unctad.org | Enhancing Backward Linkages between Tourism and Other Sectors in Lao People's Democratic Republic
Enhancing Backward Linkages between Tourism and Other Sectors in Lao People's Democratic Republic
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This report is a product of UNCTAD, prepared as part of the project on “Enhancing sustainable tourism, clean production and export capacity in Lao People’s Democratic Republic”, funded by the Swiss State Secretariat for Economic Affairs (SECO), under the framework of the UN Inter-Agency Cluster on Trade and Productive Capacity.

In Lao People’s Democratic Republic, as in other parts of the world, tourism development is frequently promoted as it promises high potential for intersectoral linkages with attendant multiple development impact. However, this report reveals that in Lao People’s Democratic Republic these intersectoral linkages have not been well developed, with particularly weak linkages to the domestic economy. There are especially weak links between tourism and agriculture, with rural economies often receiving very few economic benefits.

Rather than creating synergies between different sectors, tourism tends to generate increased food imports, which both undermines local agriculture and drains foreign exchange earnings. It is recognized, however, that there is always a trade-off between different sectors and while tourism may increase the cost of production, labourers and landowners also benefit from increased wages, resource values and infrastructure improvements.

The sourcing of goods locally, particularly from the agricultural sector, is seen as a key potential beneficial impact that the tourism sector can have in developing countries. In fact, many national tourism development plans are drawn up based on the assumption that the economic benefits of tourism will stimulate other sectors of the economy, in particular, agriculture.

This report highlights that in order to make the most of tourism and maximize the benefits to the Lao economy, there is a need to try and encourage tourists to stay in the country for longer and for Lao People’s Democratic Republic to become a destination in itself rather than simply a transit destination.

Focusing on increasing the demand for tourism products, there is a need for an improved ability to cater for both the emerging Asian market as well as backpackers, while targeting groups specifically and improving the quality of service and experience.

Quality and service are aspects of high importance to the emerging Asian market while an exciting experience and value for money are high on the list of expectations of backpackers. The age range of tourists is also changing and needs to be taken into account when targeting specific groups.

Improved use of technology and social media are of ever growing importance as tourists are increasingly connected and information can be updated more rapidly than via traditional channels.

With increased arrivals, there is a need to maintain the charm of tourist sights, for example, Luang Prabang. If this is lost, a major resource for attracting the tourists will be gone, decreasing the value of the destination.

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