usaid’s tourism for all

USAID’S TOURISM FOR ALL

ANNUAL REPORT

FISCAL YEAR 2018 (JANUARY 8, 2018 – SEPTEMBER 30, 2018)

USAID’s Tourism for All Annual Report – FY 2018 ii

USAID’S TOURISM FOR ALL ANNUAL REPORT FY 2018

JANURY 18, 2018 – SEPTEMBER 30, 2018

USAID Contract No.72042718C00001

USAID NIA PROJETU TURIZMU BA EMA HOTU

Cover Photo Caption: A beach on Ataúro, one of Timor-Leste’s most sought-after tourist destinations among residents and visitors alike. Cover Photo Credit: Peter Semone, USAID's Tourism For All Project

DISCLAIMER

The author’s views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government.

TABLE OF CONTENTS

TABLE OF CONTENTS ....................................................................................................................................... 3

ACRONYMS ............................................................................................................................................................ 4

EXECUTIVE SUMMARY ....................................................................................................................................... 6

INTRODUCTION AND PROGRAM OVERVIEW ....................................................................................... 8

PROGRESS TO DATE AND ACTIVITY STATUS ......................................................................................... 9

RISK FACTORS, PROBLEMS, LESSONS LEARNED, AND BEST PRACTICES .................................... 42

ANNEX 1: SUCCESS STORY ........................................................................................................................... 45

ANNEX 2: ENVIRONMENTAL STATUS REPORT .................................................................................... 48

ANNEX 3: PROJECT ORGANIZATIONAL CHART, UPDATED TO SEPTEMBER 30, 2018 ......... 49

ANNEX 4: REPORTS AND DELIVERABLES................................................................................................. 50

ANNEX 5: GANTT CHART OF USAID’S TOURISM FOR ALL PROJECT IMPLEMENTATION TO SEPTEMBER 30 ,2018 WITH % COMPLETION STATUS INDICATED ................................................ 51

ANNEX 6: TOURISM INVESTMENT CONSTRAINT SURVEY RESULTS .......................................... 58

USAID’S Tourism For All – Annual Report FY 2018 4

ACRONYMS

ADB Asia Development Bank AEMTL Associação Empresarial das Mulheres de Timor-Leste AETTL Associacao de Empresas de Turismo de Timor-Leste ANATOUR Associação Nacional de Operadores Turisticos ATKOMA Asosiasaun Turizmu Koleku Mahanak Ataúro AusAid Australia Aid BEE Business Enabling Environment BOSS Business Opportunities and Support Services Project CCI-TL Chamber of Commerce and Industry of Timor-Leste COP Chief of Party COR Contracting Officer’s Representative DFAT Department of Foreign Affairs and Trade DIT Dili Institute of Technology DSC Destination Stewardship Council ETDA East Timor Development Agency FY Fiscal year, from October 1 of the prior year and ending on September 30 of the

following year. GoTL Government of Timor-Leste GSTC Global Sustainable Tourism Council HCV high conservation value HOTL Hotel Owner’s Association IADE Instituto De Apoio Ao Desenvolvimento Empresarial ILO International Labor Organization LMC Local Management Council LOP Life of Project MABs Man and Biosphere Program MAF Ministry of Agriculture and Fisheries MDF Market Development Facility M&E monitoring and evaluation MFI microfinance institution MoT Ministry of Tourism MoF Ministry of Finance MOU Memorandum of Understanding MTA Marine Tourism Association MTCI Ministry of Tourism, Commerce, and Industry MEL Monitoring & Evaluation, Monitoring & Evaluation & Learning NGO Non-government organization NTA National Tourism Authority NTDP National Tourism Development Partnership NZAID New Zealand Aid PEA Political economy analysis PPP Public Private Partnerships PY2 Project Year Two PY3 Project Year Three Q1 Quarter One of a fiscal year Q2 Quarter Two of a fiscal year Q3 Quarter Three of a fiscal year Q4 Quarter Four of a fiscal year SME Small and Medium Enterprises STTA Short Term Technical Assistance SWOT Strengths, Weaknesses, Opportunities, Threats


TA Technical Assistance TBD To be determined TDA Tourism Development Authority TEDP Tourism Enterprise Development Program TI Trade Invest TIWG Tourism Investment Working Group TLTA Timor-Leste Tourism Authority ToT Training of Trainers TOWG Tour Operator Working Group TVET Technical and Vocational Education and Training UNESCO United Nations Educational, Scientific and Cultural Organization UNWTO United Nations World Tourism Organization USAID United States Agency for International Development ZEESM Zonas Especiais de Economia Social de Mercado


EXECUTIVE SUMMARY

The Timor-Leste National Tourism Policy Growing Tourism to 2030-Enhancing a National Identity was ratified and approved by the Council of Ministers in 2017. It posits five overarching themes (Priority, Prosperity, Protection, Partnership and People) through which government, industry, civil society, academia, and development partners should view tourism and focus their efforts in order to achieve the goal of tourism sector success and sustainability for the country. Building on the framework established through the National Tourism Policy, USAID’s Tourism For All project is helping promote Timor-Leste’s competitiveness as an international tourism destination while preserving its unique environmental and cultural heritage. It is expected that project activities will augment Timor-Leste’s efforts to boost tourist arrivals to 200,000 annually by 2030, increase employment in tourism to 15,000 jobs and generate US$150 million in annual tourism revenue. Ultimately, the project should be able verify the theory of change, which states:

If institutions, policies, and laws are in place to implement the National Tourism Policy, then Timor-Leste will bolster the confidence of the private sector and improve Timor-Leste’s ability to attract the investment necessary to develop its tourism industry. If local communities are engaged to develop their tourism offerings, replicable and sustainable tourism development models may be introduced that promote Timor-Leste’s cultural and natural heritage. By creating socially inclusive partnerships that offer a “win-win” for public, private, and community stakeholders, then participation in Timor-Leste’s tourism sector will expand and increase income for a broad range of Timorese.

In so doing, the project will support the Mission’s Country Development Cooperation Strategy goal of facilitating a more prosperous, healthy and democratic Timor-Leste.

Unfortunately, since commencement of implementation of USAID’s Tourism For All project Timor-Leste has suffered from a severe political stalemate, which has caused frustration, confusion and fragmentation among tourism stakeholders (public sector, industry and civil society). The appointment of a Minister for the tourism portfolio has been delayed and there has been an acute lack of budget for tourism officials to operate. As a result of these external factors, the project has experienced difficulties in advancing most results and activities scripted under Objective 1. Despite these challenges, the project has conducted extensive research and established relationships that will prove valuable in subsequent years of implementation. The project has gained a better understanding of Timor-Leste’s maritime, terrestrial and cultural assets in the project’s focus regions allowing for a better assessment of what can and cannot be achieved in the two- to four-year scope of the intervention.

Objective 2 of USAID’s Tourism For All project is focused on creating conditions for sustainable and replicable tourism investment activities. In FY 2018, the project conducted work with local communities in Hatobuilico, Maubisse, and Ataúro to help establish cooperative frameworks and build awareness of the risks and opportunities of tourism development. Segments including dive, religious, and adventure tourism were identified as presenting high potential and deserving of further study and facilitation. Given the limited aviation access, it was concluded that key source markets to develop in the short term are Indonesian Catholics, expatriates living in Indonesia, Bali holiday extenders, Australians (ex. Darwin) and residents of Singapore. By nurturing demand from these markets, increased arrival numbers can be achieved leading to improvements in product diversity and quality. The project has identified scope for interventions in product development (coffee, handicrafts, whale watching) and skills training (entrepreneurship, general tourism awareness, numeracy, hospitality). In addition, there have been efforts to harmonize the activities of development partners (NZAID, DFAT/AusAid, The Asia Foundation, and Market Development Facility) to ensure collaboration, enhance effectiveness and avoid replication.


USAID’s Tourism For All has been able to establish a strong foothold in the community during its first six months of implementation. A talented group of Timorese professionals have been recruited. An agile and focused organizational structure has been established to reflect the key themes of the National Tourism Policy (Priority, Prosperity, Protection, Partnership and People). The Grants program approach has been prepared. Institutional knowledge and awareness have been developed and networks and partnerships established. Collectively, these elements will provide the impetus for an accelerated year two engagement and work plan that will lead to the delivery of key milestones.


INTRODUCTION AND PROGRAM OVERVIEW

Context

With untouched beaches and coastal waters abundant with marine life, stunning mountain ranges, and unique cultural sites, Timor-Leste has the ingredients for a successful tourism industry. Drawing in 200,000 tourists a year by 2030 — a goal articulated in the National Tourism Policy — presents a tremendous opportunity for growth. However, indigenous businesses that provide tourism services have a limited capability to serve a new wave of tourist arrivals. Currently, the core tourism sector consists of only six tour operators, four dive shops, two hostels, and some 30 hotels in Dili, with hundreds of auxiliary service providers (e.g., taxis, microlets, coffee shops, and restaurants). Most have opened since independence, and as a result of this inexperience, service is mixed, information about attractions difficult to find, and infrastructure underdeveloped. While hotels are often half full, more hotel development will be needed to meet future demand, particularly outside Dili. The lack of travelers discourages further investment and development of the hospitality industry outside of Dili. Of the more than 70,000 international arrivals in 20161, the United Nations World Tourism Organization (UNWTO) estimates that only 5,000 were bona fide tourism arrivals.

Compared to destinations like neighboring Bali, which received 4.9 million international travelers in 2016, Timor-Leste remains off the radar of most Asian travelers. Expensive airline prices, the dollarized economy, and a lack of positive international press about Timor-Leste also hinder growth. Improvements in cost competitiveness will take time. Targeting the “off the beaten path” adventure-seeking clientele can help Timor-Leste leverage the success of nearby countries and offer distinguishing and complementary attractions. Timor-Leste also has the valuable opportunity to study and learn from the experience of other nations in the region, especially small island states in the Pacific, other nations that emerged from conflict such as Sri Lanka, and those areas with Portuguese colonial history such as Flores, Indonesia.

Tourism is recognized by the Timor-Leste government as an important sector for diversifying the non-oil economy and is referenced in many key policies. However, Timor-Leste currently lacks a consistent vision and agreement about how to achieve this goal. This inconsistency creates a confusing environment for investors and existing businesses.

Project Background

The vision behind United States Agency for International Development’s (USAID) investment in the tourism sector through USAID’s Tourism For All project (Tetun: USAID nia Projetu Turizmu ba Ema Hotu) is to promote Timor-Leste’s competitiveness as an international tourism destination while preserving its unique environmental and cultural heritage. The purpose of this activity is to expand and improve Timor-Leste’s tourism offerings using an inclusive and sustainable approach; to facilitate private investment by working with government to establish incentives and obligations that are more private sector-friendly; to promote steady and sustainable tourism growth; and to safeguard and conserve the environment and social characteristics of Timor-Leste’s local communities.

The Timor-Leste Strategic Development Plan 2011-2030 identifies five different tourism niches including: eco and marine, historical and cultural, adventure and sports, religious and pilgrimage, and conference and convention. The project will focus on these niches and products generated by Timorese tourism activities associated with them, in order to augment receipts to the local economy.

1 World Tourism Organization, Yearbook of Tourism Statistics, Compendium of Tourism Statistics and data, https://data.worldbank.org/indicator/ST.INT.ARVL?locations=TL. The statistic reflects an increase from 2015, when the number of arrivals in Timor-Leste was 62,000. Arrivals had reached a maximum value of 79,000 in 2013 but declined as the number of workers employed by international organizations in Timor-Leste declined.

https://data.worldbank.org/indicator/ST.INT.ARVL?locations=TL


Activities in the initial three-year project will stimulate public and private cooperation to market Timor-Leste as an “off-the-beaten-path” destination for adventure travelers and eco-tourists. The strategy complements the government of Timor-Leste’s current national tourism policy, which seeks to boost tourist arrivals to 200,000 annually by 2030, increase employment in tourism 15,000 jobs and generate US$150 million in annual tourism revenue. USAID’s Tourism For All project is expected to learn from and adapt to changing circumstances, including market forces, throughout implementation, which can result in shifts in selected niches or products when warranted. It will be important to consider both private sector investment on private land and how to create favorable conditions for private sector investment in, and management of, public assets such as protected natural or cultural sites. Through the project, the project staff must implement the solution accepted by USAID that contributes to measurable improvements in receipts derived from the tourism sector in Timor-Leste.

The project will focus on creating inclusive tourism by improving industry governance and promoting sustainable investment. The project will work to improve and increase employment in the tourism workforce, which the GoTL estimates is now only about 4,300 people, create public/private partnerships to boost tourism governance, and push deliberate and incremental investment that focuses on bringing more women and youth into the sector.

Theory of Change

USAID’s Tourism For All Project Goal:

Expand and Improve Timor-Leste’s tourism offerings using an inclusive and sustainable approach.

Achievement of the program goal will be measured by the following results:

● Broad Timorese participation in selected tourist niche and product activities; ● Increased income for Timor-Leste generated by tourism (for Timorese people and

government revenue). Theory of change:

If institutions, policies, and laws are in place to implement the National Tourism Policy, then Timor-Leste will bolster the confidence of the private sector and improve Timor-Leste’s ability to attract the investment necessary to develop its tourism industry. If local communities are engaged to develop their tourism offerings, replicable and sustainable tourism development models may be introduced that promote Timor-Leste’s cultural and natural heritage. By creating socially inclusive partnerships that offer a “win-win” for public, private, and community stakeholders, then participation in Timor-Leste’s tourism sector will expand and increase income for a broad range of Timorese.

PROGRESS TO DATE AND ACTIVITY STATUS

Objective 1: Facilitate Implementation of National Tourism Policy

The Timor-Leste National Tourism Policy Growing Tourism to 2030-Enhancing a National Identity was ratified and approved by the Council of Ministers in 2017. It posits five overarching themes (Priority, Prosperity, Protection, Partnership and People) through which government, industry, civil society, academia and development partners should view tourism, and focus their efforts in order to achieve the goal of tourism sector success and sustainability for the country. In addition, a new tourism brand Explore the Undiscovered was unveiled and a website launched. However, despite these advancements, tourism development in Timor-Leste remains stagnant and will continue to be until


such a time as the effectiveness of the public sector can improve its engagement with the tourism industry, civil society, conservation organizations and communities and advance appropriate legislation, policies and institutional strengthening needed to advance the tourism sector.

The current political stalemate, which has been ongoing since USAID’s Tourism For All project implementation commenced in early 2018, has caused further fragmentation among tourism stakeholders. Discussions in relation to the proposed National Tourism Authority have been halted and the newly formed Ministry of Tourism, Industry and Commerce is paralyzed to act due to the absence of leadership and a limited budget.

As a result of these external factors, there has been limited ability for USAID’s Tourism For All project to make tangible advancements in a number of the Objective 1 result and activity areas. Of note, Objective 1 primarily focuses on the Tourism Policy’s Priority (Result 2, 3), Protection (Result 4) and Partnership (Result 1) pillars. However, a strong baseline has been established in relation to organizational set-up; institutional knowledge and awareness; networks and partnerships; and capacity, which will provide the impetus for an accelerated year two engagement and work plan.

During the remaining period of implementation, the project will support institutions in order to achieve the following results:

• Assist in the formation of the National Tourism Authority; • Support the establishment of key tourism framework documents and implementation

thereof; • Improve the capacity of select government agencies to better perform their duties; • Identify select maritime, terrestrial and cultural assets in the project’s geographic focus areas

and advocate for their protection; and • Encourage broad public and private participation in policy dialogue and development.

RESULT 1: PROMOTE PUBLIC AND PRIVATE PARTICIPATION IN POLICY DIALOGUE AND DEVELOPMENT

Activity: Establish a working relationship with the National Tourism Authority and formally identify task forces or similar efforts that the project can assist by material support, including providing consultants or sponsoring activities.

The Government of Timor-Leste (GoTL) has yet to appoint a Minister of Tourism, Commerce and Industry (MTCI) resulting in ongoing delays in the creation of a Timor-Leste Tourism Authority (TLTA) or similar body to support improved stakeholder cooperation among public, private and civil society actors, as recommended in the Timor-Leste Tourism Policy.

Notably, the establishment of a TLTA was part of the five-year program of the VII Constitutional Government and was approved in principal by Council of Ministers in 2017. However, during ensuing parliamentary debates, the VII Constitutional Government program was rejected by the opposition party, putting a stop to the implementation of a TLTA. It remains unclear whether the VIII Constitutional Government, which was formed in June 2018, intends to include the TLTA initiative as part of their five-year program.

Despite these uncertainties and delays, USAID’s Tourism For All Project has instigated the establishment of a Tourism Investment Working Group (TIWG) comprised of MTCI and Trade Invest (TI) to discuss tourism development zones and the creation of a tourism investment manual. This group met twice (July and August) during which discussions focused on Dili (Cristo Rei/Metiaut), Ataúro and Hatobuilico, and the immediate needs of these destinations. In addition, key constraints to development, including the lack of land property titles and tourism investment law, have been discussed. In relation to land laws, it has been clarified that the first lease period for state-owned land

USAID’S Tourism For All – Annual Report FY 2018

11

is 50 years whereas there are no limitations on privately held land. Investors are advised to check the legal status of property with the Office of Land and Property of the Ministry of Justice and Public Works for the land use status. The need for technical expertise to further develop tourism investment regulations and possibly researching and publishing a manual have been identified as potential interventions by the project. This can help information flow and the streamlining of investment facilitation. Membership in this working group is expected to expand and the scope of discussions magnify. For example, the future membership in the TIWG might include the Chamber of Commerce Timor-Leste (CCI-TL), Associação Empresarial das Mulheres de Timor-Leste – Women’s Association (AEMTL) and Hotel Owner’s Association (HOTL).

In addition, attempts were made by the project to assemble a Tour Operator Working Group (TOWG) to include key inbound agencies and transportation companies, including: Eco Discovery, Timor Unearthed, Dive Trek and Camp, Island Explorer Holiday, Corrotrans Taxi (Blue Taxi), Mega Tour, and Timor Adventures. The first meeting was held on 18 July 2018 at the Project Office, which was attended by six of the seven tour operators. The main purpose of setting up this working group was to create new tour packages and to market new events at the national and local levels to attract tourists. Another positive outcome of the TOWG was the participation of two leading inbound tour operators in the Mt. Ramelau Taskforce. Unfortunately, it has proven difficult to have any continuity with the TOWG group because of competitive interests among the group and apprehension to any value that such a grouping can produce. Therefore, the project will take a different approach, and will collaborate independently with tour operators to develop business opportunities. The project will also collaborate with Dive Trek Camp on Cruise Tourism, a sector in which they are currently the leading company. It is hoped that through this individual partnership approach, in the medium-term, trust can be gained and the TOWG reinstated.

Meetings were also held with AEMTL and the Asosiasaun Turizmu Koleku Mahanak Ataúro (ATKOMA) to establish possible points of collaboration. Through short term technical assistance (STTA), the project is assessing the viability of assisting in the legalization of ATKOMA to enhance its effectiveness in destination marketing, tourism training and mentoring, and in research, planning and advocacy. In collaboration with AEMTL and the Dili Institute of Technology (DIT) a panel discussion was organized on 10 July 2018 to engage in dialogue on topics related to hotels, tour operators and travel agencies.

201 students (female: 147 and male: 54) from DIT’s Departments of Tourism, Travel and Hotel Management participated. The main objective of the panel discussion was for businesses to share their experiences and serve as role models for aspiring tourism professionals. The students were enthusiastic and active in discussions, and eager to know about opportunities in the tourism industry. At the conclusion of the event, a video entitled “The Sea that Sustains Us”, produced by USAID was shown to raise awareness of environmental protection of Timor-Leste’s maritime assets.

Summary Update of Output:

A TIWG was formed by the project, however it was not recognized by the TourismDevelopment Authority (TDA) as no such body exists. Attempts were also made to establisha TOWG.

DIT student engages with the AEMTL panel to seek

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RESULT 2: FACILITATE APPROVAL AND IMPLEMENTATION OF KEY TOURISM FRAMEWORK DOCUMENTS

Activity: Develop Tourism Development Framework

While it was not viable to conduct a Political Economy Analysis (PEA) during Y1 due to ongoing political changes in Timor-Leste, the tourism project was able to anecdotally validate the posited theory of change by confirming that if the framework of the National Tourism Policy is followed by public sector entities in partnership with the tourism industry and communities, the sector will be able to contribute more significantly to national development goals and income distribution. Although of a confidential nature, the project was able to garner an understanding of PEAs recently conducted by development partners and NGOs, which was helpful in guiding partnership decisions during the first year of project implementation.

The USAID’s Tourism for All project has yet to conduct its own PEA and intends to mobilize STTA in the early part of 2019 when there is more certainty in how the GoTL intends to approach the tourism portfolio. This will influence the positioning of the Tourism Development Framework and help guide program implementation, discussions and collaboration between the project and the public sector, industry and civil society.

Summary Update of Outputs:

A tourism development framework was not drafted nor released for review by interested parties due to ongoing political uncertainty and lack of tourism leadership at the national level.

Similarly, no MOUs or similar agreements were signed by USAID and ministries to develop tourism sector for reasons stated above.

Activity: National Tourism Strategy and Action Plans Developed

For reasons beyond the control of the project, the development of an official strategy and action plan in support of the National Tourism Policy implementation has not been accomplished. This is due to Ministerial positions in key Ministries not being filled, including Tourism, Industry and Commerce. In addition, a National Tourism Authority has yet to be established to facilitate improved public private partnership and collaboration. In preparation for engaging in a participatory process, USAID’s Tourism For All project, in collaboration with development partners, has internally drafted a strategic framework that outlines three pillars and proposed supporting actions as depicted in the below figure. The strategic framework proposes a vision and expected outcome that are re-enforced by actions related to tourism supply, demand and partnerships. This framework has not been harmonized with any existing work plans, budgets or strategies of the Minister of Tourism, Commerce and Industry, which has yet to share its internal plans outside of government, seriously inhibiting any shared approach to implementation.

The project has also collaborated with the Asia Foundation to integrate the aforementioned strategic framework into the 2018 Timor-Leste Tourism Barometer, which is an instrument to monitor and evaluate tourism growth and development, thereby allowing for adaptation to changing circumstances of market forces and shifts in the political economy.


A framework for national tourism strategy has been identified, but not yet released for comment due to ongoing leadership gaps at the national level.

No action plans were put in place due to aforementioned political stalemate.


Activities

Strategic Objectives

Expected Outcome

VisionTo incrementally realize the Timor-Leste Tourism Policy’s

aspiration of an integrated, prosperous and equitable tourism sector

Tourism increasingly contributes to the economy and international competitiveness of Timor-Leste

Pillar 1Collaboratively

develop the supply side of Timor-Leste

tourism by expanding

products and services

Activity Group 1.1Identify and Inventory Tourism Products and

Services

Activity Group 1.2Develop multiple tour

package itineraries

Activity Group 1.3Commit minor investments to

improve destination competitiveness

Pillar 2Leverage the

Timor-Leste brand to promote and

position the country as a

desirable tourist destination

Activity Group 2.1Secure channels to conveyTimor-Leste

Tourism brand

Activity Group 2.2Produce and curate content to express

the Timor-Leste Tourism brand

Activity Group 2.3Promote in targeted consumer markets

and measure outcomes

Pillar 3Establish

institutional arrangements that

ensure strong partnership among public and private

stakeholders

Activity Group 3.1Enable the

establishment of product clubs (i.e.

coffee tours, handicrafts, scuba diving operations)

Activity Group 3.2Establish a public

private partnership tourism authority or

similar

Activity Group 3.2Organize regular

Timor-Leste Tourism Symposia


RESULT 3: SELECTED GOVERNMENT AGENCIES BETTER ABLE TO PERFORM THEIR DUTIES

Activity: Identify key government units for close partnering

Due to the ongoing uncertainty of the new government structure, the project’s Chief of Party decided to delay conducting a Political Economies Analysis (PEA), which has hampered the ability to select government units to receive technical assistance in the base period focused on improving operational efficiencies and bolstering effectiveness. The project intends to conduct the PEA and to identify eligible government units based on objective selection criteria (e.g. expressed political will to undertake change; operating under an existing mandate to regulate tourism; likely impact on stimulating private sector investment; and linkages with communities in geographic focus areas). The ultimate determination of specific units will be a USAID decision based on information and recommendations made by the project. A scope of work has been developed and identification of suitable STTA will take place early in Y2.


No government units have been selected for targeted technical assistance nor has agreement to receive such assistance been broached.

Activity: Conduct capacity development assessments for appropriate GoTL agencies

The preparation of the PICAL tool has been completed by the project and is ready for use by the project when deemed appropriate in consideration of the fluctuating political environment and absence of a Minister for the tourism portfolio. It will also be important to complete the PEA prior to deciding which GoTL agencies should undertake the PICAL assessment.

The Public-Private Partnerships (PPP) Investment Report prepared by the project has provided some initial evidence to suggest that relevant agencies are in need of developing institutional knowledge and expertise in PPPs in order to self-reliantly implement projects without external support. Specific attention should be paid to supporting the PPP Unit and Project Development Management Unit housed within the Ministry of Finance (MoF). The report states that consideration should also be given to include municipalities in the PPP framework as key stakeholders and important partners in numerous projects. This is particularly true in the City of Dili where numerous potential projects exist.

Beyond the MoF, the project has yet to explore other beneficiaries for capacity building such as the Ministry of Agriculture and Fisheries, MTCI, Secretary of State for Environment, Secretary of State for Arts and Culture and others. The identification of these agencies will be a focus of Q1 and Q2 of PY2.


The PICAL Index assessment tool was successfully modified for the Timor-Leste context.

Activity: Assess performance, information, and capacity gaps

As evidenced in the baseline survey conducted (see next activity), the sharing of regulatory information with the public, including tourists, and with tourism businesses, seems to be limited. The project conducted a gap analysis to identify fissures in the dissemination of information to key tourism sector stakeholders. First and foremost, there is a need to disseminate the National Tourism Policy to public sector officials across key government Ministries, departments and agencies; industry leaders and employees; and civil society organizations, including NGOs. The policy was published in three languages in an easy to read format in both hard and digital versions, allowing it to be shared in multiple ways. Similarly, there is low awareness of tourism laws, due to weak broadcasting thereof. And as previously highlighted, there is a critical crisis in information sharing across government, industry and


civil society institutions leading to replication of efforts, inability to capture lessons learned and general inefficiencies. It is suggested that a possible solution to this information sharing void could be the establishment of a repository specific to tourism that would include reports, studies, policies, laws, training materials, etc. and be made publicly available. A good example of this is the regional Mekong Tourism Coordinating Office based in Thailand which has established a publicly accessible e-library2 containing relevant information for governments, industry and development partners.

In addition to poor internal information sharing, there appears to be low awareness in the international marketplace of Timor-Leste as a tourism destination and it is difficult for potential visitors to gather information, both outside and inside the country. The tourism sector is fragmented and there is significant infighting and distrust among stakeholders. This lack of cooperation impacts negatively on international marketing efforts, policy development and investment prioritization.

The project will work on easing these inefficiencies and other gaps in information sharing and dissemination in Y2.


A report identifying the information gaps likely to negatively influence the tourism sector in Timor-Leste and ways to close identified gaps was drafted.

Activity: Conduct Tourism Awareness Baseline Assessment

The National Tourism Policy calls for the development of an internal and external awareness campaign that communicates the priority of tourism across all ministries, departments, agencies, and institutions. USAID’s Tourism For All project began conducting the tourism awareness baseline assessment in Y1 via online survey, face-to-face interviews and written questionnaires.

The initial phase of the assessment was completed via online survey. Of the 90 respondents, 22% were from the private sector connected to the tourism industry; 13% were from the private sector not connected to the tourism industry; 19% from government; 24% from NGOs; and 20% from other. When asked if they are aware of the National Tourism Policy, the majority (58.43%) responded negatively, with 76.14% of respondents stating that they are unaware of the objective of the policy. The majority of respondents also stated that they do not have a copy of the National Tourism Policy and do not refer to the policy. The online survey also asked respondents whether they are aware of any laws associated with tourism; 82.02% of respondents stated that they were unaware of any laws. Ultimately, the initial phase of the baseline illustrates low awareness of the National Tourism Policy among multiple groups as well as low knowledge of tourism laws.

In the next phase, five enumerators and the M&E team will visit 100 businesses in Dili, Ataúro, and Maubisse to conduct face-to-face interviews on key questions regarding their awareness of the National Tourism Policy, tourism laws, as well as other important value chain assessment topics. The visits will conclude in October 2018 and a report will be produced summarizing all findings.


A Tourism Awareness Baseline Assessment was conducted.

Activity: Assess constraints in attracting investment in the tourism sector

2 https://www.mekongtourism.org/e-library/

https://www.mekongtourism.org/e-library/


An assessment of the constraints in attracting investment in the tourism sector was conducted by the project. From a macro economic perspective, a review of the key socio-economic indices, including: World Bank’s Doing Business Index 2018; Transparency International’s Corruption Perception Index; United Nations Development Program’s Human Development Index; The Heritage Foundation’s Index of Economic Freedom; and World Economic Forum’s Global Competitiveness Index paint a picture of Timor-Leste that is not conducive to attracting foreign investment and a limited ability to support a thriving private sector of domestic investors. The data on rankings and scores is illustrated the above figure, which compiles the results of each Index assessment.

Securing private investment requires a conducive regulatory and political climate that provides investors with certainty, transparency and predictability in their business decisions. This encompasses a range of critical issues associated with the regulatory framework, including land and property rights, equal treatment under the law, access to courts, guarantee against expropriation with conditions, free transfer of funds, etc. As the GoTL considers larger projects requiring higher levels of investment, further efforts should be directed to improving the business enabling environment indicators to increase the level of interest from international investors.

To validate these macro-level observations, USAID’s Tourism For All project organized a survey by conducting face-to-face interviews and documenting responses in a questionnaire. In total there were 26 companies identified for the survey, of which four did not respond, eight participated in face-to-face interviews and 14 completed the questionnaire independently.

The survey helped to highlight constraints and opportunities and formulate recommendations for addressing them. Key constraints identified include: the Timorese private sector is not aware of available tax benefits and investment incentives; foreign and domestic investment in priority sectors and industries has not been well communicated; the absence of quality critical infrastructure poses a significant constraint to economic growth; insufficient legal protections for foreign and domestic investors; limited awareness of PPP in facilitating investment; weak regulatory framework governing private sector investment; and inefficiency on the part of the public sector in delivering public services.

These survey results (see Annex 6) were shared with TradeInvest and along with project staff the following recommendations were developed:

• Review Decree Law about the establishment of the TradeInvest


• Develop an investment promotion plan • Organize a national investment conference • Encourage private sector engagement • Amalgamate content of the investment guide into a sector specific tourism investment guide

USAID’s Tourism For All will consider these recommendations in its Y2 work planning.


A survey identifying and describing constraints that will limit efforts to attract tourism investment was conducted.

Recommendations were developed and made available for review by TradeInvest.

Activity: Review draft tourism laws and present recommendations to MoT

Research was conducted on the existing legal framework as it relates to tourism and a short summary report produced. The study found that there are five laws that have been initiated and are currently enforced by the MTIC. These include:

1. D-L No. 7/2009 Regulations on Restaurants and Similar Establishment 2. D-L No. 24/2014 Legal Regime that establishes bases of a Tourism Policy in Timor-Leste 3. D-L No.6/2016 Legal Regime for Licensing, Exploration and Control of Social and Fun Activities,

Slot-Machines and Traditional Games 4. D-L No.17/2016 Licensing, Installation, Classification and Operation of Campsites 5. D-L No. 19/2016 Legal Regime for the Licensing and Operation of Travel and Tourism Agencies

In addition, there are at least eight other laws that directly impact the tourism sector, but that have been initiated and remain under the purview of Ministries other than the MTIC. Some of these include laws on protected areas, civil aviation, immigration, land use, forest resources, investment, culture and heritage, protected areas and environment; all of which affect tourism development. As a result, the MTIC has requested the project to review regional/international good practice in legal frameworks in support of tourism, identify gaps in the Timor-Leste context, make recommendations for improvements, and draft requisite additional laws. A scope of work will be developed for instigation in Y2.


A summary outlining the scope for recommendations pertaining to developing draft laws and regulations for tourism was prepared.

A scope of work for legal expert was drafted.

RESULT 4: SUPPORT KEY TERRESTRIAL, MARITIME, AND CULTURAL SITES TO ACHIEVE PROTECTED STATUS

Activity: Complete Inventory of Key Terrestrial, Marine, and Cultural Resources

Following a review of the information gathered during the last fiscal year on high conservation value (HCV) areas and protected sites in Timor-Leste, and after discussions with stakeholders and the USAID Timor-Leste mission (COR and Mission Director) the project has a better understanding of the feasibility of mapping and creating an inventory for HCV areas at a national scale. Realistically, meeting this challenge in a meaningful manner would require significant financial resources and technical assistance worthy of a fully dedicated standalone project of similar budget to that of USAID’s Tourism For All project. Considering that USAID’s Tourism For All Project implementation approach focuses on no more than three specific geographic areas of engagement and is not of a national scope,


the proposed mapping exercise is too broad in scale and should be narrowed in order to better align with project outcomes, results and activities.

During the fiscal year, the project met with numerous stakeholders engaged in protection of Timor-Leste’s maritime and terrestrial assets, including; the Ministry of Agriculture and Fisheries (MAF), Conservation International, Blue Ventures, UNESCO and the Coral Triangle Initiative, to gather information on the current state of protected areas and any progress regarding an inventory system for HCV areas in Timor-Leste. Through these consultations, the project was able to confirm that there are currently 46 HCV designated areas in the country, including two marine areas and one national park.

While the MAF holds primary responsibility for the oversight of HCV and protected areas, a consistent approach and management plan has yet to been established. Timor Leste’s sole national park, Nino Konis Santana National Park, established in 2007, lacks a management plan, defined boundaries, designated access points and a clear regulatory framework. This holds true for the majority of HCV areas in the country.

There has been substantial engagement between MAF and donor organizations in recent years focused on development plans for specific HCV locations and protected area management. The history of donor relations in the area of conservation and environmental protection has been competitive, and at times, contentious. Information on past studies, projects and interventions are not openly shared or cataloged, creating a situation in which it is difficult for the MAF or new donor interventions to benefit from lessons learned and avoid the duplication of efforts. From the information gleaned during the reporting period, it is abundantly apparent that work supporting conservation and protection in Timor-Leste is duplicative and is not institutionally retained beyond the life cycle of an administration, project, intervention or study. This is a serious shortcoming that should be addressed before any further investments are made in this area.

In an effort to gather, analyze and better understand the current state of HCV marine areas in Timor-Leste, the project engaged Dr. Karen Edyvane on an initial short-term assignment. Reiterating the lack of coordination and harmonization, Dr. Edyvane found that gaining access to information and previous studies from the MAF and donor organizations was difficult due to the absence of a repository for reports within the MAF, as well as a lack of institutional knowledge and memory. The findings of Dr. Edyvane’s assignment show that there has been a large amount of donor support for HCV and protected areas, but at times the resulting work has been duplicative and provided conflicting guidance and different sets of good practices. The project had planned to engage similar STTA to conduct an assessment of terrestrial HCV, however in assessing the information gathered from Dr. Edyvane’s report, and through meeting with stakeholders by the project’s technical team, a similar situation exists for terrestrial HCV locations. Therefore, the project will need to reconsider its approach.

Thus, as the project moves forward with implementation during the second year, it plans to take a more pragmatic approach towards its engagement with HCV areas. Specifically, the project will focus on the HCV areas that overlap with the three initial locations in which the project plans to concentrate its technical assistance and interventions, i.e. Dili, Ataúro and Maubisse. In so doing, the project will be able to use its resources in a more focused and effective manner to evaluate the current state of these locations and develop interventions that address conservation, protection, community engagement and the utilization of these sites as an asset for tourism development. If done correctly, pilot methodologies can be developed and shared and replicated in other HCV areas. A more detailed description of the project’s planned interventions with HCV during year two will be included in the project’s FY 2019 work plan.



An inventory of key biological, ecological and cultural resources and mapping of high conservation value areas at a national scale was not completed.

A chronicling of possible sites for consideration as UNESCO World Heritage sites was only partially completed and no assistance was provided to government efforts to compile information about potential sites and assist efforts to legally protect such sites.

Boundaries and management plans for high conservation value sites working with MAF to develop systems/mechanisms for regularly updating the inventory of such sites was not initiated.

Activity: Support GoTL efforts to complete and submit UNESCO Applications

During the first fiscal year, the project held meetings with a number of stakeholders including UNESCO, Secretary of State for Arts and Culture, Ministry of Tourism and relevant NGOs involved in culture and heritage to discuss potential world heritage sites and intangible cultural designation items. Timor-Leste has no UNESCO designation, nor any immediate plans for submission of applications. The only previous attempt was the drafting of an application under the UNESCO Man and Biosphere (MABs) Program for the Nino Konis Santana National Park, however this was never completed or submitted.

Since the UNESCO application process should be initiated and led by the host country and can also take a substantial amount of time to complete (potentially beyond the life of USAID’s Tourism For All project), approaching this process in stages and setting a sound foundation for future efforts is critical. The first phase of the process requires gathering consensus from all stakeholders on what sites and cultural intangible items are distinctive, viewed as valuable by Timorese people, and ideally have the potential to be marketed as a tourism attraction. To date, the project has been able to develop a preliminary list, following meetings with various stakeholders that includes coffee farms, Tais, religious relics, marine diversity, and national parks as sites and items to be considered as unique and of cultural significance to Timor-Leste.

The process for vetting and gathering consensus from all stakeholders for these sites and culturally intangible items will be initiated as part of the Protection event/workshop which will be held during the next fiscal year. Following the review and final selection of sites and culturally intangible items as an outcome of this workshop, the project will take systematic steps to develop, promote and recognize these sites and items in a process that may eventually lead to a UNESCO application or some other regional or international accreditation and/or recognition program.

Summary Update on Output:

Initial steps were taken to document and assist as necessary GoTL activities to identify potential heritage or world heritage sites, however no documentation was submitted to USAID.

Objective 2: Promote Sustainable Tourism Investments

There are a variety of constraints for private sector development in Timor-Leste. The World Economic Forum Global Competitiveness Report 2014- 2015, which provides aggregated results to a survey where respondents were asked to select the five most challenging factors to doing business and rank them according to how problematic they were, places Timor-Leste 136th out of the 144 countries ranked. Below is a graph from the Report that presents a useful snapshot of prevailing perspectives on challenges to the business environment in Timor-Leste.


The weak enabling environment and lack of financing may explain some of the paralysis in development of the tourism sector. In addition, the lack of secure land tenure is a major factor constraining investment, as well as the World Bank’s assessment of Timor-Leste’s Enforcing Contracts indicator as the weakest in the world.3 The country has only a short history of indigenous entrepreneurship and is hampered by an acute lack of financing for small scale entrepreneurs. Furthermore, while the government espouses a sustainable development path based on inclusive, community-based tourism, two recent approvals for tourism investment for large, multi-million-dollar resort enclaves on either side of Dili fit into a conference/mega-resort model rather than the small, slow and sustainable development geared towards bringing income to small communities espoused in the Tourism Policy.

Throughout the life of project, USAID’s Tourism For All project will work to create conditions for sustainable and replicable tourism investment activities including but not limited to refurbishment, legal recognition and increased access to information. High priority activities will be those that demonstrate the viability of joint ventures between the public sector and private businesses; ventures that are proposed by or include local communities; activities that include cultural and/or environmental protection practices as a core component of the activity; and activities that build economic opportunities for local communities, include conservation and resource protection incentives, and demonstrate local community enthusiasm for the activity.

Across the globe a wide variety of models of private, public, and community partnerships have been established using different financing and equity schemes that may be applicable to Timor-Leste. Timorese stakeholders need to be involved in determining which different ones are most viable so that they can lobby for the necessary changes in policy and legislation to advance investment.

In FY 2018, USAID’s Tourism For All project commenced work with local communities in Hatobuilico, Maubisse and Ataúro to help them establish cooperative frameworks and build awareness of the risks and opportunities of tourism development.

To achieve this objective, in FY 2018 and over the life of project, USAID’s Tourism For All project will promote sustainable tourism investments in order to achieve the following results:

● Establish intervening, sustainable management plans in the protected sites located in the project’s focus regions;

3 The World Bank’s assessment of Timor-Leste’s Enforcing Contracts indicator is the weakest in the world.


● Improve conditions for private sector investment in a reasonable number of tourism segments (marine, adventure, historic, religious, etc.);

● Improve conditions for investment in a reasonable number of tourism products (coffee, dive, handicraft, etc.);

● Increase private investment in tourism development; ● Increase public investment to support private sector to develop tourism; ● Strengthen associations involved in the tourism sector; ● Improve business skills of selected beneficiaries; ● Enhance tourist satisfaction within niches/sites/products; and ● Establish models of sustainable approaches to tourism development.

It is important to note that the focus of Objective 2 is spread across the Tourism Policy’s Prosperity (Result 6, Result 7 and Result 9), Protection (Result 10, Result 13), Partnership (Result 11, Result 12) and People (Result 5, Result 8) pillars.

RESULT 5: INTRODUCE AND ESTABLISH MODELS OF SUSTAINABLE TOURISM DEVELOPMENT

Activity: Jointly Identify and Select Three Initial Geographic Areas

Early in the implementation of USAID’s Tourism For All Project, meetings were held with officials of the Ministry of Tourism, Commerce and Industry . In the absence of a Minister, the project engaged in dialogue with the Director General, the National Director of Tourism Planning, the Director of Tourism Business, and the Interim Director of Marketing. In this introductory meeting, it was made clear that USAID’s Tourism For All Project will support the GoTL to implement the National Tourism Policy. Given the country’s geographic and infrastructure challenges, as well as current tourism demand, it was agreed that the project should initially concentrate on Ataúro island, Dili and Maubisse. The logic behind this decision are as follows:

• Dili, as the capital of the nation, is strategically positioned as the tourist hub of the country. It has significant attractions such as the Cristo Rei statue, the Joao Paulo statue, Santa Cruz cemetery, the Resistance Museum and notable Portuguese cultural heritages.

• Maubisse (includes Hatobuilico) is a nearby region to Dili and possesses a combination of cultural and natural tourism assets. Road infrastructure is in the process of being significantly improved allowing tourists to travel between Dili and Maubisse in less than two hours.

• Ataúro island is administratively a part of Dili municipality and is located approximately one hour from Dili by boat. It is a beautiful island that is increasingly popular among tourists and locals. It is said to be home to some of the world’s most diverse marine and coral life.

It was also agreed that other geographic areas can be subsequently considered to coincide with GoTL priorities and other factors that may evolve during the life of the project.

The only caveat to the above geographic concentration is that politically, only the Minister of Tourism has the authority to express the view of the GoTL and make commitments on its behalf. Therefore, the geographic concentration of the project will need final approval by the Minister once instated.


Three geographic areas were identified, and approval was received from the MTCI for the project’s sustainable tourism development activities.

Activity: Value chain analysis of constraints and bottlenecks


During the first six months of implementation, USAID’s Tourism For All project engaged in a variety of primary and secondary research activities, including face-to-face interviews, focus group discussions, and desk research with specific emphasis on focus regions. The outcomes of this research reveal a variety of strengths, constraints, opportunities and risks to tourism development in Timor-Leste that are summarized in the below SWOT Analysis matrix which considers product (supply) and market (demand) perspectives along the tourism supply chain. It is important to note that this analysis has not been officially vetted with public sector, but is a result of stakeholder consultations and anecdotal evidence and provides the framework for further strategic direction and decisions. Strengths Constraints

Product

• Vibrant cultures and traditions

• Diverse ethnic groups and festivals

• Rich history and heritage

• Scenic landscapes and natural attractions

• Friendly people • Heritage sites • Commitment by

entrepreneurs to their respective businesses

• Willingness to partner with government

• Sharing a unified goal for growth

Market

• Proximity to thriving Northeast and Southeast Asian markets

• Vicinity to Indonesia’s local, expatriate and visitor markets

• Short flight times to Asian megacities

• A new Timor-Leste brand Explore the Undiscovered

Product • Poor waste

management systems • Limited product

offerings • Variable quality

standards • Inexperienced and

undertrained human capital

• Inconvenient visa processes and policies at border checkpoints

• Weak business enabling environment

• Cumbersome regulatory environment

• Limited product development and innovation

• Low awareness of tourism investment opportunities

• Highly fluctuating and fixed expenses

• Lack of clarity in tourism-related policies, laws and regulations

• Bureaucracy for licensing matters

• Lack of government collaboration and support

• Poor economic conditions

• Variable service culture

Market • Limited awareness

of Timor-Leste • Poor connectivity • No national carrier • Limited tour

operators • Lack of destination

marketing organization

• Poor brand and communication strategy

• Limited web presence

• Limited targeting of segmented markets

• Lack of integrity in conveying product information

• Limited coordination among public and private sector actors

• Inadequate dissemination of information

• No coherent digital marketing strategy

• Too expensive to compete

Opportunities Risks


Product • Range of yet to be

discovered attractions, itineraries and resources which could significantly expand the product offering

• Catholic tourism • Improved

connectivity between gateway cities in Asia and Oceania

• Willingness among development partners to develop tourism

• Improving education and training programs

• Energetic youth interested in tourism careers

• Untouched nature • Historical assets • Religious tourism • Small improvements

to tourism infrastructure such as airport, lighting, public toilets

• Improved access • Establishment of a

Tourism Authority

Market

• Expatriates living in Indonesia who need to do visa runs or take short holiday breaks

• Indonesian Catholics (+/- 10 million)

• Bolster Timor-Leste tourism brand, e.g. Explore the Undiscovered

• Integrated digital marketing strategy

• Better unite and coordinate public and private sector stakeholders

• Improve air, land and sea access

• Expand multi-country offerings of international tour operators

• Attract more scheduled air services

• Expansion of low cost air carrier networks

• Increase air service agreements

• Social media campaign

Product

• Insufficient duty of care for international visitors

• Lack of coordination between stakeholders

• Lack of sustainability of core iconic attractions

• Lackluster engagement of people employed in the tourism sector

• Failure to deliver brand promises

• Government does not stay focused on tourism development as a means of economic diversification

• Growing crocodile population

Market

• Global competition for tourism market share

• Natural and human induced disasters

• Political instability • Economic

downturns • Negative reputation

due to petty theft, sexual harassment and aggressive behavior towards visitors

In short, Timor-Leste tourism currently suffers from a variety of challenges that are preventing smooth delivery of tourism along the value chain starting from the market and progressing to product delivery at the national, municipal and district levels. The key bottlenecks include, but are not limited to, lack of market place awareness and product distribution; fragmentation among suppliers of tourism products and services; non-performing and weak public-sector institutions; regulatory gaps and lack of enforcement of laws; local misunderstanding of tourism and weak service culture; and ineffective management and operations of public assets associated with tourism.

These are some of the factors hampering tourism sector growth in the country and represent constraints in the supporting functions and the tourism market systems that are impeding the development of Timor-Leste’s tourism. Recognizing these constraints and bottlenecks along the tourism value chain provides insight to areas where USAID’s Tourism For All can be most productive in improving the overall enabling environment for tourism development in Timor-Leste and confirms many of the interventions already identified in the project proposal.

Tourism Value Chain Constraint Potential Project Intervention

Lack of market place awareness and product distribution

Integration of the digital destination marketing eco-system; creation of a mobile app; content creation and dissemination


24

Fragmentation among suppliers of tourism products and services

Establishment of working groups; training in product pricing and delivery; awareness of the tourism system and interactions along the value chain; grants program support

Non-performing and weak public-sector institutions;

Needs analysis through PICAL, targeted capacity building, good practice sharing; improved local level management

Regulatory gaps and lack of enforcement of laws; Review of laws, identification of gaps; drafting of rules, regulations and laws; identification of enforcement approaches based on regional good practice; implementation

Misunderstanding of tourism and weak service culture

Public awareness campaign to communicate tourism policy and opportunities for employment and entrepreneurship in the sector; on the job training courses; collaboration with TVET system

Ineffective management and operations of public assets associated with tourism

Public private partnerships


A report was developed summarizing tourism sector opportunities and constraints in the CentralTourist Zone.

Activity: Form and convene destination stewardship councils, facilitate internal community meetings, and conduct rapid appraisals of community engagement

The project has yet to formalize a Destination Stewardship Council (DSC) in any of its focus regions. However, the project has successfully engaged with communities, particularly in Hatobuilico, where a number of participatory exercises have taken place through the Task Force described in the Success Story section of this annual report. Among other things, the need to establish a DSC in the form of a Local Management Council (LMC) in tourism for Hatobuilico has been identified and specific plan and organizational structure are being drafted. The membership of this LMC will likely include representatives of the Catholic Church, local authorities, representatives of local tourism industry operators, NGOs, and local women and youth groups. An appropriate mapping exercise will be completed once the LMC has been fully established. The current Mt. Ramelau situation presents an excellent case study and the resultant solutions willserve as a good practice model for designing and

managing other sites in Timor-Leste, particularly those that have religious value such as Cristo Rei in Dili. The project has engaged STTA that will travel to Hatobuilico in early October to conduct an assessment of medium to long term recommendations for

Statue of Mary on the summit of Mount Ramelau, a protected site in Timor-Leste. PH

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the area and prepare a tourism development plan. He will also conduct further exploration on how the LMC or DSC will be structured.

It is also important to note progress in Ataúro where the project has established close contact with the Asosiasaun Turizmu Koleku Mahanak Ataúro or ATKOMA, which has the potential to function as a DSC. In 2016, 35 key community stakeholders representing the private sector, local government and the community agreed to form ATKOMA, which has not yet been legally established. However, articles of association have been crafted and outline its purpose as follows: to increase employment and revenue from tourism for the communities of Ataúro, while at the same time protecting the environment and promoting local culture. Its main proposed activities include: destination marketing; tourism training and mentoring; and research, planning, development and advocacy. The idea of formally establishing ATKOMA appears to have strong local support with participation by members in regular meetings/workshops and other activities. Representatives of ATKOMA have asked that USAID’s Tourism For All project support the formal legal establishment of the association through appropriate channels within the Government of Timor-Leste. Prior to providing this support, an assessment of the need, form and purpose of a destination stewardship council to complement the work of ATKOMA and other organizations operating in the tourism sector on Ataúro is imperative. The assessment will help to ensure tourism development is community-led and provides opportunity for marginalized community actors to acquire access to the opportunities, skills, and resources to upgrade their tourism establishments, and integrate themselves into more established tour operations and supply chains for established tourism facilities. STTA is scheduled for October on Ataúro, where the short-term expert and technical lead will interact with local community stakeholders, assessing ATKOMA’s role and function, and conducting rapid appraisals of community engagement. After engaging with the community, the STTA will look at the viability of the destination stewardship council approach in the context of Ataúro. The eventual model that will emerge from Ataúro will be replicated in other locations where the project implements.


Participatory rapid appraisals and assessments were conducted and a summary report produced. Report compiled recording issues discussed and business transacted during meetings of

stakeholders.

Activity: Develop Tourism Development Strategies

As described in the previous activity, international STTA supported by local project staff are being mobilized to Hatobuilico and Ataúro where they will work with local stakeholders to guide the establishment of DSCs or similar and help to develop tourism development strategies and unique tourism experiences. These missions will also work to identify opportunities for grant funding and private investment. It is fully anticipated that once respective strategies are completed, and feasibility confirmed, the project will implement initiatives in coordination with local government, business owners, and the community. It is anticipated that the tourism development strategies developed by USAID’s Tourism For All in partnership with local communities will have a dynamic effect and activities will encourage new products and services and also attract more visitors.


The first strategy for developing a unique, heritage-based tourism experience by a destination stewardship council or similar was deferred to Q1 PY2.

Activity: Engage destination stewardship councils for participatory mapping exercises.

Thus far, no mapping exercises have been conducted due to factors described above. This mapping exercise will be conducted as part of the STTA being mobilized in October 2018 to assist communities in understanding what tourism is and its potential benefits, as well as the potential adverse


impacts to traditional ways of life and risks to women, children, and the environment if not done properly.


The first participatory mapping exercises with project technical assistance was deferred to Q1 PY2.

Activity: Design Environmental Education Training Program

USAID’s Tourism For All held a number of meetings to ascertain what environment training programs have been initiated in Timor-Leste in recent years. These included, Director General for Environmental, Director for Pollution Control and Environmental Impact, UNDP Timor-Leste, Blue Ventures in Ataúro, HABURAS Foundation and HASATIL. The GoTL has instigated several initiatives, including the green school, green garden and green villages to promote eco-tourism and community-based tourism. The UNDP has been working with ZEESM in Oecusse where training in recycling, guiding, entrepreneurship and tourism promotion has been conducted. Blue Ventures has been providing training in Ataúro to help socialize environmental awareness in local communities, promote marine preservation and cultivate seaweed. Meanwhile the Haburas Foundation and HASATIL have been working on promoting environmental awareness, natural conservation, eco-tourism and community-based tourism in various parts of the country. Notably, there were no manuals, syllabi or curricula that could be shared by any of these institutions or projects.

Subsequently, USAID’s Tourism For All conducted desk research to identify good practice models in environmental standards and training for the tourism industry and decided to develop programs for Timor-Leste that comply with the Global Sustainable Tourism Council (GSTC) criteria. There are two sets of criteria including destination (for public policy-makers and destination managers) and industry (for hotels and tour operators). GSTC criteria represent guiding principles and minimum requirements that any tourism business or destination should aspire to reach in order to protect and sustain the world’s natural and cultural resources, while ensuring tourism meets its potential as a tool for conservation and poverty alleviation. The project has made initial contact with GSTC and will initiate a more comprehensive engagement in Y2 when suitable sustainable tourism development and environmental education frameworks will be established and disseminated.

The project has initiated recruitment for a Protection Lead who will commence work early in Y2 and among other tasks be charged with developing targeted environmental education training programs to help communities better understand the impact of their actions on the natural environment.


The environmental training program design and curriculum was not completed.


Activity: Identify tourism operators and support them to attend tourism conferences

In a first attempt to support Timor-Leste tourism stakeholders to reach out to source market counterparts and receive feedback on itinerary and product design, the Project in collaboration with MTCI The Asia Foundation (TAF) and Hotel Association of Timor-Leste (HOTL) helped to organize a 14-member delegation to participate in the fifth Bali & Beyond Travel Fair 2018. The delegation included representatives of Dili-based tour operators and hotels as well as the GoTL. The event attracted 320 buyers from 41 source markets, 241 sellers and 36 national

and international media. In addition to participating in the trade show, the

delegation made a courtesy visit to the Consulate-General of Timor-Leste and the Bali Hotel Association to advocate partnership in tourism promotion and development. A number of contacts were made with Bali-based tour operators (e.g. Rama Tours) and it was suggested that familiarization visits be organized to help refine Timor-Leste’s tourism package and itinerary offer. In addition, potential future participation by Timor-Leste in other regional and international trade shows (ITB Asia, PATA Travel Mart, Asia Dive Expo) was discussed. For this to happen, it is critical that there is a budget from government. It was also suggested that local Timorese media should be developed to report on tourism at a national, regional and international scale to improve dissemination of information, particularly via digital platforms. There is also scope to collaborate with Indonesia’s Ministry of Tourism on marketing and promotion of Timor-Leste.


Bali and Beyond was identified as an appropriate international tourism conference where Timorese companies might attend.

Timorese tour operators were identified and coached to meaningfully participate at Bali and Beyond tourism conference.

Support was provided for existing tour operators and representatives of the MTCI to attend the Bali and Beyond tourism conference.

RESULTS 6 & 7: IMPROVED CONDITIONS FOR PRIVATE SECTOR INVESTMENT IN NUMBER OF TOURISM TYPES (6) AND PRODUCTS (7)

Activity: Identify primary draw attractions and conduct value chain analysis to identify constraints and identify regional trade events and support participation of local eco- and marine tourism operators

A report analyzing the Dive Tourism Industry in Timor-Leste was prepared based on face-to-face interviews, grey literature and meetings with the Market Development Facility (MDF) program, which is heavily engaged in supporting the Timor-Leste dive industry. Constraints and opportunities are identified and recommendations made to address them.

Timor-Leste is home to some of the best dive sites in the world and home to diverse coral and fish life. There are 40 dive sites that have been identified most of which are located close to Dili and around Ataúro Island. Without a doubt, dive tourism is a high potential niche market which is in need of further development and refinement.

Participants of the Bali & Beyond Travel Show stop by

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Key constraints identified include: absence of quality marine infrastructure for embarking and disembarking guests in Dili and safe mooring of vessels; lack of skilled staff with adequate training in international standard marine safety practices; poor business enabling environment due to onerous bureaucratic procedures; nonexistent collaboration between the dive industry and government in international marketing and promotion; no hyperbaric/recompression chamber in case of dive accidents; deficient marine safety and rescue services; wanting conservation efforts of maritime assets; and inadequate international aviation access. Considering the high potential of dive tourism to attract high spending international visitors, it is imperative that key constraints are addressed.

In addition to diving, the North Coast of Timor-Leste is known to be located along the annual migratory paths of whales during the months of October, November and December. There is substantial opportunity to develop whale and dolphin watching tours. Cruise tourism is also highly reliant upon the seas and is an emerging tourism niche with substantial expansion potential.

Given this diversity of marine assets, it has been suggested that a Marine Tourism Association (MTA) be established to help advocate for further development of water-based tourism activities. MDF has already established a Dive Tourism Working Group, which can be expanded upon. USAID’s Tourism For All can augment this initiative by assessing how a potential MTA would be structured, funded, and led. International good practice can be gleaned. The project can also support marine tourism through its grants program, specialized training programs and STTA.

The project originally intended to support dive operators’ participation at regional trade events. However, through initial interaction with the donor community it was established that the MDF program supported by DFAT (AusAid) had intentions of sponsoring attendance at the Australia International Dive Expo. Going forward, there may be scope for USAID’s Tourism For All through its grants program to support the dive industry. For example, the project would support dive operators in procuring a decompression chamber through an in-kind grant. The project may also provide technical assistance in setting minimum standards for dive operators from a safety perspective, specifically for Ataúro.


A value chain analysis was conducted on constraints in expanding the dive sector and final report prepared.

The plan for dive operators and destination stewardship councils to develop at least one proposal strategy document on ways which dive operators can engage with local communities through land-based activities was not completed.

Due to overlap with other donor (MDF) activities, the support for dive operator’s participation at one regional trade event did not occur.

Activity: Engage with local operators to discuss the development of itineraries in line with TL events

The project consulted with local tour operators and agreed on a number of themes for which itineraries will be developed in Y2. These include Catholic-based tourism for Indonesians (in partnership with Eco-Discovery Tours) and visa runs for expatriates residing in Indonesia and in particular Bali (in partnership with Timor Adventures). USAID’s Tourism For All also established communication with the organizer of the Tour de Timor in the hope of developing a collaboration for the 2019 event, which will celebrate the country’s 20th anniversary of independence. More substantial progress in itinerary and market development is anticipated in Y2.


New itineraries for tourism developed in collaboration with tour operators in the Central Tourism Zone will occur in PY2.


Assistance to tourism associations and the non-existent TDA to create or expand social media marketing, support activities that highlight Timor-Leste as a new destination, generating as much publicity as possible at international tourism conferences did not occur.

Promotion of local contests using social media to identify new itineraries with a goal of attracting international interest in Timor-Leste as a destination did not occur.

Activity: Engage coffee growers and marketers to begin identification of potential of targeted cultural tourism

In collaboration with Dili-based Agora Food Studio and Timor Adventures, USAID’s Tourism For All designed and tested three coffee tours (two full-day and one half-day). All three tours begin with a learning experience at Agora Food Studios where local coffee experts provide a detailed explanation of Timorese coffee. This lecture is followed by a cupping where guests are given the opportunity to taste the unique blends of the country. The tour then proceeds to one of two (Balibar Coffee Group or Timor Global) coffee growing areas to learn about cultivation and how beans are roasted. Intermixed with the coffee experience, the full day tours also visit highlights of Dili such as Cristo Rei, the Resistance Museum and the Tais Market. Both full day tours include lunch.

In addition to developing the three aforementioned tours, the project conducted research to better understand the coffee industry in Timor-Leste. The research identified that coffee is the main export commodity for Timor-Leste and has been exported to many counties in Europe, America, Asia and Australia. Although the taste of Café Timor has generated income for the country, the Government of Timor-Leste has yet to develop a strategic plan to sustain and grow the coffee sector. However, the current government has included in their annual action plan for 2019, the creation of a national policy and strategy for the development of coffee and industrial crops.

To date, several studies have been conducted on Timor-Leste’s coffee sector. These include: East Timor Coffee - An Industry Overview (2000) by Marcos Moreno Coffee Consultant, Division of Agriculture East Timor, Transitional Administration; Overview of The Coffee Sector in Timor-Leste (2003) by OXFAM; and Timor-Leste Coffee Industry Association Analysis (2016) by Andrew Hetzel Asian Development Bank.

The most recent report by the Asia Development Bank (ADB) noted that the lack of industry coordination was the main constraint to development of the sector. To cope with this constraint ADB commissioned a coffee industry specialist to consult with stakeholders, analyze conditions in the sector, and review options for establishing a coffee association. Upon consultation, major players of the coffee sector met in 2016 and agreed to establish a new industry association to pursue the common goal of developing the coffee sector and improving farmers’ lives. The stakeholders agreed that the private sector through the Timor-Leste Coffee Association work together to increase production and improve quality. Through the provision of grants, the Timor-Leste coffee Association was able to conduct its first Coffee Festival in 2017, as well as a study tour to Singapore. Moreover, the ADB study identified linkages between coffee and tourism that include: buying/drinking coffee in coffee shops in Dili; coffee cupping/tasting; day trips to coffee farms/mills; overnight visits to coffee farms; and visitations to the Coffee Museum located in Fatubesi, which is known as the place of the mother tree of the world for Arabica coffee. The coffee tree is still alive and has potential to be recognized by UNESCO. These ideas have been incorporated into the first set of tours established by the project and will be integrated in Y2 activities.


The design of a Timor coffee learning experience in collaboration with Agora Food Studios and local coffee growers was completed and a tourism committee under the framework of the Timor-Leste Coffee Association established.

Activity: Assess handicraft sector and identify linkages to specific communities and heritage, provide support through grants to handicrafts associations, and promote handicraft products


The project conducted an assessment of the handicraft sector to gain an initial understanding of what work has been done by the myriad of NGOs and private companies operating in Timor-Leste to support local artisans. The assessment concluded that there is a strong linkage between tourism and handicrafts and that souvenirs could play a key role in generating income for communities that produce Tais fabrics, dolls, woodcarvings and traditional jewelry. At present, there are limited opportunities for producers to link with buyers. The Dili-based organizations that purchase handicraft products, typically do so under wholesale arrangements and in turn sell at retail outlets in hotels and malls. A limited number of wholesale buyers provide capacity building to their suppliers to support product design, manufacturing efficiencies, etc. The overall conclusion of the assessment is that only a handful of artisan groups are capable of producing high quality handicraft products with the majority generating very basic low-quality products with limited appeal in the high-end domestic and international visitor market.

The following provides a summary of the organizations currently engaged in the handicraft sector:

• Boneca de Ataúro (Ataúro’s Doll) is a cooperative of more than 60 women based on Ataúro Island. The cooperative was founded in 2007 and manufactures high quality handmade embroidered dolls and handcrafts. Visitors can purchase souvenirs at the Ataúro workshop or the retail outlet in Dili.

• The Alola Foundation was founded in 2001 with the mission of improving the lives of women and children by supporting local production of bags, wallets, shoes, clothing and other items made from Tais. It has two retail outlets and one production center in Dili.

• Arte Jeitu is an NGO that produces high-quality hand-crafted products, including boxes, books, cards, souvenirs, jewelry and homeware items. Located at My Friends in Dili, it aims to supply and promote Timorese product and culture overseas, particularly Australia and France. It is also one of the main suppliers for the local retailer Things and Stories.

• Things and Stories is a privately-owned venture offering high quality Timorese-made handicrafts by sourcing handicrafts through a network of 56 artisan groups in nine municipalities. It has two sales outlets in leading hotels in Dili.

• Kor Timor is an NGO established in December 2006 with the objective of creating employment for Timorese people with minimum education by promoting Tais from each of Timor-Leste’s districts.

• HAFOTI is a local non-profit organization established in 2002 to represent rural women from seven municipalities in Timor-Leste, including: Aileu, Bobonaro, Baucau, Liquica, Manufahi, Oecusse and Viqueque. It has approximately 200 members representing local businesses producing local products and operate an outlet in Dili that sells member products as well as items made by other groups, organization and individuals.

• Timor Aid has supported humanitarian relief efforts and delivered projects focused on health, education, community development, advancement of women, income generation and agriculture since the late 1990s. It has grown into one of the largest Timorese NGOs and has implemented over 100 small- and large-scale development projects. Today, Timor Aid employs over 50 staff and has offices in Dili, Covalima, Oecusse and Manufahi helping to build better lives across Timor-Leste.

Worth note in the handicraft sector is the USAID’s involvement in 2006 to 2007 to provide grants to improve the condition and promotion of the Tais market in Dili, which offers a variety of handicrafts using Tais. There are currently 45 stall holders predominantly from Atsabe Ermera. However, they sell all Tais motifs from across Timor-Leste. The site has become a center for both Timorese people and international visitors in search of handicrafts.

An important study entitled Traditional Crafts of Timor Leste: A Marketing Overview was conducted by The Alola Foundation and OXFAM in 2002 with primarily focus on the Tais industry and its marketing opportunities. The research encompassed the historic and cultural relevance of Tais, the current production system, marketing the current constraints and future areas of research required. The overall objective was to identify viable economic opportunities and elevate the status of women


involved in traditional crafts industries. The methodology employed for the research was qualitative and participatory, engaging producer groups in seven districts, marketing bodies, national and international NGOs, donor bodies and government. The summary findings of the report remain relevant today and include:

• Development of the Tais industry has the potential to provide economic improvement to certain segment of society.

• Increasing interest in establishing export markets from various business enterprises and organizations

• There are small-scale linkages between producers in several districts and interested groups and buyers

• Further research is required to better assess export markets in other places including export and diversify for functional or decorative products

• Inclusive consultation with those who would be involved in all levels of production and management

• Knowledge of traditional designs and techniques still exist and women are enthusiastic to utilize these skills and to pass them on to future generations.

• Lack of organizational structure and business knowledge limits the group’s capacity to turn their skills into a profitable income generation activity.

• Producers have limited financial support and resources, time constraints for production and limited marketing opportunities.

• Recommendations to government to enact legislation in order to protect and preserve the Tais industry as a cultural product of Timor-Leste.

• The preservation of traditional knowledge and art is immeasurable in its value as a heritage resource for future generations. Tais and other handicrafts are an invaluable expression of traditional knowledge and East Timorese culture.

Of the handicrafts studied, USAID’s Tourism For All initial assessment is that Tais have the greatest potential for expansion through targeted engagement and support by the project. Following meetings with the Secretary of State for Arts and Culture, the project has agreed to further explore the potential of UNESCO recognition for Tais as intangible heritage. This will likely require collaboration with Indonesia (Nusa Tenggara Timor) as the Tais art form is shared across the border. In tandem, USAID’s Tourism For All will discuss with the Dili Municipal Government the potential for establishing a permanent Tais museum, possibly through a public private partnership, in order to display these culturally significant pieces of art. In addition, the project will seek to expand the usage of Tais into a variety of handicraft forms that will appeal to tourists. A “Highlight of Tais Tour” may also be designed to allow visitors to experience meeting the makers first hand.

Summary Update on Output:

An assessment of the handicraft sector was completed. No handicraft production tourism experiences were designed during PY1.

RESULT 8: IMPROVE BUSINESS SKILLS OF SELECTED BENEFICIARIES

Activity: Conduct experience and quality audits of accommodation providers, develop tailored action plans, and deploy training and follow-up technical assistance

Initial experience and quality audits were conducted for a number of accommodation providers in Dili, Ataúro and Hatobuilico as part of each STTA’s trip to Timor-Leste. The Chief of Party stayed at multiple hotels to record initial observations and carry out the quality audit. Informal discussions were also held with managers and owners of establishments in order to better understand challenges and priorities. Key findings include: acute aptitude deficits, limited awareness and knowledge of hospitality


by locals, poor design and delivery of industry relevant training programs, maligned hospitality and tourism education programs, and lack of career paths in hospitality and tourism.

In Y2, the project will conduct a more formal assessment and through the Hospitality Experience Development Program provide targeted and practical technical assistance to accommodation providers to understand the importance and skills needed to deliver authentic experiences and guest satisfaction.


Initial documentation of experience and quality audits of accommodation providers and business owners to understand current business skills, challenges, and priorities was conducted.

No specific action plans were developed for accommodation providers.

Activity: Design and introduce Tourism Enterprise Development Program

To inform the design of the Tourism Enterprise Development Program (TEDP), the project team met with hotels, restaurants, and tourism businesses identifying trends and gaps that may hinder businesses in expanding their revenues and attracting customers. Trends include but are not limited to: low engagement between the businesses and the community in which they are located leading to limited income generation for the local community which results in low buy-in and support; minimal patrons during the day with the majority of visits occurring in the late afternoon and evening thus affecting profits; lack of standardized quality guidelines, specifically for hotels, causing mismanaged expectations for visitors; and limited marketing and signage to attract tourists.

The project also found low productivity in the workforce in some businesses which may be in part due to lack of hospitality training, personnel management issues, and working conditions. Using data gathered through informal interviews, meetings, surveys, and observation, the project developed an initial technical strategy under the grants program for how to address the identified issues. Within the strategy, the project also wants to ensure adequate flexibility to tackle other problems that may arise or shift priorities depending on feedback and lessons learned.

The TEDP aims to encourage new tourism businesses and services as well as improvements to existing ones that will ultimately attract more tourists and increase revenues. Based on the initial analysis, the TEDP will be rolled out by geographic area to properly address the issues and gaps affecting that specific area. This is particularly crucial as it will inform the needs of the business, especially as it relates to the tourist attractions located nearby. For example, one of Timor-Leste’s most iconic tourism attractions, Cristo Rei, has the potential to draw many tourists. Nearby hotels, restaurants, and tour companies can capitalize on the visitor draw through proper marketing within Dili, particularly at the airport. Incrementally launching the TEDP via the grants program will help socialize the idea to different businesses in more manageable portions.

In Q4 of FY2018, the project drafted the grants manual to guide the grants program, which has been submitted to USAID for review and approval. Once approved, the first Annual Program Statement will be released. It will include the first phase of the TEDP with specific objectives for each of the project’s three geographic areas. Businesses such as tour operators who operate across geographic areas may apply to more than one area depending on their proposal. The project will share the idea of TEDP with key tourism-related businesses and encourage proposals. This allows for a transparent and incentivized process, rather than using only initial feedback sessions on the TEDP. Responses will be modeled on businesses plans rather than the more standardized grant proposals to ensure the businesses also contribute and are using the funding to jumpstart change, rather than purely sustain operations.



Tourism Enterprise Development Program was designed and will be introduced in Q1 FY2019. The Grants Manual was completed and submitted for approval. The release of first Annual

Program Statement will take place in Q1 FY2019.

Activity: Assess business owners’ training needs and constraints in human resources and service delivery

In preparation for the launch of the grants program through which the project will support businesses with specific training that responds to their needs, an initial assessment was conducted to better understand areas for intervention.

The assessment found that tourism service delivery in the districts is generally very weak and it is therefore necessary to institutionalize appropriate training in hospitality, tourism and tourism business management in Timor-Leste. The existing tourism training programs available in Timor-Leste are geared towards students and frequently not suitable for enterprise level participants, particularly in the districts. The project held discussions with the former leadership of the Business Opportunities and Support Services (BOSS) Project to gain an understanding of lessons learned. The BOSS project engaged the East Timor Development Agency (ETDA) to develop curriculum and specific modules for a tourism training program specifically targeted to small tourism operators in the districts, particularly restaurants and guesthouses. Three training modules were developed and delivered including: an introduction to tourists and tourism; basic hospitality and food preparation and service skills; and managing reception and housekeeping. The training materials for these modules have been shared with USAID’s Tourism For All for possible continued use.

In addition, to further support small tourism operators develop their businesses, the BOSS project collaborated with the Instituto De Apoio Ao Desenvolvimento Empresarial (IADE) to introduce to Timor-Leste the International Labor Organization’s (ILO’s) business management training programs, including Generate Your Tourism Business Idea and Start and Improve Your Tourism Business. IADE staff received training of trainers and delivered a pilot in Maubisse and Ataúro in 2015. Anecdotal feedback suggested the level of training may be too complex for some enterprise level participants.

Rather than duplicating efforts, in Y2, USAID’s Tourism For All will pick up and expand on the work of the BOSS project, possibly in partnership with ETDA, IADE and other education and training providers.


Tourism business training needs assessment for targeted geographic areas completed.

Activity: Engage private sector and discuss creation of minimum quality standards for sectors and design a Small Tourism Enterprise Operations and Management training course

Discuss on the establishment of minimum quality standards for beach camps, hotels, and restaurants did not take place due to the leadership void at the MTCI. These discussions will be orchestrated in Y2 at such a time as there is willingness on the part of the GoTL.

Similarly, the Small Tourism Enterprise Operations and Management training course will be developed and launched in FY2019, using good practice models from the region and the Global Sustainable Tourism Council criteria to provide basic guides and training on environmental standards, energy conservation measures and other measures to address climate change in tourism.



Discussions involving MTCI and private sector concerning minimum quality standards did not occur.

Small Tourism Enterprise Operations and Management training course was not designed.

Activity: Assess online marketing and branding needs

USAID’s Tourism For All Communications Specialist conducted an assessment of Timor-Leste’s online tourism marketing and branding and produced a report that highlights some of the following points.

In 2017, the Council of Ministers endorsed the tourism marketing logo and slogan Explore the Undiscovered, which is featured on the country’s official tourism website www.timorleste.tl. There is also a separate community-based eco-tourism website www.cbet-timorleste.com. There is no consistency between these two digital platforms in terms of look and feel and neither is effective in building awareness of Timor-Leste tourism nor stimulating demand for travel to the country.

Timor-Leste ranked 178 out of 193 countries and territories analyzed in the Country Brand Ranking for Tourism 2017, which considers a country’s tourism industry economic performance, digital demand, country branding rating, and online performance to measure perceptions and appeal of a tourism-specific country brand. In the Digital Country Index Timor-Leste ranked 202 out of 243 and notably in last place in Asia.

Currently, www.timorleste.tl has a link to a Facebook page which is labeled ‘Timor-Leste Offical’ (sic) Tourism Website and has 4,885 likes and 4,991 followers. The www.cbet-timorleste.com website, also has a Facebook page entitled ‘Cbet Timor-Leste’. A third Facebook page ‘Timor-Leste Tourism Centre’ also has links to the official tourism website but seems to have been abandoned with the last post dating back to August 2017. The three Facebook pages are not visually consistent, and their maintenance appears to be sporadic. There also appear to be multiple blogs, Facebook and YouTube pages claiming to be the official channel and publishing tourism information and promotional content. There is no semblance of coordination and unity in relation to Timor-Leste tourism’s digital destination marketing activities which goes contrary to good practice.

Given the current situation and considering the project’s goal and objectives, there are several interventions to address the online marketing and branding needs including: establishing a digital eco-system for Timor-Leste that conveys consistent and robust messaging; provide technical support and capacity building for operation and maintenance of digital marketing platforms; support tourism enterprises to improve their online presence; supportfamiliarization trips for bloggers, journalists and key opinion leaders to experience the Timor-Leste tourism product and disseminate information digitally.


An online marketing and branding needs assessment was conducted.

RESULT 9: IMPROVE TOURIST SATISFACTION WITH NICHES OR SITES OR PRODUCTS

Activity: Engage with and provide training to Tourism Information Center Staff and explore collaboration with TripAdvisor for country reports

During the first half of 2018, Timor-Leste’s MTCI established a visitor information center in the country’s capital Dili. The decision to do so was based on the understanding that general tourism information is needed at key points for tourists both before they arrive and once in country. However, it has been noted by USAID’s Tourism For All project that staff in the tourism information center could benefit from capacity building to help their ability to effectively engage with tourists. Initial

http://www.timorleste.tl/

http://www.cbet-timorleste.com/

http://www.timorleste.tl/

http://www.cbet-timorleste.com/


observations suggest that there is a requirement for training in understanding visitor needs, general destination awareness, itinerary development, improved digital engagement and consistency in messaging of collateral and other tourism promotion materials. Prior to establishing an engagement with said visitor information center, the project will carry out an assessment to gain a clear understanding of the needs based on regional good practice examples from destinations in Southeast Asia with similar levels of development and circumstances to those of Timor-Leste. STTA will conduct a SWOT analysis, identify good practice examples from Southeast Asia, and provide a set of recommendations for the improved operation and efficacy of the visitor information center. The outcomes of the assessment will form the basis for any future interventions by the project in support of the Tourism Information Centers in Timor-Leste.

Notably, this is not the first time that the GoTL has benefited from donor support in relation to its Tourism Information Centers. Research conducted by the project revealed that the BOSS project supported the initial attempts to establish a Tourist Information Centre in Dili by engaging a Tourism Adviser who provided staff training, developed systems and procedures to link the Center with Timorese providers (tour operators, guesthouses, car rental) and developed key tourism information materials to be made available. There is scant evidence of this training, which indicated a very low absorption/retention level. In the past it is noted that the Government did not provide the Center with appropriate resources. The location of the Center was not central or easy to find (including a lack of signage), staff did not have the requisite language skills (English and Portuguese), there was no telephone line and no funding was made available to rehabilitate the building, which subsequently suffered significant damage (the roof caved in) and was never repaired.4 It remains to be seen whether or not the new Center will suffer a similar destiny. The project will reflect on lessons learned from this previous experience to ensure that past mistakes are not repeated.

Project support will also extend to community enterprises to help them meet customer demands, better manage social media, and respond to negative online reviews. The project made contact with TripAdvisor to gather initial information on Timor-Leste visitation trends. These include:

• China is the largest international market viewing Timor-Leste on TripAdvisor, followed by Australia and Indonesia. China inbound are primarily business travellers. However, there is no need to consider any specific promotion activities at this time because access is still a challenge for travellers from China to Timor-Leste.

• Of the top 20 countries, South Korea, Indonesia and India have the highest share of Timor-Leste views from either a mobile device or a tablet.

• A full 45% of views of Timor-Leste content from South Korea come from mobile devices, while 17% of all Timor-Leste views on TripAdvisor from Australia are on a tablet.

TripAdvisor also provided a proposal to support Timor-Leste with the goals of: raising awareness for Timor-Leste as a world-class destination for holiday makers who are interested in a yet-to-be-discovered land full of rich experiences; highlighting exciting points of interest through trip guides and branded content on TripAdvisor to drive an increase in the travelers’ time and money spent in the country; enabling and encouraging real travelers to deliver messages about why travelers cannot miss Timor-Leste, which is the most effective way to influence travelers to visit a destination. The proposed campaign objective is to drive TripAdvisor users who are interested in an Indonesian holiday to consider Timor-Leste using a banner advertising campaign to drive users to the tourism page and the travel guides. Diving, adventure, culture and frontier uniqueness are what will attract travelers from key markets with targeting of travelers being those who are looking at Bali and East Indonesia. Seeking the right place, right time to the right traveler.


A tourism information center training needs assessment was completed.

4 Business Opportunities and Support Services (BOSS) Project (2016). Tourism Sector Intervention Report.


The pros and cons of an MOU or other agreement with TripAdvisor was considered.

Activity: Design and launch National Visitors Survey

Since 2014, The Asia Foundation (TAF) has conducted its international survey of visitors to Timor-Leste annually between the months of October and December. This survey utilizes a multilingual interface that is administered by trained enumerators in the departure lounge of Dili International Airport. The latest available dataset was collected in 2017, with TAF indicating that data for 2018 is being collected during the last quarter of 2018. Given these existing data collection mechanisms, expansion rather than duplication by USAID’s Tourism For All is deemed most effective. This can be done by working with TAF to extend the duration for which data is being collected as well as the breadth, perhaps in areas beyond the airport departure lounge. Currently, TAF collects data for three months in a year, however with project support data can be collected with greater frequency each quarter – thus enabling a greater sample size and the ability to account for seasonality throughout the year. It is known that a large volume of travelers enter/exit Timor-Leste through the overland border to/from Indonesia. However, these movements are currently not included in the TAF survey. It is also noteworthy that the TAF survey’s collection visitor satisfaction is limited to the end of one’s journey and therefore may not capture true traveler sentiment, particularly in relation to specific experiences and locations within the Timor-Leste tourism value chain. In consideration of the above, USAID’s Tourism For All has the opportunity to harmonize and add value to existing efforts of TAF in three specific ways: utilizing the TAF survey tools, i) increase the frequency of data collection to quarterly and ii) include overland travelers crossing border to/from Indonesia. Through the creation of a new survey instrument, iii) develop methods to better capture and quantify visitor satisfaction by working with businesses and destinations to survey travelers at point-of-sale. In year 2, the project plans to work with ATAKOMA, after supporting them to officially register, to begin carrying out regular visitor satisfaction surveys in Ataúro. This initial pilot will provide important feedback in this data collection methodology and process. Thus, with lessons learned, the project will then be able to replicate the synthesized model in other project activities in the future. Summary Update of Outputs:

A national visitors survey was not launched due to overlap with TAF/NZAID work. A MOU between DIT outlining student enumerator participant was not executed. A tourism survey was not undertaken and will be conducted starting in PY2.

RESULT 10: INCREASE PRIVATE INVESTMENT IN TOURISM DEVELOPMENT

Activity: Review existing protected area investment models under consideration

The project continues to navigate relationships with other development partners working in the same space as well as conduct deeper research in what resources exist and what has already been done. Given the lack of transparency in information-sharing in this space, it was not possible during the initial months of project implementation to address this activity. However, the project will continue to build relationships and has already made progress towards this activity. It has therefore been foregone until Y2.


No suitable model for Timor-Leste environmental fund replication was identified and no report produced.


Activity: Identify Banks and discuss loan options for tourism enterprises; and work with banks to develop a loan product tailored to the tourism industry

The initial presumption of the project that access to financial services and credit is particularly difficult for small enterprises and individuals, especially in rural areas, was verified through a survey of financial institutions with the following summary of findings:

• Moris Rasik is a microfinance institution that has been in operation since 2000. It provides loan products targeted exclusively at poor rural woman. While the program initially operated only in Maliana, it has expanded to cover all 13 districts. Moris Rasik provides loans to small and medium sized enterprises ranging from US$50 to US$50,000. While there are no specific loan products for focused on tourism enterprises, there are several recipients who are using loans to investments in accommodation, restaurant and handicraft businesses.

• Kaibauk is a microfinance institution launched in 2001 to provides microfinance services targeted at poor people across the country’s 13 districts in order to improve equality and empower women. Initially loans were granted to individuals and groups (composed of five of more people), however due to delinquency in payback, Kaibauk stopped issuing loans to groups in 2010. Currently, there are no specific products targeted at tourism businesses, however Kaibauk is interested to expand in the sector. Loans range in value from US$100 to US$35,000.

• ANZ Bank is focused exclusively on commercial customers and has limited risk appetite for small and medium sized enterprise clients. The minimum loan amount is US$500,000.

• Bank Mandiri and Bank Nacional Ultramarino or BNU were also contacted for the survey, but no response was received at the time of writing this annual report.

A number of recommendations emerged through the survey, including but not limited to:

• Training for woman entrepreneurs and targeted tourism business sector is required in areas such basic tourism knowledge, tourist needs, communication skills, management, hospitality skills, digital marketing and e-commerce, access to website related to tourism information in Timor-Leste

• The two microfinance institutions are willing and eager to expand their loan product specifically for tourism businesses and wish to gain input from the project.

• Disseminate information related to the USAID’s Tourism For All Project • There is interest in providing loan options for EcoResorts and guesthouses, possibly working

with USAID Tourism for All to create a loan product tailored to the tourism industry and offering longer-term payback provisions to account for tourism seasonality.

These ideas will feature prominently in the projects’ year two work plan, initially through collaboration with Moris Rasik and Kaibauk through technical assistance and grants.


A local product, in collaboration with MFIs and National Tourism Development Partnership and bankers, has yet to be tailored for the tourism industry.

No MOUs with MFIs and banks to offer loans that respond to tourism business needs were executed.

RESULT 11: INCREASE PUBLIC INVESTMENT TO SUPPORT PRIVATE SECTOR TO DEVELOP TOURISM

Activity: Research and cost-benefit analysis for Public-Private Partnership (PPP) interventions


The project conducted research and produced a report that comprehensively analyzed the potential value presented by PPP as a modality for securing private investments into public sector assets and services in Timor-Leste. To determine their value, the study focused on examining the relative cost-benefit of utilizing PPPs as a tool of economic governance to overcome challenges in developing the tourism sector.

The primary conclusion of the report is that although not perfect, the country’s legal, regulatory and institutional framework is sound. However, a number of challenges remain with respect to an inhibiting investment environment, low public awareness of the value PPPs present, and an absence of key institutional capacities essential for effective project appraisal and structuring. These should represent priority areas for the GoTL when considering strategies to improving the PPP regime.

In order to move forward with implementing tourism PPPs in Timor-Leste, a logical and clear approach must be adopted. The development and implementation of pilot projects for smaller-scale tourism PPPs would bolster investor confidence upon their successful completion. However, such projects require expertise in opportunity screening, feasibility assessment, and technical / financial structuring to ensure they serve as model projects for future investment.

In this regard, the study proposes that a Tourism PPP Pipeline and Pilot Initiative be developed. Under this initiative, technical assistance would be provided to develop a master list of potentially viable projects that are then screened and evaluated against established criteria and methodologies to create an opportunity shortlist. Subsequently, there will be a need to support key institutions performing their roles and responsibilities with regards to project appraisal, structuring, procurement, and management. It is recommended that rather than external advisors leading this initiative in isolation, representatives of the GoTL should be included and consulted throughout the pilot project development through targeted workshops and seminars. Members of civil society, NGOs, the tourism sector and wider business community must also be included in dialogue about the GoTL’s objectives in using PPPs to promote the tourism sector. This activity will provide the opportunity to collaboratively engage with stakeholders to develop an actionable list of pipeline initiatives that lead to successful investments in the tourism sector that benefit multiple actors in the value chain.


PPP investment report was completed and submitted to USAID.

RESULT 12: STRENGTHEN ASSOCIATIONS INVOLVED IN THE TOURISM SECTOR

Activity: In selected geographical areas, identify, engage and support tourism associations with technical assistance and/or grants

Successful tourism development is reliant on strong partnership and an equal distribution of roles and responsibilities between public and private sector actors, a function often fulfilled through the establishment of tourism-related associations. In well-developed tourism countries the presence and influence of tourism associations are decisive in the provision of products and services and their opinions are very much considered by the government in the design and making of legal and policy frameworks.

Over the past two decades of independence, there have been multiple attempts to establish associations in the tourism industry, but few have succeeded, showing the overall fragmentation of the industry. The Associacao de Empresas de Turismo de Timor-Leste (AETTL – Tourism Business Association) was established over a decade ago, however did not last long. In addition, the Associação Nacional de Operadores Turisticos (ANATOUR - Association of Tour Operators) under the


framework of the TL-CCI was established, but quickly became dormant due to conflicting interests and perceived dominance of government in dictating activities.

The project discovered that there are a number of associations and groupings besides AETTL and ANATOUR that are operational and have relevance to tourism development in Timor-Leste. The Associação Empresarial das Mulheres Timor-Leste (AEMTL) - Association of Timor-Leste’s Businesswomen was established 10 years ago and 30 active members representing women involved in business some of whom are owners of hotels, restaurants, guesthouses, and travel companies. The Association of Hotel Owners Timor-Leste (HOTL) has recently been established and is currently being registered. Its members include large Dili-based hotels and suppliers and its purpose is to advocate and represent the interests of the accommodation sector in the country. On Ataúro, the project is looking to support the Associação Turismo Koleku Mahanak Ataúro (ATKOMA) to help develop, promote and sustain community-based inclusive tourism.

USAID’s Tourism For All has initiated contact with the above-mentioned associations. With AEMTL meetings were held to identify needs and establish points of collaboration, particularly in relation to the grants program. The project also worked with HOTL to help review and provide input to their bylaws and articles of registration prior to submission to the Department of Justice. The project also met on numerous occasions with ATKOMA and is in the process of assessing the viability of formally establishing the formal establishment and registration, a process for which USAID’s Tourism For All can provide technical support.


Associations in geographical target area for initial work around Dili, Atauro, and Maubisse (Central Tourism Zone) were identified and a needs assessment completed.

No grants were issued.

RESULT 13: ESTABLISH SUSTAINABLE MANAGEMENT PLANS WITHIN PROTECTED SITES

Activity: Work with MAF to establish a framework and guidelines for identifying and assessing potential risks of introducing or expanding tourism activities to areas with high conservation values

As reported under Result 4, with the exception of Nino Konis Santana National Park, there are no established management plans or legal monitoring and enforcement at key biodiversity and cultural sites in Timor-Leste. This places the country’s 46 protected areas at high risk in relation to conservation. The project has yet to work with MAF to establish a framework and guidelines for assessing risks of tourism and other development projects to HCV areas and mitigation hierarchies. By integrating mitigation hierarchies into protected management plans and “No Net Loss” conservation values, ideally “Net Positive Impact” of tourism investments can be achieved.


Refer to Outputs under Objective 1, Result 4

Monitoring & Evaluation

In the first year, the Monitoring and Evaluation (M&E) team set up the initial M&E systems and processes as well as established the project indicators and M&E plan which governs data collection procedures. Additionally, because of the limited availability of tourism-sector data in Timor-Leste, the project initiated multiple baseline assessments in order to better inform technical and monitoring activities for the life of project. The M&E Specialist, technical staff, and partners have begun and will


continue to review relevant data, including government of Timor-Leste records, other donor publications, and surveys conducted by the project to finalize baselines by November 2018. The table below illustrates progress to date against approved indicators in the project M&E plan.

Indicator Reporting Frequency

Year 1 (Jan 18 – Sept

30)

Detail

Target Actual

1. Full-time equivalent employment of firms assisted under USG Programs

Annual 0 0

2. Number of rural household benefiting directly from USG intervention in tourism sector

Annual 0 0

3. Number of laws, policies or procedures adopted or implemented with USG assistance designed to promote youth participation at the national, municipalities/special region, post administrative/village level

Annual 0 0

4. Percentage of female participants in USG-assisted programs designed to increase access to productive economic resources (assets, credit, income or employment)

Annual 50% 0% The project gathered information on the access to economic resources through MFIs and has not moved into implementation yet for increasing that access.

5. Number of project-assisted working groups and/or partnerships operating independently of project supervision

Quarterly TBD 0

6. Number of assets managed by project-supported public-private investment or management schemes

Annual 0 0

7. Number of new strategies or action plans implemented by project-supported businesses or government entities

Quarterly 1 1 The project supported the Mount Ramelau Taskforce, established by the GOTL, through an initial site visit and survey of the area. As a result, an action plan was




30)

Detail

Target Actual

which incorporate multiple public and private stakeholders

development and the immediate recommendations were implemented prior to the re-opening of the site by the GoTL and key private sector partners such as Telkomcel.

8. Percent of project-supported Timorese tourism businesses reporting improved awareness of tourism policy

Annual 0% 0% Baseline data being gathered.

9. Number of person hours of training completed by project-supported public servants, tourism businesses, and other partners

Quarterly TBD 0

10. Number of Timorese UNESCO applications receiving project support

Quarterly 0 0

11. Value of investment in tourism sector resulting from project assistance

Quarterly 0 0

12. Number of tourism sector actors trained in use of tourism data for management with USG assistance

Annual TBD 0

13. Number of low-interest loans disbursed by Timorese MFIs to applicable tourism entities

Quarterly 0 0 Baseline data being collected

14. Percentage of goods and services procured by supported tourism enterprises from target communities

Annual 0% 0% Baseline data being collected

15. Change in median satisfaction scores on

Annual TBD 0 The Asia Foundation conducts the international visitor survey. The




30)

Detail

Target Actual

international visitor survey

project will augment TAF’s efforts in Y2.

16. Number of page views generated through project-supported marketing campaigns

Quarterly TBD 0

17. Number of tourism businesses participating in project-assisted cooperative marketing efforts

Quarterly 1 0

18. Median PICAL score for assessed institutions and associations

Annual 0 0 Tool was developed in Y1 and will be implemented in Y2

19. Number of institutions with improved capacity to assess or address climate change risks supported by USG assistance

Annual 0 0

20. Percentage of project- supported protected sites with established sustainable management plans

Quarterly TBD 0

RISK FACTORS, PROBLEMS, LESSONS LEARNED, AND BEST PRACTICES

USAID’s Tourism For All project experienced a tumultuous first year with the political stalemate stemming from the contentious elections in Timor-Leste, challenging obstacles in operational start-up, and project leadership transitions that required the project to refocus the technical strategy and better align with needs and expectations in country. The risk factors that may affect implementation are further detailed below. As a result of these risks and challenges, there were several lessons learned that shed light on best practices to help establish clear ways forward – all of which are summarized below. Understanding the current political context. After the elections earlier year, there was much disagreement among government leadership on important position appointments in large part due to corruption allegations (i.e. Minister of MTCI is still pending to date) as well as on key priorities for the sector. Thus far, there have been many discussions on the development of the oil sector, but no substantial conversations on the need to diversify Timor-Leste’s economy. There has been little clarity on where


the tourism sector falls within government priorities which will affect government buy-in and support for project activities. Great promise in the Timorese people. There is immense potential in the capacity of the Timorese people. Friendliness and interest from the people are crucial in building a marketable tourism destination. With this foundation, the project can then provide guidance and exposure to tourism sector expertise as well as appropriate trainings. Increased exposure to what constitutes “good service” can then provide important examples for how businesses and community members can approach the tourism industry. Harmonization is key. During the initial months of the project, it became quite clear the reticence from both the government and donor community to openly share information. Without personal contacts within the sector, a new project or organization will find it difficult to understand existing activities, results, and processes to better inform their own implementation. This became increasingly problematic for USAID’s Tourism For All project coming in as a new player in the established operating environment. The project sought to understand what other development partners have already accomplished and design project implementation in such a way as to harmonize efforts and minimize overlap and repetition. Minimal information was available making it difficult – and even prohibitive in some cases – for the project to conduct a grey literature review, as is the usual practice in start-up. This reluctance to share information stems from limited trust in the sector and a lack of central location for all reports, research, data, etc. With this improved understanding, the project will work to build trust through demonstrating mutual benefit in the practice of information-sharing. The project will also look to establish a repository, managed locally to ensure sustainability, that encourages government, donors, and development partners to upload their materials. This will not only assist in harmonizing efforts through minimizing replication but will also maximize the impact donors have within Timor-Leste. Donor fatigue. Based on the project’s informal interviews and research, it is apparent there is donor fatigue among businesses. Donors and development partners interview and question many businesses, without illustrating the value back to the private sector. This perception has bred an environment of distrust, thus minimizing the desire to actively participate and exacerbating the lack of information-sharing detailed above. The project learned that there needs to be a clear value proposition to illustrate the clear benefit from donor interventions. With tangible business incentives as a result of project engagement, the private sector is more likely to buy-in to project interventions and collaborate. Destination stewardship council hybrid. The project learned that the overarching concept of destination stewardship councils will need to be contextualized and adjusted for different geographic areas of Timor-Leste. The project also acknowledges that a hybrid of multiple concepts will be required to successfully engage the community and lower levels of government to ensure good governance of tourist destinations. This is a direct response to the levels of trust and communication across government, private sector, and development partners further detailed above. Flexibility of USAID’s project design. In spite of the political stalemate, USAID’s Tourism For All project was able to work with different levels of government, including national, municipal, and district while awaiting the appointment of the Minister of MTCI. This was made possible by the flexible nature of USAID’s project design that allows the implementor to adapt and adjust tact based on the context., It was also clear that the project needed to refocus technical activities to ensure activities are implemented in places where there tourism demand already exists. This will then allow strategic, pinpointed interventions, rather than broader, less effective interventions. The project also realigned its internal structure to match the national tourism policy, redirecting resources to more efficient uses. Challenging operating environment. The project experienced multiple obstacles during start-up. As a new implementer in Timor-Leste, the project needed to establish its branch office, open a bank account,


and navigate local law. It required about three months for the project to open a bank account due to the limited written information available on the process and varying responses from bank staff upon further investigation. Upon selecting a vendor, multiple face-to-face meetings, phone calls, and e-mails were required to clarify what documents are necessary and the requirements for opening a bank account that allowed international transfers for reliable cash flows. This experience represents a clear obstacle for opening a business in Timor-Leste, impeding the enabling environment for business growth in country. Additionally, navigation of local law requires the engagement of a law firm as all laws are written in Portuguese and often not available on government websites in an e-format. As a result, the project found it was clear that a “one-stop-shop” is necessary as a resource for businesses in order to encourage expansion and investment in the private sector. Environmental Compliance Activities based on the EMMP During the reporting period the project only engaged in activities and interventions (such as analyses, studies, research, workshops and meetings) that would fall under the categorical exclusion determination. Activities such as awarding grants or support to specific businesses that would require USAID review and approval, or establishing Public, Private Partnerships that would require minimum requirements for responsible due diligence were not conducted. Activity Collaboration and Coordination During PY1 the project learned of the substantial contribution to the tourism sector by a number of donors. In order to avoid duplication of efforts and ensure harmonization, USAID’s Tourism For All will continue its efforts to build consensus among the donor community thereby expanding the breadth of expertise offered to public sector counterparts and the tourism industry in Timor-Leste. Specifically, the project will work with the following implementing partners and their respective donors:

• The Asia Foundation (TAF) – Principally supported by NZAID, TAF has been working in the tourism sector for over five years in areas ranging from policy development, national tourism strategies, destination marketing, development of the Hotel Owners Timor-Leste (HOTL) Association, research (Annual Visitors Survey and Tourism Barometer), events (Tourism Symposia), and capacity building.

• Market Development Facility (MDF) – Supported by DFAT (AusAID), MDF has been working in the tourism sector for a couple of years in handicrafts, the dive sector, international cruising and international trade show attendance.

It is imperative that any intervention initiated by USAID’s Tourism For All is considered in coordination with the activities of these donor-funded programs to prevent misunderstanding amongst donors and confusion amongst beneficiaries. As such, regular donor coordination meetings will be required, which will ideally be led by the USAID mission in Timor-Leste in collaboration with the project’s Chief of Party.

A potential conflict in the project’s geographic areas of focus has been identified and remains to be resolved. Currently, TAF is working in Maubisse through NZAID funding and it is understood that NZAID may be formulating a project in Hatobuilico (Mount Ramalau). Discussions will need to be organized to understand the exact timing and scope of these interventions if and how USAID’s Tourism For All should continue to engage in these communities. Fortunately, neither Ataúro nor Dili are currently included for planned tourism interventions of either NZAID, DFAT (AusAID) or any other donors.

As the project has navigated the prospective interventions, careful consideration has been made to ensure minimal overlap of efforts. Where a duplication of activities has been identified, USAID’s


45

Tourism For All has made every attempt to either establish ways to augment the initiative or in some cases refrain from engaging so as to avoid creating an antagonistic environment. This has been a challenge and key consideration in the development of the PY2 work plan, which upon approval by USAID should be fully socialized with the above stated donors and implementors to create a spirit of consensus, collaboration, and partnership.

USAID/Timor-Leste Development Areas

On micro-enterprise, USAID’s Tourism For All project carried out a tourism value chain analysis, using the SWOT analysis methodology, of businesses in the tourism sector, including medium, small, and a few micro enterprises. The technical team engaged in a variety of primary and secondary research activities, including face-to-face interviews, focus group discussions, and desk research with specific emphasis on Hatobuilico and Meti-Aut regions of Timor-Leste. Of note from the SWOT analysis, the key bottlenecks include, but are not limited to, lack of market place awareness and product distribution; fragmentation among suppliers of tourism products and services; non-performing and weak public-sector institutions; regulatory gaps and lack of enforcement of laws; local misunderstanding of tourism and weak service culture; and ineffective management and operations of public assets associated with tourism. These bottlenecks are important opportunities for USAID’s Tourism For All project to design interventions that offer the most value to tourism businesses up and down the value chain. For example, in response to the lack of marketplace awareness and product distribution, the recommended project intervention is to integrate digital destination marketing through content creation and dissemination that is better suited for existing tourist source markets (i.e. Indonesia, Australia, and Singapore). This is particularly applicable for Meti-Aut that is easily accessible from the Dili airport for tourists who are only in Timor-Leste for a short period of time (i.e. visa runs). In parallel to targeted marketing, the project plans to work with restaurants, hotels, and other tourism businesses in Meti-Aut through its grants program to improve the quality of services and products that will encourage tourists to share positive experiences and even come back.

ANNEX 1: SUCCESS STORY

SNAPSHOT

USAID SUPPORTS THE IMPROVEMENTS OF MOUNT RAMELAU FUTURE SITE MANAGEMENTSustainable planning through local stewardship

Mount Ramelau, situated approximately 70 km north of Dili is the highest peak in Timor-Leste and is a rapidly growing tourism attraction. It is one of the country’s most sacred sites due to the Statue of the Virgin Mary which is located at the 3,000 meter summit and is therefore considered a protected


area. In the first half of 2018, it attracted 31,235 domestic and international visitors, which seriously overstretched the site’s current carrying capacity and caused grave concerns among local and national stakeholders.

In June 2018, the Government of Timor-Leste (GoTL) in consultation with the Catholic Church, Dili Diocese issued a joint resolution to temporarily close Mount Ramelau to tourist-related activities. To address the overuse of a protected area and find mitigating solutions for better management, the GoTL established a Task Force, comprised of multiple government stakeholders at varying levels as well as the private sector and community members. The Ministry of Tourism, Commerce, and Industry (MTCI) invited USAID’s Tourism For All Project to participate as a member of the Task Force to offer technical advice for immediate site management for the re-opening in October 2018 as well as future plans with an aim towards inclusivity and coordination.

At the request of the Director General of Tourism and Task Force’s General Coordinator, USAID’s Tourism For All Project co-lead a field survey to Hatobuilico and the Mount Ramelau area to engage with local stakeholders and identify the constraints and opportunities for tourism development in the short, medium, and long term. The project provided technical expertise and in-kind support for representatives of the public sector to participate and learn from the survey. The project also brought together two local tour operators who volunteered their time to join the survey team in order to offer an additional perspective.

The team of professionals from both the public and private sectors concluded the survey on August 17 and made a series of recommendations including site clean-up, installation of rubbish bins, establishment of site-specific rules and regulations, and improved signage. The project technical staff were also able to facilitate discussions with a broad cross-section of local tourism stakeholders to debate the need for improved coordination and collaboration. On a subsequent visit organized on September 12 held in Hatobuilico, the Director General of Tourism re-iterated the suggestions of the Task Force emphasizing that, “Building strong coordination is the key of success for Mt. Ramelau”. USAID’s Tourism For All has also secured the services of an international tourism planning expert who will provide medium to long term planning advice to build on the recommendations gathered as a result of the site visit. The project will also investigate the possibility of establishing a local tourism management council, premised on the activities of the Task Force, to unify local stakeholders and strengthen their capacity to operate and manage community tourism assets.

The support provided by USAID’s Tourism For All in helping to mobilize the Mount Ramelau Task Force and providing high level technical inputs has helped to ensure that the reopening

Director General of Tourism Jose Quintas and his staff and in collaboration with the Ministry of State Administration and local authorities discuss preparation efforts for the re-opening of Mt. Ramelau, including sets of rules, site management, and the establishment of future local management.

PHOTO: Joao Noronha, Engagement Advisor.


ceremony planned by MTCI for October 7, 2018 is a success and that going forward tourism in the area will be more sustainable as a result of improved local stewardship.

ANNEX 2: ENVIRONMENTAL STATUS REPORT

USAID’s Tourism For All Project

Reporting Period: January 18, 2018 to September 30, 2018

EMMP Condition

No. Workplan Activity Description

Mitigation

Measures

Responsible Parties

Monitoring Log Follow-up

Date Indicator(s) Remarks

Negative Determination with Conditions

1 Assess handicraft sector and identify linkages to specific communities and heritage, provide support through grants to handicrafts associations, and promote handicraft products

No interventions or activities took place during the reporting period that will have a negative determination

COP N/A N/A N/A Year 2 and 3


2 Research and cost-benefit analysis for Public-Private Partnership (PPP) interventions




3 Identify and engage associations in selected geographic areas



ANNEX 4: REPORTS AND DELIVERABLES

The following table lists reports and deliverables completed during FY 2018:

Deliverable/Report Status Date Submitted

Weekly Bullets Submitted Every Tuesday

Quarterly Accrual Report – Q4 FY2018

Submitted September 12, 2018

Quarterly Performance and Financial Reports – Q3 FY2018

Submitted July 15, 2018


Submitted June 8, 2018

Key Personnel Fielded Completed May 30, 2018

Project legally registered with host country government

Completed April 17, 2018

Quarterly Performance and Financial Reports – Q2 FY2018

Submitted April 13, 2018

Annual Work Plan – and Environmental Mitigation and Monitoring Plan

Submitted March 23, 2018

Branding Implementation and Marking Plan


Project Policy Manual Developed Completed March 23, 2018



Monitoring and Evaluation Plan Submitted March 7, 2018

ANNEX 5: GANTT CHART OF USAID’S TOURISM FOR ALL PROJECT IMPLEMENTATION TO SEPTEMBER 30 ,2018 WITH % COMPLETION STATUS INDICATED

FY 2018 Project Activities Months

Progress this Quarter (FY2018 Q4) Jan Feb Mar Apr May Jun Jul Aug Sep

1 2 3 4 5 6 7 8 9

Objective 1: Institutions, Policies, and Laws Facilitate National Tourism Policy

Result 1: Promote Public and Private Participation in Policy Dialogue and Development*

1

Establish a working relationship with the National Tourism Authority and formally identify task forces or similar efforts that the project can assist by material support, including providing consultants or sponsoring activities

Project staff work regularly with MTCI technical staff on assessments, data gathering, strategic planning and industry collaboration.

Result 2: Facilitate Approval and Implementation of Key Tourism Framework Documents*

1 Develop Tourism Development Framework

On hold until new minister is appointed

2 National Tourism Strategy and Action Plans Developed

Internally drafted a strategic framework and will work with The Asia Foundation to integrate into the 2018 Timor-Leste Tourism Barometer.

Result 3: Selected Government Agencies Better Able to Perform their Duties




1 2 3 4 5 6 7 8 9

1 Identify key government units for close partnering

The PEA has been delayed due to the current political uncertainty. The selection of government units based on objective selection criteria.

2 Conduct capacity development assessments for appropriate Got agencies

PICAL tool has been drafted and will be ready for implementation in Y2.

4 Assess performance, information, and capacity gaps

Initial findings illustrate that there is minimal information-sharing and a need for harmonization between development partners so as not to duplicate as well as the public sector.

5 Conduct Tourism Awareness Baseline Assessment

Online survey completed and face-to-face interviews have commenced.

6 Assess constraints in attracting investment in the tourism sector

Extensive assessment of constraints in attracting investment was completed. The project organized a survey with face-to-face interviews and documentation via questionnaire. Survey highlighted constraints and opportunities and helped the project determine the best way forward.

7 Review draft tourism laws and present recommendations to MoT

Research carried out on all tourism laws enforced by the MTIC as well as laws that directly impact the tourism sector.

Result 4: Support Key Maritime, Terrestrial, and Cultural Sites to Achieve Protected Status

1 Complete Inventory of Key Terrestrial, Marine, and Cultural Resources

The project, with STTA support, reviewed high conservation value areas and protected sites and has improved understanding of feasibility of mapping and creating inventory at a national scale




1 2 3 4 5 6 7 8 9

2 Support GoTL efforts to complete and submit UNESCO Applications

Held meetings with multiple stakeholders to discuss world heritage sites and intangible cultural destination items and determined that the project will take steps to develop, promote, and recognize sites and items that may eventually lead to a UNESCO application or other recognition program.

Objective 2: Promote Sustainable Tourism Investments

Result 5: Introduce and Establish Models of Sustainable Tourism Development

1 Jointly identify and select three initial geographic areas

Three areas identified: Dili, Maubisse, and Ataúro Need formal commitment from GOTL, once the minister is appointed.

2 Value chain analysis of constraints and bottlenecks

SWOT analysis completed and potential project interventions identified

3

Form and convene destination stewardship councils, facilitate internal community meetings, and conduct rapid appraisals of community engagement

While DSC not formalized, determined case studies and groups that may become DSC

4 Develop Tourism Development Strategies

STTA have begun analysis and work with local stakeholders to guide in the establishment of DSCs or similar entity and develop tourism development strategies

5 Engage destination stewardship councils for participatory mapping exercises

No mapping has been completed yet. STTA currently in process of mapping and will complete in Y2




1 2 3 4 5 6 7 8 9

6 Design Environmental Education Training Program

Conducted desk research and determined the project will use the Global Sustainable Tourism Council criteria for training

7 Identify tourism operators and support them to attend tourism conferences

Bali & Beyond Travel Show occurred in FY2018 Q3

Results 6 & 7 : Improved Conditions for Private Sector Investment in Number of Tourism Types and Products

1

Identify primary draw attractions and conduct value chain analysis to identify constraints and identify regional trade events and support participation of local eco- and marine tourism operators

Report analyzing the dive tourism industry completed; determined next steps for collaboration with MDF through the creation of the Marine Tourism Association

2 Engage with local operators to discuss the development of itineraries in line with TL events

Consultations completed with local tour operators and agreed on several themes for itineraries in Y2

3 Engage coffee growers sector to discuss potential of targeted cultural tourism

Developed three coffee tours and conducted additional research of the coffee industry

4

Assess handicraft sector and identify linkages to specific communities and heritage, provide support through grants to handicrafts associations

Completed assessment of handicraft sector. Determined that Tais have the greatest potential for expansion




1 2 3 4 5 6 7 8 9

Result 8: Improve Business Skills of Selected Beneficiaries

1

Conduct experience and quality audits of accommodation providers, develop tailored action plans, and deploy training and follow-up technical assistance

Conducted initial experience and quality audits of accommodations in Dili, Ataúro, and Hatobuilico

2 Design and introduce Tourism Enterprise Development Program

Draft the grants manual and designed the strategy and implementation plan for the Tourism Enterprise Development Program

3 Assess business owners’ training needs and constraints in human resources and service delivery

Completed an assessment that found tourism service delivery in districts is generally very weak and needs training in hospitality, tourism, and tourism business management.

4

Engage private sector and discuss creation of minimum quality standards for sectors and design a Small Tourism Enterprise Operations and Management training course

On hold until new MTIC minister is appointed

5 Assess online marketing and branding needs

Conducted assessment of online tourism marketing and branding. Determined several interventions to address the identified needs

Result 9: Improve Tourist Satisfaction with Niches/Sites/Products

1

Engage with and provide training to Tourism Information Center Staff and explore collaboration with TripAdvisor for country reports

STTA hired and will carry out a rapid assessment of the visitor information, completing a SWOT analysis and identifying good practices and recommendations




1 2 3 4 5 6 7 8 9

3 Design and launch National Visitors Survey

Coordinated with The Asia Foundation on how the project can augment the current international visitor survey

Result 10: Increase Private Investment in Tourism Development

1 Review existing protected area investment models under consideration

This activity was moved to Y2

2

Identify Banks and discuss loan options for tourism enterprises; and work with banks to develop a loan product tailored to the tourism industry

Only two MFIs were identified and commercial banks are not suitable for SMEs. Future partnerships are being considered.

Result 11: Increase Public Investment to Support Private Sector to Develop Tourism

1 Research and cost-benefit analysis for Public-Private Partnership (PPP) interventions

Produced a report on PPPs and examined the cost-benefit analysis of using PPPs as a tool of economic governance to overcome challenges in developing the tourism sector

Result 12: Strengthen Associations Involved in the Tourism Sector

1 In selected geographical areas, identify, engage and support tourism associations with technical assistance and/or grants

Engaged three associations (AEMTL, HOTL, and ATKOMA) and determined next steps for technical assistance and support




1 2 3 4 5 6 7 8 9

Result 13: Establish Sustainable Management Plans Within Protected Sites

1

Work with MAF to establish a framework and guidelines for assessing risk of tourism and other development projects to high conservation values

Research demonstrates that there are no established management plans or legal monitoring and enforcement at key biodiversity and cultural sites in Timor-Leste.

58

ANNEX 6: TOURISM INVESTMENT CONSTRAINT SURVEY RESULTS

DESCRIPTION OF SURVEY

The tourism investment constraints analysis survey conducted from 26-28 September 2018 to have more appropriate information in relation to the tourism investment in Timor-Leste. The objective of the survey is to gain a qualitative understanding of varied perspectives on the investment climate in Timor-Leste.

SURVEY APPROACH AND RESPONDER

SURVEY APPROACH The aim of using a survey approach by administering questionnaires was to gather qualitative data on tourism investment constraints. The questions needed to be easy to understand as it was expected that most of the respondents would have different levels of education. The questionnaire comprised 21 questions in two different sections. The methodology used for tourism investment constraints analysis is face-to-face interview and independent responding to the questionnaires.

RESPONDERS LIST The selection of responders for the questionnaire survey was principally based on the responders direct involvement or interest in tourism investment and enterprises, representatives of NGOs assisting the local community-based tourism development.

The following are the list of the 22 responders from 26 potential responders were participated in the survey:

1. JYL 2. Timor Plaza 3. PT Citilink 4. Pelican Paradise 5. Telkomcel TL 6. Heineken Timor 7. Telemor 8. Air Timor 9. SCOPE Asia Timor 10. The Ramelau Hotel 11. Golgota Hotel 12. Hotel Timor

SURVEY RESULT STATISTICS

PRIVATE SECTOR AND CIVIL SOCIETY 1. Are you aware that the Government of Timor-Leste has established legislation to facilitate

private investment from foreign and domestic investors to support economic diversification?

13. ETO (Esperança Timor Oan) Lda. 14. CCI-TL (Camara Commercio e Industria de Timor-Leste) 15. TL Cement 16. Federal Insurance 17. Sinar Mas Insurance 18. Timor Aid 19. Lao Hamutuk 20. Luta Hamutuk 21. Haburas Foundation 22. Anonym

59

2. Is the government’s framework for support private sector investment in Timor-Leste adequate to meet this objective?

3. Do you think that the investment climate in Timor-Leste provides adequate incentives and benefits to the private sector to encourage investment?

4. Has the government done enough to raise awareness among the Timorese private sector of available tax benefits and investment incentives?

(18)

(4)0

5

10

15

20

Yes No

18%

15

7

05

101520

Yes No

22%

Yes No

11 11

50%

82%

78%

50%

60

5. Have the government’s priorities in encouraging foreign and domestic investment with regards to priority sectors and industries been clearly communicated to the private sector?

6. Is there sufficient opportunity for the private sector to invest in tourism-related business opportunities?

7

15

YES NO

78%

Yes32%

No68%

(15)

Yes73%

No27%(6)

22%

(7)

(16)

61

7. Does the absence or insufficient quality of critical infrastructure pose a binding constraint to

economic growth in Timor-Leste?

8. In your view, are there sufficient protections provided for the rights of foreign and domestic investors?

9. Are you aware of the role of Public-Private Partnerships (PPP) in facilitating investment into

Timor Leste?

Yes95%

No5%

Yes No

(1)

33%67% Yes

No(14)

Yes36%

No64%

(14)

(21)

(7)

(8)

62

10. Do you believe that TradeInvest is effective in meeting its mandate to support and facilitate

investment in Timor-Leste?

11. Are you aware that TradeInvest is the public entity responsible for centralizing the

administrative procedure for granting the Certificate of investor, Certificate of Exporter and Special Agreement on Investment?

12. The process and requirements for obtaining an Investor Certificate from TradeInvest are clear

and easy to understand.

64%36% Yes

No(14)(8)

73%

27%

Yes

No(16)

(6)

5

11

3

0

3

0 2 4 6 8 10 12

FULL AGREE

TEND TO AGREE

TEND TO DISAGREE

FULLY DISAGREE

UNKNOWN

63

13. In general, government official’s interpretation of business and commercial regulations are

predictable.

14. Foreign investors are unfairly advantaged over domestic firms as it relates to obtaining an investor certificate?

15. How would you rate the efficiency of government in delivering public services (e.g. transportation, utilities, security, education, health, etc.)?

2

12

3

3

2

0 2 4 6 8 10 12 14

1

Unknown Fully disagree Tend to disagree Tend to agree Full agree

5

4

3

5 5

FULL AGREE TEND TO AGREE TEND TO DISAGREE FULLY DISAGREE UNKNOWN

3 42

13

00

2

4

6

8

10

12

14

Very Efficient Mostly efficient Very inefficient Mostly inefficient Unknown

64

16. Please indicate your view on whether any of the following issues present challenges to business

and investment in Timor-Leste by ranking its severity on the five-point scale (1 to 5).

Notes: 1: No obstacle; 2: Minor obstacle, 3: moderate obstacle, 4: major obstacle, 5: Very severe obstacle

PUBLIC SECTOR 1. Do you view the business environment in Timor-Leste as conducive to securing foreign and

domestic investment in tourism and other key sectors?

0

5

10

15Telecommunications

ElectricityTransportation

Access to Land

Tax rates

Tax administration

Customs and Trade…

Labor RegulationsSkills and Education of…

Business Licensing and…Access to Financing (e.g.…

Cost of Financing (e.g.…

Economic and…

Macroeconomic…

Corruption

Crime, theft and disorder

Anti-competitive or…R. Legal system/conflict…

1 2 3 4 5

55%45% YES

NO(10) (12)

65

2. In your view, is there a need for further reform to the regulatory framework governing private

sector investment in Timor Leste?

3. Are you aware of the benefits that Public-Private Partnerships (PPPs) present as a mechanism to facilitate and assess the financial feasibility for projects to be carried out by the Government of Timor-Leste?

4. Do you think the government’s strategy for encouraging investment in Dili, Ataúro, and Oe-Cusse has been clearly communicated to the private sector?

77%

23%YES

NO(17)

(5)

50%50%YES

NO(11) (11)

23%

77%YES

NO

(5)

(17)

66

5. Do you believe there are institutional challenges / bottlenecks to investment in Timor- Leste?

73%

27%

YES

NO

(6)

(16)