Enjoy a 15% discount on all purchases until the 31st of March 2023 using the promo code EOFWEB22 at check out!

Services Our expert insights reveal the key consumer and industry trends shaping global services, including best-in-class innovations in technology, customer experience and sustainability to thrive in dynamic times.

Calling Out Tourism as a Means to Sustainable Development

1/11/2016
Euromonitor International Profile Picture
Euromonitor International Bio
Share:

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.

Strong credentials

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”.

Stark reality

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

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.

Interested in more insights? Subscribe to our content

Latest Insights

Loyalty and the New Normal

Nadejda Popova 16 March 2023

Shop Our Reports

Car Rental: Top Six Industry Trends

This report examines the global car rental industry, providing analysis on market sizes, brand and company shares, growth trends over the review period and…

View Report

Financial Cards and Payments in Western Europe

Electronic direct/ACH and card payments continue to take share from paper transactions in Western Europe, while mobile m-commerce continues to be the most…

View Report

Financial Cards and Payments in Latin America

Although it is not the case in Brazil, the region’s biggest market, cash is still the leading payment method in many Latin American countries. However,…

View Report
Passport Our premier global market research database with detailed data and analysis on industries, companies, economies and consumers. Track existing and future opportunities to support critical decision-making across all functions within your organisation Learn More