Success Factors for Public Private Partnership: Cases in Alpine Tourism Development

By Weiermair, Klaus; Peters, Mike et al. | Journal of Services Research, February 2008 | Go to article overview

Success Factors for Public Private Partnership: Cases in Alpine Tourism Development


Weiermair, Klaus, Peters, Mike, Frehse, Joerg, Journal of Services Research


Sustainable competitiveness in tourism calls for meaningful and appropriate management approaches in order to prevent the exploitation of non-renewable resources. Generally where mass tourism is practiced, resources tend to be overconsumed and hence nature can be harmed. Thus, a major goal of sustainable tourism is to find a balance between resource use and consumer preferences or needs. A tourism nation won't achieve international competitive advantages through strict prohibitions of resource use but rather through conservation-conscious consumption. Tourism is on the one hand strongly influenced by governmental regulation and on the other hand driven by private, often also short term, interests. The following paper attempts to analyse core benefits and problems of private public partnerships (PPPs) in the tourism industry. The purpose is to derive principles and management imperatives for the formation of private-public partnerships in tourism. In order to evaluate the above mentioned principles we have selected two PPP examples of Austria's Alpine tourism development. The first case involves the development of the 'Mountain Beach Water and Nature Park' in the Western Austrian Alps, the second case study evaluates the cable way development project 'Muttersberg' of the Silvretta Nova Group in Vorarlberg (Austria). After a presentation and critical discussion of the case studies, the last part of the paper will conclude with recommendations for PPP practices in tourism and leisure and highlight implications for future research in the field of tourism - development, -financing and -cooperation.

PUBLIC-PRIVATE PARTNERSHIPS: PREREQUISITES AND KEY SUCCESS FACTORS

Before discussing specific aspects and details of public-private partnerships in tourism a few definitions may be in order: Companies which hold both private and public (government owned) assets are usually labelled mixed companies. Public-private partnerships (PPPs) are specific types of coownership and/or co-operation between public institutions and private enterprises which are formed due to some synergetic advantages and which usually share both risks and profits. Usually, the foundation is a contractual agreement between the public sector and profit oriented organisations. The majority of public-private partnerships are to be found in the development, financing and implementation and management of infrastructures (Muhm, 1998). Hence, many examples of private public partnerships can be found in the construction industry (e.g. highway construction, train stations, etc.), in energy industries where high cost/risk power plants have to be erected or in the area of waste management. Other, infrastructure projects in the field of leisure and tourism are e.g. mega sports events such as Olympic Games or world championships, national parks, a national CRS or the creation of a new museum or art gallery.

PPPs cannot be interpreted as just another form of privatization; for governments in these projects usually still assert a high influence and control over properties and management processes. Forms of PPPs can vary appreciably: e.g. service or management contracts, where public property is managed through private institutions, or BOTs (Build, Operate, Transfer) which are long-term contracts to construct and run public and privately owned infrastructure. A full list of possible configurations can be seen below in table 1.

PPPs often represent policy solutions to market failures, a concept which effectively underpins and is germane to a large set of resource questions in environmental economics. Here, the inability of markets (where normally demand and supply are determined by price) in providing specific and optimal environmental goods arises essentially from the public good nature of air, land and/or water resources. The economic literature discusses three forms of market failure (Sinclair & Stabler, 1997: 178):

* Public goods: The natural and some man-made environments cannot be excluded from public (free) consumption or enjoyment.

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