ppp: future of tourism development - best practice ... · ppp: future of tourism development - best...

Moscow, 15th March 2010

PPP: future of tourism development -Best practice examples from Austria


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Content

• About Kohl & Partner• Public Private Partnership in tourism• Best practice examples from Austria


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About Kohl & Partner

• Independent and internationally operating consulting company specialized in the hotel and tourism industry

• Leading tourism consulting company in Austria with more than 30 years of experience

• Eight offices in six countries (Villach, Vienna, Munich, Stuttgart, South Tyrol, Sofia, Bucharest and Budapest)

• International team with more than 40 tourism experts

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Core business areas

HospitalityIndustry

Destination Development

TourismInfrastructure

• Feasibility Studies• Hotel Valuations• Operator Selection• Strategic Concept

Development• Technical Service

Agreements

• Destination Audits• Tourism Master Plans• Destination Assistant

Program• Hotel Master Plans• Development of

organizat. structures

• Aqua Parks/Thermal Spas

• Conference Centers• Golf Courses• Ropeways/Cable Cars• Tourism Attractions/

Sights


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Content



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“A contractual agreement between a public agency (federal, state or local) and a private sector entity.

Through this agreement, the skills and assets of each sector are shared in delivering a service or facility for the use of the public.”

Definition Public Private Partnership


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Why do we need Public Private Partnership in tourism?


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Why do we need PPP in tourism?

PPP projects

Lack of budget and Know-How in many municipalities

Pressure by competitors requires new investment

Faster imple-mentation of tourism

projects is possible

Tourism Infra-structure Develop-ment is expensive but vital


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PicturePicturePicture

Potential areas for PPP in tourism

Tourism InfrastructureAqua Parks, Ropeways, Golf Courses

Leisure InfrastructureTheme Parks, Sport Complexes, Museums

Events & FestivalsSport, music and cultural events

Possible Public-Private Partnership


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Content



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Four golden rules for Public Private Partnership

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SUCCESSFUL PARTNERSHIP

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„Five drunks are not a team“ – a cooperation is NOT a rescue team

The involved partners should definecommon goals

Every unit needs its own business-plan and strategy

Mature partners and a strongleadership are required


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Most common PPP models in tourism

Informal cooperationOperation model PPP models

Cooperation model

Associate model

Concession model

Sponsoring

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Cooperation model 1/2

Main characteristics Best practice example

• Public & Private Sector agree to work together (usually Public Sector share is higher than 50 %)

• Public Sector has a contract with the Joint Venture

• Ideal model if nothing is built or the contributions cannot be measured

DMC of the municipality Velden

• 600 hotels and pensions with a total room count of 7.800 beds

• More than 500.000 overnights per year

Destination Management Companies

Possible tourism example


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Destination Management Company Velden

MunicipalityVelden

34 %

CasinoAustria

5 %

Cooperation model 2/2

Tourism BoardVelden

49 %

Golf Course

5 %

Event Company

4 %

T. supportAssociat.

4 %


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Operation model 1/2


• Public Sector assigns a private company for planning, constructing, financing and/or operating

• Public Entity receives fixed annual amount of money

• An operator contract as the legal basis with detailed task description

Operating company of Schönbrunncastle in Vienna

• Consists of castle, royal garden, Sisimuseum, emperor appartments, etc.

• More than 3 million visitors annualy

Leisure or cultural facilities orconvention centres



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Operation model 2/2

Schloss Schönbrunn Kultur- und Betriebsges.m.b.H. (operating company)

Castle & Royal Garden

Emperor Appartm. & Silver Collection

Sisi Museum

Emperor furniturecollection

Republic of Austria(100 % owner)

• No public subsidies – operating company keeps operational revenue

• All investment and renovation financed by theoperational revenue


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Associate model 1/2


• Public Sector signs an equity participation for a tourisminfrastructure project

• Investment as an impulse for regional tourism development

• Public sector often covers infrastructure development costs

Development of a Spa Centre in BadHofgastein

• Surface of 32.000 square metresdivided into six different zones

• Total investment for renovation and enlargement EUR 25 million

Golf Courses, Aqua Parks, Spa Centres, Ropeways



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Construction Company Spa Centre Gastein

MunicipalityBad Hofgastein

49 %

Oberbank19 %

Associate model 2/2

Regional tourismorganisation

24 %

Brewing Union Austria

6 %

Raiffeisen Bank2 %


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Concession model 1/2


• A concessionaire (private sector) is granted the right to use an existing facility

• The facility stays in the ownership of the public sector

• The concessionaire generates the revenues through direct selling of the services to customers

Development of cable car nearInnsbruck

• Connecting Innsbruck (560 m) withNordkette (2.269 m)

• Total investment of around EUR 51 million

Golf Courses, Aqua Parks, Spa Centres, Ropeways



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Concession contract for 30 years

Investment Public share

73 %

Concession model 2/2

InvestmentPrivate share

27 %

Total investment of EUR 51 million


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www.kohl.atVIENNA • VILLACH • SOUTH TYROL • MUNICH • STUTTGART • BUCHAREST • SOFIA • BUDAPEST

ppp: future of tourism development - best practice ... · ppp: future of tourism development - best...

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