Entrance and Activity Fees (Tourism)

Appendix: Generic Terms of Reference (ToR) for a Feasibility Assessment

Overview of ToR

“Fictitious” National Park (FNP) is 100,000 ha. in size and located in [FILL IN PROVINCE] of [FILL IN COUNTRY]. It has extensive attributes which make it attractive as an ecotourism destination, including [FILL IN ATTRIBUTES]. In order to effectively protect and manage the biodiversity and other natural resources of the park, a long-term, sustainable financing system is required. Initial planning discussions have identified tourism-based mechanisms as an important potential element in such a system. Already, modest revenues are being generated through park entrance fees. Opportunities seem to exist for raising entrance fees and putting in place a variety of other user fees. To examine these opportunities in-depth [NAME OF CONTRACTING ENTITY] is commissioning a feasibility study of a range of tourism-based options for financing conservation of FNP.

The study will collect extensive information and evaluate key issues and conditions influencing the feasibility of tourism-based finance mechanisms in FNP. Through on-site interviews, collection of existing data and other activities, the consultant will conduct an overall analysis of the current status of ecotourism in the area. Through extensive interviews with tourism operators and other local businesses, park staff, tourists, local community leaders and other stakeholders, the consultant will collect and analyze relevant information and recommend specific options for viable tourism-based mechanisms. In addition, the consultant will interview relevant governmental officials to assess opportunities for the generation of proprietary income that is channelled directly into conservation activities at FNP.

Terms of Reference

Objectives:

To assess the feasibility of an entrance or activity fee system designed to generate long-term funding to conservation of FNP. More specifically, the objectives are to:

  • Assess the current status of ecotourism and identify actions required to improve the ecotourism experience and visitor flows in support of a tourism-based finance programme;

  • Assess specific issues regarding the feasibility of entrance fee and concession fee programmes, and recommend next steps; and

  • Assess opportunities for implementing other types of tourism-based mechanisms.

Tasks:

  1. General assessment of ecotourism conditions and issues

    • Describe the major ecotourism attractions (assets) and related recreational activities;

    • Document current visitation volume and recent visitor flow trends; provide detailed visitor demographic data as available (e.g., % and total number of high-end tourists, backpackers, other categories; % and total number of foreign and domestic tourists; age group breakdowns; % and total numbers of visitors participating in key recreational activities such as diving / snorkeling, hiking, birdwatching, etc.)

    • Document acceptable limits of change from visitor impacts, and assess major environmental impact issues (e.g., identify major threats posed by ecotourism, and options for mitigating such threats);

    • Summarize tourism infrastructure issues, including reliability of and access by various modes of transport, communications, accommodations, etc.

    • Describe the quality and breadth of existing visitor services, and recommend measures for upgrading such services;

    • Identify major obstacles to expanding visitation and recommend measures for addressing such obstacles as appropriate (e.g., more trained guides, expansion of accommodations);

    • Describe any existing tourism-based finance mechanisms and summarize the success of such mechanisms.

  2. Assessment of general conditions for a tourism-based finance programme Describe and analyze key conditions required to put in place an effective tourism-based finance programme, including:

    • Political conditions: Support for tourism-based finance programme of key national government ministries and local government agencies, local communities, domestic tourists, and other important stakeholder groups; support for proprietary income; support for needed infrastructure improvements.

    • Economic conditions: Potential to generate significant revenues; strong willingness of foreign and domestic tourists to pay feess; existence or likelihood of funding for start-up of tourism-based finance programme and needed infrastructure improvements; accounting systems to track and monitor fee collection.

    • Legal: Legal regime exists or could be put in place to support tourism-based finance programme (including specific fees such as entrance and concession fees) and to support proprietary allocation of income.

    • Other: Organizational capacity of government to execute tourism-based finance programme, business expertise to operate concessions, ecotourism marketing expertise, overall potential for sustainable tourism to be developed, trained staff.

  3. Assess in-depth feasibility of an entrance fee programme

    • If an existing entrance fee is charged, summarize how the programme is structured and document the revenue generation trends; assess the success of the programme.

    • Assess visitor demographic issues correlated with revenue projections and analyze visitor marketing strategies (e.g., raising visitor flow versus attracting higher portions of high-end tourists).

    • Assess the optimal number and location of entrance fee collection points, staffing resources and equipment required, and other practical issues to consider in establishing an entrance fee programme.

    • Evaluate the applicability and revenue potential over a 10-year period of various pricing schemes for determining entrance charges (e.g., peak load pricing, comparable pricing, marginal cost pricing, multi-tiered pricing and differential pricing). Document key assumptions.

    • Recommend an entrance fee pricing scheme and rates, and project 10-year revenue flows. Draw on willingness to pay survey results and vary key parameters (e.g., visitation flows, prices, on-site income retention rates, etc. Document key assumptions.

  4. Assess in-depth feasibility of a concession fee programme

    • If a concession fee programme exists, summarize how the programme is structured and document the revenue generation trends; assess the success of the programme.

    • Assess current business services being provided to visitors (e.g., food, accommodations, equipment rental equipment, etc.); determine which services would be most appropriate for inclusion in a concession fee programme.

    • Evaluate applicability and revenue potential over a 10-year period of various concession fee structures and prices (e.g. auction/bidding for licenses, flat fee, percent of gross receipts, percent of net income).

    • Recommend a concession fee pricing scheme and rate(s), and project 10-year revenue flows. Draw on comparable systems in operation at other protected areas and vary key parameters.

  5. Assess feasibility of other tourism-based finance mechanisms

    • Conduct a coarse assessment of the feasibility of other tourism-based finance mechanisms and recommend which, if any, deserve further in-depth assessment

  6. Financial projections and related issues

    • Conduct a “willingness-to-pay” survey of visitors to help calculate optimal fee pricing.

    • Based on the above, develop 10-year revenue projections drawing from all fee mechanisms determined to be viable or particularly promising.

  7. Next steps Recommend specific next steps for establishing an entrance fee programme.

    • Recommend specific next steps for establishing a concession fee programme.

    • Recommend other specific next steps for implementing a tourism-based finance programme, including sequencing of steps.

Deliverables:

  1. Feasibility report. A preliminary report capturing all of the task points outlined above will be submitted to a “Review Team” for comments and discussion prior to the finalization of the report for submission to the contractor. A final report will be submitted in written and electronic form.

  2. Contact list. List of key contacts (name, title, address, email, phone number) will be attached to final report.

  3. Briefings. Concluding briefings will be provided in [LIST CITIES] to summarize preliminary results for contractor and other interested stakeholders.

Staffing and timetable: The project will be implemented during the period [FILL IN]. A preliminary report will be due on [FILL IN DATE] and a final report will be due on [FILL IN DATE]. The level of effort will require a total of [FILL IN #] consultant days. [IF A TEAM OF CONSULTANTS:] The consulting team will consist of: [FILL IN NAMES, BREAKDOWN OF DAYS AND ROLES]