Goodbye freeloading, hello free thinking; the Travel Foundation asks “Who pays?”

When you next go on vaca­tion, who will pay?

It’s a simple ques­tion and you may think the answer is obvi­ous: you, the customer.

But are trav­el­lers cov­er­ing their costs?

Experts at a roundtable event organ­ised by Cor­nell Uni­ver­sity were asked that ques­tion and they answered with a resound­ing “no”.

All those around the table — aca­dem­ics and rep­res­ent­at­ives from busi­nesses and des­tin­a­tions — accep­ted that tour­ism isn’t pay­ing its way.

Our industry is under­valu­ing its shared products — the des­tin­a­tion “assets” vis­it­ors enjoy, such as beaches, biod­iversity, her­it­age sites and infrastructure.

How has this come about? Some of the reas­ons include:

• Res­id­ents foot­ing the bill for shared infra­struc­ture. For instance, in Rhodes Island, Greece, one research study found loc­als were unwit­tingly sub­sid­ising the cost of energy dur­ing the tour­ism sea­son, by an estim­ated €20 million.
• Under­in­vest­ment in des­tin­a­tion main­ten­ance (with most tax rev­en­ues being diver­ted to mar­ket­ing and promotion).
• Eco­nom­ic “leak­age”, where as much as 80% of tour­ism rev­en­ue leaves the coun­try due to taxes, wages, and profits being paid out­side of a coun­try, and due to import­ing food and oth­er goods.
• Gov­ern­ment sub­sidies and tax incent­ives which dis­tort the com­mer­cial costs of tourism.

The res­ult for des­tin­a­tions can be seen across the world as has been high­lighted by the media recently. Islands have closed to tour­ism in Thai­l­and and the Phil­ip­pines due to envir­on­ment­al con­cerns. And res­id­ents in many European cit­ies have acted out over what has been described as “over­tour­ism”.

So how can we ensure des­tin­a­tions can bal­ance their books across their triple bot­tom line (social, envir­on­ment­al, financial)?

A 2017 WTTC report (linked below) pro­posed we should account for des­tin­a­tion main­ten­ance and sus­tain­ab­il­ity and set prices accord­ingly (referred to as the “actu­al” cost). Such a pro­pos­al may seem pain­fully obvi­ous, and yet its inclu­sion in the report tells us how far we, as an industry, must go.

Cornell’s roundtable par­ti­cipants viewed the con­tinu­ing growth of glob­al tour­ism as an oppor­tun­ity to cre­ate a fun­da­ment­al shift in how it oper­ates, con­sid­er­ing innov­a­tions such as bet­ter valu­ation of des­tin­a­tion assets, B Corp busi­ness mod­els, dif­fer­ent fund­ing approaches, and stronger loc­al governance.

The Travel Found­a­tion is now work­ing with Cor­nell and its Sus­tain­able Tour­ism Asset Man­age­ment Pro­gram, led by Megan Epler Wood, to pro­duce a joint report that will make the case for bet­ter des­tin­a­tion man­age­ment, and describe how organ­isa­tions can make the transition.

The Sus­tain­able Tour­ism Entre­pren­eur­ship and Des­tin­a­tion Asset Man­age­ment Roundtable was organ­ized by the Pills­bury Insti­tute for Hos­pit­al­ity Entre­pren­eur­ship at Cor­nell Uni­ver­sity on May 3 2018. The roundtable was part of the Sus­tain­able Tour­ism Asset Man­age­ment Pro­gram at Cornell.

Fea­tured image: Little Venice quay flooded with tour­ists. Mykonos island, Cyc­lades, Agean Sea, Greece. By Mstyslav Chernov (CC BY-SA 3.0) via Wiki­me­dia.

Downloads

• Cop­ing with Suc­cess: Man­aging Over­crowding in Tour­ism Des­tin­a­tions, Decem­ber 2017, McKin­sey & Com­pany and World Travel & Tour­ism Coun­cil (PDF; hos­ted offsite)
  

About the Author

Ben Lynam is Head of Com­mu­nic­a­tions at the Travel Found­a­tion.