Community based tourism
Community based tourism
Business Model Description
Establish and operate ecolodges, small hotels and community-based services close to natural and cultural hotspots
Expected Impact
Improve the livelihood of local communities through the development of community-based tourism and ecotourism
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
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Country & Regions
- Jordan: Countrywide
Sector Classification
Services
Development need
Prior to COVID-19 Jordan's tourism industry was one of the driving forces of the economy, accounting for about 20% of GDP with strong growth (1)
Largest private sector employer in the country. There were more than 53,000 registered employees across the sector in 2019 (2), the sector employed indirectly 19.2% in 2017 (3).
Policy priority
Strong policy momentum, one of the pre-COVID-19 priority sectors of government. Current policy focus is on expansion of the sector and increase on numbers of visitors.
Policy priority
Strong policy momentum, one of the pre-COVID-19 priority sectors of government. Current policy focus is on expansion of the sector and increase on numbers of visitors.
Hotels and Lodging
Pipeline Opportunity
Community based tourism
Establish and operate ecolodges, small hotels and community-based services close to natural and cultural hotspots
Business Case
Market Size and Environment
8 protected areas covering 1,200 square kilometers attracting more than 100,000 visitors (11)
There are few ecolodges in the country, potential to open along different hotspots:
The Royal Society for the Conservation of Nature has established 8 protected areas covering 1,200 square kilometers attracting more than 100,000 visitors (11)
Jordan Trail, 650km long, 40 days hiking through 52 villages. Homestays, camping, home visits and provision of transport and guiding services (12)
Indicative Return
15% - 20%
Prior to COVID-19 an investor is expecting an ROI of about 20% (10)
Investment Timeframe
Medium Term (5–10 years)
COVID-19 had a significant impact on the sector, although domestic tourism has picked up, recovery is only expected to be in 2021/2022. The sustainable tourism sub-sector is likely to be one of the first to recover. (13)
Based on consulted benchmark projects, the projected investment timeframe is expected to be between 5 and 10 years
Market Risks & Scale Obstacles
Environment
Business - Supply Chain Constraints
Impact Case
Sustainable Development Need
In 2019, Jordan hosted 4.5 million international visitors, who brought in an estimated USD 5.8 billion. The World Tourism Organization (UNWTO) estimates that the loss in global tourism revenues has been between USD 910 billion and 1.2 trillion, with over 100 million jobs at risk. (15)
In Jordan tourism constitutes 12% of the country’s GDP, providing most job opportunities, and this revenue comes almost entirely from international visitors. Due to COVID, the livelihood of people, small and medium businesses, entrepreneurs and local communities is jeopardized. (15)
Current focus is on increasing number of visitors and investments impacting on sustainability of Jordan's natural and cultural heritage (Jordan is home to 5 World Heritage sites) and signatory to several conventions (7)
Gender & Marginalisation
Current focus is on increasing number of visitors and investments impacting on sustainability of Jordan's natural and cultural heritage (Jordan is home to 5 World Heritage sites) and signatory to several conventions (7)
Expected Development Outcome
Increase in economic opportunities and employment opportunities, particularly for women, in rural and remote areas including through home-based and other related activites for communities such as food and craft production
Demonstrate business case and scaling of investment opportunities in tourism sector to shift trajectory
Gender & Marginalisation
Women and youth are supported with training and mentorship to improve their business acumen and are linked to markets where they can sell their products and services.
Improved income and livelihoods of women and youth
Primary SDGs addressed
8.9.1 Tourism direct GDP as a proportion of total GDP and in growth rate
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Corporates
Indirectly impacted stakeholders
Planet
Outcome Risks
Balancing development of tourism sector with imperative of sustainability and preservation of cultural heritage
Impact Classification
What
The outcome is likely to be positive, important and intended because community-based and ecotourism improves the livelihoods of local communities while preserving culture and natural heritage
Who
Communities, particularly in rural and remote areas, close to eco lodges and small hotels who benefit from income generation opportunities
Risk
There is strong pessure to increase number of tourists in Jordan affecting the sustainability of many cultural and natural heritage sites
Impact Thesis
Improve the livelihood of local communities through the development of community-based tourism and ecotourism
Enabling Environment
Policy Environment
Strong policy momentum, one of the priority sectors of government. Current policy focus on revival of sector and increase in number of visitors and investments impacting on sustainability.
Jordan is signatory to 1972 UNESCO World Heritage Convention and has 5 listed sites
Financial Environment
Fiscal incentives: Lower sales tax (7%) and reduced income tax (as investments in remote areas)
Other incentives: No specific incentives for eco-tourism or sustainable tourism initiatives
Regulatory Environment
Regulations for adventure travel are under discussion/ revision
Regulations on licensing and registration are part of five-year reform matrix
Marketplace Participants
Government
Ministry of Tourism and Antiquities
Multilaterals
EBRD is developing an investment and TA project focusing on sustainable tourism. Sector skills council, led by EBRD, with involvement of private sector and private training institutes
Non-Profit
GIZ's Employment oriented MSME promotion project focuses on improving business environment including licensing, digitalization of sector and promoting public-private dialogue (3)
Target Locations
