“The potential for innovative business practices that deliberately expand economic opportunities for the disadvantaged

1. “Despite of growing evidence of the beneficial impacts of tourism in developing countries and good practices in some individual firms, critics still question whether the overall balance of impacts is positive, particular as regards large holiday complexes and international hotel chains.” “As it has been the case of many other industries, tourism companies thus have so far focused most of their corporate responsibility efforts on environmental issues and philanthropic contributions to social programs. Much less attention has been paid to managing their economic multipliers and impacts along local and global value chains.” On CSR: “…shows tourism lagging behind other industries.” “The potential for innovative business practices that deliberately expand economic opportunities for the disadvantaged has not been fully realized.” Source: Harvard University-John F. Kennedy School of Government & ODI & IBLF/Ashley et al, 2007

3. B4D - THE BEGINNING SADC Conference on Poverty and Development in Mauritius (2008) Partnership for poverty reduction Jointly with SADC Employer Group B B4D Pathfinder = most appropriate project G C Inclusive Business

4. THE DEFINITION Inclusive business aims to overcome poverty by incorporating low income communities into a company's value chain… …while maintaining profitability and upholding the principles of Corporate Social Responsibility (CSR). Inclusive Business …sound environmental, health and safety management, fair labour conditions, good governance preservation of human rights.

5. THE APPROACH How can business practices of tourism companies be adapted to achieve long-term commercial profit and deliver greater benefits to the poor? It’s not “another problem”. It’s about profits of companies! Financial benefits

6. MODEL OF THE B4D PROJECT Uses knowledge, skills, resources and strengths of the private sector Focuses on ‘inclusive business’ Profitability People-centred, home grown Core Business Contains mechanisms for self assessment Including low income communities into a company’s value chain Charter Barometer Toolkit Certification

7. BENEFITS

8. POOR PEOPLE AS… Workers Suppliers Distributors Retailers SMEs Consumers

9. BUSINESS MODEL

10. Over 10 000 farmers involved Second largest beer brand in Africa Manual Distribution Centers Foto: HarvardKennedySchool & IFC

11. INCLUSIVE BUSINESS & SUSTAINABLE TOURISM Inclusive business aims at overcoming poverty. In general, sustainable tourism focuses on environmental sustainability. Environment = important component of inclusive business as being the resource base for the poor. Inclusive business also covers large-scale forms of tourism & mass tourism: it is neither equivalent only to ecotourism, nor to rural tourism, nor to community based tourism etc.

12. STRUCTURE OF TOURISM INDUSTRY Africa’s tourism industry = mainly SMEs lacking financial and human resources Divers range of actors involved in the tourism industry = no model solution Government: infrastructure, marketing, licensing and regulation Aspects of governance, labour, health, climate change, safety

13. OBSTACLES General obstacles: (International) Verticalisation Seasonality Dependency from origination markets Market trends Effects of instability Low linkages Lack of infrastructure Lack of skills Leakages: Repatriation of profits, import of skills, commodities, technology... Bookings abroad, big int. hotel chains, airlines: frequency & routes, etc. Source: Economic Commission for Africa & Economic Policy Research Centre/V. Gerosa, 2003

14. POLICIES At national level, tourism has been scarcely included in poverty reduction policies in Africa Lack of consideration and information about how tourism could contribute to produce outcomes that directly benefit the poor, (focus is on growth of the industry or its contribution to macroeconomic indicators.) Source: Economic Commission for Africa & Economic Policy Research Centre /V. Gerosa, 2003

15. EXAMPLES OF GIVEN POLICIES South Africa: White Paper, Poverty Relief Programme, TEP, NQ, FTTSA, CPPP, etc. In addition, Zambia, Malawi, Lesotho, Tanzania give relevance to tourism in their PRSPs Source: Economic Commission for Africa & Economic Policy Research Centre /V. Gerosa, 2003

16. TOURISM OVERCOMING POVERTY Labor-intensive, esp. in low labour cost countries Built on natural & cultural assets and consumed onsite Lower barriers to entry (e.g. tariff barriers) Great potentialities Non-cyclical and resiliency Less vulnerable than traditional sectors Catalytic effect on other economies Creates better & more gender concerned jobs Outsourcing of services (e.g. food, transport, handy-crafts) Source: Economic Commission for Africa & Economic Policy Research Centre/V. Gerosa, 2003

17. THE STARTING POINT Best case: Direct earnings of unskilled/semi-skilled workers = 25% of the tourist spending at destination level Indirect earnings (supply chain) adds an extra 60-70% on top of the direct effects of tourism. Dynamic effects of tourism have to be taken into account Natural resource base Business climate for SME development Infrastructure Livehood strategies of local households Patterns of growth of local/national economy Source: Harvard University-John F. Kennedy School of Government & ODI & IBLF/Ashley et al, 2007

18. THE BUSINESS CASE Business benefits center around: 1) mitigating risks (security, reputation, policy, regulatory risks) 2) building opportunity Enhancing customer satisfaction Improving staff morale & service quality Offering a more diverse range of unique products Improving community attitudes and interactions with guests Building the brand and improving marketing capacity FTTSA Decreasing operating costs (sourcing locally) Increasing access to finance (e.g. IFC) Collaborating more effectively with governments Source: Harvard University-John F. Kennedy School of Government & ODI & IBLF/Ashley et al, 2007

19. REQUIREMENTS High knowledge and understanding of local employment practices Willingness to e.g. link hotels and local SMEs • Policy • Innovation • Patience • Resources Collaborate with other markets (formal and informal)

20. Examples Mt. Plaisir Estate Hotel, Trinidad Source: UNDP Siwa Oasis and Example of Traditional Siwan Architecture

21. OPTIONS • Training/mentoring (staff, locals, SMEs) • New employees • Procurement • (New) products • (New) services • Marketing • Transport • Quality insurance • Packaging • Microfinance systems/incentives • Community revenue/profit sharing schemes • Industry-wide training centers (talent pool) • Building up institutional capacities • Think tanks on joint development • etc. (TEP)

22. B4D BAROMETER Charter Toolkit

23. ROAD MAP

24. SNV ODI (Overseas Development Institute), IIED (International Institute for Environment and Development) ICRT (International Center for Responsible Tourism).

25. “Tourism’s current role in expanding economic opportunity in developing countries presents a paradox. Resolving this paradox offers tourism companies the potential to play a leadership role within the industry and the business community as a whole.” Source: Harvard University-John F. Kennedy School of Government & ODI & IBLF/Ashley et al, 2007