Andrew Ireland l Palladium - Sep 27 2021
Three Ways to Harness Tourism for Inclusive Growth

Credit: Shlomo Shalev

Tourism is a key component of achieving the 2030 Sustainable Development Goals. It creates jobs, generates tax revenue, and incentivises investments in improved infrastructure, education, cultural and environmental preservation, and more. However, if mismanaged, tourism can damage historic landmarks, destroy sensitive habitats, crowd out residents, and create demand for the illegal wildlife trade.

And as we have seen from the USD 4 trillion in lost GDP as the COVID-19 pandemic grounded planes and shut borders all over the world, an overreliance on high-end international travel can backfire in times of disaster, leaving the sector vulnerable to the whims and worries of guests from abroad.

As we celebrate World Tourism Day and its focus on Tourism for Inclusive Growth, it’s worth thinking about what can be done to shift the industry's trajectory so that it generates shared value for all involved.

As tourist numbers have begun to slowly increase with the spread of vaccinations and rapid testing in Europe and North America, many countries are understandably eager to be the first to benefit from this rebound in the sector. How to capture these economic benefits while avoiding serious impacts on the health and wellbeing of their (still largely unvaccinated) citizens – especially in communities near tourist destinations – will be a key challenge for these countries moving forward.

Despite a recent uptick in travel, many do not expect a return to 2019 levels until 2023. Therefore, the global tourism sector has the opportunity to use this COVID-forced pause to re-engineer its operations to better support the wellbeing of local communities.

Here are three ways NGOs, countries, and communities can harness tourism for inclusive growth:

1. Look Beyond Traditional Tourist Destinations

Out of the top 50 most-visited tourist destinations in the world, 86 percent are in or directly beside major cities. Most international visitors to a particular country never leave the capital city. Although they undoubtedly contribute to growth, these visits and their benefits tend not to reach rural areas, where poverty and lack of opportunity are concentrated. Even in more out-of-the-way destinations, many visitors either never leave the resort or shuttle back and forth between their hotel and the beach or other sites, with little interaction with the wider community. This dynamic both limits potential for inclusive growth and opportunities to enrich the tourist experience.

Increasingly, countries are looking to spread the wealth – and alleviate over-tourism – by promoting touristic experiences that get visitors out of urban areas and their resorts. Nature-based tourism, rural tourism, cultural tourism, and even adventure tourism all aim to give tourists more “authentic” experiences that not only bring economic benefits to otherwise overlooked populations but also create incentives to protect natural and cultural assets otherwise vulnerable to destruction and neglect.

This kind of tourism was already an important growth opportunity for many economies – from beach vacations in El Salvador and Sri Lanka to trekking in North Macedonia or the mountains of Guatemala, nature tourism is often the focus of efforts to build the overall industry. The pandemic has only accelerated this trend, as people seek out opportunities to get outside and enjoy nature in a safe, socially distanced manner. As tourist flows rebound from their 2020 lows, destination countries should ramp up work to promote these alternative itineraries that bring additional visitors and value to rural communities.

"Even in more out-of-the-way destinations, many visitors never leave the resort."

2. Build on What is Already There

Even in relatively overlooked destinations, there are typically at least a couple major players – a hotel, an outfitter, a ski resort, etc. – that drive tourism in that location. As destination marketing and promotion efforts bear fruit and tourist flows increase, these “anchor firms” may need assistance to meet increased demand for high-quality food, accommodations, supplies, and nearby activities.

This market need represents a huge inclusive growth opportunity. It creates an incentive for anchor firms to support local actors throughout the supply chain – transportation agencies, tour guides, restaurants, equipment rental facilities, etc. – to better respond to the market. These collaborations can range from simple information-sharing on standards and processes to co-investment in technology upgrades and quality improvements.

With such anchor firm support, networks of smaller, locally owned businesses suddenly become able to access new markets, obtain lower-cost finance, invest in new technologies, develop new and higher-quality products, grow sales, and bring jobs and sustainable economic opportunities to the community. This not only results in a virtuous circle where better products and services attract more visitors, which in turn fuels more business growth; it also helps grow the middle class in these areas, turning local residents into potential domestic tourists themselves and helping countries avoid the overreliance on international travellers that became so apparent in March 2020.

3. Bring Everyone to the Table

While these government and private sector efforts will improve the situation, siloed and piecemeal approaches will not be sufficient to achieve inclusive growth, whether at a particular destination or the sector as a whole. Truly inclusive growth requires bringing together the full range of relevant actors – starting with representatives from the communities most affected by tourism – to develop inclusive growth strategies that generate value for everyone involved. Working together, these stakeholders must define a shared vision and accompanying “change agenda” for the destination in question, detailing agreed-upon goals and assigning responsibilities and resources for achieving those goals over a defined time period.

These groups can be formalised destination management organisations or more informal working groups actors responding to growth or funding opportunities. Together, the members of these groups can develop shared products such as tourist routes and circuits, lead joint promotional and marketing campaigns, and decide on key questions such as the appropriate carrying capacity for a sensitive natural area, or how visitors should be permitted to interact with a particular cultural or religious site. By bringing actors together to develop, implement, and track progress on a shared strategy that grows the sector in a sustainable way, these kinds of initiatives help share the resulting benefits equitably, minimise negative impacts, and ensure any remaining externalities do not land disproportionately on particular groups.

The three steps above may seem like common sense. Yet, they can be challenging to put into practice, due to the fragmented nature of the tourist supply chain and the historical neglect of remote, rural areas in terms of government attention and investment.

This is where donors and their implementing partners can help. Such third-party “catalysts” can bring actors together in ways that side-step or level out any potential power imbalances, build trust, and make connections, and draw out areas of overlapping interests and potential collaboration.

In addition to generating these collaborations, they can also help to broker public-private partnerships for investing in basic infrastructure, such as roads, electricity, water and sanitation, and digital connectivity, or foster public-private dialogue on priority enabling environment issues like registration and licensing requirements. This kind of approach facilitates locally led development and leaves behind stronger, self-sustaining ecosystems in which actors continue to work together to achieve mutually beneficial outcomes.

As countries work to rebuild their tourism industries, they have an unparalleled opportunity to address the problems that have long plagued the sector and to help some of the 120 million people pushed into poverty by the pandemic’s economic impacts.

Spreading tourist dollars to under-visited areas, strengthening connections between larger companies and their supply chains, and facilitating the creation of destination-level change agendas are all ways to make sure that these dollars remain in these touristed areas, driving inclusive and sustainable growth over the long term.

For more information, contact info@thepalladiumgroup.