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First-ever conference on circular tourism in SouthEast Europe: Opportunities and challenges

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In partnership with the European Commission, UNIDO and the Slovenian Ministry of Economic Development and Technology brought together more than 60 senior participants from governments, institutions and enterprises as well as leading circular economy experts to discuss opportunities and challenges for the transition to a circular economy in tourism.

The conference emphasized the importance of applying the principles of circular economy to the tourism sector in South-East Europe, and the need to support policy dialogue and capacity-building, including by facilitating the development of pilot projects on circular economy as well as by fostering networking and establishing regional partnerships.

“The quality of the environment is essential to tourism,” said UNIDO Deputy to the Director General, Hiroshi Kuniyoshi, in his opening statement. “Conventional tourism can put enormous pressure on the environment, and circular economy activities have the potential to address a significant number of challenges,” he added.

“More than 180,000 direct jobs can be created in the EU by 2030,” said State Secretary of the Slovenian Ministry of Economic Development and Technology, Aleš Cantarutti. “In addition, over 400,000 jobs that will be created by the implementation of the existing waste legislation. Circular tourism is therefore a major opportunity for our countries.”

The future developments were also discussed by other high-level government representatives, including State Secretary Eva Štravs Podlogar of the Slovenian Ministry of Economic Development and Technology; Deputy Minister Renata Pindzo of the Serbian Ministry of Trade, Tourism and Telecommunications; Secretary General Adrian Kamenica of the Albanian Ministry of Tourism and Environment; Secretary of State Damir Davidović of the Montenegrin Ministry of Sustainable Development and Tourism, Montenegro; and State Counsellor Shovket Hazari of the Ministry of Economy, FYR of Macedonia.

Discussions also covered supply chain management, business models, circular practices in tourism as a contributor to sustainable cities, sustainable waste management, and challenges and opportunities for circular economy in tourism. The Conference concluded on a broad recognition of the benefits of circular economy, and the strong intention to explore and identify areas for collaboration on circular economy in different sectors to substantially achieve inclusive and sustainable industrial development in South-East Europe.

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The growing power of tourism

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International tourist arrivals grew by a further 4% between January and September of 2019, the latest issue of the UNWTO World Tourism Barometer indicates. Tourism’s growth continues to outpace global economic growth, bearing witness to its huge potential to deliver development opportunities across the world but also its sustainability challenges.

Destinations worldwide received 1.1 billion international tourist arrivals in the first nine months of 2019 (up 43 million compared to the same period of 2018), according to the latest World Tourism Barometer from the World Tourism Organization (UNWTO), in line with its forecast of 3-4% growth for this year.

The global economic slowdown, rising trade, geopolitical tensions and prolonged uncertainty around Brexit weighed on international tourism, which experienced a more moderate pace of growth during the summer peak season in the Northern Hemisphere (July-September).

UNWTO Secretary-General Zurab Pololikashvili said: “As world leaders meet at the UN Climate Summit in Madrid to find concrete solutions to the climate emergency, the release of this latest World Tourism Barometer shows the growing power of tourism, a sector with the potential to drive the sustainability agenda forward. As tourist numbers continue to rise, the opportunities tourism can bring also rise, as do our sector’s responsibilities to people and planet.”

Tourism now world’s third largest export category

Generating USD 1.7 trillion in revenues as of 2018, international tourism remains the third largest export category behind fuels (USD 2.4 trillion) and chemicals (USD 2.2 trillion). Within advanced economies, tourism’s remarkable performance after years of sustained growth has narrowed the gap with automotive product exports.

International tourism accounts for 29% of the world’s services exports and 7% of overall exports. In some regions these proportions exceed the world average, especially the Middle East and Africa where tourism represents over 50% of services exports and about 9% of exports overall.
This highlights the importance of mainstreaming tourism in national export policies to broaden revenue streams, reduce trade deficits and ensure sustainable development on the long run.

The world’s top ten earners saw mixed results in international tourism receipts through September 2019, with Australia (+9%), Japan (+8%) and Italy (+7%) posting the highest growth, while China, the United Kingdom and the United States recorded declines. Mediterranean destinations were among the strongest performers in terms of earnings, both in Europe and the Middle East and North Africa region.

Regional performance

Growth in arrivals during the first nine months of 2019 was led by the Middle East (+9%), followed by Asia and the Pacific and Africa (both +5%), Europe (+3%) and the Americas (+2%):

Europe’s pace of growth slowed down to 3% in January-September this year, from double that rate last year, reflecting slower demand during the peak summer season in the world’s most visited region. While destinations in Southern Mediterranean (+5%) and Central Eastern Europe (+4%) led results, the regional average was weighed down by Northern and Western Europe (both +1%).

Also slower than last year, although still above the global average, growth in Asia and the Pacific (+5%) was led by South Asia (+8%), followed by South-East (+6%) and North-East Asia (+5%), while Oceania showed a 2% increase.

Data so far available for Africa (+5%) confirms continued robust results in North Africa (+10%) after two years of double-digit figures, while arrivals in Sub-Saharan Africa grew 1%.

The 2% increase in the Americas reflects a mixed regional picture. While many island destinations in the Caribbean (+8%) consolidate their recovery after the 2017 hurricanes, arrivals in South America were down 3% partly due to a decline in Argentinian outbound travel, which affected neighboring destinations. Both North America and Central America grew 2%.

Source Markets – mixed results among top spenders

The United States (+6%) led growth in international tourism expenditure in absolute terms, supported by a strong dollar. India and some European markets also performed strongly, though global growth was more uneven than a year earlier.

France (+10%) reported the strongest increase among the world’s top ten outbound markets, reflecting surging demand for international travel for the second consecutive year. Spain (+10%), Italy (+9%) and the Netherlands (+7%) also posted robust growth, followed by the United Kingdom (+3%) and Russia (+2%).

Some large emerging markets such as Brazil, Saudi Arabia and Argentina reported declines in tourism spending this period, reflecting recent and ongoing economic uncertainty.

China, the world’s top source market saw outbound trips increase by 14% in the first half of 2019, though expenditure fell 4% compared to the same period last year.

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Greener tourism: Greater collaboration needed to tackle rising emissions

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The World Tourism Organization (UNWTO) is calling for enhanced cooperation between the transport and tourism sectors to combat climate change.

On the sidelines of the 2019 United Nations Climate Change Conference (COP25) in Madrid, the agency on Wednesday released on Wednesday the Transport Related CO2 Emissions of the Tourism Sector report, which estimates that by 2030, transport-related emissions from tourism will comprise 5.3 per cent of all man-made carbon dioxide emissions.

“This comprehensive study analyses the environmental impact of the different modes of transport within the tourism sector”, UNWTO Executive Director Manuel Butler said at the launch. 

UNWTO said transport-related emissions remain a major challenge: “While tourism is mentioned in many Nationally Determined Contributions as a big concern, not enough has yet been done”, said Ovais Sarmad, Deputy Executive Secretary of the UN Framework Convention on Climate Change (UNFCCC). 

Against the backdrop of a growing number of sightseers both at home and abroad, the data factors in the predicted growth in global emissions to 2030 and is set against the “current ambition” for the decarbonization of transport.

“Industry must do more, but Governments must align their policies, so that at the international level we can collectively work to increase ambition”, Mr. Sarmad added. “The One Planet Sustainable Tourism Programme is a vital ongoing mechanism to promote sustainable tourism around the world.”

High ambition scenario

Transport-related CO2 emissions remain a major challenge and require tourism sectors to work closely with transport sectors worldwide in order to support its commitment to accelerate decarbonization. 

In addition, the tourism industry must determine its own high ambition scenario, complementing the efforts of the transport sector, such as by significantly decoupling growth from emissions, allowing expansion within the international climate targets.

“It is now for the tourism sector, especially tourism policy makers, to use data effectively and ensure the sector plays a leading role in addressing the climate emergency”, concluded the UNWTO chief.

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How to Develop Tourism in Tajikistan?

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An interview with Andrea Dall’Olio, Lead Financial Sector Economist at the World Bank, about Tajikistan’s tourism potential and what the country can do to respond to increasing international tourist demand.

What kind of tourist comes to Tajikistan? And what makes Tajikistan an attractive destination for tourists?

Tajikistan has both natural beauty and cultural richness, which appeals to tourists from all around the world. In addition, the country is relatively unexplored, and therefore considered “exotic”. This is a big selling point for today’s adventure tourists who want to explore places where few other people have been to.

Tajikistan attracts two kinds of adventure tourists. The first group includes independent tourists who travel the country without reliance on tour operators. This usually includes backpackers and bikers, who are attracted by the Pamir Highway, the Fann Mountains and most importantly, the country’s warm and hospitable people.

The second group includes tourists who visit the country through tour operators as part of Tajikistan-only or multi-country packages. They come to see the unique cultural sites along the Silk Road, such as Sarazm (a UNESCO site), the Hissor Fortress, the Ajina Teppa excavation site, the Khulbuk Castle, the Yamchun Fortress, and others.

Tajikistan is generally known as a safe destination, despite its proximity to Afghanistan. This was confirmed by a 2018 World Bank Group survey of tour operators: over 50% of international and local respondents confirmed they are generally satisfied with the country’s security situation.

Tourism development depends on many factors – from liberalization of the aviation sector, development of basic infrastructure, security issues, availability of information online, etc. Is there a roadmap on tourism development in Tajikistan? What are the priority issues to be addressed and what should the areas of focus be?

Tourism in Tajikistan is recognized as an important contributor to job creation and economic growth, so the Government of Tajikistan has put in place a number of initiatives to make the country more attractive for visitors. However, Tajikistan can do a lot more to attract more tourism spending.

The 2018 World Bank Group survey of tour operators pointed out several critical areas which should be looked at. For example, improving air travel connectivity to Tajikistan, as well as in-country transport are very important. Launching a Dushanbe-Khorog flight could be quite transformational. Tanzania, for example, significantly improved its tourism sector by allowing small independent airlines to fly small planes (like the Cessna Caravan) within the country.

Another area is the quality of accommodation and facilities: access to water and sanitation in guesthouses, homestays and tourism sites needs significant improvements. These improvements do not require large investments, but are critical for the comfort of visitors.

The preservation and rehabilitation of tourism sites, enhanced tourism services, simplification of the regulatory environment in the tourism sector, upgrading of skills, better regional connectivity in Central Asia, improved food services, and stronger marketing and promotion were also highlighted by tour operators as steps that could help Tajikistan reach its full development potential.

On average, a visitor in Tajikistan spends between $800 and $1,400 for a 6-12 day stay, excluding airfare, which is significantly below the global average. According to UNWTO, adventure tourists worldwide spend an average of $3,000 on an 8 day-trip.

Google maps, Trip Advisor, Air B&B, Uber – these are among the most used services by tourists and visitors throughout the world. Unfortunately, they are either not developed at all or poorly developed in Tajikistan. Why? What can we do to make these services available in Tajikistan, and therefore make it easier for visitors?

These platforms have changed the way people travel around the world. Some of them have made an inroad in Tajikistan. For example, right now, you can use AirBnB to book accommodation in Dushanbe. Of course, the inventory is still very small. In order to utilize these platforms on a wider scale in the country, some basic conditions need to exist.

For example, good internet connectivity is required to ensure a constant online presence and facilitate instant communication with guests. Language skills are also important, in order to be able to communicate with tourists directly. In addition, adequate financial infrastructure needs to be in place to allow guests to pay and reserve their accommodation online.

However, such challenges do not need to stop the growth of these services in the country. For example, to respond to the internet and language challenges, an interim approach could include a group of homestay owners who would come together and channel their communication and room reservations through one person or entity within the community, someone who has a good internet connection and English language skills.

The World Bank, through the Rural Economy Development Project, is experimenting with some of these new approaches. And, if successful, they could be replicated in other parts of the country.

Of course, modern approaches also bring about new challenges which would need to be looked at closely and managed. For example, ensuring a level playing field between different types of accommodation service providers and requiring compliance with safety and security standards are important for growth of the tourism sector.

Why do you think that, despite the efforts of the government to attract tourists and promote this sector, only about a million tourists visited Tajikistan in 2018? What policy measures should be prioritized to address this issue?

Tajikistan has a lot of potential to develop as a tourism destination. The focus, however, should not be on the number of tourists, but on the revenue that tourists can bring to the country. Many countries have adopted a “low volume-high margin” strategy to attract tourists, in order to preserve their natural and cultural assets. Ideally, Tajikistan would attract more high-spending adventure tourists who could venture into local communities, eat local food, and engage in the natural and cultural activities that the country has to offer.

Attracting a high volume of low-spending tourists could lead to mass tourism, which in turn could put the country’s natural and cultural assets at risk. This is the reason why many places, such as Machu Picchu in Peru, have started limiting access for visitors to some cultural and historic sites.

What potential has the tourism sector for Tajikistan’s economy? For example, how many jobs can it create, and how much can it contribute to GDP?

Half of the global tourism workforce is under the age of 25. Given that almost 70 percent of Tajikistan’s population is under 30, tourism can be a good source of employment for the country’s growing population. The Rural Economy Development Project aims to increase the income of the local population through investment in the tourism and agri-business sectors in Khatlon region and Gorno-Badakhshan Autonomous Oblast. Both regions border Afghanistan and opportunities for income generation are limited.

The project will support tourism development in three ways: first, it will support the preservation, rehabilitation and commercialization of a number of key historical and cultural sites. In addition, through small grants, the project will support communities in upgrading local tourism infrastructure such as cultural centers and museums, and in organizing festivals and other events to attract tourists.

Second, the project will support small businesses in tourism, such as homestays, restaurants, tour operators, artists and artisans, and others to improve the quality of their facilities, services and products, and to make them more attractive to visitors. For example, homestay owners will be able to use project funds to make improvements to their sanitation facilities.

Finally, the project will support the government’s efforts to promote Tajikistan globally and to invest in improving skills in the tourism sector.

The Rural Economy Development Project is financed through a $30 million grant from the Risk Mitigation Regime program, which works to mitigate risks of conflict and fragility in a few countries. In Tajikistan, the program focuses on creating jobs, generating income and reducing unemployment, in particular for women, youth and returning migrants who are the most vulnerable groups in Khatlon region and Gorno-Badakhshan Autonomous Oblast. Enabling these regions to attract more tourism spending will translate into more income and employment for people. This is what we are trying to achieve by promoting community-based tourism.

Which country’s experience is also applicable for Tajikistan, in terms of tourism promotion and development?

There are many countries and destinations that could serve as good examples for Tajikistan. For example, Georgia has a flourishing tourism sector today. Of course, it also faces challenges, such as over-tourism in some parts of the country. Both the positive and negative experiences of a country like Georgia could be of interest to Tajikistan. Other countries, like Jordan, have significant cultural assets and face somewhat similar challenges of security. However, they have managed to promote their tourism despite the challenges.

Tajikistan could also learn from highly developed destinations, such as Switzerland or Italy, which also have significant natural and cultural assets, about how their tourism industry is organized, how cultural sites are managed and supervised, and how the public and private sectors complement each other.

What are the roles and responsibilities of the government and the private sector?

The government and the private sector have very distinct but complementary responsibilities. The government should focus on “public goods” – which includes putting in place the appropriate policies and regulations for the tourism sector, such as the e-visa, and adequate aviation policies. Also, it should focus on investing in and preserving the country’s cultural and natural assets, such as national parks, fortresses, and historical and archeological sites. Also, the government could help with marketing and promoting Tajikistan as a destination abroad.

The private sector, on the other hand, should focus on providing high quality products and services for visitors, such as accommodation, food, travel services, souvenirs, etc. And, there are areas in which the government and the private sector could work together with civil society. For example, the maintenance of a historical site could be delegated by the government to a civil society organization. So, the government and the private sector have to work together in close partnership for the tourism sector to flourish.

Would you come as a tourist to Tajikistan, and if so, why?

I have to admit that my views are “positively biased”. Having lived in Tajikistan and travelled extensively in the country, I have a passion for its beautiful landscape, nature, history and culture. I have travelled the Pamir Highway a number of times and have been fortunate to visit sites such as Takhti Sangin, Karon Castle, Yamchun Fortress and many other beautiful and undiscovered sites in Tajikistan. I have stayed in local homestays and have enjoyed the warmth and hospitality of the local people. I would visit Tajikistan at every opportunity and would recommend the experience to anyone who enjoys adventure, nature and culture.

World Bank Originally published in Asia Plus (in Russian) on November 15, 2019.

Andrea Dall’Olio, based in Dushanbe, leads the World Bank’s Rural Economy Development Project, which aims to develop the tourism and agribusiness sectors in Tajikistan as a means to increase income earning opportunities for the local population in Khatlon region and Gorno-Badakhshan Autonomous Oblast.

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