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Lao Pdr Tourism Recovery Roadmap

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Lao Pdr Tourism Recovery Roadmap TOURISM RECOVERY ROADMAP LAO PDR Short, medium and long term priorities POINTS TO BE COVERED 1. Assignment Objectives 2. Tourism in Lao PDR: 2019, 2020 3. Pandemic Related Challenges for the Tourism Sector 4. Strategy Considerations for Lao PDR 5. Proposed Priorities and Actions for Recovery 2 1. ASSIGNMENT OBJECTIVES SCOPE OF WORK 1. Update data on the impact of COVID-19 on the tourism sector 2. Identify interventions for MOICT to help tourism recover (domestic tourism, travel bubble, green and sustainable tourism) 3. Identify priorities, actions, responsibilities for implementation, based on case studies in other countries LIMITATIONS 1. 16 days starting mid November, to be completed by end December 2. Deskbased driven 3 2. TOURISM IN LAO PDR 2019 1. Tourism contribution: 9.1% to the Lao economy & 300,000 jobs 2. Source of foreign exchange earnings: tourism in 3rd place 3. Tourism arrivals: 4.79 million (Thailand 45% - China 21.3% - Viet Nam 19.3% - Republic of Korea 4.2%) 4. Domestic tourism: 2.3 million 5. Tourism promotion budget: US$ 200,000 (US$ 0.04 per international arrival) Then came 2020 ….. 4 2. TOURISM IN LAO PDR ct’d 2020 closures, lay-offs, income decline % change from Impact of COVID- Source Impact area Jan - Sep ‘19 to 19* market Jan - Sep ‘20 International arrivals -74% Thailand -77% Revenue - restaurants, -72% to -81% China -47% accommodation, tours, attractions Viet Nam -73% Income decline (75% of MSMEs) -41% to -60% Republic of -70% Cash flow reserves (55% of SMEs) 5 months Korea Staff measures** : leave without pay 30 - 60% of staff reduced pay 10 - 30% of wages laid off Up to 75% of staff • Reference period varies for the different Domestic tourists in accommodation -33% impact areas (Jan - Mar 2020, Jan - Sep 2020, Jun - Jul 2020) International tourists in -82% accommodation ** Sector specific measures as per report table 4 5 3. PANDEMIC-RELATED TOURISM SECTOR CHALLENGES IN LAO PDR RISK OF TERMINATION 1. Cashflow issues for at least 50% of tourism businesses 2. Reluctance to borrow from financial institutions 3. Immediate support requested for: fiscal support measures, assistance with utility bills (esp. electricity), VAT relief, branding & marketing DOMESTIC TOURISM LIMITATIONS 1. Volume OK, BUT limited spending on tourism by Lao population 2. Domestic tourism = niche market 3. Domestic tourism = professional development opportunity, does not provide sufficient cash flow or reduce risk of ‘termination’ 6 4. STRATEGY CONSIDERATIONS OTHER COUNTRIES Short term relief Domestic tourism Early-re- Re- opening building of for strong borders future 7 4. STRATEGY CONSIDERATIONS ct’d OTHER COUNTRIES CONSIDERATIONS FOR LAO PDR • Not considered as part of the assignment • Recommendation by World Bank, UN, Short term EU relief • Some countries are implementing this Domestic tourism strategy Early-re- Re- opening building of for strong Required however, current Government borders future limitations to implement 8 4. STRATEGY CONSIDERATIONS ct’d OTHER COUNTRIES CONSIDERATIONS FOR LAO PDR Successful for countries with: • Domestic tourism segment pre-COVID Short term • Substitution options for air based travel relief • Sufficiently strong economy so tourism Domestic tourism spend will continue Early Re- -re- buildi openi ng for Domestic travel spend is likely focusing on ng of stron bord g business travel, VFR and vacation rentals future ers Domestic tourism is unlikely to resolve business cash flow issues in short term 9 4. STRATEGY CONSIDERATIONS ct’d OTHER COUNTRIES CONSIDERATIONS FOR LAO PDR Travel bubble : • Driven by economic incentives & trust • Boosts international travel both ways Short term relief ADB modelling: Thailand – Laos: tourism loss from -70% to -30% Domestic tourism Attractive option - needs focus on: Re- Early-re- building • Health protocols opening of for strong future • Capability to respond quickly to changes borders • Market intelligence on travel sentiment, travel & product preferences 10 4. STRATEGY CONSIDERATIONS ct’d OTHER COUNTRIES CONSIDERATIONS FOR LAO PDR Considerations for greening and sustainable tourism as a medium to long term priority: Short term • Nature-based tourism more attractive (outdoors relief = lower likelihood of COVID infection) Domestic • Indoor areas less attractive (shopping centres etc) tourism Early-re- • McKinsey: sustainability has lower impact on opening Re- of borders building travel decisions for strong future Attractive option for Lao PDR 11 5. PROPOSED RECOVERY PRIORITIES AND ACTIONS BASED ON … 3 THEMES 1. MoICT tourism recovery plan July 2020 Economic relief + revive 2. Recommendations in reports from potential donor partners Build confidence + 3. Case studies (other countries, strengthen the sector recovery scenarios and influencers) Upgrade, expand, diversify 4. Interviews with private sector 12 5. PROPOSED RECOVERY PRIORITIES AND ACTIONS ct’d 3 THEMES, 8 STRATEGIC PRIORITIES 1. Economic relief to 2. Build confidence in 3. Upgrade, expand and Theme revive the tourism travel and strengthen the diversify sector sector 1. Intensify strategic 3. Implement health protocols 6.Stimulate capital engagement between and communication strategy investment (renewing of Government and private 4. Invest in market assets) sector intelligence (market research, 7.Diversify products 2. Deploy tourism data collection & analysis), (specific focus on greening Strategic support package and training and digital tools & and sustainability) priority provide businesses with platforms 8.Diversify markets liquidity (tourism relief 5. Strengthen brand and (secondary source fund, incentivize job boost marketing to re-ignite markets) retention and protect travel (domestic, top source vulnerable groups) markets through bubble) 13 5. PROPOSED RECOVERY PRIORITIES AND ACTIONS ct’d 3 THEMES, 8 STRATEGIC PRIORITIES, 46 ACTIONS - Tourism board activated for marketing - Tourism relief fund for subsidies on utility bills, suspension of VAT until borders open, low interest loan for capital investment, low or no interest loan with grace period for ‘crisis’ payments of wages - Operational protocols for health & safety, travel bubble etc - Market research on domestic and regional source markets - Training programs for the sector - Awareness raising and cash back scheme to stimulate domestic spend on travel - Investment in facility upgrades - Incentive program for greening of tourism, with associated marketing budget for promotion of Lao PDR as a nature based tourism destination - E-commerce strategy 14 LAO PDR TOURISM RECOVERY ROADMAP DRAFT December 2020 PREPARED FOR: UNDP Laos PREPARED BY: Katelijne Lenaerts Synergy Insights Consulting [email protected] Synergy Insights Consulting, [email protected] TABLE OF CONTENTS 1. IMPACT OF THE COVID-19 PANDEMIC ....................................................................................................... 5 1.1. TOURISM IN LAO PDR ..................................................................................................................................... 5 1.2. GLOBAL IMPACT OF THE PANDEMIC ON TOURISM................................................................................................ 5 1.3. IMPACT OF THE PANDEMIC ON THE ECONOMY AND ON TOURISM IN LAO PDR ....................................................... 6 2. CURRENT CHALLENGES, EMERGING TRENDS AND RECOVERY INFLUENCERS ............................. 11 2.1. CHALLENGES FOR THE TOURISM SECTOR GLOBALLY ........................................................................................ 11 2.2. CHALLENGES OF THE TOURISM SECTOR IN LAO PDR ....................................................................................... 11 2.3. EMERGING TRENDS AND RECOVERY INFLUENCERS .......................................................................................... 12 3. APPROACHES AND INTERVENTIONS ...................................................................................................... 15 3.1. INTERNATIONAL ORGANISATIONS’ RECOMMENDED TOURISM RECOVERY PRIORITIES .......................................... 15 3.2. CONSIDERATIONS OF THE COVID-19 VACCINE FOR RE-OPENING OF BORDERS ................................................. 17 3.3. COUNTRY RESPONSES ................................................................................................................................... 17 4. RECOMMENDATIONS FOR RECOVERY PRIORITIES AND ACTIONS ................................................... 21 4.1. DOMESTIC TOURISM AS A PRIORITY FOR RECOVERY ........................................................................................ 21 4.2. NEGOTIATING TRAVEL BUBBLES AS PART OF THE RECOVERY STRATEGY ........................................................... 22 4.3. GREENING AND SUSTAINABLE TOURISM AS A PRIORITY FOR RECOVERY ............................................................ 23 4.4. THEMES AND PRIORITIES ................................................................................................................................ 23 5. PHASES, ACTIONS AND ACCOUNTABILITIES ........................................................................................ 26 5.1. PHASES ........................................................................................................................................................ 26 5.2. ACTIONS AND ACCOUNTABILITIES ................................................................................................................... 26 6. REFERENCES .............................................................................................................................................
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