An industry on shaky ground?

 

The report, 'Destinations at Risk: The Invisible Burden of Tourism', is by industry charity The Travel Foundation, sustainability consultancy EplerWood International and Cornell University in the US.

It claims that the rapid growth of tourism in the 21st century is leading to damage in destinations across the world that is largely unreported and frequently not perceived by tourists, putting destinations at risk without effective response.

While not specifically mentioning health and medical tourism, countries or cities seeking to develop these sectors should look at all costs and benefits, and not the simplistic number increases promised by consultants.

European cities such as Barcelona and the countries of Iceland and New Zealand have set out new planning systems to finance infrastructure and protect historical assets and local well-being. But the large majority of destinations are unprepared and lack the budget and expertise to both manage escalating demand and oversee a proper evaluation of tourism’s impacts on their local infrastructure and resources.

The report highlights Thailand as the largest tourism economy in Southeast Asia and the fastest growing tourism destination in the world, with visitor numbers doubling, from 15 to 35 million, between 2010 and 2017. (UNWTO, 2018).  In that time, Thailand has seen no major infrastructure overhauls. The Tourism Authority of Thailand campaigns for overseas visitors, while the Ministry of Tourism seeks to manage them.

Understanding the costs and benefits per tourist

Tourism, says the report, is an effective tool for economic development. It attracts investment in infrastructure such as airports, hotels and local transportation. Though less well understood, tourism also contributes to both national and local treasuries through a variety of taxes (both direct, such as taxes on aviation and accommodation, and indirect, such as VAT on sales), revenue to businesses, as well as paying to use local amenities and infrastructure (for example, public transport).

The report argues that there is an inherent danger in under-representing or not representing the costs of tourism growth at the destination level to ensure they correspond with revenues from tax. It is therefore vital to understand the costs and benefits per tourist and the marginal cost as visitor numbers grow.

The future of tourism will depend on the industry and government’s ability to efficiently and effectively measure and manage the full cost of each tourist. This will require systems that calculate the costs of tourism development on local economies.

Calculating costs of tourism

To date, there are no measures that consistently account for the cost of managing tourism at the local level.

Those costs need to include the infrastructure required to transport, feed and house, provide energy and water, and manage waste and waste water for the growing numbers of visitors and tourism workers in each destination.

The local economic burdens are too often invisible (overlooked, misunderstood, or ignored) to national decision makers who focus on promoting tourism growth, but are very real for local municipalities, which are seeing budgets that exceed local uses by multiples of 8-10 times higher than local consumption without the utility metering to properly assess these costs.

Tourism managers focus on an incomplete set of economic measures to assess the health of the tourism destination – i.e. the total number of visitors, as well as direct and indirect economic impacts. Those figures provide a one-sided view of tourism’s contributions to local economies and fail to account for management costs at the local level.

While the private sector uses sophisticated managerial accounting systems to understand and assign costs to specific activities at the destination level, these are not used to determine cumulative impacts in each region where tourism is developed.

As a result, the tourism industry has not looked extensively at measuring and predicting the long-term deterioration of vital assets at the destination level.

Degrading destinations using inaccurate data

Without a consistent system to manage the invisible burden on local economies, tourism growth will continue to degrade more destinations in ways that increase frustration and produce more protests, as local citizens see their most beloved historical centres, monuments, and vital resources degrading without adequate explanation or informed action.

One of the primary challenges for tourism decision makers is the inaccurate and misleading nature of the data they use to project and discuss success. Economic impact analysis does not account for the costs associated with the invisible burden.

Tourism decision makers at the international and national levels frequently make important decisions based only on international arrival figures, which excludes vital information on the growth of domestic tourism, and the economic value of each tourist.

The report concludes that the cost of managing tourism’s vital assets worldwide is not being accounted for at the international or destination level. An invisible burden is undermining the success of the tourism economy, which is causing frequent disturbances both in Europe and around the world in the form of local protests, islands closing, and failing infrastructure.

Risks for tourism economies are also escalating due to rapid land development in coastal areas. The global coastal build-up of hotels is placing a growing number of countries at economic risk due to sea level rise and the intense storms caused by climate change.

Developing countries are the most in peril of losing the economic benefits of tourism because their infrastructure is frequently poor, documentation, and the demands and costs for servicing each tourist is high compared to the costs of serving locals.

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