SOL 72011423R00006 Attachment J.1 - Statement of Objectives.pdf

USAID South Caucasus Regional Tourism Program

SOL #72011423R00006

ATTACHMENT J.1 - STATEMENT OF OBJECTIVES

1. PURPOSE

The purpose of the USAID/Caucasus Regional Tourism Program is to build durable regional cooperation among Armenia, Azerbaijan and Georgia, based on market drivers and shared economic interests in the tourism sector, thereby contributing to cohesion and peace in the South Caucasus.

2. BACKGROUND

The November 2020 conflict between Armenia and Azerbaijan and the subsequent ceasefire has led to a significant shift in the geopolitical environment in the South Caucasus. This shift presents an opportunity to contribute to durable peace and regional stability by enabling regional cooperation based on market drivers and incentives around regional tourism. Since the ceasefire, Armenia and Azerbaijan have entered into talks on border demarcation and delimitation. Despite the September 2022 events that escalated the tension between the two countries, prospects for cooperation remain strong.

Tourism is an important part of the economy for the countries of the South Caucasus, therefore a viable entry point from which to build regional collaboration, cooperation, and peacebuilding.

It has the potential to improve the livelihoods of rural, urban and peri-urban communities across multiple economic strata. In 2019 prior to the COVID-19 pandemic, tourism constituted a significant portion of GDP for Georgia (26%), Armenia (14.1%), and Azerbaijan (7%). However, all three countries suffered severe impacts from the pandemic with tourism falling significantly from 2019 to 2020 by 72.1% in Georgia, by 75.1% in Armenia, and by 67.1% in Azerbaijan. While a post-COVID recovery is underway, recovery to the 2019 levels is at least several years away.

Despite the impacts of COVID-19, the 2020 Nagorno-Karabakh war, and Russia’s invasion of Ukraine, all three countries continue to pursue recovery and growth for their tourism sectors in line with global tourism trends and best practices. For example, the countries are continuing to increase experiential tourism, developing tourism circuits and routes around destinations, diversifying source markets, and looking at new tourism segments in order to promote longer stays in a wider array of cities and locales and increase tourism spending to broaden economic benefits. There are market-driven opportunities for regional tourism that remain to be explored by stakeholders in three countries in order to attract travelers in various tourism segments.

Challenges to achieving regional tourism growth persist for the countries of the South Caucasus. These include but are not limited to: legal-regulatory issues such as non-existent or inconsistent standards (health, safety, quality), and differences in visa regimes; limited transportation linkages between the countries; inconsistent quality and price of tourism products and services; and the perceived tension between cooperation vs. competition within the context of decades of conflict between Armenia and Azerbaijan. These and other factors remain to be explored and validated with stakeholders of the three countries to remove impediments to the development of regional tourism.

Efforts to promote tourism cooperation in the South Caucasus and broader region have included the Black Sea Silk Road Corridor, regional package tours, engagement between destination management organizations (DMOs) and even attempts at regional branding (Diamonds of the Caucasus). These efforts have demonstrated that economic interests based on market drivers can provide incentives for cross-border cooperation. However, tourism related initiatives have been ad hoc, sporadic.

While there is some bilateral cooperation between Georgia and the other two South Caucasus countries, the three countries do not engage in trilateral cooperation, and communication between Armenia and Azerbaijan on tourism is nonexistent. Limited and infrequent communication between governments, business associations, tourism operators, the broader private sector, and other stakeholders impedes collaboration and cooperation as well as the ability of stakeholders in the three countries to identify shared interests, challenges and opportunities, prioritize areas of cooperation, propose solutions, and jointly take action. This reinforces low understanding and awareness of the economic benefits of regional cooperation on tourism and hinders cohesion between the three countries.

All three South Caucasus missions pursue tourism development efforts under respective bilateral portfolios. The Regional South Caucasus Tourism Program is intended to serve as a catalyst that complements and elevates the efforts on the bilateral programming The success of the regional effort is therefore contingent upon strong collaboration and coordination with the respective bilateral programs, particularly when trying to address transboundary challenges and harmonization of critical policies that affect the tourism sector. The Regional Program is expected to work in sub-sectors already prioritized by the bilateral missions as the Regional South Caucasus Program should not be in competition with those bilateral activities, but additive. Therefore, the Offeror must consider all relevant current and past projects carried out in all three countries by USAID and other development partners/donor organizations as well as appropriate host country strategies and priorities that could serve to inform and facilitate this new activity.

3. PROGRAM OBJECTIVES AND EXPECTED RESULTS

In order to achieve its purpose, the activity consists of two objectives that respond to the identified problem set. The SOW must specifically address the below objectives and results.

The Offeror must propose a set of indicators and targets measuring the results listed below.

The Contractor is expected to support stakeholders in each focus country, including but not limited to: national tourism agencies, tourism associations, destination management organizations (DMOs), tour operators, and other private sector players including food and beverage, transportation, and other hospitality firms in an effort to build regional cohesion.

Purpose: Build durable regional cooperation among Armenia, Azerbaijan and Georgia, based on market drivers and shared economic interests in the tourism sector, thereby contributing to cohesion and peace in the South Caucasus.

Objective 1: Consistent engagement among a broad range of tourism-related stakeholders in the South Caucasus fostered.

Result 1.1: Process(es) built by which a broad range of stakeholders interact on a regular basis to discuss opportunities and mitigate challenges to regional tourism.

Result 1.2: Stakeholder consensus reached around regional tourism opportunities and challenges.

Objective 2: Tangible economic benefits realized from regional tourism development initiatives.

Result 2.1: A pipeline of market-driven solutions and/or viable business ideas developed and vetted by relevant stakeholders in the South Caucasus.

Result 2.2: Market-driven joint initiatives undertaken by stakeholders to expand and facilitate regional tourism.

Result 2.3: Additional public and/or private resources mobilized to implement solutions and/or viable business ideas.

4. GRANTS UNDER CONTRACT

The Contractor will be authorized to use Grants Under Contract (GUCs) to issue grants to non-governmental partners to support the activities under the relevant components of the Program. All requirements that apply to USAID-executed grants in ADS 303 will also apply to grants executed by the contractor. USAID will retain, within the contract, the ability to terminate unilaterally any grant activities under extraordinary circumstances.

As part of this Program, USAID expects the selected contractor to function in a project management role and provide grants to non-governmental organizations, private sector entities such as tour operators, hospitality firms and food and beverage transportation companies, business associations, communities, and other non-public stakeholders in Georgia, Azerbaijan and Armenia.

The cumulative value of grants made under this provision must be up to $900,000. Grants made under this contract will be made to carry out activities that are consistent with the objectives in this SOO. The anticipated average grant size is $50,000. Grants are expected to be issued to local entities in Georgia, Armenia, and Azerbaijan, and grants are expected to be able to show a tangible linkage to regional tourism.

OPTION TO EXPAND GRANTS COMPONENT

Subject to the availability of funding and if new windows of opportunities emerge for regional cooperation, USAID may exercise an option to increase the Grants under Contract component of this award by $1,000,000. Additional funding may be used to support Objective 2 activities, such as the implementation of market-driven initiatives and/or pipeline of business ideas jointly developed by stakeholders. If this option for expansion is exercised, funding will also be made available to cover the additional cost of additional grant administration.

5. OPERATING CONSTRAINTS AND CONTRACT PARAMETERS

Operating constraints and contract parameters define the limitations of implementation and inform the characteristics of the contract. Offerors should consider the following in drafting their Proposals:

• Geographic focus

• Target beneficiaries

• Sustainability, environmental considerations, and climate change

• Gender and social inclusion

• Security considerations

• Relevant cross-cutting themes or guiding principles (e.g., market-based solutions, private sector engagement, local capacity development, connecting citizens to Government, innovative financing, youth, disability, partnerships, host country contribution, resilience, etc.)

• Constraints and risks to implementation (e.g., partnership requirements, country and regional geopolitical environment, collaboration requirements, etc.)

• Collaboration, learning, and adaptation

[End of Attachment J.1, Statement of Objectives]