Destinations at Risk, the Invisible Burden of Tourism
Tourism is, without a doubt, an effective tool for economic development, generating over 10.4% ($8.2 trillion USD) in direct contribution to global GDP in 2017. (WTTC 2018) 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). (WTTC, 2018)
But the allocation of such taxes is barely researched, and the policy implications of tourism tax allocation are vast. There is an inherent danger in underrepresenting 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. Those costs 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. These local economic burdens are too often invisible (i.e., 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. (Gossling & Peeters, 2015)
Today’s tourism managers focus on an incomplete set of economic measures to assess the health of the tourism destination – 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 utilizes 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.³ (Epler Wood,
The invisible burden is defined in this report as the unaccounted for destination costs to provide local infrastructure and the protection of eco and socio-cultural systems for tourists and local people. To date, there are no measures that consistently account for the cost of managing tourism at the local level. In short, a new set of consistent annual accounts is needed that can offer a keen, accurate understanding of where the costs per tourist lie and who bears them.
Acknowledging and measuring this invisible burden can enable decision makers to determine how such costs can be paid for in order to ensure that local ecosystems and socio-cultural values are not degraded beyond the point of no return for local people and the tourism industry. Scholars have already linked ecosystem degradation with declining profits and visitor satisfaction, noting that the relationship between tourists and local natural and social assets is especially crucial for countries where tourism is a significant mechanism for GDP growth. (Dvarskis, 2017)
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 centers, monuments, and vital resources degrading without adequate explanation or informed action.
Conclusion
This report has concluded that the cost of managing tourism’s vital assets worldwide are 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. 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 invisible burden is threatening global cultural and environmental assets of enormous renown and value. The degradation of world class parks, historic city centers and world heritage monuments has vast economic implications for countries seeking to maximize the economic benefits of tourism. A keen and accurate understanding of the costs at the destination level is needed in order to ensure that vital resources and tourism assets are not degraded beyond the point of no return for local people and the tourism industry in the future.
The invisible burden results in operational externalities for local governments that have a direct impact on local municipal budgets – impacts that are not explicit in traditional economic impact research. While theoretical approaches have addressed this question, there has yet to be a system designed for destination managers to account for costs that are silently draining limited local budgets. The management of energy, water, solid waste, waste water/ sewage and natural and social capital per tourist has proven to be the primary operational externality that requires attention. Unless these costs are factored into the cost of tourism growth, an increasing number of tourism destinations will be driven to crisis management without a proper road map.
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. Inadequate public data exists on this issue, but it is known that for the Caribbean region, 29% of facilities are at risk of inundation with 1 meter of sea level rise, in one of the few studies outlining the critical nature of this challenge for tourism development worldwide.
Developing countries are the most in peril of losing the economic benefits of tourism because their infrastructure is frequently poor, according to all UN documentation, and the demands and costs for servicing each tourist is high compared to the costs of serving locals.
Essay Question
Reread the above pages after reading the entire report.
How would you respond to the above knowledge about the invisible burdens, if you had the position in a city in your country, as the Head of Tourism.
There are many burdens that can be addressed. Do you best to address as many as possible in a response that is no longer than three pages, typed and single-spaced. Use 11point Arial type.