include evaluating risk and return metrics for competing investment
opportunities, coordinating with government entities to increase
access to investment opportunities within the destination and
developing and implementing the overall investment strategy to
increase the attractiveness of the destination from an investment
and tourism perspective.
The role of government as a partner is critical to the success of
an IPA. Leading IPAs work with governments to draft incentive
and concession legislation to induce capital investment. With the
cooperation and support of public offices, IPAs have the ability to
incentivize investors through a variety of channels. Government
involvement — via debt, equity contributions or guarantees —
serves as an indication of confidence in local investments and
its commitment to the success of the tourism value chain, while
reducing investor risk. Moreover, government-sponsored investment
programs, such as commercial immigration (e.g., the US EB-5
program), are prime examples of aligned public and private
interest with positive economic benefit. Currently, much-needed
development is taking place on new hotels and mixed-use resort
projects in the Caribbean using commercial immigration to attract
investors. Profit repatriation benefits and residence work permits
for key investors and development staff are among some of the
incentives used. Governments with investment arms that can
provide transparency and one-stop facilitation and that can deploy
public capital have increased confidence among private investors,
which in turn leads to economic development and job opportunities.
IPAs have recognized that reliable business intelligence and
local data are crucial for attracting foreign investors. The most
effective IPAs have the proper systems and people in place to
collect qualitative and quantitative data needed for foreign direct
investment. This data includes hotel performance metrics by chain
segment, room supply pipeline, macroeconomic data, construction
costs, zoning and permitting information and an overview of
available investment opportunities. The data should be accessible
and accurate to provide real added value for investors, with
responsive IPA staff filling requests for it as needed.
Key performance indicators are essential for IPA teams tracking
the effectiveness and success of the investment plan. IPAs
measure their performance by assessing the changes in three key
metrics, including international and domestic visitation, tourism
expenditure and tourism sentiment over time. IPAs can benchmark
their progress in other areas by setting strategic goals such as
the amount of capital funds raised, investor sentiment, marketing
promotions and tourism job creation.
For a destination, it is not enough to just show promise — to
capitalize on the global expansion of hospitality and tourism markets
and attract investors, well-structured IPAs have proven to be
crucial. Thanks to their transparency and responsiveness, they have
reduced hesitation in the capital markets and shown that tourism is
an important economic differentiator.