revised - tourism policy - position paper - 11feb2013

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Position Paper Developing Tourism Policy for KP Page 1 | 43

DRAFT

January, 2013

Position PaperDeveloping Tourism Policy for KP


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This page is intentionally left blank.


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Contract No.:

Task Order No.

Contractor Name: Chemonics International, Inc.

USAID Technical Office: Office of Economic Opportunities

USAID Pakistan

Date of Report: November, 2012

Document Title: Position Paper Developing Tourism Policy forKP

Authors Name: USAID Pakistan

Activity Title and Number:

Work Plan Action ID number:

The views expressed in this publication do not necessarily reflect the views of the UnitedStates Agency for International Development, the United States Government orChemonics International Inc.


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Name of Component: Business Enabling

Environment

Author: USAID Pakistan

Practice Area: BEE

Tourism, policy Khyber Pakhtunkhwa, private sector,economic growth

Data Page


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Thisreport presents the position paper for developing tourism policy for KP,

identifying key issues that need to be addressed in the proposed policy and

initiates the discussion around these issues.

Abstract


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Table of Contents

DATA PAGE 4

ABSTRACT 5

LIST OF FIGURES 6

ACKNOWLEDGEMENTS 8

EXECUTIVE SUMMARY 9

1. BACKGROUND AND CONTEXT 10

2. EXISTING AND PREVIOUS POLICIES AND PLANS 15

2.1TOURISM POLICIES AND PLANS 152.2KPS COMPREHENSIVE DEVELOPMENT STRATEGY2010-17 162.3ECONOMIC GROWTH STRATEGY OF KP 182.4TOURISM VISION DOCUMENT OF KP 182.5SWOTANALYSIS 202.6REVIEW OF TOURISM LEGAL FRAMEWORK 21

LICENSING/REGISTRATION AND REGULATION OF SERVICE PROVIDERS IN THE

TOURISM INDUSTRY 21

LAWS AFFECTING ENVIRONMENT AND HERITAGE PROTECTION 23

POLICY MAKING AND FACILITATION 24

REFORM RECOMMENDATIONS 24

3. KEY ISSUES/CHALLENGES FOR KP TOURISM SECTOR 26

3.1CROSS-CUTTINGISSUES 273.2SECTOR-SPECIFICISSUES 30

4. NEED FOR TOURISM POLICY SOME KEY ISSUES 36

APPENDIX A - LIST OF PERSONS CONSULTED 40

APPENDIX B - DOCUMENTS REVIEWED 43

List of FiguresFigure 1: Tourism Receipts and Exports ............................................................................. 10

Figure 2: Domestic Tourism Volume 2009 ......................................................................... 11

Figure 3: Foreign Tourism in Pakistan .............................................. ................................... 11

Figure 4: Origin-wise Volume of Foreign Tourists........................................................... 12


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Figure 6: Challenges Impeding Growth of Tourism Sector in KP ............................... 27

Figure 7: Developing Tourism Policy for KP ...................................................................... 36


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ACKNOWLEDGEMENTS

This position paper has been developed through support from USAID andpresents findings evolved out of extensive consultations with stakeholders from

public and private sectors of KP from tourism and other allied sectors. Thedocument also extensively relies on the vision document for tourism sectordeveloped by USAID, besides an extensive literature review of various relevantdocuments. Section 1 covering background and context has been mostlycaptured from the Vision Document. The complete list of documents consulted isalso appended at the end. A number of stakeholders have provided usefulcomments to develop this position paper. The list of all persons consulted isappended at the end (Appendix A), whereas the key highlights of variousstakeholder consultations have been compiled separately and available withFIRMS. The FIRMS team members, especially the BEE and Tourism Specialist

also gave extensive input to the team of consultants.


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EXECUTIVE SUMMARY

Tourism sector of Pakistan in general, and KP in particular, has a high potentialto contribute in the economic development of the country. The tourism sector inKP has been facing a host of challenges that have been impeding growth of thesector in KP. A thorough understanding of these constraints is required todevelop strategies to address these bottlenecks. Some of these challenges arecross-cutting, affecting the overall economy such as the sluggish economicgrowth, unclear policy and institutional regime in the wake of 18 th constitutionalamendment, poor law and order situation and low public sector capacity tofacilitate and regulate private sector. On the other hand, there are also someserious sector-specific issues affecting tourism sector such as limited availabilityof information to monitor travel and tourism trends preventing planning; lowquality of workforce; low level of private investments; absence of standards;poor infrastructure; limited and sub-optimal marketing activities, etc. currentlythe Govt. of KP does not have a clearly articulated formal tourism policy.However, considering that the tourism sector requires coordinated efforts by anumber of departments and agencies such as environment, wild life, forestry, etc.besides the Tourism Department itself, along with TCKP, the need for havingsuch a policy is critical. Moreover a well laid out tourism policy woulddemonstrate long-term commitment of government in the sector and wouldform the basis for shared understanding of and synergized actions and

coordinated planning by different stakeholders.

The proposed policy must focus on bringing clarity in governments role atvarious levels, in the wake of 18th constitutional amendment and shoulddelineate clearly the role of government vis--vis the private sector. Ideally thegovernment should adopt the role of a regulator as well as that of the facilitator,whereas the private sector should come ahead for service provision. The policymust also include a well laid out institutional structure to implement the policyto supplement TCKPs capacity. While there is a need to provide incentives to

private sector to invest, such a structure should take into account the costimplications of these incentives and should evaluate the value for money

considerations. The incentives should also be closely tied with some well laid outpolicy considerations. The policy framework should be based on and linked witha clear resource framework, where the government can highlight the extent of itscontribution through various means/forms. In the absence of sufficientresources, the government may consider mobilizing additional resourcesthrough private participation, commercial lending or donors assistance. Last butnot the least, the policy must focus on sustainable tourism development,capitalizing on countrys diverse geography and opportunities for ecotourismdevelopment, community tourism and research.


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1. Background and Context1

The tourism sector2 has gained significant importance over the past few decadesall over the world. Pakistan in general and KP in particular, blessed withimmense tourism potential, have also been endeavoring to fully capitalize on thispotential despite the security challenges faced by the country. While theprovince of Khyber Pakhtunkhwa boasts having three fourth of the countrys

tourism assets, with sites representing archeological, cultural, historical andreligious significance and attractive natural and scenic beauty, the province hasalso been facing severe conflict and security challenges. This calls for a renewedeffort on governments part to come up with innovative solutions to promotetourism in the province and facilitate investment in the sector.

Tourism Sector in Pakistan - Tourism sector of Pakistan in general, and KP inparticular, has a high potential to contribute in the economic development of the

country. During the year 2008-09, total share of tourism receipts in the GNP wasonly 0.3%; while its share in exports was only 1.2%.

Year Tourism Receipts

2006-07 PKR 16,906 Million

2007-08 PKR 16,486 Million

2008-09 PKR 17,392 Million

Source: State Bank of Pakistan

Figure 1: Tourism Receipts and Exports

Domestic Tourism in Pakistan

In Pakistan, total number of domestic tourists during the year 2009 was 46.07million.3 About half of these tourists were the people who travelled to meet theirsocial obligations (friends, relatives, etc.). About 14% travelled for recreationpurpose. Other important categories were of the people who travelled for

business, health or religious reasons.

1 Much of the content is this section has been taken from Tourism Vision Document developed by USAID.2 The World Tourism Organization defines tourists as people who travel to and stay in places outside their usual

environment for more than twenty-four (24) hours and not more than one consecutive year for leisure, businessand other purposes not related to the exercise of an activity remunerated from within the place visited. 3 Figure based on Domestic Tourism Survey 2000 by Ministry of Tourism


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Holiday/

Recreation

14.7%

VFR

56.0%

Business

21.4%

Others

7.9%

Purpose wise Arrival of Foreign Tourists(Source: Ministry of Tourism)

0

100

200

300

400

500

600

700

800

900

1,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

557500 498 501

648

798

898840 823

873

No.

ofTourists(000)

Pakistan Foriegn Tourists Arrival Trend(Source: Ministry of Toruism, via Ministry of Interior)

Figure 2: Domestic Tourism Volume 2009

International Toruism in Pakistan

In 2009, on a global basis, there were 880 million international tourists;compared to a figure of 920 million during the previous year. Total number offoreign tourists coming to Pakistan in 2009 were 0.873 million; compared to afigure of 0.557 million in the year 2000. Pakistans share of the global tourismmarket in 2009 was only 0.09%; which cannot be termed satisfactory. In SouthAsia, Pakistans share from amongst the total 10 million foreign tourists was8.7%; compared to Indias share of 50%.

Figure 3: Foreign Tourism in Pakistan


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Figure 4: Origin-wise Volume of Foreign Tourists

Majority of the foreign tourists come to Pakistan from Europe. In 2009, 44% of

the total arrivals into Pakistan were from Europe; major share of which wasclaimed by overseas Pakistanis coming from United Kingdom. South Asia was thesecond largest origin for international tourists coming to Pakistan, accountingfor 21% of the total. Of these tourists, a major share is contributed by the Sikhscoming from India for visiting their holy places.

Toruism in KP

KP is a unique province of Pakistan where all the types of tourism attractionsexist. These include tourism sites with natural, scenic beauty, sites with uniquehistorical and/or religious significance, sites foe eco-tourism, winter tourism,shopping, cuisines, sports and festivals. No other province of Pakistan can claimto have such diversity of Tourism assets. Some more popular tourist locations inKP include Swat Valley, Kaghan Valley, Chitral Valley, Dir Valley, Abbottabad andGalliat, Peshawar and Khyber Pass and surroundings.

As per some estimates4, the total number of domestic tourists visiting KhyberPakhtunkhwa in a year is about 8.8 million; which account for about 19% shareof the total national domestic tourist traffic. A higher share of KhyberPakhtunkhwa in domestic tourism compared to its share in population is a clearindicator of the competitive edge the province possesses over otherprovinces/regions of the country. On the other hand, total number of foreign

tourists arriving in Khyber Pakhtunkhwa in 2009 was 47,900; which translatedinto 5.6% share of the national foreign tourist traffic.

Tourism Institutional Structure at KP

In KP, Tourism Corporation Khyber Pakhtunkhwa (TCKP) and the Department ofTourists Services (DTS) are two major entities responsible for tourismorganisation and management. In addition, Pak Austrian Institute of Tourismand Hotel Management (PAITHM) also exists in the province which isresponsible for producing skilled human resources in the hospitality sector. Allthese organisations are collectively working under the Department of Sports,

4 Figures for 2009; KP Tourism Vision Document


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Tourism, Youth Affairs, Archaeology & Museum. A delegated Secretary performsthe responsibility of an official in-charge of the Department. After the devolutionit has been presumed that PTDCs motels and asserts in KP will be handed overto the same Secretariat. In order to compete in both the domestic andinternational markets and also to efficiently perform the newly assigned

responsibilities, it is required that both TCKP and DTS should restructure theiroriginations accordingly.

SECRETARY

Additional Secretary

Deputy Secretary

Section Officer-T Section Officer-A Section Officer-(S) Section Officer-(G)

Chief Planning

Officer

Department

of Tourists

Services

Pak Austrian

Institute of

tourism & Hotel

Management

Tourism

Corporation,

Khyber

Pakhtunkhwa

Directorate of

Sports & Youth

Affairs

Directorate of

Archaeology &

Museums

Figure 5: Organizational Structure of Department of Sports, Tourism, Youth Affairs, Archaeology &

Museum

In order to promote the tourism potentials of Khyber Pakhtunkhwa, the TourismCorporation Khyber Pakhtunkhwa (TCKP) was established as public limitedcompany in 1991. TCKP is governed by Board of Directors, where the provincialtourism minister serves as its chairman while the relevant secretaries performthe responsibilities of the directors. It is headed by a Managing Director as itchief executive. The main responsibilities of the Corporation are:

Promotion of tourism by exploiting the potential;

Produce publicity and promotional material for distribution at home andabroad;

Develop packages to attract domestic and international tourist byinvolving private sector;

Organize tourism fairs at home and attend international tourism fairs tointroduce the tourist product of KP;

Build hotels and motels, where private sector is shy to invest;

Monitor and manage the tourism activities;

Protect the tourism assets by bringing the awareness in general public byholding awareness campaigns;


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Play the role of catalyst by providing level playing field for the privatesector

Board of Directors

Chairman BoD

Managing Director

General Manager TIC &

Events & P&P

General Manager Admin

& Properties

General Manager

Special Projects (PE&D)

Information

CentresP&P Events

Manager Administration Computer Operator

Supporting Staff

Controller of Accounts

Assistant Controller of

Accounts/Cum Cashier

Figure 6: Organizational Structure of TCKP

Department of Tourist Services (DTS)

In KP, the office of Department of Tourist Services (DTS) was established byFederal Government in 1988, however, in March, 2011 after the devolution thisDepartment came under the administrative control of government of KhyberPakhtunkhwa. The main role of the Department is to provide measures forcontrolling and regulating the standard of service and amenities for tourists inHotels, Motels, Resorts and Restaurants.

The Department of Tourists Services has a mandate to implements the followingthree acts.

1. The Pakistan Hotel and Restaurants Act 1976 & Rules 1977

2. The Travel Agencies Act 1976 & Rules 1977

3. The Pakistan Tourist Guides Act, 1976 and Rules, 1977


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Assistant Controller

(B-17) Peshawar

Inspector (B-16)

Inspector Hotels & Restaurants

Inspector (B-16)

Inspector Travel Agencies

Superintendent

(BS-16)

Figure 7: Organizational Structure of DTS

Both the organization structure and the Acts implemented by DTS equallyrequire drastic amendments. The number of skilled human resources in theDepartment should be increased on priority. It is also important to improve theexisting rating system of hotels and restaurants. In addition, standards specified

for Tourist Guides should be amended and properly categorized. It is alsorecommended that an individual entity should be established within theDepartment for regular evaluation of the tourists guides and the concerned

training providers.

2. Existing and Previous Policies and Plans

2.1 Tourism Policies and Plans

In Pakistan, the available literature on tourism planning and management

reveals that the countrys first master plan was conceived in 1967. The planrecognized environmental issues in general terms, however, it did not emphasizeenvironmental conservation, urbanization and landscape preservation.Resultantly, hotels and tourists resorts emerged close to natural attractions andarchaeological monuments. From 1967 till the formulation of National TourismPolicy of 1990 some planning attempts were made for isolated projects such asUNESCO Master Plan (1972) for the Preservation of Mohenjo Daro andcompilation of tourists statistics in 1971 etc., however no comprehensive andstructured effort was undertaken to promote tourism in the country, In order tocontrol pollution in mountainous areas some environmental planning measureswere also introduced in 1983 and in 1988 by making mountaineering and

trekking expeditions responsible for leaving camping sites clean of garbage andmaking contribution of $200 for clean -up operation. The Government ofPakistan presented its first formal National Tourism Policy in 1990, however,due to some fundamental issues this Policy has rarely been implemented. Themajor reasons of this failure in implementation included absence of stakeholderinvolvement, poorly defined responsibilities of various public and private sectoractors, financial limitations, institutional constraints and low capacity. In 2010,the Tourism Ministry drafted a relatively more comprehensive National TourismPolicy. The policy identified challenges and constraints for tourism industry inPakistan, followed by marketing and developmental strategies. The marketingstrategy emphasized on public private partnership, diversification of tourismproducts, information technologies, target markets for selling specific products,


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whilst, the developmental strategy emphasized the role of public (Federal &Provincial governments) and private sectors in tourism development. It alsoproposed PPP opportunities in tourism sector of the Country. Furthermore, thedraft policy also recognized the importance of closer international cooperation,joint marketing using international organizations, multi-country and bilateral

relations for tourism development.

Although, the draft tourism policy, 2010 is comparatively more comprehensivethan national tourism policy, 1990, however, it still paid negligible attention tosome issues of grave concern like:

The three major acts covering hotels, travel agents, and tourist guide, whichall are outdated, were presented as part of the draft policy without anyappreciable changes for tackling the current needs of the industry.

PPP opportunities in Pakistans tourism sector were presented moregenerically without specifying areas for partnership and relevant investment

in each province.Like tourism policy, 1990, the action plan of the draft tourism policy poorlydefined stakeholders responsibilities.

For the sake of policies integration between provinces and the FederationPakistan National Tourism Council, actually proposed in national tourismpolicy, 1990, was reactivated without any structural or functional changes forthe sake of its more proactive role as compared to its dormant status in thepast.

Some of the unrealistic concessions and incentives mentioned in tourismpolicy, 1990 were repeated in the draft policy, which needs careful

examination for on ground implementation.The draft policy was presumed for achieving its strategic goals within the next10 years, but keeping in view the present political turmoil and financialinstability of the country the proposed time frame is still a debatable issue.

In order to maintain skilled staff complement in the tourism sector, TourismMaster Plan (2000) estimated an average of 3000 additional staff need to beupgraded each year. At present the total annual skilled staff output of thetourism training institutes is approximately 515, which is clearly insufficientto cope with the demand of the tourism industry. Although, the draft tourismpolicy has only highlighted the training need issue of the sector, however, itfailed to present a robust action plan to overcome this shortcoming of the

industry.Although, the draft policy exhibited glimpses of community importance intourism promotion, however, it neither included their exact views in theformulation of the policy nor it describe their future role in sustainabletourism development of the country.

2.2 KPs Comprehensive Development Strategy 2010-17

The Comprehensive Development Strategy (CDS) of KP presents the provincialgovernments vision and strategic direction and provides a comprehensivedevelopment plan. The CDS also presents short, medium and long term plans forvarious sectors. CDS presented an overarching development strategy covering allareas with priority policy and programs ranging from public finance,


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governance, social development, food policy, Agriculture employment, Irrigation,Power and Industrial development. CDS also extended the objectives laid outunder the national Poverty Reduction Strategy Paper (II). The CDS alsorecognized tourism as provinces key strength and important means of livelihoodto substantial percentage of population in Swat, Chitral, Abbottabad and

Mansehra. The key priorities for tourism sector as listed in CDS are given below.

Tourism Sector Priorities and Allocations

Institutional strengthening and capacity building of the Department, including STC (nowTCKP) PKR 450 Million;

Organization of sport events: national, provincial and regional events, includingpromotion of traditional sports and games PKR 200Million;

Construction of cultural exhibition halls at divisional level and art display galleries PKR330 Million;

Holding of cultural shows and activities, and display of handicrafts PKR 50 Million;

Assistance to drama artists, poets, musicians, artists, printing publication of literary andartistic works and allied activities PKR 135 Million;

Installation of chairlifts in key tourist destinations PKR 3,500 Million;

Commissioning and leasing of GoKP guest houses PKR 450 Million;

Holding of festivals and tourism promotion events PKR 600 Million;

Creation of transport fleet PKR 470 Million;

Creation of tourists hostels and centers PKR320 Million;

Development of publicity and promotional material PKR 325 Million;

Operationalization and transfer of federal government properties in

KhyberPakhtunkhwa to STC (now TCKP) PKR 400 Million;

Promotion of Khyber Pakhtunkhwa tourism abroad PKR 178 Million;

Exploring virgin tourist sites in Khyber Pakhtunkhwa PKR 125 Million;

Creation of water and air transportation PKR 1,000 Million;

Subsidies in various heads for the private sector from the tourism and hotel sector, thusmaking tourism an income-generating activity for the masses PKR 320 Million;

Procurement of caravans/mobile homes and log cabins for installation and utilization attourist sites PKR 800 Million;

Skiing facilities and water sports in feasible areas PKR 1,000 Million;

Construction of youth development centers and hostels, and the purchase of land atdivisional level PKR 200 Million;

Cash awards to talented youth, and youth exchange programmes PKR 70 Million;

Conservation and rehabilitation of historical sites in Khyber Pakhtunkhwa PKR 400Million;

Upgrading and maintenance of existing museums, and the construction of new museums PKR 80 Million;

Promotion of cultural heritage, domestically and abroad PKR 70 Million; and

Exploration and excavation and documentation of archeological sites, and publication of

reports. PKR 28 MillionSOURCE: Comprehensive Development Strategy 2010-17


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2.3 Economic Growth Strategy of KP

Economic Growth Strategy of KP reinforced the key priorities of CDS andprovided a framework to stimulate growth in potential growth/priority sectors

of the economy through enhanced public investments and complementarysectoral policies. Tourism was one of the priority sectors highlighted in this

strategy.

The Economic Growth strategy recognized that abundance of natural tourismpotential in the province can potentially transform the sector into a major driverof growth if security situation and internal conflicts settle down. The strategyalso highlighted that in areas with relatively better law and order situation,domestic tourism can be promoted to provide sources of employment andincome for the population of these areas. In order to achieve these objectives, thestrategy considers private sector as taking the lead role through investments,while TCKP contributing through monitoring and regulation. The strategy alsorecognized the limitations in terms of absence of data availability on touristarrivals, spending and visits or assets to facilitate the priorities in different typesof tourism such as ecotourism, mountain climbing, cultural tourism etc. Thestrategy also envisaged creation of a marketing department at TCKP for tourismpromotion.

2.4 Tourism Vision Document of KP

The tourism vision document recently developed with the technical assistance ofUSAID Firms Project presented a long term approach in the form of a VisionStatement which aimed to develop an international competitive tourism sectorwhich can act as the engine of economic growth for Khyber Pakhtunkhwa. The

document based its strategy on the key pillars of institutional & regulatoryreforms, infrastructure development, service quality assurance, human resourcedevelopment, aggressive marketing, investment promotion and environmentalconservation. The major recommendations of the vision document are outlinedbelow:

Institutional/Regulatory Reforms

Elevate Tourism to a high priority economic growth sector in the provincial

government.

Establish a Policy Think Tank on Tourism for broad based intellectual input

on policy and promotion of Tourism.Facilitate improvement of security environment in Swat and other tourist

places.

Transfer the control of tourism related commercial ventures to private

sector.

Provide a sustainable framework for Public Private Partnership in KP.

Strengthen KP Tourism Corporation as a provincial regulator and facilitator.

Restructure PTDC as a sector development company for national branding

and international promotion.

Facilitate prompt issuance of Pakistani visa to aspiring visitors abroad.

Ensure environmental conservation of tourism assets.


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Standards & Certifications

Upgrade the outdated and obsolete laws governing the tourism sector.

Entrust the enforcement of standards and certifications to TCKP.Enforce standards and certifications for hotels, tourist guides, transporters

and tour operators.

Marketing & Promotion

Focus on domestic tourists in the first phase of strategy as a thrust area to

revive the tourism Sector.

Focus on Buddhist & adventure tourists in the international tourist segment

to revitalize the flow of tourists with new vigor and marketing.

Plan and execute the marketing the Brand of Pakistan and KP with targettourist segments as part of a master plan.

Develop interesting and multilingual tourism information and promotion

material and ensure its wide distribution and regular update.

Develop a KP Tourism portal by TCKP as an interactive tool for promotion

and connectivity.

Promote and develop public private partnerships for tourism marketing.

Launch mass media campaign to promote tourism in domestic and

international markets.

Involve PIA and Pakistan Railways for an integrated role in tourism

promotion.Organize cultural and sports events for tourism promotion.

Mobilize community for strengthening tourist friendly environment.

Enhance participation in international tourism fairs and events.

Tourism Infrastructure Development

Improve/build access roads to tourist towns and tourist attraction places.

Improve electricity supply in tourist areas.

Improve transportation facilities to tourist places.Make Saidu Sharif airport operational.

Provide/improve support for rehabilitation of tourism infrastructure.

Develop new tourist sites and attractions.

Strengthen the institution of museums for tourism promotion in KP.

Develop archives of tourism assets.

Improve tourist facilitation services.

Human Resource Development

Undertake a holistic view and develop baseline data for human resourcedevelopment needs in the sector.


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Strengthen and upgrade the curriculum and facilities of the existing Tourism

training institutes.

Access to Finance

Improve the availability of commercial lending through a participatory

approach by SBP and commercial banks.

Ensure tourism specific prudential regulations and competitive cost of

financing.

Facilitate the existing and new investors through investment guidance and

regulatory support.

Mobilize donor community to participate in tourism development projects in

the province.

2.5 SWOT Analysis

The following SWOT analysis lists down the overall situation of tourism sector inKP.

SWOT Analysis of Tourism Sector of KP

Strengths Weaknesses

Large number of Natural andcultural tourism assets

Potential for adventure, cultureand nature tourism

Sites for winter tourism

Competitive rates

Extensive presence of hotelclusters

Unique Buddha tourism sitesfor religious tourism

Law and order situationWeak government capacity

Insufficient public and privateinvestments

Dilapidated tourisminfrastructure (roads, bridges,electricity)

Short tourist season inmountainous areas

Substandard tourist facilitationservices

Hesitation of private sector toinvest

High cost of doing business

Lack of focused and propermarketing

Low quality of workforce

Opportunities Threats

Greater provincial autonomy in

the wake of 18th

amendmentand KP Government willingness

Increase of law and order crisis

Natural disaster-prone areaLimited availability of funds


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to priorities tourism sector

Untapped tourism potential

Vast pool of domestic tourists

Focus on reconstruction

through donors support

Low public sector capacity andchange in leadership ofstakeholder departments

Change of political leadershipand shifting of priorities

2.6 Review of Tourism Legal Framework

This section looks at the legal and regulatory framework of the Tourism sectorwith a view to:

a) Identify deficiencies in the legal frameworkb) Whether the interest of the tourist is adequately protected by the legal

frameworkc) Whether there are any legal barriers to robust and effective enforcement.

Licensing/Registration and Regulation of Service Providers in the tourism

Industry

The Federal government regulated hotels, travel agencies and tourist guidesprior to the 18th amendment. However all these subjects are now devolved/or

belong to the provincial governments except carriage of passengers by air or sea,which continues to be a federal subject5.

Licensing/registration and regulatory requirements of service providers in theTourism Industry are as follows:

Hotel and Restaurant Act, 1976

The Hotel and Restaurant Act, 1976 regulates the standards of service andamenities for tourists in hotels and restaurants. The Act had been passed byParliament in pursuance of Article 144, which allows the Federation to legislateon a subject when so requested by two or more provinces. The Act prescribes a

star system of classification of hotels. The system allows the Controller to grantup to five stars to hotels depending on their services and comfort. The Act alsoallows the Controller to fix the maximum number of guests, which may beaccommodated in each room and/or unit of accommodation. He may also fixrates for board lodging and other charges6.

The Act provides for the offices of Controller, Deputy Controller and AssistantController to administer the Act7. The Act also establishes a Hotel andRestaurants Committee to advise the Federal Government in relation to matterspertaining to the Act. The Act requires the following compliances:

5 See Item No 24, Federal Legislative List, Schedule IV, Constitution of Pakistan, 19736 Section 10, Hotel and Restaurants Act, 19767 Section 3, Hotel and Restaurants Act, 1976


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i) Registration related compliances - Section 5(2) requires Hotels andrestaurants to render a certificate of medical fitness of staff prior toregistration. It also requires hotels and restaurants to comply with therequisite standards of health and comfort and building safety prior toobtaining registration.

ii) Information related compliances- Section 8(2)(e) requires owners to enterthe names of guests in a specified register. Section 9 new owners toreport change of ownership etc

Travel Agencies Act, 1976 and Rules, 1977

The Travel Agencies Act regulates both travel agencies and tour operators -thisis done by including tour operators in the definition of travel agencies 8. The Actdoes not apply to Government Enterprises, national carriers of Pakistan andforeign airlines duly authorized to operate to and from Pakistan and travel

agencies allowed to perform Hajj and other pilgrim related work9.

The Act sets up a Travel Agencies Regulatory Committee to advise the federalgovernment in the implementation of the provisions of the Act and assist in thepreparation of a code of conduct for travel agencies. The Act requires thefollowing compliances:

i) Registration compliances - Section 4 requires travel agency operators toapply for and obtain a license from the Federal Government.

ii) Maintenance of a Business Guarantee fund- Section 7 requires every travelagency to maintain a business guarantee fund. Payment from the fund mayonly be made on the orders of the Government and in the event of defaultof payment to a tourist, carrier, or hotel.

Tourist Guides Act, 1976

8 See section 2(f)(ii), Travel Agencies Act, 19769 Section 5, Travel Agencies Act, 1976

Type Regulating statute andregistering body

Compliances requiredby the Act

Registrationrequirements

Hotels Hotel and RestaurantsAct, 1976

Registration relatedInformation related

Confirmation of healthof staffConfirmation ofbuilding andequipment to health,hygiene and safety


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The Tourist Guides Act, 1976 regulates and controls the profession of touristguides. The Act establishes the Tourist Guides Regulatory Committee to advisethe federal government with regard to implementation of the Act and inpreparation of a code of conduct for tourist guides11. The Act allows the Federal

Government to fix the maximum charges to be paid to tourist guides12

. Itprohibits tourist guides from charging any fee including a tipping fee by guidesemployed by a travel agency on a fixed salary on a whole time basis 13. The Actrequires the following compliances:

i) Registration compliances - Section 7 requires tourist guides to obtain alicense prior to engaging in the business of provision of guide services.

ii) Information related compliances- Section 4(3) requires the FederalGovernment to maintain a register of tourist guides.

Summary of requirements

Enforcement of licensing and registration requirements

The enforcement of the above-noted statutes in uneven and generally ineffective

Laws affecting Environment and Heritage Protection

Natural beauty, environment, cleanliness, historic buildings/areas, artifacts andantiquities all attract tourists. Key laws, which regulate these Sectors, include the

10See section 4(2), Tourist Guides Act, 1976

11 Section 3(3), Tourist Guides Act, 197612 Section 8(1), Tourist Guides Act, 197613 Section 8(3), Tourist Guides Act, 1976

standardsNo certification inhotel managementrequired

Restaurants Hotel and Restaurants

Act, 1976

Do Do

TravelAgencies

Travel Agencies Act,1876

Maintenance ofbusiness guaranteefundRegistration related

Past experience ofmanaging travelbusinessOffice premises andrequisite number ofemployees/guidesrequiredNo certification froman institute required

TourOperators

Travel Agencies Act,1976

Do Do

TouristGuides

Tourist Guides Act,1976

Registration relatedInformation related

Examinationrequired10No certification froman institute required


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Environmental Protection Act, the Antiquities Act, 1976, the Local GovernmentAct, and the Wildlife Act. While a detailed review of these laws is beyond thescope of this work it is important to note that a high standard of enforcement ofthese Act will lead to increased tourist activity in the country and ensuresustainable development of tourism in the province.

Policy Making and Facilitation

All the above noted statutes provide for the establishment of Committees toadvise the federal/provincial government in the administration of the Act.However none of the Committees are functional and/or have assisted theFederal/Provincial Government in updating or revising rules.

Reform recommendations

While reform possibilities exist in every aspect of the legal and regulatoryframework, the following amendments will make the legal framework moreeffective and facilitative:

Hotels and Restaurants Act

i ) Detail of membership of the Advisory Committee

The Act and the Rules do not provide any detail regarding composition ofthe Advisory committee. The Act should provide for balancedrepresentation including representative of the Hotel Industry

i i) Reduction and/or removal of minimum room criteria for registration

Minimum criteria for registration of establishments as hotels should bereduced to make the Act more widely applicable. Small hotels provide thebulk of accommodation and there standards need to be regulated morerobustly as market forces have little impact on them

i i i ) Making registration mandatory before start of business

Section 5(1) currently requires filing of registration application within twomonths of the opening of the hotel or restaurant. It is not advisable for anybusiness entity to start its work first and then get registration. This alsodeprives the registration authority from taking corrective action at theoutset.

iv) Definition of businesses prohibited to operate in the vicinity of hotels

The Act and/or rules need to define the businesses that should not operatein the vicinity of hotels

v) Definition of heath, safety and environment standards

The Act and/or rules do not define the standard of health and comfort.These need to be defined to promote standardization of services

vi) Price fixation

While protection of interests of tourists is a fair objective, power to allow

the Controller to fix charges without consultation is unreasonable. Asuggested way is to allow the Controller to fix charges in consultation with


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the Committee or to fix them where he finds charges excessive ascompared to services and/or finds the service provider abusing hisposition in the market.

vii) Power of reservation

The power to reserve accommodation available to the Controller undersection 14 is excessive and should be qualified to make its use contingenton an emergency.

viii) Provision of booking/payment through internet

A large number of bookings and payments in the international hotelindustry are now made through the Internet. Provisions promoting andregulating the same should be included in the Hotel and Industries Act.

Travel Agencies Act

i ) Detail of membership of the Advisory Committee

The Act and the Rules do not provide any detail regarding composition ofthe Advisory committee14. The Act should provide for balancedrepresentation including representative of the Travel Industry

i i) Definition of Tourist

The Act excludes local tourists from the definition of tourists therebyexcluding them from safeguards provided by the law15. The definitionneeds to be amended to make it more inclusive .

i i i ) Travel agencies and Tour Operators need to be separately regulated

Travel Agencies and Tour operators are separate entities with differentscope of work and they should be dealt with separately.

iv ) Non-availability of information about Travel Agencies to tourists

The Data about travel agencies need to be searchable and accessible totourists16

v) Application of Act to Hajj operators and airlines

The Act needs to be more inclusive so as to ensure standardization ofservices. The current non-applicability provisions needs to be omitted17.

Tourist Guides Act

i) Detail of membership of the Advisory Committee

The Act does not provide any detail regarding composition of the Advisorycommittee18. The Act should provide for balanced representation includingrepresentative of the Tourist Industry

14See section 3(1), Travel Agencies Act, 1976

15See section 2(g) read with 7(3) of the Travel Agencies, Act, 1976

16 See section 4(4), Travel Agencies Act, 197617

But see proposed amendment bill in KP for restriction of exemption to national carrier only18

See section 3(1), Travel Agencies Act, 1976


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ii) Non-availability of information about Guides to tourists

The Data about tourist guides need to be searchable and accessible totourists

iii) Price fixation

The Act allows the federal government to fix charges, which should not bedone. This in anti-market and leads to a stunted and non-progressivesector

iv) Making enforcement effective

The provisions regarding fines and prosecution are ineffective and need tobe strengthened

3. Key Issues/Challenges for KP Tourism SectorThe tourism sector in KP has been facing a host of challenges that have been

impeding growth of the sector in KP. A thorough understanding of theseconstraints is required to develop strategies to address these bottlenecks. Someof these challenges are cross-cutting, affecting the overall economy such as thesluggish economic growth, unclear policy and institutional regime in the wake of18th constitutional amendment, poor law and order situation and low publicsector capacity to facilitate and regulate private sector. On the other hand, thereare also some serious sector-specific issues affecting tourism sector such aslimited availability of information to monitor travel and tourism trendspreventing planning; low quality of workforce; low level of private investments;absence of standards; poor infrastructure; limited and sub-optimal marketingactivities, etc. Some of these issues are discussed in more detail below:


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Cross-Cu ngIssues

Low Priority byGovernment

Sluggish EconomicGrowth

Unclear Policy andIns tu onal

Regime

Poor Law andOrder Situa on

Low Public SectorCapacity

Sector-SpecificIssues

Limited Availabilityof Informa on

Low Quality ofWorkforce

Insufficient Privateand Public

Investments

Absence ofStandards

DilapidatedInfrastructure

Limited and Sub-op mal Marke ng

Ac vi es

LandscapeDegrada on

Threat to CulturalAssets

Figure 8: Challenges Impeding Growth of Tourism Sector in KP

3.1 CROSS-CUTTING ISSUES

Sluggish Economic Growth Over the last few years, Pakistans economy has

faced high inflation and low growth, resulting in an economic slowdown. Thiseconomic slowdown has been further been compounded by low tax-to-GDP ratio,

high fiscal deficit, devaluing rupee, shaky law and order situation, huge energyshortfall and widespread natural disasters. According to Economic Survey 2011-


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12, Pakistans GDP growth has been projected to grow at 3.7% in FY 2011 -12against the target of 4.2%. As a result, Khyber Pakhtunkhwa continues to face itsshare of sluggish economic growth, further exasperated by high load-shedding ofelectricity in year 2011-12 creating operational problems for the existingbusinesses in the province, discouraging new private investments and impeding

the process of new employment generation. Furthermore, the sluggish economicgrowth has affected incomes of people, reducing their expenditure of leisurelyactivities such as tourism.

Unclear Policy and

Institutional Regime

- Recently under the18th constitutionalamendment, a numberof functions have beendevolved from the

federal level toprovinces. While thedevolution of power isaimed at enhancingprovincial autonomyand transferringdecision-making tolower governancetiers, this changedparadigm has also

come with some newchallenges. Theprovinces in mostcases were not readyfor this suddentransfer of increasedresponsibilities,moreover manyfunctions, which weresupposed to be performed by the national government are now subject to a lot ofconfusion with unclear responsibilities. This change also has a lot of implications

for the tourism sector. With abolishing of the federal Ministry of Tourism, thereis no entity in the federal government responsible for managing this function atthe national level. While a lot of tourism activity happens at the provincial level,there is a need for national government involvement in a number of functionssuch as countrys image building, smoothening visa regimes, etc. Moreover, theabsence of a tourism policy in KP has also created a vacuum. While TCKP hasbeen endeavoring tourism sector in the province, the sector also requirescoordinated efforts by a number of other departments and agencies such asenvironment, wild life, forestry, etc. This results in lack of synergy andcoordination.

Poor Law and Order Situation

The armed conflict in KP has taken its toll on

Bulgaria: National Tourist Council

Bulgaria established the National Tourist Council (NTC) in 1997as a consultative body to assist the government implement itsnational policy for tourism. Chaired by the Ministry ofEconomy, the NTC representatives are from centraladministration, state commissions, agencies dealing with

tourism, tourism associations, and chambers of commerce.NTCs functions include:

Presenting the annual state budget to the Minister ofEconomy. a Adopting a national tourism advertisingprogram before submitting it to the Minister ofEconomy for approval.

Overseeing the implementation of the national tourismadvertising programme.

Submitting an annual report to the Executive Directorof the Executive Agency for National TouristAdvertising and Information for approval.

Submitting concepts and programmes for tourism

development. a Delivering its opinion on draftnormative acts and making proposals for theiramendment, supplementation, or repeal.

Discussing issues related to the construction andmaintenance of tourist infrastructure and attractingforeign investments.

Coordinating and assisting in the implementation ofnational and regional projects.


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the tourism sector and the security crisis in Swat and other tourist areas in KPhas created unprecedented damage. While the situation has significantlyimproved in the last year, there is still a lot of hesitation amongst tourists,especially the international visitors, to visit tourism sites in KP. Furthermore, theheightened security situation has also created procedural hassles in visa

regimes, further discouraging international tourists.

Low Public Sector Capacity - Weak administrative capacity forms one of the

Tourism Infrastructure Damages Due to Conflict and Natural Disasters

The military operation in KP launched in early 2009 in particular in Swat valley and sometribal areas has imposed an immense cost on the local economy as large number of people(an estimated 2 million individuals) has been forced to leave their homes and livelihood. Inaddition to the loss of lives and injuries the ensuing fighting between the military andmilitants also caused damage to health facilities, educational institutions, water supply,roads, electricity, gas supply, shops, hotels, restaurants and businesses.

The World Bank survey report (2009) in KP estimated the damages incurred to tourismindustry was Rs. 180 million (US$ 2 million). According to this survey about 500 hotels havebeen operating in the Malakand division, out of which some 60 units have been reported asdamaged (12 % of total hotels).

Swat Tourism Sector Census (2010) explicitly explored the impact of conflict on the hotelindustry of Swat in terms of capital, revenue, and employment losses. The largest category ofcapital losses was recorded for building amounting to Rs. 72 million.

Pakistan Austrian Institute of Tourism and Hotel Management (PAITHOM) in Swat wasestablished in March 2001 at a cost of Rs140.50 million including foreign economic

assistance of Rs. 64.262 Shillings. Regrettably, during the military operation in Swat this stateof the art and purpose built building is not only looted but declared by Pak Army as atemporary detention cell.

Followed by 2009 conflict, the 2010 flash floods and heavy torrential rains have surpassedthe physical destructions ever caused by all the disaster in Pakistan. The catastrophe hasimpacted a wide population in Indus river basin starting from North in Gilgit-Baltistancrossing KP, and Punjab and hitting down the Sindh province. The unprecedented naturaldisaster has severely hit the human lives, livestock, infrastructure, crops, and livelihoods inKP. The dynamics of this disaster was such that life losses were less but the damage to publicand community infrastructure were beyond imagination.

According to the KP, Provincial Disaster Management Authority (PDMA) about 2000 km of

major and link roads, 40 major bridges, 40 minor bridges, 150 health facilities beside 158buildings (including hotels, motels and restaurants) damaged due to flood. The touristsdestination of Swat and Chitral were declared among worst and medium affected areasrespectively. In Swat valley almost all the hotels along the bank of river Swat were eitherpartly damaged or completely wiped out.

At present USAID and World Bank are providing financial support through various grantsprogram for revival of tourism infrastructure in KP, in particular in Swat valley. However, inorder to fully restore the tourism infrastructure both the government and private sectorparticipation will be of immense value. Furthermore, serious interventions are required byKP government in order to reinstate PAITHOM with respect to its objectives.


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core issues behind sub-optimal governance landscape in the province affecting anumber of sectors. The weak administrative capacity is manifested inoverstaffing and skill gaps, especially at the lower administrative tiers; highabsenteeism; mis-deployment and low productivity of key personnel; anddysfunctional oversight of service providers by middle and senior managers.

There are no clear performance or appraisal standards and low compensationoffered by the government prevents attraction of talent. This situation also takesits toll on the overall government functioning of the government. It is interestingto note that the situation is slightly better in TCKP, being an autonomousorganization, resulting in a number of notable initiatives by the corporation.However, the current capacity at TCKP seems limited, especially in the wake ofincreased responsibilities in post-18th amendment scenario.

3.2 SECTOR-SPECIFIC ISSUES

Limited Availability of Information The planning and management of anysector and its activities depend upon effective evidence-based decision-making,backed by flow of data and meaningful information. While the regular flow ofinformation is a cross-cutting problem, it becomes even a greater challenge fortourism sector, where the sector definition is porous and a number of privatesector players such as hotels, restaurants, travel agencies, etc. are catering toboth tourism and non-tourism sectors. This prevents collection and use ofreliable data. In many countries, to address this problem, a technique calledSatellite Accounting System is used. However, in KP, or even in Pakistan, no suchmethod is being used.

Low Quality of Workforce Availability of quality human resource has been a

significant challenge for the tourism sector. There are a few degree courses ontourism sector offered by large universities of the province. FurthermorePakistan Austrian Institute of Tourism and Hotel Management (PAITHOM) inSwat - the only notable training institute in the province for tourism-relatedtraining - has been non-operational since the conflict in Swat and is still is use byPakistan Army. The workforce issue is further compounded by the fact that notmany officials available in the public sector have thorough understanding of thesector. For private sector businesses, the reliance has mostly been on on-jobinformal trainings, making a dent in the quality of services provided.

Educational Institutes of Tourism & Hospitality in KP

No Name of Institute Date of

establishment

Courses Offered

Course Duration

1. Department ofTourism &Hospitality, HazaraUniversity, KP

2006 BS in Tourism & Hospitality 2 years /4Semester

MA in Tourism & Hospitality 4 Years/8semesters

Certificate courses in:

Front Office Management

Housekeeping Management.

Food & Beverage Service.Food & Beverage Production

3 Months


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2. Department ofTourism &Hospitality, AbdulWali Khan University,Mardan, KP

2011 BS in Tourism & Hospitality 2 years /4Semester

MA in Tourism & Hospitality 4 Years/8semesters

3. Department of

Tourism & HotelManagement,University ofMalakand, KP

2011 MA in Tourism & Hotel

Management

2 years /4

Semester

4. Pakistan AustrianInstitute of Tourismand HotelManagement(PAITHOM) Swat, KP

1999 Diploma in HotelManagement

6 Months

Short/Certificate Courses:

Front office management

House keeping

Food & beverages

Porter trainings

Tour guide trainings

3 Months

5 AdventureFoundation Pakistan

1981 Short/Certificate Courses:

Mountain Guides

Adventure Guides

21 days to 3Months


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Insufficient Private and Public Investments Development of tourisminfrastructure requires influx of substantial funds; the provision of which isdifficult for the government. In terms of travel and tourism governmentexpenditure, Pakistan was ranked 101st in the World Travel and TourismCompetitiveness Report. KP Tourism Departments budget in 2011-12 stoodaround PKR 10 million19, whereas in 2012-13, it is expected to be around PKR 11million. In 2011-12, an amount of PKR 1391.698 million was allocated fortourism (and sports) sector in Annual Development Program for 38 projects, outof which 11 projects were completed. In 2012-13 ADP, an amount of PKR 685

million has been allocated for tourism, sports, culture and museums, covering 3919 Revised estimates

DEGREE COURSES IN TOURISM

In Pakistan, formal educational in tourism and hospitality sector has comparatively a recentphenomenon. With respect to the Cabinet decision in 1960, the countrys first cookery schoolwas established at Karachi. In 1967, the school was upgraded to the status of an institute,which finally laid foundation for the establishment of the present Pakistan Institute ofTourism & Hotel Management (PITHAM). The aim of this Institution is to impart Knowledgeby training manpower for the hospitality, travel, and tourism industry. The Institute offersdiplomas, certificates and short courses in the relevant discipline.

In KP, education in tourism & hospitality sector is still at its infancy. Pakistan AustrianInstitute of Tourism and Hotel Management (PAITHOM) was established in March 2001,however, it became operational in 2006. The Institute offers 6 months diploma in HotelManagement and 3 months short courses in: front office management, housekeeping, food &beverages, porter trainings and tour guide trainings. According to the information collected,

the courses offered are mostly developed with respect to a standardized format of Austrianinstitutes in hotel management.

In 2006, for the first time, degree programs i.e. BS (4 Years) and MA (2 Years) were initiatedin Tourism and Hospitality by the Department of Tourism and Hospitality, Hazara University.In 2011, following almost similar course structure, the same programs have also beenintroduced by the Department of Tourism & Hospitality, Abdul Wali Khan University,Mardan. Department of Tourism & Hotel Management, University of Malakand, has alsostarted MA Program in Tourism & Hotel Management in 2011. Although, the mentioneddepartments have their specific board of studies for courses development/evaluation, but,critical analysis of the courses reveals that theoretical part of these courses is mostly adoptedfrom other relevant institutes, in particular from UK. However, the offered programs areunanimously following the HEC standard criteria established for BS and MA degrees. The

major issues of concern with the degree programs are:

poorly develop universities-industry linkages, in terms of skills gaps and training

needs;

relevant academics are rarely available;

lack of uniformity in the standards of courses;

most of the courses are neither up-to date, nor formally recognized internationally,

therefore, it would be difficult for the graduates to compete in the international

market and finally,

Keeping in view the limited funds availability to the governments institutes, it is less

likely that they should effectively deliver the desired practical part of the programs.


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projects, out of which 27 are ongoing and 12 are new. The flow of privateinvestments in the tourism sector of KP has also been limited. In order topromote private investments in the province, a regulatory framework is requiredto empower government officials and also to provide opportunities for secureinvestments to private sector investors. Presently, in KP, there is no such

framework; which limits the execution of this option20.

Absence of Standards

The enforcement of anystandards is virtuallyabsent in the sector. Theresponsibility ofmanaging the laws andstandards of hotels,tourist guides and travelagencies lies with

Department of TouristServices (DTS). Before18th Amendment, DTSused to work under thefederal Ministry ofTourism. As per themandate decided for DTS,it is responsible to ensurethe quality of touristservices through

implementation ofvarious enactments including: The Pakistan Hotels and Restaurants Act 1976;The Pakistan Tourist Guides Act 1976; and The Travel Agencies Act 1976. Thisabsence of a robust standards regime has implications for services offered byhotels and restaurants; licenses for tourist guides; fitness certification systemvehicles used by tourists; transportation rates, etc.

In KP the international certification will be equally beneficial for businesses,consumers, government, local communities and not the least for theenvironment. For businesses (e.g. hotels, restaurants, tour operators, travelagencies etc.) it would help to improve their quality, reduce operating cost and

would also provide a marketing advantage. It will also provide tourists withenvironmentally and socially responsible choices. In addition of providingopportunities of economic benefits to local communities, it will also ensurerespect for local culture. For government the certification will raises industrystandards in health, safety, environment, social stability and will also lower theregulatory cost. Although, international tourism certification systems arevoluntary, however, in order to compete in national, regional and internationaltourism market the KP government can make a sensible choice of specificcertification programs and can establish it obligatory for different tourismsectors.

20 The USAID Firms project is providing technical assistance to KP Govt. for developing PPP framework for the

tourism sector.

Certification is defined as a voluntary procedure that

assesses, audits and gives written assurance that a facility,product, process or service meets specific standards. Itawards a marketable logo to those that meet or exceedbaseline standards (Honey and Rome 2001) Certificationprogram in the tourism industry serve as an important toolfor distinguishing genuinely responsible companies,products, or services from those that make empty claims.

In order to acquire competitive advantages in regional andglobal tourism industry, different certification programsare followed in Asia and the Pacific. Some of thesecertification programs are: Decipher Portal (Australia),EccoCertification (Australia), Green Leaf FoundationCertificates (Thailand), Respecting Our Culture Program-ROC (Australia) and Green Globe (China, Japan). Theseprograms are successfully employed by clients in differenttourism sector in regional countries like Philippines,Indonesia, Malaysia, India, China and Japan etc, so, there isa great scope for its application in Pakistan in general andKP in particular.


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Dilapidated Infrastructure

Due to a recent history ofarmed conflict and natural

disasters, the tourism sectorin KP has suffered majorlosses, including physicaldamages to buildings andequipment and lost

businesses. This in turn has taken its toll on availability of tourist facilities in theprovince. Damage caused to access roads, unreliable supply of electricity andclosure of Saidu Sharif airport have further worsened the situation. The crisisdamaged roads and bridges in Swat valley, especially the access roadsconnecting Mingora to tourists destination of Kalam via Madian and Bahrain. At

present only four wheel vehicles can only drive on Mingora-Kalam road.

Similarly, the road from Khwazakhela to Shangla has also been partly damaged.Road connecting Chitral to the rest of the province also need up-gradation. TheMansehra- Naran road also needs up-gradation. Access roads should beconstructed on priority basis to reach tourists destination of KP. In addition, linkroads should also be developed to reach scenic places in Swat, Chitral andKaghan valley. Keeping in view the touristic importance of the mentionedroads/link roads it needs to be built and sustain as all weather roads.

Electricity is one of the basic infrastructures for tourism promotion. The poorsupply situation of electricity to the tourists destination in KP is further

devastated by the crisis. In order to encourage maximum tourists flow, thegovernment should ensure undisturbed supply of electricity to the touristsdestination in the province.

Access to comfortable and reliable tourists transport facilities in Swat, Kaghan,Naran and Chitral needs immediate attention. These transport facilities need tobe available from main cities of the country to major tourists town of KP and

from those towns to specific tourists attraction points.

Saidu Sharif airport in Swat used to have regular flights to and from Peshawar,Islamabad and Chitral but due to the conflict in the area this airport is closed. In

order to encourage and promote tourism in Swat through air route the SaiduSharif airport need to be operational.

Archaeological museums preserve the history of nations. KP is the home toGandhara civilization, however, only nine museums in the province showcasingthe glimpses of the local history. Keeping in view the rich history and culture ofthe province the number of museum needs to be increased. The conflict in Swatvalley also caused partial damage to the Swat museum, however, reconstructionis in progress in support of foreign donor.The state of the art Malam Jaba Ski Resort and chair lifts have been damagedduring the conflict in Swat valley. Similarly, an important tourist attraction in KPwas Khyber Steam Safari, which used to travel from Peshawar to Landi kotal

Trinidad & Tobago: Trinidad & Tobago Tourism

Industry Certification Programme

The Trinidad & Tobago Tourism Industry Certification(TTTIC) programme was established in 2001 as amechanism to improve the quality of tourism productsand services. It is based on the tourism standardsdeveloped by the Trinidad & Tobago Bureau ofStandards (TTBS) to ensure quality delivery. It is a jointinitiative of TTBS, the Tourism and IndustrialDevelopment Company of Trinidad and Tobago

(TIDCO), and the Tobago House of Assembly (THA),with the Trinidad & Tobago Hospitality and TourismInstitute (TTHTI) as the recognized body for hospitalityand tourism training.


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(border of Afghanistan). At present the train safari is not functioning due to thedamage caused by flood and militancy in the area. These facilities need revivalfor tourism promotion in KP.

In addition to the reconstruction of damaged infrastructure, new tourism

products and relevant infrastructure need to be developed in the province likeestablishment of culture tourism centers at potential sites; establishment of newtourists town e.g. Cherat in district Nowshera and Suna in district Kohat;construction of children and amusement park and adventure tourism facilities(rafting, rock climbing, mountain biking, sport fishing and jeep safaris etc).

Finally, establishment of basic tourism infrastructure facilities like public toilets,stop over points, information centers, fuel stations, police posts, first aidfacilities, children play areas, shelters with seating, telephone booths andparking areas along the roadsides of the tourists destination will boost tourists

flow to the province.

Limited and Sub-optimal

Marketing Activities

While the poor law andorder situation has playedits role in discouragingtourism in KP, someresponsibility also has tobe placed on lack of aneffective and well-

coordinated imagebuilding and marketingstrategy to promotePakistan and KP aspreferred tourismdestinations. KP has been bestowed with valuable tourism assets andunharnessed tourism potential in areas of natural, historic, archeological andcultural tourism, however, the tourism officials, especially at the federal level,have so far been unsuccessful in conveying this potential to the relevantaudience across the globe. According to World Travel and TourismCompetitiveness Report, Pakistan has been ranked at 117th number in the worldon effectiveness of marketing and branding activity. Similarly as per Travel andTourism Competitive Index, Pakistan has been ranked at 125 th, 127th and 62ndpositions on affinity of the local communities for tourists and tourism openness;attitude of population towards foreign visitors; and participation in internationalfairs.

Absence of a Robust Legal Regime As discussed above, the existing tourism-related laws in the province are outdated and need revision to facilitate a robustregulatory role played by the public sector, facilitate investments by the privatesector and to promote small businesses to compete. There is no PPP law in the

province, under which TCKP can invite BOT/BOO type projects.

The Bahamas: One-Stop Online Booking and

Immigration Card

In designing a competitive tourism experience, theBahamas has focused on two areas that many developingcountries have overlooked how tourists select and bookdestinations, and how to collect critical market informationfrom visiting tourists. With the spread of the Internet,tourists are increasingly comparison shopping and bookingonline. The Bahamas website, ,

allows the prospective tourist to create an online accountin which they can book and change reservations, e-mailthose plans to friends and family, and print out their ownvacation plan.


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4. Need for Tourism Policy Some Key IssuesAs discussed earlier, currently the Govt. of KP does not have a clearly articulatedformal tourism policy. However, considering that the tourism sector requirescoordinated efforts by a number of departments and agencies such as P&DDepartment, C&W Department, Finance, Excise and Taxation Department,PHA/NHA, environment, wild life, forestry, etc. besides the Tourism Departmentitself, along with TCKP, the need for having such a policy is critical. Moreover awell laid out tourism policy would demonstrate long-term commitment ofgovernment in the sector and would form the basis for shared understanding ofand synergized actions and coordinated planning by different stakeholders.Moreover, such a policy framework should ensure sustainable development oftourism as most of the uncontrolled and haphazard development of tourism hasnegatively impacted on the social, cultural, natural and economic environment oftourist destinations in KP. Therefore, the proposed policy should be based on theprinciples of sustainable development with recommendations on short, medium

and long term measures for its effective implementation to achieve sometangible results. In particular, the proposed policy would address the followingissues:

Post-18thAmendment

Scenario

Mul -StakeholderEngagement

Role of Public and

Private Sectors

Ins tu onalFramework

PolicyConsidera onsand Incen ve

Structure

Tourism Priority

Areas

ResourceConsidera ons

Developing Tourism

Policy for KP

Figure 9: Developing Tourism Policy for KP


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Post-18th Amendment Scenario As discussed earlier, after the passage of 18 thAmendment, there has been some lack of clarity on performing some of thebroader functions related to tourism sector. For effective tourism development,

the government must develop a sound and comprehensive policy framework atthe provincial level, clearly laying out the priorities of the government vis--visthe federal governments. The provincial government can then pursue the federalgovernment to maintain its role for effective coordination across the provinces.This would also result in optimal resource utilization and synergy of effort.

Role of the Government and Private Sector - The policy framework mustdelineate clearly the role of government vis--vis the private sector. Ideally thegovernment should adopt the role of a regulator as well as that of the facilitator,whereas the private sector should come ahead for service provision. As aregulator, the government should act as the custodian for rights of tourists and

ensure that they are getting quality services, whereas as a facilitator, it canprovide well-targeted tax, policy and financial incentives to private sectorplayers to promote investment in the sector. These incentives however, shouldbe tied up with clearly laid out policy objectives, rather than being offered foreverything and anything related to tourism sector. The target areas/sub-sectorscan be refined through consultations and in line with broader governmentpolicy. Last but not the least, the government should also coordinate andsynergize the tourism development efforts undertaken by various agencies,international donors and other stakeholders. If there is an established need todevelop tourism infrastructure by the public sector, this responsibility should beentrusted to the provincial agencies. For management of these facilities as wellas for undertaking other projects, various modalities can be considered includingPPPs.

Institutional Framework - The policy must include a well laid out institutionalstructure to implement the policy. Currently much of the activities areperformed by KPTD and TCKP, however, there is a need for involvement of otheragencies as well such as Environment, Archeology, Forestry, etc. Moreover, thereis a need to empower and strengthen TDKP and TCKP to drive theimplementation of policy.

Policy Considerations and Incentives Structure - Due to limited resources and

increasingly constraining fiscal space, the government may not be realisticallyable to offer all sorts of incentives to all the tourism related facilities. Theincentives therefore should be offered only under a well thought out incentivestructure. Such a structure should take into account the cost implications ofthese incentives and should evaluate the value for money considerations. Theincentives should also be closely tied with some well laid out policyconsiderations. These policy considerations would be answered through some ofthe following questions:


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Does the government envision taking a lead role in tourismdevelopment or would rather act as a facilitator and take the privatesector take the lead?

Are there certain high priority and low interest areas, where thegovernment wants to enhance investment and activity?

Should the tourism sector focus on local tourism or internationalvisitors? Such a question must be answered considering a pragmaticview of the current situation?

Are there any specific geographic regions or tourism sub-sectorswhich the government wants to promote?

In the priority areas, what are the key impediments that keep thetourists away? Is it the unavailability of infrastructure, transportnetwork inefficiency, high costs or merely a cultural issue?

What strategy can address the reputational loss of Pakistan as aterrorism-affected country? Is provincial branding a better idea?

Should the government invest in improving the overall law and ordersituation or should the government limit the tourist activities torelatively peaceful areas? Still another consideration could be to focuson developing secure zones.

Tourist Asset Mapping and Potential and Priority Areas - The governmentmust map the tourism assets and take an account of the existing situation ofthese assets. After a comprehensive mapping exercise, an improvement plan canbe developed highlighting priority areas. The government can then also identifythose areas, where there is a lot of tourism potential such as recreationaltourism, religious tourism, cultural tourism, eco-tourism, adventure tourism etc.

Resource Considerations - The policy framework should be based on andlinked with a clear resource framework, where the government can highlight theextent of its contribution through various means/forms. In the absence ofsufficient resources, the government may consider mobilizing additionalresources through private participation, commercial lending or donorsassistance.

Focus on Sustainable Tourism Development:

The proposed

policy mustemphasize ondevelopment ofsustainabletourism in theprovince.

The Brundtland

Report (UNWCED,1987), OurCommon Future,

definessustainable

Three Pillars of Sustainable Development


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development as development which meets the needs of the present without

compromising the ability of future generations to meet their own needs. Thesustainable activities take into account three main aspects including:environmental; social & cultural and economic. When we take these threeaspects into account in our activities, this is called the triple bottom line. It

means running a business, an organisation, or a government in such a way that itdoesnt destroy the resources- natural, cultural, or economic- on which itdepends. In fact a business that is run in this way can enhance all three aspectsand continue to operate profitability, while benefiting its surrounding naturalareas and communities. The principles of sustainability can be applied to anytype of tourism mass or speciality; city, beach or wilderness; large or small. Theycan also be applied to all relevant sectors of the tourists industry: lodging, tours,agencies, ground operators, guiding and transport. According to Agenda 21 forthe travel and tourism industry, sustainable tourism products operate inharmony with local environment, community and cultures, so that these can

become the permanent beneficiaries.

Therefore, the focus of the proposed policy should be on sustainable tourism,which can ensure sustainable development through fostering understandingbetween people, to create employment opportunities and bring about socio-economic benefits to the local communities particularly in the remote areas. Itshould also strive to preserve and promote KPs rich cultural and naturalheritage.


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APPENDIX A - List of Persons Consulted

USAID Firms:

1. Mr. Suleiman Ghani, Sr. Policy Advisor, USAID Firms2. Mr. Aftab-ur-Rehman Rana, Tourism Specialist, USAID Firms3. Mr. Taimur Khan, Business Enabling Environment Specialist, USAID Firms4. Ms. Asma Malik, Business Enabling Environment Specialist, USAID Firms5. Dr. Ihsan Qazi, Office Director (Islamabad), USAID Firms

Tourism Department & Tourism Corporation, KP:

6. Syed Aqil Shah, Minister for Tourism, Khyber Pakhtunkhwa7. Syed Jamaluddin Shah, Administrative Secretary, Tourism Department, KP

8. Mr. Hayat Ali Shah, GM, Special Projects, TDKP & TCKP9. Mr. Muhammad Ali Sayed, GM Events & TICs, TCKP10.Ms. Promila Isaacs, Consultant, TICs, TCKP11.Mr. Iftikhar, Deputy Secretary, Tourism Promotion, Bahrain, Swat12.Mr. Zarin Khan, Kalash Representative, TCKP13.Mr. Nadeem Khan, Finance & Accounts, TCKP21for PPP14.Ms. Zahra Alam, Tourism Department, KP

Allied departments, KP:

1. Dr. Muhammad Bashir Khan, Director General, EPA, KP2. Mr. Safdar Ali Shah, Conservator, Wildlife Department, KP3. Shah Nazar Khan, Director, Department of Archeology, KP4. Qazi Ijaz, Deputy Director, Department of Archeology, KP5. Mr. Muhammad Arabi, In-Charge, Department of Tourist Services (DTS), KP6. Mr. Hurmat Khan, In-Charge, Pak Austrian Institute for Tourism & Hotel

Management (PAITHOM), Golibagh, Swat

7. Mr. Javaid Iqbal, Regional Director, NAVTEC, KP8. Mr. Sajad Ali Shah, Director, NAVTEC, KP9. Mr. Bashir Khan, Additional Secretary Development, Finance Department,

KP22PPP

10.Shahab Ali Shah, Chief Economist, Planning and Development Department,KP23PPP

11.Mian Asim Ismail, Chief Economic Analysis Section, Public Policy and SocialReform Unit, Planning and Development Department, KP24PPP

12.Mr. Jaffer Kohistani, Manager, Patriata chairlift/cable car, TDCP, Murree,Punjab

21 Met by Ali Rahman for PPP framework

22 Met by Hasaan Khawar & Ali Murtaza for PPP framework23 Ibid.24 Ibid.


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FGD participants, mainly from the private sector:

13.Mr. Zahoor Durrani, Vice President PATO for KP, MD Sehrai Travel14.Said Nawab, President Tourism Promotion Association, Madyan, Swat15.Miraj Ud Din, President Hotel Association, Bahrain, Swat16.Bakhat Buland Khan, Sr. Vice President Hotel Association, Bahrain, Swat17.Mr. Rasool Khan, General Secretary, Islampura Khadi Association18.Mr. Wali Rehman, Vice president, Islampura Khadi Association19.Seth Matiullah, President, Tourism Promotion Association, Kaghan20.Mr. Nawazish Khan, Sr. Vice President, Tourism Promotion Association,

Kaghan

21.Mr. Asad Shah, Managing Partner, Nature Tourism Services, & ExecutiveMember, PATO, Abbottabad

22.Col. Khalid Mahmood, Principal, Tourism Training Institute (NITHHMS),Abbottabad

23.Mr. Hukum Dad, Vice President, Hotel Association, Nathiagali

24.Mr. M. Waseem, Coordinator, WWF Pakistan, Nathiagalli25.Iftikhar Hussain, Owner, Jewels Stone, Mingora, Swat26.Shirin Zada Dadar, GM, Hotel White Palace, Mingora, Swat27.Ikram Ullah, GM Swat Tourism Shop, Mingora, Swat28.Anwar Khan, GM Pameer Hotel, Mingora, Swat29.Muhammad Humayun, Manager Holiday Hotel, Madyan, Swat30.Amjad Noshad, Owner Muslim Hotel, Madyan, Swat31.Shad Muhammad, Owner Jawad Hotel, Madyan, Swat32.Abdul Rasheed, Owner Rasheed Hotel , Madyan, Swat33.Muhammad Hayat, Journalist, Swat Press Club, Mingora34.Dil Nawaz Khan, Manager Hotel Swat Valley, Bahrain, Swat

35.Ahmed Zaib, Hotel Owner 2 Star, Bahrain, Swat36.Mumtaz Khan, Hotel Owner, Bahrain, Swat37.Sher Bahudar, Owner Punjab Restaurant, Bahrain, Swat38.Nasir Khan, Owner Marina Hotel, Bahrain, Swat39.Amir Rasheed, Finance Secretary, Islampura Khadi Association40.Abdur Rehman, Member, Islampura Khadi Association41.Mr. Anayatullah, Suvastu Gallery, Mingora, Swat42.Mr. Abdullah, Handicrafts, Mingora, Swat43.Bakht Hussain, Handicrafts, Mingora, Swat44.Attaullah Khan, Arts & Crafts, Mingora, Swat45.Mr. Abdul Qudoos, Owner, Gateway Hotel, Mardan46.Mr. Arif Swati, Managing Partner, Nature Tourism Services, Abbottabad47.Mr. Asif Javed, CEO, Tourism Training Institute (NITHHMS), Abbottabad48.Mr. Khurshid Ahmed, CEO, Hotel Demanchi, Naran49.Engr. Mohsin Khan, Marketing Director, Hotel Demanchi, Naran50.Mr. Qamar ul Haq, Advocate, Abbottabad51.Mr. Noor Hussain Shah, Hotel construction contractor, Nathiagali52.Mr. Asif Ali, local entrepreneur, Nathiagali53.Mr. Hassan Awan, Veterinarian, WWF Pakistan, Nathiagali54.Mr. Barkat, Manager, Afaq Hotel, Nathiagalli55.Mr. Yousaf Akhar, CEO, SAIYAH Travel

56.Mr. Ejaz Sohail, Manager, SAIYAH Travel57.Mr. Naiknam Karim, MD, ATP


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58.Mr. Ashraf Aman, Chairman, Adventure Tour59.Mr. Paarcha Shahid, CEO, City Express60.Mr. Farhad Maqpoon, MD, Shikar Safari61.Mr. Sultan Khan, Manager, Nazir Sabir Expeditions62.Mr. Mubarak Hussain, CEO, Karakorum Explorers

63.Mr. Irfan Ullah Baig, EM, Travel Waljis (Pvt) Ltd64.Mr. Javed Awan, MD, Oriental Links65.Mr. GN Raikoti, MD, FMT (Fairy Meadow Tours)66.Mr. Liver Khan, MD, NPA (Nanga Parbat Adventure)67.Mr. Hussain Ali Ghulam, Hunza Tr

revised - tourism policy - position paper - 11feb2013

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