FINANCING TOURISM FOR PEOPLE AND PLANET

Financing tourism for people and planet is an urgently-needed form of public value creation. Joe Dodgshun, a Berlin-based writer in solutions journalism and brand storytelling reports the latest in sustainable tourism, from the ITB travel convention.

Maya Bay, the stunning Thai inlet made famous as Leonardo DiCaprio’s untouched idyll in “The Beach”, is this summer closing to tourists. In contrast to the movie, the beautiful bay has become heavily prone to overcrowding and coral devastation from boats dropping anchor. It needs time to recover.

Many of our favourite destinations are now, in some ways, suffering from their own success.

On the other hand, the OECD this week underlined tourism’s importance in driving the transition to a green and more socially-inclusive economy and — in presenting at Berlin’s ITB, the world’s largest travel industry gathering — stressed that financing for sustainable tourism development is essential.

Why is sustainable tourism important?

In 2017, there were 1.3 billion international travellers. This is forecasted to grow to 1.8 billion by 2030.

The tourism industry employs one in ten people on this planet, accounts for around one-tenth of global GDP, and is one of the most signficant tools in the world for wealth redistribution.

These travellers represent 1.3 billion chances for us to have a positive impact on the destinations we choose; benefitting their communities, environments, and economies — creating public value and adding legitimacy to tourism business.

But they also come with the opposite potential, and the reality too often features negative impacts on communities, environmental damage, high CO2 footprints, and exploitative resort models where the vast majority of the money flows back into the country where the visitor booked their holiday.

In 2016, two-thirds of international travellers visited just 20 countries, most of these in Europe.

Last summer it manifested in an overtourism backlash from many communities who had had enough, and in the growing trend of tourists struggling to enjoy their holiday among the crush of other visitors.

The upshot? A new industry strategy is needed.

There is can be no sustainable economic growth from tourism if it doesn’t take into account the opinions and needs of the communities that should benefit from it.

Who and what are tourism stakeholders?

The tourism industry is quickly recognising — like all modern industries now must — that host communities and the environment are stakeholders just as important as shareholders and customers.

A fitting example presented at the ITB was the beleaguered Great Barrier Reef.

Research last year estimated it to have a net worth of 56 billion Australian Dollars, including an AU$ 6.4 billion annual contribution to the Australian economy, mostly from tourism.

Having recognised the worth of this unique environment as a stakeholder, the Australian government is investing one billion dollars in environmental protection, research, and indeed sustainable tourism projects.

While it is questionable whether this will have much impact given the country’s fossil fuel policies and devastating global warming-driven bleaching of the reef, such measures are an important step.

Tourism relies on healthy environments and robust communities to attract visitors in the first place, making tourism that takes planet and people into account the only economically sustainable tourism.

Divesting the bad, and then what?

The last year has seen a huge shift in divestment from fossil fuels, as the financial sector reacts to both public opinion and the increasingly high risk of investing into a sector on a slippery slope.

This trend was heartily confirmed this week with the European Commission’s reveal of a sweeping new strategy to boost sustainable finance, reshaping the financial system as a tool for good.

It stands to reason that unsustainable tourism development — i.e. that which can’t prove environmentally and socially-friendly credentials for financing — should and will also be on the chopping block.

Which raises the question, how can divested capital flows be redirected into sustainable tourism?

The OECD report recommends that governments help by creating environmental criteria for public financing and investment, incentivising private investment in resource efficient tourism infrastructure, like low-CO2 transport and energy-efficient hotels, and encouraging responsible business practices.

It will be a collaboration

This could take a range of forms, likely often as public-private partnerships, such as that led by Spain’s State Company for the Management of Innovation and Technologies in Tourism, SEGITTUR.

Also presenting at the ITB, SEGITTUR is spending €60 million on helping Spanish holiday spots to transform into “smart destinations”, including digitisation and improved energy efficiency, plus the increased ability to better understand weaknesses around sustainability and overcrowding.

Such initiatives — and many more, including widespread ecotourism efforts and campaigns helping tourists to travel respectfully: see, Iceland — show a wealth of candidates for sustainable tourism financing.

But this doesn’t mean the finance sector, the tourism industry, and governments have it covered.

What this means is that we all have to ask sustainability questions of our investment managers, our politicians, the companies we holiday with, our own companies, and ourselves — to ensure our investments, from a hotel room, through to tax contributions or massive funds, are sustainable ones.

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