Tourism an inclusive business opportunity for PH

MANILA, Philippines – Growing tourist interest in the Philippines and the region provides a unique opportunity to spread wealth to the bottom of the pyramid without the trade-offs that often accompany a booming tourism industry.

Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), the German government’s development arm, said Southeast Asia is the ideal environment to put into practice inclusive business models, particularly the triple bottom line the United Nations is aiming for under its Social Development Goals. 

The triple bottom line is a new way to measure sustainability, taking into account not only an organization’s income, but how it shares it with others and its impact on the environment.

Tourism represents a unique opportunity for unlocking opportunities for social impact because of the wide range services and sectors that it requires, said Sarah Schwepcke, who heads GIZ’s inclusive business unit for Southeast Asia.

In the Philippines, tourism generated direct and indirect employment for 4,232,000 people or 11.1% of total Philippine employment in 2014, based on the World Travel and Tourism Council’s (WTTC) Economic Impact 2015 study.

Travel and tourism’s total contribution to the gross domestic product (GDP) amounted to 11.2% in 2014, and is projected to contribute 5% in 2015. The numbers are similar for neighbors as well, with Vietnam at 9.2% and Indonesia at 9.3%

For this tourism growth to be meaningful and sustainable, innovative inclusive business models that allow low-income people to enjoy better employment and entrepreneurship must be put in place, said GIZ.

Unfortunately, based on its research, inclusive business models are still few and far between, although some notable models are sprouting up.

GIZ highlighted a few of them during a  panel discussing the inclusive opportunities in the sector, held as part of the Asian Development Bank’s Inclusive Business Asia forum on February 18.

Inclusivity key to survival

“For all of El Nido’s reputation of being an exclusive place, it’s actually a very inclusive community and a business has to be inclusive to survive there,” said Mariglo Laririt of El Nido Resorts, a group of sustainable resorts on El Nido and Taytay islands operated by Ten Knots Development Corporation.

The group was started 30 years ago by an avid Japanese diver who envisioned a dive camp that would would bring humans and nature in harmony, as she put it.

The group started its partnership with the local community by sourcing local produce for the resorts kitchen.

It was as much a business decision as a sentimental one,  Laririt explained. Given El Nido’s remote location, you save a lot by tapping nearby sources.

The partnership then evolved into employing locals, a direction that the resort group has deliberately followed.

Laririt pointed out that in 2006, 72% of its staff came from the local municipality.  By 2013, it was at 90%, which contributed to El Nido resorts’ WTTC  award for best sustainable practices.

One of the keys to success was that the group religiously measures the social impact of its initiatives, from the amount of training its staff gets to the benefit it brings to the community in terms of education, to the environmental cost of bringing tourists to a remote island.

“Everything is measured so that we can maintain a good balance. After all, you can’t manage what you can’t measure,” Laririt said.

Incorporate everything

Another local business that grew because of its inclusive business model is Bohol Bee Farm, a hotel, store, and restaurant chain.

Starting out, as the name suggests, as a simple bee farm and a two-table restaurant, founder and CEO Vicky Sandidge eventually grew it into an enterprise that can accommodate 700 diners at a time, with a staff of 328 people.

Sandidge credits her success to always finding use for everything in her immediate environment. This includes getting help from neighbors, incorporating local fruits into products, and rousing her long dormant baking skills that she learned more than 30 years ago.

“As an entrepreneur, you have to to be constantly aware of your surroundings  and what you can incorporate into your offerings to grow,” she said

“Growing becomes much easier if you understand the community around you,” she added.

Government can do more

Both businesses have grown with the help of their communities, in the absence of government support in terms of creating ideal conditions for business.

Sandidge’s chief complaint lies in the confusing system she faces every time she applies for permits, gets licenses, or pays taxes.

“I’m happy to pay taxes but the system is really confusing. The government needs to do a better job guiding entrepreneurs throughout the whole process,” she said.

Laririt, for her part, thinks that the public sector needs to a much better job making those taxes work for the country.

Palawan gets the highest possible business tax but despite this,  there is no hospital on El Nido or a real public college, she said. The municipality currently has two doctors for every 40,000 people, Laririt added.

This weighs on the mind of tourists in a remote location hours away from a hospital in the event of an emergency.

Laririt added that the government needs to step up its obligation of protecting  Palawan’s environment as well.

“We love to be inclusive, we love to help, but we can only do so much more if other stockholders, the government, don’t fulfill their role,” she said.

Both businesswomen also believe that some of the ideas can be replicated elsewhere, although they were careful to say that these ideas need to be tailored to individual environments.

The one thing that should stay constant for an inclusive business to succeed is to always treat the local community as a partner.

“You cannot be an island. Connect to the local people around you. They will be your shield and will protect you from the day-to-day troubles. Your investors, or financing may run out, but you can always rely on the community if you treat them well,” Laririt said. – Rappler.com