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    © International Trade Centre, International Trade Forum - Issue 3/2001 

    World tourism grew by an estimated 7.4% in 2000 - its highest growth in nearly a decade and almost double the increase of 1999. Directly or indirectly, tourism is estimated to provide 245 million jobs and over US$ 5 trillion in economic activity worldwide, of which US$ 2.3 billion in 39 LDCs.

    Leisure market changing

    Leisure and recreation account for 62% of international tourism, with business-and-leisure trips accounting for 18%; the remaining 20% of international travelling is due to other motives, such as visiting friends and relatives, religious purposes/pilgrimages, health treatment, etc.

    In addition, however, the market for leisure tourism is fragmenting into segments that include cultural tourism, eco-tourism and adventure sports. Nature travel, including eco-tourism, already accounts for over 10% of the market, and cultural tourism is the basis of Europe's tourism attraction. There are also important segments developing within the 'sun and sand' segment for families, the elderly and for incentive travel. Sports tourism, including golf, yachting and diving, is starting to represent a significant proportion of the leisure travel market in the United States, Europe and Japan.

    The impact of e-trade 

    E-trade is having a profound effect on the tourism industry. Consumers have adopted online travel planning faster than any other online retail activity, and leisure travel bookings online are expected to exceed US$ 29 billion (or 12% of industry revenues) by 2003. Increasingly, tourist destinations are offering 'virtual reality' samplings online of the ambience and their tourism products, before consumers make a travel commitment. Consumers now expect not only to make destination selections online but also to make travel, accommodation and local transportation arrangements at the same web site.

    Earnings 15% lower for LDCs 

    Data from the World Tourism Organization (WTO) for 1998, however, indicate that developing countries, including the LDCs, draw in only 53% of international tourism receipts though they account for approximately 61% of international tourist arrivals. Revenues per arrival averaged US$ 609 for developing countries, as compared with US$ 827 for developed market economies. For LDCs, the average receipts per arrival were US$ 502.

    Of the LDCs, only the United Republic of Tanzania is a significant tourism destination, generating US$ 570 million in visitor expenditure. Cambodia, Nepal and Uganda are the only other LDCs to generate more than US$ 100 million. Zambia ranks alongside these countries in terms of numbers of visitors, but its receipts per arrival are much lower as it attracts high numbers of day visitors to the Victoria Falls.

    Excellent potential, many challenges 

    Nevertheless, many of the LDCs have excellent tourism potential, with a rich diversity of natural, cultural and other heritage assets. However, in the majority of LDCs, including the United Republic of Tanzania, a high proportion of the assets remain undeveloped and inaccessible to visitors. Moreover, the LDCs have yet to make a significant impact in this industry that is forecast to become one of the largest in the world. Their product offer is unknown and their industries are underdeveloped as a result of structural constraints:

    • Lack of effective promotion, both of the destination and products offered by specific businesses.
    • Weak tourism administration.
    • Lack of basic facilities, proper infrastructure and social services.
    • Lack of investment in the tourism plant and associated products (attractions, entertainment, shopping, etc.).
    • Lack of qualified, trained and skilled human resources.
    • High level of ecological fragility and vulnerability.

    Raise awareness 

    One of the main challenges for LDCs is to raise awareness of potential tourists of their offerings. Most LDCs do not have an experienced tourist board to promote the destination and the private sector lacks the expertise and resources to promote their products to the tourism trade and on the Internet. Online bookings are difficult or non-existent, due to limitations in the telecommunications and Internet infrastructure. Information is not presented in a manner that helps the potential visitor to differentiate the country and businesses' market offerings from others.

    In most LDCs, there has been little training of front-line personnel (e.g., taxi drivers, tour guides, interpreters, hotel and restaurant staff, attractions staff) in customer service standards. LDCs have also neglected two issues of primary importance to foreign visitors: health and safety. For this reason, most foreign tourists prefer to travel with prepaid arrangements where an intermediary is responsible for the quality of service that they receive. This leads to a lowering multiplier effect in the host countries.

    But perhaps most importantly, many LDCs have yet to embrace the concept of sustainable tourism. Conventional hotel-based tourism, restricted to the beach, is not sustainable, and it often builds resentment in the host community.

    For more information, see the "Business Tourism" article in Forum 3/1999 (available from http://www.tradeforum.org/news/fullstory.php/aid/161.html). For technical assistance from ITC, contact Doreen Conrad, Head, ITC Trade In Services Unit, at conrad@intracen.org