Tourism investment & finance 21 Unit 2: Evaluate Investment Environment

Materials and supplies:
In many destinations tourism development requires the 
importation of construction and other materials and specialized equipment. Imports add 
significant costs to a business, particularly when the government imposes import duties.
•
Cross-sector linkages
: Weak cross-sector linkages may exist between tourism and 
agricultural production or manufacturing, which hurt investor ability to develop a 
competitive product. Difficulties in meeting standards stem from inadequate market and 
technical knowledge, a shortage of business skills, and absence of economies of scale. 
•
Labor challenges:
Tourism is a service-oriented, labor-intensive industry requiring 
semi-skilled and skilled workers and well trained managers. Common labor constraints 
include 
o
Lack of basic skills training to deliver the service quality required by international 
tourism companies and visitors 
o
Visa and permitting requirements for employing skilled foreign employees
o
Lack of trained managers 
o
High turnover rates
o
Labor laws that restrict businesses hiring practices 

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TOURISM INVESTMENT & FINANCE
26 
I
NVESTMENT 
C
OMPETITIVENESS
As discussed, The World Economic Forum’s (WEF) Travel & Tourism Competitiveness Report 
(2011) specifically highlights investment as a key indicator of competitiveness in travel and 
tourism. It ranks 139 countries based on an assessment of three tourism-specific measures and 
14 sub-measures (Figure 2.1). 
 
BOX 2.1
 
 
“B
EHIND
-
THE
-B
ORDER
”
 
B
ARRIERS TO