The FINANCIAL — WTO members on 12 July recognized tourism as an important services export which can help small economies with their economic development.
Members discussed tourism’s “value chains” at a meeting of the Committee on Trade and Development’s Work Programme on Small Economies.
Tourism is now the third largest export in terms of global earnings after fuel and chemicals, according to a representative from the United Nations World Tourism Organization (UNWTO). Tourism is responsible for one out of 11 jobs and 10% of the world’s economic output.
“It is encouraging and interesting to see that small economies are really taking advantage of the sector, especially in the last few years,” said Zoritsa Urosevic, Head of UNWTO’s Geneva office.
Tourism is of major importance to many developing countries, particularly for small economies, WTO Development Division Counsellor Hans-Peter Werner said in his opening remarks concerning a background paper prepared for the meeting, according to WTO.
Core components of tourism value chain include travel organization and booking, transportation, accommodation, food and beverage provision, handicrafts, excursions, as well as cultural and natural assets.
Besides its direct contributions to the economy, tourism also yields indirect benefits through government spending on infrastructure, domestic purchases of goods and services inputs and investment flows. In addition, there are backward linkages with agriculture, fisheries, construction, utilities and telecommunications. Tourism has already played a vital role in helping members like Cabo Verde, the Maldives and Samoa graduate from least developed country (LDC) status.
Presentations from the Guatemalan Institute of Tourism and the South Pacific Tourism Organization further underscored the significance of the sector to small economies.
It was stressed that trade and tourism policymakers must work together to enhance the sector’s contribution to small economies. Speakers at the meeting also said there was a need to enhance links with other industries and to improve the business environment to attract investments.
Strong action around a tourism export strategy must be shared by trade and tourism ministries, said Anton Said, the International Trade Centre’s (ITC) chief of export strategy. Such a strategy must address gaps in supply-side capacities, the quality of the overall business environment, and ease of market entry, as well as keeping sight of development goals, he said.
“There needs to be a cohesive, coherent outlook,” said Mr Said. “At the end of the day, tourism is an export.”
The secretariat paper similarly cited the need for strong coordination across different ministries and implementing agencies due to tourism’s backward linkages with other industries. The paper recommended developing an understanding of each small economy’s assets and the type of tourism suitable to it.
WTO Services Division Counsellor Dale Honeck added that tourism’s forward linkages must also be taken advantage of, as there are opportunities in such areas as medical tourism, hosting business conventions, and encouraging investment in second homes or retirement residences.
In addition, tourism’s value-added to an economy can also be increased by attracting a more diverse mix of tourist arrivals, using e-commerce to broaden the reach of local tourism businesses, and broadening the offer to include cultural, wildlife, and heritage tourism, Mr Honeck said.
Gib Brown, a development advisor with the United States Agency for International Development (USAID), emphasized the need to develop a base level of resources to underpin tourism development and visitor growth. He said it was important to implement tourism development strategies in stages and to pay attention to sequencing.