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White Paper Considerations for Updating the National Tourism Strategy for Belize June 2005 A Project Supported by CPEC Prepared for the Belize Tourism Board

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Page 1: Considerations for Updating the National Tourism Strategy ... Belize – White Paper on Updating the National Tourism Strategy Executive Summary - i Executive Summary Background The

White Paper

Considerations for Updating the National Tourism Strategy

for Belize

June 2005

A Project Supported by CPEC

Prepared for the Belize Tourism Board

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Belize – White Paper on Updating the National Tourism Strategy Table of Contents

Table of Contents

EXECUTIVE SUMMARY Background i Tourism’s Contribution i Global Market Trends i Tourism’s Impact iv Competitive Destinations v The Implications for Updating the National Tourism Strategy vi

1. INTRODUCTION _____________________________________________________________________ 1

2. THE GROWTH OF TOURISM – INTERNATIONAL TRENDS ________________________________________ 3 2.1 The Growth of Global Tourism in 2004 3 2.2 Tourism Growth in Belize 4

2.2.1 Market Origin 7 2.3 Market trends 7

2.3.1 Historic & Cultural 8 2.3.2 Geo-tourism 11 2.3.3 Adventure Tourism 13 2.3.4 Community Tourism 15 2.3.5 Cruise Tourism 16 2.3.6 Consumer Buying Behaviour 20

3. TOURISM’S IMPACTS ________________________________________________________________ 23 3.1 Tourism and Biodiversity 23

3.1.1 The Multi-Stakeholder Approach to Sustainable Tourism 24 3.1.2 Moving Forward 26

3.2 Tourism and Economic Development 27 3.2.1 The Case of Small Tourism Enterprises 27

4. COMPETITIVE DESTINATIONS __________________________________________________________ 30 4.1 Tourism Planning 30 4.2 Tourism Standards 31

4.2.1 The History of Tourism Standards 31 4.2.2 Product Specific Standards 31 4.2.3 Standards, ethics, certification and guidelines 34

4.3 Marketing 35 4.3.1 Destination Marketing 35

4.4 Specialty Marketing 36 4.5 Partnerships and Collaboration 37 4.6 Human Resource Development 38

5. DESTINATION MANAGEMENT TRENDS____________________________________________________ 40 5.1 Managing Tourism as a Business 40

5.1.1 The Business Model for Managing the Tourism Sector 41 5.2 Policies and Regulation 42 5.3 A Market-Driven Orientation 42

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Belize – White Paper on Updating the National Tourism Strategy Table of Contents

5.3.1 The Case of Belize Community Tourism 42 5.3.2 The Business of Tourism – How Much Investment? 44 5.3.3 Stayover versus Cruise – The Business of Tourism 46

5.4 Success Factors for Destination Management 47

6. IMPLICATIONS_____________________________________________________________________ 48

7. CONCLUSION _____________________________________________________________________ 54

REFERENCES ________________________________________________________________________ 55

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Belize – White Paper on Updating the National Tourism Strategy Executive Summary - i

Executive Summary

Background The National Tourism Strategy for Belize was prepared in 1998. Considerable changes have taken place within the country's tourism industry and the global tourism sector has undergone significant transformations that influence Belize's market position. The 1998 strategy had set a minimum target of 120,000 visitors per year by Year 5 and 140,000+ by Year 10. In sharp contrast to these forecasts, the international visitor arrivals (overnight tourists and same-day visitors) for Belize almost reached 800,000 in 2003, and exceeded 1,000,000 in 2004. The cruise sector has accounted for the majority of this growth, increasing from 14,000 in 1998 to 851,000+ in 2004. This has created a significant number of issues and challenges for the Belize tourism sector and is of particular concern in updating the National Tourism Strategy.

This White Paper reports on key global trends that should be considered in updating the National Tourism Strategy for Belize. Its purpose is to promote discussion and debate on the way forward for an updated National Tourism Strategy.

Tourism’s Contribution Tourism today generates US $6.2 trillion in expenditures and is expected to grow 4.6% per annum between 2006 and 2015. In 2005 the sector represents 6.5% of total global exports and contributes 3.8% of estimated total GDP. Taking into account spin-off effects, GDP contribution is estimated to be 10.6%. The industry generated 74 million jobs or 2.8% of total world employment.

Tourism is one of the top five exports for 83% of all countries and is the main source of foreign currency for 38% of the world's nations. In Belize, the rate of growth in tourism has been significant. The WTTC estimates growth for Belize in 2005 will be 9.4%, significantly more than the 3.3% forecast for the Caribbean region and 5.4% globally. This organization further estimates that Belize tourism in 2005 will generate 6,450 full-time job equivalents. Taking into account spin-off effects, the estimated jobs attributable to tourism are 15,422. Tourism contribution to GDP is an estimated 7.8% and the tourism sector is increasing at an estimated growth rate for the next 10 years of 4.7%.

Global Market Trends Land-based overnight tourists in Belize were dominated in 2004 by the United States market (59.5%) with Europe contributing 14.2% and neighbouring Guatemala 6.9%. The significance of the U.S. sector increases dramatically when the cruise market is examined as approximately 84% of worldwide cruise guests originate from the U.S.

The strength of the Belize product and its international market position is reflected in the recent announcement of the top ten world adventure travel destinations in 2003. Looking at the global vacation purchases of its adventure and experiential travellers, iExplore has ranked Belize as #9, up from its position of #12 in 2002.

Experiential Travel

Belize is particularly well positioned for future growth in stayover tourism. The movement towards experiential tourism is evident in almost all facets of the industry and has become the primary consideration on the part of travel trade intermediaries. In 1998, the World Tourism Organization

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predicted that cultural and other closely associated forms of special interest tourism such as nature tourism would be among the hottest trends of the 21st Century. This prediction was recently confirmed by the Pisa Forum, an annual think-tank comprised of leaders of the global tourism sector, who noted that current market trends show that tourists are increasingly seeking experiential tours and offerings. Express Travel and Tourism (2003) added their voice to this viewpoint, noting that demand for authentic experiences that focus on local culture, learning, closeness to nature and wellness is on the rise, especially among older age groups. Recent research into the phenomenon has focused on two broadly defined market segments:

Historic/cultural travellers – defined as travellers who tend to include some type of historical or cultural activities on their leisure trips;

Geo-tourists – defined as consumers whose attitudes, behaviours and travel habit profiles show a high incidence of travel and a distinct preference for culturally and socially-related travel. They also tend to participate in educationally and socially-oriented activities and are socially and environmentally conscious.

While these segments are overlapping, some key findings from the research are significant for Belize:

the WTO estimates that 37% of all international trips include a culture/heritage component and that the market is growing at an annual rate of 15%;

in the U.S. alone, it is estimated that 81% of U.S. adults that travelled in the last year are considered historic/cultural travellers (118 million);

the geo-tourist market identified by the US Travel Industry Association (TIA) and the National Geographic Traveller identified a consumer market of 55 million of which:

− 21.2 million adult travellers are oriented to large city destinations and their cultural experiences and attractions (urban sophisticates),

− 16.3 million travellers are distinguished by their interest in environmentally-oriented travel (Geo-Savvys); and

− an estimated 34.5 million American adults are heritage tourism enthusiasts.

The geo-tourism market segment is particularly interesting as it is the first study of its kind conducted by the Travel Industry Association of America to examine attitudes of tourists related to sustainable tourism behaviour. Their 2002 study showed at least 55 million Americans who could be classified as sustainable tourists who have high expectations for unique and culturally authentic travel experiences that preserve and protect the ecological and cultural environment. The study indicated that a further 58 million travelling Americans could also be moving in this direction and be classified in the future as "geo-tourists". The majority (39 million) of the geo-tourist market segment seek the following activities:

visiting destinations with authentic historic and archaeological sites;

travel to experience people, lifestyles and cultures different from their own;

believe it's important to learn about the destination's people, history and culture; and

believe it's important that their visit to a destination does not damage its environment.

Also of particular interest to Belize is the fact that 81% of the geo-savvy segment (16.3 million American adults) report that they prefer to stay in small-scale accommodations and visit small towns and rural areas.

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Adventure tourism emerged in the last two decades as one of the fastest-growing market segments worldwide. The WTO's 1998 prediction that adventure tourism would be one of the hottest trends of the next ten years remains valid today and Belize is particularly well positioned to take advantage of this market. In America alone, the TIA estimated in 1997 that one-half of U.S. adults (98 million) took an adventure vacation within the past five years. Over 12 million of these participated in scuba diving or snorkelling, Belize's key adventure tourism market. In the case of scuba diving, industry experts in both North America and Europe report that the dive market will continue to grow as the tourism market generally, and adventure tourism in particular, grow.

The community tourism market is an emerging segment that is not yet well defined. However, it is a natural outgrowth of market trends towards geo-tourists and heritage/cultural travellers. A recent survey of tour operators interested in this product area (2004) demonstrated a high level of interest in this segment and in Belize in particular.

Cruise Tourism Segment

Cruise tourism has grown exponentially in recent years and is forecast to generate 16 million cruise guests by 2009 in Cruise Lines International Association (CLIA) member products. The primary source market for the cruise industry is North America where growth is dramatic – a rate of about 7% annually for the past 12 years. While growth in the industry is continuing, its nature is changing to some extent. Capacity expansion in North America has increased steadily and price reduction policies have been required to fill this additional capacity. The industry has accelerated its move to shorter cruises and has moved to make the cost of a cruise more attractive by positioning to drive-to markets. The International Council of Cruise Lines estimates that the total benefit of the cruise industry to the United States in 2002 was about US$20 billion. They further estimate that a 2,000-passenger ship with a crew of 950 generates approximately US$180,000 in on-shore spending per U.S. port and the average port-of-call spend is US$82 per visit.

The #1 area for cruises is the Caribbean region with 44% of the capacity placement in 2004. In Belize, growth has been dramatic with 406 stops in 2004 along with 851,436 passengers on board.

Growth in the cruise industry and the Caribbean has generated considerable debate, particularly from the accommodation sector who identify a number of issues:

uneven competitive base of the cruise sector vs. the accommodation sector (where the cruise industry enjoys a largely tax-free status while hotels continue to face taxes);

lack of involvement from the regional cruise sector and regional marketing campaigns; and

little in the way of contribution by the cruise sector to regional social programs that benefit local populations.

The Internet and E-commerce

No single marketing trend in the tourism industry in recent years has had the impact on the destination-consumer relationship than the Internet. The growth in the “iTraveller”, defined as those who recently used the Internet to research and/or book travel, is significant and growing. A 2002 study showed that over one-third of Americans and one-quarter of Canadian households recently used the Internet to research and/or book travel. Americans, in particular, have gravitated to the Internet as a source of information and purchasing with two-thirds (68%) reporting on-line travel purchases on-line.

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This trend has major implications for destination marketing. Competitive destinations are now investing heavily in web marketing. Designed to reach consumers but also to complement the destination's marketing relationships with the international travel trade and media, destination web sites are now encompassing the following functions:

consumer-directed travel information including access to booking engines;

special access for tour operators and wholesalers/travel agents to access information, image libraries and the like to facilitate their client management requirements; and

special access to the media for news releases, information pieces, and images to facilitate travel writing.

Thus, sophisticated destinations are combining traditional marketing methods with facilitating/enabling tools on the Internet for their customer base.

Tourism’s Impact The ongoing growth of the global tourism industry and the expectations that it will double in size by 2020 have fuelled considerable discussion on the question of tourism's impact.

The increasing awareness of the economic development potential of tourism together with concern over tourism impacts has motivated many destinations to become more strategic in their role in managing tourism sector growth. For years, there has been a focus on issues such as overuse of water resources, air pollution, land degradation, waste and litter problems, inadequate sewage treatment, aesthetic pollution, habitat destruction and eco-system alteration have all been raised as important areas to address when considering tourism impacts. Many destinations have emphasized program development, legislation and regulations to respond to the need for responsible environmental management of tourism's impact.

In recent years, international debate has evolved to concern about the opportunities and threats that tourism presents for biodiversity conservation. Indeed, biodiversity was identified as one of the top five priority areas for the 2002 World Summit on Sustainable Development with potential negative impacts of tourism and biodiversity in local communities expressed in many areas:

unplanned tourism that can often result in total landscape transformation in a very short period with significant habitat disruption;

aggressive price discounting and other marketing tactics generating high volumes and resource degradation and depletion; and

a lack of understanding regarding the nature of the environmental resource and the degree to which it can withstand development pressures (Caribbean coral reefs, for example, have been cited as a hot spot concern for biodiversity).

The flip-side of this increasing concern is a growing appreciation that tourism can make significant contributions to local environmental management and the conservation of biodiversity. It can provide a source of financing and an economic justification for protected areas, offer economic alternatives for local communities, and raise awareness through interpretive practices about the importance of biodiversity.

The discussion has evolved now to specific consideration for a multi-stakeholder approach to sustainable tourism. In the case of the World Travel and Tourism Council, they emphasize a partnership approach in their recent Blueprint for New Tourism Report (September, 2003) where the

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tourism industry must partner with local authorities to ensure that tourism benefits match the needs of national and local economies.

This movement has resulted in a Convention on Biological Diversity that has led in February, 2004 to adoption of suggested guidelines on biodiversity and tourism development. The authors of these guidelines are advising all governments to integrate them into their strategies and plans for tourism development and national biodiversity.

In the area of economic development, destinations are becoming increasingly aware of tourism's potential role in leveraging exports, attracting investment, and supporting local economic development. This is reflected of an integrated approach to economic development within a destination where tourism plays an integral role and serves as a strategic tool for national governments to achieve economic objectives.

Competitive Destinations One of the most significant world trends in tourism today is the drive towards destination competitiveness to maintain and/or enhance market share. Increasingly professional approaches are being adopted by destinations to manage their tourism sectors including:

sustainable tourism planning;

community tourism initiatives;

market-driven tourism standards;

codes of ethics, certification and guidelines for nature, heritage and cultural tourism;

e-marketing;

specialty marketing;

partnerships and collaboration; and

human resources development and occupational standards certification.

These national management trends have also evolved to incorporate more rigorous business principles in the approaches destinations are taking towards managing tourism sectors. The business model recognizes that tourism visitor expenditures are the "revenues of the business" and like any other business, the destination needs to determine its competitive market niche, be responsive to its marketplace and customers, invest in a sustained marketing effort, invest in its product including resource management (to protect significant resources in the destination) as well as the more traditional upgrading/improving to meet market-driven demands, and conduct market research to guide both marketing and product development. Destinations are also beginning to examine models where the business case for tourism’s destination marketing budget is explicitly tied to its performance in generating visitor expenditures in the destination.

This business model for tourism at the destination level lies at the heart of success factors for destination management. These are generally acknowledged to include the following:

1. An industry/government partnership with strong and effective cooperation. 2. Industry operates with a single voice on priority issues (managing consensus within itself),

thereby serving as an effective partner in destination management activities. 3. There is a clear and shared vision for tourism.

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4. There is consensus that destination management involves managing the tourism sector as a business using sound business practices and performance monitoring, reviews, and fostering a positive business investment environment for the tourism sector generally.

5. There is an agreed tourism sector plan and strategy with guiding policy and tourism development and marketing programs.

6. There are realistic budgets for destination marketing including cost sharing by industry. 7. There are effective partnerships with the international travel trade community, strengthening

marketplace relationships for the destination.

The Implications for Updating the National Tourism Strategy This White Paper has examined a number of key trends that will influence Belize's tourism sector in the future. A summary of the key implications is provided below.

Component International Tourism Trends Possible Areas of Action

Global Growth in Tourism • 4.6% per year to 2015 • confirm/redefine preferred

markets and nature of tourism for the country

• develop a growth management policy to confirm and protect Belize destination image/market position

Market Segments • growth areas include

heritage/cultural tourism, geo-tourism, adventure tourism and cruise tourism

• manage cruise tourism growth including strategies for environmental management, historic/cultural integrity

• develop specific strategy for stay-over market

• confirm and/or adjust market positioning related to historic/cultural/adventure and eco products

• develop community tourism

Focus on Biodiversity • Caribbean region identified as

one of the global "hot spots" for urgent conservation

• evaluate land use and tourism planning frameworks

• examine and introduce "best management practices", integrate international guidelines on biodiversity and tourism development

Tourism Planning • partnerships are key to

tourism's delivery of consistent results and benefits

• sustainable tourism is the norm • community-based tourism

planning approaches are helping to foster sustainable tourism

• modernize tourism planning process to reflect global trends

Standards • market-driven standards are

defining competitiveness for destinations

• continue to strengthen standards adoption by the destination, particularly in areas related to accommodation,

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Component International Tourism Trends Possible Areas of Action

Marketing • ethical marketing • e-marketing • strategic/specialty marketing

• enhance marketing approaches to strengthen e-marketing program

• use technology to strengthen relationships with travel trade partners

• strengthen strategic and specialty marketing efforts

Human Resources Development

• occupational standards and international certification

• eco/adventure tourism certification

build on recent tourism training programs to introduce certification and occupational training across the industry

Competitive Destination Management

• strengthen destination management and adopt business models

• Adopt a business model for destination management

• Develop performance measures for assessing effectiveness in managing the tourism sector including tourism’s contribution to the economy and social and cultural values

The proposed National Tourism Policy outlined in the 1998 Strategy recognizes the importance of sustainability (i.e. Responsible Tourism), a cooperative approach (including all stakeholders) to development of the industry, a focus on environmentally based tourism activities, involvement of local people in the process (community-based tourism approach) and alludes to the need for industry standards (i.e. “that tourists will be treated well, and their safety and health will be ensured and that operators will act responsibly”).

All these components, as highlighted in the review of existing trends and competitiveness, should be at the forefront of Belize’s new tourism strategy if it wishes to maintain and grow the high yield eco/cultural/adventure markets. However, mass cruise visitation threatens to compromise the country’s eco-destination status. The implications of this growth must be examined critically, particularly in light of the country’s commitment to its marketplace position as an ecotourism destination. Therefore, the National Tourism Strategy update must address the question of growth management as the primary destination priority in the short term.

Market driven destination management supported by market research guiding strategic investment in product development and marketing are cornerstones for destination management today. A stronger business orientation to tourism offers opportunities for the country. Belize has developed a sound foundation for destination management recent years, developing modern policies and regulations to guide tourism sector activities and strengthening tourism sector institutions. One of the areas requiring some attention as part of the National Strategy update is the orientation to tourism as a business requiring investment and yielding returns to more than just the industry itself. The strong tourism statistical base that the Belize Tourist Board has developed needs to be expanded to include data on tourism’s economic, social, cultural and environmental contribution. This helps to increase an understanding of the importance of tourism and the return on investment Belize achieves through tourism sector investment.

Belize – White Paper on Updating the National Tourism Strategy Executive Summary - vii

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1. Introduction

In 1998 a National Tourism Strategy was developed for Belize. The Belize Tourism Board is now in the process of reviewing this document, given the considerable changes that have taken place within the country’s tourism industry itself and globally. The 1998 Strategy had set a minimum target of 120,000 visitors per year by Year 5 and 140,000+ by Year 10. In sharp contrast to these forecasts, the international visitor arrivals for Belize reached 1,000,000 in 2004. The most dramatic growth has been in the cruise sector, which grew from just over 14,000 in 1998 to 851,000+ in 2004. Cruise tourism is now slow down from the exponential growth experienced since 1998. Nonetheless there does exist the possibility of up to one million or more cruise passengers in the short term. This has created a significant number of issues and challenges for the Belize tourism sector and is of particular concern in updating the National Tourism Strategy.

The purpose of this White Paper is to report on trends and considerations that should be taken into account in updating the National Tourism Strategy for Belize. It is intended to serve as a discussion paper on which to initiate consultations on the way forward towards an updated National Tourism Strategy.

This White Paper focuses on the changes and trends within the industry from a macro perspective. Section 2 looks at the global growth of tourism together with the predictions for Belize, and highlights the economic implications of this growth.

Following this broad overview of impact trends and implications, Section 2 also examines the current and emerging market trends and profiles. The sectors that have direct relevance to Belize have been reviewed, including historic and cultural tourism, geo-tourism, adventure and ecotourism, community tourism and cruise tourism. This section concludes with a discussion on the buying behaviour of consumers in general and the increasing significance of the Internet in the decision-making process.

The international debate on the impact of growth is reviewed in Section 3 and the main concerns and issues are presented. There is particular concern over the ongoing loss of global biodiversity as a result of tourism activities, and attention is now centred on involving all stakeholders in the process of developing an industry that is environmental, socially, culturally and economically sustainable. The challenge for national governments and the Belize Tourism Board is to identify ways of integrating what is traditionally a fragmented industry and working together to increase competitiveness and overall sustainability of the tourism industry.

In Section 4 the factors that underlie a destination’s competitiveness and sustainability are examined, and recent international trends and developments are noted. Issues related to tourism planning and product development have been identified. The role of guidelines and standards with respect to specific products and tourism sectors is discussed, and best practices in marketing are briefly outlined. The critical need for partnerships and collaboration and the facilitative role of national government is emphasised, together with the benefits to be gained from developing a human resources strategy.

Destination management has become increasingly professionalized as governments and industry strive to maintain and enhance competitiveness. Governments, in particular, have become more aware of the many contributions tourism can make to the image of their destination, not only for tourism, but also for attracting investment and enhancing exports. Trends in destination

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management, particularly as it relates to increasing recognition concerning the need to treat management of the tourism sector as a "business" are examined in Section 5.

The implications of these global trends and developments for updating the Belize National Tourism Strategy have been summarized in Section 6 . From this summary it can be seen that there is a need for Belize to carefully consider its overall tourism strategy in light of the rapid growth in international cruise arrivals. This sector could potentially jeopardize the country’s position as an ecotourism/nature-based destination, and considerable effort will need to go into reviewing the factors that underlie competitiveness and sustainability. The preparation of a proactive strategy will need to build on these factors, while minimising impact and maintaining the country’s ecotourism integrity.

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2. The Growth of Tourism – International Trends

2.1 The Growth of Global Tourism in 2005 The global tourism reported that the record robust recovery started in 2004 and should continue through 2005 at a healthy rate, according to the World Travel and Tourism Council1. The figures released this April show that travel and tourism has made a recovery from 9/11, the war in Iraq, SARS and the down turn in the international economy. The December 2004 tsunami which struct some tourism destinations around the Indian Ocean, had a significant, but limited overall impact on the tourism economies. Based on measures from 174 national economies the WTTC figures again show how tourism has become one of the world’s largest and fastest growing industries.

1. Demand – Encompassing all components of Travel & Tourism consumption, investment, government spending and exports is expected to grow 5.4% (real terms) and total $6.2 trillion in 2005. The ten-year annualized growth (2006-2015) forecast is 4.6% per annum illustrating the outlook for strong long-term growth.

2. Visitor Exports – the continued strength of the Pound and Euro against the US dollar, is expected to push Visitor Exports to nearly $820 billion in 2005 or real growth of 7.3%.

3. GDP – travel & tourism’s contribution to the world economy is illustrated by the direct industry impact of 3.8% of total GDP and the combined direct and indirect impact of the Travel & Tourism economy expected to total 10.6% in 2005.

4. Employment – the global Travel & Tourism industry is expected to produce 2.1 million new jobs in 2005 over it’s 2004 level to total 74.2 million jobs or 2.8% of total world employment. The broader perspective of the Travel & Tourism economy (direct and indirect) is expected to create more than 6.5 million new jobs for the world economy for a total of 221.6 million jobs dependent on Travel & Tourism or 8.3% of total employment.

The significance of tourism for many regional and national economies, and its sensitivity to external events has been clearly recognized in these past events. With the general downturn there was a new appreciation for the linkages between tourism and many other sectors of an economy within a destination. Tourism is one of the top five exports for 83% of all countries and is the main source of foreign currency for 38%. Ensuring its ongoing growth and sustainability has taken on a new sense of priority, particularly for these areas that experienced a more widespread economic decline from the decrease in arrivals in the past two years.

1 WTTC, April 8, 2005, Press Release: Global travel and tourism poised for continued growth in 2005

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2.2 Tourism Growth in Belize The opening years of the millennium were as difficult for the Caribbean region as a whole, as anywhere else in the world. The adverse impact of 9/11 continued into the year 2002 as travellers’ concerns regarding safety continued to keep the number of long-stay arrivals down significantly. Countries such as the Cayman Islands were down by 9.4% and Jamaica by 0.8% for that year2, and declines were felt in many destinations including Aruba, Bahamas, Barbados, British Virgin Islands, Cancun, Cozumel, Cuba, Dominican Republic, Martinique, St. Maarten, Turks & Caicos and the United States Virgin Islands. One notable exception to this trend was Belize which has been the only country in the Caribbean to experience consistent increases with respect to overall tourist arrivals since 1998. The period November 2002 through to December 2004 saw 22 record-breaking months of tourist arrivals via the Philip Goldson International Airport – the entry point of 70% of total overnight arrivals to the country. Airport arrivals for the four quarters in 2004 showed an increase of 10.7%, 1.7%, 5.4% and 10.1% respectively over the corresponding quarters of 20033. As can be seen from Exhibit 2.1 tourism growth in Belize has also been fuelled by an extraordinary level of growth in the country’s cruise statistics. Figures for 2004 represent an upsurge of 48% over 2003 with the arrival of over 851,000 visitors, which represents the third highest growth in ship arrivals for the entire region.

Exhibit 2.1 International Arrivals to Belize 1998 – 2004

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

1998 1999 2000 2001 2002 2003 2004P

CruiseStay-over

Source: Belize Tourism Board & Caribbean Tourism Organization web sites

The forecasted rate of growth for the tourism industry in 2005 and over the next ten year period for Belize is shown in Exhibit 2.2. The equivalent rates for the Caribbean region and the world are shown by way of comparison. A more detailed review of the industry and its anticipated economic impact for Belize is given in Exhibit 2.3.

2 Welcome to the Caribbean.com website, Caribbean tourism outlook 3 Belize Tourism Board, web site, May 2005

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Exhibit 2.2 Rate of Growth and Economic Significance of Tourism – Comparative Overview of Estimates and Forecasts 2005 and 2006 - 20154

Global Caribbean Region Belize

Total demand

2005 rate of growth5 5.4 3.3 9.4

2005 % of total - - -

Annual growth rate 2006-20156 4.6 3.4 4.6

2015 % of total - - -

Value of tourism contribution to GDP

Value of tourism contribution direct & indirect to GDP

2005 rate of growth 5.2 5.1

3.6 4.5

13.6 11.0

2005 % of total 3.8

10.6 4.7

15.4 7.8

20.0

Annual growth rate 2006-2015 3.5 4.0

3.7 3.5

4.7 4.5

2015 % of total 3.9

11.3 5.1

16.3 8.9

22.4

# of T&T jobs direct

# of T&T jobs in broader economy

2005 rate of growth 2.9 3.0

-0.6 0.9

11.4 9.3

2005 % of total 2.8 8.3

5.0 15.1

8.3 19.7

Annual growth rate 2006-2015 1.4 2.0

3.2 2.9

3.9 3.7

2015 % of total 2.8 8.9

5.7 16.8

9.4 22.2

4 WTTC 2005, Belize: Travel and Tourism Sowing the Seeds of Growth 5 Real growth adjusted for inflation 6 Annualized real growth adjusted for inflation

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Exhibit 2.3 Rate of Growth and Economic Significance of Tourism in Belize – Estimates and Forecasts 2005 and 2006 - 2015

2005 2005 % of

total 2005 rate of

growth

Annual Growth

rate 2006-2015

Value 2015 2015 % of total

Total demand BZD 632.9m US $316.5m - 9.4 4.6 BZD 1,212.7m

US $606.4m -

# of T&T jobs direct 6,450 8.3 11.4 3.9 9,453

9.4

# of T&T jobs in broader economy 15,422 19.7 9.3 3.7 22,214 22.2

Value of tourism contribution to GDP

BZD 171.2 m US $85.6 m 7.8 13.6 4.7 BZD 329.3m

US $164.6m 8.9

Value of tourism contribution direct & indirect to GDP

BZD 438.6 US $219.3 m 20.0 11.0 4.5 BZD 826.4m

US $413.2m 22.4

Visitor exports BZD 275.1 m US $137.6 m 22.3 14.1 5.0 BZD 546.5 m

US $273.3 m 22.4

Other T&T related exports

BZD 26.4 m US $13.2 m 2.1 5.5 4.4 BZD 49.7 m

US $24.9 m 2.0

Personal travel & tourism

BZD 123.7 m US $619 m 7.3 6.6 5.4 BZD 256.1 m

US $128.1 m 9.5

Business travel BZD 59.9 m US $30.0 m - 9.0 3.1 BZD 98.6 m

US $49.3 m -

Value of capital investment

BZD 110.2 m US $55.1 m 24.5 3.9 3.6 BZD 191.8m

US $95.9 mil 25.0

Value of related government expenditures

BZD 37.6 m US $18.8 m 12.1 7.0 4.3 BZD 69.8 m

US $34.9 m 12.6

Source: WTTC, April 2005

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2.2.1 Market Origin The United States accounts for over half (59.5%) of Belize’s visitors, while Europe (14.2%) and neighbouring Guatemala (6.9%) are also substantial markets. These figures only related to the land-based tourists. The significance of the US sector increases dramatically when the cruise market is examined as approximately 84% of worldwide cruise guests originate from the US7, and therefore it can be assumed that the vast majority of cruise visitors to Belize are from the US.

Exhibit 2.4 Market Origin of International Overnight Arrivals to Belize

USEuropeCanadaEx-Pat BelizeansGuatemalaMexicoOther

Source: Belize Tourism Board web site – 2004P data

The strength of the Belize product and its international market position is reflected in the recent announcement of the top ten world adventure travel destinations in 2003. Looking at the global vacation purchases of its adventure and experiential travellers, iExplore have ranked Belize as number 9, up from its position of 12 in 20028.

2.3 Market trends Market trends are having a dramatic impact on worldwide tourism. The movement towards "experiential" tourism is evident in almost all facets of the industry and has become the primary consideration on the part of travel trade intermediaries.

In 1998, the World Tourism Organization (WTO) first predicted that cultural and other closely associated forms of special interest tourism, such as nature tourism (i.e. adventure and ecotourism) and thematic tourism, would be among the hottest trends of the 21st century (WTO, 1998). This prediction was recently confirmed by the Pisa Forum, an annual ‘think tank’ comprised of leaders of

7 CLIA, Feb. 26, 2004, Press Release, CLIA member cruise lines post strong passenger growth with over 9.5 million cruisers in

2003 8 Hospitality Trends (htrends.com), January 2004, Top Ten World Adventure Travel Destinations in 2003

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the global tourism sector. In its 2003–2004 report, the Pisa Forum noted that current market trends show that tourists are increasingly seeking experiential tourism offerings. Furthermore, demand for authentic experiences which focus on local culture, learning, closeness to nature and wellness is on the rise, especially among older age groups (Express Travel and Tourism, 2003).

The growing interest in nature, cultural and heritage tourism has sparked a number of recent market research studies. Among these are reports which focus on more broad based market segments. These reports include studies on two more broadly defined market segments:

Historic/Cultural travellers – defined as travellers who tend to include some type of historical or cultural activities on their leisure trips

Geotourists – defined as consumers whose attitudes, behaviours and travel habit profiles show a high incidence of travel and a distinct preference for culturally and socially-related travel. They also tend to participate in educationally and socially oriented activities and are socially and environmentally conscious.

Both these two market segments are well suited to Belize’s tourism product, which includes not only excellent natural resources but also a strong cultural and heritage component. The following sections present key trends within the various market segments of relevance to Belize. However, it is important to note the large degree of overlap between these different market segments. For example, the research findings show that over one third of US Heritage Tourism Enthusiasts are Soft Outdoor Adventure Enthusiasts (35%) and about one in five are Hard Outdoor Enthusiasts (19%). This highlights the need for Belize to offer a range of quality products and experiences that will appeal to these niches markets and other potential visitors.

2.3.1 Historic & Cultural Globally, the World Tourism Organization estimates that 37 % of all international trips include a culture/heritage component and that the market is growing at an annual rate of 15% (Canadian Tourism Commission, 1999).

US Market Looking at the US market alone, the various recent market studies have produced the following estimates of overall culture and heritage tourism market size as well as the sizes of subset markets:

Eighty-one percent of U.S. adults who travelled in the past year, or 118 million adults, are considered historic/cultural travellers. These travellers included historical or cultural activities on almost 217 million trips in 2002, up 13% from 192 million in 1996 (TIA, 2002)

TIA and National Geographic Traveler identified a consumer market of 55 million ‘geotourists’. Within this larger market segment, are two subsets of particular interest (TIA and NGT, 2002):

o Urban Sophisticates - 21.2 million adult travellers; more oriented to large city destinations and cultural experiences and attractions.

o Geo–Savvys - 16.3 million adult travellers; distinguished by their well-above interest in environmentally-oriented travel.

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Seventeen percent, or about 34.5 million American adults, are Heritage Tourism Enthusiasts.

Market Profiles Comparative analysis of the recent studies of US culture and heritage tourists are summarized in Exhibit 2.5. These include:

Gender – in the US females are somewhat more likely to seek out culture and heritage experiences, but the gender split is relatively even overall.

Age – in the US the various studies have found the average age of culture and heritage tourists to be mid to late 40s.

Education – culture and heritage tourists are generally highly educated, with a high proportion being college/university graduates.

Household income – in the US the research shows that culture and heritage tourist segments all have average household incomes of about $70,000 (USD) or higher.

Household composition – in the US the indications are that culture and heritage tourists tend to live in adult only households.

Occupation – the American studies that have collected information on occupations have all found that a high percentage of tourists that show a preference for culturally and socially-related travel are executives, managers or professionals.

Exhibit 2.5: Sociodemographic Characteristics of Culture and Heritage Travellers

Study & Focus Gender Age Education Household Income

Household (HH) Composition Occupation

US Travellers TIA, 2002 Historic/Cultural Travellers

Equal men/ women

40% Baby Boomers

41% university degree 46% $50,000+ Not available 31% managerial/ professional

TIA & NGT, 2002 Geotraveller – Urban Sophisticates

54% women Avg 45 years 50% Baby Boomers

63% university degree 25% grad degree

$76,630 Avg 46% $75K+ 17% $100K+

70% adult only 23% executive/ managerial 43% professional/ specialty

TIA & NGT, 2002 Geotraveller – Geo Savvies

54% women Avg 43 years 50% Baby Boomers

61% university degree 25% grad degree

$68,220 Avg 38% $75K+ 17% $100K+

59% adult only 21% executive/ managerial 43% professional/ specialty

Source: Travel Industry Association of America, National Geographic Traveller Magazine

Memberships & Media Habits About two thirds of American Heritage Tourism Enthusiasts are members of auto clubs, such as AAA. Almost one third of Americans who fit the profile of this segment belong to an art gallery/museum organization, while 20% of them belong to nature or zoo/botanical garden organizations.

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Exhibit 2.6: Organization Membership & Culture and Heritage Travellers

Study & Focus Auto Club Art Gallery/ Museum Nature Zoo/ Botanical

Garden

US Travellers CTC, 2002b - Heritage Tourism Enthusiast 63% 32% 16% 20%

Source: Canadian Tourism Commission

Media Habits US heritage tourists read newspapers and magazines regularly. The vast majority read the weekend and weekday editions of local newspapers and community newspapers are equally popular. The travel section of weekend editions of local newspapers are read by about three quarters of American heritage tourism enthusiasts, while two thirds read the weekday edition travel sections.

Exhibit 2.7: Media Habits of Culture and Heritage Travellers

Study & Focus

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Wee

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News

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Trav

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Natio

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Wat

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US Travellers CTC, 2002b – Heritage Tourism Enthusiasts

88% 84% 76% 63% 80% 52% 46% 63%

Source: Canadian Tourism Commission

Activities The following exhibit summarizes the findings of the recent studies with regard to the most popular activities of heritage travellers. The activities identified as most popular are those in which at least 30% of these tourists participated on a recent trip.

The findings provide greater insight into the shared interests of heritage travellers. They illustrate that visiting/attending historic sites, museums, festival and fairs, live theatre and art galleries are popular activities for all arts and heritage tourism market segments. One of the most notable findings is that these travellers also enjoy a range of non-culture and heritage activities. Their high participation levels in soft outdoor adventure and tourism activities clearly show that these travellers desire vacations, which allow them to indulge their interest in arts and culture but also to partake in other types of experiences. Belize has the opportunity to significantly expand its current markets if it is able to further complement its nature-based tourism products with high quality heritage and cultural experiences

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Exhibit 2.8: Activity Preferences of Arts, Culture and Heritage Travellers

Study Heritage Performing Arts Visual Arts Outdoor Mainstream

US Travellers TIA, 2002 – Historic/ Cultural Traveller

43% Historic Site 30% Museum 20% Heritage/ethic festival

23% Live theatre 10% Opera/classical concert 9% Dance performance 19% Other concert

21% Art Gallery Not available Not available

CTC, 2002b – Heritage Tourism Enthusiast

81% General history museums 68% Farmers’ fairs or markets 67% Local festivals or fairs 64% Science & tech museums 63% Historic sites 55% Historical replica cities/towns

57% Live theatre

79% Arts/crafts studios 66% Art Galleries

58% Wildlife viewing 53% Flora viewing 38% Hiking/ backpacking 37% Cycling 35% Fishing

66% Zoos 59% Aquariums 57% Botanical gardens 44% Casinos 31% Planetariums

Source: Canadian Tourism Commission, Travel Industry Association of America

Historic/Cultural Traveller A new study9 from the Travel Industry Association of America (TIA) and Smithsonian Magazine illustrates the continued and growing interest in cultural, arts, historic and heritage activities while travelling. The study shows that 81% of U.S. adults who travelled in the past year, or 118 million, are considered historic/cultural travellers. This equated to almost 217 million person-trips10 which is an increase of 13% from 192 million in 1996.

2.3.2 Geo-tourism A recent study, the first of its kind to examine American travellers from this perspective, looked at the attitudes that lead to potential sustainable tourism behaviour. These results provide the travel industry with insight into future consumer expectations. “The Geotourism Study11”show that there are at least 55.1 million Americans who could be classified as “sustainable tourists” or “Geotourists”.

The travel habits of these Americans are guided by their heightened awareness of the world around them. These “Geotourists” have high expectations for unique and culturally authentic travel experiences that protect and preserve the ecological and cultural environment. The study also found other segments representing a further 58 million travelling Americans that could also be moving in that direction.

9 Travel Industry Association of America, 2003, The Historic/Cultural Traveler. 10 A person-trip is one person on one trip travelling 50 miles or more from home, one way. 11 Travel Industry Association of America, 2002, The Geotourism Study: Phase 1.

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Geotourism Profile Geo-Savvys (who comprises 30% of Geotourists) show a distinct preference for culturally/socially-oriented travel. Over 80% believe their experience is better when their destination preserves its natural, historic, and cultural sites and attractions. Nearly three-quarters (73%) indicated that the educational experience provided by travel is very important to them. The following table highlights their key preferences and characteristics:

Exhibit 2.9: Activity Preferences of Geotourists

Geotourists 55.1 million

Key Preferences Geo-Savvys

16.3 million

Urban Sophisticates

21.2 million

Good Citizens

17.6 million

Visit destinations with authentic historic and archaeological sites 81% 77% 63%

Travel to experience people, lifestyles, and cultures different from their own

81% 75% 52%

Important to learn about the destination's people, history, and culture 81% 75% 52%

Important that their visit to a destination does not damage its environment.

81% 83% 75%

Prefer small-scale accommodations run by local people 81%

Key Characteristics Geo-Savvys

16.3 million

Urban Sophisticates

21.2 million

Good Citizens

17.6 million

Enjoy outdoor recreation and sports 73%

Read or watch shows about nature and the environment 61% 60%

Subscribe to nature/environmental publications 35%

They recycle and try to save electricity and water at home 85% 90% Source: Travel Industry Association of America and National Geographic Traveller Magazine

Of importance to Belize is the indication that 81% of Geo-Savvy’s prefer to stay in small scale accommodations and visit small towns and rural areas. The other two Geotourist groups also demonstrate a number of preferences that highlight the need to plan for sustainable tourism development and offer authentic cultural and nature products.

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2.3.3 Adventure Tourism As mentioned earlier, the WTO predicted in 1998 that nature-tourism which encompasses adventure tourism would be one of the hottest trends of the first decade of 2000. This still remains the case today and Belize is well positioned to take advantage of this market with its pristine natural resource base. The following sub-sections cover some of the key trends in this sector.

Adventure Travel A study by the Travel Industry Association of America (TIA, 1997) while somewhat dated, still provides a good indication of the size of the America adventure travel market. One-half of US adults (98 million) took an adventure vacation within the past five years.

Exhibit 2.10: Hard Adventure Activities on Trips

1.5

4.1

5.7

7.4

8

10.8

12.4

14.8

0 2 4 6 8 10 12 14 16

Sky Diving

Extreme Sports (Bungee)

Cave Exploring

Rock Climbing

Rugged Hiking

Mountain Biking

Scuba Diving/Snorkelling

Whitewater Rafting/Kayaking

Millions

Source: Travel Industry Association of America, 1997

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Exhibit 2.11: Soft Adventure Activities on Trips

13.2

15.6

20

22.5

24.1

24.3

27.2

44.8

64.7

0 10 20 30 40 50 60 70

Sailing

Wilderness Tours in Vehicle

Water Skiing

Canoeing

Horseback Riding

Bird Watching

Biking

Hiking

Camping

Millions

Source: Travel Industry Association of America, 1997

This market consists of both soft12 and hard13 travellers, with the majority (92 million) of travellers being classified as soft adventurers.

Over 12 million US residents took a vacation over a five year period that involved scuba diving or snorkelling, Belize’s key adventure tourism market.

The market for soft adventure products is far greater mainly because they appeal to a broader segment of the population. Soft adventure generally involves less risk and less skill than many of the hard adventure activities.

Scuba diving According to the 2000 European Dive Travel Market study a large number of European divers are taking dive vacations. This is based on the current availability and pricing of diving vacations, together with the trend toward learning to dive abroad. This equates to an estimate of 1 in 2 active divers taking a diving vacation abroad. The diving experts interviewed as part of the survey all held the general belief that the dive market would continue to grow, and that growth in the travel sector is a natural outcome of this growth. This is an important finding for a country like Belize whose dive industry comprises a major component of its tourism product.

12 Soft adventure includes: camping, biking, hiking, bird watching, sailing, horseback riding, water skiing, canoeing, wilderness tours

by vehicle 13 Hard adventure includes: hiking rugged terrain, white water rafting, rock climbing, mountain biking, windsurfing, bungee jumping,

scuba diving, snorkelling

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Exhibit 2.12: European Divers taking a Dive Vacation

- 50,000 100,000 150,000 200,000 250,000 300,000 350,000

Portugal

Belgium

Denmark

Switzerland

Spain

Austria

Norway

Sweden

Netherlands

Italy

U.K.

France

Germany

Number taking a Dive Vacation

Source: Technodive S.A.R.L. 2000.

The size of the European Dive market does not appear to have grown since 1994. However, the new study did use a more rigours definition of diver, which excluded many of those who take diving courses (i.e. become certified), but are no longer active.

Exhibit 2.12 highlights the size of the European dive travel market, which is estimated at 860,000 divers. Germany represents the largest portion, accounting for over one-third (35%) of all potential European dive travellers. France is the second largest market with 150,000 (17%) of Europe’s dive travellers, while the UK and Italy also contain substantial markets.

Analysing dive travellers as a percentage of the population reveals that Scandinavian countries have the highest percentages of dive travellers per head of population. Norway and Denmark displayed the highest rankings, although their overall market size is quite small at 50,000 and 40,000 respectfully. The likelihood of European divers travelling for diving is also a reflection of the resources/sites available nearby. Destinations such as Spain, the South of France, Italy, and Croatia are regular destinations for divers from these countries and from Northern Europe. The islands of Corsica, Sardinia, Malta, Cyprus, and the Balearics are served by direct charters from many European cities and are popular sites with well-established dive centres.

2.3.4 Community Tourism The concept of community tourism is one that is closely linked to sustainability and other niche forms of tourism such as ecotourism and cultural tourism. Community tourism according to Godde (1998) can be regarded as a process that brings empowerment to a community and sets a basis for sustainable development. Its essential characteristics include:

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participation of all community stakeholders in the planning and management of local tourism development of opportunities at the community level for local individuals and businesses to

become increasingly involved in the delivery of tourism

provision of mechanisms through which local control can be maintained and local concerns can be addressed, thereby strengthening traditional stewardship roles. The development of standards and certification programs at community, regional, national and international levels is now playing a key role in this process

potential to improve the cultural identity and socio-economic well-being of the community An emphasis on tourism development that both benefits the local community and maintains its inherent character is particularly prominent in ecotourism and cultural tourism. In these product areas where the focus is on the significance of the underlying environmental and cultural resource base, and the critical need to maintain these resources as the basis for quality tourism experiences, there is a strong likelihood that the community will be a major stakeholder in the process. As a result many examples of community tourism can be found in ecotourism and cultural tourism ventures.

This ‘overlap’ is a reflection of process rather than product, as a community perspective is often central to the development of such products. The community-based approach, however, can be found outside these tourism domains and can be identified in any tourism product, be it urban, rural or otherwise, that is based on community involvement as an essential ingredient to its planning, delivery and management.

Belize has a diverse and fragmented tourism industry – the accommodation sector is an excellent example of this structure. An estimated 92% of the accommodation properties have 20 rooms or less and 70% have 10 rooms or less (Tourism Strategy Plan for Belize, 1998). With numerous small scale tourism businesses located throughout Belize there is a real need for a community-based approach and process to achieve a sustainable tourism industry.

Addressing community tourism is particularly important for Belize, given recent findings (2004) from a survey of tour operators interested in this product area. The high level of interest is a powerful validation for Belize’s perceived market position by the travel trade specializing in this product area (and related areas including nature, heritage/culture and adventure).The findings indicated a strong market interest, one that Belize can capitalize on through a market-driven approach to developing a sustainable, community-based tourism product offering14.

2.3.5 Cruise Tourism Cruise tourism has grown exponentially in recent years and has become the most aggressively expanding sector in the tourism industry. Worldwide the cruise industry is now valued at US$15bn15. Its broad appeal is reflected in the 2003 statistics of the Cruise Lines International Association (CLIA) who recorded 9.5 million cruise guests for the year – an increase of 10.2% on 200216. Growth is expected to continue with forecasts of 16 million for 2009.

14 CPEC, 2004, Survey on Community Tourism Potential With International Tour Operators, Small Planet Consulting 15 Peisley, T., Oct. 2003, Global Changes in the Cruise Industry 2003-2010 (extract), Seatrade Research Report 16 CLIA, Feb. 26, 2004, Press Release, CLIA member cruise lines post strong passenger growth with over 9.5 million cruisers in

2003

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The number one source market for the cruise industry is North America. In 2003, almost 8 million originated from the North American market – representing a growth of 6.9% in that particular segment17. Indeed, growth in the North American market has been at a steady rate of approximately 7% annually for the past 12 years. Exhibit 2.13 illustrates the dramatic increase in this sector over the period 1980 to 2003.

Exhibit 2.13 Growth in North American Cruise Market 1980 – 2003

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

1980 1990 1995 2000 2003

Source: CLIA data

The robust demand is further reflected in the fact that CLIA member line ships attained a 102.6% load factor in 2003 compared with 98.6% in 2002. This level of demand is particularly impressive given the significant obstacles that challenged the entire travel industry in 2003 and the increase in supply. In 2003 capacity continued to increase with the introduction of 15 vessels which accounted for over 21,000 new berths. In 2004 a further 12 ships will be added to the CLIA member lines representing 27,000 additional berths. However, growth of North American capacity is likely to stabilize beyond this year as capacity growth is to be cut in half with a limit set of five ships/10,000 berths per annum18.

While growth in this industry will continue, its nature is changing to some degree. Recent expansion of this sector in North America has been stimulated by the continual deployment of new ships to offset the decline in demand for European-based vacations following 9/11, and by a price reduction policy. With the arrival of the Queen Mary 2, the largest ocean liner ever built, and ongoing global unrest, discounting has increased with some lines offering up to a 60% reduction in rates19.

17 These statistics represent virtually the total market demand in North America as the member lines of the CLIA represent 97.5% of

the cruise capacity marketed in this region. 18 Moody, A.J., Feb. 2004, Trends in the North American cruise industry – presentation to the AAPA Cruise Workshop, Quebec 19 Canada Tourism, 2004, United States – Leisure – October – December 2003

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Furthermore there has been an element of repositioning taking place to maintain growth. The industry has accelerated its move to shorter cruises and cruises originating in drive-to markets. The average length of a cruise vacation in 2003 was 6.88 days – down slightly from 6.96 in 2002. Both moves have made the cost of a cruise more attractive, especially to first-time cruisers, and have provided an opportunity to broaden the industry’s penetration into the vacation market. The increase in the drive-to market has had the added benefit of attracting those who have had residual fears of flying.

Exhibit 2.14 Trends in Average Length of Cruise

Category Shares Length of Cruise

1980 2000 200220

1 – 5 days 24.3% 36.9 34.4

6 – 8 days 59.1 50.8 55.2

9 – 17 days 15.4 11.6 9.9

18+ days 1.2 0.7 0.4

It is likely that overall growth in demand will moderate from 2005 onwards with a return to pre-2000 market dynamics and a move into a third phase of revenue growth. The period 1997 – 2000 was characterized by revenue growth of 20% per annum, which then declined to 5% per annum during the years 2000 – 2004. During the next three years it is predicted that revenues will again increase to approximately 14% annually.

Looking at existing demand, the economic impact of the industry is significant, both in terms of overall impact and with regard to direct spending at ports-of-call. According to the International Council of Cruise Lines the total economic benefit of the cruise industry to the United States in 2002 was US$20.4 billion21. It was estimated that a 2,000 passenger ship with a crew of 950 generates approximately US$180,000 in on-shore spending per US port and the average port-of-call spend is US$82 per visit. Among the principle beneficiaries of cruise expenditures, are the retail sector and the land-based tour and attractions sector.

When cruise location is examined, the number one area for cruises is the Caribbean region with 44% of the capacity placement in 200422. Exhibit 2.15 illustrates total global capacity deployment for that year.

20 Based on data for the first three quarters of 2002 – CLIA Passenger Carrying Report Summary 21 BREA, August 2003, The Contribution of the North American Cruise Industry to the US Economy in 2002, International Council of

Cruise Lines. 22 Moody, 2004

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Exhibit 2.15 Global Capacity Deployment in 2004 and Average Annual Growth of Capacity 2000–04

Global Capacity Deployment 2004

Average Annual Growth of Capacity 2000 - 2004

Caribbean 44 15.3

Europe 22 17.7

Alaska 8 14.3

Canada/North East 1 3.9

Hawaii 4 41.9

Bahamas & Bermuda 5 -2.6

5.6 US-Mexico (West) 5 12.6

Other 11 15.8

Global 12.9

Source: Moody, 2004

The dramatic growth in cruise tourism internationally is reflected in the visitor arrivals to Belize. As was seen in Exhibit 2.1 cruise arrivals have grown from just over 14,000 in 1998 to 851,436 in 2004. Much of this growth has been in the past two years, with the arrivals for 2003 representing an increase of 80% on the previous year and 2004 an increase of 48% over 2003. This growth trend continued with 406 stops in 2004 accounting for over 850,000 cruise visitors. There is a considerable range in the size of vessels visiting Belize, from smaller ships like the ‘Seabourn Legend’ with a capacity of 208 passengers to the much larger ‘Explorer of the Seas’ and ‘Voyager of the Seas’ which both have a capacity of 3,840 passengers on any scheduled stop. Both the Royal Caribbean and the Carnival Cruise Lines have Belize as a permanent port of call.

The implications of these trends are mixed as was reflected in a talk given by a senior regional tourism official last year2324. The issues that were raised included:

Uneven competitive base of the cruise sector versus the land-based accommodation sector. The cruise industry enjoys a largely tax free status while hotels continue to face taxes. Again, unlike the cruise sector, the land-based hotels are subjected to a US$1.50 environmental levy per guest. Furthermore, many luxury cruise liners were built with the aid of government subsidies, a situation that does not extend to hotel construction in the Caribbean.

Lack of involvement from the regional cruise sector in regional marketing campaigns.

23 Barbados Nation press article, June 2003, Caribbean cruise industry ‘Threat to tourism’ 24 Vice-president of the St. Lucia Hotel and Tourism Association, and then (June 2003) president to be of the Caribbean Hotels

Association

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The cruise industry has shown little in the way of contribution to any regional social programs that would benefit the local population. A large proportion of the cruise industry profits ‘leak’ out of the local economies and are repatriated to the origin countries.

Looking at Belize specifically, the rapid growth in cruise arrivals has resulted in annual cruise visitors more than three times the size of Belize’s population. It is now a significant issue with respect to the country’s position as an ecotourism destination.

2.3.6 Consumer Buying Behaviour The Internet and e-commerce have dramatically changed the way that travel and tourism information is delivered to potential consumers. Many travellers now use the Internet to obtain information on travel destinations and physically book travel. Websites such as Expedia and Travelocity deal with large volumes of bookings and provide consumers with the ability to customize their vacations and chose from an array of options.

i Travellers iTravellers are classified as those who recently used the Internet to research and/or book travel. A Canadian Tourism Commission study of iTravellers (2002) in North America revealed the following results:

Exhibit 2.15: iTravellers Internet Usage for Vacations

86%

77%

49%

51%

62%

88%

74%

52%

40%

39%

0% 20% 40% 60% 80% 100%

Planning andResearch

Decide onAccommodation

Decide onDestination

Decide on Transport

Reserve/Book

CanadaUS

Source: Canadian Tourism Commission, 2002.

Over one-third (35%) of American and one-quarter of Canadian households recently used the Internet to research and/or book travel.

The majority (86%) of American iTravellers use the Internet to research/plan their vacation

Almost two-thirds of Americans book or reserve travel on-line.

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Americans have used the Internet extensively for purchasing, with 89% having purchased something on-line, while two-thirds (68%) have purchased travel on-line.

The top three on-line travel purchases for American itravellers are:

o Accommodations 48%

o Flights 38%

o Car rentals 22%

Of the American iTravellers who brought a flight in the past year, nearly three-quarters (71%) did so on-line. Approximately 60% of those purchases were made directly from airline sites and 31% from mega travel sites.

It is important to ensure that web based information on Belize has links through to travel purchase sites so that iTravellers have the option to follow through immediately to book or purchase if they make a decision.

Americans believe that the Internet makes travel planning easier. They find it faster than other channels and like the ability to comparison shop (include prices in $US). The first web sites that American itravellers visit when deciding on a vacation include airlines, search engines, accommodations and mega travel sites.

Exhibit 2.16: The First Websites visited by American iTravellers

9%

10%

13%

13%

15%

23%

25%

25%

26%

41%

48%

0% 10% 20% 30% 40% 50%

Weather

Other Transport

Map Sites

Car Rental

Local Visitor Bureaus

Portal Sites

Travel Mega Sites

Destination Specific

Accommodation

Search Engines

Airline Sites

Source: Canadian Tourism Commission, 2002.

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Exhibit 2.16 highlights the need for Belize to partner with airlines and search engine sites. It is important to capture iTravellers attention early in the decision making process and offer them the opportunity to consider Belize. This first contact is critical as approximately 40% of iTravellers are considering more than one destination when they initially go on line for travel purposes, and 10% have no specific destination in mind.

Although the Internet is a great source of information and should be a key marketing focus, it should not be relied on solely to sell products and services as consumers are more likely to question the reliability of the information contained on the Internet. Links to and recommendations from credible institutions on a website can assist in overcoming some of these perceptions. However, eco- and cultural consumers usually need to be convinced through other trusted sources first, such as friends (word-of-mouth), well known organizations or community groups. Academic institutions, for example, can also play a key role in distributing information through their alumni and publications.

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3. Tourism’s Impacts

The anticipated ongoing growth of the industry globally and the expectations that it will double in size by 2020 has fuelled considerable discussion on the overall impact of this growth. The economic benefits have become more apparent through the WTTC’s Tourism Satellite Accounting methodology that was introduced in 2000. This now clearly illustrates how travel and tourism cause a significant ‘ripple effect’ within a national economy and impact many other sectors, as can be seen in the employment figures and contribution to the GDP. However, tourism has long been regarded as a ‘two-edged sword’ and much of the international debate has concentrated on the need to minimise the actual and potential negative impact that is often associated with tourism development, and the roles of government and the various stakeholders in this process.

Destinations are also considering the positive impacts tourism can generate for them in economic development areas. This includes tourism's potential contribution to a vibrant small business sector, and to investment promotion and export development.

3.1 Tourism and Biodiversity There is no lack of discussion on the physical impact of tourism. This tends to focus on issues such as overuse of water resources, air pollution, land degradation, waste and litter problems, inadequate sewage treatment, aesthetic pollution, habitat destruction, and alteration of ecosystems. However, much of the recent international debate has become centred on the opportunities and threats of the industry for biodiversity conservation. Biodiversity is essential for human development with an estimated 40% of the global economy based on biological products and processes. Ongoing losses have prompted so much concern that biodiversity was identified as one of the five priority areas for the 2002 World Summit on Sustainable Development. In 2003 UNEP and Conservation International published the findings of an extensive research project on tourism and biodiversity25. The primary objective of this work was to identify priority areas where biodiversity loss is a significant concern. The geographical overlay between tourism development and a series of global biodiversity “hotspots” representing areas for urgent conservation was identified and mapped, and the future implications of these overlays discussed. This research demonstrated a strong correlation between biodiversity hotspots in the South and areas of rapid tourism growth, including the Caribbean region.

In such areas there is a high level of concern regarding the potential negative impact of tourism on biodiversity and local communities. Factors of particular concern include:

The development of unplanned tourism without management standards and guidelines that seek to promote nature conservation and deliver tangible benefits to local communities. Such development can often result in total landscape transformation in a very short period, with significant habitat disruption from deforestation or drainage of wetlands.

Heavy price discounting and other marketing tactics aimed at attracting high volume turnover can lead to a loss of economic feasibility. Any associated resource depletion will accentuate the cost of tourism to the local population.

25 Christ, C., Hillel, O., Matus, S., & Sweeting, J., 2003, Tourism and Biodiversity: Mapping Tourism’s Global Footprint, UNEP and

International Conservation.

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A lack of understanding regarding the nature of the environmental resource in many of these “hotspots”. Such areas are often fragile ecosystems that are particularly susceptible to development pressures. The coral reefs of the Caribbean region, for example, are at a very high level of risk from tourism related activities and factors including sewage runoff that stimulates algae growth and hinders their ability to survive, careless behaviour from boaters, jet skies, divers and snorkelers who cause direct physical damage to the reefs, and local entrepreneurs who break off pieces to sell as souvenirs.

While negative impacts of this nature are a serious issue globally, there is a growing appreciation that tourism can make significant contributions to local environments and the conservation of biodiversity. The industry can provide a source of financing for conservation and an economic justification for protected areas; and may well offer economic alternatives for local communities, thereby reducing over-exploitation from other resource-based activities. However, developing this symbiotic relationship between tourism and biodiversity needs commitment and proactive decision making at all levels of government and from all stakeholders alike. The UNEP/International Conservation report outlines the roles and responsibilities for all players, including governments, the private sector (outbound tour operators and ground handlers, accommodation providers, cruise ships, air travel, and trade associations), development agencies, local residents, non-governmental and inter-governmental organizations, and tourists themselves. Acting on the recommendations will promote more responsible tourism activities and development that can positively affect both biodiversity and local economies.

3.1.1 The Multi-Stakeholder Approach to Sustainable Tourism A key aspect of current international discussions on tourism is this recognition that all stakeholders have a vital role to play in ensuring that tourism contributes to the environmental, social, cultural and economic well-being of a destination. The World Travel and Tourism Council refer to the need for a new perspective on tourism to ensure that the industry delivers its benefits to the full potential in their recent document The Blueprint for New Tourism26. This report emphasises the partnership approach that is required if tourism is to deliver consistent results that match the needs of national and local economies.

3.1.1.1 The Role of National Governments First and foremost, national governments must recognize travel and tourism as a top priority and play a lead role within the tourism industry. National governments set the framework for tourism development and biodiversity conservation through policy and legislation, and have the capacity to develop strategies that can mitigate the negative impacts on the industry and its resource base, and facilitate long-term sustainable benefits. Both the WTTC paper and the UNEP/International Conservation report highlight the responsibilities of national government as a prerequisite for responsible and sustainable tourism. These include, but are not limited to the need to:

1. Use a multi-stakeholder participatory planning process to develop long-term national and local tourism strategies, policies and master plans that reflect concerns about biodiversity conservation and poverty reduction. These should be integrated into broader sustainable development strategies and processes, including trade-related policies, investment promotion, economic incentives for the use of environmentally sound technologies, land-use planning, and taxation.

26 WTTC, September 2003, Blueprint for New Tourism

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2. Enforce existing laws and regulations to avoid inappropriate development of tourism in core conservation areas, and avoid perverse incentives for tourism development to be environmentally damaging (such as reduced land taxes for cleared land).

3. Control the planning, siting, design, and construction of tourism facilities and infrastructure according to biodiversity conservation principles and guidelines.

4. Create a competitive business environment that avoids inflationary taxation, guarantees transparency, and offers more attractive corporate ownership rules.

5. Bring new professionalism, funding and coordination into promotion and marketing, employment and training needs, infrastructure and regional/local policy.

6. Liberalize trade, transport and communications, and ease barriers to travel and to investment.

7. Support private sector voluntary initiatives in conservation and provide opportunities for the private tourism sector to contribute to sustainable tourism management initiatives through direct donations, in-kind services, and the establishment and maintenance of private reserves.

8. Improve awareness, and exchange of knowledge between those responsible for and affected by tourism and nature conservation at a national, sub-national and local level. This will include facilitating studies on carrying capacity and limits to acceptable change assessments – particularly for sensitive areas – and the implementation of visitor management plans based on the studies and assessments.

9. Develop or adopt certification schemes that reflect national or local priorities and provide incentives for their adoption.

10. Ensure that quality statistics and information feed into policy and decision-making processes.

3.1.1.2 The Role of Industry and the Private Sector New tourism is dependent on all parties playing an effective role. The UNEP/International Conservation report outlines the responsibilities for industry and the private sector with regard to the conservation of biodiversity through tourism, while the WTTC promote more generic tasks in The Blueprint for New Tourism. Elsewhere, a strong and parallel theme that has emerged in recent years is that of social responsibility and corporate citizenship. This focuses on the fundamental importance of this sector taking responsibility for social, environmental and economic performance given competitive opportunities and constraints. A detailed review of the role that industry and the private sector can play in developing sustainable tourism is presented in a series of guidelines prepared by WTTC, the International Federation of Tour Operators (IFTO), the International Hotel and Restaurant Association (IH&RA) and the International Council of Cruise Lines (ICCL) in 200227. This report looks at developing a more systematic and integrated approach to implementing social, economic and environmental programs, funds and initiatives. It acknowledges that one of the barriers to achieving sustainability has been the inherent fragmentation of the industry and the relative fragility of viable operating margins, especially for the small and medium-sized enterprises that make up the majority of the industry. From this has evolved a lack of responsibility towards the overall impact of travel and tourism and limited accountability. The participating organizations

27 WTTC, IFTO, IH&RA & ICCL, 2002, Industry as a Partner for Sustainable Development: Tourism

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stress the need for strong partnerships between the private and public sectors, non-governmental organizations, institutional bodies and local communities in order to bring about workable policies and logical planning that will realize the positive impacts of tourism and avert the more negative problems. The report is based on a multi-stakeholder international dialogue process. Creating this dialogue process at the national and local level is fundamental to ensuring that the guidelines discussed in this report are understood and implemented at the grassroots level.

The need for corporate social leadership and an integration of social and environmental values into tourism business operations is also the central theme of the WTTC report entitled Corporate Social Leadership in Travel and Tourism, published in 2002. This document acknowledges that many steps have been taken in terms of organisation and site specific environmental management strategies, codes of conduct and other various local initiatives, but stresses the importance now of adopting new business models that make the principles of sustainability central to all business operations. This will not only ensure the long-term sustainability of the industry within any destination, but it will also be a major factor in developing competitiveness. Corporate social leadership can add value to company and destination brands, increase market share with the growing number of environmentally and socially conscious tourists, and will improve access to investment capital. The report presents a number of case-studies to illustrate the benefits to be gained from adopting this approach.

3.1.2 Moving Forward The Convention on Biological Diversity has made significant steps in moving forward with these various themes. In February 2004 a draft decision was put forward that the Conference of the Parties adopt the Guidelines on Biodiversity and Tourism Development that had been formulated after considerable debate. The Working Group is advising that all Governments integrate the Guidelines in the development or review of their strategies and plans for tourism development and national biodiversity. They recognize that policy-making, planning and management for tourism should be based on a multi-stakeholder process which can be coordinated at the national level by the government. The Guidelines have been formulated to provide a framework for the management of tourism and biodiversity at the national level, although the principles are applicable at lower institutional levels. A step-by-step process is laid out with detailed guidelines for each stage, as follows:

Baseline information and review

Vision and goals

Objectives

Review of legislation and control measures

Impact assessment

Impact management and mitigation

Decision-making

Implementation

Monitoring and reporting

Adaptive management

In addition, the document recommends the need for a notification process for tourism development proposals and outlines the information requirements. Finally, it stresses the importance of education, capacity building and awareness-raising within all sectors and at all levels. The implementation of

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these guidelines will assist in bringing together many of the components discussed in this Section, and will increase the competitiveness and sustainability of a destination’s tourism industry, while promoting and safeguarding its biodiversity.

3.2 Tourism and Economic Development The tourism sector is gaining attention throughout the globe for its potential contribution to economic development aspirations of a destination. Historically regarded as a sector of second tier importance, tourism is now demonstrating how robust it can prove to be in attracting investment, creating jobs, fostering sustainable management practices towards a destination's resource base, and generating enhancements in local quality of life. In the previous section, economic development considerations were discussed in terms of tourism’s impacts on other sectors as well as the impacts of world competitiveness trends on small tourism enterprises. Leveraging tourism benefits to advance growth objectives of other sectors is an important aspect of any modern tourism strategy. There are many examples where tourism promotion has positive impacts on the sales of a destination’s specialty products (eg, Jamaica’s Blue Mountain coffee, Australia’s outback oriented marketing programs indirectly promoting everything from raingear to Outback restaurants and Foster’s beer). Enlisting tourism as a partner in such areas as resource protection, revenue generation for parks (eg, Antigua’s Nelson’s Dockyard National Park)), sources of investment for cultural events (e,g., St. Lucia’s Jazz Festival) are all now well recognized initiatives that have been successful for destinations. Competitive destinations are effectively marrying tourism with other sectors to achieve multiple economic and social objectives for their citizens and it is a trend that will only accelerate.

Destinations leverage on tourism activity for economic development purposes in many different ways:

looking to tourism as a source of revenue for a country's heritage, culture and nature attractions and activities;

building the rationale for upgrading cities (and in particular special areas such as waterfronts) based on tourism activity and the potential to attract additional tourism to help finance such activity;

investing in culture and arts with explicit linkages between these areas and the tourism sector;

linking local economic development support programs directly to the tourism sector and fostering a market-driven approach to such economic development support;

linking the destination marketing efforts of the tourism sector with investment promotion and export development, particularly in specialty destinations' specific products; and

investing in major events and festivals that attract tourism, provide enjoyable activities for local citizens, and generally enhance the image of the destination.

All of these approaches are being pursued to a greater or lesser degree worldwide and all rely on tourism to assist in enhancing the quality of life for a destination's citizens. These approaches are strategic in looking to tourism as a source of activity and revenue or as an image "enhancer" to assist in promoting anything from exports to major cultural programs.

3.2.1 The Case of Small Tourism Enterprises Also important and historically less well executed is the effort required to foster local entrepreneur development and participation in the tourism sector. This is particularly important for the Caribbean region where the investment in tourism is generally dominated by larger accommodation properties

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and/or cruise facilities. Local entrepreneurs have historically been left on their own when they invest in small hotels, ground tour operations, attractions and the like. The issues they face in an increasingly competitive environment worldwide must be considered as part of the National Tourism Strategy.

The Caribbean tourism sector has long been seen as the economic cornerstone for the future for many small island economies. The internationally recognized sun, sand and sea resources of the region gave rise to the world’s leading beach resort product for many years. While tourism development produced needed jobs and economic activity in the region, it did not meet the promise of strong local participation and entrepreneurship in the sector. The large hotel foundation of the sector with its high capital challenges precluded investment access to all but a very few entrepreneurs in the region. Local entrepreneurs entering the sector did so with small hotel and small tourism services operations, some with the aid of development finance facilities implemented by many countries in the seventies and eighties. Viable small hotel operations, however, generally proved to be elusive in the face of increasing competition world-wide, the high costs of marketing, and an inability to meet market expectations for quality standards. Moreover, the small operator is also constrained by an inability to compete against bigger operations during economic downturns and discount pricing.

One of the key issues facing the Caribbean, and indeed a common issue worldwide, is the absence of a strong connection between national government programs on economic development and the tourism sector. Historically regarded as a sector of second tier importance, tourism is now demonstrating how robust it can prove to be in attracting investment, creating jobs, fostering sustainable management practices for a destination's resource base, and generating enhancements in local quality of life. However, much more can be done on the part of national governments to strengthen the link between the tourism sector and local economic development. The small hotels sector in the Caribbean is a case in point. Ownership is largely indigenous and many of these properties offer a product that is at the lower end of the value scale. The experiences offered by these operations leaves the visitor with more exposure to and understanding of local culture than the usual sun, sea and sand product in the Caribbean. Customers for these small tourism enterprises typically include significant numbers of tourists from the region. For example, the small hotel sector relies heavily on regional markets, particularly in the smaller property categories (less than 25 rooms) and in the off season. Without this regional market, many small properties could not survive.

The small hotels sector, as with other small tourism enterprises, finds it difficult to compete in the international marketplace. Many jurisdictions suggest that the small hotels sector is in fact in decline and the distance between larger properties and their smaller counterparts in terms of viability is increasing. In the hotel sector, this is reflective of trend that is experienced worldwide. The decline in independent properties in favour of franchises, flagged properties, and hotel cooperatives started some 30 to 40 years ago and continues today, dominating the hotel sector worldwide. The principles behind branding, franchising and cooperative models all relate to offering a consistent standard in the marketplace and achieving economies of scale. There are now initiatives in the Caribbean to foster cooperative models in an attempt to overcome these constraints.

3.2.1.1 Positive Trends for the Future Small tourism enterprises are well positioned to deliver cultural and nature experiences to customers. In this regard, the potential for enhancing local entrepreneurial opportunities, careers for young people, and community tourism activity is significant given international marketplace trends towards experiential tourism. This was documented previously in Section 2 of this White Paper. It is underscored by such organizations as the World Tourism Organization, whose 2001 list of hottest

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products for the next decade are eco-tourism, adventure tourism, cultural tourism, cruises and themed tourism. Small tourism enterprises are well positioned to take advantage of these trends but they do require a coherent and supportive economic development policy in order to fully realize the potential.

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4. Competitive Destinations

There are many factors that influence a destination ability to operate competitively in the international tourism marketplace. Destinations must ensure that the experiences they are able to offer potential visitors are based on the principles of quality, sustainability and authenticity in order to compete with and surpass the experiences offered by other destinations. This section addresses some of the key components of destination competitiveness including tourism planning, product, standards, marketing, partnerships and human resource development.

The key considerations in ensuring a competitive destination are discussed in this section. Section 5 addresses the question of destination management and how destinations are increasingly professionalizing their approach to managing the tourism sector.

4.1 Tourism Planning Tourism planning in Belize should take into account not only the needs of visitors but also those of the local residents. Local residents usually expect benefits in the form of revenues from tourism, while at the same time preservation of their natural environment and culture. Visitors too are beginning to appreciate the benefits of supporting these local objectives, as this can lead to a more authentic and experiential product that gives them a greater understanding of the local culture and lifestyle.

Planning for tourism is a partnership, between private industry operators who provide the products and governments who provide the resources and a framework in which tourism can function effectively. According to the WTTC:

The public sector has a special responsibility to ensure the sustainability of key tourism assets, such as the natural and cultural resources that preserve the attractiveness of tourism destinations and the competitiveness of tourism companies. The most effective policy responses are those that focus on key government tasks, such as coordinating infrastructure development and fostering competitiveness, rather than focusing on short-term protectionism or micro-intervention in market mechanisms (WTTC, 2003).

A Community Based Approach Community tourism is essentially a process of tourism planning and management with a greater degree of community involvement. For this approach to be successful there has to be a clear understanding of the underlying steps and factors that contribute to the successful implementation of community tourism initiatives. At the core of community based tourism is the concept of sustainability (e.g. environmental, social and economic).

While many community tourism initiatives are led and driven by local communities themselves, local governments can also play a key role in the process through the development of policies and legislation to support community tourism enterprises. Other initiatives are developed externally by NGOs, who often view community tourism development as a means to protect natural resources or stimulate rural development.

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4.2 Tourism Standards The identification of best practice and the growth of standards and certification programs have attracted considerable attention on a global scale as efforts are being made to develop integrity within the tourism industry, and to assist the tourist and the travel trade in distinguishing market ready products on the basis of underlying values, quality and the nature of the experience.

Standards have an important role in product development as they provide a means of establishing benchmarks and best practices for tourism products and services. This ensures tourism is developed in a manner consistent with destination resources (cultural, environmental and economic).

Many different organizations such as tourism associations, NGOs and governments play a role in the development and implementation of tourism standards (see Section 3.6).

4.2.1 The History of Tourism Standards Tourism standards originated with the need to protect public health and safety in the hotel industry. An important part of building codes, accommodation facility standards include specifications for building and fire prevention as well as regulations governing health concerns including food preparation in restaurants. Over the course of many decades, these standards were refined, not only by the public sector from a code and regulatory standpoint, but also by the private sector as they develop standards and practices for their own businesses through such vehicles as franchises and branded properties. This reflects the move to ensure that the accommodation or tourism facility meets the expectations of the marketplace.

Training also received attention and has increasingly been modernized to be market-driven and to reflect a "standard" of hospitality, service and skills that a competitive tourism operation requires. The work of such organizations as the American Hotel and Lodging Association has been instrumental in creating training programs and tools for the industry. Destinations around the world are investing in training programs across a wide spectrum of tourism activities, all to meet international tourism market expectations.

Modernizing standards in the tourism industry is no different from doing the same in other sectors such as manufacturing, agriculture and technology. In order to compete, the tourism industry must meet international standards or gradually fall by the wayside. In today's tourism world, and with the capacity of the consumer to travel globally, there are simply too many destination options that the consumer can turn to if they are unhappy with the experience in a particular destination.

4.2.2 Product Specific Standards Tourism guidelines and standards are generally activity based. The standards refer to a specific activity and outline codes of conduct, ethics and rules to be observed while participating in an activity. Many of the earlier activity guidelines devised were associated with wildlife viewing.

A local, regional or national association that has an affiliation with the specific activity usually devises the activity guidelines. In some cases associations are often formed for the purpose of addressing a lack of standards within a certain activity or area. The standards briefly discussed below reflect Belize’s key product segments.

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Cruise Industry Careful management and regulation of the cruise industry in Belize is essential to preserve the country’s natural environment and existing tourism experience (i.e. diving, cultural tourism and ecotourism). Projects like the Principles for the Cruise Stewardship Initiative launched by the Oceans Blue Foundation looks at ways of controlling the cruise industry’s impact on destinations and the environment in which they operate. The Cruise Stewardship Initiative is based on the following three principles:

Corporate Responsibility to Protect and Preserve the Marine Environment - The cruise tourism industry has a duty to protect and preserve the marine environment including the duty to prevent, reduce and control environmental harm

Best Available Technology on Cruise Ships - To predict and prevent environmental harm from cruise activities, the cruise tourism industry should require the adoption of best available technology on cruise ships

Voluntary Initiative Exceeding Regulatory Standards - In the pursuit of environmentally responsible tourism, the cruise tourism industry should work together with other stakeholders such as governments, local communities, indigenous peoples, and other appropriate organisations. Voluntary initiatives should be pursued by the cruise tourism industry to ensure the highest possible standards of environmental responsibility for every cruise ship

Belize has already put considerable discussion into formulating a Belize Cruise Tourism Policy and has introduced an Environmental Compliance Plan for Liveaboard Passenger Vessels in 1999. The challenge today is to review and develop these policies in the context of the phenomenal growth of this sector of the tourism industry. The environmental implications of this growth must be examined critically, particularly in light of the country’s commitment to its market place position as an ecotourism destination. Further consideration must be given to ways of absorbing these arrivals without jeopardizing the integrity of ecotourism, and to developing mechanisms that will strengthen the inter-sectoral linkages and reduce the associated leakages from the national economy. In an effort to increase the sustainability of the cruise industry, Bermuda, for example, has insisted that cruise ships operating in its waters employ more Caribbeans, especially Bermudians, and that they pay a contribution of US1.5 million to an educational fund to assist young people28. In addition, the country has requested that each passenger coming onshore is provided with a US$30 voucher at the ship’s expense, and they are the only island in the region to charge a head tax of US$60. Working together as a region to implement principles and practices such as these would heighten the impact of the cruise industry within each destination and would increase its longer-term sustainability. This has been advocated by the Caribbean Hotel Association who would like to see the development of a regional cruise policy and fully support current efforts of Caribbean governments to impose a regional and regional US$20 head tax on arriving cruise passengers29. This levy would assist in addressing the competitive imbalance that exists between the cruise and land-based tourism sectors,

Small Hotels Standards A key component in Belize’s development as a tourism destination is its accommodation sector which is comprised almost entirely of small properties. According to a 1995 review of the

28 Barbados Nation press article, June 2003, Caribbean cruise industry ‘Threat to tourism’ 29 Hospitality Trends (htrends.com), November 2003, Strategic objectives of the Caribbean in tourism development

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accommodation sector, 92% of hotels had 20 or less rooms and 70% had 10 or less. 10 years later, 91% of hotels have 20 or less rooms and 68% have 10 or less. Developing, implementing and maintaining standards for this sector will be key to growing Belize’s tourism industry.

The Caribbean Experiences™ brand was designed specifically for small accommodation properties within the Caribbean and Belize was involved in the Small Tourism Enterprises Project (STEP) that saw the development of this product. Caribbean Experiences™ outlines minimum standards for inclusion within the program and assumes that properties have first met their respective national standards. The entry requirements have been developed based on a market-driven approach, recognizing the importance of minimum standards related to public health and safety. To cater to the high-end ecotourism market segment Belize will need to go considerably further to meet the higher expectations of this market.

Ecotourism Standards Ecotourism and sustainable tourism standards should be the focus for Belize as its natural and cultural resources are its key tourism products (i.e. reefs, caves, Mayan Ruins and its living Mayan culture). Worldwide there are a huge number of standards, certification schemes and codes of conduct that seek to manage ecotourism’s impact and are a mix of process versus performance based criteria.

The 2002 Draft International Ecotourism Standard (IES) would likely provide a good framework for Belize’s tourism standards as it is primarily performance based and includes significant social and economic criteria. The IES has also developed special clauses and rules for small businesses which makes it particularly applicable to Belize with its large number of SMEs.

The Draft International Ecotourism Standard (IES) was developed by Ecotourism Australia (formally the Ecotourism Association of Australia) and the Cooperative Research Centre for Sustainable Tourism of Australia. The IES is based on:

the Nature and Ecotourism Accreditation Program (NEAP), Agenda 21, and the principles contained in the Mohonk Agreement (2000).

Green Globe 21 has been assigned an exclusive licence for the distribution and management of the IES. Green Globe 21 is a global affiliation with a benchmarking and certification program for sustainable travel and tourism. Green Globe America (Puerto Rico) has been taken on by Caribbean Action for Sustainable Tourism (CAST) and is responsible for the Caribbean and South American regions.

The objective of the IES is to facilitate environmentally sustainable ecotourism. The standard provides a means of determining the baseline environmental performance level for ecotourism products (e.g. accommodations, tours and attractions).

PADI Project AWARE (Protecting the Underwater Environment) Belize would also benefit from encouraging the dive industry and operators to participate fully in high profile marine programs such as PADI’s Project AWARE. This would help to not only protect the destination’s natural resources and manage their use in a more sustainable manner, but would also demonstrate Belize's commitment to sustainability and the environment in the market place.

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4.2.3 Standards, ethics, certification and guidelines There are a huge array of standards that come in the form of codes of ethics, awards, certification programs and guidelines, which are currently being used or developed to help regulate and benchmark tourism operations around the world. Research commissioned by the WTO in 2001, identified approximately 500 current initiatives including ecolabels, awards and codes of practice.

According to the Rainforest Alliance, there is an urgent need for governments, businesses, NGOs, communities, and other stakeholders to agree upon common standards and a global mechanism to promote sustainable tourism practices. This process is underway with the establishment, in April 2003, of the Partnership for Effective Implementation of Tools for Monitoring Ecotourism and Sustainable Tourism. This initiative, a direct result from recommendations contained within the proposal for a "Sustainable Tourism Stewardship Council” could eventually see the creation of an entity that would be responsible for "certifying the certifiers."

The standards with the greatest relevance to Belize will be those that focus on the concepts of sustainability, ecotourism and acknowledge the small scale and widespread nature of the tourism in Belize. Standards are essential in helping to establish benchmarks for some of the most basic requirements such as health, hygiene and safety, while also providing consumers and the travel trade with a valuable indication of a product's or destination’s commitment to the local economy, culture and environment. Standards are in part a reflection of the need to protect a destination’s resources, while also offering a consistency and quality of product that today’s more savvy and experienced traveller is demanding.

The effect of standards relating to sustainable tourism has been minimal to date as half of all eco-labels are only four years old (WTO, 2002). Based on WTO research in 2002 into voluntary sustainable tourism initiatives (i.e. eco-labels) worldwide the following observations where made:

Two-thirds of eco-labels are led by private tourism associations or non governmental organizations, one-third are led by government organizations.

Two-thirds of eco-labels have been functioning as multi stakeholder groups since their inception including representatives from tourism, environmental, social and consumer groups.

The costs for the development of eco-labels have come from private organizations (1/3), government agencies (1/3) or a combination of private and government sources.

Global Code of Ethics for Tourism One code that should be mentioned under standards is the “Global Code of Ethics for Tourism” developed by the WTO and approved in 1999. The Code sets a frame of reference for the responsible and sustainable development of world tourism. It draws from many similar declarations and industry codes and adds new thinking that reflects our changing society.

The code includes nine articles outlining the "rules of the game" for destinations, governments, tour operators, developers, travel agents, workers and travellers themselves. The tenth article involves the redress of grievances and is the first time that a code of this type has been given a means for enforcement. Grievances will be addressed through the creation of a World Committee on Tourism Ethics made up of representatives of each region of the world and each group of stakeholders (i.e. governments, the private sector, labour and non-governmental organizations) within the region.

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The following sections detail some of the activity specific codes and standards for direct relevance to Belize’s tourism industry.

4.3 Marketing The ability to identify market segments that match a destination’s resources and infrastructure is a key component of competitiveness. Destinations work to communicate their strengths and opportunities to potential consumers.

4.3.1 Destination Marketing Destination marketing to create awareness is a fundamental component of any tourism destination management regime. The relationship between the public and private sector is generally typified as follows:

a destination (public sector) establishes market awareness in target markets through destination promotion; and

private sector operators "close the sale" against that awareness.

The importance of destination marketing cannot be avoided. As destinations compete more aggressively year-by-year for customers, those who do not establish and maintain effective destination marketing approaches will inevitably lose market share.

The concern around destination marketing is discussed in more detail in Section 5 of this White Paper (Destination Management Trends). Below are some considerations related to destination marketing specific to some of the key market segments that are of interest in Belize.

4.3.1.1 E-Marketing E-marketing represents the most significant single trend in the tourism industry in the last decade. In 2002, the Travel Industry Association of America (TIAA) estimated that 64 million Americans now research their travel options on-line and 42% of travel planners say they now do all or most of their trip planning on-line. The observation by TIAA is that:

"Destinations and businesses that do not have an on-line presence will not even be considered by the many travellers who now rely almost exclusively on the web for travel planning information".

Thus, it is mandatory to have an on-line presence in order for any destination to effectively the marketplace it is targeting. Moreover, this on-line presence must not only be available but also competitive when considered against the on-line presence of competing destinations. Destinations are now developing increasingly sophisticated e-marketing strategies including:

pay-per-click advertising;

link strategies;

permission e-mail marketing;

viral marketing;

e-public relations; and

off-line promotion of web sites.

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A fundamental strategy for any e-marketing approach is the search engine strategy. Frederick Marckini, author of Search Engine Positioning, comments that:

"The harsh reality: it's Top 30 or nothing …. most searchers do not keep clicking through past the third page. In fact, most searchers don't even click through to the second page."

Thus in the space of a few short years, all destinations have had to develop and mature their web marketing skills in order to be competitive.

4.4 Specialty Marketing The new cultural or ecotourist is generally well educated and likely to respond to an effective marketing strategy. While they utilise media like the Internet, they do not base their purchasing decisions wholly on information gathered from this source. One type of marketing technique that resonates with this audience is the concept of ethical marketing.

Ethical Marketing Ethical marketing represents an honest and factual representation of the product, delivered in the framework of cultural and social values of the consumer (EplerWood, 2003). Ethical marketing analyses people’s values and enables marketers to more closely predict consumers’ motivations for purchasing certain products and services. The goal is to create an authentic message that acknowledges those cultural values and relays this through a media source the consumer group respects and trusts. The concept of ethical marketing has the potential to appeal directly to Belize’s key market segments (i.e. cultural and ecotourists).

Strengthening niche segments within the industry to enable them to deliver the ethical marketing message effectively is another approach that would enhance competitiveness. The creation of product groups/clubs/associations under common themes is an excellent way of improving marketing performance. Product groups are able to pool resources and network to increase their ability to reach specific target groups such as American adventure travellers.

Creating product groups, clubs and associations This approach to both marketing and product development has been used effectively in Canada by the Canadian Tourism Commission and in Namibia (southwest Africa) through the creation of establishments like the Namibian Community-Based Tourism Association.

Canadian Product Clubs The Canadian product clubs concept brings together many small and medium sized enterprises (SMEs) to form a partnership with a common vision. This initiative has been extremely successful and by the end of 2000 thirty-one clubs had been formed involving hundreds of partner organizations and more than 5,000 associated members and businesses. The product clubs help SMEs build networks and pool their resources to create new packages, research consumer needs, and develop product and marketing strategies.

Namibian Community-Based Tourism Association (NCBTA) NCBTA provides an example of a membership-based association dedicated to developing and supporting community tourism enterprises. The NCBTA works with individual groups by providing advice, loans, training and promotional services. It also lobbies government to develop tourism policy and ensure that the community obtains permission to own not only the wildlife but also the

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land essential to their tourism initiatives. They also liaise with the private sector to work towards integrating the community tourism enterprises into the main tourism industry.

4.5 Partnerships and Collaboration The current international debate and focus on roles and responsibilities of stakeholders that was reviewed in Section 2 of this paper, has clearly demonstrated that sustainability can only be achieved through partnerships and collaboration that involve all stakeholders. The World Travel and Tourism Council have observed that new tourism needs new joint strategies, using new mechanisms springing from new partnerships with public authorities. Industry’s recognition of its broader responsibilities has to be matched by government, and all sides must be prepared to adopt a new form of long-term thinking, and a new degree of openness and cooperation, to develop contingency plans as well as development strategies30.

One approach that assists in developing the necessary dialogue and sets the stage for cooperation is a cluster-based economic strategy. This is a ‘regional’ or destination based approach that looks at the tourism industry holistically and seeks to identify ways of building and strengthening the domestic supply chain so as to minimize ‘leaks’ away from the regional cluster. It is particularly applicable to the tourism industry which is traditionally fragmented and lacking any coherent internal structure. While the theory of economic clustering has been around for some time, it has been given a new emphasis in the tourism sector through work conducted by ICF Global Economic Development Practice and a recent paper of their’s commissioned by the World Tourism Organization31. Regional/destination cluster-based competitiveness strategies promote bottom-up solutions in partnership with public institutions. In bringing all the players to the table, the cluster approach facilitates the identification of new products and packaging strategies, and assists in the development of relevant investment policies, based on a better understanding of the overall industry and its growth and seasonal cycles. It creates an opportunity to review how existing regulatory and tax policies encourage or constrain the growth of the industry, and provides a forum for devising strategies that will reduce external leakages from the cluster economy. The paper presents a case-study that was conducted in Northeast Brazil and outlines a number of collaborative actions that emerged from the initiative. These included the planning of a new destination interpretive theme park; a tourism training initiative to develop new training resources that would meet hospitality industry occupational standards; tourism trails and tourism enterprise zones, a marketing partnership; and, a hotel finance initiative.

Government Participation in Tourism Standards Governments in some countries are taking an active role in developing standards for the tourism industry. In Costa Rica the Certification for Sustainable Tourism program (CST) is government funded and led, and is implemented through the Costa Rican Tourism Institute (ICT). At present only operators in the accommodations sector have been certified. However, the ICT is working on certification for tour operators and plans to implement this in the near future. The ICT also works closely with Blue Flag to certify beaches in Costa Rica. While certification is mainly based on performance criteria, the CST has various environmental criteria for assessing physical components of products similar to the ISO system.

30 WTTC, September 2003, Blueprint for New Tourism 31 Gollub, J., Hosier, A., and Woo, G., c. 2002, Using Cluster-Based Economic Strategy to Minimize Tourism Leakages, WTO web

site

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In other countries governments are supporting tourism certification in a number of ways by providing funding (e.g. annual grants, lower costs for small businesses, competitive loans), use of marketing resources, and the provision of advice and training. This allows associations, NGOs, and the tourism industry to control the process.

In New Zealand, the government recently granted NZ$2.5 million to expand the existing Qualmark certification scheme, which is being developed jointly by the tourism industry sectors, the Adventure Tourism Council and the Tourism Industry Association of New Zealand. Two of the most prominent programs, Blue Flag (Europe, South Africa, Caribbean and Costa Rica) and NEAP (Australia) are also partially government funded.

According to a 2002 World Tourism Organization study of member states, government financial support for certification programs is crucial to half the schemes surveyed.

4.6 Human Resource Development A destination’s competitiveness can be enhanced through the development of a human resources strategy that focuses on creating, maintaining and improving the skills necessary to deliver a quality tourism experience to the visitor. Encouraging the adoption of occupational standards and the development of related training programs has become the focus of various countries.

Occupational Standards describe the skills, knowledge and attitudes necessary to achieve competent performance in a specific occupation. Numerous standards relating to the tourism industry have been produced by a range of national organizations, such as the Canadian Tourism Human Resource Council, the UK Institute of Customer Service, the UK Hospitality Training Foundation, the Ecotourism Association of Australia, the American Hotel and Lodging Education Institute, and the Caribbean Hotel Association. These provide a job analysis or job profile that contains criteria-based performance statements, knowledge requirements of the job and contextual information. The standards act as benchmarks against which the proficiency of people in the particular occupations is assessed. They help businesses and individuals plan their skills development and maintain their competencies.

Occupational standards exist for a wide range of tourism and hospitality related jobs, including:

Front line operations Housekeeping Food and beverage service Food preparation Campground operations Outdoor adventure guiding Tour and ecotour guiding Customer care Environmental conservation Sales and marketing

The adoption of occupational standards will not only assist in the delivery of a quality experience and the promotion of a ‘performance culture’, but they will also enhance the tourism profession

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as a career. Where occupational standards are combined with a commitment to best practice in human resource management, productivity will be improved and employee satisfaction and motivation will be heightened.

As a minimum commitment to the principles of sustainability a destination should give consideration to implementing a code of ethics for tourism personnel. The Australian EcoGuide Code of Ethics32, for example, is an illustration of a code that helps ensure the wise use and conservation of a community’s natural resources, the preservation of the cultural and aesthetic resources, and the on-going delivery of a high quality product and a continuing welcoming spirit. Given Belize’s focus on ecotourism, a code of this nature would be particularly relevant to the industry and the need to protect the country’s biodiversity.

32 Ecotourism Association of Australia,2001, EcoGuide Program

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5. Destination Management Trends

The development of a tourism sector will not be successful without a commitment to destination management encompassing investment in tourism product development, infrastructure and destination appeal, and destination marketing programs. Destination management regimes combining policy and regulations with proactive industry development and cooperative approaches to destination marketing are all formulas for success in today's highly competitive tourism industry.

5.1 Managing Tourism as a Business Tourism investment by destinations has typically been motivated by economic development objectives to increase foreign exchange earnings, generate jobs and create new businesses. Indeed, tourism has been extraordinarily successful in these areas largely because of its position as one of the fastest growing industries in the world. Tourism touches not only on its own industry of operators and suppliers, but also contributes to generating markets for such activities in a destination as arts, culture, crafts, and so on.

Until recently, most destinations have not placed a significant priority on developing their tourism sectors. Attention has been on traditional industries (agriculture, mining, manufacturing and more recently high technology), based on the argument that tourism is a service industry providing low-paying job opportunities. More sophisticated destinations are now recognizing that the business of tourism is more far reaching than expected.

As tourism has increasingly garnered the attention of economic development planners and strategists, the motivations for investment in tourism have evolved to a new level of sophistication over the last two to three decades, taking into account the sector's positive impacts on social and environmental matters in addition to economic concerns. Specifically, the economic development community now recognizes tourism's important role in several areas:

enhancing the quality of life for residents of a destination through such spin-off effects as environment, heritage and cultural protection measures that are generated by investments in tourism;

revenue generation for public sector facilities such as parks and protected areas, heritage attractions and the like; and

improved infrastructure, and ancillary services.

Enhancing a destination's quality of life for its citizens also increases the appeal of the destination to foreign investors. The linkage between tourism and trade is now acknowledged by economic development planners as a key strategy in attracting foreign investment and promoting export of goods and services from the destination. The greater the awareness of the destination, the more that trade activities and investment promotion can be linked to that awareness thereby generating value-added for those involved in this aspect of economic development for a country.

These factors, together with the increased competition for tourism market, has led to a much greater focus on treating the tourism sector as a business. It is not longer just the purview of an enthusiastic industry with support provided by government through destination marketing. Tourism sector management is increasingly becoming professionalized.

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5.1.1 The Business Model for Managing the Tourism Sector From a destination perspective, tourism visitor expenditures are recognized as "the revenues of the business". Like any other business, the destination needs to:

determine its competitive market niche; •

be responsive to its customers;

invest in its product including continual upgrading/improving to meet market driven standards; and

apply a sustained marketing effort.

The difficulty that many destinations encounter is the lack of commitment to a destination business model for the tourism sector. It is acknowledged by most destinations that the private sector cannot possibly compete on its own in today's world marketplace. It requires a partnership between government and the tourism industry in order to launch and sustain a competitive marketing and tourism sector development effort. The business model for tourism is built around a public/private partnership as illustrated in the exhibit below. It reflects the evolving approach to destination management in which an increasingly sophisticated partnership between the public and private sectors jointly manages the tourism sector.

Destination Management Model

Tourism Markets

Public Sector

• Market Destination, creating awareness

• Encourages, facilities training

• Regulates product safety, standards

• Upgrades infrastructure

• Promotes quality of life in _________

• Encourages economic development

Tourism Products

Private Sector

• "Closes the sale", leveraging on destination awareness

• Participates in cooperative marketing

• Invests in tourism products

• Continually upgrades product to meet market expectations

Public Sector

• Market Destination, creating awareness

• Encourages, facilitates training

• Regulates product safety, standards

• Upgrades infrastructure

• Promotes quality of life enhancements in tourism investment

• Encourages integrated economic development

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The public sector manages tourism sector growth, product quality and markets the destination. The private sector invests in tourism products and "closes the sale" against the destination awareness created by public sector destination marketing programs.

5.2 Policies and Regulation Belize has made substantial progress since the 1998 National Strategy on management of the tourism sector. Policy and legislation has been put in place for the Belize Tourism Board, tour operators, tour guides and the cruise sector among others. The development of this legislation has been framed by consultative processes with industry. This work has provided Belize with an excellent foundation for managing the tourism sector. The tour guide system in Belize, for example, is regarded as a best practice in the region and many countries regularly refer to it in considering how they might improve their own practices.

The central issues for Belize to which policies and regulations must respond has less to do with the details of these policies than they do with the implications of how to manage two very different tourism sectors – stayover and cruise. The best cruise policy by itself will not resolve that issue. Rather it requires consensus on a national tourism strategy that defines core values concerning Belize tourism and how to manage both sectors so as not to compromise the country’s competitive advantage.

5.3 A Market-Driven Orientation Like any corporation, tourism destination managers today must continually ask themselves questions relevant to their business prospects. These include:

• What are our core values? • What business are we in? • What is our business model? • How are our product lines doing (eg, cruise, stayover, and segments within stayover)? • What is the market telling us? • What are the key market trends to which we should be responding • Do our products meet market expectations? • How are we doing against the competition? • How do we maximize benefits for our shareholders (i.e., citizens)? • How do we access the market? • Can we improve on how we manage our relationships with our tourism intermediaries? • What is our image in the marketplaces we are targeting? • How is our public relations? • And so on…….

These are questions that all businesses ask regularly and tourism managers are beginning to incorporate business tools more explicitly in the tourism destination management function. Of particular note is the market driven orientation that destinations are adopting, recognizing that success comes with sound market research and attention to market expectations and trends.

5.3.1 The Case of Belize Community Tourism An excellent example of this is the recent research that the Belize Tourism Board undertook to determine what the market is looking for in community tourism experiences. The survey of fifty tour

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operators resulted in identification of thirty-four who expressed interest in doing business with Belize in the community tourism area. (It is noteworthy that resource constraints permitted a survey of only those operators serving Belize already. There are many others serving Central and South America in this product area who are candidates for Belize’s product.) The tour operators identified a number of key product characteristics that they were looking for in packaging Belize’s community tourism products.

Tour operators reported that they are looking for products which provide opportunities to learn about the Belize’s varied natural attractions, local ways of life, and indigenous peoples through the eyes of community members. The experiences must be real and authentic, not staged ones developed just for the tourist market. Education is also an integral part of the experiences, and may form the core component of a trip.

Community tourism product opportunities identified during on the consultations include:

Homestays at local bed & breakfasts, lodges, cabins and other accommodations •

Visits to local farms where visitors can learn about agricultural methods and sample local produce and even participate in agricultural activities

Nature based activities led by community guides, including rainforest and national park walks which focus on birdwatching, nature viewing and the uses of flora and fauna

Soft adventures activities, such as diving, fishing, caving, kayaking and canoeing, led by community guides

Demonstrations of resource use such as weaving and basket making

Products that focus on hands-on learning experiences, currently a hot trend travel trend

For the academic sector, products that combine theoretical learning with community tourism accommodation, cuisine and activities experiences

Visitor participation in a communal work projects, such as conservation or infrastructure development projects

Opportunities to sample local cuisine, including preparing and having meals with local families

Opportunities to participate in local festivals and other events

Visits to places, including the homes of artisans, where visitors can meet the artist and purchase art

Visits to projects that display community cooperation in farming, crafts, building, and celebrating

Programs that allow communities to share their knowledge of local ecosystems

Experiences with youth groups, such as visits to schools

These results provide an excellent information base for structuring a program to strengthen Belize’s community tourism product with full expectation that the investment will result in more business for local suppliers.

The research also examined the requirements of the tour operators for supportive marketing activities by the destination to improve market capture for the community tourism product. The results are informative and provide clear direction that will enable the Belize Tourist Board to examine its

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program and make the necessary adjustments should the investment be judged as viable for the anticipated business.

This is but one example of the importance of sound tourism market research to support product development and ensure a successful match to market expectations. An important trend in the tourism sector globally, investment in strengthening the market driven orientation destinations adopt is a clear competitive strategy.

5.3.2 The Business of Tourism – How Much Investment? This is always an important question for governments. Only in recent times have tourism managers taken on this question with anything remotely resembling sound research. Up until the last one to two decades, for example, most government information functions (census/statistical data) did not even recognize tourism as an economic sector. In the last decade there has been much work undertaken on the importance of understanding the contribution tourism makes to a destinations economy and to social, heritage, cultural and environmental values. The creation of tourism satellite accounts is an important trend in this regard. Without this information, it is akin to trying to run a business without knowing the revenues the business produces!

5.3.2.1 Destination Marketing Another consideration in the “how much investment is enough?” debate relates to the impacts of that investment on revenues and the impact of competitor investments. One could, for example, look to data collected by the Caribbean Tourism Organization (CTO) to illustrate the point. In the 1990’s, most countries in the Caribbean were able to increase their visitor expenditures significantly.

Visitor Expenditures by Reporting Countries (US$ ‘000,000s)

Destination 1990 1999 % Change

(10-year)

Martinique 240.0 404.0 683.0

Turks and Caicos Islands 36.5 238.0 552.1

British Virgin Islands 132.1 299.9 127.0

Trinidad and Tobago 94.7 209.6 121.3

Aruba 353.4 773.5 118.9

Guadeloupe 197.1 400.2 103.0

St. Lucia 153.8 311.1 102.3

Dominica 25.0 48.8 95.2

Cayman Islands 235.7 439.4 86.4

Grenada 37.5 66.6 77.6

Jamaica 740.0 1,279.5 72.9

Anguilla 34.6 56.5 63.0

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St. Maarten 315.5 449.4 42.4

St. Vincent & Grenadines 56.0 78.9 40.9

US Virgin Islands 697.0 954.9 37.0

Barbados 493.5 666.2 34.5

Belize 91.4 111.5 22.2

St. Kitts and Nevis 57.7 70.4 22.0

Bahamas 1,332.9 1,582.9 18.7

Antigua and Barbuda 298.2 290.0 -2.7

Source: CTO data for reporting countries

Following a destination business model approach, one would assess the factors affecting the performance of those with both low and high performance to identify lessons learned and best practices. An important consideration is the investment these countries made in destination development and marketing. While this data is difficult to assemble, the CTO has been reporting national investments in tourism marketing (including tourism agency administrative costs). For 1999, reporting Caribbean countries indicated the following marketing budgets.

Tourism Marketing Expenditures – 1999 (US $)

Country 1999 Marketing Budget ($US)

Percent of 1999 Visitor

Expenditures

Bahamas $ 53,985,000 3.41%

Bermuda $ 33,207,000 na

Jamaica $ 26,989,000 2.11%

Cayman Islands $ 23,745,000 5.40%

Aruba $ 20,293,000 2.62%

Barbados $ 18,331,000 2.75%

Martinique $ 7,540,000 na

St. Lucia $ 6,918,000 2.22%

St. Maarten $ 5,077,000 1.13%

Guadeloupe $ 4,500,000 1.12%

BVI $ 4,115,000 Na

Trinidad & Tobago $ 3,323,000 1.59%

St. Kitts & Nevis $ 2,929,000 4.16%

Belize $ 2,706,000 2.43%

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Bonaire $ 2,696,000 na

Grenada $ 1,693,000 2.54%

St. Vincent $ 1,048,000 1.33%

Dominica $ 773,000 1.58%

Source: CTO data for reporting countries

While the data is not definitive, it does give an indication of the levels of expenditures that are being made on marketing by destinations in the region. Significant investments in marketing, together with smart marketing strategies, will be the norm in the future and reflect trends that are shaping the future of the industry globally.

5.3.2.2 Investment in Product Development What is missing from the CTO data is the investment the destination is making on product development. This includes support for entrepreneurs, training programs, market driven standards resource protection and sustainable tourism policies. Product development and maintaining/improving product quality is at the heart of the competitive business model of any corporation. And yet many destinations do not give this area the attention it deserves, particularly as it relates to small enterprise development.

In Belize this is particularly important because of the character of its industry and the quality of the resource base. Industry is dominated by small enterprises and this needs a product development orientation quite different from a destination that is characterized by larger properties. Small enterprise development programs, cooperative marketing strategies, and training programs adapted to the needs of this sector are essential to facilitate product competitiveness. The natural, heritage and cultural resource base provides Belize with a significant competitive advantage that must be protected, with tourism taking advantage of the resources but ensuring that they are sustained.

5.3.3 Stayover versus Cruise – The Business of Tourism This is a longstanding debate in the Caribbean. Most destinations welcome cruise customers as a source of revenue for their small tourism enterprises (e,g. taxis, ground operators), attractions, shopping and arts and crafts. Setting aside for a moment the impact of cruise passengers on a destination, the visitor expenditures deserve careful consideration. Cruise is one of two main lines of business for the Caribbean, the second being stayover visitors. Typically the relationship between cruise spending and stayovers is skewed heavily to stayovers as illustrated in some sample countries below.

2002 $US millions Country

Stayover Expenditures

Cruise Expenditures

Total

% Cruise Expenditures of Total

Antigua and Barbuda

265 8.7 273.7 3.1%

Barbados 595 52.8 614.8 8.5%

Belize 120.6 12.2 132.8 9.2%

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Dominica 40.9 3.8 44.7 8.5%

Grenada 120.1 3.4 123.5 2.8%

St. Lucia 236 20.2 256.2 7.9%

Source: CTO Data, 2002

The question related to the business of tourism is what business strategy makes sense for the cruise line of business, given its limited relative contribution to visitor expenditures. There are many indirect benefits from cruise that countries have pointed to as justification for investment in this line of business:

• Increased awareness of the destination • Return stayover visits by cruise passengers • Improvements in waterfronts and port areas • Growth in opportunities in small tourism enterprises

None of these are particularly amenable to quantification but all have merit. On the negative side, cruise markets do generate negative impacts such as:

• Pollution and environmental degradation (examples include illegal dumping, coral reef damage) • Congestion at port areas and in shopping areas during cruise “days” • Congestion at attractions • Diminished appeal of attractions to stayover markets seeking and expecting more intimate

nature, culture and heritage experiences than is possible during cruise “days”

A key concern in this debate is how a strategy might be conceived and implemented that does not compromise the product line generating the largest business for most destinations – the stayover market. This is of particular importance to Belize and will be one of the major (if not the most important) issue to be addressed in the update of the national strategy.

5.4 Success Factors for Destination Management This business model for tourism at the destination level lies at the heart of success factors for destination management. These are generally acknowledged to include the following:

• An industry/government partnership with strong and effective cooperation. • Industry operates with a single voice on priority issues (managing consensus within itself),

thereby serving as an effective partner in destination management activities. • There is a clear and shared vision for tourism. • There is consensus that destination management involves managing the tourism sector as a

business using sound business practices and performance monitoring, reviews, and fostering a positive business investment environment for the tourism sector generally.

• There is an agreed tourism sector plan and strategy with guiding policy and tourism development and marketing programs.

• There are realistic budgets for destination marketing including cost sharing by industry. • There are effective partnerships with the international travel trade community, strengthening

marketplace relationships for the destination.

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6. Implications

The current international tourism trends and the components of destination competitiveness and management discussed in this report have a number of implications for Belize’s tourism industry as it develops its new tourism strategy.

The implications of these international trends relevant to the 1998 Belize Tourism Strategy are summarized in the table below (Exhibit 6.1). For each of these general areas, suggested action initiatives for 2004 to update the Belize National Tourism Strategy are identified. These are suggested as a general guideline for Belize as it proceeds to update its National Tourism Strategy.

Exhibit 6.1: International Tourism Trends – Implications for Belize Tourism Strategy

International Tourism Trends 1998 - Belize Tourism Strategy 2005 – Areas of Action

GLOBAL GROWTH

Global growth in tourism industry

Currently in a new period of growth following the global downturn of the years 2001-2003.

10 year annualized growth for 2006-2015 predicted to be 4.6%

Tourism is expected to contribute 3.8% of total world GDP in 2005, and 10.6% when the indirect impact is included.

Growth sluggish pre 1998.

4.0 – Strategy defined focus of industry as “responsible tourism”. This represented a shift from the more narrow concentration on “ecotourism” of the 1990s, to one that embraces a wider spectrum of market segments, with an underlying focus on the principles of sustainability. The overriding emphasis is still on promoting Belize as a destination for nature-based activities.

Section 6 – established a “preferred growth management strategy” which aimed for a 4% compound average annual growth rate, and an increase of 20,000 in visitor numbers over a five year period. These “new” visitors envisaged as elite, upscale natural history and diving tourists.

Anticipated an additional 20,000 during the period 2004-2008, which would bring the annual total number of visitors to 140,000. Growth of this nature allows for an ongoing commitment to small-scale, rather than mass tourism.

Phenomenal growth in period 1998 to 2004. Visitor numbers rose from 190,237 in 1998 to 1,082,268 in 2004. In 2004 cruise tourism represented 78.7% of this total, up from 72.3% in 2003. The stay-over market as a percentage of total visitors, has declined by 6.4% from 2003 to 2004.

2005 rate of growth predicted to be 9.4% for Belize; direct contribution to GDP expected to be 7.8%.

Must seek to quantify social/cultural, economic and environmental impact of this unplanned growth.

Review perceived market position – to what extent has the market image of Belize altered in the light of this growth?

Undertake assessment of industry to determine whether this form of mass tourism can co-exist with other sectors that seek to attract the “new” tourists, as defined in the 1998 Strategy.

Re-define preferred markets and nature of tourism for the country.

6.2.4 – considered a “what if” scenario of 400,000+ visitors – concluded that this would result in serious environmental and cultural impact, and the elimination of ecotourism, and as such would be unsustainable.

Note – growth had already outstripped 10 year predictions by the end of 1998. Stay-over visitors totalled 176,054 for

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that year.

Niche Market Growth:

Cruise Tourism - Has become the most aggressively expanding sector in the tourism industry. Cruise Lines International Association recorded 9.5 million cruise guests for 2003 – an increase of 10.2% on 2002. Over 8 million originated from the North American market.

Growth expected to moderate from 2005 onwards.

Number one location is the Caribbean Region, with 44% of capacity placement in 2004

Cruise tourism not regarded as a significant sector in 1998. Cruise visitors totalled 14,183 in that year. No focused strategy for this market segment.

Develop strategy that focuses specifically on cruise tourism – in terms of total capacity, environmental management, and preservation of cultural integrity. Can this sector of tourism be zoned more effectively?

Consider long-term sustainability of total industry if growth in this sector continues in the short-term. Examine experience of other cruise destinations and seek to incorporate best practices and lessons learned.

Review economic value of cruise tourism v. stay-over tourism. Update growth strategy for stay-over tourism.

Historic and Cultural Tourism – a growing market of travellers who are seeking some type of historic or cultural activity while on vacation.

Geotourism – a substantial market segment of travellers who are concerned about sustainability and authentic experiences.

Adventure Tourism – including forms of ecotourism, continues to be an in demand product, especially “soft adventure”, which has a broader appeal.

7.2 Identified as an existing market with potential

9.0 Product Development: Priority Projects

Assess the market readiness of historic/cultural/adventure and eco products and their related infrastructure (e.g. roads, washrooms, and signage)?

Evaluate Belize’s progress towards inclusion in the Mundo Maya touring routes of Guatemala, Honduras and Southern Mexico?

Further examine new market segments like Geotourism that overlap with some of Belize’s traditional niche markets.

Is the existing product mix providing an authentic experience within a sustainable context, particularly as it relates to the environment and local culture?

Continue to evaluate and monitor the effectiveness of current marketing initiatives

FOCUS ON BIODIVERSITY

Regarded as an international priority area.

Caribbean Region has been identified as one of the global ‘hotspots’ representing a need for urgent conservation within the context of the tourism industry.

Considerable concern over unplanned tourism; inadequate management standards and

4.5 Tourism Strategy to be based on an environmental ethic.

4.6 Policy Area 7 – commitment to adhering to the principles of sustainable development – thereby ensuring that environmental protection will be the cornerstone for all policies relating to tourism in Belize.

Section 8 – recognition of the country’s strong natural and cultural resource base – much of which is unspoilt and set aside in protected areas.

Overriding issue is the degree to which the Belize Government is playing a lead role in maintaining biodiversity.

Evaluate current land use planning framework – to what extent has it been effective as a tool for protecting the environment?

Assess the way in which “best management practices” have been implemented – what monitoring has taken place to establish “limits of acceptable change” in zoned areas?

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guidelines; inappropriate marketing; and, a lack of understanding regarding the nature of the environmental resource in these ‘hotspot’ areas.

International Guidelines on Biodiversity and Tourism Development – Convention on Biological Diversity advising that all Governments integrate the Guidelines into the development and/or review of national strategies

Recognition that all stakeholders have a role to play with regard to biodiversity and sustainable tourism in general. In particular, national governments are expected to take a lead role in establishing an appropriate framework for tourism development and facilitating collaboration

8.1 – tourism land use planning framework put in place to protect the resource base. Based on a system of “zoning” to allow for maximum protection where necessary and guide development into areas more appropriate. Series of zones and nature of development identified.

Section 10 – recognizes the need for an increased understanding of the linkages between tourism development and the environment

10.1 – adoption of the concept of “limits of acceptable change” and need for the establishment of “best management practices” – e.g. with regard to design and planning issues

10.3 – strengthen the linkages between tourism and various environmental sub sectors/agencies in Belize

Assess biodiversity – what changes have taken place sine 1998 that are attributable to tourism? What is the known impact of cruise tourism on biodiversity?

Consider integrating the international Guidelines on Biodiversity and Tourism Development into a tourism strategy review

Assess significance of each Guideline within current strategy and amend accordingly to ensure maximum protection of biodiversity.

How strong are the linkages between tourism and other agencies with an environmental responsibility? Develop ways of enhancing these linkages.

TOURISM PLANNING

Effective partnerships, as advocated by the Blueprint for New Tourism (WTTC), between government and industry are key to tourism’s delivery of consistent results and benefits for local economies.

An increasing awareness of the need for planning to address social and environmental concerns at the local level, while providing sustainable economic opportunities.

Growing acknowledgement of the benefits of a community-based approach to planning, where local residents are actively involved in the planning process.

4.4 – key objectives of the tourism Strategy

5.6 – role of the private sector tourism planning

8.0 – tourism land use framework: planning

10.0 – tourism and environmental management linkages

11.0 – community-based Initiatives

Review and evaluate the mechanisms to facilitate interaction between industry and government for the purposes of tourism planning. Are the WTTC “Blueprint for New Tourism” principles being put into practice?

To what extent are environmental and social outcomes being considered in the tourism planning process?

Evaluate the extent of community decision-making and participation in the planning process.

Continue to look at mechanisms for increasing local participation and opportunities in tourism.

Review policies and legislation – has a framework been created that supports the development of community-based enterprises?

Examine cruise policies, legislation and standards to ensure more widespread local benefits and opportunities and mitigate impacts.

STANDARDS

An essential component of a sustainable tourism industry and key to providing a quality tourism experience.

4.6 – policy directions – establishing types, standards and best practices

8.1 – overall goals and objectives for tourism and use planning and best management practices

Strengthen accommodation standards to reflect market expectations.

Review the Cruise Stewardship Initiative and its potential application in Belize to ensure increased local

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Accommodation standards, Ecotourism standards, Certification, Global “Codes of Ethics” and Cruise Industry standards

9.0 – product development: priority projects

10.0 – tourism and environmental management linkages

benefits and opportunities.

Examine the Draft International Ecotourism Standard and its potential application within the Belize tourism industry.

MARKETING

The concept of ethical marketing uses authentic and targeted messages that can appeal directly to the nature-based market segment.

Travellers’ use of the Internet as a source of information and for booking vacations has increased dramatically over the last decade.

Product clubs and groups are emerging as effective tools for building networks and pooling resources for marketing, packaging and research.

5.1 – identifying an appropriate role for government

5.7 – encouraging the involvement of other agencies and local organizations

7.0-7.4 proposed Marketing Strategy

11.0 – community-based initiatives

Evaluate the structure and role of the Belize Tourism Board (BTB). How effective has the BTB been in facilitating greater industry involvement in marketing, as outlined in 7.4.2 and 7.4.3 in the 1998 Strategy?

Further analyze and research Belize’s nature-based tourism markets to enable an ethical marketing approach that can focus on consumers’ social and cultural values

Examine new sponsorship and partnership arrangements outside traditional sectors (e.g. Banks, and other financial institutions e.g. AMEX)

Design an e-marketing strategy and develop on-line partnerships with key organizations (e.g. airlines and search engines)

Assess the merits of a central on-line booking and reservation service that makes it easy for potential visitors to book vacations on-line

Continue to develop a traditional media strategy that utilizes well known and reputable organizations (as identified in 7.3.2) to deliver an authentic message

Promote the cooperative marketing benefits of the Caribbean Experiences™ Brand for small accommodation businesses

MULTI-STAKEHOLDER APPROACH TO SUSTAINABLE TOURISM

Growing promotion of a multi-stakeholder approach to sustainable tourism. WTTC’s Blueprint for New Tourism and UNEP International Conservation both highlight the responsibilities of the various sectors and the fundamental need to work together. National governments expected to play a key role in facilitating this collaboration.

Strategy emphasizes the need for Government commitment and support of the Tourism Strategy Plan, particularly as Government support in the past had been relatively small.

4.1 – advocates a proactive approach by all stakeholders to develop, market and manage the industry.

Government is to be responsible for involving the local people in tourism decision making processes.

4.4 – key objective is to establish tourism as a national priority.

Review and evaluate the institutional changes – how effective have these been in increasing participation and collaboration?

To what extent is the Belize Government playing the lead role in facilitating the growth of tourism?

Determine strategies for increasing stakeholder participation and collaboration.

Consider ways of ensuring that the private sector adopts applicable international guidelines and codes of practice that would enhance corporate

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Parallel theme of social responsibility and corporate citizenship – WTTC Corporate Social Leadership in Travel and Tourism. Focuses specifically on the role of the private sector in the development of tourism that is environmentally, socially and economically sustainable.

Emergence of international “guidelines” from within the private sector – aimed at increasing social responsibility and accountability.

Recognition of the need for new business models that have the principles of sustainability central to all business operations.

4.6 – Policy directions – outline Government’s varied roles – e.g. Government committed to improving public sector services and infrastructure necessary for the ongoing growth of tourism

Section 5 – proposed institutional framework for tourism that is designed to strengthen the role of Government, and increase stakeholder participation and collaboration

responsibility

INTER-SECTORAL COLLABORATION

Trend towards integrating tourism more effectively into the wider economy. Greater levels of dialogue aimed at increasing the degree of leverage between various sectors.

Regional/destination cluster-based competitive strategies regarded as an example of this dialogue. Provides an opportunity to assess the financial and regulatory context of the wider economy, and identify ways of reducing external leakages.

Section 13 – identified ways of strengthening the linkages between tourism and other sectors of the Belize economy – particularly with regard to transportation, local food production, and arts and entertainment.

13.7 – committed to improving lines of communications between various government departments, and between government and the tourism industry.

G.3.4 – Strategy estimates a level of economic leakage from tourism in the early 1990s to be between 55 and 60%

Continue to monitor levels of economic leakage.

Review impact of 1998 Strategy on strengthening the linkages between tourism and various sectors of the economy

Identify further ways of developing cluster-based competitive strategies for the country, and update tourism strategy accordingly.

HUMAN RESOURCE DEVELOPMENT

Increasing emphasis on “occupational standards” as a means of creating, maintaining and improving the skills necessary to deliver a quality tourism experience.

Growing trend towards defining and implementing best practices in human resource management.

Significance of the Australian EcoGuide Code of Ethics to Belize given the country’s focus on ecotourism

3.6 – Recognition that training and awareness-building is required to improve services

Section 12 – “Belize Cares” initiative proposed – to be built on a set of guiding principles similar to Hawaii’s “Aloha Spirit” program – to include a related awareness campaign

Creation of a “tourism training institute” to review the existing technical/vocational curricula, assess needs and develop an appropriate delivery plan

Review status and impact of “Belize Cares” initiative. Is it meeting its original objectives? Consider ways of expanding this initiative.

Review role of “tourism training institute”.

Develop a tourism human resources strategy that focuses on the changing needs of the industry – should seek to integrate best practices in recruitment, retention and management.

Enhance tourism career awareness.

Evaluate existing training opportunities against industry needs in Belize and standards elsewhere. Seek to incorporate “occupational standards”

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into the tourism industry, together with the required training and assessment framework.

DESTINATION MANAGEMENT

Increasing emphasis on "the business of tourism" as a model for destination management.

The business model integrates the need for sustainable tourism and market expectations concerning such areas as environmental management and cultural integrity.

Destination management is implied throughout the Belize Tourism Strategy although the business model for destination management in Belize is not addressed in this strategy in any explicit way.

Develop a financial model for the business of the tourism sector that can be used as the basis of business planning and ongoing monitoring.

Address the linkages between tourism and other sectors in the strategy in order to leverage tourism sector investment.

Develop a monitoring system including effectiveness assessments for marketing, product development, and competitiveness.

Develop market intelligence related to marketing competitiveness in the context of Belize's key competitors.

Develop a tracking system for tourism sector performance including return on investment for marketing and product development activities.

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7. Conclusion

The proposed National Tourism Policy outlined in the 1998 Strategy recognizes the importance of sustainability (i.e. Responsible Tourism), a cooperative approach (including all stakeholders) to development of the industry, a focus on environmentally based tourism activities, involvement of local people in the process (community-based tourism approach) and alludes to the need for industry standards (i.e. “that tourists will be treated well, and their safety and health will be ensured and that operators will act responsibly”).

All these components, as highlighted in the review of existing trends and competitiveness, should be at the forefront of Belize’s new tourism strategy if it wishes to maintain and grow the high yield eco/cultural/adventure markets. However, mass cruise visitation threatens to compromise the country’s eco-destination status. The implications of this growth must be examined critically, particularly in light of the country’s commitment to its marketplace position as an ecotourism destination. Therefore, the National Tourism Strategy update must address the question of growth management as the primary destination priority in the short term.

Further consideration must be given to ways of absorbing these arrivals without jeopardizing the integrity of ecotourism, and to developing mechanisms that will strengthen the inter-sectoral linkages and reduce the associated leakages from the national economy. Bermuda is a case in point, where the country has taken proactive steps to increase the sustainability of its cruise industry by requiring cruise companies to contribute set amounts directly to the local economy.

Market driven destination management supported by market research guiding strategic investment in product development and marketing are cornerstones for destination management today. A stronger business orientation to tourism offers opportunities for the country. Belize has developed a sound foundation for destination management recent years, developing modern policies and regulations to guide tourism sector activities and strengthening tourism sector institutions. One of the areas requiring some attention as part of the National Strategy update is the orientation to tourism as a business requiring investment and yielding returns to more than just the industry itself. The strong tourism statistical base that the Belize Tourist Board has developed needs to be expanded to include data on tourism’s economic, social, cultural and environmental contribution. This helps to increase an understanding of the importance of tourism and the return on investment Belize achieves through tourism sector investment.

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