Eco & Community Based Tourism
Eco & Community Based Tourism
Business Model Description
Through B2B and B2C models, communities that have that have attractive, and/or cultural assets, i.e. local livelihood, craftsmanship, traditional farming and cuisines can adapt their communities into attractions for eco- and community-based tourism. Through training on tourism management and entrepreneurship, and construction of facilities and accommodations, he communities can generate revenue from servicing tourists while also preserving their ecological and cultural assets. This IOA will help distribute tourism income to remote areas to help reduce income inequalities, generate incomes for communities from lodgings, selling local food and products and guided tour services, and help the planet from incentivizing communities to protect the environment and ecosystem as attractions for eco-tourism. Investors can invest money directly in the communities to develop their tourism capacity or in companies that will partner with communities. Some examples of companies in this space are:
Local Alike is a famous social enterprise that partners with communities across country to help them develop community-based tourism. The products are, for instance, guided tours to experience a local lifestyle and homestay accommodation, with future plans to tap into promoting local-made products and cuisines.
Suan Sampran is recognized as a popular organic tourism destinationin Nakhonpathom province, officially operated in 1962. It works hand in hand with local farmers to produce organic vegetables, fruits, and health and wellness products for the farmer market. Guests can practise traditional Thai crafts, experience herbal healing treatment, enjoy Thai fine dining, visit farmer market, or tour local farms.
Mae Kampong is a showcase of eco- and community-based tourism in Chiang Mai province where visitors can enjoy experiences of local lifestyle, such as traditional tea leaves preparation, coffee farming, traditional massage, and homestay that are run by local communities (17).
Expected Impact
Eco- and community-based tourism in second tier provinces generates income and incentivizes communities to protect natural and cultural assets.
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
Sector Classification
Services
Development need
A challenge for Thailand's service sector is the transition from traditional to modern services with high value-added (1). During the pandemic in 2020, up to 8.4 million people became unemployed, of which 23% were tourism jobs and 45% were in other service sector jobs (2).
Policy priority
The 13th National Economic and Social Development Plan (2023 - 2028) aims to promote service sectors ranging from 'comprehensive medical and health services', 'value tourism' as well as 'circular economy and low-carbon society', of which elements are related to high-value services (1).
Gender inequalities and marginalization issues
There is a high concentration of female workers in tourism sector (3). In 2019, formal employment in the accommodation and food service industry category consisted of 702,400 female (64.8%) and 380,800 male (35.2%) workers (4). Growth in the tourism sector can help reduce inequalities in both income and employment gap between male and female workers.
Due to the pandemic, women risk higher unemployment than men due to the high risk of job disruption in 'accommodation and food service' industry (5).
Investment opportunities introduction
Service sector contributed to 58.6% of GDP in 2019 (6). World Tourism Organization (UNWTO) reported that in 2019, Thailand had the 3rd highest international tourism revenue globally at USD 65 billion, and 12th highest number of foreign visitors globally at 40 million people (7).
Key bottlenecks introduction
Service sector has workforce with limited skills to deliver high-value services, which hinders the growth of the service sector (1). Pandemic recovery support programs are also needed as the service sector was strongly impacted (5).
Hospitality and Recreation
Development need
Tourism accounted for about 11% of GDP or USD 66.7 billion (THB 2 trillion) in 2019, creating more than 7 million jobs (20% of total employment) (8). International visitors decreased by 95% in September 2021, compared to the previous year, with only 9% room occupancy for hotels (9).
Thailand was ranked 130th of 140 countries in 2019 for environmental sustainability (8).
Policy priority
Second-tier provinces are the focused area of development as per Thailand’s tourism strategies and policies in 2025 and 2020 (10). Thailand Medical Hub strategy was also laid between 2017-2026 (11). Investment promotion measures, such as income tax exemption, are available for companies investing in community enterprises at grassroot level (12).
Gender inequalities and marginalization issues
Tourism concentrates in the top 5 provinces where major and highly developed cities are located, receiving around 78% of foreign tourists (8). This leads to inequalities in tourism income distribution between wealthy and less developed provinces.
Investment opportunities introduction
In 2019, Thailand ranked the 31st in the world in Travel and Tourism Competitiveness Report by World Economic Forum (increased from 34th in 2017) and the 3rd among ASEAN countries in terms of. These are more than 3,000 communities in Thailand that are starting to engage in community-based tourism (10). Before COVID-19, Thailand also has a steady growth in tourism revenue from both domestic and international travelers, contributing to 21.6% of the GDP in 2018 (+6.0% from the previous year). The number of low-cost flights also has increased by 120% between 2014-2018 (13).
Key bottlenecks introduction
There can be limited access to finance for low-income households and communities to invest in converting their homes into accommodations. Moreover, tourism revenue in Thailand is seasonally concentrated during the high season from December to February, consisting of 28% of all tourist visits (8). As for medical tourism, competition for medical personnel would become more intense in the future (14).
Hotels and Lodging
Pipeline Opportunity
Eco & Community Based Tourism
Through B2B and B2C models, communities that have that have attractive, and/or cultural assets, i.e. local livelihood, craftsmanship, traditional farming and cuisines can adapt their communities into attractions for eco- and community-based tourism. Through training on tourism management and entrepreneurship, and construction of facilities and accommodations, he communities can generate revenue from servicing tourists while also preserving their ecological and cultural assets. This IOA will help distribute tourism income to remote areas to help reduce income inequalities, generate incomes for communities from lodgings, selling local food and products and guided tour services, and help the planet from incentivizing communities to protect the environment and ecosystem as attractions for eco-tourism. Investors can invest money directly in the communities to develop their tourism capacity or in companies that will partner with communities. Some examples of companies in this space are:
Local Alike is a famous social enterprise that partners with communities across country to help them develop community-based tourism. The products are, for instance, guided tours to experience a local lifestyle and homestay accommodation, with future plans to tap into promoting local-made products and cuisines.
Suan Sampran is recognized as a popular organic tourism destinationin Nakhonpathom province, officially operated in 1962. It works hand in hand with local farmers to produce organic vegetables, fruits, and health and wellness products for the farmer market. Guests can practise traditional Thai crafts, experience herbal healing treatment, enjoy Thai fine dining, visit farmer market, or tour local farms.
Mae Kampong is a showcase of eco- and community-based tourism in Chiang Mai province where visitors can enjoy experiences of local lifestyle, such as traditional tea leaves preparation, coffee farming, traditional massage, and homestay that are run by local communities (17).
Business Case
Market Size and Environment
> USD 1 billion
Over 800,000 foreign tourists and more than 2 million domestic tourists traveled on eco-tourism and adventure tourism trips in Thailand, spending over USD 10 billion in 2016 (1).
Indicative Return
> 25%
According to expert interview, the ROI is greater than 25% due to payback period being within 1 year, making revenue generation from second year and onwards highly profitable.
Investment Timeframe
Short Term (0–5 years)
According to expert interview, investment timeframe is typically within 1 year under normal circumstances before the pandemic.
Ticket Size
< USD 500,000
Market Risks & Scale Obstacles
Capital - Limited Investor Interest
Business - Supply Chain Constraints
Impact Case
Sustainable Development Need
Overtourism contributes to environmental degradation. Mass tourism that excludes local community may generate income for the overall national economy, but can also miss the opportunity to preserve and promote local cultures, which has much more tourism value in the long-term.
Limited domestic demand for sustainably produced foods, herbs and spa products can be a barrier for entrepreneurs of wellness tourism to sustain their business.
Gender & Marginalisation
Rooted in economic inequalities, individuals living in rural areas (including indigenous communities) tend to be driven by poverty to seek employment in the cities, causing a loss in local livelihood and traditions in their hometown.
Activities of indigenous communities and rural communities are often stigmatized as a cause of environmental degradation in remote areas.
Unlegalized status of Thailand's sex tourism is considered an issue where sex workers are often subjects of exploitations (13). Moreover, as sex work is an illegal profession, sex workers are not covered by social security, and are left without any financial support during the pandemic and lockdown (14).
Expected Development Outcome
Eco- and community-based tourism has the potential to distribute tourism income directly to local communities, create jobs, and incentivize environmental conservation.
Eco- and community-based tourism can also be a key driver to promote sustainable agriculture, cuisines, handicrafts, and other services with cultural values, which can be marketed to tourists to expand market channel and grow local businesses.
Gender & Marginalisation
Eco- and community-based tourism can help create positive perception of the general public and tourists towards indigenous communities as stewards of the environment.
Appreciation of local cultures and livelihoods can attract tourists, which create jobs and encourage communities to take pride and preserve their way of living.
Community-based tourism are often led by women within their communities, which help empower women from the earned income. It also helps reduce the economic pressures of women to travel to urban tourist hubs and participate in sex tourism.
Primary SDGs addressed
8.9.1 Tourism direct GDP as a proportion of total GDP and in growth rate
International tourism direct receipt contributed to 12% of GDP in 2019 and had 6% growth rate from 2018 (2,3).
According to 20 Years National Strategy, Thailand aim to achieve 28% of GDP from tourism by 2032 (4). Thailand also set target to be within top 80 ranking countries in the Travel and Tourism Competitiveness Index (TTCI) in the Natural Resources pillar by 2037 (ranked 122 in 2019) (18). Also, Thailand set target for revenue from creative and cultural tourism to increase from 2017 to 2037 by 20% (18).
10.1.1 Growth rates of household expenditure or income per capita among the bottom 40 per cent of the population and the total population
Growth rates of income per capita among the bottom 40% of the population was 4.6% per year in 2019 (9).
Thailand aims to achieve at least 15% average growth rates of income per capita among the bottom 40% of the population by 2022 (9), and to be higher than that of the national average by 2030 (10). Thailand also set target for ratio of tourism income between major cities and smaller cities to be 60:40 by 2037 (18).
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Planet
Indirectly impacted stakeholders
People
Gender inequality and/or marginalization
Planet
Corporates
Outcome Risks
Regulations on educational qualification for obtaining tour guide licenses and regulation on accommodation quality standard can limit the degree of participation for the IOA from the local communities.
Eco- and community based tourism is currently for the niche market and need to be developed to further expand the market.
Gender inequality and/or marginalization risk: Tourism can only apply specific communities that have unique or attractive cultural assets, thus excluding many other low income communities.
Impact Risks
Unexpected impact risk: Eco and community-based tourism may lead to greenwashed tourism among entrepreneurs. Thus, public awareness on eco and community-based tourism must also be promoted.
Unexpected impact risk: Unless properly managed, eco-tourism may result in damage to vulnerable environment and ecosystems rather than restoring the ecosystem.
Stakeholder participation risk: The whole community must agreed to participate in community-based tourism to no cause unintended conflicts.
Execution risk: Tourism revenue can be absent during low season, such as in Northern regions that depend on the cold weather to attract tourists, or during recovery periods for the environment.
Gender inequality and/or marginalization risk: Balancing between income and sustainability became very important to empower marginal communities but also prevent tourism going over the carry capacity, causing damage to social structure and culture. Limiting the number of tourists may be necessary in certain cases.
Impact Classification
What
Significant and positive outcomes from eco- and community-based tourism are job creation, environmental conservation, sustainable agricultural practices, and cultural asset preservation.
Who
Local communities received benefits from higher income, healthy lifestyle, and sense of community.
Risk
High price of medical and wellness services and exclusion of local supply chain may reduce the benefits for the locals.
Contribution
Additional contribution is likely better than base case as beneficiaries include only include certain communities that are compatible for tourism.
How Much
Scale: NA, Depth: 28% of GDP from tourism, of which will create high impact if focused on sustainable tourism (3). Duration: Medium-term. Have to limit growth to not exceed carrying capacity.
Impact Thesis
Eco- and community-based tourism in second tier provinces generates income and incentivizes communities to protect natural and cultural assets.
Enabling Environment
Policy Environment
BCG Model (Bio, Circular and Green Economy) aims to promote ecotourism in second tier provinces through development of quality, safety and hygience standards, capacity building programs in targeted areas, and creative economy training (5). This policy supports the IOA by doing capacity building for targeted areas and communities to improve tourism quality and impact.
Second National Tourism Development Plan (2017-2021) aims to improve the quality and diversity of products and services for medical, wellness, and responsible tourism, and promote niche-market branding (11). This policy supports the IOA by promoting eco and community-based tourism as solutions to help income distribution for local communities and create value-added services that do not affect the environment.
Other public investment in tourism focuses on infrastructure development and information technology, i.e., Tourism Intelligence Center (15). This policy supports the IOA by helping stakeholders plan and management tourism activities.
Financial Environment
Financial incentive: Thailand's Tourism Promotion Fund supervised by the Ministry of Tourism and Sports is also available for communities with sustainable tourism being one of the awarding criteria (7).
Financial incentive: Private investment as well as public-private partnership (PPP) are encouraged as stated in the Second National Tourism Development Plan (2017-2021) (11).
Fiscal incentives: Board of Investment (BOI) Promotion provides Corporate Income Tax exemption, import duty exemption on machinery and raw materials, and other non-tax incentives for hotels under specified conditions, and for tourism promoted services such as cultural or craft centers (16).
Regulatory Environment
Thailand has adopted sustainable tourism standards, such as Global Sustainable Tourism Council (GSTC) Destination Criteria, and "Criteria for Thailand's Community-Based Tourism Development" that is equally recognized by Thai government's National Tourism Policy Committee (6). This standard supports the IOA by raising tourists' confidence that the tourism activities will not have any impact on the environment and will benefit the communities.
Amazing Thailand Safety and Health Administration (SHA) audits and grants certification for COVID-19 and disease control measures within tourism facilities and services. SHA is a collaboration between Ministry of Tourism and Sports, Tourism Authority of Thailand, and Ministry of Public Health (12). This standard supports the IOA by increasing tourists' confidence in safety of the facilities and services, especially during post-pandemic recovery.
Marketplace Participants
Private Sector
Local Alike, Anurak Community Lodge, Cookly. Corporate clients. Corporate venture capitalists (i.e. InVent by Intouch Holding, True Incube, 500 Tuk Tuks
Government
Tourism Authority of Thailand, Department of Tourism (Ministry of Tourism and Sports), Community Development Department, Creative Economy Agency
Multilaterals
Asian Development Bank (ADB), International Financial Corporation (IFC), United Nations World Tourism Organization (UNWTO)
Non-Profit
Thailand Community Based Tourism Institute,
Public-Private Partnership
NIA Deep Tech Incubation Program
Target Locations
References
- (1) https://www.nesdc.go.th/download/document/Yearend/2021/plan13.pdf
- (2) https://www.unicef.org/thailand/media/5071/file/SocialImpactAssessmentofCOVID-19inThailand.pdf
- (3) http://library.fes.de/pdf-files/bueros/thailand/15747.pdf
- (4) https://www.mol.go.th/wp-content/uploads/sites/2/2020/06/สถิติแรงงานประจำปี-2562.pdf
- (5) https://www.ilo.org/wcmsp5/groups/public/---asia/---ro-bangkok/documents/briefingnote/wcms_747944.pdf
- (6) https://www.oecd.org/economy/surveys/Economic-assessment-thailand-overview-2020.pdf
- (7) https://www.theglobaleconomy.com/rankings/international_tourism_revenue/
- (8) https://www.bot.or.th/Thai/MonetaryPolicy/EconomicConditions/AAA/250624_WhitepaperVISA.pdf
- (9) https://www.mckinsey.com/industries/travel-logistics-and-infrastructure/our-insights/reimagining-travel-thailand-tourism-after-the-covid-19-pandemic
- (10) https://www.jica.go.jp/project/thailand/025/materials/ku57pq00003u68o4-att/survey_202003.pdf
- (11) https://hss.moph.go.th/fileupload/2560-102.pdf)
- (12) https://www.boi.go.th/en/grassroot
- (13) https://www.eeco.or.th/web-upload/fck/editor-pic/files/industry/High-value%20and%20medicaltourism_2020.pdf
- (14) https://data.worldbank.org/indicator/ST.INT.RCPT.CD?locations=TH
- (1) https://thaiembdc.org/2017/02/13/ecotourism-gaining-ground-in-thailand/
- (2) https://data.worldbank.org/indicator/ST.INT.RCPT.CD?locations=TH
- (3) https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?locations=TH
- (4) http://nscr.nesdb.go.th/wp-content/uploads/2019/04/05-การท่องเที่ยว.pdf
- (5) https://waa.inter.nstda.or.th/stks/pub/2021/20210519-bcg-strategy-2564-2569.pdf
- (6) https://tis.dasta.or.th/dastaknowledge/wp-content/uploads/2018/08/criteria-cbt-Ver-Eng2.pdf
- (7) https://nakhonratchasima.mots.go.th/article_attach/215444.pdf
- (8) https://localalike.com/pdf/annual-report-2018.pdf
- (9) http://nscr.nesdb.go.th/wp-content/uploads/2021/01/17_NS_16.pdf
- (10) http://sdgs.nesdc.go.th/เกี่ยวกับ-sdgs/เป้าหมายที่-10-ลดความไม่เ/
- (11) https://www.rolandberger.com/publications/publication_pdf/roland_berger_the_second_national_tourism_development_plan_2017_2021.pdf
- (12) https://web.thailandsha.com/about/details
- (13) https://blogs.lse.ac.uk/gender/2019/10/24/what-you-want-to-see-is-what-you-get-realities-representations-and-reputations-of-sex-tourism-in-bangkok/
- (14) https://www.bangkokpost.com/thailand/general/1922736/sex-workers-left-in-cold-by-outbreak
- (15) https://tic.mots.go.th/app/landing
- (16) https://www.boi.go.th/upload/content/BOI-A%20Guide_EN.pdf
- (17) https://researchcafe.org/community-based-tourism/
- (18) http://nscr.nesdb.go.th/wp-content/uploads/2019/12/%E0%B8%AA%E0%B8%A3%E0%B8%B8%E0%B8%9B%E0%B9%80%E0%B8%9B%E0%B9%89%E0%B8%B2%E0%B8%AB%E0%B8%A1%E0%B8%B2%E0%B8%A2-Update-04-12-2562.pdf