World Tourism Alliance Xianghu Dialogue | Speech by: Ahmed Eiweida, Ph.D, World Bank Global Leader for Cultural Heritage & Sustainable Tourism

WTA Chairman Mr. Duan Qiang; Zhijiang Vice Governor Mr. Wang Wenxu; IPRCC officials; distinguished guests, friends, ladies and gentlemen.

It is a great pleasure for me and the World Bank Group to address the WTA Xianghu Dialogue 2018 and jointly launch selected cases. We praise this conference, which puts a focus on poverty reduction and sustainable tourism.?As we heard today, sustainable tourism is important for development and poverty alleviation. The Dialogue is to share knowledge and experience. It also calls for greater joint efforts and innovative methods to tourism investments, tourism services and products development, policy reforms, improved infrastructure and effective practices. I hope this event can offer a good opportunity for the audience to share insightful ideas and practical cases.

In helping developing countries around the globe, the World Bank Group has the Twin Goals of reducing extreme poverty and achieving shared prosperity. We contribute most effectively top the global efforts of ending extreme poverty by 2030.

The tourism industry has emerged as a significant contributor to the economy from global evidence, esp. on job creation and poverty reduction. According to UNWTOI, international tourist arrivals grew by 7% in 2017, reaching 1.3 billion tourists. They generated US$ 1.6 trillion in export earnings. UNWTO forecasts growth in international tourist arrivals between 4% and 5% in 2018 (UNWTO, 2018). By 2030, international tourist arrivals are expected to reach 1.8 billion (UNWTO Tourism Towards 2030). This upward trend reflects a similar trend in China. The tourism industry in China embraces even more rapid development. Tourism revenue has seen an annual increase of over 10% in the past five years, accounting for over 10% of the total GDP. Revenues increased from 3.7 trillion RMB to 5.4 trillion RMB during the period 2014 to 2017.

Over the past ten years, one in five of all jobs created globally was in the tourism sector. With the right regulatory conditions and government support, nearly 100 million new jobs could be created over the decade ahead. Global experience demonstrates tourism is a labor-intensive industry. It provides proportionally more income opportunities for low-skilled laborers and the poor.

Some general challenges:

There are difficulties in coordinating development across the various arms of government and in mobilizing the right type of investment from the private sector. A whole of government approach is needed to attract foreign investors, domestic businesses and international partners – who all have a role to play.

Destinations need to be better connected to markets and opportunities. Many of the services which visitors use are supplied by small business – how can these many small enterprises get access to the skills and knowledge they need to compete in a global marketplace?

The complex nature of tourism makes measuring its impact difficult. How do we know if the work is actually delivering the development outcomes our clients are seeking and are we capturing all the impacts – economic, social, and environmental? Without solid evidence that shows how tourism is benefiting communities, it is difficult to mobilize the financing needed to develop the sector. Our GSG is working with our partners including UNWTO to learn how best to measure the impacts of tourism.

Challenges facing China:

Like many other countries, China faces challenges to boost tourism industry. For instance, slow growth of international tourists to China in contrast with its rapid increasing domestic tourists. In 2017, the number of international tourists to China only increased 2.9% while the number of its domestic tourist increased 15%. Clearly there is a huge room for improvement in attracting international tourists. Further, historic sites in China have been facing multiple challenges in leveraging heritage assets under technical and financial constraints, limited participation and benefit for local communities and people, losing the local distinctive features and indigenous culture.

Common question to answer: how to develop the tourism sector in a sustainable manner that stimulates job creation and local economic development. We need to ensure that tourism development helps communities and destinations to upgrade their infrastructure, strengthen tourism assets, stimulate tourism-related jobs and enterprises, and increase the value chain linkages in and around destinations. As case studies showed, targeted investments linked to improvement of living conditions, infrastructure, public spaces and facilities benefit both local residents and tourists.

We welcome the government and private investors’ measures to promote high-quality and sustainable tourism development. These include (a) strengthening tourism infrastructure and assets; (b) promoting the development of key tourism regions and travel routes; (c) facilitating markets and diversifying tourism products; (d) designing in-depth cultural tourism experiences; and (e) enhancing institutional capacity to support tourism-related local economic development.

Why is the World Bank Group interested in Tourism?

It is because tourism can be a powerful force in fighting poverty. Tourism is an important source of employment, foreign exchange, tax revenues and has the ability to generate economic activity for small- and medium-sized businesses which supply goods and services both during construction of infrastructure and operations. It can also bring income to local communities and helps build skills and engagement especially for women, youth and the poor.

What is the World Bank Group doing now in tourism?

With the public sector, the World Bank has 146 active/pipeline projects focusing on the tourism sector representing approximately $2.5 billion in lending + technical assistance in 6 priority regions. Over $700 million of that is in EAP and more than half of that is in China. We also work with governments to strengthen policy advice and regulatory regimes.

With the private sector, IFC: has 55 projects (worth $500 million). Over the years we have invested $2.1 Bn in more than 272 hotels in 88 different countries. This has had a very significant impact on growth and jobs. IFC also has invested $500 million in tourism related transport infrastructure – airlines, airports, port facilities etc.

In China, the World Bank focus is on protecting cultural and natural heritage, improving basic infrastructure, and fostering tourism development for the benefit of selected communities (including ethnic minority groups). For example, Shandong and Zoucheng Cultural Heritage Project had positive effects on small business outcomes. On average, small businesses in project neighborhoods received extra customers per month which was 2.5 times the incremental customers of small businesses and 11.3 times of average revenue than the gains in comparator control neighborhoods over the 2011‐2017 period.

Take another example, the Bank invested Guizhou Cultural Heritage Project generated impressive employment opportunities, including 10,343 person-months of workers, 20% of employment opportunities went to the poor. Project sites saw an increase in tourism/hospitality sector employment from 3,023 people in 2010 to 13,551 people in 2016. The Project trained 3,215 people in special skills (traditional dancing, singing, and handicrafts of minority villages) and practical skills (including tour guides, tourist services, hospitality). In the project areas, poverty rates dropped from 44.3% to 27.87%. It likely contributed to allowing 21 ethnic minority villages and 134 groups to escape poverty.

Furthermore, I hope to highlight that it is necessary and possible to engage local communities and residents within and near touristic sites when tourism project is to be design and implemented. The World Bank invested Gansu Cultural Heritage project successfully got local government support to incubate 12 community organizations for tourism services and related products, and apply participatory approaches to 30 project villages to encourage local people’s participation in and benefit from the project.

I would like to call for more investment to be put in improving supporting infrastructure, upgrading of vehicular, pedestrian and multimodal accesses to the tourism attractions, strengthening of pedestrian connections, last mile access and trails systems, upgrading of recreational areas/parks and adaptive reuse of selected structures, close participation of local communities and residents, offering training to residents in tourism activities (knowledge, skills, hospitality, handicrafts).

The World Bank is willing to initiate a long-term partnership with WTA while it has been a long partner with IPRCC. We hope to make joint efforts to reduce poverty through tourism development where possible. Today I am also honored to launch a dozen of good cases jointly selected by WTA and IPRCC for broader knowledge sharing. These cases show practical models of tourism which brings jobs and local economic development. Also, they demonstrate evidence in tourism driving poverty reduction. To share these cases is aimed to highlight good practices, facilitate building up a database of good cases on poverty reduction for more convenient and thorough learning across China and among other countries.

Moving forward, especially as we endeavor to scale-up this approach and finance more initiatives, I would like to share with you three suggestions:

Integrated approach: Our global experience showed that tourism is only the tip of iceberg. For tourism to contribute the desired goal of poverty alleviation, we need take an integrated approach, using local endowments (human, cultural and natural) and sustainable tourism as drivers for local economic development and job creation.

Systematic impact evaluation: In order to speak with confidence about project results, a scientific socioeconomic impact evaluation system must be included in projects design from the beginning. This includes drawing accurate socioeconomic baseline date, using a control group, and measuring results and impact year by year using social survey techniques with a significant size of sampling.

Partner to build a repository of global best practice: As we all benefited from learning from these case studies today, I would like to suggest partnering under the auspices of WTA to build a robust database of repository of global best practice. The World Bank already has documented several projects globally that we financed, we shared a sample of them through the WTA website, and will be happy to share more.

In closing, I believe China’s experience in tourism-driven poverty reduction is valuable and referable to many countries. I also call for more referable cases to be shared for global poverty reduction and sustainable tourism. Wish a successful event.