The Future of Travel and Tourism: Creating an Office for Sustainable Tourism

Executive summary

Accounting for 1 in 10 jobs worldwide, the tourism industry is growing and presents immense economic opportunities to communities around the globe. At the same time, many cities are finding that tourism is having a detrimental impact on their residential and commercial economies, leading to backlashes—sometimes violent—from residents and small-business owners. While many jurisdictions have enacted policies to manage and control this growth, little has been done in a coordinated manner. The establishment of an Office of Sustainable Tourism, coupled with an advisory task force of stakeholders, would best position jurisdictions to create policy proposals and marketing initiatives to ensure that local communities benefit from tourism. Once established, the office and task force should begin with a focus on three areas: regulating home-sharing platforms, protecting the commercial centers of cities and marketing new destinations. 

Background

Tourism is one sector of the economy that continues to grow, outpacing the general economy for the last seven years (World Travel & Tourism Council). Since 2000, the number of people taking international trips has doubled to more than 1.2 billion people annually (The Economist). Tourism accounts for 1 in every 10 jobs, with 1 in 5 new jobs created in 2017 attributed to tourism (McKinsey & Company). More often than not, the economic benefits of tourism reach those who need it most: Women and people younger than 25 have greater representation in the tourism workforce than they do in the general workforce (World Travel & Tourism Council).

There are a number of reasons for the recent rise in tourism worldwide, including the following:

  • The emergence of a global middle class, especially in Asia, has made travel more accessible to millions of people; 
  • The price of airfare has declined in inflation-adjusted dollars, also making travel more accessible;
  • New technology — including online booking applications and home-sharing platforms — has made travel easier and less expensive; and
  • Travel bloggers and social media create and reinforce interest in travel (McKinsey & Company).

This is good news for many local economies. But in many cities, there has been a downside to this thriving sector of the economy: overtourism. This term was coined in 2016 by the travel publication Skift, which defined overtourism as 

“a new construct to look at potential hazards to popular destinations worldwide, as the dynamic forces that power tourism often inflict unavoidable negative consequences if not managed well. In some countries, this can lead to a decline in tourism as a sustainable framework is never put into place for coping with the economic, environmental, and sociocultural effects of tourism. The impact on local residents cannot be understated either”(Ali).

Some examples of the potentially detrimental effects of overtourism include the following:

  • Airbnb and other homesharing platforms effectively turn apartments into hotels, depleting housing supply for local residents and, in many cases, driving residents away from the city center. A report from the New York City Comptroller’s Office estimated that these listings cost New Yorkers a collective $616 million in higher rent in 2016 alone (Stringer).
  • The population of Venice is half what it was 30 years ago, and on many given days, the city has more visitors than Venetians. Dubrovnik, too, has lost half its population in the last 20 years (The backlash against overtourism). 
  • In Iceland, where a 2008 financial collapse and 2010 volcanic eruption drew the world’s attention and created a new interest in the country, tourism visits have increased by 264 percent in five years (Sheivachman, Iceland and the Trials of the 21st Century), prompting concerns about infrastructure, the economy and the natural environment. 
  • In Barcelona, a city of 1.2 million residents that has more than 32 million visitors per year, demand for tourist accommodation has sent rents soaring. Everyday shops are being replaced by souvenir stands and bike rental shops. The backlash has been fierce there — last July masked protesters attacked a tour bus, slashing its tires and writing “Tourism Kills Neighborhoods” on the windshield (Leadbeater).

Megan Epler Wood, director of the International Sustainable Tourism Initiative at the Center for Health and the Global Environment at the Harvard School of Public Health, called these cities  “canaries in the coal mine,” suggesting that other cities need to look at what is happening there and plan ahead so that they don’t have the same fate (Sheivachman, Proposing Solutions to Overtourism in Popular Destinations: A Skift Framework). 

In the last two years, much has been written about the phenomenon of overtourism, and many solutions have been proposed and enacted, including limits on home rentals, higher taxes on hotels in city centers, higher fees for airports and cruise ports, more creative marketing, outright caps on visitors and more. But little has been done in a coordinated manner. 

Government entities dedicated to tourism have historically focused merely on promoting their destination to tourists. “The rough estimate is maybe 80 percent of tax money that goes towards tourism in a destination generally goes to tourism marketing organizations, but they’re not management organizations, they’re marketing organizations,” said Epler Wood. “What if you gave 80 percent of all the money to manage the destination?” (Sheivachman, Proposing Solutions to Overtourism in Popular Destinations: A Skift Framework).

For example, NYC & Company, New York City’s official destination marketing agency, has the following as its mission statement: “Our mission is to maximize travel and tourism opportunities throughout the City, build economic prosperity and spread the dynamic image of New York City around the world” (NYC & Company). These efforts have no doubt brought visitors to New York City who have contributed to the local economy, but cities need to focus not just on attracting tourism, but also on managing its effects. 

A new framework for tourism

To manage and harness this growth in the worldwide tourism industry, jurisdictions that currently have offices responsible for promoting tourism should establish a new office, an Office for Sustainable Tourism, that focuses not merely on promoting the destination to potential visitors, but ensuring that local residents benefit from the tourist visits. The mission of this office would supersede that of traditional tourism marketing agencies and instead look at the larger picture. Its mission statement would read as follows: To manage tourism in a way that ensures the maximum benefit to local residents and small businesses, while highlighting and preserving the culture and character of neighborhoods. 

Because the effects of overtourism are so far reaching, touching on housing, small businesses, the natural environment and more, the Office for Sustainable Tourism should have an advisory board composed of government, commercial and nonprofit stakeholders from these relevant areas. Each would bring to the table a different perspective on the effects of tourism and, together, the board members would offer advice and policy and marketing recommendations to the Office for Sustainable Tourism.  

Though the problems in each city, region and nation are unique and will require customized solutions, each office should begin its work by focusing on three broad areas:

  1. Regulate the peer-to-peer accommodation market to ensure housing for locals. Platforms such as Airbnb started out as a way for homeowners and renters to make extra money renting a spare room in their home. Today, Airbnb is a $30 billion company that, in too many cases, has been exploited by companies that buy properties in city centers and turn them into de facto hotels (Shankman). This depletes housing supply for residents, driving up costs and driving residents away from the city center. Many cities have passed laws to regulate this — and all cities should strongly consider laws that would prohibit properties from being rented on such platforms for more than 60 or 90 days out of the year. This prevents people or real estate companies from turning residential properties into hotels and would help restore the platform to its original intent. Most importantly, such a policy would mitigate the often detrimental effects of tourism on the local housing market. 
  2. Protect the commercial center of cities. Amsterdam has become a poster child for the transformation of a city center into a tourist center. Because an increasing – some would say overwhelming – number of businesses in the Dutch capital’s heart are now catering to people who don’t live there, local residents are concerned that their city is turning into a theme park. The city previously banned new currency exchange businesses, souvenir shops and massage parlors within Amsterdam’s innermost region. Now, the city is banning additional categories of businesses that cater to tourists, including bike rental shops, ticket agencies and so-called “Nutella shops” that serve waffles with the hazelnut spread (O’Sullivan).  This solution is extreme — and likely only appropriate for a city center as small as that of Amsterdam — but the problem is real in many cities, and solutions should be considered before the problem becomes out of control. 
  3. Use policy and marketing to spread tourism geographically and encourage tourism that creates jobs for local communities. The previous points should not be taken to assume that tourism has an overall negative impact. Likewise, the mission of the Office for Sustainable Tourism should not be interpreted as one that it is anti-tourism. Part of its mission is to market destinations and bring in tourists. Jurisdictions, however, need to do a better job of diffusing tourists so they are not descending on the same location. The top ten visited countries account for nearly half of all tourist arrivals. Tourism is also unevenly distributed within countries (McKinsey & Company). Jamaica serves as excellent example of a nation that deliberately channeled the economic potential of tourism to where it was needed most. In 2015, Jamaica shifted from “sun, sea and sand” marketing to a “community tourism” focus that highlights unique cultural elements of the island.  Now, for example, the Ministry of Tourism and Entertainment promotes a Jerk Country Tour, where tourists visit a spice garden and factory. This 13-year-old tour company now employs 80 full time staff (McKinsey & Company). Jamaica is not alone: London, Venice and Reykjavik, to name a few, have launched initiatives to encourage travelers to visit areas outside of the most crowded sites. In other parts of the world, including Japan’s Chubu region, South Korea’s Jeju Island and Scotland’s North Highlands, initiatives have been launched to create new visitor attractions as alternatives to nearby overtouristed areas (McKinsey & Company). 

In addition to these three areas, the Office for Sustainable Tourism should consider additional site-appropriate measures, including 

  • limits on visitors, especially to environmentally sensitive sites; 
  • taxes and fees for city center hotels, as well airports and cruise ports, with revenue funding infrastructure investments;
  • efforts to spread tourism to non-peak months or seasons.

“Overcrowding is easier to prevent than to recover from,” according to McKinsey’s Coping with Successreport. “Good tourism management practices and stringent planning are key to the sustainable development of tourism”(McKinsey & Company). The Office for Sustainable Tourism would do just that, employing smart planning and marketing to ensure that cities, regions and nations don’t have to deal with the issues Barcelona, Reykjavik, Venice and others are currently grappling with.   

Conclusion: Tourism offers great potential for the future of work

Barring a great economic downturn, travel and tourism will contribute to economic prosperity across the globe in the coming decades. The travel and tourism industry accounted for 313 million jobs in 2017—roughly 10 percent of all jobs worldwide—with that number predicted to increase to more than 400 million jobs by 2028 (World Travel & Tourism Council). This includes 

  • direct economic activity, such as accommodation, transportation, attractions, and food and beverage; 
  • indirect economic activity, such as the construction of new hotels or the building of airplanes;
  • induced economic activity, such as jobs and spending by those who are employed by the travel and tourism industry (World Travel & Tourism Council).

Over the next decade, travel and tourism is expected to outperform the global economy, contributing around 25 percent of global net job creation and 11.7 percent of global gross domestic product (World Travel & Tourism Council). 

“People in 99 percent of countries in the world are crying out for more, not fewer, tourists,” said Alex Dichter of McKinsey & Company (The Economist). The challenge, however, becomes, how to better manage this growth, and this requires a new vision for the future. The new Office of Sustainable Tourism and the policies it implements will help shape and implement that vision, by working within municipal, state and national governments around the world to build a framework to ensure that their residents benefit and thrive as more and more people — perhaps two billion per year in another decade or two — partake in the joys and benefits that travel has to offer. 

Works Cited

Ali, Rafat. “The Genesis of Overtourism: Why We Came Up With the Term and What’s Happened Since.” Skift August 2018.

Leadbeater, Chris. “Anti-tourism protesters in Barcelona slash tyres on sightseeing buses and rental bikes.” The Telegraph August 2017.

McKinsey & Company. “Coping with success.” 2017.

NYC & Company. About NYC & Company. n.d. December 2018. <https://business.nycgo.com/about-us/who-we-are/>.

O’Sullivan, Feargus. “Amsterdam Doesn’t Want Any More Stores for Tourists.” Citylab October 2017.

Shankman, Samantha. “Barcelona Overtourism: Airbnb and Short-Term Rentals.” Skift August 2017.

Sheivachman, Andrew. “Iceland and the Trials of the 21st Century.” Skift 2016.

—. “Proposing Solutions to Overtourism in Popular Destinations: A Skift Framework.” Skift October 2017.

Stringer, NYC Comptroller Scott. “NYC Renters Paid an Additional $616 Million in 2016 Due to Airbnb.” 2018.

The Economist. “Wish you weren’t here: The backlash against overtourism.” The Economist October 2018.

World Travel & Tourism Council. “Economic Impact 2018.” 2018.

World Travel & Tourism Council. “Gender equality and youth employment.” n.d.

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