IDB Lab offers grants, loans to revitalise tourism in LAC

The Inter-American Development Bank (IDB), through its innovation laboratory IDB Lab, is partnering with the United Nations World Tourism Organization (UNWTO ) to identify business models that transform and revitalise the tourism sector.

As a result of this collaboration, IDB Lab is launching an innovation challenge and has invited both public and private sector organisations that wish to participate to apply until July 31 and present project proposals.

“The challenge aims to identify innovations in two categories: development of the tourism labour force, which needs to acquire new digital skills for the recovery phase, and environmental sustainability, which includes implementing waste management measures through circular economy models as well as climate-smart agricultural practices,” the IDB said in a press release.

IDB Lab challenge is open to public and private sector candidates across 15 countries. These countries are: The Bahamas, Barbados, Belize, Costa Rica, the Dominican Republic, El Salvador, Guatemala, Guyana, Haiti, Honduras, Jamaica, Nicaragua, Panama, Suriname, and Trinidad and Tobago.

The Kaieteur Falls in Guyana is one of the South American country’s major tourist attractions. (Photo: Guyana Tourism Authority)

Eligible participants for the challenge include entrepreneurs, start-ups, non-government organisations, social ventures, public innovation agencies, and other organisations specialised in and knowledgeable of the tourism sector. 

Participants may access up to US$500,000 in grants (non-reimbursable financing for technical assistance), and loans amounting between US$500,000 and US$2 million. However, the hemispheric bank expects applicants to contribute at least 50 per cent of their respective project’s total budget.

“According to the UNWTO, the tourism sector is among the hardest hit by the COVID-19 outbreak. Before the current pandemic, tourism was one of the world’s largest economic sectors, supporting one out of every ten jobs (319 million) worldwide and accounting for 10.4 of global GDP (gross domestic product),” the release cited.

In the 15 countries selected for this challenge, the average contribution of tourism to GDP is 16.4 per cent — or US$1 out of every US$6 contributed to GDP. The industry also contributes to employment generation in these countries with an average contribution of 17.9 per cent.

Tourism’s share of total exports is also significant since in 8 of the 15 countries it represents more than 20 per cent of exports.

“The sector is highly resilient and, in the past, has survived unexpected challenges through collaboration and innovation among stakeholders,” the IDB stated.

“The widespread emergency triggered by COVID-19 provides a unique chance for the tourism industry and its closely linked supply chains to embrace digital transformation and stimulate innovation ecosystems in the public and private sectors. Innovation can help the industry get back on track and emerge from this crisis ready to grow again,” the bank also said.