Economic impacts of tourism on indigenous enterprises in Namibia

1. Economic impacts of tourism on indigenous enterprises in Namibia Julia Jänis 26.4.2011

2. Contents of the presentation • Whatdowemeanbyeconomicimpacts of tourism? • Whydoesitmatterwithwhomweco-operate in a destination? • Examples of economicimpacts on indigenoustourismenterprises in Namibia • Where to findindigenousenterprises? • Howcanresponsiblechoices in the globalvaluechainbeused for marketing?

3. Whatdowemeanbyeconomicimpacts of tourism? • Impacts on national economy • Taxrevenue • Contribution to GDP • Share of tourism in allexportcommodities • Share of tourism in allemploymentopportunities  Measuredbyquantitavivemethods (TSAs, SAMs etc.)

4. Whatdowemeanbyeconomicimpacts of tourismcont. • Impacts on local and regional economy • Tourism as a source of employment (youth women, disadvantaged groups) • Tourism and local supply chains • Tourism and regional development • Tourism and economic empowerment of the disadvantaged /marginalised population groups • Tourism and Local Economic Development (LED)  Measured by quantitatvie and qualitative methods

5. Whydoesitmatterwithwhomweco-operate in a destination? Choice of local partners (accommodation providers, tour operators, other service providers) may have a profound economic, ecological, social, cultural and political significance in the destination • What choices are required for responsible tourism?

6. Characteristics of foreign-ownedorprivilegedminority-ownedserviceproviders • Owners and managers often foreign or elite, other staff local • Vertical integration and large chains • Possible leakage of revenue • Profit created by low wages • Tourism products reproduce stereotyped images • Better competitiveness than local SMEs

7. Possiblealternativeprovidedbyindigenousserviceproviders • All staff local • Co-operation with other tourism SMEs • No leakage, revenue benefits large numbers of people through extended family support • Possibility to create new and innovative tourism products based on local cultural diversity • Possibility for more personal interaction between tourist and the hosts

8. Potentialchallenges of indigenousserviceproviders • Employmentbased on seasonaldemand • Lowwages(competition, salarylevels) • Lack of customersdue to poormarketing and lack of credibility • Employment and choice of attractionsbased on ethnicbackground • Inadequateskills in hospitality, financial management, productdevelopment etc.

9. Case of Namibia

10. Economicimpacts on indigenoustourismenterprises in Namibia • 94% of Namibian tourism enterprises owned by white or foreigners • Unemployment level 50%, in many areas 70-80% (especially youth and women) • 30% of Namibians live below poverty line • Poverty associated with gender and regional inequality, low education, youth unemployment

11. Economicimpacts on/of indigenoustourismenterprises in Namibia cont. • All revenue invested in Namibia • SMEs offer home stays, visits to small entrepreneurs, communal conservancies, community-based tourism enterprises etc. • Pro-poor supply chains • Peer support and co-operation

12. Economicimpacts on indigenoustourismenterprises in Namibia cont. • Economic empowerment leads to social empowerment which is required to combat the apartheid legacy • Namibia has the highest income inequality in the world • Inferiority complex, lack of self esteem • Lack of appreciation for local cultural heritage (arts and crafts etc.)

13. Where to findindigenousenterprises? • Marketing and advertising is a major challenge  Lack of capital and skills • Internet, NGOs, sponsored participation in tourism and travel trade fairs • Travel guides • Brochures • Co-operating private partners

14. Howcanresponsiblechoices in the globalvaluechainbeused for marketing? The value chain describes the full range of activities that firms and workers do to bring a product from its conception to its end use and beyond. This includes activities such as design, production, marketing, distribution and support to the final consumer.

15. Howcanresponsiblechoices in the globalvaluechainbeused for marketing? • Responsible choices build up a positive image • Concrete benefits of responsible choices can be explained (e.g. employment of youth or disabled, pro-poor procurement, nature conservation) • Groups or individuals in the value chain can be included in the travel itineraries (e.g. visit to a women’s group that makes and sells local crafts)

16. Final remarks • The selection of local/foreign, black/white, large firm/SME is first and foremost a political choice • Other values can also determine the choice: ecological, economic, cultural etc. • Indigenous enterprises may not inherently be more responsible; they too can be requested for ethical and environmental principles • SMEs cannot take the entire market share in tourism

17. Final remarks cont. • Responsible tourism promotes: • Fair trade certified tourism enterprises • Indigenous tourism enterprises (incl. SMEs and CBTEs) • Tourism enterprises committed to ecological and/or pro-poor and/or sustainability principles • In other words: Tourism that strives to make a difference

18. THANK YOU!