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The Community-Based Tourism Concept

Community-based tourism (CBT) is defined as tourism that takes environmental, social, and cultural
sustainability into account (Goodwin and Santilli, 2009).
It is also defined as a form of tourism that seeks to empower communities to manage tourism growth and
achieve community aspirations relating to their well-being and includes economic, social, and environmentally
sustainable development. Therefore, CBT not only involves a partnership between tourism businesses and the
community to deliver benefits to both, but also involves community and external support for small tourism
enterprises, which in turn commit to providing support for community projects that improve collective well-
being (Association of Southeast Asian Nations [ASEAN] Secretariat, 2016).
Three (3) groups shall work together in agreement of their duties, scope, and limitations to achieve a successful
community-based tourism:
 Community – serves as the reservoir of manpower. In order for a project to be successful, the
community must agree with it. They have to be consulted on any tourism-related projects as they are
the direct recipients of its impact.
 Government – acts as the intermediary between the community and the private sector. It entices
potential investors to invest in the country.
 Private Sector – provides the influx of investments as well as capacity building for the community.
Benefits of Community-Based Tourism
Community-based tourism brings economic benefits and opportunities since tourism is an activity that
involves a large array of retail and service businesses. Below are among the key benefits of CBT (Tamir, 2015):
 It is a popular means for integrated conservation and development projects. CBT is an option for the
tactical response to the ongoing global challenge of sustainability.
 It creates major employment opportunities for local communities. Locals can be employed in a range
of jobs from cleaners, drivers, to guides.
 It enables the sourcing of goods and services from the local community. With CBT, it is the small,
medium, micro-enterprises, and the informal sector that provide a number of shelter, food, drink, and
other services to the tourists. Additionally, locals can also promote their arts and crafts.
 It is a popular means of supporting biodiversity conservation. CBT enhances social sustainability by
empowering local communities to manage and take care of their own resources and assist in cultural
preservation. CBT is a tool for biodiversity conservation because of its potential to produce sustainable
revenues and create incentives for continued natural resource conservation, especially with regard to
ecotourism initiatives.
Community-Based Tourism Issues and Challenges
Using tourism to achieve community development is a wonderful concept in principle, but in practice, it is
troubled with challenges. The potential CBT success of an area depends on varying factors and these must be
identified prior to undertaking the development of tourism operation. Below are among the challenges and
issues that constrain the development of CBT initiatives (Tamir, 2015):
 Heterogeneity of Communities – communities are divided into different functions based on various
factors such as class, gender, and ethnicity, and certain families or individuals are likely to claim
privileges because of their status. In this case, it is unlikely that community members will have
equitable access to participation in tourism development and its benefits.

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 Community Exploitation – usually, local communities lack resources, information, and power
compared to other participants in the tourism process, hence they are susceptible to exploitation.
 Lack of Local Skill – the lack of certain skills needed in the tourism industry also hinders the progress
of CBT. Communities need to acquire managerial, entrepreneurial, and marketing skills to ensure that
they break through into the market and gain a bigger share of benefits from the tourism industry.
 Infrastructure Challenges – the CBT potential of an area depends on the presence of tourism resources
known as ‘community-based tourism assets’ that can range from nature-based activities to local
handicrafts to cultural events. However, the existence of tourism resources can still be constrained by
resource limitations such as water and electricity supplies and land area accessibility. Lack of
infrastructure, such as roads and airports, can harm the competitive position of tourism resources.
 Negative Impact of Tourism – despite good impacts, tourism can potentially have negative impacts.
The damage from the unregulated flow of tourists can lead to excessive solid waste, litter, erosion,
sewage, water and air pollution, natural habitat disturbances, tear of infrastructure, and
environmental degradation.
The Blue Ocean Strategy
The Concept of Blue Ocean Strategy
Blue Ocean reflects the unknown or the unexploited market space (Ahmat, et al., 2014). It is the opposite of
Red Ocean, which refers to the known market space in which companies try to outperform their rivals to grab
a greater share of existing demand.
Blue Ocean Strategy (BOS) uses the logic of value innovation. Value innovation means thinking beyond
outperforming the rivals in an existing industry, and focuses on creating a leap in value for buyers and the
company, thereby opening a new and uncontested market space.
Value innovation places equal emphasis on value and innovation. Value without innovation is value creation;
something that improves value but is insufficient to make a company stand out in the marketplace. Innovation
without value tends to be technology-driven, often going beyond what buyers are ready to pay for. Value
innovation occurs when companies align innovation with usefulness and price strategy, which is the same as
simultaneously pursuing differentiation and cost control (Kim & Mauborgne, R. A., 2016).
Analytical Frameworks
The following analytical frameworks that are central to value innovation and the creation of blue oceans (Kim
& Mauborgne, R. A., 2016):
 The Strategy Canvas – the strategy canvas serves as a diagnostic tool that captures the current state
of play in the known market space. This allows a company to understand where the competition is
currently investing, the factors the industry currently competes on in products, service, and delivery,
and what customers receive from the existing competitive offerings on the market. This involves
studying a company with regard to its investment in each area of the industry in which it operates.
The basic component of the strategy canvas is the value curve. The value curve is a graphic depiction
of a company’s relative performance across its competition.
Example: The US wine industry had long competed on seven (7) main factors:
o Price per bottle;
o An elite, defined image in packaging including labels and enological (pertaining to
the wine and winemaking) terminology;
o Above the line marketing to raise consumer awareness in a crowded market;

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o Aging quality of wine;

o The prestige of a wine’s vineyard and its legacy;
o The complexity and sophistication of a wine’s taste; and
o A diverse range of wines to suit different consumer preferences.
These factors were viewed as key to the promotion of wine as a unique beverage for the
informed wine drinker. As seen in the strategy canvas (image below), the horizontal axis
captures all the range of factors the industry competes on and invests in.

Figure 1. Strategy Canvas of the US Wine Industry

Source: (Kim & Mauborgne, R. A., 2016)
The vertical axis of the strategy canvas captures the offering level that buyers receive across
all the key competing factors. A high score means that a company offers buyers more, and
hence invests more, in those factors. In the case of price, a higher score indicates a higher
price.
As presented in the value curves in the strategy canvas, premium brand wines have the same
strategic profile. They offer a high price and presented a higher level of offering across all
competing factors. On the other hand, budget wines also have the same strategic profile. Their
price was low, as was the offering across all competing factors. The two (2) groups moved in
lockstep, but at different altitudes of offering level.
To fundamentally shift the strategy canvas of a company in an industry like the example above, it must
begin by reorienting its strategy focus from competitors to alternatives, and from customers to
noncustomers. It must resist the old logic of benchmarking competitors in the existing field and choose
differentiation and cost leadership.
 The Four Actions Framework – to create a new value curve that achieves both differentiation and
low-cost leadership, the four actions framework is used.
o Eliminate. Which of the factors that the industry takes for granted should be eliminated?
This helps review factors that can be eliminated in the industry. These may be
circumstances that the industry has long competed on but due to the fast-changing
environment, these have become obsolete, no value, or have been taken for granted.

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o Reduce. Which factors should be reduced well below the industry’s standard?
This determines if products and services have been overdesigned in the race to match and
beat the competition. In short, companies overserve customers, increasing their cost
structure for no gain.
o Raise. Which variables should be raised well above the industry standard?
This question pushes a company to uncover which factors should be raised beyond what
the current industry is offering.
o Create. Which factors should be created that the industry has never offered?
This helps a company discover entirely new source of value for buyers and to create new
demand and shift its strategic pricing.
In pursuing the first two (2) questions (of eliminating and reducing), a company gains insight on how
to drop its cost structure in relation to competitors. The second two (2) factors provide a company
with insight on how to lift buyer value and create new demand.
The actions of eliminating and creating push companies to go beyond maximizing the value they offer
in relation to existing factors of competition. Eliminating and creating prompt companies to change
the factors themselves, hence making the existing rules of competition irrelevant.
Collectively, these allow a company to systematically offer buyers an entirely new experience while
keeping its cost structure low.
Example (cont.): Applying the framework to the strategy canvas of the US wine industry,
Casella Wines created yellow tail, a wine whose strategic profile broke from the competition
and created a blue ocean. Instead of offering a wine as wine, Casella created a social drink
accessible to everyone: beer drinkers, cocktail drinkers, and traditional wine drinkers. Below
is the strategy canvas of yellow tail.

Figure 2. Strategy Canvas of Yellow Tail

Source: (Kim & Mauborgne, R. A., 2016)

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Looking at the graph, Casella Wines acted on all four (4) actions – eliminate, reduce, raise, and
create. By looking at the alternatives of beer and ready-to-drink cocktails and thinking of
noncustomers, Casella created three (3) new factors in the US wine industry – easy drinking,
ease of selection, and fun and adventure and reduced everything else in the key competing
factors. Casella found that the mass of Americans rejected wine because of its complicated
taste, hence created the new social drink with uncomplicated structure, sweet and fruity,
making it appealing to the mass of alcohol drinkers. In a span of two (2) years, the drink
emerged as the fastest-growing brand in the histories of both Australian and the US wine
industries.

References:
Kim, W. C. & Mauborgne, R. A. (2016). Blue ocean strategy: how to create uncontested market space and make
the competition irrelevant. Boston, Massachusetts: Harvard Business Review Press.
Ahmat, et al. (2014). Blue ocean strategies in hotel industry. Theory and Practice in Hospitality and Tourism
Research, 165-166. Retrieved from http://what-when-how.com/Tutorial/topic-956utr168/Theory-
and-Practice-in-Hospitality-and-Tourism-Research-59.html on 24 January 2018
Tamir, M. (2015). Challenges and opportunities of community based tourism development in Awi Zone: A case
study in Guagusa and Banja Woredas, Ethiopia. Journal of Tourism, Hospitality and Sports, 11, 55-57.
Retrieved from
http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.1007.6016&rep=rep1&type=pdf on 22
January 2018
Goodwin, G. & Santilli, R. (2009). Community-based tourism: a success? Retrieved from
http://www.haroldgoodwin.info/uploads/CBTaSuccessPubpdf.pdf on 22 January 2018
ASEAN Secretariat. (January 2016). ASEAN community-based tourism standard. Retrieved from
http://www.asean.org/wp-content/uploads/2012/05/ASEAN-Community-Based-Tourism-
Standard.pdf on 18 January 2018

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