How to Finance Community Projects: The View from an International institutionAn OAS/USAID Project May 24, 2003The case ofCaribbean Small Tourism Enterprises Project STEP

PresentationIntroduction Creativity & enterpriseQuality, standards, value Profitability and sustainability

Sustainability the case of STEP ProgramProduct improvementMarketing Finance What do Funding Institutions Expect ?

Creativity & EnterpriseBuilding on community valuesPride of placeKey messages historical & contemporary practicesPeople basedMust know what the new customer is looking forPartnering is critical Involving the community at all levelsUsing your Jamaican creativity

Quality, Standards & ValueMarket expectationsAuthentic experiencesButWith quality in terms of hospitality, facilities and safe practicesTravel trade demands itLiability issues, value issuesThey need a satisfied customer

Sustainability Always a ChallengeConstraints to SustainabilityStandards, Training & HRDMarket access Access to financingSTEP Program one example - designed to overcome constraints

STEP ProgramAntigua & BarbudaBahamasBarbadosBelizeDominicaGrenadaGuyanaJamaicaSt. LuciaSt. Kitts & NevisSt. Vincent & the GrenadinesSurinameTrinidad & TobagoDominican Republic (Observer)

Helping the Small Tourism SectorWho are they?

Small hotels75 rooms or less1,500 properties in 14 countries with 36,000 roomsOther Small Tourism EnterprisesSites, Attractions, Services and Community Tourism Products

Conceptual ApproachSmall Hotel PropertiesSites, Attractions & EventsRegional Brands (e.g. nature lodges, plantation inns)Package Experiences:(e.g. small hotel plus nature tours)Caribbeanexperiences.com(Reservations, Call Centre & Destination Information)Consumer and Travel Trade

How STEP is DeliveredOAS offices in each country to support program14 STEP Coordinators for program deliveryNational public/private sector working group.

STEP Programs & ToolsTraining to international standardsAH&LA, CESO & Net Corps Toolkits Environmental Walk-through programResource centers

Resource CentresTo Dateinstalled in Dominica, Barbados, Grenada, St. Lucia, St. Kitts, Trinidad & Tobago, St. Vincent, Belize, Jamaica and (Walk-About) BahamasTraining materials, video library, TV/video facility, internet access, toolkitsEnvironmental management toolkits & CAST informationIn 20037 more centres including another two to be installed in Jamaica

Sites, Attractions, Services, and Community TourismIn 2003 STEP began its focus on DevelopingStandards, training (technology, Management, Guiding etc)training materials (Tool kits, course Materials) Certification Started in St. Lucia, Grenada and BarbadosWill start soon in Jamaica with local partners

Integrating Sites, Attractions, Tourism Services & Community TourismIdentifying products that fit the small hotel market segmentsNatureHeritageCultureCommunitiesEvents, Festivals, MusicMarketing as part of Caribbean ExperiencesHelp with product upgradePackaged with small hotelsBring customers, make sales

Marketing:The CaribbeanExperiences

Caribbeanexperiences Brands & StandardsPrinciples behind hotel brandingQuality standardsMarket presence (no. of rooms in brand)Branding system for small hotels in CaribbeanExperience drivenMatched to market norms & expectationsExamplesBed & Breakfasts of the CaribbeanPlantation Inns of the CaribbeanNature Lodges of the Caribbean

Corporate StructureNon-profit entityModeled generally on largest non-profit hotel brand Best WesternCooperative ownership by MembersStart-up initially managed through STEP organizationViability based on member fees, commissions & training/services fees

Entry Requirements for HotelsMust meet the brands and standards requirements - Assessed and ratedIndependent audit of CE ratingsAgreement with hotelier on:CE brand adherenceAllocation of roomsEMS walkthrough Training program participation Maintenance of financial recordsReporting of performance

Entry Requirements for attractionsMust meet the international physical and service standardsMust be licensed by local agency - TPDCOMust be assessed and ratedMust be rated by Independent auditorAgreement with operator/community on:Maintenance of quality standardsHealth and hygiene and sanitationEnvironmental Management System in Place On-going training and certification for participants Maintenance of financial recordsReporting of performanceConstant monitoring of satisfaction by visitors Monitoring of impact on Communities and timely feedback to operator/community

Caribbean Tourism Investment Facility

product development and upgrade of sites and communitiesimproving and expanding the propertiesMarketing, promotions and training

To meet the International Standards:Financing will be required for:

Two Product Upgrading Funds ProposedMicro-Enterprise/SME/Credit Union FacilityEstimated $5-7 millionFunding range: $10K-$75K per projectIncludes environmental management upgradesIncorporate USAID guarantee program as appropriateLong-term Debt & Equity FacilityEstimated $25-50 millionFunding range: $75K-$5 million per project

Accessing Funds What do They Expect? It is not easy Must depend on the creativity, partners and contacts you have nurturedA quality productMatched to MarketFeasibility assessmentCan it work & be profitable?Business PlanWho owns and operates the businessHow will it be marketedForecast of income & expenditures

Thank You