This sounds groundbreaking. A very interesting initiative that seems to really support the development of small tourism businesses in an extremely innovative way. Any project that manages to successfully grant SMEs tangible opportunities to become more sustainable and competitive on the global stage is worthy of high praise indeed. Best of luck with this, great to read about.
As one of the co-founders of WHL Consulting and the Tourism Development Bank I wanted to share another perspective of the TDB that I believe is also extremely important and I don’t want it to be overlooked. The fact is that the accommodations sector in the developing world makes up a big part of the total business environment in many countries, however they tend not to spend on the businesses services that they need. So the TDB also plays a significant role for the service providers (photographers, trainers, certification schemes, renewable energy suppliers, travel writers, etc) to be able to make more business. The feature of the TDB that is most important to me is its ability to be a market maker.
SMEs get access to the services they actually need to be more competitive and suppliers of these services (who are SMEs as well) enjoy a larger clientele base. A true win-win scenario.
The Tourism Development Bank has been selected as a finalist by the International Ecotourism Society for Innovation Leadership in Sustainable Tourism. We are honored to receive this designation and share this with the reviewers of this competition. You can see our listing at http://www.yourtravelchoice.org/2010/08/2010-innovation-award-finalist-w....
Excellent initiative, where all stakeholders in the travel industry can benefit, and most especially accommodation providers. This project puts them in the spotlight and makes them the biggest benefactors of their own tourism and business, and as I hope this takes off on a global scale it will benefit the small and medium communities and businesses with which we work, in a powerfully positive way.
We have just completed a short video of interviews with SME clients of the Tourism Development Bank from Ouro Preto Region in Minas Gerais, Brazil. You can see the video in our listing or see the original posting on YouTube: http://www.youtube.com/watch?v=VrEeAnrrzGc
We hope this video demonstrates the enthusiasm and interest by SMEs in our pilot destinations to utilize the Tourism Development Bank.
As industries are becoming more global, we are seeing more of the " big guys " gaining more and more power. At this point, I think that it is crucial to focus attention to the smaller hospitality providers. (Especially in some countries, where tourism is their main source of income)
This is by far a unique way of creating leverage to gain more market share for these smaller enterprises. Can't wait to see where this goes!
This is a great innovation for small and medium accommodation providers who may not be readily accessible to an online form of marketing that is so popular. With this, the locally owned establishments will be able to survive in a competitive market and bring business into their destination.
I have spent years traveling throughout South America, selling e-commerce solutions and marketing tools to small hotel and hostel owners. In my experience, these small business owners were more than eager to work with me and my company; however, the majority of them did not have the cash to spend/invest. This was truly an ongoing theme throughout most of South America. Most developing countries do not have the security to make investments that do not immediately return a profit, and they do not have the same advantages as the rest of the world in terms of credit, etc.
I think this project is brilliant. The majority of small hotel owners in the developing world would be thrilled to have the power to offer their unused rooms as a global currency. This allows the small hotel owner more power to choose how they run their business, instead of being more dependent on giants like Expedia. Also, unused rooms expire every night. I think WHL just figured out how to make money off rooms that expire, which is an economy I would like to be a part of.
The TDB concept is indeed remarkable. I hope the people involved in the tourism development of Brazil for the World Cup and Olympic Games can support TDB to make things start to materialize for the small guys. Overall, this project has potential to be applied all over the country. Can’t wait to see this happen!
Thanks for the message Andre. Indeed Brazil is an intriguing market and is where one of our pilot projects is being held. We have started work in the Ouro Preto region in the state of Minas Gerais. We have signed up our first clients in a small town just a few kms away from Ouro Preto called Mariana.
Brazil is very interesting for us because it seems that there are many independently-owned properties throughout the entire country and many of them struggle to maintain occupancy throughout the year. In fact our work in Brazil is one of the main contributors to the invention of the TDB.
Our hope through the pilot process (and things like this competition) is to demonstrate a large enough positive effect for public and private partners alike to jump on board quickly and push the program throughout the entire country, with particular emphasis on cities that will be hosts to the 2014 World Cup!!!
I am indeed extremely happy to see the TDB "on the scene". The WHL Group has straddled the commercial tourism world and the development world since its inception and has always struggled with SME development, particularly in the developing world.
For much of the developing world the challenges for SME accommodation providers are huge. They often lack infrastructure (Internet, reliable power supply etc.) as well as access to the sophisticated online global distribution (sales / marketing) channels available to counterparts in the developed world. As a result surviving in business is a day-to-day challenge ....a situation which does not facilitate long term planning or investment.
The TDB could be a real game changer. The service is far more than a simple financing solution in that it brings into play a deep knowledge of the systemic needs of SME accommodation providers which the TDB (being part of the WHL Group) has, plus professional service providers and a whole new array of distrbution options to build revenue streams.
As per previous comments, I think the project in Ouro Preto - Brazil will have a great impact for SMEs. I have been working in this project and we had a great feedback from many small accommodation providers. Although this destination has a great number of accommodation providers, they are almost 100% small companies that strugle to get financing or support in crucial areas like marketing and distribution (speacially in online space). With the payment in rooms through the Tourism Development Bank, SMEs can get many key services for their businesses that they coudn´t if they had to pay in cash, and this is great!
It is really rewarding to work in such project where you can make a difference specially for small and locally owned accommodation providers! I think this project will have a much better impact than other 100% subsidezed projects by the government or donors as the SMEs have to give a counterpart to participate and get the benefits - so they will care for the project. And the best part is that they can pay in rooms over time. At the same time they are paying for the project, they will be receiving new guests that they might not be able to reach before.
This is a great initiative that will definitely help small and medium accommodation providers compete with the "big guys". I can't wait to see how it develops!
Incredible concept. The SME accommodation market makes up the majority of existing global room capacity. Solving their capital constraint problem is ground breaking. The primary effects of this mechanism (positive economic benefits and liquidity) are clearly going to create positive social and environmental externalities for the immediate community.
This will be a wonderful opportunity for the small buisiness world. I've been in the banking industry for many years and have seen many new and/or small business owner get very frustrated with the lack of options in the traditional financing world. The Tourism Development Bank is not only opening financial options, but also creating a global opportunity for the small local operators to expand their exposure.
This will be a huge opportunity in the developing world.
The TDB concept is really great initiative! It´s simple, but very clever idea, which can help smaller accommodation and service providers to develope their business and to compete on the local market... Brilliant!
What a great concept, just love the idea. Can see this working really well in this part of the world (Indochina) - so many SME accommodation providers that could just do with that little bit of help to develop more sustainably
I've worked in the tourism supply and demand side on the African continent and also now in tourism and sustainable tourism consulting for the last decade or so. Tourism SMEs are a particularly neglected segment of the economy - they aren't as "glam" as the more mainstream and high end products packaged for the European and American markets. Yet in aggregate they are significant local economic drivers, they provide a very authentic, individual and local experience and allow you to "touch and feel" a country in a way a major international hotel can't. Such business are fantastic and appealing product, just waiting to be found. They could also benefit from the marketing and product development support and investment incentives that governments provide to the more mainstream product, but they rarely have access to these. They are also in desperate need of solutions to help minimise their operating costs and their impacts on the environment. This is why I believe the tourism development bank is a game changer. It is able to provide these services in return for a currency that SME hotels can afford: room nights. It steps in where so many other actors: government, investment and development authorities, banks and financial institutions simply can't. It's a great idea and I congratulate Zack and his team for thinking of it and creating the mechanism to make it happen and more importantly: to make it profitable and sustainable for all involved.
The whole idea behind the TDB is fascinating, and I believe it could have wide-ranging implications for a number of different areas of tourism, especially in developing markets. I think that this type of innovation could inspire a fundamental shift in the way that tourism-related services are transacted in certain regions, and positive development of tourism product could be sped up and expanded.
This is truly an innovative idea with potential for wide-scale application for a host of services. What a great way to create financial value for otherwise unused rooms. Good luck and I look forward to seeing this idea progress!
What a great idea - freeing up otherwise dead assets and turning them into an investment engine for the SMEs.
I wonder how widely applicable this model is. What is the full range of products and services relevant to SMEs in the hospitality sector that could be purchased through this mechanism? How many other sectors might be amenable to using similar payment mechanisms?
The first products and services we have sold through this service are those related to building and improving market access. SME accommodation providers need to be connected to markets as a first step so that rooms are available for sale. Beyond the market access services we have started exploring areas of systemic need and areas where we can see both potential for a fast return to the SME and an enhancement to their future long term sustainability.
The first area we have zeroed in on is energy and we are now working with groups like E+Co to explore mechanisms to improve energy efficiency for SMEs and a shift to using renewable energy. Beyond this we are also looking at water and some training services.
With respect to moving to other industries, there are definitely possibilities but the financial intermediary will need both very deep sector knowledge as well as specific tools/services/facilities to be able to manage risks which traditional financial services providers will not or can not manage. In this case the TDB is linked to the WHL Group which has a long experience in selling accommodation for small accommodation providers in the developing world. This allows the TDB to disburse funds against room inventory pledged by the SME accommodation providers knowing they will be able to sell the room inventory within a reasonable time frame. Banks and other typical financial intermediaries do not have this facility.
Thanks for the comment and the questions. To start off with and answer your question 2... I don't know... the reason that we are in the position to offer the TDB for the accommodation sector is that we are connected to the WHL Group and whl.travel, so we have a built-in distribution system for taking on the inventory and selling it in the market.
To provide an answer to your first question. Currently we are using the Tourism Development Bank to provide Market Access Services which increase the competitiveness of the SMEs: panoramic immersive photography; updated marketing copy; e-commerce services; and training. We are looking for other partners offering value-added services that provide long-term sustainability for the SME. One area we see massive potential is in renewable energy and energy efficiency services. In some parts of the world (like Africa or the Pacific) energy consists of up to 60% (depending on the global oil price) of the operating costs. Switching to alternative renewable energy sources will only become more important into the future. The dilemma however is the immediate cost is often beyond what scarce capital these properties have.
We would also be keen to look into offering hospitality training. This being said we are also very much open to other ideas and collaborative opportunities.
Fantastic initiative, and one I see huge potential for in so many places around the world. Working with SMEs in the tourism industry, I know that this would be widely accepted as a form of payment for services, and not just in the developing world, but also in developed markets who also often lack the upfront cash required for improvements in their property and marketing.
I would love to see the Tourism Development Bank on a much bigger scale, offering a whole range of products and services around the world, a menu of items for SMEs to improve their businesses, paying with their empty rooms. It really is a new form of currency for SMEs in tourism and a sustainable form of development.
Just on the energy front alone this could be huge - thousands of energy-draining accommodations around the world suddenly switching to renewable energy sources - quite brilliant.
Well done to everyone involved. I really wish you the best with this project and hope you receive the financing you need to take this another six levels.
Comments
This sounds groundbreaking. A very interesting initiative that seems to really support the development of small tourism businesses in an extremely innovative way. Any project that manages to successfully grant SMEs tangible opportunities to become more sustainable and competitive on the global stage is worthy of high praise indeed. Best of luck with this, great to read about.
As one of the co-founders of WHL Consulting and the Tourism Development Bank I wanted to share another perspective of the TDB that I believe is also extremely important and I don’t want it to be overlooked. The fact is that the accommodations sector in the developing world makes up a big part of the total business environment in many countries, however they tend not to spend on the businesses services that they need. So the TDB also plays a significant role for the service providers (photographers, trainers, certification schemes, renewable energy suppliers, travel writers, etc) to be able to make more business. The feature of the TDB that is most important to me is its ability to be a market maker.
SMEs get access to the services they actually need to be more competitive and suppliers of these services (who are SMEs as well) enjoy a larger clientele base. A true win-win scenario.
The Tourism Development Bank has been selected as a finalist by the International Ecotourism Society for Innovation Leadership in Sustainable Tourism. We are honored to receive this designation and share this with the reviewers of this competition. You can see our listing at http://www.yourtravelchoice.org/2010/08/2010-innovation-award-finalist-w....
Excellent initiative, where all stakeholders in the travel industry can benefit, and most especially accommodation providers. This project puts them in the spotlight and makes them the biggest benefactors of their own tourism and business, and as I hope this takes off on a global scale it will benefit the small and medium communities and businesses with which we work, in a powerfully positive way.
We have just completed a short video of interviews with SME clients of the Tourism Development Bank from Ouro Preto Region in Minas Gerais, Brazil. You can see the video in our listing or see the original posting on YouTube: http://www.youtube.com/watch?v=VrEeAnrrzGc
We hope this video demonstrates the enthusiasm and interest by SMEs in our pilot destinations to utilize the Tourism Development Bank.
As industries are becoming more global, we are seeing more of the " big guys " gaining more and more power. At this point, I think that it is crucial to focus attention to the smaller hospitality providers. (Especially in some countries, where tourism is their main source of income)
This is by far a unique way of creating leverage to gain more market share for these smaller enterprises. Can't wait to see where this goes!
This is a great innovation for small and medium accommodation providers who may not be readily accessible to an online form of marketing that is so popular. With this, the locally owned establishments will be able to survive in a competitive market and bring business into their destination.
Awesome initiative!
I have spent years traveling throughout South America, selling e-commerce solutions and marketing tools to small hotel and hostel owners. In my experience, these small business owners were more than eager to work with me and my company; however, the majority of them did not have the cash to spend/invest. This was truly an ongoing theme throughout most of South America. Most developing countries do not have the security to make investments that do not immediately return a profit, and they do not have the same advantages as the rest of the world in terms of credit, etc.
I think this project is brilliant. The majority of small hotel owners in the developing world would be thrilled to have the power to offer their unused rooms as a global currency. This allows the small hotel owner more power to choose how they run their business, instead of being more dependent on giants like Expedia. Also, unused rooms expire every night. I think WHL just figured out how to make money off rooms that expire, which is an economy I would like to be a part of.
The TDB concept is indeed remarkable. I hope the people involved in the tourism development of Brazil for the World Cup and Olympic Games can support TDB to make things start to materialize for the small guys. Overall, this project has potential to be applied all over the country. Can’t wait to see this happen!
Thanks for the message Andre. Indeed Brazil is an intriguing market and is where one of our pilot projects is being held. We have started work in the Ouro Preto region in the state of Minas Gerais. We have signed up our first clients in a small town just a few kms away from Ouro Preto called Mariana.
Brazil is very interesting for us because it seems that there are many independently-owned properties throughout the entire country and many of them struggle to maintain occupancy throughout the year. In fact our work in Brazil is one of the main contributors to the invention of the TDB.
Our hope through the pilot process (and things like this competition) is to demonstrate a large enough positive effect for public and private partners alike to jump on board quickly and push the program throughout the entire country, with particular emphasis on cities that will be hosts to the 2014 World Cup!!!
Thanks for your support Andre.
What a fascinating, simple yet totally awesome initiative. Well done to all concerned.
I am indeed extremely happy to see the TDB "on the scene". The WHL Group has straddled the commercial tourism world and the development world since its inception and has always struggled with SME development, particularly in the developing world.
For much of the developing world the challenges for SME accommodation providers are huge. They often lack infrastructure (Internet, reliable power supply etc.) as well as access to the sophisticated online global distribution (sales / marketing) channels available to counterparts in the developed world. As a result surviving in business is a day-to-day challenge ....a situation which does not facilitate long term planning or investment.
The TDB could be a real game changer. The service is far more than a simple financing solution in that it brings into play a deep knowledge of the systemic needs of SME accommodation providers which the TDB (being part of the WHL Group) has, plus professional service providers and a whole new array of distrbution options to build revenue streams.
I have great hopes for this business.
A very clever tool that can definitely help small tourism business!
A very clever tool that can definitely help small tourism business!
As per previous comments, I think the project in Ouro Preto - Brazil will have a great impact for SMEs. I have been working in this project and we had a great feedback from many small accommodation providers. Although this destination has a great number of accommodation providers, they are almost 100% small companies that strugle to get financing or support in crucial areas like marketing and distribution (speacially in online space). With the payment in rooms through the Tourism Development Bank, SMEs can get many key services for their businesses that they coudn´t if they had to pay in cash, and this is great!
It is really rewarding to work in such project where you can make a difference specially for small and locally owned accommodation providers! I think this project will have a much better impact than other 100% subsidezed projects by the government or donors as the SMEs have to give a counterpart to participate and get the benefits - so they will care for the project. And the best part is that they can pay in rooms over time. At the same time they are paying for the project, they will be receiving new guests that they might not be able to reach before.
What an inspired idea.
It sounds like an innovative way to enable small service providers to benefit from the type of services that are normally out of their grasp.
Definitely a win-win idea, nice work
Very interesting idea… Pure out of the box thinking! This project can contribute allot to small tourism businesses development.
This is a great initiative that will definitely help small and medium accommodation providers compete with the "big guys". I can't wait to see how it develops!
Incredible concept. The SME accommodation market makes up the majority of existing global room capacity. Solving their capital constraint problem is ground breaking. The primary effects of this mechanism (positive economic benefits and liquidity) are clearly going to create positive social and environmental externalities for the immediate community.
What a great tool to enable small businesses to access financing. This is a very innovative idea with untold potential. Very exciting!
This will be a wonderful opportunity for the small buisiness world. I've been in the banking industry for many years and have seen many new and/or small business owner get very frustrated with the lack of options in the traditional financing world. The Tourism Development Bank is not only opening financial options, but also creating a global opportunity for the small local operators to expand their exposure.
This will be a huge opportunity in the developing world.
The TDB concept is really great initiative! It´s simple, but very clever idea, which can help smaller accommodation and service providers to develope their business and to compete on the local market... Brilliant!
What a great concept, just love the idea. Can see this working really well in this part of the world (Indochina) - so many SME accommodation providers that could just do with that little bit of help to develop more sustainably
I've worked in the tourism supply and demand side on the African continent and also now in tourism and sustainable tourism consulting for the last decade or so. Tourism SMEs are a particularly neglected segment of the economy - they aren't as "glam" as the more mainstream and high end products packaged for the European and American markets. Yet in aggregate they are significant local economic drivers, they provide a very authentic, individual and local experience and allow you to "touch and feel" a country in a way a major international hotel can't. Such business are fantastic and appealing product, just waiting to be found. They could also benefit from the marketing and product development support and investment incentives that governments provide to the more mainstream product, but they rarely have access to these. They are also in desperate need of solutions to help minimise their operating costs and their impacts on the environment. This is why I believe the tourism development bank is a game changer. It is able to provide these services in return for a currency that SME hotels can afford: room nights. It steps in where so many other actors: government, investment and development authorities, banks and financial institutions simply can't. It's a great idea and I congratulate Zack and his team for thinking of it and creating the mechanism to make it happen and more importantly: to make it profitable and sustainable for all involved.
The whole idea behind the TDB is fascinating, and I believe it could have wide-ranging implications for a number of different areas of tourism, especially in developing markets. I think that this type of innovation could inspire a fundamental shift in the way that tourism-related services are transacted in certain regions, and positive development of tourism product could be sped up and expanded.
This is truly an innovative idea with potential for wide-scale application for a host of services. What a great way to create financial value for otherwise unused rooms. Good luck and I look forward to seeing this idea progress!
What a great idea - freeing up otherwise dead assets and turning them into an investment engine for the SMEs.
I wonder how widely applicable this model is. What is the full range of products and services relevant to SMEs in the hospitality sector that could be purchased through this mechanism? How many other sectors might be amenable to using similar payment mechanisms?
Hi Jennye,
The first products and services we have sold through this service are those related to building and improving market access. SME accommodation providers need to be connected to markets as a first step so that rooms are available for sale. Beyond the market access services we have started exploring areas of systemic need and areas where we can see both potential for a fast return to the SME and an enhancement to their future long term sustainability.
The first area we have zeroed in on is energy and we are now working with groups like E+Co to explore mechanisms to improve energy efficiency for SMEs and a shift to using renewable energy. Beyond this we are also looking at water and some training services.
With respect to moving to other industries, there are definitely possibilities but the financial intermediary will need both very deep sector knowledge as well as specific tools/services/facilities to be able to manage risks which traditional financial services providers will not or can not manage. In this case the TDB is linked to the WHL Group which has a long experience in selling accommodation for small accommodation providers in the developing world. This allows the TDB to disburse funds against room inventory pledged by the SME accommodation providers knowing they will be able to sell the room inventory within a reasonable time frame. Banks and other typical financial intermediaries do not have this facility.
Cheers......... Len
Dear Jennye,
Thanks for the comment and the questions. To start off with and answer your question 2... I don't know... the reason that we are in the position to offer the TDB for the accommodation sector is that we are connected to the WHL Group and whl.travel, so we have a built-in distribution system for taking on the inventory and selling it in the market.
To provide an answer to your first question. Currently we are using the Tourism Development Bank to provide Market Access Services which increase the competitiveness of the SMEs: panoramic immersive photography; updated marketing copy; e-commerce services; and training. We are looking for other partners offering value-added services that provide long-term sustainability for the SME. One area we see massive potential is in renewable energy and energy efficiency services. In some parts of the world (like Africa or the Pacific) energy consists of up to 60% (depending on the global oil price) of the operating costs. Switching to alternative renewable energy sources will only become more important into the future. The dilemma however is the immediate cost is often beyond what scarce capital these properties have.
We would also be keen to look into offering hospitality training. This being said we are also very much open to other ideas and collaborative opportunities.
Brilliant initiative. Looking forward to seeing this live and supporting SMEs.
Fantastic initiative, and one I see huge potential for in so many places around the world. Working with SMEs in the tourism industry, I know that this would be widely accepted as a form of payment for services, and not just in the developing world, but also in developed markets who also often lack the upfront cash required for improvements in their property and marketing.
I would love to see the Tourism Development Bank on a much bigger scale, offering a whole range of products and services around the world, a menu of items for SMEs to improve their businesses, paying with their empty rooms. It really is a new form of currency for SMEs in tourism and a sustainable form of development.
Just on the energy front alone this could be huge - thousands of energy-draining accommodations around the world suddenly switching to renewable energy sources - quite brilliant.
Well done to everyone involved. I really wish you the best with this project and hope you receive the financing you need to take this another six levels.