NATURE-ORIENTED TOURISM IN ECUADOR

NATURE-ORIENTED TOURISM IN ECUADOR

Bob Fries – ACDI/VOCAMarcela Correa – CARANA Corporation

November 16, 2006

OVERVIEW

• Assessment Basics– Objective, Process and Lessons

• Value Chain Characteristics– End Markets– Enabling Environment– Interfirm Cooperation– Support Services

• Competitive Strategy– Strategic Vision and Potential Action Items

• Tourism and Biodiversity: A Link?

ASSESSMENT BASICS - OBJECTIVE AND PROCESS

OBJECTIVE To provide information that helps key stakeholders develop a strategy

and action plan for making Ecuadorian ecotourism a more competitive and sustainable industry

PROCESS• Qualtitative analysis of “nature-related tourism” in 3 regions:

– Mindo, Puerto López/Parque Nacional Machalilla, Napo River basin

• Interviews: – 42 service providers (operators, lodging, support services)– 14 public sector entities – 8 associations – 27 tourists

• Stakeholder workshop

LESSON: VALUE CHAIN AND NWP FRAMEWORKS

Ownership

Functions

Input

Tour operators and service providers

Travel agents and wholesalers

End market

Buffer zones (cities)

High biodiversity areas

Localsupplies

Localnon-localsupplies

Lodges, restaurants,

other attractions

Lodges, restaurants,

other attractions

Eco-lodge

Local tour operators

Outbound tour operators

Inbound tour operators

Foreign and/or Ecuadorian tourists

Foreign and/or Ecuadorian tourists

Foreign and/or Ecuadorian tourists

Two important adaptations:

Resource Owners/ Managers

Actors in and out of sensitive zones

LESSON: ECUADOR’S COMPARATIVE ADVANTAGE NOT TRANSLATED INTO COMPETITIVE ADVANTAGE

• Galápagos • Megadiversity • Indigenous cultures• Proximity of coast, sierra and Amazon regions

• …. But how about competitive advantage?

END MARKETS: RANKINGS FROM OUTBOUND OPERATORS

0.00.51.01.52.02.53.0Comfort

Security

Value

Experience

Ecuador

Peru

Costa Rica

Operators’ Perception: Ecuador is Competitive

END MARKETS: INTERNATIONAL TOURIST ARRIVALS

International Tourist Arrivals

0200400600800

1000120014001600

1995 2000 2001 2002 2003 2004

(000s)

Ecuador

Peru

Costa Rica

Source: World Tourism Organization, 2005

A slower growth rate, declining market share

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

END MARKETS: INTERNATIONAL TOURISM RECEIPTS

Tourism Receipts

0

200

400

600

800

1000

1200

1400

1600

1995 2000 2001 2002 2003 2004

$US

mil

lio

ns

Ecuador

Peru

Costa Rica

Source: World Tourism Organization, 2005

A decline in earnings

ENABLING ENVIRONMENT

• Tourism infrastructure and related systems– Potential high impact of targeted upgrades of facilities &

infrastructure

• Public sector capacity– Planning, regulatory and enforcement capabilities, and

resources for sustainable tourism across all levels of government

– Tourism investment not proportional to its role in the economy

• Limited public-private cooperation

• Decentralization– Key to local empowerment?

INTER-FIRM COOPERATION MINDO

MindoHigh biodiversity areas Buffer zones (cities)

To

ur

op

era

tors

an

d

serv

ice

pro

vid

ers

Tra

vel a

ge

nts

an

d

wh

ole

sale

rsE

nd

ma

rke

tIn

pu

tO

wn

ers

hip

Local supplies

Outbound tour operators

Inbound tour operators

Foreign tourists-high-mid/ end-

Ecuadorian tourists

-high end-

Ecuadorian and foreign

tourists-low-end-

Guides

Private ownership

Government / private

ownership (Bosque

Protector Mindo Nambillo)

Local restaurants -

groceries

Transport

Local tour operators

Lodge, butterfly

farm, restaurants

(n=7)Hotels, lodges (B&B)

(n=>30)

Linkages Along Two Market Channels

The destination’s disconnected anchor

Higher end birdwatching meets lower end recreation

Value chain learning and benefits vs. low-cost competition

Congestion and litter

Horizontal linkages – will they bridge the gap?

FIRMS SERVING DISTINCT END MARKETS

INTER-FIRM COOPERATIONLOWER NAPO

Vertically integrated independent operations

Public protected areas

Key to success?—

Indigenous community + NGO = private joint venture

Lower NapoHigh biodiversity areas Buffer zones (cities)

To

ur

op

era

tors

an

d

serv

ice

pro

vid

ers

Private ownership

Ow

ne

rsh

ipT

rave

l ag

en

ts a

nd

w

ho

lesa

lers

En

d m

ark

et

Inp

ut Non local

supplies

Outbound tour operators

Foreign tourists -high-mid end-

Local tour operators

Community based

lodge (high end) n=1

Government (Parque

Nacional Yasuní, Reserva

Biológica Limoncocha,

Reserva Forestal

Pañacocha) and Local

communities

High-mid end

lodges

Inbound tour operators

Indigenous territories

Community based lodge

n=1

Scientific research stations

Local supplies

Vertical Linkages, Niche Markets

and Conservation

PRIVATE SECTOR INCENTIVES TO INVEST IN PUBLIC INFRASTRUCTURE

SUPPORT SERVICES

• Lack of lending products for tourism enterprises

• Paucity of market information– International marketing opportunities through CORPEI &

FondoMixto

• Availability of hospitality and business development training via NGOs, universities, vocational centers, GOE and others

STAKEHOLDER WORKSHOP

• Two Sessions• Thirty Stakeholders

– Operators– Community Associations– Ministry of Tourism

• Focus on Opportunities and Constraints• Limitation – Not Ready for Strategic Plan

FOUR ELEMENTS OF A STRATEGIC VISION

1. A national brand as the leader in sustainable tourism

2. Responsive to market demand

3. Conscious link to more effective natural resource management

4. Increased collaboration between value chain actors

SHORT-TERM ACTION ITEMS

Enabling Environment Initiatives• E-efficiencies• Streamline legalization process• Concessions and differentiated fee strategy in protected

areas

…And not very short-term• Clear delineation of roles and responsibilities

– between ministries – between national and local levels of government

• Zoning and planning

SHORT-TERM ACTION ITEMS

Interfirm Cooperation

• Targeted local collaboration– Local Stakeholder session– EcoRuta– Codes of conduct– limits of acceptable change systems – information services

– Collaborative websites, reservation systems

• Upgrading of key attractions – signage, interpretive trails,

information and restroom facilities

Firm-level Upgrading

• Business alliances

• Targeted training – Guide training

– Tourism and NRM training for key protected area sites

– Specialized training

FINDINGS – SHORT-TERM ACTION ITEMS

Support Services

• Loan products for upgrades – e.g., software, safety or waste management investments

• Market analysis – Local analysis of market segments and customer

satisfaction– Feedback loop with Fondo Mixto’s overseas analysis

• Longer term – contract firm to manage a statistical system

ECOTOURISM AND NRMCAN THEY SUPPORT EACH OTHER?

• Yes, if– Scarce natural resource is important element of the

destination– Effective business/NR management capacity exists– Local communities benefit

• Think more broadly than ecotourism.

• Facilitate local planning and collaboration around immediate benefits

• Longer term, national level priorities:– Planning and enforcement, – Flow of market information, technical knowledge, and

promotion services

QUESTIONS?

THANK YOU! Please visit www.microlinks.org/breakfast for

seminar presentations and papers

Bob Fries, [email protected] Correa, [email protected]

November 16, 2006