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Tourism, Retail & Property

Tourism: Enhancing Economic Growth in Emerging Markets

September 2013

Since 1956, IFC has invested over US$2.8 billion (including syndications) in 267 hotel projects in 89 countries; more than 52% are in frontier countries.



Hotels play a critical role in development as they catalyze tourism and business infrastructure. In addition, hotels generate jobs, grow tax revenues, increase foreign exchange earnings, and provide better opportunities for small businesses. This ability to facilitate local, regional, and national economic growth—thereby helping to reduce poverty—is the reason that IFC is deeply committed to the hotel and tourism industry. Our commitment extends to environmental protection and cultural preservation with investments in hotels that complement unique natural habitats and enhance the attractiveness of historically significant sites.


IFC’s Track Record


Our investments in the hotel sector have had a far-reaching impact globally and vary from supporting city center and airport hotels that contribute to business infrastructure to tourist hotels and resorts, including eco-tourism and all-inclusive properties. We also support historic and environmental preservation tourism projects that encourage redevelopment of historic buildings and preservation of historic sites.  In addition, we invest in mixed-use facilities, such as, hotels combined with shopping centers, office towers, and residences.


Our partners include leading domestic and international investors and companies, such as, Occidental, Orient Express Hotels, TPS Serena, Shangri-La, and other investors that affiliate with large hotel brands, including, Hilton, Marriott, Hyatt, Inter-Continental, and Accor, via management or franchise contracts.  


Many IFC hotel clients use energy, water, and waste disposal audits to identify energy efficiency and cost saving opportunities; some have their own water/sewage treatment and power generation facilities. IFC has also invested in energy service companies (ESCOs) and has undertaken Cleaner Production Loans to improve energy and water efficiency.

Tourism and Poverty Reduction


The latest research from the World Travel and Tourism Council suggests that the travel and tourism industry will generate 324 million direct and indirect jobs worldwide by 2021, which is 1 in 10 jobs. In 2010, international visitors spent more than $900 billion on goods and services annually, of which 37% were spent in emerging market countries. Tourism-related inflows are often the primary source of foreign exchange in many developing countries (and the main source of foreign exchange for 47 of the world’s 50 Least Developed Countries). No other sector spreads wealth and jobs across poor countries in the same way as tourism.


In IDA-eligible countries, the development of high-end hotels sends a positive signal to foreign investors. Hotels create critical business infrastructure and venues for international conferences.
In fact, in many IDA countries, tourism is one of the first sectors to be developed and is a catalyst for the development of other sectors. In some destinations, for every US$4 spent by a tourist, US$1 reaches the poor. High-end hotels in particular create an average of 1.5 to 3 jobs per hotel room and can generate substantial tax revenue.


However, in Middle Income Countries, there is often a need for 2- and 3-star hotels, as an emerging middle class begins to travel. IFC also supports integrated mixed-used developments, which include hotels along with commercial and retail complexes that enhance prime business infrastructure both for international and local business activities, and spur economic growth.


Private financial markets are often unwilling to fund hotel investments in developing countries on account of risk factors, such as, political or economic instability, seasonality, unstable cash flows, capital intensive nature of developments, etc.  This is often the reason that IFC and other investors need to step in.


Business Contacts:

Olaf Schmidt,
Carolyn Cain,
Bernard Micallef,


Media Contact:

Elizabeth Price,

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