The tourism industry’s growth has evolved beyond simply increasing visitor numbers. Countries prioritising a sustainable agenda could become the new investment magnets, provided initiatives are responsibly managed, as Jason Mitchell discovers.
A growing number of countries only want foreign firms to invest in their tourism sectors if they make a strong commitment to sustainability. During the past few years, ‘sustainable’ or ‘responsible’ tourism has become a hot topic in the global tourism sector, one of the biggest industries worldwide with annual revenues of $2300bn directly and $7600bn indirectly. One in 10 people on the planet are employed in tourism directly or indirectly.
It is an industry that is growing fast: between 5% and 7% annually, according to the UN World Tourism Organization (UNWTO). Between January and August 2017, destinations worldwide attracted 901 million international tourist visitors, up 56 million on the same period in 2016.
Countries across the globe are developing sustainable tourism strategies. The UNWTO suggests these should have three principal objectives: first, protection of the natural environment; second, conservation of the cultural heritage of host communities; and third, helping to advance the local economy in a fair and far-sighted fashion.
“Sustainable or green tourism is the future of tourism,” says Andrea Nicolas, managing director of Green Tourism, a Scotland-based company that runs an accreditation programme for companies committed to responsible tourism. “If you destroy the environment or the destroy the local community, you destroy the product.”
Dr Taleb Rifai, secretary general of the UNWTO, agrees. “We cannot have five-star hotels in three-star communities,” he says. “There cannot be islands of luxury in very poor communities. We cannot have local people just employed as servants. I think we must distinguish between mature economies and developing countries. In the developed world, people are already very sensitive towards the natural environment. In the developing world, this sentiment is not so strong as people are new to foreign travel and feel they have a right to it.”
Many governments view tourism as one of the key ways to advance their national economies, but they want to ensure that the natural environment is in no way blighted and that any economic gains are shared with the local community.
“Costa Rica is a country whose main attraction is nature,” says Mauricio Ventura, the country’s tourism minister. “We do not want mass tourism. During the past 30 years, we have spread the benefits of tourism around the country to 32 tourism development areas. People throughout the country have seen the social and economic benefits. Costa Rica has become a brand name committed to sustainable tourism; everyone who wants to invest here must comply with the essence of that brand.”
Costa Rica is one of the countries most dependent on tourism. The sector accounts for 27% of jobs and generates revenue of $4bn annually, or 29% of all the dollar inflows in to the country. For two decades, Costa Rica has run a voluntary accreditation programme for tourism businesses, called the Certification of Sustainable Tourism. Mr Ventura’s ministry is in the process of launching a more sophisticated version of the programme suited to larger hotels, entertainment complexes and car rental companies.
The country also plans to modify its incentive rules for foreign investors, which will place more emphasis on sustainability. Investors will receive greater incentives if they employ a larger number of people from the local community or install solar panels, for example.
Slovenia is another country that sees tourism as fundamental to its future economic development but that wants to avoid mass tourism. Its annual tourism revenues amount to €2bn and it expects that to rise to €3.7bn by 2030. In 2016, it attracted 4.3 million foreign tourists. More than 65% of the country is covered by forests and it has 30,000 kilometres of watercourses.
“Tourism is a priority for us,” says Darja Radic, former secretary of state for tourism for Slovenia and now a consultant. “It is one of the main ways in which we can create jobs in the countryside. Slovenia is a hidden corner of Europe but is slowly becoming more visible. We do not want the number of tourists we attract to increase dramatically, but we would like each tourist to spend a greater sum. We want to develop the sector in a slow and carefully planned way.
“Clearly, we want to attract foreign investment in our tourism industry but that could be in business sectors or infrastructure that underpin the industry: for example, green transportation, waste management or efficient energy.”
In 2015, the Slovenian Tourist Board introduced its own accreditation programme, which grants bronze, silver or gold awards to tourism businesses.
The Seychelles, an Indian Ocean archipelago of 115 islands, is an example of a country that has had to put the brakes on its hotel development because it wants to ensure that it has all the infrastructure in place to meet the needs of its growing tourist numbers. It expects 350,000 international visitors in 2017, compared with 304,000 in 2016.
“Conservation of the natural environment is very important to us,” says Sherin Francis, chief executive officer of the Seychelles Tourism Board. “About 50% of our land is protected and we will only grant building permits if the plans meet rigorous environmental standards.
“A moratorium on new hotel development until 2020 has been put in place, as we want to make sure that our airports, road and electricity grid can cope with the expanding tourist numbers. There are lots of opportunities for foreign investors in these industries or in green energy or the construction of ports and marinas. We just want to ensure that we have a bit more control over the pace of growth.”
Risk and Reward
Tourism is often seen as way for a country to get rich quick. Some countries, such as Sri Lanka, have managed to improve their economies markedly through advancing the industry. Its ‘visitor exports’ – spending within the country by international travellers – rose by 26.4% between 2010 and 2016. However, countries such as Myanmar have seen the adverse consequences of promoting the industry with a ‘gold rush’ mentality. Visitor exports soared by 73.5% between 2010 and 2016.
“Some governments, particularly in the developing world, see tourism as a quick fix for economic growth,” says Libby Owen Edmunds, an Indonesia-based sustainable tourism specialist. “But this can happen to the detriment of the natural environment or the local community. Governance has been an issue in [Myanmar], for example. There was no time to prepare for the sector’s expansion. Land has been taken away from local people for hotel development or fishermen have been displaced.”
She adds that tourism ministries can be under a lot of pressure to get tourism numbers up, but their plans can backfire if they do not follow sustainable tourism strategies. In Myanmar, for example, the number of hotels almost doubled to 1300 between 2010 and 2015, with foreign firms committing to invest $2.7bn in the sector during that period. But today many of the hotels stand half-empty and it is believed that tourism visitor numbers plunged to 2.9 million last year from 4.7 million in 2015.
Tourism is one of the fastest growing industries worldwide and presents incredible opportunities for foreign investors, not just in new hotels and resorts but in all the associated infrastructure. However, it is vital that the growth is managed, so that the natural environment is protected and local communities do not feel threatened.