New Approaches to Tourism in LACSDN Case Study of the Mexican Tourism Sector Yewande Awe May 1, 2007 Thesis Environment Development Policy Lending such as the Mexico Environment DPL is an effective instrument for ensuring sustainability in poverty alleviation efforts in the tourism sector. 1
Presentation Outline 1. Overview of Mexican tourism sector 2. Factors that affect sustainability of tourism in Mexico 3. The project 4. Some project outcomes 5. Value added of project & Lessons learned Mexican Tourism Sector 5% of paid jobs nationwide (1.9 million) US$ 10,800 million foreign currency inflows in 2004 7 th most visited tourist destination in the world Over 20 million international visitors in 2004; about 80 million domestic tourists 2
Tourism Sector Forecasts 2000 2025 International Tourist Arrivals (millions) Annual growth rate in number of international tourist arrivals International Tourism Revenues (millions of dollars) Annual growth rate in international tourism revenues Domestic Tourism Arrivals Percentage of GDP 20.6 1.8% 6.4 3.7% 49.8 8.9 49.4 4.1% 27.4 6.7% 92.5 10.5 Challenges to Growth of Tourism Sector Competitiveness Lack of diversity of tourism offerings Growing tourists demand for sustainable practices in destinations Need to shift to high end tourism segments Environmental: Environmental quality is key determinant of selection of tourist destination Environmental degradation as a result of tourism growth unmatched with adequate planning and investments Inadequate infrastructure to service local and tourist populations 3
Sustainability Factors in Mexican Tourism Security Environmental quality Attractiveness of site Access to sites of interest The Goose That Laid the Golden Egg A Case for Sustainable Tourism in Mexico ACAPULCO Past glory Massive tourism Competition, insufficient infrastructure, environmental deterioration Today: low-medium segment tourism TODOS LOS SANTOS Maintained high value tourism product e.g. whale watching; fees Promoting environmental sustainability Maintained high value Promoting environmental 4
The Mexican Response National Development Plan Growth with Quality (sustainable economic development) economic development with human and environmental quality Enhance competitiveness and stimulate growth National Tourism Program Government s s environmental policy Mainstream sustainability principle into economic sectors Mexico Environment Development Policy Lending Program Background: Recognition by GOM of need for Environment to coordinate efforts with economic sectors responsible for largest share of degradation Goals: Support GOM s reform program to enhance competitiveness and stimulate growth in Mexico Specific Objectives: Mainstream environmental considerations into the development agendas of four key sectors tourism, energy, forestry, water Improve the efficiency and effectiveness of environmental management in Mexico 5
Loan Structure DPL program to support part of Mexico s medium-term goal-oriented oriented program Three operations in series in 5 years based on achievements Other options considered and rejected: DPL + TAL : no additionality principle APL: no additionality; ; policy reform SIL: single sector Outcomes of Mexico ENVDPL Development of Local Agenda 21 Action Plans Sustainable tourism development Short, medium, long term strategies and actions to: promote participation of local communities in tourism-related related activities ensure preservation of natural and cultural resources of tourist destinations in Mexico Local Agenda 21 Committees play central role in building consensus among stakeholders for implementation of strategies to maximize social welfare, economic benefits and environmental quality 6
Outcomes ENVDPL II Disclosure of environmental information Implementation of Programa de Playas Limpias Sustainable Tourism Award Operation of tourist facilities in a sustainable manner Establishment and implementation of indicators and benchmarks for measurement of good environmental performance Implementation of certification scheme for sustainable tourism based on indicator systems Value Added & Lessons Learned Ownership Catalyst of inter-institutional institutional coordination Ministry of Finance is main driver Different ministries working together tourism, environment, finance Involvement of multiple stakeholders Government, private sector, civil society Continuous learning Acapulco vs Los Cabos Technical Assistance 7
Conclusion Environment Development Policy Lending such as the Mexico Environment DPL is an effective instrument for ensuring sustainability in poverty alleviation efforts in the tourism sector. Thank you!! 8
SEA in the Tourism Sector Rationale: To develop a decision-making tool to evaluate long-term (10-15year) 15year) environmental consequences of tourism sector development Focus: Two representative regions, using internationally replicable methodology Strong local participation Three principal scenarios:- Business as usual Moderate growth Accelerated growth Analytical Work Development of scenarios of tourism sector development Quantification of environmental degradation associated with each scenario Potential for opportunities for sustained growth Assessment of economic externalities of alternative scenarios, including environmental and social costs and benefits Identification of priority issues and areas Assessment of efficiency and effectiveness of current policy instruments to address priority issues 9
Growth with Quality Principles relevant to environmental management Sustainability Incorporate environmental considerations in all GOM programs Competitiveness Increased efficiency and effectiveness in regulation of governmental services to assist development of productive sectors Federalism Greater decentralization based on efficiency Transparency Setting clear criteria and procedures for GOM decision-making processes; public disclosure on programs and resources National Tourism Program Achieving total satisfaction of tourists traveling to Mexico Attaining sustainable destinations Developing competitive tourism businesses Capacity building of regional and local actors Consensus-building Implementing Agenda 21 at municipal level Monitoring systems for sustainable systems Public disclosure of indicators of environmental quality 10
Strategic Approach Provide a blueprint for mainstreaming environmental variables in key economic sectors By setting environmental priorities to ensure poverty reduction, improved quality of life, and improved quality of growth Cross-sectoral sectoral coordination and goal definition for each priority sector Inter-institutional Coordination Mechanism (Tourism, Environment, Finance) nce) to set priorities, embody them in formal rules, and provide framework rk under which informal rules can be shaped Analytical work to identify links between sector, environment, and a natural resources; estimate economic externalities Promotion of Strategic Environmental Assessment (SEA) concepts Emphasis on public disclosure and opening up of decision making to the public Strengthening overall governance Use a portfolio of environmental policy instruments For example, EIA, environmental indicators, economic instruments to influence behavior and to return funds to sector for better environmental management A feedback loop that embraces adaptive management, promotes continuous improvement Project benefits and costs Winners, losers? Who paid project costs? Did project produce anticipated returns? Externalities? env,, soc, cultural costs and benefits 11
Lessons Learned Is project sustainable? Does natl govt want a repeat? Why or why not? Do local govts want a repeat? Why or why not? Did outsiders benefit? SEA recommendations Master plan for tourism development,, with goals for quality, quantity and diversity of tourism products specific to each region Promote qualitative rather than quantitative tourism model Shift from low end (1 job per bed) to more lucrative segments (up p to 7 jobs per bed) Diversify tourism offerings from massive tourism (sun and sand) to theme travel etc Develop/update land use plans Training of human resources in sector Fiscal incentives to promote innovative and environmentally sustainable tourism projects 12
Outcomes ENVSAL I Target setting and inter-institutional institutional coordination Intersectoral Technical Working Group Intersecretarial Commission for Tourism created by President in 2004 for better coordination between government, private sector and civil society Office for Promotion of Sustainable Tourism created Decrease overexploitation of, and improve operation of and investments in national tourism resources via direct and indirect charges Maritime activities, protected areas, whale watching Twenty-fold increase in marine park revenues (2001-2002) 2002) Income from natural areas increased by over 500 times 13