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									                                                                             LEGIII/BH-618105-05

                                             ANNEX

                                         THE PROJECT

                           Sustainable Tourism Network for SMEs

I.     Objective

1.01   The objective of the Project is to improve the competitiveness of pilot destinations in The
       Bahamas, contributing to positioning the country as a sustainable tourism destination. The
       purpose of the Project is to diversify the tourist product and market sustainable tourism
       packages offered by a network of Small and Medium-sized Enterprises (“SMEs”) in specific
       market segments. The pilot destinations are: (i) Main destinations: Exuma and Cays, Andros,
       Abaco and Cays, Eleuthera including Spanish Wells and Harbour Islands, Grand Bahama,
       Nassau/Paradise Island, and Cat Island. (ii) Secondary destinations: San Salvador (heritage),
       Long Island (heritage) and Bimini Islands (marina).

1.02   The beneficiaries of the Project will be: (i) one hundred and fifty (150) micro, small and
       medium enterprises in four (4) key tourism sub-sectors, such as accommodation providers,
       marinas, tour operators, and tourism services providers, especially in the Family Islands;
       (ii) fourteen (14) local consultants trained during the Project to provide technical assistance
       to the tourism SMEs; (iii) one thousand five hundred (1,500) public sector officials, potential
       investors, Non Governmental Organizations (NGOs) and community groups and three
       hundred and eighty (380) stakeholders made aware of the Project; and (iv) all other micro,
       small and medium tourism enterprises directly or indirectly related to the tourism sector that
       could benefit from the new stopover tourism arrivals.

II.    Description

2.01   To achieve the objective described in Section I above, the Project will have five (5)
       interrelated components: (i) awareness and organization of the SME Network; (ii) product
       development; (iii) training; (iv) a matching grant fund for technical assistance; and
       (v) branding and marketing of pilot destinations participating in the Project.

       (i)   Awareness and establishment of the SME Network

2.02   The purpose of this component is to support the establishment of the SME tourism Network,
       which will embody a common vision and strategy to promote and develop sustainable
       tourism products in The Bahamas. In particular, this component will finance two (2)
       activities: (i) organization of awareness events to identify SME Network members and build
       awareness of the key stakeholders at the public/private sectors at selected destinations about


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       the benefits of sustainable tourism and networking strategy; and (ii) design of the Network’s
       operating manual including the development and definition of the Network’s concept,
       operating procedures, and member benefits and obligations.

2.03   The outcome of this component will be a fully operational SME tourism Network with at
       least one hundred and fifty (150) members in four (4) different typologies of business:
       seventy five (75) accommodation providers, twenty (20) marinas, five (5) tour operators and
       fifty (50) tourism services providers. Through the awareness seminars, conferences and fora, it
       is expected that by the end of the Project one thousand and five hundred (1,500) stakeholders
       throughout The Bahamas will learn about sustainable tourism and networking benefits. The
       organization of a new tourism SME Network will allow its members to: i) diversify the
       present tourism supply organizing and selling new integrated tourism packages to potential
       markets, and ii) identify and implement eco-friendly activities in order to safeguard the
       country’s natural and cultural environment.

       (ii)   Product development

2.04   The purpose of this component is the improvement and diversification of the present tourism
       product supplied by the tourism SMEs in the seven (7) pilot destinations. Critical elements of
       this component will be the creation of new tourism packages in heritage, culture and nature
       tourism to be sold in the international tourism markets and establishing in the country
       standards most suited to this type of tourism, including criteria for operating business
       concessions at heritage sites. It will include the following activities: i) a tourist asset
       database; ii) a diagnostic of the existing tourism services and organization of the new tourism
       packages; iii) analysis of the environmental impact assessment regulations and procedures to
       be applied by the SME Network members; iv) criteria, guidelines and tendering documents
       for concessions at government owned and managed historical/heritage sites, and; v) a
       signage/plaque program.

2.05   The database will be compiled by a local consultant to include information about the natural
       and cultural assets of the pilot destinations, such as their location, characteristics, connected
       services, etc. A diagnostic analysis of the existing tourism services provided by the SME
       Network members is key to identify which services have to be improved or developed in
       order to organize the new tourism packages. An international expert or firm will identify the
       general needs of the SMEs, produce general guidelines and also develop the new tourism
       packages. During this process it will be recommendable to utilize a bottom-up process
       involving the SMEs members of the network, and especially the tour operators, who will sell
       these packages.




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2.06    There are several historical/heritage sites that could be developed by the private sector. The
        criteria and guidelines for concessions at government owned and managed historical/heritage
        sites and the tendering documents needed for such concessions will facilitate the involvement
        of local entrepreneurs and community groups in effectively managing the concessions. In
        addition, the signage and plaques program for heritage, historical and cultural sites will
        develop standards and provide useful information to the tourists. An analysis to identify the
        regulations and procedures to be implemented by the SME network members will also be
        developed, in order to reduce the adverse environmental impact of the tourism activities.

2.07    Results will consist of nine (9) different tourism packages - three for each market segment:
        nature, heritage and culture- organized and offered by the SME tourism network. Each
        package will at least have to include weekend, weekly, and multi-island options. It is also
        expected that all the SME Network members will be implementing environmental impact
        assessment regulations and procedures. Seven new concession sites will be established by
        the end of the Project, and twenty-five (25) tourism signage/plaques in ten (10) selected
        tourism sites in the pilot destinations will be installed.

        (iii)   Training

2.08    This component will train local consultants to provide technical assistance to the SME
        network members under Component (iv). The component will finance the design of courses
        and production of materials in environmental management and in networking management
        and marketing. The environmental management course will include, the following modules,
        among others: i) integrated approach to the coastal zone; ii) environmental impact of
        tourism; iii) environmental conservation in tourism destinations; iv) development of eco-
        compatible tourism SMEs. The networking management and marketing course will include
        the following modules: i) tourism SME network systems; ii) tourism marketing for SMEs;
        iii) tourism packages development, and; iv) tourism promotion and commercialization tools.
        The training courses will be tailored for local specialists and will result in at least seven
        specialists trained in both courses.

        (iv)    Matching grant fund for technical assistance

2.09    This component seeks to reduce high operating costs, enhance the environmental
        management, service quality, and managerial capacity of a group of tourism SMEs1 in the

1
  To be eligible for the Project, firms must: (i) be formally incorporated businesses operating in the
tourism sector; (ii) have fewer than one huy100 employees; (iii) meet the country’s environmental and labor
requirements; (iv) be a member of the SME network, and (iv) provide the necessary information and indicators
concerning the firm’s performance. The assessment process in Component II (Product Development) will determine
which firms meet the conditions and are eligible for the matching fund in Component IV.

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         Network, to facilitate their access to the domestic and international tourism markets. To
         achieve this and in order to create incentives that will lead to greater demand for these
         services, the matching grant fund will provide training and technical assistance to twenty (20)
         marinas, seventy five (75) accommodations, and fifty (50) tourism services providers to
         develop business plans2. The matching grant fund will cover on average fifty per cent (50%)
         of total costs3. The component will also finance the organization of technical workshops to
         disseminate successful/best management sustainable tourism initiatives.

2.10     Results will consist of twenty (20) marinas, seventy five (75) accommodations, and fifty
         (50) tourism services providers with business plans implemented and by the end of Project
         all SME Network members will be able to access the targeted tourism markets. Three
         technical workshops in each of the seven main destinations are also expected to take place by
         the end of the Project.

         (v)     Branding and marketing of pilot destinations

2.11     The aim of this component is to make the Network’s tourism packages offered in the pilot
         destinations known in commercial sales channels and to potential markets, and to generate
         demand. The activities that will be financed include: (i) a manual of basic criteria for
         products to be developed and implemented within the network; (ii) a Marketing Strategy; (iii)
         a Network web-portal; (iv) two catalogues, one for the end consumers and another one for
         the travel agencies and tour operators; (v) tourism workshops and familiarization trips; (vi)
         press tours, and; (vii) tourism fairs.

2.12     The marketing plan will be developed by an experienced firm and will indicate the tourism
         segments and geographical markets where network marketing and promotion activities
         should be focused in the medium-term. The manual of basic criteria for products to be
         developed and implemented within the network, includes the creation of a logo and the rules
         for using it, but most importantly the manual will outline the best sustainable tourism
         practices for the new tourism packages. The web portal will be the main marketing tool of
         the SME tourism network to sell their services internationally. Finally, the tourism
         workshops and familiarization trips, press tours, fairs and catalogues are basic promotional
         activities intended to reach out to the new potential markets.



2
  Each participating SME will draw up a business plan, to include: (i) the product concept and proposed activities; (ii) the
price; (iii) distribution; (iv) promotion and; (v) the environmental management of the business.
3
  The funding will be applied to those costs associated with consulting services (technical assistance and training) and
acquisition of software. Firms will not use Project funds to purchase equipment (hardware and machinery) and/or
working capital. The maximum subsidy will be tree thousand dollars (US$3,000) per firm.

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                                               -5-


III.   Total Cost of the Project

3.01   The estimated cost of the Project is the equivalent of one million eight hundred fifty nine
       thousand eight hundred and ninety two dollars (US$1,859,892) in accordance with the
       following table:

                                          Project Costs
                                            (in US$)
               ACTIVITIES              BANK           LOCAL                          %
                                                                       TOTAL
                                                   CONTRIBUTION
         Personnel                       240,000         132,600        372,600      20%
         Logistics                        35,920          39,800         75,720       4%
         Component 1                     172,400          74,800        247,200      13%
         Component 2                     163,600          55,000        218,600      12%
         Component 3                      68,600          19,000         87,600       5%
         Component 4                     421,600          13,000        434,600      24%
         Component 5                      83,600         224,400        308,000      17%
         Subtotal                      1,185,720         558,600      1,744,320      95%
IV.      Contingencies                    35,572               0         35,572       2%
         Evaluations                      50,000               0         50,000       3%
         Audits                           15,000               0         15,000       1%
         Subtotal                      1,286,292         558,600      1,844,892     100%
                 Cluster Activities       15,000               0         15,000
                             Total     1,301,292         558,600      1,859,892
         Percentages (excluding
                                            70%               30%         100%
         Cluster activities)

       Execution

4.01   The Bahamas Hotel Association (“BHA”) will be the executing agency for this Project.
       BHA will coordinate and work closely with two (2) programs that target tourism SMEs and
       that are managed respectively by the Small Hotels Unit of the Ministry of Tourism and the
       Nassau/Paradise Island and Family Islands Promotion Boards.

4.02   The BHA will delegate the day-to-day operations of this Project to a Project Coordination
       Unit (“PCU”) and financial reporting to the Bank, through the Bank’s Country Office in
       Bahamas. The PCU will operate from BHA’s Nassau office. The PCU will be headed by a
       Project Coordinator, assisted by an Administrative Assistant and a part-time Accounting
       Officer. The Executive Vice President of the BHA will provide support to the PCU,
       especially with the promotion of the Project and coordination with partner organizations. The
       PCU will operate on the basis of an Annual Work Plan (AWP) that will be presented to the


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                                                -6-


       Bank for approval at the beginning of each year. The first AWP will be revised during the
       Project start-up workshop.

4.03   BHA will appoint a Local Technical Expert, to work closely with the international
       consultants and to ensure continuity after the end of the Project. In addition, BHA will also
       select five (5) Destination Facilitators (“DFs”) for the seven pilot destinations who will
       provide key local advice in the development of the SME Network, as well as important
       assistance in Project implementation.

4.04   A nine-member (9) Project Steering Committee will be formed by BHA and representatives
       from relevant organizations such as, The Bahamas Ministry of Tourism (“MOT”), The
       Bahamas Antiquities, Monuments & Museums Corporation (“AMMC”), Bahamas Out
       Islands Promotion Board, Grand Bahama Island Promotion Board; Nassau-Paradise Island
       Promotion Board; and the Caribbean Alliance for Sustainable Tourism (“CAST”). The
       primary functions of the Committee will be to: (i) provide strategic vision; (ii) coordinate
       inter-institutional support for Project activities; (iii) review Project updates and provide
       feedback on the overall performance of the Project; (iv) ensure national coordination; (vi)
       facilitate the inclusion of the Project’s outcomes in regional and international discussions and
       initiatives; (v) furnish advisory assistance and guidance on specific topics; and (vii) help to
       identify and possibly provide additional technical assistance and funding to support the
       Project. This Committee will meet quarterly or as required.

V.     Monitoring and Evaluation

5.01   The Bank, through the Country Office in The Bahamas will be responsible for supervision
       and control, monitoring compliance with contractual clauses, processing disbursement
       requests, and for receiving the annual audited financial statements. The PCU will have a
       Project monitoring system based on the timetable of activities, the logical framework
       indicators, and the AWP. This system will be the primary tool for tracking progress in
       execution, the accomplishment of objectives, and impacts. The BHA will submit to the Bank
       Country Office, an AWP within two (2) months of Project approval to be discussed during
       the start-up workshop. After the first year, disbursements will be contingent upon evidence of
       compliance with the indicators for each AWP. Based on the annual work plan the BHA will
       present to the Bank semiannual progress reports, in accordance with the Bank's standard
       reporting requirements. In addition, BHA will organize a Project Completion Workshop to
       discuss the Project’s best practices and lessons. The Bank will utilize information discussed
       at the Project Completion Workshop as well as other reports to monitor Project
       implementation progress and to prepare a Project Completion Report within three months of
       the last disbursement.



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                                                 -7-


5.02   In coordination with the BHA, the Bank will hire external consultants to prepare a baseline
       of indicators, and conduct a mid-term evaluation and a final evaluation. The mid-term
       evaluation will be prepared twenty-one (21) months after the signing of the Letter of
       Agreement or when fifty per cent (50%) of the resources have been disbursed. The purpose
       of the mid-term evaluation will be to examine progress and make the necessary corrections in
       order to achieve the Project objectives upon Project completion. The final evaluation will be
       conducted three (3) months after the Project execution period. The emphasis will be on best
       practices, sustainability aspects and lessons learned, so that these can be shared with other
       Projects in the sustainable tourism cluster. There will be annual audits and a final audit of the
       Project, for which the executing agency will provide full access to the necessary information
       and documentation.




                                        ATN/ME-9466-BH

								
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