As mentioned in a previous post, one of the topics that the team examined in detail during the research trip to Vientiane was pro-poor tourism. However, during the trip we realized that the issues Vientiane faced were not the issues we expected. The biggest problem with Vientiane’s tourism sector is not that micro and small businesses get a disproportionately small share of tourism revenues; the problem is that there is not enough tourism revenue!
A 2010 estimate of the Laos tourism sector put annual visitors at roughly 2 million per year with total tourism receipts of nearly US$ 300 million (just to clarify, these are nationwide figures, not city figures). When you compare these national numbers to those of other tourist locations in the region, such as Indonesia (US$ 7.6 billion in revenues in 2010) and Singapore (13.2 million international visitors and S$ 22.2 billion revenue in 2011), it is clear that Laos as a whole, let alone Vientiane, is very far behind.
It’s not that there is not much to see in Laos – even within the borders of Vientiane capital, there are already plenty of interesting sites. However, a small capacity international airport combined with poor internal road conditions and a government on a shoestring budget means that there is little chance of Vientiane catching up to the figures of its ASEAN neighbors in the near future.
However, this level of underdevelopment may be a blessing in disguise, because it means that, rather than following the trend of high-end resorts, casinos and cities full of shopping malls, Vientiane will be able to implement a pro-poor tourism strategy from the very outset. The city will be able to focus on promoting its traditional crafts and products, financing its small businesses, and training its urban and peri-urban laborers. Because the market is not yet dominated by fancy restaurants and high-end shopping outlets, it is still a market where small businesses can thrive.
But, of course, they still need to build the roads first.