Destination Development and
Institutionalization Strategies
In the OIC Member Countries
58
Creating Incentives for Investment
Several regions globally offer investment incentives for the tourism industry to business wishing to locate,
expand, and retain their operations in a new region.203 Local governments will provide discretionary
support and approve projects where investments will stimulate significant economic activity and
community benefits. 204 In addition, local governments look for diversity and value-add to the wider
regional economies beyond the growth of the business investment itself. 205
Local governments offer incentives for projects that create jobs, create operational value-added services,
catalyze additional investment, generate growth across industries, and support growth of other
businesses. 206
Investment incentives:
In addition to direct support services, investors can also expect to receive direct financial incentives, which
can include reduced taxes (income and property taxes), reduced operational costs, reduced customs,
reduced infrastructure costs, reduced regulatory fees or reduced real estate costs 207.
Table 11: Tourism Incentive Examples
Tourism incentive examples208 :
Duty-free imports of capital goods, equipment and inputs
Training grants for local employees
Accelerated depreciation on assets
Reduced long-term lease of business property
Loan guarantees
Grants or tax breaks
Source: DinarStandard Analysis and Oxford Business Group
Facilitating Legislative Change
In designing incentives for investors, it is critical that domestic revenue loss is not significant and that local
investors are protected. Governments as a result must develop strong legislations, but are also in
competition with other foreign governments to attract investment. As a result, the regulatory climate must
203 Australia, Queensland Government, Business Queensland. (2018). Incentives for tourism investors. QLD. Retrieved from
204 Examination of Tourism Investment Incentives (1987). UNWTO.
205 Wanhill, S. (1986). Which investment incentives for tourism? Tourism Management, 2-7. Retrieved from
206 The Hungarian Investment and Trade Development Agency, “Incentives for Investments In the Tourism Sector”, INCENTIVES FOR
INVESTMENTS IN THE TOURISM SECTOR [PDF]. (n.d.). Hungarian Investment and Trade Development Agency. Retrieved from
207 Enticing developments: A review of the fiscal incentives used to promote tourism investment [Web log post]. (n.d.). Retrieved from
Ertürk, C. (n.d .). Government Incentives For Tourism Sector [PDF]. Cathic. Rretrieved fro