Investment in ecotourism in the Philippines

1. Investment in Ecotourism – Exemplary Cases of Industry and Government Collaboration from the Philippines, Australia and New Zealand

2. Investment in ecotourism in the Philippines Pamilacan Island, Bohol Marine Life Tour (dolphin and whale watching) designed in early 2000, with NGO (WWF) and government initiatives to wean communities from destructive fishing

3. Investment in ecotourism in the Philippines • Pamilacan Marine Life Tour launched in 2003 with NZAID grant through government (1.2 M Php in Phase 2) for trainings, equipment, facilities, boats, etc. • Tours marketed through private tour operator (Travel Village Tours) and DOT • PIDWWO as lone operator offering half day tours • One of the 12 finalists for the 2006 WTTC Tourism for Tomorrow Awards

4. Investment in ecotourism in the Philippines Today, many operators, bringing guests from Panglao Island resorts to do dolphin and whale watching Mainstreamed into Bohol Tour itineraries Ayala Foundation assisting LGU ecotourism All earnings to private operators and communities

5. Investment in ecotourism in the Philippines Sapang Bato, Clark, Angeles City Sapang Bato 4x4 wheel drive through rugged terrain and natural formations from Mt Pinatubo eruption Designed by DOT in early 2000

6. Sapang Bato also launched in 2003 with NZAID grant through government (1.5 M Php in Phase 2) for trainings of Aetas, guides, retrofitting jeeps, facilities, etc. Tours marketed through DOT Regional Office DOT and community offering half day tours Investment in ecotourism in the Philippines

7. Today a private sector enterprise taken over by Korean investors bringing local and foreign tourists as part of Clark and Pampanga tour itineraries Investors have an agreement with Aetas who own the area as part of their ancestral domain Investment in ecotourism in the Philippines

8. Lake Sebu, South Cotabato Ecotourism products designed by DENR and DOT and implemented with grant from NZAID to launch Lake Tour, waterfalls view and Handicrafts Revitalization (7 M Php Phase 2) Resorts to operate lake tour with Tboli women guides Handicrafts through women’s federation Investment in ecotourism in the Philippines

9. Lake Sebu Operators boats were refurbished, Tboli women guides trained Private owner of waterfalls location supported with materials for picnic huts and road improvement (through LGU) Kenhulung Federation Women Weavers trained in business and handicraft design; marketing and promotions through DOT Investment in ecotourism in the Philippines

10. Today Lake Sebu is a regular tourism destination for Southern Mindanao Handicrafts regularly exhibited and sold in trade fairs Brisk business in handicrafts at Lake Sebu Handicraft Center; plus exports to US and Europe Lake tours still operated by resort owners Fully LGU and community operated enterprises Investment in ecotourism in the Philippines

11. Lessons from the Philippines • Ecotourism initiatives are usually Government and NGO driven, and start as small scale activities • Start up funds are usually from National Government, LGU, with organizational activities and trainings led by NGOs through grants • Product development, marketing and promotions usually done by DOT • Government requisites usually involve stakeholder consultations, involvement of IPs • Private sector comes in only when the products are proven successful

12. Investment in protected areas in Australia • Short lease terms (5-10 years offered) • Significant investment required by private sector • Lengthy processes • Sites selected and offered by Government

13. History of investment • Sites within parks identified then offered to market • Limited success • Limited Government take-up of direct approach from investors (probity, sites not acceptable to Government) • Investors prefer freehold or 30+ year leases with right of renewal

14. Western Australia • 8 sites selected by Government, extensive due diligence undertaken and offered to private sector • 2 sites taken up by existing commercial operators that had been seeking campsites

15. Queensland • Eight sites selected by Government and released for private sector investment • None taken up • External expertise provided on lease and licence conditions and to advise on investor requirements

16. Victoria • Ten sites selected by Government – external advise that none deemed suitable for investment • Legislative changes occurring to allow for investor led approaches to Government

17. Why is there limited interest? • Poor selection of sites offered • Remote and regional locations expensive to build for low return • Small companies with low capacity for innovation or high up front costs • Perception/experience of long and costly approval processes • Seen as high risk by finance companies • Sites within protected areas are constrained by management policies and perceptions of being elitist • Global Financial Crisis

18. From the investors… • Site offered by government should be as broad as possible – need choice • Sites should be outstanding A site should have: • Ease of access for transport of visitors and services • A reliable water source • A footprint adequate to the scale of the development and able to encompass self-contained infrastructure • Reliable access to the experiential undertakings of the protected area or national park surrounding the site

19. Lessons from Australia • Government needs to be open to approaches from investors with proposals for protected and natural areas • If led by Government, need to provide a choice of high quality sites with outstanding experience on offer • Recognise and allow for the vision, innovation and market knowledge of entrepreneurs and investors – the good ones will drive success • Minimise the level of investment by Government or investor before it is clear that a site will be available for and capable of development

20. Lessons from Australia • Support investors to proceed to development through a case management approach that allows for efficient dealings with multiple Government agencies • Adopt a triple bottom line sustainability-driven approach that is objective and minimises political or community determination of proposals • Government being sensitive to the fragile feasibility aspects of most ecotourism invesments

21. Key considerations • Investors want to have confidence in the availability of a site • How good is the site? • will it actually go ahead? • Is private land or a different product a better bet? • They are seeking • 30 year + 30 minimum for reasonable size development • Ideally some up front costs and support • Capacity to get ROI over lease term • Potential for resale • Market viability of high end products in remote locations outside major destinations • Significant up front investment in Government selected site may only attract a local small developer with limited capital rather than the innovative entrepreneur • Small developers will have higher expectations re Government infrastructure assistance • Is there a better ROI through investment in freehold land rather than ongoing annual payments to Government over lease term

22. Investment in protected areas in New Zealand • Government paved the way with infrastructure for over 100 years • Almost all ecotourism ventures were driven by entrepreneurs and approved by government

23. A quick look at things now… Over 300 eotourism businesses in parks $10M+ in revenue from licenses Organic growth No ecotourism investment programs

24. Government-led examples • Milford Track and other Great Walks • Sale of selected accommodation and other park assets in 1990s • Waitomo Caves

25. Leading industry examples • Driven by families, Maori businesses with passion and commitment • Whale Watch Kaikoura • Real Journeys • Franz Josef Glacier Guides

26. Recent developments • Streamlined commercial policies for parks • Strong business partnerships between business world and conservation agencies • Air New Zealand and NZ Great Walks – a game changer

27. Lessons from New Zealand • Enable the right conditions for investment • Don’t lead investors by the hand – work with them • Walk towards the business world in partnership

28. Insights What do these examples tell us about attracting private sector investment in protected natural and cultural areas? Here are some insights from our experience: • Investors will not respond well if sites are chosen for them. Regardless of the economic climate, our advice is to work with or enable investors to drive site selection • Sites need to be special and as cliché as it sounds, the wow factor must be there Consulting in Tourism

29. Insights • Protected natural and cultural areas that are part of an established tourism destination or tourism corridor will be far more appealing to investors than remote sites with limited visitor flows • Government agencies should avoid over investing in due diligence and land preparation processes in the hope that investors will come forward • Find out first, what investors consider to be the roadblocks then work on changing those Consulting in Tourism

30. Insights • Smart investors are passionate and clever, they want to be in the driving seat, and as a rule, will not enter into public tender processes where their IP is threatened • It’s not all about having long lease terms for accommodation developments. We have witnessed improvements to lease terms in New Zealand and Australia of late but that has not translated into further investment. Remember, most investors prefer private land over public land. Consulting in Tourism

31. Insights • Looking back 50+ years, it is worth noting that many of the successful private sector nature and adventure products in the market today got there by the drive and ability of entrepreneurs who had a vision or just a crazy idea. In other cases, early government investment were sold off to get government out of business and create opportunities for the private sector. Consulting in Tourism

32. Insights • Many of the processes being used today to attract investment seem to overlook the history of how the leading nature and adventure destinations came into being. While the global economic situation is obviously having an effect, don’t put too much reliance on incentives and allocation processes to leverage investment. Chances are, the best cases will be when investors come forward on their own accord. Consulting in Tourism

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