Some observations regarding success and failure in Aid funded Tourism Development.

A couple of years ago I was invited to chair the innovation session at an EU parliamentary summit in Brussels. The summit discussed projects to support SME’s in tourism.  I was the only SME representative in a hall full of ‘experts and project heads’. Frustrated at the lack of understanding of Tourism businesses, I set aside my prepared script anf  I took the opportunity to tell them where they are going wrong, ( perhaps a little rudely) which directly led to my work for the European Council.

The main points of my speech were as follows…
In Montenegro, throughout the Balkans and with projects in Ukraine and Moldova I have seen lots of different approaches, all designed to achieve similar outcomes. The reasons for success or failure are many, but there are a few issues common to all.

1. Motivate local partners. 

Example: A failed project in Montenegro – lack of local support was the main reason for the failure.

Rather than embrace the opportunities in the project, potential local partners became outspoken critics. The problems began when the donor agency publicized the amount of money (millions of Euros), that the project would be spending. The intention was to generate interest and support, but the way the announcement and press coverage was handled, created an expectation that there would be easily obtainable cash grants for SME’s. I attended the first meetings and found that many would-be project supporters had come with a ‘shopping list’ of items (equipment, marketing support), that they expected the donors just to provide. Their expectations were dashed and they were lectured about their shortcomings as businesses and their ‘unreasonable
attitude’. The atmosphere turned hostile and the project looked unlikely to succeed from then on. The situation was compounded by the project team spending ostentatiously on their work, cars and drivers, a helicopter trip to tour Montenegro etc. etc. The predictable comment was ‘so that is where the money is being spent’.

My take away from this debacle is that development agencies can lack tact and have a poor understanding of the people they wish to help. The donor agencies also share the blame for creating a dependency culture here in the past and they still like the kudos and publicity of giving money. (I do appreciate that favorable publicity is one of the main intended consequences
of aid money).  If you tell people you have millions of Euros in aid for them, it is not ‘unreasonable’ that they might expect to directly benefit in Euros.

Before donor agencies lecture potential supporters about ‘wanting something for nothing’, they should look at their own failings in this regard. Time and again projects have approached my business asking for our suggestions, our product ideas and our contacts. I am always asked to attend meetings at their convenience and to support their project. I am a business man and I want something in return. The development ‘experts’ are receiving a salary and all expenses, what do I as a business get from the project?
Normally our ideas just end up in a final report, to win new project funding for the ‘experts’ themselves.


I. Approaches to potential partners should be personal. As any good salesman
knows you need to go out to your prospective partners, to their place of
work and to learn from them, about their business, their problems and their
needs. You do this before you make any claims about what your project will
be and what it will deliver.

II. Tailor the project. If you listen, the businesses will tell you what is
required to bring them success, don’t rely on academic theories and best
practices elsewhere, they are a guide not a one size fits all solution,
every situation is different.

III. Develop relationships by adopting the stance of an equal, not an
expert. So you have money to spend. (It is not your money it belongs to a
tax payer somewhere). So you have been successful in another market or
destination, that doesn’t make you automatically smarter than a businessman
who is struggling in THIS market or destination.

IV. The project goals have to match the stake holder’s own goals. This is
particularly true if the project is to be part funded, or rely on support
from tourism businesses. For example, many projects aim to develop new
signage, produce guides, and publish information sources, these are all
great for increasing the volume of independent travelers but the benefits to
supporting businesses need to be thought through and explained. A tourism
business which has invested time and effort identifying attractions and
gathering information will be reluctant to provide this information freely
to a new ‘visitors information portal’  Thought should always be given as to
how these new resources can be used to generate revenue for the individual
businesses not just to the destination economy as a whole.

The above are all time consuming but worthwhile. In Moldova rather than call a large  initial meeting and launch straight into a two day training seminar, we facilitated a structured discussion based around Moldova’s brand attributes, the experience visitors have in visiting the
country, good and bad, and used this discussion to identify needs. I stayed an extra week at my own expense and travelled with the local businesses, stayed with local family home stays etc to get a real understanding of what was needed but also to build relationships necessary for the project to succeed.

2. Set worthwhile goals.

A detailed final report, a training seminar, a web site or an inventory of tourism assets are not goals in themselves, they are a means to an end.

Why are so many projects afraid to say that they will achieve a measurable increase in bums on bus seats, or new tourist visits? I guess because it is hard to achieve and too measurable.   It is much easier to concentrate on delivery of specific elements within a project (boxes ticked), than the overall goal.
In my media days, the marketing director of one of the UK’s largest advertisers told me
that he wasn’t interested in what his ads looked like, whether they formed an association with my TV shows, or even how many people saw them, what interested him was how many units he sold. Most tourism businesses feel the same way. For example, if you want businesses to be more environmentally friendly you have to explain how this improves their bottom line.


Develop a business strategy for the project, in most cases, with the clear
aim of attracting specific market segment(s). Take time to set an
achievable, measurable goal which has the support of stake holders. Each
task within the project should be directly relevant to achieving the goal.

3. Be innovative (break with tradition).

Example: The DEU (European Union) responsible for IPA funding are too risk
averse in my view. They award grants to the same kinds of projects time and again. They
are so predictable that an industry has grown up teaching businesses how to
complete the application forms, which terminology to use, how to get points
in the scoring process. This means that the same approaches are tried again
and again. It also means that the same people are awarded the grants time
and again, often because of their political affiliations. I appreciate that
some checks are needed but the system still allows for money to be wasted.
For example, I can cite grant funding for projects which are just directly
duplicating previous work, (developing a mountain guide book, when one
already exists, training seminars which are identical to those given the
year before). There seems to be no consideration given to other projects
already in place, hence overlaps and duplication.

I do understand the requirements of the donor agencies, to ensure that they are legal and fair but the system creates many distortions in the design of projects. In general the emphasis from the EU for grant support is for:

Class room based capacity building training, whether appropriate or not.

Tourism cultural routes development, whether these are desirable/ marketable
or not. (One example, the much trumpeted Balkans ‘Routes of the Caesars’
based on the fact that some of Rome’s more obscure leaders were born in the
region, in my view the money spent on the project is not justified by the
potential consumer interest in the theme, yet the website and leaflets
produced look so good that the whole project is considered a success).

Emphasis is given to supporting Government or NGO’s rather than businesses
or business associations. I am afraid to say that in our part of the world
many government institutions and NGOs are not fit for purpose. (USAID also
seem to have a fear of any project which can clearly bring financial gain to
businesses).  This usually means that the project is not sustainable once
the grant money has been spent.

There is a general uneasiness about directly funding marketing efforts or
the staging of new events.

Aid support goes to those who are best at lobbying for it, not to the most
deserving or those who can really make a difference.


If the objective is to develop and grow tourism, marketing should be at the
center of any project. (Instead of a ‘limited print run leaflet’ tacked on
the project objectives as an afterthought).

New approaches to capacity building training are needed, much better to
support and coach stake holders to work together to deliver a catalytic
event as a marketing tool than to kill them with power point in the

Do not be afraid of building a project which generates an immediate profit
for the stake holders, this may be hard to explain politically but it is the
best guarantee of sustainability.

Be prepared to bypass internal political and cultural blocks to change,  where these
stifle development. (For example in Montenegro the Govt. had been insisting on their own national guide’s qualifications, but, they have been too slow to act and anyway, international tourists want to see internationally recognized qualifications).

There is a cultural ‘condition’ in government departments in many Eastern Europe’s transitional economies that kills innovation, avoids risk and is resistant to change!! It is not true that for change to happen Govt. has to be in agreement/support. 


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