< < < < < < < < < < An introduction to the Tourism PPP. The Turespaña experience

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1 < < < < < An introduction to the Tourism PPP. The Turespaña experience < < < < < Joan-Carles Cambrils Cabinet Chief of the Spanish General Directorate of Tourism 1

2 CONTENTS 1. Characteristics of the public-private partnerships 2. Reasons for public-private partnership 3. Examples of public-private partnership 4. Scope of public-private partnership at Turespaña 5. Forms of public-private partnership at Turespaña 6. Results of public-private partnership at Turespaña 7. Pros and cons 8. Recommendations 2

3 CONTENTS 1. Characteristics of the public-private partnerships 2. Reasons for public-private partnership 3. Examples of public-private partnership 4. Scope of public-private partnership at Turespaña 5. Forms of public-private partnership at Turespaña 6. Results of public-private partnership at Turespaña 7. Pros and cons 8. Recommendations 3

4 1.1. DEFINITIONS OF PPP (1) Legal forms of cooperation between public authorities and the world of business which aim to ensure the funding, construction, renovation, management or maintenance of an infrastructure or the provision of a service. (source: GREEN PAPER, European Commission).

5 1.1. DEFINITIONS OF PPP (2) A cooperative venture between the public and private sectors, built on the expertise of each partner, that best meets clearly defined public needs through the appropriate allocation of resources, risks and rewards. It relates to the provision of public services or public infrastructure. Second, it necessitates the transfer of risk between partners. (Source: The Canadian Council for Public-Private Partnerships)

6 1.1. DEFINITIONS OF PPP (3) Forms of cooperation between Public and Private Tourism Agents in different levels of commitment: low participation, projects cooperation or stable partnership.

7 1.1. DEFINITIONS OF PPP (4) PUBLIC PRIVATE An agreement between private and public sector agents to undertake a particular project in line with at least one of the two principles below: Joint decision-making. Joint risk/financing.

8 1.2. SCOPE OF TPPP General issues about the tourism system. Tourism marketing (mainly Communication, research and product development) Tourism Quality policies. Education and trainning 8

9 1.3. FORMS OF TPPP PPP in Tourism Decision/Management SOFT IMPACT Agreements Advisory bodies Public Incentives NTO s, Autonom. Organism, Institute, Tourist Boards Association Foundation STRONG IMPACT NTA s, Public Administrations Consortium Societies, Corporations 100% PUBLIC 100% PRIVATE

10 CONTENTS 1. Characteristics of the public-private partnerships 2. Reasons for public-private partnership 3. Examples of public-private partnership 4. Scope of public-private partnership at Turespaña 5. Forms of public-private partnership at Turespaña 6. Results of public-private partnership at Turespaña 7. Pros and cons 8. Recommendations 10

11 2. REASONS FOR PUBLIC/PRIVATE PARTNERSHIP 1 st reason: The best tourism experiences enjoy public and private goods and services. Many environmental and cultural goods (that are tourism attractions) are public goods (non excludability, non rivality). Particular TPPP can reduce or avoid the parasitism and the lost of communal goods 11

12 Private goods Public goods

13 2 nd reason: External effects (+ and -) caused by tourism activity. Upset somebody s welfare without his consent Why the external effects happens? The general welfare balance the environmental negative effects. It s difficult to quantify the negative/positive effects in money. The property rights are not clearly defined. 13

14 (cont.) 2 nd reason: External effects (+ and -) caused by tourism activity. Private/Public agreements for solutions to the external effects: A) Awareness of the problem with public campaigns: ethic change. B) Negotiation by those involved, stipulating a price for welfare o discomfort. C) Penalize or grant for the external effects. Effect of a + externality

15 Cambrige (Eng)

16 3 rd reason: the economic - touristic cycle of destination: Long term medial costs are increasing. Number of tourists Rejuvenation Stagnancy Consolidación Downhill Development Implication Exploration Time

17 Long term global medial cost of tourism production, consequence of the law of decreasing marginal productivity Global medial cost New destination (short term) Medium size destination Mass destination N.B. the economic downturn accelerates this commitment: more efficient choice of public/private investments and mk actions (long term) Global medial cost = explicit costs + opportunity costs Q= trips or inclusive tours

18 In order to correct this problem, Turespaña has promoted the consortiums for requalifying a few mature destinations

19 4 th reason: sustainability. Next generation should be able to use the same amount of natural capital. People and NGOs are endogenous resources taking important economic decisions. New culture/new governance of tourism that supports Turespaña: shared Leadership with all the actors. Spanish Tourism Council Mesa de la calidad (Quality Advisory Council)

20 CONTENTS 1. Characteristics of the public-private partnerships 2. Reasons for public-private partnership 3. Examples of public-private partnership 4. Scope of public-private partnership at Turespaña 5. Forms of public-private partnership at Turespaña 6. Results of public-private partnership at Turespaña 7. Pros and cons 8. Recommendations 20

21 3. EXAMPLES OF PUBLIC-PRIVATE PRIVATE PARTNERSHIP SPAIN (national level) Turespaña: autonomical body for marketing: 100% public. Segittur: a 100% public national company for research and new technologies. Paradores: a 100% public national hotel company, with nearly a 100 establishments, most of them monumental buildings, located in strategic places. Advisory bodies and consortiums: TPPP 21

22 3. EXAMPLES OF PUBLIC-PRIVATE PRIVATE PARTNERSHIP SPAIN (local level) Convention Bureau: non-profit making associations. More than a 100 local constituted or in process TPPP (with a Turespaña grant). 1

23 3. EXAMPLES OF PUBLIC-PRIVATE PRIVATE PARTNERSHIP Visit London: Public Limited Company, P-P shareholders Berlin Tourismus Marketing Gmbh: 85% private capital, 15% public capital (land of Berlin) Amsterdam Tourism & Convention Board (ATCB): Private non-profit association set up with public and private capital. Depended on by five private companies with legal personality (marketing, bookings, congresses, information and advisory). Wonderful Copenhagen (WOCO): private non-profit entity (business foundation) with public/private capital. Marketing Manchester: commercial company with 50% public/private capital (source: FEMP) 23

24 CONTENTS 1. Characteristics of the public-private partnerships 2. Reasons for public-private partnership 3. Examples of public-private partnership 4. Scope of public-private partnership at Turespaña 5. Forms of public-private partnership at Turespaña 6. Results of public-private partnership at Turespaña 7. Pros and cons 8. Recommendations 24

25 4. SCOPE OF PUBLIC/PRIVATE PARTNERSHIP AT TURESPAÑA 4.1. The 2020 Spanish Tourism Plan is a PPP outcome WHAT'S THE PLAN? All public administrations and all agents in the industry are committed to making the Spanish Tourism System more competitive and sustainable by 2020 for the wellbeing of the wider community. HOW WAS IT DONE? Through an open debate between the public and private sector to examine Spain's position and tackle the challenges posed by new trends. WHO TOOK PART? Over 35,000 tourists Over 100 industry experts Over 2,000 industry representatives All public administrations 25

26 4. SCOPE OF PUBLIC/PRIVATE PARTNERSHIP AT TURESPAÑA 4.2. Spanish Council of Tourism A TPPP, the Spanish Council of Tourism approved the 2020 Plan. It was officially supported by the Autonomous Community Conference and the National Government. 54 MEMBERS (19 from Autonomous Communities, 4 from Spanish Federation of Municipalities and Provinces (FEMP), 4 from the State Tourist Board, 6 from the Spanish Confederation of Business Organisations (CEOE), 6 Chambers, 4 Syndicates, 9 of repute) It has advisory functions Frequency: It meets usually twice a year. 26

27 4. SCOPE OF PUBLIC/PRIVATE PARTNERSHIP AT TURESPAÑA 4.3. Spanish Tourism Strategies New Tourism Economy Knowledge Innovation Capturing talent 2. Value for customers Experimental Spain 3.Sustainability Tourism, the environment and society 4. Competitive environment Legal framework and simplification 2020 positioning Tourist destination planning and management Cooperative culture Helping to sell Regeneration of mature tourist destinations Competitive Industry-wide Plans Perceived quality Deseasonalisation and redressing regional balance 4. Shared leadership Accessibility of tourism 27

28 4. SCOPE OF PUBLIC/PRIVATE PARTNERSHIP AT TURESPAÑA 4.3. Spanish Tourism Strategies 2020 a. Knowledge / Innovation (e.g.) Agreement with the National Council of Chambers (INTELITUR) Agreements with the Instituto Tecnológico Hotelero - CEHAT Boosting PP innovation clusters (THINKTUR) MK research training innovation

29 4. SCOPE OF PUBLIC/PRIVATE PARTNERSHIP AT TURESPAÑA 4.3. Spanish Tourism Strategies 2020 b. Building a more sustainable / more competitive model of tourism (e.g.) Boosting quality, quality incentives (Q label, Instituto de la Calidad Turística Española) Plans for re-qualifying mature destinations with local PP partners

30 4. SCOPE OF PUBLIC/PRIVATE PARTNERSHIP AT TURESPAÑA 4.3. Spanish Tourism Strategies 2020 c. Building value for customers / Helping to sell (e.g.) Agreements with companies to jointly fund product campaigns. Joint destinations promotion with PP tourist destinations/brands Agreements with PP partners for press trips.

31 CONTENTS 1. Characteristics of the public-private partnerships 2. Reasons for public-private partnership 3. Examples of public-private partnership 4. Scope of public-private partnership at Turespaña 5. Forms of public-private partnership at Turespaña 6. Results of public-private partnership at Turespaña 7. Pros and cons 8. Recommendations 31

32 5. FORMS OF PUBLIC-PRIVATE PRIVATE PARTNERSHIP AT TURESPAÑA (i) PP signed Agreements - Agreements, arrangements for dissemination, raising awareness - Agreement with TT.OO. to recommend Q qualified establishments Agreements, arrangements for Promotion/helping to sell. - CoMK with Air Europe, Monarch, TUI, REWE, ABTA, 32

33 5. FORMS OF PUBLIC-PRIVATE PRIVATE PARTNERSHIP AT TURESPAÑA (i) PP signed Agreements - Agreements, arrangements for Training/quality - Co finance the biggest Tourism postgraduate university network- SICTUR - Agreements, arrangements for Sponsorship - Eurobasket 2014, Madrid Tennis Open, Pan European Golf, Liverpool F.C., Spanish Basketball and Football Federations and Moto GP. 33

34 5. FORMS OF PUBLIC-PRIVATE PRIVATE PARTNERSHIP AT TURESPAÑA (ii) Advisory entities Creation and participation in the Spanish Council of Tourism (for advisory purposes) Quality Advisory Council Group of MK experts asses over the new Spain creativity 1

35 5. FORMS OF PUBLIC-PRIVATE PRIVATE PARTNERSHIP AT TURESPAÑA (ii) Incentives to the private participation in public programs Co-finance Q label Support European Charter for Sustainable Tourism in Protected Areas (ECST) Support to innovation tourism clusters (25 Agrupaciones Empresariales Innovadoras) Cofinance IT trainnig (Plan Avanza) Support to the creation on Local TPPP 35

36 5. FORMS OF PUBLIC-PRIVATE PRIVATE PARTNERSHIP AT TURESPAÑA (iv) Participation in legal institutions, sharing responsibilities to all levels, like consortiums Mallorca, Costa del Sol, Gran Canaria 1

37 CONTENTS 1. Characteristics of the public-private partnerships 2. Reasons for public-private partnership 3. Examples of public-private partnership 4. Scope of public-private partnership at Turespaña 5. Forms of public-private partnership at Turespaña 6. Results of public-private partnership at Turespaña 7. Pros and cons 8. Recommendations 37

38 6. RESULTS OF PUBLIC/PRIVATE PARTNERSHIP AT TURESPAÑA A (2009) i. 260 agreements with private companies and associations to carry out joint activities ii. Total investments of 63 million (43% Turespaña-40% private sector-17% other public administrations) in co-mk. Induced private/other public investments: 31 million. iii. iv. Over 2,500 firms hold the Q quality label 30 innovation clusters set up ( 3.8 million in funding) v. 38 Projects of the Avanza training plan ( 4 million in funding) vi. 17 competiveness plans and 3 destination requalifying plans 38

39 CONTENTS 1. Characteristics of the public-private partnerships 2. Reasons for public-private partnership 3. Examples of public-private partnership 4. Scope of public-private partnership at Turespaña 5. Forms of public-private partnership at Turespaña 6. Results of public-private partnership at Turespaña 7. Observed pros and cons 8. Recommendations 39

40 7. OBSERVED PROS AND CONS PROS Powerful tool for implementing policies more effectively: MK, quality, awareness, innovation. Share of information, resources, risks and rewards. Move actors to a new cooperation culture. CONS Need of an strategy results oriented: P&P have different goals. Lack of experience in PP cooperation Lack of institutional support Need of market incomes Disproportionate Government role

41 CONTENTS 1. Characteristics of the public-private partnerships 2. Reasons for public-private partnership 3. Examples of public-private partnership 4. Scope of public-private partnership at Turespaña 5. Forms of public-private partnership at Turespaña 6. Results of public-private partnership at Turespaña 7. Pros and cons 8. Recommendations 41

42 8. RECOMMENDATIONS Understand why a TPPP. Share vision and objectives Adapt national/regional laws Share risks Professional management Team work Mesuared results. Believe on your partnership: a PP effective cooperation requires a decided and positive attitude

43 < < < < < THANK YOU VERY MUCH FOR YOUR ATTENTION < < < < <