects. But this is the weakest point of all, for when the money is lacking. 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.

Funding Ecotourism through Coalition Building
Desmond Kaplan

This model has a significant advantage to all concerned since it allows the pooling of limited resources to produce results from which each agency benefits. In other words the added value to a relatively small contribution becomes substantial. Each member of the coalition is represented on the project steering committee thereby ensuring a say. Project documents and press releases include the logo of each of the paying participants so each group is able to visibly demonstrate their involvement, gaining public relations mileage at low cost - critically important to most organizations reliant on public/political support. The idea is based on the "win-win" model of mutual benefits.

I am participating in a pilot project (The Yodfat -- Hararit Project -- see below) that I helped to put in place for this purpose and am in the process of setting up another in a different area. In both cases one is dealing with management of environmental quality in rural regions where there are a mix of nature reserves, forest areas, grazing, various forms of agriculture and natural attractions like water. These areas are being visited by increasing numbers of people for recreation purposes; clearing of garbage alone represents a serious challenge, not to mention damage control. The model uses a management and coordination framework that allows for the pooling and efficient use of limited resources while creating an entity that demonstrates good practice and visible, quantifiable results; this in itself creates the conditions for attracting support and funding.

The Yodfat-Hararit Pilot Project: This is an ongoing project that began over ten year ago. Its history provides a very graphic account of the ingredients and processes affecting work in a sensitive environmental context with viable tourism potential. I will try to concentrate on the financial side but, pretty much by definition, one has to connect it holistically to the surrounding milieu in order to gain a useful understanding of the picture. The core territory of the project is about 100 sq. km. in the Central Galilee Region in Israel. Most of land is reserved for open space in one form or another and is designated in regional plans as being of high environmental sensitivity. It is surrounded by several towns and villages providing an immediate population of some 50000 people while being within one hour traveling time of the all of the Haifa metropolitan population numbering some 1 million. The village where I live, Yodfat, is one of three small villages (total population under 2000) within the core area.

First Stages -- The Local Situation: It began in the early nineties when I was given the task of preparing a tourism development guide-plan for Yodfat. The village gave me a modest planning budget of some $3000 and we received a similar amount through a program of consulting services aid for tourism development that is managed by a partnership between the ministries of tourism and trade and industry and other bodies including NGO's (too many details required to spell out the complete who's who). This plan became the first tool whereby the community of Yodfat could begin to develop a workable understanding of the framework within which publicly provided infrastructure could provide a platform for entrepreneurial activity while controlling the excesses that unbridled free enterprise are too often capable of producing, to the detriment of local quality of environment and life in general. The plan set out to provide a local basis within which these activities could be balanced combining public and private resources and interests. Various impacts were studied including the relationship between residential areas and tourist businesses, optimization of traffic, parking and so forth. Today, Yodfat (pop. about 350) is visited by some 100000 people per annum. There is much room to improve but essentially it is functioning, in an at least minimally sustainable way, as far as interaction with residents is concerned. The main tourist business/attraction in the village has been functioning for some ten years. It is a facility called the "monkey forest" that comprises a large wooded area (enclosed) in which squirrel monkeys run free; visitors wander about in the same enclosure as the monkeys, interacting with them -- we will not go into the ecological questions here! In addition there is a ceramicist, food outlets and even the local grocery store benefits from the tourist traffic. The local textile plant has opened a factory outlet which has become an attraction in its own right. Each business is investor financed while municipal taxation of these businesses provides funding for environmental maintenance in the village itself. The problems start to appear as one goes into the surrounding countryside where the connectivity between a business and the environment become less clear. More and more visitors spend time in the surrounding open countryside, challenging its carrying capacity.

The Wider Regional Context: The attractiveness of the surrounding countryside, the proximity of a "target" population and the desire on the part of the local political leadership to promote local economic development led to a plan in the eighties that designated three major additional tourist development nodes in the core region. The concept was based on private enterprise being attracted to invest in hotel-type attractions in the area. Before it was finally approved, a local coalition of the three villages in the core area began to challenge the wisdom of this plan pointing to the need to support local small-scale businesses and expressing concern about the environmental damage that might occur if large corporate scale projects moved in -- the preferred idea was to promote development based on the principles "small is beautiful" and ecotourism. I acted as a professional consultant to the group on a voluntary basis. Being a stakeholder myself, I was concerned about environmental deterioration in my back yard and exposed myself to accusations of practicing NIMBY (not in my back yard)! This made it all the more important to present well rationalized and professional arguments. The thrust of the objection to adding more development points was substantiated by a new national tourism development plan that was produced at that point in time and others who argued forcibly in favor of developing tourist services only in existing settlements rather than "invading" open terrain and bringing in more infrastructure to otherwise relatively pristine countryside. We were able to refer to these new plans to good effect and start a process of rethinking the development of the region.

Funding Planning and an Implementation/Management Framework: After a number of false starts the local (three villages) voluntary coalition got the backing of a local environmental NGO who then provided the first seed resources for a campaign that led to the funding coalition which backed the production of a new alternative plan incorporating principles of sustainable development including ecotourism. The $30000 budget for the plan was split between the JNF (forestry authority), the tourism ministry, the nature and parks authority, the environmental NGO mentioned above and the regional municipal authority. The plan includes the setting up of a management body to oversee the implementation of the plan and to coordinate ongoing environmental management of the area, including cleanups and development of tools for managing carrying capacity issues. Today the new plan is in place and the management body is functioning in a pilot capacity. A special feature of this body is that it requires no special additional funding since it employs the existing staff and organizational and logistical infrastructure of already existing institutions, exploiting channels that are already in place. The "trick" is to get these existing bodies to coordinate and focus in ways that generate the added value required. This pilot project is an ongoing learning experience that has already fed other projects. There is still a long way to go but we already know for sure that one of the most important ingredients for success is ongoing leadership and vision backed by professional and management skills.

Tanzania Examples
Andrew Hurd

First, limited technical capacity and understanding of what eco-tourism is. The term has been over-used to the point that it has too many meanings, and thus little meaning at all. Investors think that all they have to do is use natural materials, hire local people, provide nature guides and donate a small percentage to the local community development fund and they are doing eco-tourism. It's this last item that leads to the second obstacle.

Second, investors are fed up with local community politics, i.e. money is not used for purposes intended. Village leaders sign agreements with hoteliers stipulating that the money will be used for furnishing a school or building teacher houses, but more often than not, the money goes to other uses, including pockets. Investors get frustrated and stop payments, killing any chance for a mutual beneficial relationship. Their attitude becomes, "why should I be a bloody philanthropist when the community leaders just pocket the money?" It is important for all of us to keep in mind that not all local people/villagers/local communities are honest people and that the misuse of funds we see at top levels of government also trickle down to the local level. Investors are unwilling to take the time to work out a rigorous and transparent relationship with the village (the third obstacle).

Third, as many have written in this conference, 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 un-tied donations.

As a result, many hoteliers and tour operators realize after a time that they can run a successful business without the hassle of dealing with the local community (though many continue to advertise that they have excellent relationships with them). Let's be honest, the eco-tourism market, though growing, is still quite small and many, if not most, tourism investors will abandon the concept once they realize it isn't a quick, cheap and easy prospect. I would argue that lack of financing doesn't mean that an investor won't develop a tourism enterprise, but that the investor won't go the extra mile to develop it responsibly, using the triple bottom line as a guiding principle. It's this extra push (or is it pull?) that is needed.

That being said, if these frustrated investors, in partnership with local communities, could tap into some funds and technical expertise, most would be quite happy to give it a shot. An idea that I've been playing with here in TZ is to establish a private foundation (with a boring name like the Responsible Tourism Foundation) that provides small grants/loans and TA to coalitions of local communities, private investors and local government (a la Mr. Hillel's idea of establishing a platform to channel funds). Though I am hesitant to create a new institution (TZ has over 1,000 NGOs, the majority of which are briefcase in nature), the need for such a foundation is clear to me, at least in this context. I've seen too much donor (bi- and multi-lateral) aid tip-toe around tourism without committing funds to where it is needed the most -- getting responsible tourism enterprises up and running. Tourism Master Plans and Marketing Strategies are great, but it is time that a system is set up to 'incubate' and sustain strong tourism coalitions.

The Foundation would focus on the following four aspects: product development (I've seen too many good ideas being tried in the wrong places and vice versa); TA in areas of site selection, infrastructure provision and design of accommodations (green building) and business plans; assistance in developing strong, transparent relationships between all partners; and joint marketing efforts. Another activity (which I've already put in progress despite not having set up the foundation) could be establishing a Stewardship Awards for Tourism initiative to recognize the leaders in responsible (environmental and cultural/community) tourism and to encourage others to follow suit (the major incentive being marketing value). The Foundation would set eligibility criteria and assist coalitions in developing funding proposals (only coalitions of partners could apply for the funds and TA -- applications from sole communities, local governments or private investors would not be eligible). The Foundation would use models and experience that seems to be working (the Cultural Tourism Program, funded by SNV in TZ, is one such example).

Of course, the big question (that I have no answer to) is who is going to supply financial assistance to the Foundation? Mr. Hillel's idea of an inter-organizational system is good, but I worry about the ability of those organizations to 'let go' and work together (and agree on standards and eligibility criteria). Are CI, WWF, WTO, UNEP, UNESCO, World Bank and others ready for this? Boy, wouldn't that be nice ... Let me stop the rambling here. In short, I propose that country-specific private foundations (eventually networked globally) would be well-placed to give local communities and investors that little extra push to work towards developing, and sustaining, responsible tourism.

Three Notes
Oliver Hillel

1) I would shape the proposal as a business incubator as well: for a couple of years, the budding ecolodge and sales management businesses will need a decreasing dose of four essential components of support: basic and practical business education (business management, financing, human resources management, marketing, etc - traditional communities often have a long learning curve to really understand the nature of business as a going concern, the concepts of economic capital, risk management, markets, etc), regular consultancies for business planning and feasibility studies, credit for development, and marketing assistance. Otherwise they might die on you... even with this, the risk is always there.

2) I've been involved in a model somewhat different from the one you describe, that in spite of difficulties has evolved well since 1998, in the Guatemalan city of Flores in the Peten. There, several independent community-owned businesses, ranging from ecolodges to Spanish schools and homestays and to forest products, are marketed by an enterprise called Ecomaya (see http://www.ecomaya.com), with shares held by the NGO ProPeten (associated to Conservation International) and by each individual community-based business - if it didn't happen already, the NGOs shares will eventually be bought back by the others. Ecomaya is then a kind of non-exclusive distributor (although some community businesses such as the Ecoescuela de Espanol have decided to grant Ecomaya exclusive contracts). Over time, this marketing business mostly became a tour operator (as non-timber forest products are harder to produce and market), and has been leveraged by some green credits. The model is somewhat different from the one Alan proposes as it is more independent - your chain of ecolodges seems to be more centrally managed, with communities having a predetermined share.

My experience is that it is hard enough to support the self-management of a single community, so if your model requires several communities to work together, coordinated under the guidance of some umbrella NGO or so, the risk of disaggregation and lack of ownership/commitment is big. Why not establish each of the ecolodges as a separate going concern, independently managed, and establish the management/reservation chain as one (probably the biggest and most efficient) marketing and distribution channel - but let the communities figure precise relationships with the operator/marketing agent out by themselves as much as possible. Some will probably be more successul than others, and risk is always there, but the arrangement is much more sustainable as it develops management skills from the start, and independence from the project and grants scheme is much nearer. It would also be a sounder way to disburse the up-front profits you refer to: the big risk being that these "profits" be taken as salaries instead, creating the expectation of regular payment against a changing market... Non-exclusive arrangements with the reservations service/distributor would be good for two reasons: it would add the possibility of direct sales for each lodge, and it would open the way for the distributor to choose other products to increase its product portfolio.

3) I would factor in a conservation pay-back scheme from the start - it's much harder to do it later... Is there a plan for a community-run or private protected area close to the reserve you mention, financed from lodging rates? Will the lodges pay a fee to the reserve management? Are there clear standards for conservation?

Travel Learning Connections
Carol Patterson

Awards can be effective
Ron Mader

Business Concern?
Rengyu

However, I would like to question whether all ecotourism is really a business concern at all. Or if by being 'financed' by banks or institutions that demand so much, the 'look and feel' and tradition of the village is basically altered. Do ecotourists really wish to experience projects that have been financed by banks and institutions, that are subject to reports, statistics, master plans, ISO standards, et. al.? Perhaps in some cases, but perhaps not in all. In a worst case scenario -- after having trained up the indigenous tribal families in management, finance, marketing, internet skills and such, they would probably be inclined to leave the village and get a job at the UN (just an example, Hillel). It seems these discussion are either like this or heavily 'intellectual' in content - of course nothing like the non-virtual international conferences held in five-star resorts. But most probably I'm totally out of line here and beg forgiveness for sticking my head in where not appropriate. I did like Paul's suggestion that perhaps the question be seen on a local and indigenous level and we could "learn" other paradigms of business and finance, which seems to me to be an integral part of ecotourism. "Unfortunately, in many rural settings finding such people to lead ecotourism projects is one of our major challenges." Isn't that at least part of the attraction (and thus financial viability) of rural ecotourism 'projects' is that they are not the kind of people financiers would lend to? Of course this would also put a lot less need on consultants and experts in the field.

Response and a Question
Desmond Kaplan

I am confronting identical questions in my own work and am sure that the issue is pretty universal. I would like to suggest to the participants and organizers of this conference that we explore the possibility of using this forum as a springboard for initiating the establishment of a database that includes case study and other research material that will provide a tool that can be used for explaining (and marketing/selling) to government or state institutions the economic contribution that can be made through investment in development and long term maintenance of environmentally special areas. One could imagine that convincing arguments and marketing strategies can be put together for this purpose, if we could coordinate our efforts. State investment in ecotourism infrastructure and its maintenance needs to be seen as no less important than investment in other economic infrastructure; in the long run it should also produce the kind of tax base that will make it sustainable. In other words I am suggesting that we work together in order to put together a convincing cost-benefit picture. Maybe Hillel Oliver could suggest sources for funding an initiative of this kind with the help of UNEP?

Responding
Ana Garcia Pando

We are dealing with a more profound issue here: where local governments have the ruling over their territories, resources are found to pay for maintenance and conservation of infrastructures, for they are felt as owned by the community. Tourism, as a tool for land management is helping redesign the role of local governments in Europe, for they are the institutions which are closer to the territory and the people, and best results have been obtained by transferring both the funding and the actual ability to intervening in the territory to the local governments.

Thus, many publicly funded infrastructures have become a source of income for local governments who are obtaining economic resources from the touristic operation of such infrastructure, enough to attend their own maintenance and preservations. In other cases, public bids are called and local entrepreneurs get access to manage the infrastructures, paying an amount to the municipality and catering for the conservation needs of the infrastructures. No "business plan" , no "great idea" and no infrastructure funding project is admitted to public funding without a clear description on how it is going to operate once funding is over. This way, public infrastructure also become a new source of employment.

Yardsticks
Rengyu

I realize there are no universal answers or solutions, but I do think there are and can be alternative world views and ways to do things, discovering and giving value to these are to me giving more value-added meaning to ecotourism. If it can lead to opening the eyes and minds of visitors to different paradigms of thinking and doing things (not just basket weaving and cheap handicrafts gimmicks, but even business management & finance and alternative social and political systems, etc.) then to me the ecotour program is a grand success. If we have to change the native people to become like western clones to compete in the international market economy as it is today (i.e. to compete for loans & financing to become profitable), to me -- that could mean the complete failure of ecotourism. I do realize that this may seem to be a rather radical view, but that alone should not invalidate it. I appreciate Mary Finn's ideas a great deal.

There are other yardsticks by which to measure the success or sustainability of an ecotourism program other than financial.

Exploitation and Greenwashing
John Shores

In work promoting the community-based tourism programs in the Peace Corps, we focused on community empowerment as the first goal (similar in many ways to the programs Mike Robbins recently described for Canada). A community that feels it is in control of its own destiny can then look farther into the future and shape its own development. In the case of Peace Corps, the Volunteers were not under any pressure to promote a particular program or initiative. Helping the community to analyze the opportunities, understand the consequences, and choose in an informed way was plenty. In some cases, communities approached the Volunteers for assistance. They might hear of a community bed & breakfast in a nearby town, or see tourists on the river passing their village in canoes owned by people from another village. They wanted to know why tourists were not stopping in their village, or they asked for help in building a rest house or buying outboard motors for their canoes. By using techniques like one called "appreciative inquiry" a village or community could identify its own strengths and decide to build new efforts around those strengths. Education was a part of nearly every program, often including business-related skills like literacy, numeracy, accounting, and management. Visits by village leaders (often with representatives for the men, women, and youth) to similar villages with more experience with a particular development project were extremely useful in providing concrete examples and building networks of peers.

When an empowered community decided on its own to take an incremental step into tourism, it often amazed me with the quantity of financial resources it was able to assemble to meet a chosen investment goal. In communities that seemed (to me) to have little or no cash moving through the economy, the family savings were sometimes astonishing. In no instance was anyone trying to force a change on a village or community. I agree with Rengyu that forced change would be a disaster, and from my perspective wouldn't meet the goal of cultural sustainability that I expect of a program that wants to qualify as community-based tourism.

At the same time, preparing a community for change is one way to buffer them from some of the negative effects of increased commerce with the outside world. While it is possible to present travelers with an "authentic" experience with the hope of educating the traveler, it is probably more likely that a far greater social and cultural change will happen in the community itself. On a number of occasions a village leader has told me how she (or he) was saddened because so many of the young people moved to the larger cities or the capital to look for work, and almost in the same breath confided that she hoped her oldest child would be able to go to highschool and on to the university. We cannot stop these changes and we would be presumptuous even to think it was our decision to make. But we can help communities to foresee, understand, and make informed decisions about these changes as they approach. Community-based tourism gives communities a set of tools for participating in the travel economy. Self-financing gives some measure of control. Offering education and training so that members can participate in the travel economy at higher decision-making levels is crucial to their empowerment.

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, are difficult to replicate, and are not really institutionalized. 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.

For example: A family might dedicate time to producing handicrafts to sell to tourists in order to generate cash income. But this takes time away from other productive efforts such as agriculture that might feed the family outside of the cash economy. There is a direct tradeoff of food for cash, but the new cash income may not really offset the lost food production. The family may now have to buy foodstuffs that otherwise they would have grown themselves. And sales of craft items by neighbors may put more cash into the local economy, causing inflation. Maybe a child is pulled out of school to tend to the craft sales. My point here is that there are consequences to the decisions to pursue tourism and many of the consequences, and costs, may not be obvious.

Rengyu also suggests that an ecotour may be successful (satisfied guests and benefits to the community) without itself being financially profitable. I would predict that while the community might be happy with that scenario, the particular ecotour operator would soon go out of business.

The sustainability issue is one that deserves more discussion. To qualify as sustainable tourism, a tourism system must not adversely affect the environment. Ecosystems must remain intact. Species diversity and richness must be maintained. The biosphere must not be degraded. Anything else is not sustainable. (I present this argument in more detail at http://www.geocities.com/shores_system/ecot).

Economically sustainable essentially means that all of the affected parties would be willing to continue the particular activities, with the current distribution of benefits and costs, indefinitely.

Culturally sustainable is a more challenging concept. Tourists might be attracted to a community because of the agrarian, remote, and non-commercial quality of life there. The community members might look to tourism as a way to diversify the economy, end their remoteness, and bring more amenities to the community. Those two paths are rather divergent, especially if one heeds the words of tour packagers and operators who tell us that travelers are seeking an "authentic" experience.

Rural Community Perspective
Mary Finn

And a business plan is after all nothing 'magical' or complicated, it's just a conventional tool used to make sure that important planning steps or actions are not overlooked (and to ensure that all stakeholders involved are equally informed and working on the same assumptions). It seems more appropriate to large, complex projects which need extensive planning coordination, and especially as a tool for proving to outside financiers that the project managers have done their homework, are well-organized etc.

Similarly with the quality element - as Rengyu and others have pointed out, you lose the authenticity of poor rural community if you impose western standards of luxury or try to meet the 'preferences and expectations of a wealthy New York business person' (as one of the participants remarked). My question is -- shouldn't ecotourists be thinking about meeting the preferences and expectations of the communities they visit, instead of the other way around?

I know in practice there usually must be a compromise between the two, but I do 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.

An approach that has worked well as far as financing Santa Lucia's startup (and that could potentially work for other communities) was to concentrate initially on receiving volunteer vacationers (university students and professionals on extended leaves of absence) instead of full-fledged tourists. Volunteers pay less, but stay longer, and are also more willing to tolerate less than perfect conditions or unfinished lodgings, and even help finish constructions, build trails, design pamphlets, etc. This type of approach also integrates well with other community projects, such as sustainable agriculture, reforestation, conservation etc., as volunteers provide labor/expertise as well as funds for these types of projects.

In this sense, the volunteer program has served as a phased-in approach to ecotourism, which allowed the community to self-finance part of their capital needs and provided an opportunity for the members of the community to get on-the-job training in various aspects of this new business. At the same time, it has served as a defacto barter system in the case of many professionals who have come and helped the community with conservation planning, English education, computer skills, etc.

And unlike tmost commercial institutions, and even many NGOs (whose systems are generally closed to unconnected outsiders), there ARE individuals and organizations open to helping previously unknown, rural, third world communities, especially in the area of volunteers. Just to acknowledge a few -- Ron and Planeta.com, Ami Dar and Idealist.org, Workingabroad.com, and Earthfoot.org.

I'm sure there are many more, but the problem for many third world communities still remains -- how to find out about these resources, and how to take advantage of them (since to do so requires some level of internet savvy and English ability, both fairly large hurdles).

I'd like to end with a short 'wish-list' of financing/startup/marketing mechanisms I think could be very helpful from a community ecotourism perspective:

- SME incubators and free or low-cost 'extension' and training services

- Sources of micro-credit, at lower international interest rates (as local interest rates in places like Ecuador are prohibitively high.)

- More open sources of information and technical and financial aid, something like an ecotourism consulting 'corps' (similar to Vista volunteers?) Even a clearinghouse or listing of professionals with expertise who are willing to do pro-bona work for communities or offer their services via barter could be helpful.

- Inter-community networks for direct community-to-community exchange of information and experiences.

- Possibly the establishment community marketing cooperatives, to share internet expertise, advertising expenses, etc. (but with open membership and no exclusivity so that member communities retain control and it doesn't become a defacto marketing monopoly).

Sustainability and Success
Ana Garcia

SUCCESS. Profitable (in whatever sense: spiritual, personal, economic, financial, cultural) enough to encourage the investor to maintain the operation

The scale of profit is what makes ecotourism businesses a choice for a special type of entrepreneur or a typical choice for "locals",. (for they don't need to move infrastructure, resources, headquarters, staff etc to a distant area, there is lesser capital cost). So what I mean is that to be sustainable, an ecotourism business needs to be successful -- success meaning generating a minimum return to cope with debt, to repay the investment, to sustain a minimum marketing strategy and to permit its workers (or owners, typically the same people) lead a decent life.

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. That is why I call a business plan, and what I call sustainability.

Strengthening Capacities
Cuahtemoc Cedillo

Thus, I think one of the most important financing objectives, to have success in this productive-conservative alternative that is ecotourism, is to identify and strengthen the capacities of such potential leaders and operators. So, I think is necessary to create and support some regional ecotourism schools, learning by doing, sharing knowledge, and constructing the bridges between different conceptions of life and cultural profiles.

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