Over the past few months, there has been a step-change in the push for sustainable business practices and policies on a global scale, thrust into the limelight with the announcement of the United Nations’ Sustainable Development Goals (SDGs).
Travel shout out
The travel industry is mentioned and associated with three of the 17 SDGs (Goals 8, 12 and 14) where travel and tourism is cited as an important sustainable development driver, generating jobs and income for local communities with the aim to reduce negative impacts and maximise the positives such as protecting culture, heritage, and the natural environment.
Sustainability has been a recurring theme throughout the conferences that I’ve attended over the past three months – the Adventure Travel Trade Association’s Global Summit, World Travel Market celebrating its 10th year of its Sustainability Day and the World Bank Group’s Tourism Summit recently in December 2015.
It is common knowledge that tourism demand is already large and will continue to grow apace, with 1.2 billion international arrivals in 2015, and set to rise to 1.8 billion by 2030 in a best case scenario.
Travel is already one of the world’s leading industries with 10% of global GDP, accounting for 1 in 11 jobs worldwide – set to grow to 1 in 9 potentially by 2030. Dr Kim, President of the World Bank has thrown his support behind the cause, where for every US$1 spent in a destination there is a ripple effect of US$3 elsewhere in the economy so the potential benefits are great. However, as Helen Marano, Vice President of the WTTC warned at the WBG Tourism Summit “growth will kill us if we don’t manage it responsibly”.
The travel industry is not above reproach and there is still a lot of hard work to be done to ensure that the economic and social benefits transfer to local destinations in a fair and responsible way.
UNEP reports that leakage from tourism expenditure is as high as 40% to 50% for emerging economies, and around 10% to 20% for advanced economies, where leakage refers to the tourism revenue that is repatriated. In terms of revenue flight, it runs into billions, with an estimated US$300 billion being lost to destinations. Common causes of leakage include airfares, taxes, wages and imports. Unfortunately the countries that would benefit most from tourism revenues are the most exposed to revenue flight.
For all-inclusive package holidays, the direct amount left in the local destination is even smaller, where leakage is reported to be 80% or more. For travel operators like TUI, the all-inclusive offer will be increasingly difficult to justify once the SDGs come into force.
Leakage from Inbound Tourism Receipts US$ million 2015
Source: Euromonitor International from UNEP and UNCTAD
Call to action
Some destinations are already taking direct action including outright bans on visitors, quotas, restrictions and preventive measures. Cillian Murphy, Chair of Loophead Tourism, Ireland mentioned that they’ve taken the approach of ensuring a sustainable community and that determines tourism development, so they’ve banned tour buses at their main heritage site, actively dissuading day trippers, preferring higher spending longer-stay visitors.
The travel industry and its global bodies have until 2017 – the official international year of sustainable development – to agree on the necessary tools and metrics to ensure that they can deliver their promises. It will also be necessary to protect the nomenclature to ensure that terms like “sustainable” and “local” do not become vacuous. The travel industry may need to follow the same certification path for labelling as the food and drinks industry did with “organic” to preserve the value of such terms and guarantee standards.