Tourism investment & finance 21 Unit 2: Evaluate Investment Environment

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TOURISM INVESTMENT & FINANCE
21 
 
Unit 2: Evaluate Investment Environment
. 
 
At the end of this unit, participants will be able to:
•
Evaluate the investment environment of a country
•
Identify barriers to investment 
•
Understand enabling conditions for investment 
•
Identify strategies and tools for attempting to overcome common barriers 
B
ARRIERS TO 
I
NVESTMENT 
A country’s investment environment
 
is influenced by many factors, including overall political 
stability; the degree to which rule of law is respected and enforced; the laws and regulations that 
impact access to capital and credit; the degree to which government agencies seek to facilitate 
or inhibit private investment; the quality and maintenance of transport and other tourism-related 
infrastructure; the level of and attitudes toward corruption; and tax and immigration policies, as 
they relate to both foreign and domestic investors and tourism-related businesses.
The investment environment is primarily a function of government policy. While business 
practices can also impact the attractiveness of a potential investment destination, those 
practices are permitted or prohibited by government policy.
Policies that directly and indirectly impact tourism planning, financing, regulation, and promotion 
define the viability of a proposed investment project. Some of the most common investment-
climate-related barriers include: 
 
Insufficient information available to analyze opportunities
— Investors often lack reliable, 
comparable, and timely tourism data and other information necessary to adequately forecast 
and plan for development. The inability to gauge potential demand increases project risk. Key 
information includes:
•
Reliable visitor data, by month, year, point of entry, destination, country of origin, 
average length of stay, average daily expenditure, purpose of travel, etc. 
•
Industry performance data, including hotel occupancy and average daily rates, by 
region and accommodations category, number of visitors to specific regions and 
visitor attractions, utilization rates, environment carrying capacity, etc. 
•
Reliable or comparable data on tourism investment flows 

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TOURISM INVESTMENT & FINANCE
22