Tourism

General Policy

The Bank will consider requests for loans and technical cooperation to finance studies and investment projects contributing to the development of tourism in the Member Countries.

Requests for investment in the tourism field received by the Bank should respond to one or more of the following objectives:

• Attracting international tourism and promoting and facilitating national tourism, with a view to improving the country's balance of payments and raising local income levels;
• Developing, primarily, areas which possess tourist attractions and are little developed economically;
• Creating new employment opportunities, particularly in areas of tourist attraction; and
• Contributing to Latin American regional integration.

Fields of Activity

1. INFRASTRUCTURE WORKS. The Bank may cooperate in the financing of infrastructure works included in the project, as well as the required investments for expanding the local production base. In such cases, the directives contained in the policies on financing of each sector included in the project will be observed.

2. BASIC FACILITIES, INCLUDING HOTELS, AND DEVELOPMENT OF CULTURAL TOURIST ATTRACTIONS. The Bank will expect the competent agencies of the public sector and the private sector to finance basic facilities, including hotels, and development of cultural tourist attractions. The intent of the Bank's policy is to exclude the financing of large and luxury hotels. However, the Board may consider a relaxation of this policy in exceptional circumstances relating to the project, the beneficiaries and the country. It may be the case that:

a) The risks involved in launching the project, particularly with respect to provision of basic facilities, require limited investments to provide incentives for the broader possible participation of the private sector in subsequent stages.

b) The development of the tourism attractions is a fundamental aspect of the project and the country does not have the necessary experience or capability, or properly qualified institutions may be non-existent or very weak.

The Bank is particularly interested in strengthening the institutions responsible for developing the tourism attractions and assuring their utilization and preservation.

c) Tourist hotels are available for the high-income trade and it is essential to expand the supply of facilities to meet the demands of other income groups; particularly when the diversification of such supply requires the participation of small and medium businessmen.

d) The basic infrastructure exists but there are insufficient or no basic facilities in potential tourist areas with low levels of employment.

e) The nature of the tourist attraction precludes the participation of the private sector, and hotel and para-hotel facilities must be financed by the public sector.

The Bank may consider the financing of this type of item to support the development of small and medium hotel establishments. In such cases, however, the Bank will participate only when:

i. The national public agencies and organizations have been unable to find alternative sources of adequate financing for goods and services of the type and quality required. In determining whether such alternative sources exist, the results of any positive efforts will be taken into account, together with the levels of profitability considered necessary for achieving the aims of the project.

ii. Such investments are, by their nature, the indispensable complement that assures that the other investments will yield the benefits anticipated during the launching stage of the project.

Basic Criteria

DIRECT LOANS: Financial and technical support will be extended for tourism development projects comprising a group of inter-related actions or subprojects coordinated under a single physical plan and an integrated investment program.

This mode of operation is justified when the purpose of the project is to develop a tourist attraction area or a number of complementary geographic areas located in a single country or in one or more countries. Whether the tourism development projects involve the creation of new activities or the expansion, development and improvement of existing activities, they may be designed for execution either in one single stage or as part of a longer-range program to be undertaken in successive stages or in coordination with complementary projects.

GLOBAL LOANS: Where there are development institutions or agencies in the country or in the region engaged in similar work, global credit loans or loans for multiple works may be authorized for the development of tourism attractions, for basic facilities (including hotels), and for investments in tourism infrastructure, provided that the foreseeable amounts of the projects are not large enough to justify specific loans.

The financing of basic facilities by this mode of operation is justified when the purpose is to support the development of small and medium hotels.

In all such cases where it is foreseen that more than 50% of the loan will be used to finance basic facilities, it will be necessary to have a program which establishes national or regional priorities in this field according to the project's area of influence.

To assure that the basic facility aspects in global loans are consistent with this policy, the loan document will explain the criteria which have been followed to determine the autonomous limits. In any event, the Bank should be informed of the sub-loans which are below the autonomous limit.

In each project, care will be taken to see that both tourists and the rest of the community have access to the recreational areas and to the basic works and services.

The environmental impact of the investments should be considered in all projects, especially those for tourism development. It is essential that account be taken of the need to maintain an adequate ecological balance and avoid deterioration of the natural and human environment. Conservation, rehabilitation and/or beautification of the environment is a fundamental objective.

Policies on Procurement of Goods and Services

As an addition to the general policies, where special circumstances warrant, the public bidding requirement may be waived on the procurement of goods and services for the restoration and preservation of cultural tourist attractions.

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Prevailing Reference Document: GP-55-10, March 1981.