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    Tourism: Community Development Pays Back


    © International Trade Centre, International Trade Forum - Issue 2/2005

    Photo: Centro de Documentação e Memória Olodum In 1998, 1.5 million tourists visited the historic town of Salvador de Bahia. A UNESCO World Heritage site, the town's culture is as big a draw as its sunny beaches. Pictured here is Olodum, a local Afro-Brazilian cultural group highlighting African heritage through music, dance, theatre and art.

    Large corporations in the tourism sector are finding that investing in local community development brings healthy returns.

    An interview with the manager of Hotel Sofitel in Bahia, Brazil, gives an example of corporate social responsibility in practice.

    The belief that large corporations benefit little from developing the supply capacity of local communities is false. True, there are a number of non-quantifiable benefits, which can make it difficult to justify an investment. However, consider the cost and time involved in developing a marketing or image-building campaign. Many corporations are finding that it pays off in terms of reputation and cost savings to be a responsible corporate citizen by investing in the communities where they work.

    Firms that might be associated with environmental damage, such as mining, oil and chemical companies, have discovered the advantages of investing in local communities. For example, Shell Corporation invests largely in education and housing. And some mining companies have paid for the restoration and renovation of historical sites.

    Tourism is no different.

    Tourism sector is shifting

    Recently, the tourism sector shifted from developing resorts with imported qualified personnel and supplies to training local people and improving the community's supply capacity. It is a mutually beneficial relationship for both communities and resort areas.

    The Costa do Sauípe in Bahia, Brazil is the largest tourism resort in South America. It was financed by the pension fund of the Banco do Brasil. The Hotel Sofitel, based in the resort, is an ITC partner in a project to reduce poverty through community-based tourism. It is developing supply capacity in seven areas, of which two are services - cultural activities and waste management. Other services hold potential, including transportation, cleaning and laundry, water sports, language classes, and printing and publishing.

    Interview with Christophe Caron, General Manager of Hotel Sofitel in Costa do Sauípe:

    Q: What made the hotel decide to participate in the ITC project in Costa do Sauípe?

    A: Since 2000, Sofitel has operated two hotels in this resort with 600 rooms and a large conference centre. The first problem we faced was the supply of qualified personnel. We had to hire in Salvador, 80 kilometres away. The cost of transportation was becoming a nightmare. Every day, the resort transported 3,000 people, which cost more than workers' salaries did. We discussed this issue with Banco do Brazil and together decided to create a special project to better integrate the local community. ITC's methodology on community-based tourism was identified and implemented in the Berimbau project.

    Q: What are the benefits to the community?

    A: In 2001, Sofitel started training its own staff. Because there are 55 different lines of work, this is a complex task. Language skills are also necessary in the hotel business. The population of 5,200 within a 20-kilometre radius is poor and uneducated, with limited access to medical care. Sofitel alone employs 500, providing workers and their families with training and medical coverage. Our goal for 2005 is to employ locally 70% of permanent staff and 50% of extra and seasonal employees. Since we started, 250 Sofitel employees have been promoted to higher positions, including some in management.

    The resort has also raised awareness about the environment. The local community collects, selects and recycles waste, some of which is used in local agriculture. It is a small-scale development with great potential. Sofitel serves 2 million people per year at this resort. It would be an advantage to serve food that is free of chemicals and pesticides.

    Q: Does integrating the local community improve the quality of service to your guests? If so, how?

    A: In the beginning, the satisfaction rate of clients in both Sofitel hotels was very low: only 21%. Today, after several years of training the local community, satisfaction rates have gone up to 90%. This is an important achievement.

    The local culture is very rich. We have invested in developing local arts and traditions. The community now entertains guests with dancing presentations of capoeira and ancient religious rituals and supplies a variety of handicrafts that are sold at an open-air market inside the resort.

    Q: Has there been an increase of foreign guests since the project started?

    A: When Sofitel opened its doors in 2000, foreigners represented 5% of the clientele. We expect that number to reach 45% by the end of this year. This is a success. In 2004, Sofitel had 108,000 guests and a 34% increase in operating income. This represents more jobs, more food, more culture, more handicrafts and, overall, a better standard of living for the local community.

    The increase in foreign clients requires greater improvement in services and in all the products on offer. This is part of learning how to assess foreign taste and produce according to local availability.

    Q: What would be needed to develop any other potential services?

    A: There are many opportunities, such as renting beach equipment, massage and Portuguese language classes in local households. However, the local community has not yet fully grasped the importance of professionalism and long-term commitment. The solution would be to link up with brand names and large national corporations to provide these services. There has been talk about producing local products such as natural shampoo and soap, but I haven't seen any action. A five-star hotel will only supply these to guests if there is a long-term perspective and professionalism in producing and supplying local products.

    Q: Do you have any suggestions on how to improve the project outputs?

    A: First, the lack of technical skills must be addressed. A local hotel school would improve the pool of workers and decrease the dependence on external staff. The Brazilian Government must understand that we are competing globally. Second, a cooperative of extra and seasonal staff should be established, which would help both hotels and workers to plan year-long requirements. Finally, there should be a promotional strategy element in developing such resorts: we are selling a destination, not a hotel. The resort is competing with destinations such as Cancún, Mexico and Mauritius. We must sell Brazil as a destination, Bahia as the home state, Costa do Sauípe as the resort and finally, Sofitel as the hotel.

    Emmanuel Barreto (barreto@intracen.org) is a Senior Adviser in ITC's Trade in Services Section.