• Matthew Willis

Development Opportunities for Lao Tourism Sector – Insights from the Field

For tourists hoping to travel to the Southeast Asia region, the Lao People’s Democratic Republic (Lao PDR, or Laos) has not often been a first choice. In fact, according to the ASEANstats data portal, the landlocked nation of just over 7.1 million people ranks near last in visitor arrivals within mainland Southeast Asia. There is a particularly dramatic difference between Laos and neighboring Thailand, where cities like Bangkok and Chiang Mai have become powerhouses of international tourism and hospitality.


Still, the Lao PDR’s relatively small tourism sector might be seen not as a permanent condition, but rather as a matter of untapped potential. This is why IBI, as the implementing partner for USAID’s Laos Business Environment Activity, has identified the tourism industry as a key sector in the country’s future development.

A view from Paksong, Champasak province.

To this end, IBI has supported the Government of Laos in promoting a brand of sustainable tourism, or eco-tourism. This leverages some of the country’s unique characteristics, such as lower population density, community-based volunteer opportunities, and the ecological features of its 21 National Protected Areas. Officials at the Ministry of Industry and Commerce, as well as the Lao National Chamber of Commerce and Industry (LNCCI), look to position the country as a place where travelers can experience yet-undiscovered nature while escaping the region’s urban centers.


According to Ecotourism Laos, a government-supported marketing campaign, one advantage of eco-tourism is its decentralized nature. Rather than converging upon a few cities, tourists can travel and stay in villages throughout the country. By staying overnight, purchasing traditional handicrafts, and enjoying local cuisine, tourists will contribute to broader and more inclusive economic growth in Laos. These factors make eco-tourism an attractive target for USAID and other international development programs.


Since 2019, the IBI team implementing the LBE Activity has been working to support eco-tourism businesses, as part of a broader focus on enhancing the competitiveness of small and medium-size enterprises (SMEs). When the project began in late 2019, IBI sought to strengthen eco-tourism SMEs by proposing enhanced standards of marketing and management, as well as by better integrating tourism enterprises with the agricultural sector and handicraft markets. Such an approach is creating a positive feedback loop by increasing the demand for certain specialty goods produced in Laos, such as coffee beans.


These tourism initiatives, as well as other activities under LBE, were profoundly affected by the onset of the COVID-19 pandemic and related closures. However, even as travel was restricted and international arrivals came to a near-halt, IBI was quick to adapt its approach. By mid-2021, the team had collaborated with the LNCCI to draft an Eco-tourism SME Action Plan in anticipation of the country’s re-opening. The plan offers guidelines for product development and marketing, as well as infectious disease preparedness. IBI’s staff helped to operationalize the plan by hosting training sessions for women-led eco-tourism SMEs. They have also assisted Laos’s Ministry of Information, Commerce and Tourism in collecting digital records on tourism-related data.


More recently, IBI has worked to promote the Lao Green Travel Zone, a government plan to incrementally re-open the country to travelers. IBI has also supported the use of web platforms to connect local handicraft producers with overseas buyers. Eventually, the team at IBI hopes that Laos will be prepared to accept more foreign visitors than ever, showcasing an economy which is increasingly competitive in today’s world.

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