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Innovations in Tourism


In 2004, Heloisa Barros was convinced that her only option was to sell her farm, Engenho Velho (“Old Mill”), a 10-acre property in São Bento do Sapucai, 200 kilometers from Sao Paulo. Although the farm had been in her family for more than 100 years, it now seemed likely that Heloisa, her mother, brother, sister-in-law, and nieces and nephews would end up in the street. Then she found out about a rural tourism program called “Adding Value to Your Property,” an initiative of the National Rural Training Service (SENAR), a Brazilian para-statal training institution for rural workers.

Heloisa signed up for the program and found a way to save her farm: rural tourism. Under SENAR’s guidance, the family invested US$1,000 to restore the property and receive visitors. They set a daily price of US$70 for room and board. When neighboring inns began referring guests to her, Heloisa knew that she had succeeded. She then returned to SENAR for training in marketing in order to launch a store where her mother would sell coffee, homemade sweets and breads, tablecloths, and napkins.

Engenho Velho is a success story for rural community tourism (RCT) that has been recognized by the International Labour Organization’s Inter-American Centre for Knowledge Development in Vocational Training (CINTERFOR). RCT is growing in many remote communities throughout Latin America. By 2006, at least 5,000 micro businesses were operating in Brazil alone, and in Costa Rica more than one tourist in 10 had a rural experience.

RCT includes a series of sustainable activities planned and coordinated by the local residents, who preserve their rural culture and focus the benefits on the community, promoting conservation practices for forests, energy and water, along with the intelligent use of biodiversity. The idea is that the so-called
“new millennium tourist” not only visits rural areas, but also lives with families, partaking of country life, from planting and harvesting to milking cows and preparing feasts. Simply put, the visitors get involved.

RCT is seen as a social activity that organizes flexible, varied and trained groups of self-managed communities, which is particularly fertile ground for microlending. According to Gonzalo Freiria, director of Rural Tourism at the Faculty of Agricultural Sciences of the Business University (UDE) in Uruguay, the expansion of micro and small service companies enhances rural business “since entrepreneurship evelopment includes products identified with local areas and subsidiaries of programs tailored to consumer interest and demand.”

The World Tourism Organization views RCT as “key” for diversifying subsistence economies through providing employment to idle workers and capital to family-run micro-services. Under sustainable management, jobs are created by generating local value chains with no need for further investment or infrastructure other than water, electricity, and roads.

Sprouting From the Ground Up
RCT started in Europe in the 1950s and came to Latin America in the 1980s as a survival mechanism in response to the crisis in the countryside. At fi rst, it depended on resources from international aid; the United States recently became affiliated in the 1990s.

The Inter-American Development Bank (IDB), through its Multilateral Investment Fund (MIF), now finances a cluster of 24 projects in the region involving more than 6,500 micro, small, and medium-sized enterprises. It is the largest laboratory for RCT in the region and includes the creation of self-guided tours, sustainable development programs, and labor skills training in Ecuador, Peru, Bolivia, Colombia, Guatemala and Argentina. The MIF also provides resources to the Local Ethnotourist Business Network in Honduras, southern Belize, the southern macroregion of Peru, and 30 communities in Costa Rica through the National Ecotourism Consortium Cooperative (COOPRENA), the country’s leading RTC developer.

Although experiences are plentiful, not all countries have a clear policy for promoting RCT. Mexico is a case in point, although it is home to the most powerful tourism machine in Latin America. Mexico’s rural and semi-rural communities, which encompass some 40 million people, do not participate in tourism activities. In fact, 24 culturally valuable sites in the country are on UNESCO’s World Heritage list, and the preservation of some, like the Mayan cities of Chichen-Itza, Uxmal, and Calakmul, could be achieved through rural projects.

But Mexico has not gotten there yet, and could perhaps take note of the successful case into Quindio, Colombia, to plan its entry in this promising fi eld. In 1991, Colombia took four coffee farms in crisis and transformed them to host tourism. The project generated a cluster of businesses, and 15 years later, the area is now home to 600 rural microenterprises. Quindio has become the second-largest tourist destination in Colombia.

Leaders and Emerging Leaders
The regulations, policies and experiences that help create a sustainable RCT industry are most evident in Peru, Costa Rica, and Ecuador, the rising star. In 2007, the Microenterprise Tourism project (MET)—an alliance forged by the World Tourism Organization, Ecuador’s Tourism Ministry, the Netherlands Development Organization, and the Rainforest Alliance to integrate tourism microenterprises, microcredit, and poverty reduction—identifi ed 100 microenterprises along tour routes or circuits with tourism potential. Nearly 30 were certified as sustainable by the Rainforest Alliance, and several more are being studied by MET to determine their need for microcredit.

In Costa Rica, RCT is being consolidated. Approximately 20 of the 35 groups affiliated with the Mesa Nacional Campesina, the country’s main labor organization, have decided to merge agriculture with tourism. Currently some 1,500 families in nearly 70 rural communities and villages provide room and board in family homes, organized by the Actuar, Grupo Jazon, and Cooprena networks.

In 2004, these networks formed an alliance to strengthen RCT, which made Costa Rica one of the most organized systems. In 2007, the government officially endorsed RCT, and next to ecotourism, sun and surf tourism, and adventure travel, it is the fourth macro-product cal mass. At the World Tourism Organization’s 2007 summit in Cartagena (Colombia), Peru reported that 60% of the 1.7 million tourists visiting the country each year have a rural experience. In Costa Rica, the proportion is 12% of 1.8 million tourists. With these statistics the Peruvian government is promoting the country as a destination for experiential tourism. The country has even designed a “cultural tourist” profile and rural tourism guide, inaddition to resources that have been mobilized to make services in rural communities more competitive, adapting best practices from Costa Rica. Peru now has quality standards for services in inns and shares information on business models with establishments that are included in this system. The government has also launched a non-reimbursable investment fund to finance rural community tourism.

Already Achieved … and Yet to Do
The backstory of RCT now seems to promise a happy ending. The authorities have taken concrete steps to get involved. Brazil’s SENAR, for example, which helped Engenho Velho, is the leading authority in training rural entrepreneurs. In Argentina, the agriculture faculty at the University of Buenos Aires (UBA) offers a postgraduate degree in Rural Tourism Management, and many champions of RCT have graduated from the program.

The experiences are beginning to produce results in the communities, too. A survey by the Business University of Uruguay shows that RCT has generated employment in villages and towns and repositioned rural businesses in the country. In Costa Rica, tourism organizations realize that the hourly wages of rural tourism workers are 50% higher than for other occupations in the countryside.

Of course challenges remain. “Some of the biggest problems are the low participation of local stakeholders in profi ts, the lack of tourism development planning at the regional, local, and product levels, and a focus on product development that lacks more precise information on markets and their trends,” explains Santiago Soler, MIF expert and coordinator of the sustainable tourism cluster. “There is also a loss of the large profi ts to the developed ountries, mainly due to prepaid packages.”

In addition, community participation is limited. Low levels of education, training and business management, along with a lack of access to technology and fi nancing and ignorance about marketing, are still huge challenges that need to be addressed.

Long-term commitment is also essential, since RCT does not have quick results. At this stage, public monitoring can be crucial. In Costa Rica, the Sustainable Tourism Development Plan 2002–2012 has attempted to regulate microentrepreneurs. One difficult area to reconcile is the balance between generating economic benefits and the parallel commitment of investors to local development.

It is not easy. Community activities need consensus that can be diffi cult to forge, while a booming business requires rapid decisions. The World Tourism Organization estimates that RCT will grow signifi cantly in the next 15 years. Approximately 3% of tourists worldwide are drawn to the experience, which is growing about 6% annually, above the average growth of worldwide tourism.

The demand exists and infrastructure and services are needed in order for facilities to make realistic business projections. Expectations are high: CINTERFOR estimates that farmers could capture up to 8% of the aggregate spending of the tourist industry with their projects. This would be US$114 million–$384 million per year for peasants in Peru alone. Another US$360 million could reach Costa Ricans if their rural community tourism captures 5% of the tourism market, and some US$4 billion would go to Mexican community farmers if they corner 8% of the market.

The problem is to move the money to the countryside. Investment is needed, too. But above all, RCT needs programs such as “Tourism for All,” launched in Ecuador in 2007 to train some 4,500 microentrepreneurs in interdisciplinary knowledge drawn from Project MET.

The IDB is also contributing. The MIF cluster of 24 enterprises supported by the Bank is professionalizing the process and expanding the social base. “The support ranges from rural tourism projects to operations that can take part in the fl ow of mass tourism on cruise ships and re-route it toward tangible benefi ts for local communities,” says Yves Lesenfants, the cluster’s technical advisor. “The cluster researches innovative uses of information and communications technologies to open new markets, such as working with virtual communities or improving the technology infrastructures ofdestinations.”

The IDB’s goal is to discard some of the romantic and empirical notions of tourism development at the micro, small, and medium-sized business levels and generate strategies at various levels that begin with proponents and implementers. According to Lesenfants, a steady supply of rural services quickly falls into place as demand for RCT grows. And because of its nature, the supply must be managed through a specialized marketing chain. “This market is not passive; it interacts with the product and is a participant in social development efforts,” he says. “This is the marketing hook, and in the cluster we pay attention to the marketing chain due to its obvious role in the process’s sustainability.”

The point is to open the fi eld, and open it wide. “Promoting RCT in the region, as a strategy to reduce poverty and generate employment, is a political strategy that needs to be taken to the superstructure level, since such a wide cross-section of skills is involved,” says Ernest Barrera, director of the
postgraduate agriculture program at the UBA and head of the CINTERFOR study. “Without an active rural tourism policy, spontaneous development lets producers with greater business capacity edge out the small farmers, campesinos, and indigenous people, and then their participation will be marginal.”

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