PPP future of tourism development Best practice examples

PPP: future of tourism development Best practice examples from Austria Moscow, 15 th March 2010

PPP: future of tourism development Best practice examples from Austria Content • About Kohl & Partner • Public Private Partnership in tourism • Best practice examples from Austria 2

PPP: future of tourism development Best practice examples from Austria About Kohl & Partner • Independent and internationally operating consulting company specialized in the hotel and tourism industry • Leading tourism consulting company in Austria with more than 30 years of experience • Eight offices in six countries (Villach, Vienna, Munich, Stuttgart, South Tyrol, Sofia, Bucharest and Budapest) • International team with more than 40 tourism experts 3

PPP: future of tourism development Best practice examples from Austria Core business areas Destination Development Hospitality Industry • • • 4 Feasibility Studies Hotel Valuations Operator Selection Strategic Concept Development Technical Service Agreements • • • Destination Audits Tourism Master Plans Destination Assistant Program Hotel Master Plans Development of organizat. structures Tourism Infrastructure • • • Aqua Parks/Thermal Spas Conference Centers Golf Courses Ropeways/Cable Cars Tourism Attractions/ Sights

PPP: future of tourism development Best practice examples from Austria Content • About Kohl & Partner • Public Private Partnership in tourism • Best practice examples from Austria 5

PPP: future of tourism development Best practice examples from Austria Definition Public Private Partnership “A contractual agreement between a public agency (federal, state or local) and a private sector entity. Through this agreement, the skills and assets of each sector are shared in delivering a service or facility for the use of the public. ” 6

PPP: future of tourism development Best practice examples from Austria Why do we need Public Private Partnership in tourism? 7

PPP: future of tourism development Best practice examples from Austria Why do we need PPP in tourism? Lack of budget and Know-How in many municipalities Faster implementation of tourism projects is possible PPP projects Pressure by competitors requires new investment 8 Tourism Infrastructure Development is expensive but vital

PPP: future of tourism development Best practice examples from Austria Potential areas for PPP in tourism Tourism Infrastructure Aqua Parks, Ropeways, Golf Courses Leisure Infrastructure Theme Parks, Sport Complexes, Museums Possible Public. Private Partnership Events & Festivals Sport, music and cultural events Picture 9 Picture

PPP: future of tourism development Best practice examples from Austria Content • About Kohl & Partner • Public Private Partnership in tourism • Best practice examples from Austria 10

PPP: future of tourism development Best practice examples from Austria Four golden rules for Public Private Partnership 11 1 „Five drunks are not a team“ – a cooperation is NOT a rescue team 2 The involved partners should define common goals 3 Every unit needs its own businessplan and strategy 4 Mature partners and a strong leadership are required SUCCESSFUL PARTNERSHIP

PPP: future of tourism development Best practice examples from Austria Most common PPP models in tourism 1 Cooperation model 2 Operation model 3 Associate model 12 4 Concession model PPP models 5 Informal cooperation 6 Sponsoring

PPP: future of tourism development Best practice examples from Austria Cooperation model 1/2 Main characteristics Best practice example • Public & Private Sector agree to work together (usually Public Sector share is higher than 50 %) • Public Sector has a contract with the Joint Venture • Ideal model if nothing is built or the contributions cannot be measured DMC of the municipality Velden Possible tourism example Destination Management Companies 13 • 600 hotels and pensions with a total room count of 7. 800 beds • More than 500. 000 overnights per year

PPP: future of tourism development Best practice examples from Austria Cooperation model 2/2 Municipality Velden 34 % Tourism Board Velden 49 % Destination Management Company Velden Casino Austria 5% 14 Golf Course 5% Event Company 4% T. support Associat. 4%

PPP: future of tourism development Best practice examples from Austria Operation model 1/2 Main characteristics Best practice example • Public Sector assigns a private company for planning, constructing, financing and/or operating • Public Entity receives fixed annual amount of money • An operator contract as the legal basis with detailed task description Operating company of Schönbrunn castle in Vienna Possible tourism example Leisure or cultural facilities or convention centres 15 • Consists of castle, royal garden, Sisi museum, emperor appartments, etc. • More than 3 million visitors annualy

PPP: future of tourism development Best practice examples from Austria Operation model 2/2 Republic of Austria (100 % owner) Schloss Schönbrunn Kultur- und Betriebsges. m. b. H. (operating company) Castle & Royal Garden Sisi Museum Emperor Appartm. & Silver Collection • • 16 Emperor furniture collection No public subsidies – operating company keeps operational revenue All investment and renovation financed by the operational revenue

PPP: future of tourism development Best practice examples from Austria Associate model 1/2 Main characteristics Best practice example • Public Sector signs an equity participation for a tourism infrastructure project • Investment as an impulse for regional tourism development • Public sector often covers infrastructure development costs Development of a Spa Centre in Bad Hofgastein Possible tourism example Golf Courses, Aqua Parks, Spa Centres, Ropeways 17 • Surface of 32. 000 square metres divided into six different zones • Total investment for renovation and enlargement EUR 25 million

PPP: future of tourism development Best practice examples from Austria Associate model 2/2 Municipality Bad Hofgastein 49 % Regional tourism organisation 24 % Construction Company Spa Centre Gastein Oberbank 19 % 18 Brewing Union Austria 6% Raiffeisen Bank 2%

PPP: future of tourism development Best practice examples from Austria Concession model 1/2 Main characteristics Best practice example • A concessionaire (private sector) is granted the right to use an existing facility • The facility stays in the ownership of the public sector • The concessionaire generates the revenues through direct selling of the services to customers Development of cable car near Innsbruck Possible tourism example Golf Courses, Aqua Parks, Spa Centres, Ropeways 19 • Connecting Innsbruck (560 m) with Nordkette (2. 269 m) • Total investment of around EUR 51 million

PPP: future of tourism development Best practice examples from Austria Concession model 2/2 Investment Public share 73 % Investment Private share 27 % Total investment of EUR 51 million Concession contract for 30 years 20

PPP: future of tourism development Best practice examples from Austria www. kohl. at VIENNA • VILLACH • SOUTH TYROL • MUNICH • STUTTGART • BUCHAREST • SOFIA • BUDAPEST 21