Tourism: Enhancing Economic Growth in Emerging Markets
The tourism industry is a major contributor to employment, foreign exchange earnings, and tax revenues for developing countries. Hotels and tourism generate economic activity for small- and medium-sized businesses which supply goods and services both during construction and operations. IFC invests in hotels and tourism because of its strong development impact, particularly for low-income countries and fragile and conflict-affected countries.
Since 1956, IFC has invested over $2.8 billion in 267 projects in 89 countries with more than half of these investments in frontier countries.
IFC investments promote development of critical infrastructure in places where there is often a shortage of business class hotels for potential investors. They send a positive signal to other investors and mixed-use hotel, commercial and real estate complexes create venues for international conferences, and basic infrastructure like roads, power, and telecommunications in leisure destinations.
According to the World and Tourism Council, every dollar spent on travel and tourism generates over three dollars of economic output. Over 100 million workers are employed in this industry worldwide, and tourism revenues account for more currency flows to developing countries than all aid flows from foreign donors.
We have observed that higher quality hotels create the most jobs, up to three jobs per hotel room or twice as many as budget hotels. Hotel companies also provide training that helps develop the workforce, creating lifelong skills for future promotion and self-employment especially for women. These jobs range from highly skilled to unskilled in areas like information technology, food service, accountants, receptionists, housekeepers, and security. Hotels generally prefer locally sources for operating supplies like food and beverages, and are willing to work with local suppliers to improve quality.
Sustainable Development, Energy Efficiency
IFC’s green building tool, EDGE, helps clients reduce their environmental footprint and save money on water and energy. IFC also invests in energy service companies that help companies manage consumption, and provide Cleaner Production Loans to finance investments in energy efficiency.
Our partners include leading domestic and international investors and companies like Occidental, Orient Express Hotels, TPS Serena, Shangri-La, and other investors that affiliate through management or franchise contracts with large hotel brands including Hilton, Marriott, Inter-Continental, and Accor.