REVISED - Tourism Policy - Position Paper - 11Feb2013gg

7/28/2019 REVISED - Tourism Policy - Position Paper - 11Feb2013gg

http://slidepdf.com/reader/full/revised-tourism-policy-position-paper-11feb2013gg 1/43

Position Paper – Developing Tourism Policy for KP Page 1 | 43

Position Paper – Developing Tourism Policy for KP

DRAFT

January, 2013






Contract No.:

Task Order No.

Contractor Name: Chemonics International, Inc.

USAID Technical Office: Office of Economic Opportunities

USAID Pakistan

Date of Report: November, 2012

Document Title: Position Paper – Developing Tourism Policy for

KP

Author’s Name: USAID Pakistan

Activity Title and Number:

Work Plan Action ID number:

The views expressed in this publication do not necessarily reflect the views of the UnitedStates Agency for International Development, the United States Government orChemonics International Inc.




Data Page

Name of Component: Business Enabling

Environment

Author: USAID Pakistan

Practice Area: BEE

Tourism, policy Khyber Pakhtunkhwa, private sector,economic growth

Abstract

This report presents the position paper for developing tourism policy for KP,identifying key issues that need to be addressed in the proposed policy and

initiates the discussion around these issues.




Table of Contents

DATA PAGE 4

ABSTRACT 5

LIST OF FIGURES 6

ACKNOWLEDGEMENTS 8

EXECUTIVE SUMMARY 9

1. BACKGROUND AND CONTEXT 10

2. EXISTING AND PREVIOUS POLICIES AND PLANS 15

2.1 TOURISM POLICIES AND PLANS 15 2.2 KP’S COMPREHENSIVE DEVELOPMENT STRATEGY 2010-17 16

2.3 ECONOMIC GROWTH STRATEGY OF KP 18

2.4 TOURISM VISION DOCUMENT OF KP 18

2.5 SWOT ANALYSIS 20

2.6 REVIEW OF TOURISM LEGAL FRAMEWORK

LICENSING/REGISTRATION AND REGULATION OF SERVICE PROVIDERS IN THE

21

TOURISM INDUSTRY 21

LAWS AFFECTING ENVIRONMENT AND HERITAGE PROTECTION 23

POLICY MAKING AND FACILITATION 24

REFORM RECOMMENDATIONS 24

3. KEY ISSUES/CHALLENGES FOR KP TOURISM SECTOR 26

3.1 CROSS-CUTTING ISSUES 27

3.2 SECTOR-SPECIFIC ISSUES 30

4. NEED FOR TOURISM POLICY – SOME KEY ISSUES 36

APPENDIX A - LIST OF PERSONS CONSULTED 40

APPENDIX B - DOCUMENTS REVIEWED 43

List of FiguresFigure 1: Tourism Receipts and Exports ............................................................................. 10

Figure 2: Domestic Tourism Volume 2009 ......................................................................... 11

Figure 3: Foreign Tourism in Pakistan ................................................................................. 11




Figure 4: Origin-wise Volume of Foreign Tourists........................................................... 12

Figure 6: Challenges Impeding Growth of Tourism Sector in KP ...............................27

Figure 7: Developing Tourism Policy for KP ...................................................................... 36




ACKNOWLEDGEMENTS

This position paper has been developed through support from USAID and

presents findings evolved out of extensive consultations with stakeholders frompublic and private sectors of KP from tourism and other allied sectors. Thedocument also extensively relies on the vision document for tourism sectordeveloped by USAID, besides an extensive literature review of various relevant documents. Section 1 covering background and context has been mostlycaptured from the Vision Document. The complete list of documents consulted isalso appended at the end. A number of stakeholders have provided usefulcomments to develop this position paper. The list of all persons consulted is

appended at the end (Appendix A), whereas the key highlights of variousstakeholder consultations have been compiled separately and available withFIRMS. The FIRMS team members, especially the BEE and Tourism Specialist

also gave extensive input to the team of consultants.




EXECUTIVE SUMMARY

Tourism sector of Pakistan in general, and KP in particular, has a high potentialto contribute in the economic development of the country. The tourism sector inKP has been facing a host of challenges that have been impeding growth of the

sector in KP. A thorough understanding of these constraints is required todevelop strategies to address these bottlenecks. Some of these challenges arecross-cutting, affecting the overall economy such as the sluggish economicgrowth, unclear policy and institutional regime in the wake of 18 th constitutional

amendment, poor law and order situation and low public sector capacity tofacilitate and regulate private sector. On the other hand, there are also some

serious sector-specific issues affecting tourism sector such as limited availabilityof information to monitor travel and tourism trends preventing planning; lowquality of workforce; low level of private investments; absence of standards;poor infrastructure; limited and sub-optimal marketing activities, etc. currentlythe Govt. of KP does not have a clearly articulated formal tourism policy.However, considering that the tourism sector requires coordinated efforts by a

number of departments and agencies such as environment, wild life, forestry,etc. besides the Tourism Department itself, along with TCKP, the need for havingsuch a policy is critical. Moreover a well laid out tourism policy woulddemonstrate long-term commitment of government in the sector and would

form the basis for shared understanding of and synergized actions andcoordinated planning by different stakeholders.

The proposed policy must focus on bringing clarity in government’s role at

various levels, in the wake of 18th constitutional amendment and shoulddelineate clearly the role of government vis-à-vis the private sector. Ideally thegovernment should adopt the role of a regulator as well as that of the facilitator,whereas the private sector should come ahead for service provision. The policymust also include a well laid out institutional structure to implement the policyto supplement TCKP’s capacity. While there is a need to provide incentives to

private sector to invest, such a structure should take into account the cost

implications of these incentives and should evaluate the value for moneyconsiderations. The incentives should also be closely tied with some well laid out policy considerations. The policy framework should be based on and linked witha clear resource framework, where the government can highlight the extent of its

contribution through various means/forms. In the absence of sufficient resources, the government may consider mobilizing additional resourcesthrough private participation, commercial lending or donors’ assistance. Last but

not the least, the policy must focus on sustainable tourism development,

capitalizing on country’s diverse geography and opportunities for ecotourism

development, community tourism and research.







1. Background and Context1

The tourism sector2 has gained significant importance over the past few decadesall over the world. Pakistan in general and KP in particular, blessed withimmense tourism potential, have also been endeavoring to fully capitalize on this

potential despite the security challenges faced by the country. While the provinceof Khyber Pakhtunkhwa boasts having three fourth of the country’s tourism

assets, with sites representing archeological, cultural, historical and religious

significance and attractive natural and scenic beauty, the province has also beenfacing severe conflict and security challenges. This calls for a renewed effort ongovernment’s part to come up with innovative solutions to promote tourism in

the province and facilitate investment in the sector.

Tourism Sector in Pakistan - Tourism sector of Pakistan in general, and KP in particular, has a

high potential to contribute in the economic

development of the country. During the year

2008-09, total share of tourismreceipts in the GNP was only 0.3%;

while its share in exports was only1.2%.

Source: State Bank of Pakistan

Figure 1: Tourism Receipts and Exports

Domestic Tourism in Pakistan

In Pakistan, total number of domestic tourists during the year 2009 was 46.07

million.3

About half of these tourists were the people who travelled to meet theirsocial obligations (friends, relatives, etc.). About 14% travelled for recreationpurpose. Other important categories were of the people who travelled for

business, health or religious reasons.

1 Much of the content is this section has been taken from Tourism Vision Document developed by USAID.2 The World Tourism Organization defines tourists as ‘people who travel to and stay in places outside their usual

environment for more than twenty-four (24) hours and not more than one consecutive year for leisure, businessand other purposes not related to the exercise of an activity remunerated from within the place visited’.3 Figure based on Domestic Tourism Survey – 2000 by Ministry of Tourism

Year Tourism Receipts

2006-07 PKR 16,906 Million

2007-08 PKR 16,486 Million

2008-09 PKR 17,392 Million




Figure 2: Domestic Tourism Volume 2009

International Toruism in Pakistan

In 2009, on a global basis, there were 880 million international tourists;compared to a figure of 920 million during the previous year. Total number of foreign tourists coming to Pakistan in 2009 were 0.873 million; compared to a

figure of 0.557 million in the year 2000. Pakistan’s share of the global tourism

market in 2009 was only 0.09%; which cannot be termed satisfactory. In SouthAsia, Pakistan’s share from amongst the total 10 million foreign tourists was

8.7%; compared to India’s share of 50%.

Figure 4: Origin-wise Volume of Foreign Tourists

Holiday/

Recreation 14.7 %

VFR 56.0 %

Business % 21.4

Others % 7.9

Purpose wise Arrival of Foreign Tourists Source: Ministry of Tourism ) (

0 100 200 300 400 500 600 700 800 900

1,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

557 500 498 501

648 798

898 840 823 873

Pakistan Foriegn Tourists Arrival Trend Source: Ministry of Toruism, via Ministry of Interior ) (

Figure 3 : Foreign Tourism in Pakistan




Majority of the foreign tourists come to Pakistan from Europe. In 2009, 44% of the total arrivals into Pakistan were from Europe; major share of which wasclaimed by overseas Pakistanis coming from United Kingdom. South Asia was thesecond largest origin for international tourists coming to Pakistan, accounting for

21% of the total. Of these tourists, a major share is contributed by the Sikhscoming from India for visiting their holy places.

Toruism in KP

KP is a unique province of Pakistan where all the types of tourism attractionsexist. These include tourism sites with natural, scenic beauty, sites with uniquehistorical and/or religious significance, sites foe eco-tourism, winter tourism,shopping, cuisines, sports and festivals. No other province of Pakistan can claimto have such diversity of Tourism assets. Some more popular tourist locations inKP include Swat Valley, Kaghan Valley, Chitral Valley, Dir Valley, Abbottabad and

Galliat, Peshawar and Khyber Pass and surroundings.

As per some estimates4, the total number of domestic tourists visiting KhyberPakhtunkhwa in a year is about 8.8 million; which account for about 19% shareof the total national domestic tourist traffic. A higher share of Khyber

Pakhtunkhwa in domestic tourism compared to its share in population is a clearindicator of the competitive edge the province possesses over otherprovinces/regions of the country. On the other hand, total number of foreigntourists arriving in Khyber Pakhtunkhwa in 2009 was 47,900; which translatedinto 5.6% share of the national foreign tourist traffic.

Tourism Institutional Structure at KP

In KP, Tourism Corporation Khyber Pakhtunkhwa (TCKP) and the Department of Tourists Services (DTS) are two major entities responsible for tourismorganisation and management. In addition, Pak Austrian Institute of Tourism andHotel Management (PAITHM) also exists in the province which is responsible forproducing skilled human resources in the hospitality sector. All theseorganisations are collectively working under the Department of Sports, Tourism,

Youth Affairs, Archaeology & Museum. A delegated Secretary performs theresponsibility of an official in-charge of the Department. After the devolution it

4 Figures for 2009; KP Tourism Vision Document




has been presumed that PTDC’s motels and asserts in KP will be handed over tothe same Secretariat. In order to compete in both the domestic and internationalmarkets and also to efficiently perform the newly assigned responsibilities, it isrequired that both TCKP and DTS should restructure their originationsaccordingly.

Figure 5: Organizational Structure of Department of Sports, Tourism, Youth Affairs, Archaeology & Museum

In order to promote the tourism potentials of Khyber Pakhtunkhwa, the TourismCorporation Khyber Pakhtunkhwa (TCKP) was established as public limited

company in 1991. TCKP is governed by Board of Directors, where the provincialtourism minister serves as its chairman while the relevant secretaries performthe responsibilities of the directors. It is headed by a Managing Director as it chief executive. The main responsibilities of the Corporation are:

Promotion of tourism by exploiting the potential;

Produce publicity and promotional material for distribution at home and abroad;

Develop packages to attract domestic and international tourist by involvingprivate sector;

Organize tourism fairs at home and attend international tourism fairs tointroduce the tourist product of KP;

Build hotels and motels, where private sector is shy to invest;

Monitor and manage the tourism activities;

Protect the tourism assets by bringing the awareness in general public by holdingawareness campaigns;

Play the role of catalyst by providing level playing field for the private sector




Figure 6: Organizational Structure of TCKP

Department of Tourist Services (DTS)

In KP, the office of Department of Tourist Services (DTS) was established byFederal Government in 1988, however, in March, 2011 after the devolution thisDepartment came under the administrative control of government of KhyberPakhtunkhwa. The main role of the Department is to provide measures forcontrolling and regulating the standard of service and amenities for tourists inHotels, Motels, Resorts and Restaurants.

The Department of Tourists Services has a mandate to implements the following threeacts.

1. The Pakistan Hotel and Restaurants Act 1976 & Rules 1977

2. The Travel Agencies Act 1976 & Rules 1977

3. The Pakistan Tourist Guides Act, 1976 and Rules, 1977




Figure 7: Organizational Structure of DTS

Both the organization structure and the Acts implemented by DTS equallyrequire drastic amendments. The number of skilled human resources in theDepartment should be increased on priority. It is also important to improve the

existing rating system of hotels and restaurants. In addition, standards specifiedfor Tourist Guides should be amended and properly categorized. It is alsorecommended that an individual entity should be established within theDepartment for regular evaluation of the tourists’ guides and the concernedtraining providers.

2. Existing and Previous Policies and Plans

2.1 Tourism Policies and Plans

In Pakistan, the available literature on tourism planning and management revealsthat the country’s first master plan was conceived in 1967. The plan recognized

environmental issues in general terms, however, it did not emphasizeenvironmental conservation, urbanization and landscape preservation.Resultantly, hotels and tourists resorts emerged close to natural attractions andarchaeological monuments. From 1967 till the formulation of National TourismPolicy of 1990 some planning attempts were made for isolated projects such asUNESCO’ Master Plan (1972) for the Preservation of Mohenjo Daro and

compilation of tourists’ statistics in 1971 etc., however no comprehensive and

structured effort was undertaken to promote tourism in the country, In order tocontrol pollution in mountainous areas some environmental planning measures

were also introduced in 1983 and in 1988 by making mountaineering andtrekking expeditions responsible for leaving camping sites clean of garbage andmaking contribution of $200 for clean -up operation. The Government of Pakistan

presented its’ first formal National Tourism Policy in 1990, however, due to some

fundamental issues this Policy has rarely been implemented. The major reasonsof this failure in implementation included absence of stakeholder involvement,poorly defined responsibilities of various public and private sector actors,financial limitations, institutional constraints and low capacity. In 2010, the

Tourism Ministry drafted a relatively more comprehensive National TourismPolicy. The policy identified challenges and constraints for tourism industry in

Pakistan, followed by marketing and developmental strategies. The marketingstrategy emphasized on public private partnership, diversification of tourism

A s s i s t a n t C o n t r o l l e r ( B - 1 7 ) P e s h a w a r

I n s p e c t o r ( B - 1 6 ) I n s p e c t o r H o t e l s & R e s t a u r a n t s

I n s p e c t o r ( B - 1 6 ) I n s p e c t o r T r a v e l A g e n c i e s

S u p e r i n t e n d e n t ( B S - 1 6 )




products, information technologies, target markets for selling specific products,whilst, the developmental strategy emphasized the role of public (Federal &Provincial governments) and private sectors in tourism development. It alsoproposed PPP opportunities in tourism sector of the Country. Furthermore, thedraft policy also recognized the importance of closer international cooperation,

joint marketing using international organizations, multi-country and bilateralrelations for tourism development.

Although, the draft tourism policy, 2010 is comparatively more comprehensivethan national tourism policy, 1990, however, it still paid negligible attention to

some issues of grave concern like:

The three major acts covering hotels, travel agents, and tourist guide, whichall are outdated, were presented as part of the draft policy without anyappreciable changes for tackling the current needs of the industry.

PPP opportunities in Pakistan’s tourism sector were presented moregenerically without specifying areas for partnership and relevant investment

in each province.

Like tourism policy, 1990, the action plan of the draft tourism policy poorly defined

stakeholders’ responsibilities.

For the sake of policies integration between provinces and the Federation“Pakistan National Tourism Council”, actually proposed in national tourism

policy, 1990, was reactivated without any structural or functional changes for

the sake of its more proactive role as compared to its dormant status in thepast.

Some of the unrealistic concessions and incentives mentioned in tourismpolicy, 1990 were repeated in the draft policy, which needs carefulexamination for on ground implementation.

The draft policy was presumed for achieving its strategic goals within thenext 10 years, but keeping in view the present political turmoil and financialinstability of the country the proposed time frame is still a debatable issue.

In order to maintain skilled staff complement in the tourism sector,Tourism Master Plan (2000) estimated an average of 3000 additional staff need to be upgraded each year. At present the total annual skilled staff output

of the tourism training institutes is approximately 515, which is clearly

insufficient to cope with the demand of the tourism industry. Although, thedraft tourism policy has only highlighted the training need issue of the sector,however, it failed to present a robust action plan to overcome this

shortcoming of the industry.

Although, the draft policy exhibited glimpses of community importance in

tourism promotion, however, it neither included their exact views in theformulation of the policy nor it describe their future role in sustainabletourism development of the country.

2.2 KP’s Comprehensive Development Strategy 2010-17

The Comprehensive Development Strategy (CDS) of KP presents the provincialgovernment’s vision and strategic direction and provides a comprehensive




development plan. The CDS also presents short, medium and long term plans forvarious sectors. CDS presented an overarching development strategy covering allareas with priority policy and programs ranging from public finance, governance,social development, food policy, Agriculture employment, Irrigation, Power andIndustrial development. CDS also extended the objectives laid out under the

national Poverty Reduction Strategy Paper (II). The CDS also recognized tourismas province’s key strength and important means of livelihood to substantial

percentage of population in Swat, Chitral, Abbottabad and Mansehra. The keypriorities for tourism sector as listed in CDS are given below.

Tourism Sector Priorities and Allocations

Institutional strengthening and capacity building of the Department, including STC (now TCKP)– PKR 450 Million;

Organization of sport events: national, provincial and regional events, including promotionof traditional sports and games – PKR 200Million;

Construction of cultural exhibition halls at divisional level and art display galleries – PKR 330Million;

Holding of cultural shows and activities, and display of handicrafts – PKR 50 Million;

Assistance to drama artists, poets, musicians, artists, printing publication of literary and artisticworks and allied activities – PKR 135 Million;

Installation of chairlifts in key tourist destinations – PKR 3,500 Million;

Commissioning and leasing of GoKP guest houses – PKR 450 Million;

Holding of festivals and tourism promotion events – PKR 600 Million;

Creation of transport fleet – PKR 470 Million;

Creation of tourists’ hostels and centers – PKR320 Million;

Development of publicity and promotional material – PKR 325 Million;

Operationalization and transfer of federal government properties in

KhyberPakhtunkhwa to STC (now TCKP) – PKR 400 Million;

Promotion of Khyber Pakhtunkhwa tourism abroad – PKR 178 Million;

Exploring virgin tourist sites in Khyber Pakhtunkhwa – PKR 125 Million;

Creation of water and air transportation – PKR 1,000 Million;

Subsidies in various heads for the private sector from the tourism and hotel sector, thus making

tourism an income-generating activity for the masses – PKR 320 Million;

Procurement of caravans/mobile homes and log cabins for installation and utilization at tourist sites – PKR 800 Million;

Skiing facilities and water sports in feasible areas – PKR 1,000 Million;

Construction of youth development centers and hostels, and the purchase of land at divisionallevel – PKR 200 Million;

Cash awards to talented youth, and youth exchange programmes – PKR 70 Million;

Conservation and rehabilitation of historical sites in Khyber Pakhtunkhwa – PKR 400 Million;

Upgrading and maintenance of existing museums, and the construction of new museums –

PKR 80 Million;




Promotion of cultural heritage, domestically and abroad – PKR 70 Million; and

Exploration and excavation and documentation of archeological sites, and publication of reports.– PKR 28 Million

SOURCE: Comprehensive Development Strategy 2010-17

2.3 Economic Growth Strategy of KP

Economic Growth Strategy of KP reinforced the key priorities of CDS andprovided a framework to stimulate growth in potential ‘growth/priority sectors’

of the economy through enhanced public investments and complementarysectoral policies. Tourism was one of the priority sectors highlighted in thisstrategy.

The Economic Growth strategy recognized that abundance of natural tourismpotential in the province can potentially transform the sector into a major driverof growth if security situation and internal conflicts settle down. The strategyalso highlighted that in areas with relatively better law and order situation,

domestic tourism can be promoted to provide sources of employment andincome for the population of these areas. In order to achieve these objectives, thestrategy considers private sector as taking the lead role through investments,while TCKP contributing through monitoring and regulation. The strategy alsorecognized the limitations in terms of absence of data availability on tourist

arrivals, spending and visits or assets to facilitate the priorities in different typesof tourism such as ecotourism, mountain climbing, cultural tourism etc. Thestrategy also envisaged creation of a marketing department at TCKP for tourismpromotion.

2.4 Tourism Vision Document of KPThe tourism vision document recently developed with the technical assistance of USAID Firms Project presented a long term approach in the form of a VisionStatement which aimed to develop an international competitive tourism sectorwhich can act as the engine of economic growth for Khyber Pakhtunkhwa. The

document based its strategy on the key pillars of institutional & regulatoryreforms, infrastructure development, service quality assurance, human resourcedevelopment, aggressive marketing, investment promotion and environmentalconservation. The major recommendations of the vision document are outlined

below:

Institutional/Regulatory Reforms

Elevate Tourism to a high priority economic growth sector in the provincialgovernment.

Establish a Policy Think Tank on Tourism for broad based intellectual input onpolicy and promotion of Tourism.

Facilitate improvement of security environment in Swat and other tourist places.

Transfer the control of tourism related commercial ventures to private sector.

Provide a sustainable framework for Public Private Partnership in KP.




Strengthen KP Tourism Corporation as a provincial regulator and facilitator.Restructure PTDC as a sector development company for national branding andinternational promotion.

Facilitate prompt issuance of Pakistani visa to aspiring visitors abroad. Ensureenvironmental conservation of tourism assets.

Standards & Certifications

Upgrade the outdated and obsolete laws governing the tourism sector.

Entrust the enforcement of standards and certifications to TCKP.

Enforce standards and certifications for hotels, tourist guides, transporters andtour operators.

Marketing & Promotion

Focus on domestic tourists in the first phase of strategy as a thrust area to revivethe tourism Sector.

Focus on Buddhist & adventure tourists in the international tourist segment torevitalize the flow of tourists with new vigor and marketing.

Plan and execute the marketing the “Brand of Pakistan” and KP with target tourist

segments as part of a master plan.

Develop interesting and multilingual tourism information and promotion material

and ensure its wide distribution and regular update.Develop a KP Tourism portal by TCKP as an interactive tool for promotion andconnectivity.

Promote and develop public private partnerships for tourism marketing.

Launch mass media campaign to promote tourism in domestic and internationalmarkets.

Involve PIA and Pakistan Railways for an integrated role in tourism promotion.

Organize cultural and sports events for tourism promotion.

Mobilize community for strengthening tourist friendly environment.Enhance participation in international tourism fairs and events.

Tourism Infrastructure Development

Improve/build access roads to tourist towns and tourist attraction places.

Improve electricity supply in tourist areas.

Improve transportation facilities to tourist places.

Make Saidu Sharif airport operational.

Provide/improve support for rehabilitation of tourism infrastructure.

Develop new tourist sites and attractions.Strengthen the institution of museums for tourism promotion in KP.




Develop archives of tourism assets.

Improve tourist facilitation services.

Human Resource Development

Undertake a holistic view and develop baseline data for human resource development needs in the sector.

Strengthen and upgrade the curriculum and facilities of the existing Tourism training

institutes.

Access to Finance

Improve the availability of commercial lending through a participatory approach by

SBP and commercial banks.Ensure tourism specific prudential regulations and competitive cost of financing.

Facilitate the existing and new investors through investment guidance andregulatory support.

Mobilize donor community to participate in tourism development projects in theprovince.

2.5 SWOT Analysis

The following SWOT analysis lists down the overall situation of tourism sector in KP.

SWOT Analysis of Tourism Sector of KP

Strengths Weaknesses




Large number of Natural andcultural tourism assets

Potential for adventure, culture

and nature tourism Sites

for winter tourism

Competitive rates

Extensive presence of hotel clusters

Unique Buddha tourism sites forreligious tourism

Law and order situation

Weak government capacityInsufficient public and privateinvestments

Dilapidated tourism infrastructure(roads, bridges, electricity)

Short tourist season inmountainous areas

Substandard tourist facilitationservices

Hesitation of private sector toinvest

High cost of doing business

Lack of focused and proper

marketingLow quality of workforce

Opportunities Threats

Greater provincial autonomy in the

wake of 18th amendment and KP

Government willingness

Increase of law and order crisis

Natural disaster-prone area

Limited availability of funds

to priorities tourism sector

Untapped tourism potential

Vast pool of domestic tourists

Focus on reconstruction

through donors support

Low public sector capacity andchange in leadership of

stakeholder departmentsChange of political leadership

and shifting of priorities

2.6 Review of Tourism Legal Framework

This section looks at the legal and regulatory framework of the Tourism sector with aview to:

a) Identify deficiencies in the legal framework

b) Whether the interest of the tourist is adequately protected by the legalframework

c) Whether there are any legal barriers to robust and effective enforcement.

Licensing/Registration and Regulation of Service Providers in the tourism Industry




The Federal government regulated hotels, travel agencies and tourist guidesprior to the 18th amendment. However all these subjects are now devolved/orbelong to the provincial governments except carriage of passengers by air or sea,which continues to be a federal subject 5.

Licensing/registration and regulatory requirements of service providers in the TourismIndustry are as follows:

Hotel and Restaurant Act, 1976

The Hotel and Restaurant Act, 1976 regulates the standards of service andamenities for tourists in hotels and restaurants. The Act had been passed byParliament in pursuance of Article 144, which allows the Federation to legislateon a subject when so requested by two or more provinces. The Act prescribes astar system of classification of hotels. The system allows the Controller to grant

up to five stars to hotels depending on their services and comfort. The Act also

allows the Controller to fix the maximum number of guests, which may beaccommodated in each room and/or unit of accommodation. He may also fixrates for board lodging and other charges6.

The Act provides for the offices of Controller, Deputy Controller and Assistant Controller to administer the Act 7. The Act also establishes a Hotel andRestaurants Committee to advise the Federal Government in relation to matters

pertaining to the Act. The Act requires the following compliances:

i) Registration related compliances - Section 5(2) requires Hotels andrestaurants to render a certificate of medical fitness of staff prior to

registration. It also requires hotels and restaurants to comply with the

requisite standards of health and comfort and building safety prior toobtaining registration.

ii) Information related compliances- Section 8(2)(e) requires owners to enterthe names of guests in a specified register. Section 9 new owners to report change of ownership etc

Travel Agencies Act, 1976 and Rules, 1977

The Travel Agencies Act regulates both travel agencies and tour operators -this is

done by including tour operators in the definition of travel agencies8

. The Act does not apply to Government Enterprises, national carriers of Pakistan andforeign airlines duly authorized to operate to and from Pakistan and travel

agencies allowed to perform Hajj and other pilgrim related work 9.

The Act sets up a Travel Agencies Regulatory Committee to advise the federalgovernment in the implementation of the provisions of the Act and assist in the

5 See Item No 24, Federal Legislative List, Schedule IV, Constitution of Pakistan, 19736 Section 10, Hotel and Restaurants Act, 1976

7 Section 3, Hotel and Restaurants Act, 19768 See section 2(f)(ii), Travel Agencies Act, 19769 Section 5, Travel Agencies Act, 1976




preparation of a code of conduct for travel agencies. The Act requires thefollowing compliances:

i) Registration compliances - Section 4 requires travel agency operators toapply for and obtain a license from the Federal Government.

ii) Maintenance of a Business Guarantee fund - Section 7 requires every travelagency to maintain a business guarantee fund. Payment from the fund mayonly be made on the orders of the Government and in the event of default of payment to a tourist, carrier, or hotel.

Tourist Guides Act, 1976

Type Regulating statute and Compliances required Registration

registering body by the Act requirements

Hotels Hotel and Restaurants Registration related Confirmation of health Act,1976 Information related of staff

Confirmation of

building andequipment to health,hygiene and safetyguides. The Act establishes theTourist GuidesRegulatoryC10ommittee to advisethe federalgovernment withregard to

implementation of theAct and in preparationof a code of conduct for tourist guides11.The Act allows theFederal Government to fix the maximumcharges to be paid totourist guides11. It

10 See section 4(2), Tourist Guides Act, 197611 Section 3(3), Tourist Guides Act, 197611 Section 8(1), Tourist Guides Act, 1976




prohibits tourist guides from chargingany fee including a

tipping fee by guidesemployed by a travelagency on a fixedsalary on a whole timebasis 12. The Act requires the followingcompliances:

i) Registration compliances - Section 7 requires tourist guides to obtain a licenseprior to engaging in the business of provision of guide services.

ii) Information related compliances- Section 4(3) requires the Federal Government tomaintain a register of tourist guides.

Summary of requirements

Enforcement of licensing and registration requirements

The enforcement of the above-noted statutes in uneven and generally ineffective

Laws affecting Environment and Heritage Protection

12 Section 8(3), Tourist Guides Act, 1976




Natural beauty, environment, cleanliness, historic buildings/areas, artifacts andantiquities all attract tourists. Key laws, which regulate these Sectors, include theEnvironmental Protection Act, the Antiquities Act, 1976, the Local Government Act, andthe Wildlife Act. While a detailed review of these laws is beyond the scope of this work it is important to note that a high standard of enforcement of these Act will lead to

increased tourist activity in the country and ensure sustainable development of tourismin the province.

Policy Making and Facilitation

All the above noted statutes provide for the establishment of Committees to advisethe federal/provincial government in the administration of the Act. However noneof the Committees are functional and/or have assisted the Federal/ProvincialGovernment in updating or revising rules.

Reform recommendations

While reform possibilities exist in every aspect of the legal and regulatoryframework, the following amendments will make the legal framework more effectiveand facilitative:

Hotels and Restaurants Act

i ) Detail of membership of the Advisory Committee

The Act and the Rules do not provide any detail regarding composition of theAdvisory committee. The Act should provide for balanced

representation including representative of the Hotel Industry

i i) Reduction and/or removal of minimum room criteria for registration Minimumcriteria for registration of establishments as hotels should be reduced to make theAct more widely applicable. Small hotels provide the bulk of accommodation andthere standards need to be regulated more robustly as market forces have littleimpact on them

i i i ) Making registration mandatory before start of business

Section 5(1) currently requires filing of registration application within twomonths of the opening of the hotel or restaurant. It is not advisable for anybusiness entity to start its work first and then get registration. This alsodeprives the registration authority from taking corrective action at the outset.

iv ) Definition of businesses prohibited to operate in the vicinity of hotels The Act and/or rules need to define the businesses that should not operate in the vicinity of hotels

v) Definition of heath, safety and environment standards

The Act and/or rules do not define the standard of health and comfort. Theseneed to be defined to promote standardization of services

v i) Price fixation




While protection of interests of tourists is a fair objective, power to allow theController to fix charges without consultation is unreasonable. A suggestedway is to allow the Controller to fix charges in consultation with theCommittee or to fix them where he finds charges excessive as compared toservices and/or finds the service provider abusing his position in the

market.

vi i ) Power of reservation

The power to reserve accommodation available to the Controller undersection 14 is excessive and should be qualified to make its use contingent onan emergency.

vi i i ) Provision of booking/payment through internet

A large number of bookings and payments in the international hotel industryare now made through the Internet. Provisions promoting and regulating the

same should be included in the Hotel and Industries Act.

Travel Agencies Act

i ) Detail of membership of the Advisory Committee

The Act and the Rules do not provide any detail regarding composition of the Advisory committee 13 . The Act should provide for balancedrepresentation including representative of the Travel Industry

i i) Definition of Tourist The Act excludes local tourists from the definition of tourists therebyexcluding them from safeguards provided by the law14. The definitionneeds to be amended to make it more inclusive .

i i i ) Travel agencies and Tour Operators need to be separately regulated TravelAgencies and Tour operators are separate entities with different scope of work andthey should be dealt with separately.

iv ) Non-availability of information about Travel Agencies to tourists The Dataabout travel agencies need to be searchable and accessible to tourists 15

v) Application of Act to Hajj operators and airlines

The Act needs to be more inclusive so as to ensure standardization of services. Thecurrent non-applicability provisions needs to be omitted16.

Tourist Guides Act

i) Detail of membership of the Advisory Committee

13 See section 3(1), Travel Agencies Act, 197614 See section 2(g) read with 7(3) of the Travel Agencies, Act, 197615 See section 4(4), Travel Agencies Act, 197616 But see proposed amendment bill in KP for restriction of exemption to national carrier only18

See section 3(1), Travel Agencies Act, 1976




The Act does not provide any detail regarding composition of the Advisorycommittee18. The Act should provide for balanced representation includingrepresentative of the Tourist Industry

ii) Non-availability of information about Guides to tourists

The Data about tourist guides need to be searchable and accessible to

tourists

iii) Price fixation

The Act allows the federal government to fix charges, which should not bedone. This in anti-market and leads to a stunted and non-progressivesector

iv) Making enforcement effective

The provisions regarding fines and prosecution are ineffective and need tobe strengthened

3. Key Issues/Challenges for KP Tourism SectorThe tourism sector in KP has been facing a host of challenges that have beenimpeding growth of the sector in KP. A thorough understanding of theseconstraints is required to develop strategies to address these bottlenecks. Someof these challenges are cross-cutting, affecting the overall economy such as the

sluggish economic growth, unclear policy and institutional regime in the wake of 18th constitutional amendment, poor law and order situation and low publicsector capacity to facilitate and regulate private sector. On the other hand, there

are also some serious sector-specific issues affecting tourism sector such aslimited availability of information to monitor travel and tourism trendspreventing planning; low quality of workforce; low level of private investments;absence of standards; poor infrastructure; limited and sub-optimal marketingactivities, etc. Some of these issues are discussed in more detail below:




Figure 8: Challenges Impeding Growth of Tourism Sector in KP

3.1 CROSS-CUTTING ISSUES

Sluggish Economic Growth – Over the last few years, Pakistan’s economy has

faced high inflation and low growth, resulting in an economic slowdown. Thiseconomic slowdown has been further been compounded by low tax-to-GDP ratio,

high fiscal deficit, devaluing rupee, shaky law and order situation, huge energyshortfall and widespread natural disasters. According to Economic Survey






created unprecedented damage. While the situation has significantly improved inthe last year, there is still a lot of hesitation amongst tourists, especially theinternational visitors, to visit tourism sites in KP. Furthermore, the heightenedsecurity situation has also created procedural hassles in visa regimes, further

discouraging international tourists.

Tourism Infrastructure Damages Due to Conflict and Natural Disasters

The military operation in KP launched in early 2009 in particular in Swat valley and some tribalareas has imposed an immense cost on the local economy as large number of people (an estimated2 million individuals) has been forced to leave their homes and livelihood. In addition to the loss of lives and injuries the ensuing fighting between the military and militants also caused damage tohealth facilities, educational institutions, water supply, roads, electricity, gas supply, shops, hotels,restaurants and businesses.

The World Bank survey report (2009) in KP estimated the damages incurred to tourism industrywas Rs. 180 million (US$ 2 million). According to this survey about 500 hotels have been operatingin the Malakand division, out of which some 60 units have been reported as damaged (12 % of totalhotels).

Swat Tourism Sector Census (2010) explicitly explored the impact of conflict on the hotel industryof Swat in terms of capital, revenue, and employment losses. The largest category of capital losseswas recorded for building amounting to Rs. 72 million.

Pakistan Austrian Institute of Tourism and Hotel Management (PAITHOM) in Swat was establishedin March 2001 at a cost of Rs140.50 million including foreign economic assistance of Rs. 64.262Shillings. Regrettably, during the military operation in Swat this state of the art and purpose built building is not only looted but declared by Pak Army as a temporary detention cell.

Followed by 2009 conflict, the 2010 flash floods and heavy torrential rains have surpassed thephysical destructions ever caused by all the disaster in Pakistan. The catastrophe has impacted a

wide population in Indus river basin starting from North in Gilgit-Baltistan crossing KP, and Punjaband hitting down the Sindh province. The unprecedented natural disaster has severely hit thehuman lives, livestock, infrastructure, crops, and livelihoods in KP. The dynamics of this disasterwas such that life losses were less but the damage to public and community infrastructure werebeyond imagination.

According to the KP, Provincial Disaster Management Authority (PDMA) about 2000 km of majorand link roads, 40 major bridges, 40 minor bridges, 150 health facilities beside 158 buildings(including hotels, motels and restaurants) damaged due to flood. The tourists’ destination of Swat

and Chitral were declared among worst and medium affected areas respectively. In Swat valleyalmost all the hotels along the bank of river Swat were either partly damaged or completely wipedout.

At present USAID and World Bank are providing financial support through various grants programfor revival of tourism infrastructure in KP, in particular in Swat valley. However, in order to fullyrestore the tourism infrastructure both the government and private sector participation will be of immense value. Furthermore, serious interventions are required by KP government in order toreinstate PAITHOM with respect to its objectives.

Low Public Sector Capacity - Weak administrative capacity forms one of the coreissues behind sub-optimal governance landscape in the province affecting a numberof sectors. The weak administrative capacity is manifested in overstaffing and skill

gaps, especially at the lower administrative tiers; high absenteeism; mis-deployment and low productivity of key personnel; and dysfunctional oversight of




service providers by middle and senior managers. There are no clear performanceor appraisal standards and low compensation offered by the government preventsattraction of talent. This situation also takes its toll on the overall government functioning of the government. It is interesting to note that the situation is slightly

better in TCKP, being an autonomous organization, resulting in a number of notableinitiatives by the corporation. However, the current capacity at TCKP seems limited,especially in the wake of increased responsibilities in post-18th amendment scenario.

3.2 SECTOR-SPECIFIC ISSUES

Limited Availability of Information–

The planning and management of anysector and its activities depend upon effective evidence-based decision-making,backed by flow of data and meaningful information. While the regular flow of information is a cross-cutting problem, it becomes even a greater challenge fortourism sector, where the sector definition is porous and a number of privatesector players such as hotels, restaurants, travel agencies, etc. are catering toboth tourism and non-tourism sectors. This prevents collection and use of

reliable data. In many countries, to address this problem, a technique calledSatellite Accounting System’ is used. However, in KP, or even in Pakistan, no such

method is being used.

Low Quality of Workforce – Availability of quality human resource has been asignificant challenge for the tourism sector. There are a few degree courses ontourism sector offered by large universities of the province. Furthermore

Pakistan Austrian Institute of Tourism and Hotel Management (PAITHOM) inSwat - the only notable training institute in the province for tourism-relatedtraining - has been non-operational since the conflict in Swat and is still is use byPakistan Army. The workforce issue is further compounded by the fact that not many officials available in the public sector have thorough understanding of thesector. For private sector businesses, the reliance has mostly been on on-jobinformal trainings, making a dent in the quality of services provided.

Educational Institutes of Tourism & Hospitality in KP

No Name of Institute Date of

establishment

Courses Offered

Course Duration

1. Department of

Tourism &

Hospitality, Hazara

University, KP

2006 BS in Tourism & Hospitality 2 years /4

Semester

MA in Tourism & Hospitality 4 Years/8

semesters

Certificate courses in:

Front Office Management

Housekeeping Management.

Food & Beverage Service.

Food & Beverage

Production

3 Months

2. Department of

Tourism &

Hospitality, Abdul

Wali Khan University,

Mardan, KP

2011 BS in Tourism & Hospitality 2 years /4

Semester

MA in Tourism & Hospitality 4 Years/8

semesters




3. Department of

Tourism & Hotel

Management,

University of

Malakand, KP

2011 MA in Tourism & Hotel

Management

2 years /4

Semester

4. Pakistan AustrianInstitute of Tourism

and Hotel

Management

(PAITHOM) Swat, KP

1999 Diploma in Hotel

Management

6 Months

Short/Certificate Courses:

Front office management

House keeping

Food & beverages

Porter trainings

Tour guide trainings

3 Months

5 Adventure

Foundation Pakistan

1981 Short/Certificate Courses:

Mountain Guides

Adventure Guides

21 days to 3

Months




DEGREE COURSES IN TOURISM

In Pakistan, formal educational in tourism and hospitality sector has comparatively a recent phenomenon. With respect to the Cabinet decision in 1960, the country’s first cookery school

was established at Karachi. In 1967, the school was upgraded to the status of an institute,which finally laid foundation for the establishment of the present Pakistan Institute of Tourism & Hotel Management (PITHAM). The aim of this Institution is to impart Knowledgeby training manpower for the hospitality, travel, and tourism industry. The Institute offersdiplomas, certificates and short courses in the relevant discipline.

In KP, education in tourism & hospitality sector is still at its infancy. Pakistan AustrianInstitute of Tourism and Hotel Management (PAITHOM) was established in March 2001,however, it became operational in 2006. The Institute offers 6 months diploma in HotelManagement and 3 months short courses in: front office management, housekeeping, food &beverages, porter trainings and tour guide trainings. According to the information collected,the courses offered are mostly developed with respect to a standardized format of Austrianinstitutes in hotel management.

In 2006, for the first time, degree programs i.e. BS (4 Years) and MA (2 Years) were initiatedin Tourism and Hospitality by the Department of Tourism and Hospitality, Hazara University.In 2011, following almost similar course structure, the same programs have also beenintroduced by the Department of Tourism & Hospitality, Abdul Wali Khan University, Mardan.Department of Tourism & Hotel Management, University of Malakand, has also started MAProgram in Tourism & Hotel Management in 2011. Although, the mentioned departmentshave their specific board of studies for courses development/evaluation, but, critical analysisof the courses reveals that theoretical part of these courses is mostly adopted from otherrelevant institutes, in particular from UK. However, the offered programs are unanimouslyfollowing the HEC standard criteria established for BS and MA degrees. The major issues of concern with the degree programs are:

poorly develop universities-industry linkages, in terms of skills gaps and training needs;

relevant academics are rarely available;lack of uniformity in the standards of

courses;

most of the courses are neither up-to date, nor formally recognized internationally,therefore, it would be difficult for the graduates to compete in the internationalmarket and finally,

Keeping in view the limited funds availability to the governments’ institutes, it is less likelythat they should effectively deliver the desired practical part of the programs.

Insufficient Private and Public Investments – Development of tourisminfrastructure requires influx of substantial funds; the provision of which isdifficult for the government. In terms of travel and tourism government expenditure, Pakistan was ranked 101st in the World Travel and Tourism

Competitiveness Report. KP Tourism Department’s budget in 2011-12 stoodaround PKR 10 million17, whereas in 2012-13, it is expected to be around PKR 11million. In 2011-12, an amount of PKR 1391.698 million was allocated fortourism (and sports) sector in Annual Development Program for 38 projects, out of which 11 projects were completed. In 2012-13 ADP, an amount of PKR 685million has been allocated for tourism, sports, culture and museums, covering 39projects, out of which 27 are ongoing and 12 are new. The flow of privateinvestments in the tourism sector of KP has also been limited. In order to

promote private investments in the province, a regulatory framework is requiredto empower government officials and also to provide opportunities for secure

17 Revised estimates




investments to privatesector investors.Presently, in KP, there isno such framework;

which limits the execution of this option18.

Absence of Standards – The enforcement of anystandards is

virtually absent in thesector. The responsibility

of managing the lawsand standards of

hotels, tourist guidesand travel agencies

lies withDepartment of

Tourist Services(DTS). Before 18th Amendment, DTS

used to work under the federal Ministry of Tourism. As per themandate decided for DTS, it is responsible to ensure the quality of

tourist services through implementation of

various enactments including: The Pakistan Hotels and Restaurants Act 1976;The Pakistan Tourist Guides Act 1976; and The Travel Agencies Act 1976. Thisabsence of a robust standards regime has implications for services offered byhotels and restaurants; licenses for tourist guides; fitness certification systemvehicles used by tourists; transportation rates, etc.

In KP the international certification will be equally beneficial for businesses,consumers, government, local communities and not the least for theenvironment. For businesses (e.g. hotels, restaurants, tour operators, travel

agencies etc.) it would help to improve their quality, reduce operating cost andwould also provide a marketing advantage. It will also provide tourists withenvironmentally and socially responsible choices. In addition of providingopportunities of economic benefits to local communities, it will also ensurerespect for local culture. For government the certification will raises industrystandards in health, safety, environment, social stability and will also lower theregulatory cost. Although, international tourism certification systems arevoluntary, however, in order to compete in national, regional and international

tourism market the KP government can make a sensible choice of specific

certification programs and can establish it obligatory for different tourismsectors.

Dilapidated Infrastructure – Due to a recent history of armed conflict and naturaldisasters, the tourism sector in KP has suffered major losses, including physicaldamages to buildings and equipment and lost

18 The USAID Firms project is providing technical assistance to KP Govt. for developing PPP framework for the

tourism sector.

Certification is defined as “a voluntary procedure that assesses, audits and gives written assurance that a facility,product, process or service meets specific standards. It awards a marketable logo to those that meet or exceedbaseline standards” (Honey and Rome 2001) Certification

program in the tourism industry serve as an important toolfor distinguishing genuinely responsible companies,products, or services from those that make empty claims.

In order to acquire competitive advantages in regional andglobal tourism industry, different certification programs are

followed in Asia and the Pacific. Some of these certificationprograms are: Decipher Portal (Australia), EccoCertification(Australia), Green Leaf Foundation

Certificates (Thailand), Respecting Our CultureProgramROC (Australia) and Green Globe (China, Japan).These programs are successfully employed by clients indifferent tourism sector in regional countries likePhilippines, Indonesia, Malaysia, India, China and Japan etc,so, there is a great scope for its application in Pakistan ingeneral and KP in particular.




businesses. This in turn hastaken its toll on availability of tourist facilities in the province.Damage caused to access roads,

unreliable supply of electricityand closure of Saidu Sharif airport have further worsenedthe situation. The crisis damaged

roads and bridges in Swat valley,especially the access roads

connecting Mingora to tourists’destination of Kalam via Madianand Bahrain. At present only fourwheel vehicles can only drive on

Mingora-Kalam road. Similarly, the road from Khwazakhela to Shangla has alsobeen partly damaged. Road connecting Chitral to the rest of the province alsoneed up-gradation. The Mansehra- Naran road also needs up-gradation. Accessroads should be constructed on priority basis to reach tourists’ destination of KP.

In addition, link roads should also be developed to reach scenic places in Swat,Chitral and Kaghan valley. Keeping in view the touristic importance of the

mentioned roads/link roads it needs to be built and sustain as all weather roads.

Electricity is one of the basic infrastructures for tourism promotion. The poorsupply situation of electricity to the tourists’ destination in KP is further

devastated by the crisis. In order to encourage maximum tourists’ flow, the

government should ensure undisturbed supply of electricity to the tourists’

destination in the province.

Access to comfortable and reliable tourists’ transport facilities in Swat, Kaghan,Naran and Chitral needs immediate attention. These transport facilities need to

be available from main cities of the country to major tourists’ town of KP andfrom those towns to specific tourists’ attraction points.

Saidu Sharif airport in Swat used to have regular flights to and from Peshawar,Islamabad and Chitral but due to the conflict in the area this airport is closed. Inorder to encourage and promote tourism in Swat through air route the SaiduSharif airport need to be operational.

Archaeological museums preserve the history of nations. KP is the home toGandhara civilization, however, only nine museums in the province showcasing

the glimpses of the local history. Keeping in view the rich history and culture of the province the number of museum needs to be increased. The conflict in Swat valley also caused partial damage to the Swat museum, however, reconstruction

is in progress in support of foreign donor.

The state of the art Malam Jaba Ski Resort and chair lifts have been damagedduring the conflict in Swat valley. Similarly, an important tourist attraction in KPwas Khyber Steam Safari, which used to travel from Peshawar to Landi kotal(border of Afghanistan). At present the train safari is not functioning due to thedamage caused by flood and militancy in the area. These facilities need revival for

tourism promotion in KP.

Trinidad & Tobago: Trinidad & Tobago Tourism

Industry Certification Programme

The Trinidad & Tobago Tourism Industry Certification(TTTIC) programme was established in 2001 as amechanism to improve the quality of tourism productsand services. It is based on the tourism standardsdeveloped by the Trinidad & Tobago Bureau of

Standards (TTBS) to ensure quality delivery. It is a joint

initiative of TTBS, the Tourism and Industrial

Development Company of Trinidad and Tobago

(TIDCO), and the Tobago House of Assembly (THA),with the Trinidad & Tobago Hospitality and Tourism

Institute (TTHTI) as the recognized body for hospitality

and tourism training.




In addition to the reconstruction of damaged infrastructure, new tourismproducts and relevant infrastructure need to be developed in the province likeestablishment of culture tourism centers at potential sites; establishment of newtourists town e.g. Cherat in district Nowshera and Suna in district Kohat;

construction of children and amusement park and adventure tourism facilities(rafting, rock climbing, mountain biking, sport fishing and jeep safaris etc).

Finally, establishment of basic tourism infrastructure facilities like public toilets,stop over points, information centers, fuel stations, police posts, first aid facilities,children play areas, shelters with seating, telephone booths and parking areasalong the roadsides of the tourists destination will boost tourists’ flow to theprovince.

Limited and Sub-optimal Marketing

Activities – While thepoor law and ordersituation has played itsrole in discouragingtourism in KP,

some responsibilityalso has to be placed onlack of an effective

andwellcoordinatedimage building and

marketing strategyto promote

Pakistan and KP as preferred tourism

destinations. KP has been bestowed with valuable tourism assets andunharnessed tourism potential in areas of natural, historic, archeological and

cultural tourism, however, the tourism officials, especially at the federal level,have so far been unsuccessful in conveying this potential to the relevant audience

across the globe. According to World Travel and Tourism CompetitivenessReport, Pakistan has been ranked at 117th number in the world on effectivenessof marketing and branding activity. Similarly as per Travel and TourismCompetitive Index, Pakistan has been ranked at 125 th, 127th and 62nd positions onaffinity of the local communities for tourists and tourism openness; attitude of

population towards foreign visitors; and participation in international fairs.

Absence of a Robust Legal Regime – As discussed above, the existing

tourismrelated laws in the province are outdated and need revision to facilitate arobust regulatory role played by the public sector, facilitate investments by theprivate sector and to promote small businesses to compete. There is no PPP lawin the province, under which TCKP can invite BOT/BOO type projects.

4. Need for Tourism Policy – Some Key IssuesAs discussed earlier, currently the Govt. of KP does not have a clearly articulatedformal tourism policy. However, considering that the tourism sector requirescoordinated efforts by a number of departments and agencies such as P&DDepartment, C&W Department, Finance, Excise and Taxation Department,

PHA/NHA, environment, wild life, forestry, etc. besides the Tourism Department

itself, along with TCKP, the need for having such a policy is critical. Moreover awell laid out tourism policy would demonstrate long-term commitment of

The Bahamas: One-Stop Online Booking

and

Immigration Card

In designing a competitive tourism experience, the Bahamas

has focused on two areas that many developing countries

have overlooked – how tourists select and book

destinations, and how to collect critical market information

from visiting tourists. With the spread of the Internet,

tourists are increasingly comparison shopping and booking

online. The Bahamas’ website, <www.bahamas.com>,

allows the prospective tourist to create an online “account”

in which they can book and change reservations, e-mail

those plans to friends and family, and print out their own

vacation plan.




government in the sector and would form the basis for shared understanding of and synergized actions and coordinated planning by different stakeholders.Moreover, such a policy framework should ensure sustainable development of tourism as most of the uncontrolled and haphazard development of tourism has

negatively impacted on the social, cultural, natural and economic environment of tourist destinations in KP. Therefore, the proposed policy should be based on theprinciples of sustainable development with recommendations on short, mediumand long term measures for its effective implementation to achieve some tangible

results. In particular, the proposed policy would address the following issues:

Figure 9: Developing Tourism Policy for KP

Post-18th Amendment Scenario – As discussed earlier, after the passage of 18th Amendment, there has been some lack of clarity on performing some of thebroader functions related to tourism sector. For effective tourism development,

the government must develop a sound and comprehensive policy framework at the provincial level, clearly laying out the priorities of the government vis-à-visthe federal governments. The provincial government can then pursue the federal

government to maintain its role for effective coordination across the provinces.This would also result in optimal resource utilization and synergy of effort.

Role of the Government and Private Sector - The policy framework must delineate clearly the role of government vis-à-vis the private sector. Ideally thegovernment should adopt the role of a regulator as well as that of the facilitator,




whereas the private sector should come ahead for service provision. As aregulator, the government should act as the custodian for rights of tourists andensure that they are getting quality services, whereas as a facilitator, it canprovide well-targeted tax, policy and financial incentives to private sector players

to promote investment in the sector. These incentives however, should be tied upwith clearly laid out policy objectives, rather than being offered for everythingand anything related to tourism sector. The target areas/sub-sectors can berefined through consultations and in line with broader government policy. Last

but not the least, the government should also coordinate and synergize thetourism development efforts undertaken by various agencies, international

donors and other stakeholders. If there is an established need to develop tourisminfrastructure by the public sector, this responsibility should be entrusted to theprovincial agencies. For management of these facilities as well as for undertakingother projects, various modalities can be considered including PPPs.

Institutional Framework - The policy must include a well laid out institutionalstructure to implement the policy. Currently much of the activities are performedby KPTD and TCKP, however, there is a need for involvement of other agencies aswell such as Environment, Archeology, Forestry, etc. Moreover, there is a need to

empower and strengthen TDKP and TCKP to drive the implementation of policy.

Policy Considerations and Incentives Structure - Due to limited resources and

increasingly constraining fiscal space, the government may not be realisticallyable to offer all sorts of incentives to all the tourism related facilities. Theincentives therefore should be offered only under a well thought out incentivestructure. Such a structure should take into account the cost implications of theseincentives and should evaluate the value for money considerations. Theincentives should also be closely tied with some well laid out policyconsiderations. These policy considerations would be answered through some of the following questions:

Does the government envision taking a lead role in tourism

development or would rather act as a facilitator and take the privatesector take the lead?

Are there certain high priority and low interest areas, wherethe government wants to enhance investment and activity?

Should the tourism sector focus on local tourism orinternational visitors? Such a question must be answered consideringa pragmatic view of the current situation?

Are there any specific geographic regions or tourism sub-

sectors which the government wants to promote?In the priority areas, what are the key impediments that

keep the tourists away? Is it the unavailability of infrastructure,transport network inefficiency, high costs or merely a cultural issue?

What strategy can address the reputational loss of Pakistanas a terrorism-affected country? Is provincial branding a better idea?Should the government invest in improving the overall law and ordersituation or should the government limit the tourist activities to relativelypeaceful areas? Still another consideration could be to focus on developingsecure zones.




Tourist Asset Mapping and Potential and Priority Areas - The government must map the tourism assets and take an account of the existing situation of these assets. After a comprehensive mapping exercise, an improvement plan canbe developed highlighting priority areas. The government can then also identify

those areas, where there is a lot of tourism potential such as recreationaltourism, religious tourism, cultural tourism, eco-tourism, adventure tourism etc.

Resource Considerations - The policy framework should be based on and linkedwith a clear resource framework, where the government can highlight the extent of its contribution through various means/forms. In the absence of sufficient

resources, the government may consider mobilizing additional resources throughprivate participation, commercial lending or donors’ assistance.

Focus on Sustainable Tourism Development:

development as “development which meets the needs of the present without compromising the ability of future generations to meet their own needs”. Thesustainable activities take into account three main aspects including:

environmental; social & cultural and economic. When we take these three aspectsinto account in our activities, this is called the “triple bottom line”. It meansrunning a business, an organisation, or a government in such a way that it doesn’t destroy the resources- natural, cultural, or economic- on which it depends. In fact a business that is run in this way can enhance all three aspectsand continue to operate profitability, while benefiting its surrounding naturalareas and communities. The principles of sustainability can be applied to anytype of tourism mass or speciality; city, beach or wilderness; large or small. Theycan also be applied to all relevant sectors of the tourists industry: lodging, tours,agencies, ground operators, guiding and transport. According to Agenda 21 forthe travel and tourism industry, “sustainable tourism products operate inharmony with local environment, community and cultures, so that these canbecome the permanent beneficiaries.”

Therefore, the focus of the proposed policy should be on sustainable tourism,which can ensure sustainable development through fostering understandingbetween people, to create employment opportunities and bring about

socioeconomic benefits to the local communities particularly in the remote areas.It should also strive to preserve and promote KP’s rich cultural and natural

heritage.

The proposed

policy must emphasize ondevelopment of sustainabletourism in theprovince.

The Brundtland

Report (UNWCED,1987), “Our

Common Future”,definessustainable

Three Pillars of Sustainable Development




APPENDIX A - List of Persons Consulted

USAID Firms:

1. Mr. Suleiman Ghani, Sr. Policy Advisor, USAID Firms

2. Mr. Aftab-ur-Rehman Rana, Tourism Specialist, USAID Firms

3. Mr. Taimur Khan, Business Enabling Environment Specialist, USAID Firms

4. Ms. Asma Malik, Business Enabling Environment Specialist, USAID Firms

5. Dr. Ihsan Qazi, Office Director (Islamabad), USAID Firms

Tourism Department & Tourism Corporation, KP:

6. Syed Aqil Shah, Minister for Tourism, Khyber Pakhtunkhwa

7. Syed Jamaluddin Shah, Administrative Secretary, Tourism Department, KP

8. Mr. Hayat Ali Shah, GM, Special Projects, TDKP & TCKP

9. Mr. Muhammad Ali Sayed, GM Events & TICs, TCKP

10. Ms. Promila Isaacs, Consultant, TICs, TCKP

11. Mr. Iftikhar, Deputy Secretary, Tourism Promotion, Bahrain, Swat

12. Mr. Zarin Khan, Kalash Representative, TCKP

13. Mr. Nadeem Khan, Finance & Accounts, TCKP19 – for PPP

14. Ms. Zahra Alam, Tourism Department, KP

Allied departments, KP:

1. Dr. Muhammad Bashir Khan, Director General, EPA, KP

2. Mr. Safdar Ali Shah, Conservator, Wildlife Department, KP

3. Shah Nazar Khan, Director, Department of Archeology, KP

4. Qazi Ijaz, Deputy Director, Department of Archeology, KP

5. Mr. Muhammad Arabi, In-Charge, Department of Tourist Services (DTS), KP

6. Mr. Hurmat Khan, In-Charge, Pak Austrian Institute for Tourism & Hotel

Management (PAITHOM), Golibagh, Swat7. Mr. Javaid Iqbal, Regional Director, NAVTEC, KP

8. Mr. Sajad Ali Shah, Director, NAVTEC, KP

9. Mr. Bashir Khan, Additional Secretary Development, Finance Department,

KP20 – PPP

10. Shahab Ali Shah, Chief Economist, Planning and Development Department,

KP21 – PPP

19 Met by Ali Rahman for PPP framework 20 Met by Hasaan Khawar & Ali Murtaza for PPP framework 21 Ibid.




11. Mian Asim Ismail, Chief Economic Analysis Section, Public Policy and Social

Reform Unit, Planning and Development Department, KP22 – PPP

12. Mr. Jaffer Kohistani, Manager, Patriata chairlift/cable car, TDCP, Murree,

Punjab

FGD participants, mainly from the private sector:

13. Mr. Zahoor Durrani, Vice President PATO for KP, MD Sehrai Travel

14. Said Nawab, President Tourism Promotion Association, Madyan, Swat

15. Miraj Ud Din, President Hotel Association, Bahrain, Swat

16. Bakhat Buland Khan, Sr. Vice President Hotel Association, Bahrain, Swat

17. Mr. Rasool Khan, General Secretary, Islampura Khadi Association

18. Mr. Wali Rehman, Vice president, Islampura Khadi Association

19. Seth Matiullah, President, Tourism Promotion Association, Kaghan

20. Mr. Nawazish Khan, Sr. Vice President, Tourism Promotion Association,

Kaghan

21. Mr. Asad Shah, Managing Partner, Nature Tourism Services, & Executive

Member, PATO, Abbottabad22. Col. Khalid Mahmood, Principal, Tourism Training Institute (NITHHMS),

Abbottabad

23. Mr. Hukum Dad, Vice President, Hotel Association, Nathiagali

24. Mr. M. Waseem, Coordinator, WWF Pakistan, Nathiagalli

25. Iftikhar Hussain, Owner, Jewels Stone, Mingora, Swat

26. Shirin Zada Dadar, GM, Hotel White Palace, Mingora, Swat

27. Ikram Ullah, GM Swat Tourism Shop, Mingora, Swat

28. Anwar Khan, GM Pameer Hotel, Mingora, Swat

29. Muhammad Humayun, Manager Holiday Hotel, Madyan, Swat

30. Amjad Noshad, Owner Muslim Hotel, Madyan, Swat

31. Shad Muhammad, Owner Jawad Hotel, Madyan, Swat

32. Abdul Rasheed, Owner Rasheed Hotel , Madyan, Swat

33. Muhammad Hayat, Journalist, Swat Press Club, Mingora

34. Dil Nawaz Khan, Manager Hotel Swat Valley, Bahrain, Swat

35. Ahmed Zaib, Hotel Owner 2 Star, Bahrain, Swat

36. Mumtaz Khan, Hotel Owner, Bahrain, Swat

37. Sher Bahudar, Owner Punjab Restaurant, Bahrain, Swat

38. Nasir Khan, Owner Marina Hotel, Bahrain, Swat

39. Amir Rasheed, Finance Secretary, Islampura Khadi Association

40. Abdur Rehman, Member, Islampura Khadi Association

41. Mr. Anayatullah, Suvastu Gallery, Mingora, Swat

42. Mr. Abdullah, Handicrafts, Mingora, Swat

43. Bakht Hussain, Handicrafts, Mingora, Swat

44. Attaullah Khan, Arts & Crafts, Mingora, Swat

22 Ibid.




45. Mr. Abdul Qudoos, Owner, Gateway Hotel, Mardan

46. Mr. Arif Swati, Managing Partner, Nature Tourism Services, Abbottabad

47. Mr. Asif Javed, CEO, Tourism Training Institute (NITHHMS), Abbottabad

48. Mr. Khurshid Ahmed, CEO, Hotel Demanchi, Naran

49. Engr. Mohsin Khan, Marketing Director, Hotel Demanchi, Naran

50. Mr. Qamar ul Haq, Advocate, Abbottabad

51. Mr. Noor Hussain Shah, Hotel construction contractor, Nathiagali

52. Mr. Asif Ali, local entrepreneur, Nathiagali

53. Mr. Hassan Awan, Veterinarian, WWF Pakistan, Nathiagali

54. Mr. Barkat, Manager, Afaq Hotel, Nathiagalli

55. Mr. Yousaf Akhar, CEO, SAIYAH Travel

56. Mr. Ejaz Sohail, Manager, SAIYAH Travel

57. Mr. Naiknam Karim, MD, ATP

58. Mr. Ashraf Aman, Chairman, Adventure Tour

59. Mr. Paarcha Shahid, CEO, City Express

60. Mr. Farhad Maqpoon, MD, Shikar Safari

61. Mr. Sultan Khan, Manager, Nazir Sabir Expeditions62. Mr. Mubarak Hussain, CEO, Karakorum Explorers

63. Mr. Irfan Ullah Baig, EM, Travel Waljis (Pvt) Ltd

64. Mr. Javed Awan, MD, Oriental Links

65. Mr. GN Raikoti, MD, FMT (Fairy Meadow Tours)

66. Mr. Liver Khan, MD, NPA (Nanga Parbat Adventure)

67. Mr. Hussain Ali Ghulam, Hunza Travel Services

68. Mr. Amir Ullah, MD, Hunza Guides Pakistan

_________________



Appendix B - Documents Reviewed

1. Pakistan National Tourism Policy 2010 (Draft)2. Pakistan in the 21

stCentury, Vision 2030 (PC)

3. Pakistan National Conservation Strategy4. Khyber Pakhtunkhwa Provincial Conservation Strategy5. The Pakistan Hotel and Restaurants Act 1976

6. The Travel Agencies Act 1976 and rules 19777. The Pakistan Tourism Guides Act and rules 1977

8. Khyber Pakhtunkhwa Tourism Vision Document9. Tourism census report for Malakand, Swat10. Tourism related laws of India, Nepal, Sri Lanka, Iran & Turkey11. Sector recovery and development strategy for Swat tourism12. Master Plan for Promotion & Development of Tourism in KP13. Pakistan National Tourism Policy 1990 (Ch 5: Conclusions)14. Best Practice Case Studies in Tourism15. Tourism Management in Pakistan (Ch 5: Analysis)16. Pakistan Tourism National Plan 2000

a) Final Report

b) Technical Vol.1: Medium Term Marketing Strategyc) Technical Vol.2: Physical Planning & Environmental Considerations

d) Technical Vol.3: Economic & Investment Analysise) Technical Vol.4: Human Resource Development