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ADB, India Sign $31 Million Loan to Develop Tourism, Boost Jobs in Tamil Nadu

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The Asian Development Bank (ADB) and the Government of India today signed a $31 million loan agreement to build up the state tourism industry and boost visitor arrivals.

The signatories to the tranche 4 loan for Infrastructure Development Investment Program for Tourism (IDIPT) were Mr. Sameer Kumar Khare, Additional Secretary (Fund Bank and ADB), Department of Economic Affairs, Ministry of Finance, who signed for the Government of India, and ADB Country Director for India Mr. Kenichi Yokoyama, who signed for ADB.

“The ADB-supported project in Tamil Nadu aims to make tourist sites more attractive, convenient, and safe for visitors,” said Mr. Khare after signing the agreement.

“The increased tourism traffic generated by this project will generate extra jobs in Tamil Nadu, especially through skills training and community-based activities targeting the poor and women,” said Mr. Yokoyama.

Approved in September 2010, the $250 million IDIPT aims to build opportunities for local communities and boost local economy by enhancing tourism in three other states—Punjab, Himachal Pradesh and, Uttarakhand—besides Tamil Nadu. This will be achieved through developing and preserving sites of natural and cultural heritage, and building connectivity, capacity, and infrastructure around state tourist sites.

The Government of India’s recent Three-Year Action Agenda (2017–2018 to 2019–2020) envisages the hospitality, travel, and tourism sector as a major driver of growth and employment. The agenda recognizes India’s significant potential to increase the number of arrivals, global presence by leveraging its cultural industries, and capacity to create large-scale jobs among the poorest segments of the population. It identifies key areas for action, including infrastructure, marketing, and skills development, all of which are aligned with the MFF road map.

The project will support the conservation and restoration of eight heritage monuments, one museum, three temples, and a pond. It will build various facilities at the sites, including information centers, rest centers, and toilet blocks, with facilities served by solar-powered lighting and energy efficient lighting. The total cost of the project is $44.04 million, of which the government will provide $13.04 million. The estimated completion date is June 2020.

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Advancing Harmonized Travel Protocols and Financing Tourism’s Survival

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The World Tourism Organization (UNWTO) has again convened its Global Tourism Crisis Committee to lead the sector in harmonizing travel and health protocols and securing vital financing for businesses struggling to survive an historic crisis.

The ninth meeting of the Crisis Committee advanced solutions to the biggest challenges standing in the way of international travel returning.

Committee members, drawn from political leadership, international organizations, including UNWTO’s sister UN agencies, finance and the private sector, discussed the Crisis Committee’s Recommendations, which focus on four core areas: the resumption of safe, cross-border travel; promoting safe travel at all points of the tourist journey; providing liquidity to tourism businesses and protecting jobs, and restoring confidence in travel.

The virtual meeting was co-hosted by the Kingdom of Saudi Arabia. Opening the proceedings, the Minister for Tourism, His Excellency Ahmad bin Aqil Al Kateeb, said: “Saudi Arabia has been collaborating with partners across the public and private sectors both regionally and globally to accelerate the resumption of international travel. The facilitation of safe and seamless travel is the only way to restore confidence among travelers and tourism businesses, which will ultimately be the drivers of the sector’s recovery.”

Harmonized protocols and building confidence

The Committee backed the proposed EU Digital Green Pass as an example of joined-up protocols for other regions to follow. Addressing the meeting, EU Vice President Margaritis Schinas said that “we can make summer 2021 the beginning of the post-pandemic era, one that is safer, more sustainable, more resilient and more prosperous”. He stressed that “the tourism sector can – and should – be at the forefront of this effort, leading the recovery of the European and the global economy”.

Mr. Schinas also outlined the work being done to raise consumer confidence in tourism, already devastated by issues surrounding cancelling and refunding travel services and noted: “UNWTO’s efforts to develop an International Code for the Protection of Tourists are most welcome”. The landmark legal code is one of several key UNWTO initiatives aimed at restoring confidence in international travel.

Also at the Committee, UNWTO and IATA (the International Air Transport Association) announced the forthcoming launch of a new Destination Tracker. This tool will be available on the websites of both organizations and provide comprehensive and up-to-date information on the restrictions and requirements of airlines and destinations, allowing tourists to make informed choices.  

Recommendations for Recovery

The Recommendations of the UNWTO Global Tourism Crisis Committee highlight the importance of basing policies on current international health and aviation regulations, including but not limited to provisions from the World Health Organization (WHO) and those the International Civil Aviation Authority (ICAO), most notably its ‘Take Off’ guidance and the work of its Civil Aviation Recovery Taskforce (CART). The Recommendations also call for the creation of Public Health Corridors, the implementation of digital health solutions and the development of a common “traffic-light” system as a recognizable risk management framework. In presenting the Recommendations,  the Minister of Tourism of Greece and Chair of the UNWTO Crisis Committee’s Technical Group, Harry Theoharis, said that ”this year we have more tools in our arsenal, including vaccinations, to address all concerns of travellers and people employed in the tourism sector.”

Financing tourism’s survival

Through the Global Tourism Crisis Committee, UNWTO also advanced on its work addressing one of the other key challenges facing global tourism, namely the sudden halt of tourism cash flow and the need to support businesses and protect jobs. Along with ICAO and the WHO, UNWTO is one of the only UN agencies working with the OECD on its International Mobility Initiative. UNWTO is also working closely with the European Bank for Reconstruction and Development (EBRD).  

OECD and EBRD again contributed to the latest meeting of the Crisis Committee, advancing coordinated efforts to both support tourism businesses through the current crisis and also to build future resilience and achieve greater sustainability, including through promoting green investments in the sector. Also updating the Committee were the Inter-American Development Bank (IDB) and the International Finance Corporation (IFC), with their representatives focusing in particular on the potential role of innovation, green investments in tourism and on supporting businesses, now and during the recovery phase.

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Vaccinate SIDS to Restart Tourism Kickstart Recovery, UNWTO Urges

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The World Tourism Organization (UNWTO) is calling for the international community to show solidarity with Small Island Developing States by ensuring they have access to COVID-19 vaccinations.

With tourism a leading employer and economic pillar for many of the SIDS, the United Nations specialized agency has stressed that pledges to ensure ‘nobody is left behind’ in the recovery phase of the crisis must be backed up with firm actions. Given the relatively small size of the populations of the SIDS, the cost of mass vaccinations will be minimal compared to the potential benefits of restarting tourism. Moreover, given tourism’s wide value chain and proven ability to create opportunity for all, the impact of rolling out mass vaccinations and allowing tourism to restart, will go beyond economic benefits.   

UNWTO Secretary-General Zurab Pololikashvili says: “By sharing vaccines with Small Island Developing States, the international community can help accelerate the restart of tourism in these leading destinations. Due to the size of the populations of the SIDS, the cost of mass vaccinations will be small, but the benefits will be significant. It will restore confidence in visiting SIDS, allowing the many social and economic benefits of tourism to return.”

Secretary-General Pololikashvili made the comments after a meeting with His Excellency Dario Item, Ambassador of Antigua and Barbuda to Spain, at the UNWTO headquarters in Madrid. One of the 38 SIDS, Antigua and Barbuda is a top tourism destination and is looking to the restart of tourism to protect businesses and jobs and economic growth at both the national and local level. Ambassador Item affirmed Antigua and Barbuda’s application to become a Member State of UNWTO, pending ratification by the upcoming UNWTO General Assembly (October 2021, Marrakesh, Morocco).

According to UNWTO data, prior to the start of the pandemic, tourism accounted for more than 30% of total exports in the majority of the 38 SIDS. In some countries, this proportion has risen as high as 90%. The significance of tourism makes these destinations especially vulnerable to falling tourist numbers, making the timely restart of the sector of vital importance.

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Tourism’s Recovery Strategies

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The Asian Development Bank (ADB) partnered with the UN World Tourism Organization (UNWTO) to lead a conversation on what the COVID-19 pandemic’s impact on global tourism means for development across the Asia-Pacific region. Held as part of the World Trade Organization’s Aid-for-Trade Stocktaking Event, the special session brought key sector representatives together to assess how the sector can be transformed to drive recovery and build sustainability.

According to the latest data from UNWTO, the pandemic led to a 73% fall globally in international tourist arrivals in 2020. The drop has been even steeper in Asia-Pacific where ADB estimates a decline of over 80% for 2020, as many Asian countries continued to impose strict travel restrictions. This sudden fall has placed the sector’s ability to drive sustainable development forward on hold.

Building Sustainability and Resilience

The special event at WTO, moderated by Anna Fink, Economist at ADB, explored how ‘aid-for-trade’ can be used to build greater sustainability and resilience in the tourism sector. Joining Matthias Helble Senior Economist at the Asian Development Bank and Zoritsa Urosevic Director of Institutional Relations and Partnerships at UNWTO were representatives from the governments of Azerbaijan and New Zealand, and Suzanne Becken, a tourism expert from Griffith University.

ADB’s Matthias Helble shared that, according to latest ADB estimates, a full recovery for the sector is only expected by 2023 at the earliest. Promotion of domestic tourism, as well as the creation of ‘travel bubbles’ that would allow travel to resume between certain destinations, were highlighted as potential strategies for driving recovery in the short-term. The introduction of vaccine passes could further accelerate recovery. However, these measures should only be temporary, and countries ultimately need to prepare for a full opening.

Short and Long-Term Support for Tourism

ADB’s Matthias Helble stressed that a prolonged pandemic puts the survival of large parts of the tourism sector at risk. To help governments finance policy measures that facilitate targeted aid to households and firms most severely affected by the pandemic, ADB launched a $20 billion support package in April 2020. By the end of 2020, ADB had committed $16.3 billion of this package in the form of grants, technical assistance, and loans to developing member governments and the private sector. At the same time, UNWTO has expanded on its support to Member States across the region, including through the launch of the UNWTO Tourism Recovery Technical Assistance Package, delivering expert support to destinations across the historic Silk Road.

For longer-term recovery, UNWTO’s Zoritsa Urosevic stressed the importance of developing a new finance architecture to to adopt and build innovative, low carbon, circular, safe, and inclusive business policies, and instruments for recovery. At the same time, both ADB and UNWTO reiterated the importance of international cooperation and the harmonization of policies, both to restart international tourism and then to monitor and guide future growth to ensure the sector delivers on its potential to drive sustainable development. 

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