How to Finance Community Projects: The View from an International institution

1. How to Finance Community Projects: The View from an International institution The case ofCaribbean Small Tourism Enterprises Project – STEP An OAS/USAID Project May 24, 2003

2. Presentation • Introduction • Creativity & enterprise • Quality, standards, value • Profitability and sustainability • Sustainability – the case of STEP Program • Product improvement • Marketing • Finance • What do Funding Institutions Expect ?

3. Creativity & Enterprise • Building on community values • Pride of place • Key messages – historical & contemporary practices • People based • Must know what the “new” customer is looking for • Partnering is critical • Involving the community at all levels • Using your Jamaican creativity

4. Quality, Standards & Value • Market expectations • Authentic experiences But • With quality in terms of hospitality, facilities and safe practices • Travel trade demands it • Liability issues, value issues • They need a satisfied customer

5. Sustainability Always a Challenge • Constraints to Sustainability • Standards, Training & HRD • Market access • Access to financing STEP Program one example - designed to overcome constraints

6. Antigua & Barbuda Bahamas Barbados Belize Dominica Grenada Guyana Jamaica St. Lucia St. Kitts & Nevis St. Vincent & the Grenadines Suriname Trinidad & Tobago Dominican Republic (Observer) STEP Program

7. Who are they? Small hotels 75 rooms or less 1,500 properties in 14 countries with 36,000 rooms Other Small Tourism Enterprises Sites, Attractions, Services and Community Tourism Products Helping the Small Tourism Sector

8. Conceptual Approach Sites, Attractions & Events Small Hotel Properties Regional Brands (e.g. nature lodges, plantation inns) Package Experiences: (e.g. small hotel plus nature tours) Caribbeanexperiences.com (Reservations, Call Centre & Destination Information) Consumer and Travel Trade

9. How STEP is Delivered • OAS offices in each country to support program • 14 STEP Coordinators for program delivery • National public/private sector working group.

10. STEP Programs & Tools • Training to international standards • AH&LA, CESO & Net Corps • Toolkits • Environmental Walk-through program • Resource centers

11. Resource Centres • To Date • installed in Dominica, Barbados, Grenada, St. Lucia, St. Kitts, Trinidad & Tobago, St. Vincent, Belize, Jamaica and (Walk-About) Bahamas • Training materials, video library, TV/video facility, internet access, toolkits • Environmental management toolkits & CAST information • In 2003 • 7 more centres including another two to be installed in Jamaica

12. Sites, Attractions, Services, and Community Tourism • In 2003 STEP began its focus on Developing • Standards, • training (technology, Management, Guiding etc) • training materials (Tool kits, course Materials) • Certification • Started in St. Lucia, Grenada and Barbados • Will start soon in Jamaica with local partners

13. Integrating Sites, Attractions, Tourism Services & Community Tourism • Identifying products that fit the small hotel market segments • Nature • Heritage • Culture • Communities • Events, Festivals, Music • Marketing as part of Caribbean Experiences • Help with product upgrade • Packaged with small hotels • Bring customers, make sales

14. Marketing:The CaribbeanExperiences

15. Caribbeanexperiences™ Brands & Standards • Principles behind hotel branding • Quality standards • Market presence (no. of rooms in brand) • Branding system for small hotels in Caribbean • Experience driven • Matched to market norms & expectations • Examples • Bed & Breakfasts of the Caribbean • Plantation Inns of the Caribbean • Nature Lodges of the Caribbean

16. Corporate Structure • Non-profit entity • Modeled generally on largest non-profit hotel brand – Best Western • Cooperative ownership by Members • Start-up initially managed through STEP organization • Viability based on member fees, commissions & training/services fees

17. Entry Requirements for Hotels • Must meet the brands and standards requirements • - Assessed and rated • Independent audit of CE ratings • Agreement with hotelier on: • CE brand adherence • Allocation of rooms • EMS walkthrough • Training program participation • Maintenance of financial records • Reporting of performance

18. Entry Requirements for attractions • Must meet the international physical and service standards • Must be licensed by local agency - TPDCO • Must be assessed and rated • Must be rated by Independent auditor • Agreement with operator/community on: • Maintenance of quality standards • Health and hygiene and sanitation • Environmental Management System in Place • On-going training and certification for participants • Maintenance of financial records • Reporting of performance • Constant monitoring of satisfaction by visitors • Monitoring of impact on Communities and • timely feedback to operator/community

19. Caribbean Tourism Investment Facility • product development and upgrade of sites and communities • improving and expanding the properties • Marketing, promotions and training To meet the International Standards: Financing will be required for:

20. Two Product Upgrading Funds Proposed • Micro-Enterprise/SME/Credit Union Facility • Estimated $5-7 million • Funding range: $10K-$75K per project • Includes environmental management upgrades • Incorporate USAID guarantee program as appropriate • Long-term Debt & Equity Facility • Estimated $25-50 million • Funding range: $75K-$5 million per project

21. Accessing Funds – What do They Expect? • It is not easy – Must depend on the creativity, partners and contacts you have nurtured • A quality product • Matched to Market • Feasibility assessment • Can it work & be profitable? • Business Plan • Who owns and operates the business • How will it be marketed • Forecast of income & expenditures

22. Thank You