Beyond growth: indicators that reveal the true cost and benefits of tourism
by Kelly Galaski, Travel Foundation Sustainable Tourism Specialist, The Travel Foundation
Much of tourism today continues with a narrow fixation on economic impact, especially growth in arrivals, overnight stays, visitor spending, and the number of jobs. Yet tourism’s impacts are far-reaching and nuanced, affecting the environment, livelihoods, infrastructure, culture, heritage, and individual well-being. With tourism set to double in size by 2050 (see Envisioning Tourism in 2030 and beyond), isn’t it time we started to measure the true cost and benefit of tourist visits to the places and communities that host them? Ask yourself, what does success in terms of residents’ quality of life and their access to resources look like? How do we measure its impact on the environment and biodiversity?
Ultimately, prioritising growth in terms of visitor numbers alone means that local residents are likely to lose out, whether through loss of housing and access to land and resources, overcrowding, pollution, or the destruction of natural environments exacerbated by the impacts of climate change which tourism has played no small part in fuelling. Just ask residents in any number of European cities such as Amsterdam, Barcelona, and Venice, or in areas of exceptional natural beauty such as Borocay, Indonesia, or Cozumel, Mexico. All of these destinations, among several the Travel Foundation has been working with are now taking steps to minimise the impacts of tourism, and serve as useful examples of how destinations can reframe their approach to tourism development.
Embracing a holistic approach to planning that includes Key Performance Indicators (KPIs) across economic, environmental, socio-cultural, and governance empowers destinations to make informed decisions that benefit both visitors and locals alike. Here’s how you can re-think your KPIs to ensure a positive, sustainable future for your destination.
1. Economic: beyond profits
To assess the economic impact of tourism across the destination, KPIs need to go further than capturing the revenue generated to also include the distribution of economic gains. A false assumption that each dollar spent has the same worth leads to many strategies simply aiming to attract the biggest spenders. We need a more nuanced approach that includes an assessment of which spending supports small businesses and has less negative environmental and cultural impacts, as well as which is most reliable and resilient to shock.
A good first step for many will be to understand where there are weaknesses, challenges, and future risks, asking questions about tourism’s benefits to the local economy and businesses, including:
- Does tourism provide decent employment opportunities?
- Is the sector able to attract and retain skilled employees?
- Is there a dependency on limited source markets, tour operators, or products?
- Do local supply chain links exist that support local producers, suppliers, and SMEs?
For example, for a destination where worker recruitment and retention are a challenge, key performance indicators may include a percentage decrease in the employment gap, increased worker satisfaction, and the number of tourism businesses with policies around diversity, fair wages, and working conditions. Early warning signals may include worker shortages and decreased revenues, with emergency signals around business closures.
One organisation striving to broaden the definition of success of tourism in their place is 4VI (formerly Tourism Vancouver Island), which has set itself new social responsibility commitments to communities, environment, cultures, and businesses. Through our partnership with 4VI, the Travel Foundation has been supporting the development of new KPIs, including the percentage of workers making a liveable wage, growth in revenues for cultural tourism experiences, plus the number of such businesses and employees, as well as increased revenues for First Nations communities.
2. Environmental: nurturing nature
There are so many factors to consider for the environment that, at first the task can seem daunting. These include: water use, climate action - including the reduction of greenhouse gas emissions and protection of assets from climate change impacts (see the Glasgow Declaration on Climate Action in Tourism), solid waste management, pollution of air, land and sea, and the conservation of habitats and biodiversity.
Again, assessing strengths and weaknesses, as well as priority areas (including local communities), is a good place to start. For example, the Travel Foundation worked with both Vail and Lake Tahoe to create Destination Stewardship plans, the development of which included stakeholder engagement to identify priorities for action. For Lake Tahoe, this resulted in a focus on the health of the lake and minimisation of litter. Their new KPIs now also include the volume of litter on trails, beaches, and other public spaces, recreationist awareness of the issue, and the financial contribution of tourism to waste management. Similarly, stakeholders in Vail identified climate action and the health of its only watershed and surrounding landscapes as priority areas around which KPIs have been created.
3. Socio-cultural: Empowering Communities
Tourism's influence on local communities extends beyond economic gains, affecting a broader cross-section of society through its impacts on social dynamics, culture, and quality of life. To assess these aspects, place managers can track resident satisfaction, the ability to input on decisions around tourism, local access to services and resources such as local transport and beaches, safety and crime, plus the preservation of cultural heritage.
Following the Great East Japan Earthquake of 2011, Kamaishi City in Japan established a 10-year tourism vision to help the physical reconstruction of the city’s heavily damaged regions and to build back residents’ pride in the place they call home. The plan includes KPIs that measure the percentage of citizens who are proud of their city and aims to ensure both visitors and residents have a greater understanding of Kamaishi’s history and why it is unique.
4. Governance: funding, implementation and monitoring
Effective governance structures are essential to the successful management of tourism’s impacts. This includes the existence of, and adherence to, plans and strategies, as well as funding to address any negative impacts and opportunities for residents to input to decisions with transparent processes. KPIs based around these aspects could include implementing a destination stewardship plan, and measuring the amount raised for these activities and the percentage of funds specifically allocated to addressing negative tourism impacts. Warning signals may be set around lack of funds, diminishing resident satisfaction and visitor experience, and the lack of collaboration across stakeholders.
A vital aspect of effective governance is the equal participation from public and private sectors and civil society organisations and a structure that reflects the diversity of destination communities. In New Zealand, seven organisations across the public and private sectors, including Air New Zealand, Tourism New Zealand, and New Zealand Māori Tourism have come together to create Tiaki, a Māori word loosely meaning to care, conserve and protect. It is a collaborative movement, inviting everyone to look at the world through an indigenous lens, form a deeper connection with place, and to reflect this in our attitudes and behaviours. The country also has KPIs based on Māori principles across economic prosperity and wellbeing, shared respect and care for others, guardianship/sustainability and a sense of family and belonging.
Several destination stewardship initiatives in the United States have formed destination stewardship councils that include a wide range of private and public sector representatives, including DMOs, conservation agencies, land managers, planners, and more. Lake Tahoe’s destination stewardship council committed to funding implementation upon publication of its plan.
A broader set of measures will not only help to track progress and evaluate effectiveness, but can also help to reveal new stories about the place that enrich the lives of residents, engender a sense of pride and help to attract visitors that will support goals. An inspiring example can be found at Cuidadores de Destinos, a Chilean organisation focussed on supporting destination stewardship, which has developed new ‘Wonderful KPIs’ for tourism based on visioning workshops with communities. Resulting KPIs include the percentage of ambient sounds that belong to birdsong, the number of women who feel safe walking home at night, and the number of public decisions that residents were part of.
Leading destinations are already showing how success can be redefined, creating benefits for both current and future generations of residents and visitors alike. As the tourism sector navigates the challenges of climate change and strives for equitable outcomes for resident communities, broader KPIs can serve as a compass, guiding destinations towards a more just, profitable and resilient future.
For example destination KPIs, see the following: