Evolving thinking on tourism and poverty

reductionCaroline Ashley, Overseas Development Institute

Agenda

1. Changing perceptions of pro poor tourism: – who, why, what

2. Conceptual framework – three different pathways of impact on the poor

3. Understanding the tourism value chain – what have we learnt so far?

Photo copyright Flickr – FirstMichael, 2006

The emergence of ‘pro poor tourism’

• Pre 1999: academic literature pro and anti tourism.

• 1992: sustainable tourism – mainly green

• 1999-: how could tourism help meet the Millennium Development Goals?– ‘Pro Poor Tourism’ = increasing net benefits

to the poor. Tourism can be pro-poor and can be made more so.

Since 1999

• Positives– Many organisations

and policies embrace PPT

– We now know key ingredients for pro-poor destinations

– Emerging work with businesses, destinations.

• Negatives– More policies than

action– Excessive focus at

micro level not the mainstream.

– Inappropriate business models – ignore the market

– Lack of rigorous data

Different ideas about tourism

Signs of convergence?

Local economic developmentHow to use tourism for linkages & enterprise?

Local economic developmentLocal linkages,

enterprise development

Pro-poor tourism practitioners

Need to scale up effort & impactLink with private sector

Tourism plannersArrivals, receipts,

Marketing & statistics

Pro-poor tourism practitioners

Community tourism, micro businessConservation

Livelihood impacts

Economists development professionals

Wary of tourism special-pleading

CompaniesProfits

Signs of convergence?

Local economic developmentLocal linkages,

enterprise development

Tourism plannersArrivals, receipts,

Marketing & statistics

Pro-poor tourism practitioners

Community tourism, micro businessConservation

Livelihood impacts

Economists development professionals

Wary of tourism special-pleading

CompaniesProfits

Using core competencies for local impact

Competitive advantage

Signs of convergence?

The common question: how to harness tourism to reduce

poverty at a significant scale?

But… what do we actually know about how tourism affects poverty?– Less than you would think given

all the PPT commitments– More than you would think given

the usual PPT arguments (it’s big, it’s labour intensive, and

micro projects can be good)

Conceptual framework:3 pathways by which tourism affects different poor people

Markets,

factor prices,

infrastructure,

natural resources, skills, growth

problems

Non- tourism sector

(supply chains and wages spent by tourism staff)

Dynamic changes

in the economy

Tourism

sector

Pathway 1:Direct effects

Pathway 2:Indirect effects

Pathway 3:Dynamic effects

Earnings, income, livelihood impacts

Income

Poor Households

Within destination

Outside destination

3 pathways by which tourism affects different

poor people

1. direct income from employment, small and informal sector, and non-labour income?

2. indirect income from supply chains, and from tourism staff spending their wages

3. dynamic effects on the local and national economy

What is the evidence?

1. Direct income

• Formal sector jobs can be 10% to 80% of income of the poor

• Informal sector is where thousands of the poor gain access

• Joint ventures, donations, community tourism generate small income compared to others, but may be significant at local level.

• Livelihood impacts: very mixed• Tourism is generally more labour-intensive

than other non-agricultural sectors. Often includes more women and un-skilled workers.

2. Indirect income

• Supply chains boost economic impact of tourism by 50 to 80%

• Can involve farmers and workers in distant poorer areas

• Food chain may be 50% of tourism impact!

• Do not ignore! Focus on creating linkages, not blocking leakages

3. Dynamic impacts

• Positive and negative• Key positives: infrastructure, market

development, wage rates, tax revenue

• Potential big negative: higher exchange rate reduces farm exports

• Impacts on natural resources, mixed.

How to assess flows within a destination?

Assessing the tourism value chain in Laos:

• Luang Prabang – a cultural heritage town in Laos (Asia)

• Where to the poor participate and where should pro poor intervention be targeted?

• 2006: analysis of the four sub-chains – accommodation, food, excursions, and shopping.

Consum

erS

ervice P

rovider

Food ($7m)Accommodation ($8.7m)

Excursions and transport ($1.8m)

Curios and craft($4.4m)

Suppliers

Service

Provider

Food ($7m)Accommodation ($8.7m)

Excursions and transport ($1.8m)

Curios and craft($4.4m)

HotelGuest House

Rest-aurant

Snack stall Guide

Local Transp

ort

Tour Operat

orCraft shop

Curio vendor

Ow

nerO

wner

Com-pany

Secure family

Family/ individu

alFamily/ individu

al

Secure family

Secure family

Family/ individu

alFree-lance

Com-pany

Suppliers

Service

Provider

Food ($7m)Accommodation ($8.7m)

Excursions and transport ($1.8m)

Curios and craft($4.4m)

HotelGuest House

Rest-aurant

Snack stall Guide

Local Transp

ort

Tour Operat

orCraft shop

Curio vendor

Ow

nerO

wner

Com-pany

Secure family

Family/ individu

alFamily/ individu

al

Secure family

Secure family

Family/ individu

alFree-lance

Com-pany

Worker

Staff StaffStaff WorkerEmployed guide

Service

Provider

Food ($7m)Accommodation ($8.7m)

Excursions and transport ($1.8m)

Curios and craft($4.4m)

HotelGuest House

Rest-aurant

Snack stall Guide

Local Transp

ort

Tour Operat

orCraft shop

Curio vendor

Ow

nerO

wner

Com-pany

Secure family

Family/ individu

alFamily/ individu

al

Secure family

Secure family

Family/ individu

alFree-lance

Com-pany

Worker

Staff StaffStaff WorkerEmployed guide

Suppliers

Fruit, veg, and specialty food

suppliersSilk producer, silver

seller, material gatherer

Imports – silk, cotton, silver

Construction workers, companies,

furniture makers

Fish and Meat suppliers

Rural villages

Wholesaler, Textile Weaver, EmbroidererTailor, Paper-maker,

Local transport

Service

Provider

Food ($7m)Accommodation ($8.7m)

Excursions and transport ($1.8m)

Curios and craft($4.4m)

HotelGuest House

Rest-aurant

Snack stall Guide

Local Transp

ort

Tour Operat

orCraft shop

Curio vendor

Ow

nerO

wner

Com-pany

Secure family

Family/ individu

alFamily/ individu

al

Secure family

Secure family

Family/ individu

alFree-lance

Com-pany

Worker

Staff StaffStaff WorkerEmployed guide

Suppliers

Fruit, veg, and specialty food

suppliersSilk producer, silver

seller, material gatherer

Imports – silk, cotton, silver

Poor or sufficient households

Women are a significant proportion

Women in the majority

Ethnic minority group in the

majority

Poor or sufficient households

Construction workers, companies,

furniture makers

Fish and Meat suppliers

Rural villages

Wholesaler, Textile Weaver, EmbroidererTailor, Paper-maker,

Local transport

Service

Provider

Food ($7m)Accommodation ($8.7m)

Excursions and transport ($1.8m)

Curios and craft($4.4m)

HotelGuest House

Rest-aurant

Snack stall Guide

Local Transp

ort

Tour Operat

orCraft shop

Curio vendor

Ow

nerO

wner

Com-pany

Secure family

Family/ individu

alFamily/ individu

al

Secure family

Secure family

Family/ individu

alFree-lance

Com-pany

Worker

Staff StaffStaff WorkerEmployed guide

Suppliers

Fruit, veg, and specialty food

suppliersSilk producer, silver

seller, material gatherer

Imports – silk, cotton, silver

Poor or sufficient households

Women are a significant proportion

Construction workers, companies,

furniture makers

Fish and Meat suppliers

Rural villages

Wholesaler, Textile Weaver, EmbroidererTailor, Paper-maker,

Local transport

Service

Provider

Food ($7m)Accommodation ($8.7m)

Excursions and transport ($1.8m)

Curios and craft($4.4m)

HotelGuest House

Rest-aurant

Snack stall Guide

Local Transp

ort

Tour Operat

orCraft shop

Curio vendor

Ow

nerO

wner

Com-pany

Secure family

Family/ individu

alFamily/ individu

al

Secure family

Secure family

Family/ individu

alFree-lance

Com-pany

Worker

Staff StaffStaff WorkerEmployed guide

Suppliers

Fruit, veg, and specialty food

suppliersSilk producer, silver

seller, material gatherer

Imports – silk, cotton, silver

Poor or sufficient households

Women are a significant proportion

Women in the majority

Construction workers, companies,

furniture makers

Fish and Meat suppliers

Rural villages

Wholesaler, Textile Weaver, EmbroidererTailor, Paper-maker,

Local transport

Service

Provider

Food ($7m)Accommodation ($8.7m)

Excursions and transport ($1.8m)

Curios and craft($4.4m)

HotelGuest House

Rest-aurant

Snack stall Guide

Local Transp

ort

Tour Operat

orCraft shop

Curio vendor

Ow

nerO

wner

Com-pany

Secure family

Family/ individu

alFamily/ individu

al

Secure family

Secure family

Family/ individu

alFree-lance

Com-pany

Worker

Staff StaffStaff WorkerEmployed guide

Suppliers

Fruit, veg, and specialty food

suppliersSilk producer, silver

seller, material gatherer

Imports – silk, cotton, silver

Poor or sufficient households

Women are a significant proportion

Women in the majority

Ethnic minority group in the

majority

Construction workers, companies,

furniture makers

Fish and Meat suppliers

Rural villages

Wholesaler, Textile Weaver, EmbroidererTailor, Paper-maker,

Local transport

Service

Provider

Food ($7m)Accommodation ($8.7m)

Excursions and transport ($1.8m)

Curios and craft($4.4m)

HotelGuest House

Rest-aurant

Snack stall Guide

Local Transp

ort

Tour Operat

orCraft shop

Curio vendor

Ow

nerO

wner

Com-pany

Secure family

Family/ individu

alFamily/ individu

al

Secure family

Secure family

Family/ individu

alFree-lance

Com-pany

Worker

Staff StaffStaff WorkerEmployed guide

Suppliers

Fruit, veg, and specialty food

suppliersSilk producer, silver

seller, material gatherer

Imports – silk, cotton, silver

Poor or sufficient households

Women are a significant proportion

Women in the majority

Ethnic minority group in the

majorityEarnings to poor

Construction workers, companies,

furniture makers

Fish and Meat suppliers

Rural villages

Wholesaler, Textile Weaver, EmbroidererTailor, Paper-maker,

Local transport

Key findings

• Importance of supply chain – food, and also raw materials for crafts. Could increase local supplies.

• Out-of-pocket spending: need to keep shopping as ‘unique selling point’ of LPB

• Rural excursions – popular but generating tiny tiny income. Need overhaul.

Looking ahead

• Need a wide range of policy interventions: training, enterprise support, regulatory reform, land tenure..

• Both growing the tourism cake and changing the slice accessible to the poor

• Must work with the private sector, • Must look beyond the micro – but

use local reality to inform the macro.

• Much more that we don’t know– e.g. poverty impacts of different sector– Impacts of pro-poor interventions.

www.odi.org.uk/tourism

C.Ashley@odi.org.uk

New publications from the ODI Tourism Programme

Opinions

Pro-poor tourism: what’s gone right and what’s gone wrong?

Briefing Papers

Can tourism offer pro-poor pathways to prosperity?

Assessing how tourism revenues reach the poor.