Ecotourism in Ecuador:Competitiveness and Sustainability

20 june 2006

Two Complementary Tools?

NWP to Manage Natural Resources

Value Chains for Equitable Growth of Industries

Nature Understand biophysical, economic and political characteristics of natural resources

Sustainability and market demand are both incentives for conservation

Wealth Market access, income distribution, and incentives for effective of ineffective NRM

Actors, Factors and Relationships –market demand, distribution of benefits and incentives to collaborate or compete

Power Environmental Policies, planning, effectiveness, land tenure, and conflict

Enabling Environment – Policies, business climate, standards, conflict enforcement, infrastructure

COMPETITIVENESS AND SUSTAINABILITY

Efficiency

New MarketsProduct Differentiation

Upgrades for ….

Can nature-oriented tourism be competitive in the long term without attention to conservation?

Integrating NWP and Value Chain Frameworks

• Analyzing relationships between actors• Incorporating the ownership and management of scarce

resources into the value chain, and into the questionnaires• Using relationships, opportunities and constraints to shape

a competitive strategy

In order to gain

• Better information on the competitiveness and sustainability of businesses dependent on scarce natural

ATTRIBUTES OF ECOTOURISM – IDENTIFIED BY OUTBOUND OPERATORS

• Authentic experiences involving natural and cultural resources that– Do not harm those resources– Benefit local communities

• Comfort• Security• Value for the price

ECUADOR’S COMAPARATIVE ADVANTAGE

• Galápagos

• Megadiversity

• Indigenous cultures

• Proximity of coast, sierra and Amazon regions

…. But how about competitive advantage?

Rankings from Outbound Operators

0.00.51.01.52.02.53.0Comfort

Security

Value

Experience

Ecuador

Peru

Costa Rica

WTTC Benchmarks

0

2

4

6

8Precio

Impacto Humano

Infraestructura

Ambiente

Ecuador

Peru

Costa Rica

Fuente: World Travel and Tourism Competitiveness Monitor 2004

International Tourist Arrivals

Arribos Internacionales

0200400600800

1000120014001600

1995 2000 2001 2002 2003 2004

(000

s)

Ecuador

Peru

Costa Rica

Fuente: Organización Mundial del Turismo, 2005

MARKET SHARE – Arrivals to Central and South America

Market Share - Central and South America

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

1995 2000 2001 2002 2003 2004

Ecuador

Peru

Costa Rica

Fuente: Organización Mundial del Turismo, 2005

International Tourism Receipts

Tourism Receipts

0

200

400

600

800

1000

1200

1400

1600

1995 2000 2001 2002 2003 2004

$US

mil

lio

nes

Ecuador

Peru

Costa Rica

Fuente: Organización Mundial del Turismo, 2005

ANALYSIS

• Ambiguity of “ecoturism”

• So we analyzed “nature-related tourism” in 3 regions: – Mindo – Puerto López and Parque Nacional Machalilla– Rió Napo Basin

• Qualitative analysis of the relationships between actors, and the opportunities and constraints they faced for becoming more competitive and sustainable

• Interviews: – 42 service providers (operators, lodging, support services)– 14 public sector entities (e.g., Min Tur, MAE, CORPEI, Fondo Mixto, municipalities,

Parks)– 8 associations – 27 turistas

MINDO

MACHALILLA

LOWER NAPO

LESSONS FROM THE MAPS

MAPS

• Map activities inside and outside the protected area• Include resource ownership/management as one of the functions• Maps – an effective tool at stakeholder session

OWNERSHIP AND MANAGEMENT• Range of ownership models can support competitive tourism and

effective NRM. Capacity for and commitment to both elements, local benefits, and clear legal standing are important factors.

• Upgrades to public lands not always necessary. Their shaping of the “destination” is key.

• Differential park fee structures advisable.• Strong demand for clear and effective land use planning procedures,

agreements and enforcement mechanisms.

LESSONS FROM THE MAPS

ACCOMODATIONS AND LOCAL OPERATORS• Ease of entry and challenges of illegal operations • Two supply markets – integrated vs. Fragmented• Relative profitability is unclear… but upgrades proceed• Investments through equity, rather than debt

INBOUND AND OUTBOUND OPERATORS• “Ecotourism” and “cultural” tourism labels not useful• Product pricing is important factor• Outbound operators remain important for booking tours, and for providing

market access and feedback to local operators

LINKAGES• Positive correlation between more sustainable tourism and vertical linkages.• Horizontal linkages are generally weak• More promising linkages are local, with focused objectives

FINDINGS – Elements of a Strategic Vision

• A national brand as the leader in sustainable tourism• Responsive to market demand – wide range of segments, including

mass tourism segments that do not damage its protected resources or its brand

• Conscious link to more effective natural resource management – planning, limits of acceptable change, environmentally sound waste management

• Increased collaboration between value chain actors, with the development of an industry-level awareness replacing the current enterprise level understanding of competitiveness. – Build and shape the national brand through local collaborative efforts that

define and promote mini-brands or destinations. – National level entities engaged in an iterative process, with market

access and information and technical information flowing to local destinations and businesses, and market and product information flowing back to shape national level services.

FINDINGS – Critical Opportunities and Constraints

• Grouped Opportunities & Constraints identified during interview process into 7 categories:– Enabling Environment– Natural Resource Management– Destination Development and Promotion– Supply Market Collaboration– Business Practices– Access to Finance– Firm-level Product Differentiation and Expansion

• Vetted the O&Cs with the stakeholders at the workshop

FINDINGS – Critical Opportunities and Constraints

• Categories with highest number of key O&Cs:

• Most significant subcategories (with 10+ votes):– Information and promotion

– Tourism and protected areas

Business PracticesKey Themes

Key Constraints / Opportunities

Business planning •-       Business owners in the tourism industry, especially small business owners, possessed limited business skills related to planning, accounting, and financial management•-       There is a small but significant supply of business development service providers for the tourism sector•-       Business planning training courses, though limited, are offered by NGOs, universities, training centers, Ministries and other public entities

Firm-level marketing

•-       Firms lack access to international markets•-       There are international marketing opportunities through CORPEI and FondoMixto

Technical capability and Labor force development

•-       Native communities can build on their pre-existing relations to share business practices and lessons learned from tourism activities•-       Generalized lack of reservations systems•-       Lack of available personnel trained in hospitality or with knowledge of foreign languages •-       Very limited hospitality training courses are offered by NGOs, universities, training centers, Ministries and other public entities

Self-evaluation and feedback mechanisms

•-       Lack of feedback mechanisms prevalent throughout all types of service providers

Category No. of votes

Enabling Environment 30

Business Practices 22

Natural Resource Mgmt 17

FINDINGS – Critical Opportunities and Constraints

• Highlights:– Lack of access to finance was acknowledged throughout all

interviews and during workshop– Interviews emphasized themes related to Supply-market

Collaboration (more so than was reflected in workshop)– Only 2 specific O&Cs received more than 5 votes during the

workshop: • Weak infrastructure and related systems, including roads, waste

management, health services, security, and education • Need for increased objective information and promotional material at

the regional level• Interviews provided examples of strategies to address both

FINDINGS – Short-term Action Items

Conclusions

• Yes, there can be a positive relationship between nature-based tourism and effective NRM. Preconditions: – Scarce natural resource is important element of the destination– Effective business/NR management capacity, local benefits, and

clear legal standing more important than type of ownership

• To reach a large enough market and effectively contribute to conservation, think more broadly than ecotourism

• Given the scarcity of information, collaboration, and resources, facilitate local planning and collaboration around immediate benefits

• Longer term, national level priorities include flow of market information, technical knowledge, and promotion services

• Keep an eye on impact of significant cash into traditionally non-cash communities

CONCLUSIONS - Methodology

• Yes, NWP and Value Chain Frameworks effectively informed each other

• Resource ownership/management is important function for scarce resource-based products

• Qualitative questionnaire’s effective in mapping relationships of a more complex service industry like “nature-based tourism.” Less effective in guaging relative profitability. Survey approach is necessary for gaining useful information from tourists.

• Stakeholder meetings effective in vetting findings and launching new dialogues between actors in atomized chain. Opportunities for follow-up facilitation may make them more useful for shaping strategic vision and action planning.

QUESTIONS

............... and Thank You.

• NOTE – Following slides are left over from prior presentaton

Superestructura

• Definición de las competencias • Reglas del juego no están claras• Descentralización • Planificación y visión• Eficiencia del sector público• Servicios básicos • Tenencia de tierra• Relación pública-privada

Prácticas empresariales

• Planificación empresarial• Mercadeo• Alianzas empresariales• Legalidad• Capacidad técnica y laboral• Evaluación y retroalimentación• Créditos

Desarrollo y promoción del destino

• Seguridad• Infraestructura• Información y promoción• Desarrollo

Acceso a financiamiento

• Acceso a crédito, dependencia• Rentabilidad• Tamaño del crédito

Manejo de Recursos Naturales

• Manejo, monitoreo, mejores prácticas y códigos de conducta

• Conservación y oportunidades económicas• Turismo y áreas protegidas• Tenencia de tierras• Educación e interpretación

Colaboración entre proveedores de servicios (incluyendo operadores)

• Competencia• Polarización• Unión / cooperación • Segmentación de mercado

Diferenciación de productos y expansión a nivel empresarial

• Inversiones que captan nuevos nichos de mercado• Conocimiento del mercado• Conectividad• Nuevos patrones/tendencias