The Evolution of a Tourist Cluster in an Urban Area: the Case of FortalezaAirton Saboya

Academic Summit: Clusters as entrepreneurial ecosystems

4 September 2013

The Evolution of a Tourist Cluster in an Urban Area: The Case of Fortaleza

Airton Saboya

Universidad de ValenciaInstitute of Local Development - IIDL

E-mail: arsavaju@alumni.uv.es

Presentation Summary

1. Introduction 1.1. The Local Ecosystem

1.2. Tourism and Local Development 2. Objectives and Methodology

3. Main Results

4. Managerial and Cluster Implications

5. Final Remarks

1. Introduction

• Local Development has emerged as an alternative way of territorial planning.

• The concept of local development is related to the idea of determining the territorial resource basis as well as the necessities demanded by people, communities, municipalities and society as a whole (Pike, Rodríguez-Pose and Tomaney, 2011).

• A key tool is concerted action between different local socio-economic actors, public and private, targeting the efficient and sustainable use of endogenous resources.

• This approach considers the importance of social capital, the links of cooperation, solidarity and entrepreneurial ecosystems that contribute to the local development strategy (Pike, Rodríguez-Pose and Tomaney, 2011).

1.1. The Entrepreneurial Ecosystem

• Local Development and the Agglomeration of Enterprises.

• A cluster can be conceptualized as a concentration of interconnected companies and institutions in a given sector (Altenburg and Meyer-Stamer, 1999).

• An Entrepreneurial Ecosystem is a community as well as a network of interactions among firms and between firms and their environment interacting as a system.

• The Entrepreneurial Ecosystem encourages exchanges in the input, labour and product markets.

• The Entrepreneurial Ecosystem allows the emergence of economies of scale external to the firms but internal to the cluster. It also favours the reduction of transaction costs.

• The system may generate social inclusion, economic growth as well as development for a territory (Altenburg and Meyer-Stamer, 1999).

1.2. Tourism and Local Development

• Tourism became one of the main targets of local development strategies.

• This activity has evolved in the 20th century succeeding the technological evolution of passenger transportation, reduction in travel time and costs along with the expansion of the middle classes.

 • The typical Fordist Model (Noguera Tur, 2011):

– Long product/service cycles and a lack of differentiation. – Passive enjoyment and standardized vacation.– Homogeneous destinations and prevalence of the producers interests.– Economies of scale, spatial and business concentration. – Legal permissiveness to attract investment and to generate environmental impacts.

• The Post-Fordist Model (Noguera Tur, 2011):– The growing necessity to differentiate and improve the quality of tourism services. – Multiplication of tourism products, – Short life cycle, continuous innovation and the prevalence of client interests.

2. Objectives and Methodology

• A cluster related policy has helped to boost tourism in Fortaleza. Both national and local governmental agencies have been key players fostering investments, entrepreneurial initiatives and business opportunities.

• The purpose of the study is to present such achievements plus the evolution and main social-economic impacts of the tourism sector in this city.

• The methodology utilized is policy and cluster analysis (Barbosa and Zamboni, 2000).

• In addition, official statistical data and a regional input-output model were employed in order to estimate the economic and social impacts of the tourism demand in Fortaleza (Guilhoto et al, 2010; Valdo Mesquita, 2013).

3. Main Results - Fortaleza Indicators

Population: 2,5 million Area: 313 Km2

HDI: 0.786 GDP per Capita: US$ 6,344

The Strategic Location of Fortaleza

Source: SETUR (2013).

Fortaleza Flight TimeLisbon – Europe: 6h30

Miami – North America: 6h30Buenos Aires – South America: 5h00

Praia – Africa – 4h00

The Tourism Cluster

Source: Barbosa and Zamboni, 2000.

FortalezaThe Entrepreneurial Ecosystem

Business Number of Firms

Travel Firm 333

Lodging 280

Event Business 61

Tourism Transport 27

Taxi Cooperative 4

Tour Operator 715

Restaurant 950

Handcraft Store 225

Total 2.595

(2012).

Sources: Valdo Mesquita (2013) and IBGE (2012).

Fortaleza - Tourism Demand

Year National International Total

1995 723.688 38.089 761.777

2004 1.534.544 249.810 1.784.354

2012 2.761.412 233.612 2.995.024

Source: Valdo Mesquita (2013).

Fortaleza – Tourism Demand by Motivation

Year Leisure Business Event Other Total

1995 571.333 152.355 15.236 22.853 761.777

2005 1.643.995 206.730 110.256 7.875 1.968.856

2010 1.795.383 624.481 218.030 53.835 2.691.729

Source: SETUR (2012).

Fortaleza – Tourism Indicators

Item 1995 2011

Expense per Capita/Day (US$) 21 76

Average Permanency (Day) 12 11

Expense per Capita (US$) 248 806

Tourism Demand (Million of Tourists) 0.7 2.8

Tourism Direct Revenue (US$ Billion) 0.2 2.3

Tourism Total Income (US$ Billion) 0.3 4.0

GDP (US$ Billion) 6.2 36.5

GDP Impact (%) 4.0 11.0

Source: SETUR (2012).

Brazil and Fortaleza – Estimates of Tourist Demand

Tourist Demand (Million of People)

2010 2014 2018

BRAZIL 72,7 85.5 90.9

National 67.7 78.0 90.0

Foreign 5.0 7.5 9.0

FORTALEZA 2.6 3.2 3.8

National 2.5

3.0 3.5

Foreign 0.1 0.2 0.3

Sources: Brazilian Enterprise of Airport infrastructure-INFRAERO, Ceará State Secretary of Tourism and Economic Impacts of the 2014 World Cup, Fundaçao Getulio Vargas –FGV and Ernst Young, 2010.

The Main Cluster Strategies

• Elaboration of an analysis about the tourism potential in the region.

• Design and implementation of financing programs destined specifically to the tourism sector.

• Modernization and diversification of infrastructure and leisure equipment.

• Improvement of transport connections to national and international sites.

• Attraction of national and international investors to the tourist sector.

• Strengthening of horizontal and vertical integration among tourism firms.

• Promotion of city attractions at national and international spheres.

4. Managerial and Cluster Policy Implications

• As a result of these strategies, Fortaleza became one of the most popular destinations for Brazilian tourists.

• In recent years, the city has been able to attract international visitors as well.

• About 3 million people visited this city in 2012.

 • Presently, the main challenge of the cluster is to upgrade its niche market from the

natural heritage, mainly sun, sand and beach, mass tourism to a demand based on cultural legacy.

• Accordingly, due to the 2014 World Football Cup, a strategy based on business, sport and artistic events has been sought.

• Consequently, a number of projects are under way …

Convention Centre

Cost of the Project: US$ 240 million Capacity: 30 thousand people.Floor space: 152,694 m².Parking: 3,200 parking stalls.Helipad. 2 pavilions.Meeting space with more than 5,000 m² of floor space.

Fortaleza Convention Centre

A modern and innovative construction. The Convention Centre will be the second largest in Latin America, with capacity to host 18 simultaneous events and 30 thousand delegates. The architectural design was inspired by the local landscape and handicrafts. The new space is expected to serve as a support centre for the international press during the 2014 World Cup.

MULTI-USE ARENA AND A LEISURE COMPLEX 67 THOUSAND COVERED SEATSVIP AREA AND MEETING SPACE

RESTAURANTS, STORES AND MOVIE THEATER RECREATIONAL FACILITIES AND MUSEUM

ACCESSIBILITY FOR THE DISABLED MEDIA CENTER

PARKING WITH 1,900 STALLS

Reform of the Castelao Stadium

International Airport Expansion

The project includes the refurbishment of the passenger terminal as well as adaptation of existing access roads to the airport. The airport will have up to date technology and equipment, jet bridges, baggage carousels and elevators.

Fortaleza International Airport

Area: 117,620 m2

Elevators: 20

Check in Counters: 80

Baggage Carousels: 9

Jet Bridges: 13

Construction of the Harbour Passenger Terminal

Maritime access will be facilitated after the construction of the Harbour Passenger Terminal. The project includes a new wharf, stores, restaurants, access roads and parking, well as a container terminal. The terminal will target national and international cruises.

Mucuripe HarbourNew Wharf - 350 mPassenger terminal, roads and parking – 20,000 m2Container Terminal – 40,000 m2Praia Mansa - 70,000 m2

The project will target :

Street lighting.

Paving of sidewalks and roads.

Renovation of street furniture.

Accessibility for the disabled. Construction of recreational

areas.

Bike and jogging paths.

Embellishment in general.

The cost of the project is US$ 150 million.

Waterfront Revitalization

Fortaleza Aquarium

Latin America´s largest high tech aquarium. The Aquarium will be the biggest aquarium in Latin America, enhancing Fortaleza as an international tourism destination. The new attraction is expected to receive 1.2 million visitors a year. The goal is to make the oceanarium a tourist magnet for Fortaleza.

Fortaleza AquariumCost of the project: US$ 125 million.Floor space: 21.5 thousand m².Capacity: 15 million litres of water.Visitors expected: 1,2 million per year.3 levels, restaurants, 4D cinema, aquarium, submarine simulator.

5. Final Remarks

• It is quite certain that the tourism sector will benefit from the infrastructure investments.

• However, the evolution of the tourism cluster needs to be assessed continuously as this new infrastructure and equipment is added to the city heritage.

• Tourism is an important source of economic activity, employment and development, but none of these benefits remains whether this activity is not planned in a sustainable territorial development strategy.

• Nowadays, the tourism fordist model has evolved to a post-fordist one.

 • In conclusion, public intervention needs to take into account at an integrated

tourism development along with the local society including greater responsibility and profitability for the inhabitants of the territory.

 

Thanks!

Airton SaboyaE-mail: arsavaju@alumni.uv.es