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Emerging Market Speaker Series

Fueling Economic Growth:

ICT and Tourism

June 16, 2011

Christina Heyniger Tourism Practice

© 2011 Vital Wave ConsultingTM Proprietary and Confidential: Do not copy or distribute.

Goals of This Presentation

1

1. Convey tourism’s importance as a sector

2. Introduce eco-adventure as a fast growing and relevant

segment within it

3. Explore ICT an important enabler for tourism

4. Use Mexico as a case study to illustrate the opportunity

for government


2

Tourism: The direct contribution of Travel and Tourism to global GDP is U.S.$1,850

billion in 2011. Projected to grow to U.S.$2,860 billion by 2017.

Year 1990 2005

436

Tourism Overview Characterization of Industry

805

Million’s

Arr

ivals

Average Growth rate = 4% per year

2

World Economic Forum data: http://www.weforum.org/s?s=travel+and+tourism


Tourism in Emerging Markets Tourism is a key export for 83% of developing countries

3

34%

94%

0%

20%

40%

60%

80%

100%

Growth Rate of International Travelto Developing Countries 1990-2000

Developed

Developing In terms of foreign

exchange: US$200 billion

in 2005


Emerging Markets Forecasts 5% growth per year compared to world average of 4%

4

Million

unwto.org/facts/eng/vision.htm

1950 1960 1970 1980 1990 2000 2010 2020

0

200

400

600

1000

800

1200

1400

1600

South Asia

Middle East

Africa

East Asia/Pacific

Americas

Europe

Actual Forecasts

1.6 bn

1 bn

694 mn


Local Activities

Web 2.0+

New tech is lowering cost of entry for this

fragmented sector into travel distribution

Search

Web search is increasingly focused on local (e.g Yelp, Google)

Mobile:

Using mobile devices to deliver relevant local

content from GPS, profile, social network

Social:

Tying social connections into online

“local” recommendations

PhoCusWright, May 17, 2010 “When They

Get There and Why They Go” presentation

to Adventure Travel Trade Association

Opportunities to Leverage Technology in the

Tourism Sector

5


6

Differentiating Eco-Adventure and Mass Tourism

Mass tourism = Commodity, passive, packaged, predictable

6


7


Historical Context:

• 20 years ago eco-adventure had no name, and

was representing a fringe of travel activities

making up close to 5% of the market.

Current Environment:

• Nature and ecotourism market grew 3x faster

than the tourism industry overall in 2004.

• At its current pace eco-adventure will be 50% of

all reasons to travel in the next 10 years.

• Estimated growth rate of eco-adventure tourism

for 2010 and 2011 is 17% annually.

Adventure Travel Trade Association and George Washington University;

World Economic Forum, 2011 Travel and Tourism Competitiveness Report

“Eco,”“sustainable,” “responsible,”

“adventure” = authentic, personalized,

participatory, unscripted, involves local

communities, often owner-operated businesses

7


8


Key Take-Away: “Eco-Adventure”

tourism is the high growth sector of

tourism industry.

8


Characterizing Tourism Providers & ICT

Local tour operators – partnering with Global TOs, online booking, basic websites.

Outfitters or Guides, with basic English skills, conducting most business over their mobile phones.

No broadband coverage, IT

training or language skills

No access to international markets – lack of

understanding of how tourists interested in

sustainable tourism products/services

search/find destinations.

Key Take-Aways:

• Fragmented Industry; majority of providers are small to medium sized; widely ranging

levels of sophistication when it comes to technology use

• Sector can be more powerful with platform-agnostic solutions that link the different levels

Global Tour Operators

with Sophisticated website,

CRM systems and offices in

several countries

9


Case Study: Mexico

10

Framework for Evaluating Eco-

Adventure Tourism Market Potential Finding

Policy Prioritizing adventure and nature tourism

Safety

Concerns in border regions; 4.89 score in

Adventure Tourism Development Index

(ATDI)

Physical Infrastructure Excellent in key states

ICT

Good telecommunications infrastructure;

rural business owners’ application of

technology for business is limited

Cultural Resources Excellent for eco-adventure

Natural Resources Excellent for eco-adventure

Activity Resources Excellent for eco-adventure

Entrepreneurship Good/ ATDI score = 8.1 (out of 10)

Humanitarian/ basic conditions Varies widely by state and region

Health Poor/ ATDI score = 3.52

Image/Marketing Mainly known for sun and beach;

changing image to incorporate nature


11

Tourism Competitiveness & ICT

Key Take-Away: Tourism competitiveness correlates with ICT. However, ranking

systems have important limitations: more tourists does not always = “better”; the

existence of technology does not mean businesses know how to apply it

Chart depicts tourism competitiveness against ICT rank (World Economic Forum)

Mexico Tourism Competitiveness = 43/139

ICT rank= 75/139

Ethiopia Tourism Competitiveness: 122/139

ICT rank = 138/139

ICT Score Low High

Kenya Tourism Competitiveness= 103/139

ICT rank = 112/139

Touri

sm C

om

peti

tiveness

H

igh

11

United States Tourism Competitiveness= 6/139

ICT rank= 21/139

Switzerland Tourism Competitiveness= 1/139

ICT rank= 2/139


12

Deeper Dive on ICT and Tourism

Competitiveness Rankings

The table above presents individual criteria scores used by World Economic Forum Travel and Tourism

Competitiveness Index when ranking countries for tourism competitiveness. (139 total countries ranked)

ICT Component Rank Overall

ICT Rank

Country

Extent of

Business

Internet Use

Broadband

Internet

Subscribers

Internet

Users

Telephone

Lines

Mobile

Phone

Subscribers

Switzerland 15 3 10 2 35 2

United

States 7 18 15 20 76 21

Mexico 78 53 77 74 92 75

Kenya 73 127 103 119 115 112

Ethiopia 134 136 136 125 139 138

Successful eco-

adventure

destinations in

Adventure Tourism

Development Index

Markets striving to

grow eco-

adventure arrivals

Key Take-Away: ICT rank also correlates in destinations that are successful for eco-

adventure tourism.

12


Mobile Opportunity in Mexico

How ICT Supports Tourism

• Reservation systems

• Online travel agencies (however, eco-adventure providers not

represented yet in these systems)

• Destination management systems

• Social networking and web 2.0 portals

Opportunities and Needs in Mexico:

• Availability of communication for rescue services

• Mobile money

• Location based services: identifying activities and providers

in your area

13


Triple Bottom Line Benefits To Promoting Eco-

Adventure Tourism in Mexico

Economic Benefits

• Tourism estimated at 8% - 13% GDP, 2 million direct jobs with

potential to be much greater

• Third largest source of foreign exchange after oil and remittances

Environmental Benefits

• Eco- adventure offers opportunity to develop sustainable tourism,

in contrast to areas where natural resources degraded by overuse

in mass tourism context, for example: Cancun, Cozumel

Social Benefits

• Celebration and preservation of local cultures

• Local people can more fully experience benefits of eco adventure

revenues; economic leakage occurs when mass operators and resorts

dominate

14

Sources: http://www3.weforum.org/docs/WEF_TravelTourismCompetitiveness_Report_2011.pdf

http://www.siimt.com/es/siimt/relevancia_del_sector

Mexico is investing

in the sector;

Chiapas, Mexico

hosting 2011

Adventure Travel

World Summit


ICT Opportunity for Emerging Markets

Application Examples:

Ex: Tour Kenya: mobile application available

from Nokia for $1.99. Travelers use the

application to find restaurants, activities, in

Kenyan cities

Ex: Beijing Taxi Guide by Hoodhot

Application Examples:

Ex: Rescue or security communication

services

Information

• Offered for a fee to end users

• Funded by private companies

Local Social Issue or Public Service

• Offered at no charge to end user

• Funded by government or NGO

Key Take-Away: Asymmetric usage exists in traveler originating markets (smartphones) and

emerging market destinations (predominantly feature phones). Apps that require high bandwidth

are not always relevant for emerging markets unless they can be downloaded before departure.

15


Summary

16

1. Tourism is an important sector globally, and of great

importance to emerging markets; Eco-adventure is fast

growing and relevant segment within the sector

2. ICT is an important enabler for tourism (as in many other

sectors, i.e. Health, Education, Manufacturing)

3. Mexico provides an interesting example: has political

will, is investing in development programs. ICT

investments now are well timed.


Additional Considerations

Business Owner Knowledge

of Environmental

Sustainability Principles

and Practices

Environmental

Management Policies at

National and Local Levels

Seasonality and

Employment Opportunities

It is important to note that there are many other

strategic issues challenging sustainable tourism and

its use in emerging markets where tourism has the

potential to deliver greater benefits

17

Thank you

For more information contact:

Christina Heyniger

[email protected]

+1.202.297.2206

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