Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Green Growth Advisory Program for Lao PDR Synthesis Report Report Synthesis PDR inLao Growth Green for Sector as aStrategic Tourism Nature-Based Developing © 2019 The World Bank 1818 H Street NW, Washington DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved This work is a product of the staff of The World Bank. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this work is subject to copyright. Because The World Bank encourages dissemination of its knowledge, this work may be reproduced, in whole or in part, for non-commercial purposes as long as full attribution to this work is given. Attribution—Please cite the work as follows: “Developing Nature-Based Tourism as a Strategic Sector for Green Growth in Lao PDR © World Bank.” All queries on rights and licenses, including subsidiary rights, should be addressed to World Bank Publications, The World Bank Group, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: [email protected]. Front cover: Gibbon Experience treehouses. Photo credit: Nou Shong for the Gibbon Experience. i Contents Foreword v List of Abbreviations vi List of definitions and phrases vii Acknowledgements ix Executive Summary xi 1 Introduction 1 1.1 Capturing nature-based tourism potential 2 1.2 Nature-based tourism: A priority for Lao PDR’s green growth and development plans 5 1.3 Methodology and organization of this assessment 5 2 State of NBT in Lao PDR 7 2.1 NBT assets 7 2.2 Lao PDR’s Conservation Landscapes: the NPA network 10 2.3 Structure of tourism in Lao PDR 12 2.4 Current tourism markets for Lao PDR 12 2.5 Comparison countries 18 2.6 Visa regime 22 3 Market demand and diversification 23 3.1 Market demand 23 3.2 Market segmentation 24 3.3 Regional market opportunities for NBT 27 4 Barriers to investment and NBT businesses 32 4.1 Regional context of barriers to investment 32 4.2 Business environment 34 4.3 Barriers specific to tourism 35 4.4 Barriers specific to NBT 38 5 Impact of NBT on community incomes and poverty reduction 41 5.1 Case study on benefits of NBT for community income 41 5.2 Policy implications of the case study 45 5.3 Tourism, concessions, and communities in PAs 46 6 Scenarios for future growth and economic impacts from NBT 49 6.1 Scenarios 49 6.2 Economic forecasts based on the three scenarios 51 7 Priority recommendations 54 7.1 Priority recommendations 54 7.2 Roles and responsibilities of key agencies and actors 57 ii Appendix A Detailed action plans 62 A.1 Target segments 62 A.2 Product/market development for four selected NBT clusters 63 1. ‘Northeast Heritage’ Tourism Landscape: Nam Et – Phou Louey NP, supported by Nam Xam NPA, as well as Viengxay Caves and Plain of Jars Historic Sites 63 2. ‘Central Loop’ Tourism Landscape: Hin Nam No NPA, Nakai Nam Theun NP and Phou Hin Poun NPA. 64 3. ‘Capital Nature’ Tourism Landscape: Phou Khao Khouay and Phou Phanang NPAs, supported by Nam Ngum Lake 66 4. ‘Southern Lao PDR’ Tourism Landscape: Dong Hua Sao and Xe Pian NPAs 67 Appendix B Key Issues, Recommendations, and Actions Matrix 69 Appendix C Key actors to address barriers for tourism-related private sector investments in Lao PDR 80 List of Boxes Box 1: Ecotourism vs Nature-based Tourism 2 Box 2: Elephant Conservation Center (ECC), Xayaboury Province 4 Box 3: Gibbon Experience, Bokeo Province 4 Box 4: The Case of Rwanda 19 Box 5: Nam Kat Yolapa, Oudomxay Province 25 Box 6: Conflicting interests 37 Box 7: Nam Nern Night Safari, Houaphan Province 39 Box 8: Tourism Concessions in PAs in Namibia 47 iii List of Tables Table 1: Area of Lao PDR NPAs 11 Table 2: NBT landscape cluster selection considerations 11 Table 3: Visitors, revenue, accommodation and occupancy (2012–2017) 13 Table 4: Average length of stay (2012–2017) 13 Table 5: Market penetration of international visitors 15 Table 6: Key international markets arriving by air 17 Table 7: Comparator landlocked countries (19) 16 Table 8: International Visitor Arrivals, 2005–2016 (‘000) 20 Table 9: The ‘4 Ps’ and ‘4 Cs’ of marketing 23 Table 10: Explaining the ‘4 Ps’ of marketing through the example of a Lao waterfall 24 Table 11: Identified market segments and their characteristics 29 Table 12: Key Indicators for ASEAN member countries 33 Table 13: Poverty headcount in Nong Luang village by economic activities 43 Table 14: Average level of salaries in Nong Luang village 44 Table 15: SAM Tourism local multipliers 44 Table 16: Incremental revenue per year from NBT scenarios in target clusters (US$) 52 Table 17: Incremental NBT visitors per year over 10 years in the four target clusters 53 Table 18: Target segments 60 Table 19: Additional capacity requirement for incremental visitors to target NBT clusters 63 Table 20: Market segmentation within the cluster identified in Lao PDR’s Northeast 64 Table 21: Market segmentation within the cluster identified in Lao PDR’s Central 65 Table 22: Market segmentation within the cluster identified in Lao PDR’s North/Central 66 Table 23: Market segmentation within the cluster identified in Lao PDR’s South 68 List of Figures Figure 1: Locations Researched for the Assessment 9 Figure 2: Visitor arrival numbers (January–December 2016) 14 Figure 3: Visitor arrival numbers for key markets (January–December 2016) 15 Figure 4: Border crossings (including international airports) 17 Figure 5: ASEAN shares of inbound tourism (2016) 20 Figure 6: Annual growth (2016 versus 2015) in ASEAN inbound tourism 21 Figure 7: Proportion of international visitors to Lao PDR by gender (2012–2017) 26 Figure 8: Ease of Doing Business Ranking and Indicators for the Lao PDR (2019) 36 Figure 9: Circular flow of income in the multiplier process 42 Figure 10: Direct local economic impact: Public-private partnerships versus community supplied services 43 Figure 11: Incremental revenue per year from NBT scenarios in target clusters (US$) 52 Figure 12: Locations incremental NBT visitors per year over 10 years in the four target clusters 53 Figure 13: Roles and responsibilities of ley agencies and stakeholders 60 Photo credit: Swisscontact Developing Nature-Based Tourism as a Strategic Sector for Green Growth in Lao PDR v Foreword vi List of Abbreviations ADB Asian Development Bank ALOS Average Length of Stay ASA Advisory Services and Analytics ASEAN Association of South East Asian Nations B2B Business to Business (trade/wholesale marketing) B2C Business to Customer (consumer/retail marketing) CBT Community-Based Tourism CITES Convention on International Trade in Endangered Species of Wild Fauna and Flora DMN Destination Management Network DOF Department of Forestry ECC Environmental Compliance Certificate ERC Enterprise Registration Certificate ERM Enterprise Registration and Management ESIA Environmental and Social Impact Assessment FDI Foreign Direct Investment FX Foreign Exchange GDP Gross Domestic Product GMS Greater Mekong Subregion IFC International Finance Corporation of the World Bank Group INGO International Nongovernmental Organization IPD Department of Investment Promotion IUCN International Union for Conservation of Nature LANITH Lao National Institute of Tourism and Hospitality LENS2 Second Lao Environment and Social Project LGBT Lesbian, Gay, Bisexual, and Transgender MAF Ministry of Agriculture and Forestry MoD Ministry of Defence MoES Ministry of Education and Sports MoF Ministry of Finance MoFA Ministry of Foreign Affairs MoHA Ministry of Home Affairs MoIC Ministry of Industry and Commerce MoICT Ministry of Information, Culture and Tourism MoJ Ministry of Justice MoNRE Ministry of Natural Resources and Environment MoPS Ministry of Public Security MPI Ministry of Planning and Investment MPWT Ministry of Public Works and Transport NBT Nature-Based Tourism NGGS National Green Growth Strategy to 2030 NGGSC National Green Growth Steering Committee NGO Non-Governmental Organization NP National Park NPA National Protected Area NSEDP National Socio-Economic Development Plan NTB National Tourism Board OSO One Service Office Developing Nature-Based Tourism as a Strategic Sector for Green Growth in Lao PDR vii PA Protected Area PAMD Protected Area Management Division PMO Prime Minister Order PPP Public-Private Partnership PR Public Relations ROI Return on Investment SAM Social Accounting Matrix SME(s) Small and Micro Enterprise(s) TTCI Travel and Tourism Competitiveness Index UNDP United Nations Development Programme UNESCO United Nations Educational, Scientific, and Cultural Organization UNWTO United Nations World Tourism Organization UXO Unexploded Ordinance VDF Village Development Fund WCS Wildlife Conservation Society WEF World Economic Forum WTTC World Travel and Tourism Council List of definitions and phrases ALOS Average length of stay (or ‘duration factor’), expressed in number of 24-hour periods Cluster Reflecting a demand-led approach to marketing and product development, ‘cluster’ implies a more coordinated and strategic approach to destination management involving a range of stakeholders (including landowners, product managers, and other suppliers) who are natural competitors and at the same time cooperate for mutual benefit by presenting an integrated range of visitor choices and experiences within an identifiable and marketable geographic area. Co-operative A ‘co-op’ or co-operative enterprise. The legal status of co-operative enterprises varies from country to country and is not universal.