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Emerging Market Speaker Series
Fueling Economic Growth:
ICT and Tourism
June 16, 2011
Christina Heyniger Tourism Practice
© 2011 Vital Wave ConsultingTM Proprietary and Confidential: Do not copy or distribute.
Goals of This Presentation
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1. Convey tourism’s importance as a sector
2. Introduce eco-adventure as a fast growing and relevant
segment within it
3. Explore ICT an important enabler for tourism
4. Use Mexico as a case study to illustrate the opportunity
for government
© 2011 Vital Wave ConsultingTM Proprietary and Confidential: Do not copy or distribute.
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Tourism: The direct contribution of Travel and Tourism to global GDP is U.S.$1,850
billion in 2011. Projected to grow to U.S.$2,860 billion by 2017.
Year 1990 2005
436
Tourism Overview Characterization of Industry
805
Million’s
Arr
ivals
Average Growth rate = 4% per year
2
World Economic Forum data: http://www.weforum.org/s?s=travel+and+tourism
© 2011 Vital Wave ConsultingTM Proprietary and Confidential: Do not copy or distribute.
Tourism in Emerging Markets Tourism is a key export for 83% of developing countries
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34%
94%
0%
20%
40%
60%
80%
100%
Growth Rate of International Travelto Developing Countries 1990-2000
Developed
Developing In terms of foreign
exchange: US$200 billion
in 2005
© 2011 Vital Wave ConsultingTM Proprietary and Confidential: Do not copy or distribute.
Emerging Markets Forecasts 5% growth per year compared to world average of 4%
4
Million
unwto.org/facts/eng/vision.htm
1950 1960 1970 1980 1990 2000 2010 2020
0
200
400
600
1000
800
1200
1400
1600
South Asia
Middle East
Africa
East Asia/Pacific
Americas
Europe
Actual Forecasts
1.6 bn
1 bn
694 mn
© 2011 Vital Wave ConsultingTM Proprietary and Confidential: Do not copy or distribute.
Local Activities
Web 2.0+
New tech is lowering cost of entry for this
fragmented sector into travel distribution
Search
Web search is increasingly focused on local (e.g Yelp, Google)
Mobile:
Using mobile devices to deliver relevant local
content from GPS, profile, social network
Social:
Tying social connections into online
“local” recommendations
PhoCusWright, May 17, 2010 “When They
Get There and Why They Go” presentation
to Adventure Travel Trade Association
Opportunities to Leverage Technology in the
Tourism Sector
5
© 2011 Vital Wave ConsultingTM Proprietary and Confidential: Do not copy or distribute.
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Differentiating Eco-Adventure and Mass Tourism
Mass tourism = Commodity, passive, packaged, predictable
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© 2011 Vital Wave ConsultingTM Proprietary and Confidential: Do not copy or distribute.
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Differentiating Eco-Adventure and Mass Tourism
Historical Context:
• 20 years ago eco-adventure had no name, and
was representing a fringe of travel activities
making up close to 5% of the market.
Current Environment:
• Nature and ecotourism market grew 3x faster
than the tourism industry overall in 2004.
• At its current pace eco-adventure will be 50% of
all reasons to travel in the next 10 years.
• Estimated growth rate of eco-adventure tourism
for 2010 and 2011 is 17% annually.
Adventure Travel Trade Association and George Washington University;
World Economic Forum, 2011 Travel and Tourism Competitiveness Report
“Eco,”“sustainable,” “responsible,”
“adventure” = authentic, personalized,
participatory, unscripted, involves local
communities, often owner-operated businesses
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© 2011 Vital Wave ConsultingTM Proprietary and Confidential: Do not copy or distribute.
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Differentiating Eco-Adventure and Mass Tourism
Key Take-Away: “Eco-Adventure”
tourism is the high growth sector of
tourism industry.
8
© 2011 Vital Wave ConsultingTM Proprietary and Confidential: Do not copy or distribute.
Characterizing Tourism Providers & ICT
Local tour operators – partnering with Global TOs, online booking, basic websites.
Outfitters or Guides, with basic English skills, conducting most business over their mobile phones.
No broadband coverage, IT
training or language skills
No access to international markets – lack of
understanding of how tourists interested in
sustainable tourism products/services
search/find destinations.
Key Take-Aways:
• Fragmented Industry; majority of providers are small to medium sized; widely ranging
levels of sophistication when it comes to technology use
• Sector can be more powerful with platform-agnostic solutions that link the different levels
Global Tour Operators
with Sophisticated website,
CRM systems and offices in
several countries
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© 2011 Vital Wave ConsultingTM Proprietary and Confidential: Do not copy or distribute.
Case Study: Mexico
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Framework for Evaluating Eco-
Adventure Tourism Market Potential Finding
Policy Prioritizing adventure and nature tourism
Safety
Concerns in border regions; 4.89 score in
Adventure Tourism Development Index
(ATDI)
Physical Infrastructure Excellent in key states
ICT
Good telecommunications infrastructure;
rural business owners’ application of
technology for business is limited
Cultural Resources Excellent for eco-adventure
Natural Resources Excellent for eco-adventure
Activity Resources Excellent for eco-adventure
Entrepreneurship Good/ ATDI score = 8.1 (out of 10)
Humanitarian/ basic conditions Varies widely by state and region
Health Poor/ ATDI score = 3.52
Image/Marketing Mainly known for sun and beach;
changing image to incorporate nature
© 2011 Vital Wave ConsultingTM Proprietary and Confidential: Do not copy or distribute.
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Tourism Competitiveness & ICT
Key Take-Away: Tourism competitiveness correlates with ICT. However, ranking
systems have important limitations: more tourists does not always = “better”; the
existence of technology does not mean businesses know how to apply it
Chart depicts tourism competitiveness against ICT rank (World Economic Forum)
Mexico Tourism Competitiveness = 43/139
ICT rank= 75/139
Ethiopia Tourism Competitiveness: 122/139
ICT rank = 138/139
ICT Score Low High
Kenya Tourism Competitiveness= 103/139
ICT rank = 112/139
Touri
sm C
om
peti
tiveness
H
igh
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United States Tourism Competitiveness= 6/139
ICT rank= 21/139
Switzerland Tourism Competitiveness= 1/139
ICT rank= 2/139
© 2011 Vital Wave ConsultingTM Proprietary and Confidential: Do not copy or distribute.
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Deeper Dive on ICT and Tourism
Competitiveness Rankings
The table above presents individual criteria scores used by World Economic Forum Travel and Tourism
Competitiveness Index when ranking countries for tourism competitiveness. (139 total countries ranked)
ICT Component Rank Overall
ICT Rank
Country
Extent of
Business
Internet Use
Broadband
Internet
Subscribers
Internet
Users
Telephone
Lines
Mobile
Phone
Subscribers
Switzerland 15 3 10 2 35 2
United
States 7 18 15 20 76 21
Mexico 78 53 77 74 92 75
Kenya 73 127 103 119 115 112
Ethiopia 134 136 136 125 139 138
Successful eco-
adventure
destinations in
Adventure Tourism
Development Index
Markets striving to
grow eco-
adventure arrivals
Key Take-Away: ICT rank also correlates in destinations that are successful for eco-
adventure tourism.
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© 2011 Vital Wave ConsultingTM Proprietary and Confidential: Do not copy or distribute.
Mobile Opportunity in Mexico
How ICT Supports Tourism
• Reservation systems
• Online travel agencies (however, eco-adventure providers not
represented yet in these systems)
• Destination management systems
• Social networking and web 2.0 portals
Opportunities and Needs in Mexico:
• Availability of communication for rescue services
• Mobile money
• Location based services: identifying activities and providers
in your area
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© 2011 Vital Wave ConsultingTM Proprietary and Confidential: Do not copy or distribute.
Triple Bottom Line Benefits To Promoting Eco-
Adventure Tourism in Mexico
Economic Benefits
• Tourism estimated at 8% - 13% GDP, 2 million direct jobs with
potential to be much greater
• Third largest source of foreign exchange after oil and remittances
Environmental Benefits
• Eco- adventure offers opportunity to develop sustainable tourism,
in contrast to areas where natural resources degraded by overuse
in mass tourism context, for example: Cancun, Cozumel
Social Benefits
• Celebration and preservation of local cultures
• Local people can more fully experience benefits of eco adventure
revenues; economic leakage occurs when mass operators and resorts
dominate
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Sources: http://www3.weforum.org/docs/WEF_TravelTourismCompetitiveness_Report_2011.pdf
http://www.siimt.com/es/siimt/relevancia_del_sector
Mexico is investing
in the sector;
Chiapas, Mexico
hosting 2011
Adventure Travel
World Summit
© 2011 Vital Wave ConsultingTM Proprietary and Confidential: Do not copy or distribute.
ICT Opportunity for Emerging Markets
Application Examples:
Ex: Tour Kenya: mobile application available
from Nokia for $1.99. Travelers use the
application to find restaurants, activities, in
Kenyan cities
Ex: Beijing Taxi Guide by Hoodhot
Application Examples:
Ex: Rescue or security communication
services
Information
• Offered for a fee to end users
• Funded by private companies
Local Social Issue or Public Service
• Offered at no charge to end user
• Funded by government or NGO
Key Take-Away: Asymmetric usage exists in traveler originating markets (smartphones) and
emerging market destinations (predominantly feature phones). Apps that require high bandwidth
are not always relevant for emerging markets unless they can be downloaded before departure.
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© 2011 Vital Wave ConsultingTM Proprietary and Confidential: Do not copy or distribute.
Summary
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1. Tourism is an important sector globally, and of great
importance to emerging markets; Eco-adventure is fast
growing and relevant segment within the sector
2. ICT is an important enabler for tourism (as in many other
sectors, i.e. Health, Education, Manufacturing)
3. Mexico provides an interesting example: has political
will, is investing in development programs. ICT
investments now are well timed.
© 2011 Vital Wave ConsultingTM Proprietary and Confidential: Do not copy or distribute.
Additional Considerations
Business Owner Knowledge
of Environmental
Sustainability Principles
and Practices
Environmental
Management Policies at
National and Local Levels
Seasonality and
Employment Opportunities
It is important to note that there are many other
strategic issues challenging sustainable tourism and
its use in emerging markets where tourism has the
potential to deliver greater benefits
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