An Integrated Approach to Resort Development

8/12/2019 An Integrated Approach to Resort Development

1/152

A TOURISM ANDTI-IE ENVTRONMENTPUHLIC ZTTON

Monday,July14,20084:43:28PM


2/152

nIntegratedpproach toResortDevelopment

SM C SE STUDIESy Edward Inskeep ndMark Kallenberger

WORLD TOURISM ORG NIZ TION



3/152

Copyright: 0 1 9 3 2 WTOAl rights resemed. No par t of this publication may be reproduced, stored in aretrieval system or transmitted in any form or by any means: electronic,electrostatic, magnetic tape, mechanical, photocopying, recording or otherwise,without the direct permission in writing from the copyright holder.First EditionCover Photo: Jameos de Agua, Lanzarote, Canary Islands, Spain; Cabildo Insular

de Lanzarote.

Photo Credits:INDONESIA: Bali Tourism Development Corporation.KOREA: Korean National Tourism Corporation, Kyongju Tourism Agency.MWCO: Fondo Nacional de Fomento al Turismo.DOMINICAN REPBLIC: Oficina de Turismo de la Repblica Dominicana de Madrid.

rk i sh Ministry of Tourism.SPAIN: Cabildo Insular de Lanzamte and Instituto de irismo de Espaa.

ISBN 9 2 8 4 4 0 0 4 0 6Depsito Legal M 8.375-1992Printed inSpain

WORLD TOURISM ORGANIZATIONCALLE C PIT N HAYA, 4 22 8 0 2 0 MADRID SPAlNTEL: 7 0 6 2 8 FAX: 5713733 TELM 2 1 8 8 OMT E



4/152

ACKNOWLEDGEMENTS

W T O and the authors would like to thank the tourism authorities in each resortand country for their cooperation. This publication could not have beenproduced without their assistance. Also thanks should be extended to NancyCockerell Scott Wayne and Michael Berggren for editing copyediting andproofreading this manuscript.

FIGURES

Number1 TOURISM STRUCTURE PLAN O F BALI

NUSA DUA RESORT PLAN 19733 NUSA DUA RESORT PLAN 1988

KYONGJU TOURIST M P5 KYONGJU TOU RISM PROJECT6 POMUN LAKE RESORT7 YUCATANREGION8 CANCU N RESORT PLAN9 CANCUNCITYPLAN

10 PUERTO PLATA TOURISM R EGION11 PLAYA DORADA RESORT PLAN1 2 ANTALYA REG ION13 14 EAST AND S OU TH ANTALYA TOURISM PLAN NING AREAS15 LANZAROTE ISLAND6 LANZAROTE PLAN IMPACTS O F UNCO NTROLLED

DEVELOPMENT17 LANZAROTE LAND USE ST RU CT RE PLAN8 LANZAROTE TOURISM STRUCTURE PLAN



5/152

CONTENTS

ForewordKey Conclusions Recommendations

Pag No

Chapter IntroductionChapter 2 Nusa Dua Resort Bali IndonesiaChapter 3 Pomun Lake Resort Kyongju Republic of Korea 26Chapter 4 Cancun Resort Cancun Mexico 44Chapter 5 Puerto Plata Resort Project Dominican Republic 65Chapter 6 South Antalya Tourism Development Project-Turkey 85Chapter 7 Lanzarote Tourism Planning Project Canary Islands Spain 105Chapter 8 General Conclusions 123



6/152

FOREWORD

Over the last two decades, a nurnber of large tourist resorts have beendeveloped around the world, many of which have become highlypopular holiday destinations. The growth in tourism generated bythese resorts has brought significant economic and social benefits totheir respective countries, including increased foreign exchangeearnings, direct and indirect employment. In addition, the resortsdevelopment has stimulated local and regional development,encouraging new local industries and intemational trade.

The success of these resorts can be largely attributed to theadoption of an integrated approach to their development arefuiplanning and implementation that took into consideration regionalenvironmental, economic and socisculturai factors. This kind ofapproach helps minimise environmental, socio-economic andmarketing problems often associated with uncontrolled tourismdevelopment.

In line with WTO s concern for sustainable tourismdevelopment, a detailed evaluation of six tourist resorts wascommissioned in 1990 The results of these case studies highlight theimportante of an integrated approach to tourism development andoffer some valuable lessons for tourism policy-makers and public andprivate sector planners. Many aspects of the approach to eich resort sdevelopment are applicable to tourism resort projects all over theworld.

ntonio Enrquez SavignacSemtary eneralWorld Tourism Organization

vii



7/152


8/152

Special organisational structures, with effective leadership and a competenttechnical staff, are necessary to develop and manage resorts. high leve1 ofcoordination is required between the many different agencies involved in aresort s development, as well as between the public and private sectors. Thisorganisational structure, after gaining experience in the initial resortdevelopment, can often be used to develop other resorts in the country orregion.Adequate financing is required for the resort and related regional infrastmcture,which can be expensive to develop, as well as for the superstructure ofaccomrnodation and other facilities. Various financing techniques and sourcesre available, and approaches can be used to recover at least some of the

infrastmcture investment.Since a newly developing resort is n untested economic venture, thegovemment or a public corporation may need to be pioneers in developing thefust hotels, to encourage private investment.Marketing is essential, both to attract investors and also tourists to the resort.



9/152

ChapterINTRODU TION

sustainable tourism development is one of the major issues facing the worldstravel and tourism industry in the 1990s. Not only are tourists becoming moreconcerned about different forms of environmental pollution in their holidaydestinations; tliere is also a growing numbcr of tangiblc examples ofenvironmcntal pollution translatcd into a loss of toiirisrn incorne. 171e decline inpopulanty of certain traditional Mcditcrrancan holidav rcsorts that havc hccnovcrbiiilt and under-maintaincd, thc reduccd appcal of the Rlack Forest damagedby acid rain, o r the blooms of algae along the Adriatic coast of Italy are dramaticproof of the threat to tourism from environmental neglect.

The costs are impossible to quant*, but they are enormous. And it isalready clear that tourists are beginning to shun operators and destinations thathave received bad publicity over their environmental record. Leading touroperators themselves are increasingly appointing Environmental Advisors tomonitor the environmental practices of hotels and resorts to avoid losing valuahleclients.

s far as new resort development is concerned, the problems are perhapsless acute ut only on the condition that concerted effons are made on thepart of both governments and the operating sector to ensure an integratedapproach to the resort s development. Only in this way will the development besustainable and avoid placing undue strains on the carrying capacity of the resortor the destination.

n Yntegrated approach to resort development implies the controUedplanning and irnplementation of resort projects in order to achieve a balanceddevelopment that satisfies economic, environmental and social objectives. Ingeneral, it applies to long term project development t times, over a period ofmany years nd constant monitoring and control at the different phases ofdevelopment ensure that the basic concept can be adapted to changingcircurnstances and market demand.

The success of an integrated tourist resort depends on a number offactors. These include a good transportation infrastructure with e sy access toand within the resort for guests and staff, and an architectural design that blendsinto the surrounding natural environment, reflecting traditional local designs andusing as many local materials as possible. Specific natural geographical attractionsshould be preserved and incorporated into the resort wherever feasible, and itneeds adequate utility services, such as water supply, electric power,telecomrnunications, sewage and solid waste disposal systems.

Successful integrared resorts are also planned within the framework of theirregional environmental, economic and socio-cultural setting, as well s overalldevelopment policies and plans, so that they are well related to the region.



10/152

Carefully planned and properly implemented integrated tourist resorts can bringsubstantial economic and social benefits while also minimising thoseenvironmental socio-economic and marketing problems often associated withuncontrolled tourism development.

n anaiysis of how some existing resorts have been planned implementedand financed can yield valuable insights into the approaches principies andtechniques of resort development that have proven to be successful as well asthe types of problerns that have been encountered. Although each country andresort area is unique the experience gained from planning and developingdifferent types of existing resorts can provide useful ideas that other countriesmay be able to adapt to their own needs in their pursuit of effective tourismdevelopment.

ThisWT study which was conducted in 1990/91 analyses six resorts aillargely completed and representing various regions of the world and diierenttypes of development. For each case study comprehensive details are providedon planning and implementation including the current status of development.Economic environmental and socio-cultural factors in planning andimplementation are also analysed as well as the development impact of thesefactors. The report evaluates the financing of both the infrastructure andsuperstructure of the resorts the respective roles of the public and privatesectors in financing and fmancial policies and procedures applied. Finally itassesses the potential of applying these planning and implementation proceduresin other development projects around the world.

Nnsa Dua Resort n Bali Indonesia represents a medium-sized beachresort in an island environment that also offers outstanding cultural and scenicday tour attractions.Pomun Lake Resort at Kyongju Republic of Korea is a medium-sizedinland resort based primarily on nearby historic and cultural attractions for daytours. It also offers its own diverse recreational facilities and activities.Cancan Resort on the e stern Yucatan Coast of Mexico is a largescale beach and marine oriented resort providing a wide variety of touristfacilities and activities as well as comprising a related new town development.Puerto Plata Resort n the Dominican Republic is a medium-sizedbeach and marine resort that has served as a catalyst for regional tourismdevelopment.The South Antalya Tourism Devdopment Project on theMeditemnean coast of Turkey is a prime example of a major beach tourismdevelopment planned in a large area of existing villages agricultural land and amountainous hinterland of parks and forests.Lanzarote n the Canary Islands is a case study of a controlled tourismdevelopment that was planned and implemented for a complete islanddestination reaching maturity.



11/152

The results of this study are designed to be used by national regional andlocal government tourism policy makers and officials responsible for planningand implementing reson development as well as by private sector enterprisesand organisations involved in tourism development.

The studywas carried out by two consultants each visiting three of theresons to observe actual development patterns. In addition to meeting withpublic agency officials and private sector organisations to obtain backgroundinformation the consultants also met with officials of the WorldBankInternational Finance Corporation and Inter-American Development Bank inWashington DC to discuss their involvement in the different projects. Furtherinformation on the study may be obtained from the respective national tourismadministrations NTAs) of the countries in which the different resorts are located.



12/152

NUSA DUA RESORTBALI, INDONESIABACKGROUNDTourism in IndonesiaIndonesia is the fifth largest country in the world, in terms of population, andencompasses some 13,000 islands, of which about 3,000 are inhabited. Thecountry possesses a great diversity of languages, cultures, historic and culturalsites and n a t u d environments which provide a wide range of attractions forinternational and domestic tourists.

Tourism developed more slowly in Indonesia than in some other SoutheastAsian destinations during the 1970s for a number of reasons. These included itsinadequate tourism infrastructure, facilities and services and the rather weakimage of the country internationally. Because of the country's generauy lowincome levels, domestic tourism was also lirnited. Since the late 1970s, tourismhas expanded rapidly, from 501,430 arrivals in 1979 to 2.2 mn in 1990. Growthrates were particularly high during the second half of the 1980s. Domestictourism has also grown in line with the country's economic growth and as aresult of measures to encourage domestic travel by Indonesians.

Indonesia attracts a wide range of tourist markets. Of the 2.2 ninternational arrivals to the country in 1990 ased on country of residente39 per cent were from other Southeast Asian (ASEAN) countries, particularlySingapore and Malaysia, and a further 23.5 per cent were from other parts ofAsia, notably Japan, Taiwan, Hong Kong and the Republic of Korea. Europegenerated some 22.2 per cent of amivals, led by the Netherlands ecause ofhistoric links he UK Germany, France, Italy and Switzerland. North Americaaccounted for 5.6 per cent, and 9.2 per cent were from Australia and NewZealand. Australia, in fact, was one of the earliest source markets for tourism inBali. More than 75 per cent of al1 amvals are holidaymakers, with the balancetravelling on business and for other private reasons.

Seasonality is not especiaily marked, although the months of June to Decemberattract the highest number of international visitors. Average length of stay is m u n dtwelve nights. According to a survey conducted in 1990, the average expenditure offoreign tourists in the country was US l, 197 for business traveliers and US 967 forholidaymakers,with an overall average of US 967 The highest spending marketswere the Italians, Dutch and Japanese. n 1988, intemational tourist receipts totalledUS 1,028mn epresenting 5.3per cent of Indonesia's total exports.

The current medium-term national tourism development policy is focused onseven broad objectives: improved access to tourism areas; tourist promotion;



13/152

maintenance and improvement in the quaiity of the counuy's tourism product;application of an integrated approach to resort development; emphasis on marineand nature tourism development (without neglecting other forms of tourism);human resource development for tourism; and implementation of a tourismawareness programe for Indonesians. Pelita 5, the national development plan for19891993, targets 2.5mn 3.5 m n nternational tourist amvals ayear by 1993.

Although Bali is the leading destination for leisure tourists to Indonesia, otherregions of the country have also been, or re in the procesi of being developed.Some of these re b e g i i n g to attract significant numbers of tourists. Thepreparation of a national tourism development strategy is also currently underway.

Tourism n ali

Baii is the best known of ii Indonesian islands internationally, thanks to its richHindu culture of colourful ceremonies, variegated arts and S, temples,traditional villages and life styles, combined with its highly scenic naturalenvironment of terraced rice fields, mountains, lakes and beaches. Tourism to theisland did not reaiIy develop to any appreciable extent until the late 1960s andearly 1970s. But it expanded rapidly in the second half of the 1970s and 1980swith the opening of several large hotels and a number of smaller, but often goodquality hotels and guesthouses. s the accomodation supply increased, thisstimulated the growth of smaU independent arts and handicraft shops, restaurantsand other tourist-oriented enterprises throughout the popular tourist areas of theisland. It is estimated that about 40-50 per cent of al l international tourist arrivalsin Indonesia visit Bali, either as their sole destination oras a stopover on multi-destination tours of the country. There are d i i c t international flights to the island,accounting for about 22 per cent of total air passenger arrivals to Indonesia.

In the late 1960s, the government initiated an overaIl policy for tourismdevelopment in Indonesia, recognising that Bali was the logical place to focustheir preliminary efforts. Itwas also recognised that since tourism in Bali haduntil then developed in an uncontrolled manner, it was essential to introducesome careful planning into future development. This subsequently resulted in theNusa Dua resort project.Current tourism development objectives for Bali, s laid down and approved bythe provincial government, may be summarised as foUows:

To support and enhance the traditional religious and community customs of theBalinese society.To diversify the island's range of tourism facilities and to spread the benefits oftourism development to the various regions (of which four re identified for theisland ast, West, North Central and South Central).To increase the social benefits of tourism through investments in education,manpower training and development programmes.



14/152

To increase community benefits by targeting employrnent opportunities forlocals and by promoting integrated community health and environmentalmanagement programmes.To incorporate measures, in the integrated programme approach, to ensurecoastal protection and the avoidance of conflicts with areas designated forreligious purposes.To increase the local inhabitants awareness of these development objectivesthrough public information programmes.

volution o he Nusa Dua ProjectIn 1970 an amement was reached between the central government, the UnitedNations ~ e v e i o ~ m e n trogramme OJNDP as the financing agency, and the WorldBank (International Bank for Reconstruction and Development IBRD and theInternational Development Association IDA) as the executing agency, for thepreparation of a regional tourism plan for the island of Bali. The plan, drawn upby French consultants, was completed and approved by the government in 1971Figure 1 2J It emphasised the need to concentrate on the development of

international standard accommodation in an area where the potentially negativeeffects of tourism would be minimised and an adequate infrastructure could beprovided, in other words, an integrated resort development. The plan identifiedthe existing main tourism development areas of Sanur and Kuta andrecommended the construction of a road network between the main attractionsof the island, stopover points and the different resort centres. It was alsorecommended that development should be camed out in different stages.

The choice of site for the integrated resort was based on the followingcriteria, which were best met by Nusa Dua, located on the eastern side of theBukit Peninsula:

Accessibiity from the international airport (NgurahRai), located on the isthmusbetween the capital city of Denpasar and the southern peninsula of Bukit.The availability of suitable land not already being used for imgated ricecultivation or other high value agriculture.An attractive beach.

To help ensure the priority development of hotels in Nusa Dua, thegovernment fter consultation with the World Bank in 1972 imited thenumber of international standard hotel rooms outside the resort to 1 600(icluding several hundred existing rooms) until 1985. Thiswas the date whenthe Nusa Dua resort was initiauy expected to be operational. Implementation ofthe resort project was to be largely the responsibility of a newly-created,government owned tourism corporation, the Bali Tourism DevelopmentCorporation BTDC). Infrastructure and common facilities of the project included



15/152

water supply, sewage and solid waste disposal systerns, electric power,telecommunications, interna1 streets and storm water drainage, landscaping andlandscape irrigation, an amenity core or resort centre, and a service centre. Theresort was expected to attract private investors to build and rnanage the hotelsand other commercial facilities in the resort. Several international advisers wereto be attached to the BTDC

Figure

LEGEN s g n w srou.-. Link-nillS.h-qTwi.

a.sbsa h-sTaii.M.S(wSiphlumTwnm S(aW*-1wn

O M a f u r L w m M O r n n i p m -W rnicr W,

. r i l ~ m n R a i n r ~ ~ ~ n < u ~ ~ BvXlt Pailn$ula1.PI ,Ama Twm* , ,re*CIW

m



16/152

Some infrastructure improvements were also planned for the two nearbyvillages of Bualu and Benoa, including the paving of roads, street Lighting, publicwater supply and limited medical facilities. The project was to includeconstruction of a new twelane road between the airport and resort, connectingto a new road linking the resort and airport (and nearby Kuta tourism area) to theexisting tourism area of Sanur and to the road network leading to the majorattractions of south-centralBali and elsewhere. Some upgrading of existing roadsurfaces and replacement of inadequate bridges in the tourist excursion areaswere also stipulated in the project.

The Bali Tourism Development Board (BTDB) was to be responsible forimplementing the regional tourism plan, which required coordination betweenseveral government agencies, hotels and other private sector tourism enterprises,and Balinese cornmunity organisations. Technical assistance, in the form ofvarious advisers, was provided to help the BTDB and government formulate andimplement policies and programmes. These were designed to mitigate thepotentially negative effects of tourism on Bali's social and cultural Me, make thebest possible use of the existing human and natural resources for tourism, anddistribute the benefits of tourism in an equitable manner to the Balinesepopulation.

The project included the construction of a hotel, tourism education andtraning centre he financia1 responsibility of the government. A smaUdemonstration farm was to be established to help local farmers grow vegetablesand fruits suitable for sale to international hotels and restaurants. Technicalassistance would be provided for improvements in the production and marketingof food items.

The project was budgeted at US 36.1 mn for the infrastructure and relatedcomponents. Of this, US 18.1 n would be required in foreign exchange. TheIDA was to provide a credit of US 16.0mn covering per cent of the foreignexchange &uired, or slightly more than 44 per c ei t of e total project co siwith the government financinn the remainder. Some US 0.35mn of the IDAcredit was allocated for the retroactive fmancing of water investigations, welldriing and technical assistance to the BTDC.

THE RESORT PLAN AND REGION LCONSIDER TIONSResort owept a and Use lanA detailed resort plan was prepared in 1973 by a Japanese consulting firm. Thiswas based on the conceptual land use plan for Nusa Dua incorporated in the1971 Bali regional plan.Y his comprehensive study exarnined the regionalplanning framework and relationships and existing environmental conditions ofthe site. It made recommendations on the resort concept and specific land use,transportation, other components of the infrastructure: zoningregulations, siteplanning concepts, architectural and landscaping guidelines, renewal of the



17/152

nearby vlages of Bualu and Benoa, and implementation techniques andschedule.

The concept of the resort was that of an integrated high quality beachcomplex with seif-contained recreation and cornmercial facilities. It was targetedat higher spending tourists in search of a high quality hotel and resortenvironment offering a wide range of facilities and services.

The plan, reproduced in igure 2 shows the staged development of 2,500hotel rooms in the fmt stage and 2,000 in the second stage n twelve beach-oriented hotel lots, with a centraiiy located arnenity core (resort commercialcentre) and festival park (cultural centre), and an auxiliary services area includiiga convention centre, traffic terminal and landscape plants nursery. Otherfacilities included were BTDC office, a service area for water and sewagetreatment plants and sewage lagoons, open space preserved areas for parks ontwo offshore land-tied islets Pnd along the shoreine, a sports park, an unspecifiedreserve, a boat jetty, and the interna1 road system including a roadway speciallydesigned for a local shuttle bus service.

igure



18/152

The land acquired for development was about 310 hectares. The site area ismostly flat with some hills inland where the golf course has been developed.There was iittle existing development on the site, except for coconut trees and aboat landiig and storage area on the beach used by fishermen living in thenearby Bualu village. The plan also showed a possible third stage fordevelopment of hotels in an inland area near the resort and along the beach toBenoa village, but this was not part of the designated resort area.

Although the basic concept and layout of the plan were adopted andimplemented, some minor changes were made during the course ofimplementation based on new circumstances.As an example, it was decidedbefore development started to delete the two cornmerciai sub-cores and to locatethe National Tourism Education and Training Centre scheduled for Bali in one ofthe auxiliary facility areas. Somewhat later, it was decided to develop a 9-hole golfcourse in the unspecified reserve area and then a second 9-hole course extendiiginto the auxiliary area and taking over one of the hotel lots.

More recently, about 400 condominium viiias duplex cottage units)associated with the golf course and 200 serviced apartments associated withexisting hotels were added to the plan. The plant nursery proved to beuneconomic, as it was cheaper to purchase plants on the open market, so it wasabandoned and the area was used for part of the golf course expansion. It wasalso decided that the Nusa Dua Beach pier, shown on the original plan, wasunnecessq.

A revised plan was prepared in 1988 .This included recommendations forfurther improvements to the nearby villages, a bypass road system to sewe thesevillages, and an implementation prograrnme, s shown n Figure 3. The principalchanges since this plan was prepared include the deletion of the proposedcentrally located convention centre. Convention facilities were included in one ofthe resort hotels, and the originally designated area is being developed s part ofthe golf course expansion.

The resort plan included a number of development standards and designguidelines.A maximum building height of 15-m ppiicable to aii of Bali asstipulated for Nusa Dua. This height limit was selected so that the top ofbuildings would be below the tops of the trees helping them to blend into thenatural environment. Maximum density standards were established the overalldensity of the resort is about 20 hotel rooms per hectare), with a maximumnumber of rooms set for each hotel lot. The maximurn floor area ratio for eachhotel lot was 0.5 and the maximum lot coverage by buildings w s 5 per cent. Itwas stipulated that aU utility lines were to be placed underground. A minimum50-m distance from the shore-ne was generally applied for main budiigs,although a few recently developed hotels seem to have managed to get aroundthat requirement.



19/152

Architectural design guidelines were established by a Design ReviewCommittee. These were based on the use of traditional Ralinese architectiiralmotifs and some local building materials such s the distinctive Balinese stylebrick. Exterior advertising signs are strictlv controlled with only directional signsailowed. s already mentioned, extensive landscaped park and open space areaswere ailocated in the plan. The preservation of the two islets as parks, integratedwith a park area adjacent to the lagoon between the islets and with the shorelinelandscaping and footpath, is worth special mention. Extensive landscaping hasbeen integrated into the road network and existing trees on the site retainedwherever possible.

Public access is legally required to all shoreline areas in Indonesia and thiswas appiied in Nusa Dua, with access comdors provided from the central facilityand internal transportation area to the beach. As recommended on the plan, onewide corridor has been developed to provide access for fishermen from Bualu tothe beach where their boats are stored. The plan included the preservation ofsome smali existing Hindu temples on the site. These are used by Baliieseemployees and are also of interest to tourists.

Resort Infrastr u:twre and EmpZoyee HousimgThe resort infrastmcture was carefully planned and enaineered to meet.international standards and avoid any potential environmental problems. Theinternal road network, shown on the plan, was integrated with swale-typedrainage-ways which re attractively landscaped and provide an open spacefeature.As mentioned, a separate road for shuttle bus service runs parallel to themajor interna1 road that connects the hotels and other facilityareas s planned,th new two-lane road was constructed connecting the resort with theinternational airport, Kuta and Sanur, as well as the general road system thatprovides access to the major tourist attractions, such as artists village, templesand scenic areas.

As development has progressed, the access point to the resort entrancewhich is also the access to the Benoa Peninsula and village as becomecongested. This is likely to grow worse with the continued development of thearea. The 1988 plan proposed a by-pass road to provid a direct connection fromthe airport access road to the Benoa road, thus aiieviating congestion at theresort entrance point. It also recommended a by-pass road around Bualu village toprovide better access to that area. However, the main airport access road, whichsewes the villages as well as the resort, is also becoming congested and could getworse. So there is now talk of expanding this road to four lanes.

As far as the resort water supply is concerned, a well-field located sevedmiles away from the resort was developed in the mid-1970s, with a pipelineextended to the resort service area where it was treated and distributed to theresort users. Separate potable and irrigation water distnbution systems were alsodeveloped. Since the initial development, the resort s potable water system hasbeen connected directly to the Denpasar water system, with the weil-field water



20/152

T DENPPS R

.r

1LoWDEWrrvTOURW EXPANSON SHOTTERU 1m.W n R W U SUEDIUWTERU 99 95 1WROOMSL O W T E R U ? M Z W O 250 R W U ST O T U lOOi754 R W U S



21/152

- NUSA DUA 8 ENVIRONSOVERALL PLANTOURIST ACCOMMO DAilONm 3 NUSA DUA BEACH HOTEL 300 ROOMSN5 350 ROOMSm 700 RCOMS 50-100 COTTAGESNUSA DUA PUSATaCONVENTlON COMPLEXIUSINESS PARKC PlAzzAd NUSA DUA BAY VILLAGEe SOUTH ISLAND OUAY LAGOONCO MM UNIN GOLF DEVELOPMENTa PALM GROVECOASTALc SEA VlEWd HILLTOPBALINESE COTAGES

f SPORTiHEALTH COMPLEXTIME SHARE VILLASh LAKESIDE VILLASMARINE RELATED PROJECTSm CORAL REEF IN FlLLb WSP. FISH FARMVILLAGE REVITALISATION PROJECTSa BUALU UP-GRADING5 SAWANGAN UP-GRADING5 BENOA REVITALISATIONINFRASTRUCTURE PROJECTS8-89 URGENTICORRIDOR- RESERVATION FOR CONSTRUCTIO

@ 88-89 URGENTIPERMATA NUSA DUA THROUGH ROUTE9-90 FERMATA NUSA DUA TO BTDC/NUSA DUA

0-91 TANJUNG BENDA SOUTHERN ACCESS.BUFFERZONE 1 < INTEGRITEDVILLACE RMTAUS Al lO N+TDURISY

RTNEDIUU: NDLONG-ERU ~ ~ T E R U I ~ I O P E R ~ ~ ~ D N B O R I W 91-94 LONG TERM UNGASAN TO SAWANGAN LlNKPDLEY U R D E N V l W MEDIUH.TERU 1991-SYU:,IW- R W U SS T I R W O Y E S T A Y I V h U S U I O L O N U E R M 19 62W W R W M STENS~MU I R I E T U R O E N I N O X I T N IO TO It RWUS 1-94 LONGTERM UNGASANTODENPASAR LINK VIA MUMBULM WORTICULTURE

FIN AL REPORT- M A Y 1988 P A R T 1 -PAGE 303



22/152

now being used in the resort irrigation system for use on the golf course andresort landscaping.

Electnc power for the resort is provided directly from the island's electricalg i d system as originally planned. The resort telecommunications' system is alsoconnected to the general island system.

separate sewage collection and treatment plant system was developed forthe resort as there was no existing sewage system in this area. Sewage effluent istreated to a secondary leve1 with the waste water, along with the weil field water,supplying the resort imgation system. Although consideration was initially givento the establishment of a soiid waste collection and disposal system, theindividual hotels decided that it was more economical to dispose of their solidwaste by paying local companies to coiiect it. Part of it is then used in recyclingoperations such as for feeding livestock. This approach has not been totallysatisfactory, however, because the waste material that is not reused is apparentlyoften not disposed of elsewhere in a sanitary manner.

No housing for resort employees was developed directly on the resort, butland was made available adjacent to the access road and near the resort forprivate housing development. This has pmvided a total of about 800 units. Onearea was designated for higher quality housing and another for less expensiveaccomrnodation. Development of these areas is currently underway in line withdemand. Some employees also live in the nearby villages and a large number iivein Denpasar and elsewhere. Minibus service is available for employeescommuting from these more distant locations.

conomic Impact maZysisThe World ank analysis projected that the resort would provide directemployment for about 5,8006,000 people in hotels and other establishments,with an additional3,700 jobs generated for artists and handicmft workers, by1983 hen it was originally expected to be fully operational. The economicrate of retum was calculated at 18.7 per cent, with net foreign exchange earningsof US 8.5 m n n 1978 and US 36.2 mn annually fmm 1985 onwards. Central andlocal governments were also expected to receive substantial direct revenues fromtaxes generated by the resort operations. It is likely that these targets wereachieved, albeit at a later date than origina@ planned.

s has already been explained, stmng consideration was given in the resortplanning to regional relationships. The resort site was selected and plannedwithin the framework of the Bali regional plan, with the resort viewed as oneirnportant component of the island's overall tourism development structure.Regional road development was carried out as part of the project to provide goodaccess between the resort and the airport and to other tourism re s and the



23/152

island s tourist excursion road network. Much of the resort s other infrastructurewas integrated into Bali s infrastructure systems.

The relationship of the resort development to the nearby villages of Bualu,adjacent to the resort and Benoa, about 3-km north of the resort, was consideredespecially important. In the past, these villages were isolated, highly traditional,had very limited infrastructure development and community services, and thevillagers generally had low education, skiiis and incomes. One major objectivewas for the viilagers to benefit from the resort development. The projectincorporated plans to improve viilage roads, develop a village and rural watersupply system from the resort system with public water taps provided, extendelectric power to the villages and install street lighting. The provision of in-housewater and electrical power supplies was an option, the cost of which was theresponsibility of the individual householders. Some community services, such asthe upgrading of medical clinics, were also financed by the resort developers.

Villagers were encouraged to develop small-scale enterprises such ashandicraft shops and restaurants to serve tourists, and this has been verysuccessful. The viilagers also eam money from working in the resort and rentinghousing to resort employees and students of the Tourism Education and TrainingCentre. During the resort development, some villagers were able to work onconstruction projects and were given priority for this type of work depending ontheir skiii levels. Young village locals were trained to work in the resort.

Despite the efforts di ic ted at improving the nearby villages, it wasrecognised after the resort was opened that these villages required additionalplanning and encouragement for development. Thus, the 1988plan includessections on village upgrading plans and programmes.

DEVELOPMENT IMPLEMENT TIONrganisation and ResponsibiZities for ResortZmpkmentation

s indicated in the initial agreement between the govemment and the WorldBank, the Bali Tourism Development Corporation (BTDC) was established inNovember 1973as a governrnent-owned l i t e d iability corporation to developand manage the Nusa Dua resort project. The BTDC was responsible fordeveloping the major infrastructure, includiig the interna1 roads, drainage, watersupply and sewage disposal systems, common area landscaping and certaincommon-use facilities. The BTDC was also responsible for attracting hotelinvesunent, negotiating with interested hotel management groups, and leasinghotel sites. s part of its promotional activities, the corpora tion~repared nddistributed an investment booklet. The BTDC was also initialhr re s~ ons ibieordevelopment of the amenity core and the leasing of commercial facilities in thiscentre. It established its main office within the Nusa Dua complex and a branchoffice in Jakarta.



24/152

Operation of the potable water supply system has since been transferred tothe local govemment and, as was otiginaily planned, the electtical andtelecommunications operations are integrated into the island-wide systems andrun by the responsible agencies. Due to the difficulties in developing the amenitycore, that project site has been leased to a private company for development andoperation. The golf course development and operation, including a club houseand sports centre, is contracted to a private company that w also be developingthe condominium units referred to previously. The regional road improvementsthat were part of the project, but outside Nusa Dua, were developed by thecountry s highways department.

Much of the technical work (planning, engineeting, etc.) of the BTDC wascontracted to consultingfirms. Among the many technical advisers anached tothe BTDC during its first years of operation were a development adviser, whoassisted in promotional efforts to attract investors and carry out financia1negotiatiois, engineering, architectural and agricultural advisers. Zoningregulations and architectuml design guidelines were prepared for the resortdevelopment, based n large part on the recornmendations of the 1973resortplan.

The BTDC is currently organised under a Board of Supervisors or Directorsand a managing director, with two directors ne for development andoperations and the other for administration and finance. These two directors areresponsible respectively for operations and development and k a n c e and generaladministration, with various units and sections designated within these fourdivisions. n addition to the continuing development activities, the BTDC is nowresponsible for the fouowing operational functions:

Sewage collection and treaunent.Irrigation system (supplied from the treated sewage effluent and the well-field).Common area landscaping and maintenance of the two islet parks.Maintenance of the interna1 road system.Operation of the intemal shunle bus service.Street lighting.Beach maintenance and security.OvemU secutity of the resort s cornrnon areas.Fire protection for the resort.Emergency medical clinic (ieased to the ptivate sector).Hotel Bualu (a 50-room commercial hotel used s a tralliing hotel by theTourism Education and Training Centre).



25/152

In early 1991, the BTDC had 272 staff members includiig staff involved insecurity, maintenance and the Hotel Bualu. Based on its experience and successwith the Nusa Dua resort, the BTDC is currently expandiig its operations todevelop new resorts elsewhere in the country. It is particularly involved inManado in North Sulawesi and Biak in Irian Jaya, and has established some branchoffices to develop those resorts. The BTDC is also planning other resortselsewhere in the country. Although rather diierent from the Nusa Dua resort,they are being planned and developed as integrated complexes.

Resort euetopmetzt ProgrammdngAcquisition of land for the resort and infrastructure development wasprogrammed and costed in detail by the World Bank, with a constructionschedule incorporated into the 1973 Nusa Dua plan. The infrastructure wasinitiaily scheduled for completion by the end of 1976 and the resort scheduled tobe fulk operational by 1983. Land ;cquisition, which involved the purchase ofprivate landholdiigs at market value, generaiiy proceeded smoothly.

Since the land was relatively undeveloped, there was no issue aboutresettlement of existing residents. There were some, but not serious delaysexverienced in the development of the infrastructure, which was finallycokpleted by the late 1970s. However, there was a major delay in attracting thefirst hotel investors, despite promotional efforts by the BTDC and investmentincentives such as tax exemptions. Consequently, the first hotels were notopened until the mid-1980s. This initial difficulty n attracting investors wasattributed by the government to the rather slow growth of tourism in Indonesiaduring the late 1970s and early 1980s and the restrictive air policy of that period,which limited the number of international airlines serving Bali. Anothercontributos. factor may have been the usual reluctante of private investors to bepioneers in a new resort venture. Arnong the first investors were twogovernment companies TAerowisata, a subsidiary of the national airline(Garuda), and PTHI a government owned hotel corporation. The development ofClub Mditerrane in Nusa Dua in 1987 may have been helpful in demonstratinginternational investor contidence in the resort s viability.

With the opening of Indonesia to more international airlines, includingincreased di i c t flights to Bali, and the generally rapid growth of tourism to thecountry and Bali since the mid-1980s, hotel development in Nusa Dua hasprogressed rapidly and the resort is now virtually completed.

The Bali Tourism Development Board (BTDB), with the govemor as chairman anda technical staff includiig some international advisers, was also givenresponsibiiity from the outset for coordination of the Bali regional tourism plan.s an example, it camed out detailed land use plans for the Sanur and Kutatourism areas, in order to improve existing development patterns and guide



26/152

future growth, and plans for the first and some second stage tourist excursionroads identified in the 1971 regional tourism plan. The excursion road plans wereaimed particularly at preserving fertile agricultura1 land, open space areas andscenic views adjacent to the roads, along which the linear development of artsand handicraft shops and tourist restaurants was beginning. It was proposed thatinstead of linear road development, a clustering of these cornrnercial enterprisesadjacent to existing villages should be encouraged. Implementation of these planshas been mixed, with some control exercised on excursion road developmentbut apparently little implementation of the Sanur and Kuta plans.

The BTDB also coordinated aspects of the Nusa Dua resort development.Zoning regulations were written for the Nusa Dua resort and BTDB staff wereinvolved in the Nusa Dua Design Review Comrnittee activities. multi-facetedsociocuihml programme was undertaken. For Nusa Dua, this was directed atmonitoring the social impact of the construction phase of the resort on thenearby villagers, including educating the viagers about the project and how theycould benefit from it. In other tourism areas in Bali, the BTDB conducted a publicawareness programme. The BTDB also undertook surveys of tourist profiles andattitudes toward tourism development in Baii in order to provide a better basisfor the effective planning, development and management of tourism. Theseactivities have since been discontinued.

s mentioned previously, an agricultural development programme wasattached to the Nusa Dua project with an agricultural adviser assigned to theprogramme for a few years. This programme was designed to help local farmersirnprove their production and marketing of fmits and vegetables for use ininternational hotels and restaurants. A small demonstration farm was establishedin Bali with some progress on the production of more suitable food. Althoughvalid in concept, the programme was not highly successful overall, in partbecause the cite selected for the demonstration farm was not as suitable as itmight have been.

dwcatton and Tratndng o Resort mpZoyeesOne of the two national Tourism Education and Training Centres was located inNusa Dua, as already mentioned, because of the close access to several maiorhotels. This centre, organised to serve several of the provinces of East Indonesia,was designed in n attractive Balinese architectural style and opened in the late1970s. It was financed and is managed by the central government. The schoolinitiaiiy received international technical and some financial for equipment)assistance from the International Labour Organization @O). During its first yearsof operation, priority w s given to Banese who were to be trained to work nthe Nusa Dua resort, but the school now receives students from al1 the variousprovinces.

Since the original local students had very lirnited general educationalbackgrounds, special remedia1 education programmes were organised for themby the school to bnng them up to the entry acceptance requirements of the



27/152

school so that they could enroll in the regular tourism programmes. Many ofthe young villagers took advantage of this opportunity, completed theirtraining programmes, and are currently working in the resort. Some of thesehave since taken the school s advanced programmes and have now beenpromoted to supervisory and assistant manager leve1 positions in the resorthotels.

At the present time, the school offers a number of different certificate anddiploma programmes f up to two, three and even four years long t thecraft and supervisory levels in hotel and catering operations, tour and traveloperations and tourism management, as well as short refresher and specialcourses for existing tourism employees. The school currently handles up to 2,000students annually including short course participants. However, the school wasdesigned to handle only 1,000 students and enr oihent for regular students istherefore restricted. Since present capacity is limited, the government intends torelocate the school inland within the next year or so, and to lease the present siteto an investor for reson purposes. It is expected that payment for this site wi besufficient to finance the new school development.Al graduates of the schoolfind employment, and there is considerable competition for places at the school,with about 3,000 applicants each year for the 250 regular programme entryplaces available. The development of the new school will enable twice as manystudents to enroli every year.

C u w e n t Status of DevelopmentThe Nusa Dua resort is nearing completion. As indicated, the land was al1acquired during the early stage of the project, and both the interna1 and regionalinfrastructure, including access to the resort and in the nearby villages, wascompleted by the late 1970s. Since the mid-1980s, hotel development hasprogressed rapidly, as shown by Table 1.

U these hotels are of four or five star category. The convention centre, aseparate complex on the Bali Indah Hotel site, contains a main hall with seatingcapacity for 1,800, a medium-size hall, an auditorium, 10 meeting rooms, a 1,000-seat capacity dining hall and exhibition galleries. The total 5,100 existing andplanned hotel and other accommodation units exceeds the originally planned4,500 un ts in the fust and second stages of the resort plan. This is due to theaddition of condominiums and serviced apartments. ~bnsiderations being givento the development of another hotel but nothing is definite.

The first nine holes of the golf course are operational and the secondnine holes were due to open in 1991. The golf club house is underconstruction. Development of the amenity core commenced in 1990. This willcontain shops and offices as well as an amphitheatre for culturalperformances, scheduled to be completed in mid-1991. s already mentioned,the Tourism Education and Training Centre was opened in the late 1970s, aswas the BTDC office.



28/152

Table :Current st tus of hotel development in usa Dua

Hotel No. of rooms Status

lex)

Existinv AccommodationHotel Club Bualu traininghotel part of school compNusa Dua Beach HotelMelia Bali Sol 5

5 Bali 4 5club Med Niisa Dua 4

Nusa Indah HotelConvention CentreBaliGrana nyan norei fi u Contwo hotel lots)Sheraton Lagoon Nusa

BeachTotal existing on 9 lots)Planned Accommodation

Westin HotelPacific Island Club

asat 19l

Condominium vill s bythe golf course)Serviced apartments crinexisting hotels sites:

Total planned

TOTAL LL UNITS

Opened late 1970s

OpenecOpenecOpenec- - -55 m m s opened1987; 50-room

cxpansion plannedOpened 1990

Opened 1990

Opened 1991Opened in 1991

Site lease signedSite lease signedPlannec



29/152

Some three and four star category beach hotels have been developed or arebeing planned outside the resort project area but along the adjacent BenoaPeninsula. These do not come under the BTDC, although they are generallycompatible with the later stage recommendations of the 1973plan. They areconnected to the Denpasar water supply system in the same way as Nusa Dua.Discussions are also underway over the question of i i i g hese hotels to theNusa Dua sewerage system. Other hotels have been built, or are planned for theJibaran Beach area on the isthmus between the airport and Nusa Dua.

Socio-Econumtc and Env ronmentrrt Impacts f r as the economic impact of the resort development is concemed, precise

figures are not available. But it is likely that the pmjected generation of about6,000 jobs is close to being achieved ased on an approximate 1.5staff perhotel room, plus employees of the BTDC and golf course nd will be exceededwhen the resort is fully completed. signif~cant, unidentitiable number of jobshave also been created in the tourism supply sector for arts and crafts productionand sales.

It is unclear how much foreign exchange earnings and governmentrevenues in the form of taxes are generated by the resort, but estimates suggestprojected targetsw be met or even exceeded because of the hi h quality ofdevelopment and related hi h tourist expenditure pattems.

Within the resort, there appears to be little negative environmental or socio-cultural impact because of the well developed infrastructure and strict land useand design controls applied. However, beach erosion is taking place adjacent toone of the hotels, and a retaining wall has been built to control further erosion.This problem is probably the resuit of natural coastal processes because there hasbeen no disturbance of the Nusa Dua shoreline during the course of the resort sdevelopment.

It is unfortunate that the stretch of footpath in the common area along thebeach by one of the developed hotel sites has been removed, thus interruptingthe continuity of this pleasant public access way.

Some traffic congestion is being experienced on the access road,particularly near the resort entrance. It is expected that this wiil be rnitigatedonce the new local bypass roads are developed and if the main access road iswidened. The present system, whereby hotels operators are individuallyresponsible for disposal of their waste to local entrepreneurs, may be generatingsome waste disposal pmblems outside the resort. In addition, since land usecontrols were not strictly applied to the areas along the access to Nusa Dua, therehas been some linear commercial development with unattractive advertisingsigns, especially near the resort entrance.

The nearby villagers have benefited signicantfy from a socio-economicpoint of view as a resuit of the resort development, as was originally planned



30/152

through the various programmes already detailed. As mentioned, plans have beenprepared for further upgrading of the local village environment.

FIN NCING OF PL NNING ND DEVELOPMENTThe original regional plan was nanced by the UNDP and the centralgovernment. The financing of subsequent resort planning and infrastmctureengineering was the responsibility of the BTDC. It was partly funded by a WorldBank loan, although more recent resort planning has been financed from theBTDC's budget. The total infrastmcture costs including the regional roads wasabout US 37 mn, or close to the original estimate. Of the proposed World Bankloan of US 16mn nly US 14.3 mn was actually used. Of this, US 9 mn wasused by the government to capitalise the BTDC and the remainder allocated tothe highways department for regional road development. The balance of thefinancing was provided in local currency by the government through the BTDC.

Smce 1987, the BTDC has been operating a ta profit and, since 1989, haspaid a dividend to the government as asharehblder,-as well as paying corporatetaxes. The agreement with the government is that the BTDC does not need torepay its initial capitalisation (including the World Bank loan to the governmentwhich is repaying the loan), but will instead pay dividends and corporate taxes.Some of the profits of the BTDC are being used to finance BTDC resort projectselsewhere, as previously described.The primary source of revenue for the BTDC is from the leasing of hotel,amenity core, golf course and condominium development sites. The lease rentfor the hotels is based on the allowable number of rooms for each site specitiedin the 1973 plan and is established as being equitable for both developers and theBTDC. Lease rents are set for a 30-year period with renegotiation for extensionsat the end of that period. The cash flow of BTDC has been enhanced through thepayment in advance of the total 30-year lease rent by two hotel developers. Othersources of revenue are user fees paid for the sewage service provided to theHotel Club Bualu and other hotels.Hotel financing was arranged by the respective investors involved anddetails have not been fully disclosed. s already stated, one hotel is owned by a

government hotel corporation. The hotel fmanced and developed by PTAerowisata has been sold to a joint venture company set up by an Indonesiangroup and the Sultan of Bmnei. The Hiton hotel is totally owned by Indonesianinterests. The other hotels are jointly owned by Indonesian and internationalcompanies. The BTDC has a small interest in one of the hotels, as well as owningthe Hotel Club Bualu. The amenity core is leased to an Indonesian company andthe golf course operation and future condominium development are jointventures between Indonesian and international interests. There was nointernational agency fmancing involved in the development of hotels and othercommercial facilities.Various investment incentives including certain tax exemptions were andstiil are provided to the Nusa Dua investors and investors generally in Indonesia 5/.



31/152

Bali Hyatt Nuca D u aResort

Local Balinese food ondisplay



32/152

Nusa Du a footpathlinking the resort hotels

Local Balinesedancing Nusa ua

Nusa Dua golf course



33/152

The extent of these incentives has been gradually decreased through the years asit has become easier to attract project investments.

OVER LL N LU TION ND CONCLUSIONSResort and RegdonaZ ZanndngThe plan for the Nusa Dua resort has proved to be realistic and successful overall,pro li ig a high quality, environmen ly sensitive and functional resort thatmeets current market demands. The basic concept was maintained throughoutits implementation despite some modifications.

It should be noted that, although the priinary attractions of Bali are its richcultural heritage and scenic beauty, past experience among tourists on the islandhas shown that most prefer to stay n beach accommodation, spending part oftheir time on sightseeing tours and the remainder, relaxing on the beach oraround the hotel swimming pool and in recreational activities. This is theestablished pattern in the Sanur and Kuta resorts. Thus, the concept ofdeveloping a beach resort is valid even within the Bali context of culturaltourism. For tourists who wish to have more direct experience of village life,small scale accornmodation and other tourist facilities are available in some of theBalinese towns.

With respect to regional relationships, the regional transportationinfrastructure was suitably planned to ~rovideccess to the resort and from theresort to other parts of Bali, although it will require some further improvementsin the near future to alleviate growing traffic congestion, especially near theresort entrance. In the nearby villages, proper consideration was given to bothinfrastructure improvements and programmes to provide socio-economicbenefits to villagers. Plans are underway to further upgrade the environment ofthese villages.

Nusa Dua is seen by some observers as an exclusive resort designed onlyfor certain high-spending market segments. However, it should be recognisedthat, within the regional context of Bali, Nusa Dua is only one developmentamong a wide range of different types of tourist accommodation. Bali stillcaters to a diverse range of market segments. In fact, as has been mentioned, anumber of three and four star hotels are now being developed quite close toNusa Dua, thereby providing this immediate area with a greater variety oftourist facilities.

The resort was plamed within the frarnework of a regional tourism plan forBaliwhich has proved in concept, to be an appropriate one. Detailed planningfor other tourism areas was carried out s a result of this plan. With thedevelopment of Nusa Dua and the continued rapid growth of tourism in Bali, it isclear that the 1971 regional plan is now rather outdated and requires review andrevision. In addition, the rapid growth of tourism has resulted in some



34/152

development problems. Consequently, work on a new regional planning studyhas commenced, with assistance fmm UNDP Thisw result in a comprehensivetourism development plan and the formulation of a tourism managementprograme for Bali.

The Nusa Dua project was the first integrated resort to be developed inindonesia. Because of its environmental and financia1 success, it is seen as amodel by the government and, as previously stated, the integrated resort concepthas been adopted by the government for application in newly developingtourism regions elsewhere in the country.

evetopment ImptemetttatiortDespite the delays experienced in attracting hotel investment, the approachadopted for the Nusa Dua development seems to have been a valid one. Thedelay, it was recognised, was due largely to the inadequacy of international airaccess to the island; a more open skies policy has since been adopted.Modifications to the plans for implementation were relatively minor; contractingprivate companies for: the arnenity core, golf course development andmanagement and transfer of responsibility for a potable water supply to theDenpasar city water system.

The BTDC pubiic corporation approach to the development of theinfrastnicture, and management and maintenance of the resort's common areas,roads and sewage system, with leasing of hotels and other commercial sites tothe private sector has generally been successful. The BTDC has become aprofitable venture and wl probably continue to be viable. n addition to thefacilities whoiiy owned by indonesian private interests, the joint venture(iiternational and Indonesian) approach to f m c i n g c om er ci al development isconsistentwith overall national investment policy. Based on its experience withNusa Dua and the financia1 resources available, not to mention the governmentpolicy of developing integrated resorts elsewhere in the country, the BTDC isnow involved in developing resorts in other areas.

The planned regional road development and infrastruaure irnprovementsto nearby viiiages have been successfuUy completed, although it is recognisedthat road and viilage improvements must be continued. The social developmentand training programme has also been successful in generating socio-economicbenefits for the villagers. However, the demonstration farm and agricultura1programme concept from the original project id not come up toexpectations for various reasons.

The detailed planning for other tourism areas, prepared as part of theoriginal project programme, was not satisfactorily implemented, either, exceptfor some open space controls that were applied to the excursion roads. In fact,the relativeky uncontrolled development of tourism, especially of small-scaleenterprises, outside Nusa Dua is a cause of concem for the govemment andmany residents. new approach is required to ensure preservation of the



35/152

distinctive environmental character of Bali, without discouraging localentrepreneurship.

Concern is also being expressed by Baiinese about the perceived, andperhaps actual, loss of control over ownership of and employment in tourismenterprises to Indonesians from other parts of the country. With its dynamictourism sector, Bali is attraaing a lot of investment and an influx of Indonesians.It is hoped that the recently launched regional tourism planning and managementproject wii address these fundamental issues and generate some positiveproposals for the future development of tourism on the island.

ix&l . Bim P w r Snrisdk OaLuia .Pengeluuan d n PandansanWisatawan Mancanegara -1990.2. SCEi O. ali Tourism SNdy. 1971.3. Panfic ConsulranU,K K i e Niua Dua Area Dcvelopmenr Plan. September 1973.4.JCP, Inc and PiGim nca na Multiplan.Nusa Dw Arca TourismDevelopmcnt Feasibility S ~ d yf Phax l Dcvelopmenr. May 1988.nii s repon w s preceded by the repon: JCP. inc.

in associaon withJlBUapan T m l B m a u . Updatingthe Nwa Du Arn Tourism Dcvelopmenr Plan. January 1987.5. Indonesian Govemmenr lnvestmenrCoordlnatingBoard. in donah Brlef Gulde for Investors. April 1989.



36/152

hapter3POMUN L KE RESORT

KYONGJU REPUBLIC OF KOREBACKGROUNDTo~t t~stnn oreaT h e Republic of Korea offers a wide range of attractions linked to both itsdistinctive culture and history and its natural environment of scenic mountains,lakes and beaches. During the past two decades, international tourism hasdeveloped rapidly, with foreign visitor arrivals growing from 232,795 in 1971 toclose to 3mn in 1990 /. In addition, domestic tourism has become important,reflecting the country's rapid econornic development during the past severalyears, with increased disposable incomes and holiday time available to Koreansfor vacations. Korea's weil developed transportation system and the relativelyshort distances between urban and tourist areas facitates travel within thecountry by both domestic and international tourists.

Of the total international arrivals in 1990, 55 per cent were from Japandue to the proximity of the market and its historic links with Korea nd afurther 15 per cent were from other Asian countries, particularly Taiwan andHong Kong. North America, especially the USA, generated an 11.6 per centshare and Europe, 5 per cent. Some 12.5 per cent were overseas Koreans(living mainly in Japan and the USA) visiting their friends and relatives W R .According to purpose of visit in 1990, 58.4 per cent were on holiday, 13 percent traveing on business, 11.6 per cent on Vi , and the balance for otherprivate reasons.

The peak season for international tourism is May to October, althoughseasonality is not strongly marked. The average length of stay of internationaltouristswas 5.5 nights in 1990. About one third of tourists came on group toursand the rest were FITs (fully independent travellers). The vast majority of touriststo Korea arrive at Kimp'o international airport in Seoul, making that city theprirnary tourist gateway to the country. Average visitor expenditure per trip in1989 was US 1,304a lthough some 1.5mn Koreans travelled overseas in1990, there was (and has always been) a positive balance on the country'stourism account, with international tourist receipts (US 3.5 bn) exceedingexpenditure on travel abroad WS 3.1 bn). In 1989, the country had 335registered hotels with 37,148 rooms.

Government policy is for the continued development of both internationaland domestic tourism, and this sector has been given a relatively high priority innational development planning.



37/152

Tourism in he yongju AreuThe Pomun (previously spelt Bomun) Lake Resort is located near the city ofKyongju, 400-kmsoutheast of Seoul. Access from Seoul is by frequent expresstrain or bus (about four hours travel time), or by scheduled air service fromSeoul to either Pusan or Pohang, with completion of the journey by road. Thenational high-speed highway (expressway) network connects Kyongju to otherurban centres in the country. The Kyongju area offers perhaps the best knownand most interesting historic sites in Korea. Kyongju was the capital of the Silla(also spelled Shilla) Kingdom (57 BC to 935 AD), and numerous kings tombs(large circular mounds), Buddhist temples, a famous religious grotto and otherreligious and historic sites remain from that period. TumuliPark, for example,contains more than 20 of these tombs and much of the historic area is designatedas Kyongju National Park. Because of the outdoor nature of these sites, Kyongjuhas been t emed an open-air museum.

The tombs have been well preserved, and two of the excavated tombs havebeen developed with small interior museums. The temples, grotto and otherreligious and historic sites have been well maintained or restored, and theBuddhist sites attract many domestic and international pilgrims s well as generalinterest tourists. The weil developed Kyongju National Museum has a largenumber of Sia Kingdom artifacts s exhibits. A Silla Cultural Festival is heldevery year in October. The distinctive Sia style pottery is being authenticallyreproduced and is an imponant example of handicmfts on sale to tourists. Themodem city of Kyongju, with about 150 000inhabitants, is also an attraction fortourists who want to observe the bustle of a contemporary Korean provincialcity. Figure 4 is a tourist map of the Kyongju region, indicating the relationship ofPomun Lake Reson to the city of Kyongju and nearby site attractions.

Figure 4

7:mr


38/152


39/152

According to the World Bank appraisal, the Pomun Lake Resort wouid bedeveloped in its first stage for 3,000 hotel rooms on a site of 1,040 hectares. Theproject would include the provision of water, sewage and solid waste systems forthe resort and city of Kyongju, construction of a multi-purpose dam (DuckdongDam) and a smali irrigation system, provision of electricity andtelecommunications facilities, resort roads and street lighting, site preparationand common area landscaping, public facilities at the resort including a tourismcentre, an amenity core with shopping and restaurant facilities, a smaU marina,golf course and community facilities, constmction and/or realignment of accessroads to historic sites, and the provision of training facilities for hotel andrestaurant employees.

For water supply and sewage, the p rograme recommended the expansionof the Kyongju city water system to serve the resort and the development of asewage and solid waste system serving both the city and resort. There wouid alsobe improvements made to the rural water supply, environmental sanitation,electricity and streets for five existing vlages in the area, plus the developmentof an elemenrary school to serve these villages. The muiti-purpose dam wouid beconstructed upstream from the existing Pomun Lake (which was created by adam constmcted in 1921) to control flooding, stabilise the water leve1 in PomunLake and suppiy water for the project area, the City of Kyongju and the villages,and facilitate a small agricultura1 irrigation project.

The Bank's total estimated cost for the project's infrastructurewas US 50mn, with a foreign exchange content of US 21mn or 42 per cent of the total.Proposed Bank financing was for US 25 nwhich wouid cover the foreignexchange cost and provide US 4 mn for local cost financing. The remaining costswould be financed from the government budget. It was expected that privateinvestors would finance and construct the hotels and a certain number of othertourist facilities. In addition to the immediate project cost, the governmentfmanced the historic site preservation, the Kyongju National Museum and othertourist attractions in the region, as weU as regional infrastruchire like theairports' and national expressway network that serves Kyongju.

It was agreed that responsibility for developing the project wouid rest withfive government agencies. The Agricultud Development Corporation (ADC)would build the Duckdong Dam and related irrigation works. The Kyongju CityGovernment (KCG) wouid be responsible for constmction of the water supplyand sewage and solid waste disposal systems of both the city itself and the resort.The Korean Electric Company (KECO) would construct and operate theelectricity facilities of the project.'The Ministry of Communications MC) wouldinstali and operate the tel ec o~ un ic at io ns 'acilities. The Kyongju DevelopmentOffice (KDO) would be responsible for implementation of aU the remaininginfrastructure works included in the project.

After construction, the KCG would operate and maintain the dam, thewater supply, sewage and solid waste disposal systems, and ii the project roads.The ADC and the Farmers Land Improvement Associationm ,r anothersuitable organisation, would operate and maintain the imgation works. new



40/152

\ M U L C H E

- +,E N T ~HOOL -..

U N ~ J ~OURISM Pnum TBOMUN LAKE LAND USE PLAN

IAL HIGHWAYS----rnuvii4ClALHIGHWAY-PRWECT ROAOS9 O T ELs.>. . FUTURI

r U R E 8 H O L EViLLliGPARKS.

RWE,4 ~-IYERSCONTOUAS IN METER:

2HOTEL5

NGFACILITIESEAPARTAMENT


41/152

igure



42/152

entity, the Kyongju Tourism Agency KTA), would operate and maintain all publicareas within the resort and lease and/or seil sites and facilities to privateinvestors. The KTA was to be established not later than January 1 1975. Overallproject coordination would be provided by the Secretariat for ~conomic ffairsin the Office of the President of the Republic.

THE RESORT PL N ND REGION LCONSIDER TIONSResort oncept nd and UsePlanFollowing the World Bank appraisal and conceptual plan, detailed planning forthe resort was prepared in 1973. This called for eight hotel sites and 4,000 rooms

. revision to that plan was made in 1974, recommending that two of theproposed hotel sites be used for additional golf course development and reducingthe nurnber of rooms to 3,000. The present plan is sti for 3,000 rooms. Toreflect the increasing number of domestic tourists visiting this area, 1,000 roomshave been ailocated for Korean style accommodation with lower tariffs and theremaining 2,000 rooms designated for hotels of intemational standard. igure 5shows the original conceptual plan and igure 6 is a pictorial map illustrating thepresent plan, much of which has been developed.

The concept of the Pomun Lake Resort is that of an integrated, relativelyself-contained, medium density resort providing a variety of accommodation,recreation and anciary facilities. The resort is designed to cater to bothinternational and domestic tourists and serve as a base for exploration of thenearby historic, cultural and religious sites, as weii providing its own recreationand commercial facilities.

The land use plan shows six hotel sites, four of which are oriented to thelakeshore and lake views, one to a water channel and one, a hillsideaccommodation area where the Korean style inns are being developed and youthhostels re planned. condominium apartment area is located on the inland sideof the main resort road, as are the hotel school and associated training hotel. Theresort is focused on a centrally located amenity core that includes an integratedshopping complex with an amphitheatre for cultural performances, an aquarium,convention centre, large Korean style restaurant and small marina on the lakefront, post office, the Kyongju Tourism Agency office, and other communityfacilities. Fishing and boating facilities and activities are available on the lake.pagoda stnicture in the shopping complex and a large traditional water miilwheel near the amenity core provide visual foca1 points for the central area of theresort.

The 18hole and 36hole golf courses are situated in the northern part of theresort. Also in the northern area is a small themed family park. On a lakeshoresite south of the hotels is Doturak World Playground, an amusement park offeringa variety of rides and recreation facilities, and an expansion area for thedevelopment of a theme park. replica of a Silia style folk village s planned for a



43/152

site near the Korean inns. There is a petrol station and bus terminal on the mainaccess road.

Specific land use controls, development and design standards wereprepared and appiied to the resort9 hese include procedures for submission'and approval of plans, general land use, architectural and landscaping standardsand additional requirements for specific use areas. These standards function aszoning regulations for the resort, with each type of land use having its particulardevelopment standards.

Major hotels, for example, have a maximum allowable height of 45-m (12-15stories), maximum site coverage by buiidings of 20 per cent, and minirnumsetback from the lake shoreline of 10-m (although this setback is actually 12-14111for the existing hotels). Outdoor advertising sig is are prohibited and onlyidentification, legal and construction signs are ailowed. Exterior lighting is alsocontrolled.

Architectural design must include consideration of climatic conditions,traditional ar ch ite~ t ~r inci~l esuch as the Korean courtyard layout, andspecific characteristics of the site location. Overall site planning must giveattention to maintaining view comdors. No reflecting finishes on exterior wallsare permitted except for glass and hardware items and exterior colours ofbuiidiigs must be predominantly subtle and 'warm'. Landscapingprincipies to befoliowed are also specified. Al1 utility lines must be placed underground.

The resort site of more than 1,000 hectares is flat near the lake shore andhiy further inland. This site was barren and undeveloped at the time of itsacquisition for the resort development.

Inf~as tructure nd mpZoyee Howsdngii infrastructure was developed to international standards. Water supply is

provided by the Kyongju City system, which was upgraded as part of the resortproject, and receives its source of water from Toktong Lake, created byDuckdong am as part of the project. n addition, this lake provides irrigationwater for the resort. Pomun Lake is used for recreational purposes and providessome water supply for industrial purposes. Sewage collection and disposal arealso provided by the city, whose sewage system was developed as part of theresort project. The sewage treatment plant is located about 10-km from theresort. Electric power and telecommunications are provided by the pubiic utilityagencies for the region. Solid waste coilection and disposal are provided by thecity of Kyongju, with some segregation and recycling of material, and theremainder incinerated if possible or disposed of in sanitary land fa stormwater drainage system was part of the resort infrastructure plan and designed forthe northem side of Pomun Lake where the resort facilities are located. Thissystem involved a checkdam and sand basin to prevent sand flow into the lakeand a total of 1 -km of drainageways.



44/152

soriginally planned, the regional infrastructure includes access to theresort, improvements made to some roads linking with historic sites, and someinfrastructure improvements to five nearby villages, such as the development ofan elementary school, as well as improvements to the Kyongju city water supplyand sewage disposal systems.

No specific area was designated for major employee housing, but individualhotels provide some dormitory facilities for lower leve1 employees, while manyother employees find their own housing outside the resort, mostly in Kyongju.The hotels provide bus service for employees living in Kyongju.

Economk Impact nalysisThe World Bank appraisal included an economic anaiysis of the resort whichindicated that, when fully operational with 3,000 rooms, the resort wouldprovide employment for 5,400 people in the hotels and 1,500 employees in theother resort facilities. Indirect employment generated outside the resort couldamount to 10,000-15,000 obs. The economic rate of return of the resortdevelopment was estimated at 18.5 per cent. Net foreign exchange earningsgenerated by the resort were projected at US 66.4 mn per year from 1984onwards, once the resort was fully operational. Economic analyses conducted inother reports in the early 1970s suggested slightly different figures, but stillwithin the range of economic viability. report prepared in 1980 analysed thefinancia1 situation of the resort up to that time .

s has already been stated, much attention was devoted to planning regionalintegration of the resort. The resort, in turn, depends on the regional historical,cultural and religious sites for its primary support. The resort development wasviewed as only part lthough its role was seen as a major one- f the overalldevelopment planning of the Kyongju region. In addition to the regionalattractions, the city of Kyongju w s intended to be the service town for the resort,providiig much of the infmtructure and community services as weU as housingand services for the resort employees. Some regional infrastructure improvements(water supply and sewerage systems) were included for the city as weU as for thenearby villages; some road improvements were made to attraaion sites. In additionto infrastructure improvements to the nearby villages, the application of zoningreguiations to these villages was considered necessary in the plan, to controlexpansion of the viilages. The plan also included statements that these villagerscould obtain employment in the resort in the lower skied types of jobs.

naddition to the project designated regional improvements, thegovernment made major investments in preseming tourist attractions anddevelo~ingisitor facilities related to these sites, and in the development of the-Kyongju National Museum. As mentioned, some of the sites are in the KyongjuNational ark This reflects the fact that Kyongiu is viewed as one of the most-important historic places in the country, and should be conserved as a major



45/152

element of th e national cultural heritage as well as to attract tourists to Kyongju.The national highway network development also provided good access toKyongju by routing an expressway from Seoul to Pusan through Kyongju.

DEVELOPMENT IMPLEMENT TIONrganisation an d Responsibilities for Resort a n dRegional Pla n ZmpZementation

The Kyongju Development Office, an extension office of the Ministry ofConstmction, was established for the purpose of implementing the physicaldevelopment of the immediate resort area development, and the KyongjuTourism Agency was set up to develop and manage the resort. The variousagencies' involvement in the major project components was as follows:

Agricultura1 Development Corporation (ADC): To construct and equipDuckdong Darn with spillway and reservoir outlet works to Pomun Lake;constmct and equip an irrigation system at the Bulguk area with reservoiroutlet works, canals, flumes, conduits, tunnels and a pumping station; and landconsolidation work at the Bulguk area.Kyongju City Government (KCG): To construct and provide expansion of thewater supply for the City of Kyongju with a new water pump station and otherimprovements; instali a new water treatment plant for the city; constmct andequip a sewage system for the city with a sewage coilection network andtreatment system; construct and equip Pomun Lake resort with a water supplysystem, including a water treatment plant and intake at Duckdong Lake; instaU asewage system for the resort; provide tmcks for the collection of solid waste inthe city and the resort; and provide water supply systems and environmentalsanitation for the five nearby villages.Korean Electric Company (XECO): Constmct and insta an electrical supplysystem for the resort, with undergrounding of lines, and to the five nearby villages.Kyongju Development Office0 0 nd Kyongju Tourism Agency (KTA): Theprovision of a tourism infrastmcture and facilities in the resort and nearbyvillages, including a storm water drainage network, environmental sanitation ofthe lake basin, earthworks and waterworks along the Shin Pyong River (in t heresort area), the amenity and service core, an l hole golf course and clubhouse, landscaping of the resort comrnon area, and facilities n the nearbyvillages; constmction of a street network of about 12-km within the resort areaand the street lighting system; constmction and equipping of a hotel schoolwith facilities for about 250-300 students and a 30-room training hotel(expanded from 30 to 50 rooms in 1990); constmction of four roads (includingbridges) to provide access to historic monuments and scenic sites;constmction of four roads (including bridges) t o provide access to the resort;and relocation of three roads that would be affected by the DuckdongReservoir development.



46/152

Ministry of Comunications (MOC): Const-uction and equipping oftelecommunications facilities for the resort comprising telephone, telegraph,telex and fax, and subscribers trunk diang facilities.

In addition, the Ministry of Culture is responsible for conservation andmaintenance of the various historic and cultural sites in the region.

The KTA was estabiished in August 1975 by the Korean National TourismCorporation (KNTC) to manage aspects of the resort under the managementof other agencies. The responsibilities of the KTA now include:

Attracting private sector investment for comercial facilities and conductingnegotiations with private investors.Management of the amenity core facilities, including the shopping complex andconvention centre and several community facilities.Management and maintenance of common area landscaping and amenityfacilities.Management of the 18hole golf course and club house.Maintenance of the resort streets and street lighting.Tourist promotion.

The landscaping operations have proved to be quite successful and, basedon its accumulated experience at Pomun Lake, the KTA is now providiiglandscaping se dces to other places in the country. With the development ofPomun Lake now scheduled to be virtually completed in the near future, the KTAhas become involved in the planning and future development of a new marineresort at Kampo o on the coast east of Kyongju. That resort wi provideadditional facilities for tourists and complement the attractions of the Kyongjuarea and Pomun Lake with marine recreation facilities. Kampo o is also plannedto include a golf course.

Throughout the development and management of the project, closecoordination has been maintained between the maior agencies involved. These arethe Ministry of Transportation (which includes the Tourism Bureau), KNTC, KTA,the provincial government and Kyongju municipal government. The TourismBureau is responsible for the national leve1 policy and planning of tourism and theKNTC is the tourism development and marketing ann of central government. ThePomun iake Resort management agency of the KTA is organised into eightdeparunents and 14 sections. In early 1991, it had a staff of 129.

Resort eveZopmerct ProgrammZmgDevelopment programmingw s specified in the 1973 Bomun Lake TourismDevelopment Plan. In agreement with the World Bank, the resort development

Monday,Ju

Documents

An Integrated Approach to Resort Development