Post | 16 Nov 2021

Why sustainable tourism does not necessarily mean more inclusive tourism

Jessie Smith

Economist, Tourism Economics

As the tourism industry emerges from the COVID-19 pandemic there are clear opportunities for change. But while the financial benefits of tourism are well documented, the wider social and environmental agendas provide diverging perspectives on how the sector should respond to this opportunity.

From the environmental perspective, there are calls either to limit traveler volumes or to increase the efficiency of transport reducing the impact per passenger. Over the longer run the industry focus is on the latter to retain activity. The UK Government’s recent publication of its Net Zero Strategy echoes this, with a heavy focus on R&D opportunities. But limits or increased tariffs may be imposed in the nearer term to prompt behavioural change. This almost certainly jeopardises employment, particularly in a sector hard hit by the pandemic, so justifying any policy change on the basis of social welfare should be considered with caution.

At present, social responsibility regarding environmental damage due to tourism is at the discretion of travelers. Carbon offset options have been popular with airlines to meet traveler expectations to date. The appropriate carbon price level is uncertain, but with CORSIA, the global carbon offset scheme launched by ICAO in 2016 coming into effect for the first time this year, determining a single price of carbon is getting closer. (See the recent APF work incorporating carbon prices here). Given that France and Austria have banned domestic flights where alternative transport exists, COP26 and its aftermath will attract much attention as to whether volume-limiting measures (through restrictions or price mechanisms) or increasing the efficiency of aviation is the preferred action in both the short and longer term.

It is important to consider these climate decisions in the context of a travel industry that accounted for 1 in 4 new jobs over the past five years. COVID-19 has obviously had a devastating effect on many reliant on the sector. Unsurprisingly, island destinations have the greatest tourism reliance, supporting 53% of the Maldives’ employment, for example. This is true even among more diverse developed economies—Iceland, and Greece, for example, both rely on tourism for roughly one-fifth of their national income.

In addition, the people most negatively affected by COVID-19 tend to be those most reliant on the sector for employment. Tourism disproportionately employs women, youth, and minorities. McKinsey found women’s jobs to be 1.8 times more vulnerable to the crisis than those held by men, due to pre-existing inequalities. Limiting tourism volumes further threatens these jobs.

Although the tourism industry often provides a foot in the door and an income for those who might struggle to find employment elsewhere, the sector sometimes fails to fully develop these individuals. There is a need to develop training and upskilling opportunities directly aimed at the sector to ensure that the wider benefits of development can be fully realized.

Pressure for improvements to the tourism model are nothing new, and making difficult decisions about climate change is essential. However, limiting volumes, especially in the short term, could be detrimental to those employed in the sector. Alternatives might include targeted policies or encouraging geographical dispersion of visitors, which too would combat problems of over-tourism as well as more widely distributing the benefits of tourism for a more sustainable future.

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