Tourism – It’s More Than Just A Numbers Game

Shannon Guihan | May 1, 2017

The business of travel and tourism is huge. A lawyer won’t tell you that and a banker won’t know it. But it’s true. The World Travel & Tourism Council (WTTC) is the foremost tourism organization dedicated to the business of travel, and they monitor the size of the tourism industry on a country by country basis, annually. Their ‘Economic Impact’ report qualifies travel by the revenue generated, jobs created, the number of tourists visiting a country and the industry’s overall GDP contribution.

Last month, the WTTC told us that the overall contribution to global GDP was 10.2%. That’s US$7.6 trillion. Travel and tourism jobs now represent 1 in every 10 jobs on the planet.1

There’s no question that tourism numbers worldwide are huge. But measuring numbers on their own is a sure way to miss other factors that are, arguably, more important in indicating that a destination is on the right path for success.

What’s the percentage of tourism business that are locally owned versus foreign-owned? What kind of development is the destination’s tourism industry encouraging? Or, a question that’s becoming increasingly important to global travel and tourism:

Are there too many people leaving insufficient revenue?

Understanding the Opportunity for Destinations

As the shift from heavy industry to a service based economy continues to happen globally, more and more new and developed destinations are recognizing the economic opportunity presented by the ever-growing tourism industry. Governments, by and large, understand they cannot ignore the staggering movement of people across borders. They recognize that tourism is a job creator and a top service export, that it generates foreign direct investment, employs youth and can significantly contribute to sustainable development and poverty alleviation.

But all destinations are not equal. Destinations, at the basic level, tend to measure success in tourism with a single metric – visitation numbers. This makes sense – visitation numbers are relatively easy to measure, they can easily be tied to direct economic benefit and, most importantly, they justify tourism investment from stakeholders. But visitation numbers tell only part of the story.

Numbers, Numbers

It’s true, tourism begets tourism. Once a critical mass of travellers have been to a destination, its popularity will only grow, and as a destination matures along the destination lifecycle, those figures can reach staggering heights, until saturation occurs, followed by stagnation.

I’m not suggesting that a destination aim for ‘under the radar’. I am suggesting that a destination needs to consider both –

1.    What makes it a unique destination, and

2.    How to carefully develop the destination to protect its unique features

A recent study by Griffith University in Australia identified that nearly half of UNESCO Heritage Sites have no plans in place to address the issues of overtourism. The report is clear in its claim that ‘tourism is seen as a risk factor that threatens both natural and cultural heritage, for example as a result of overuse and physical damage.”

Truly A Case of Less is More – Overcrowding vs. Yield

Stronger yield is good for business, and in the business of tourism a combination of strong yield and good visitor management must be the goal. More dollars per visitor results in fewer visitors required to thrive. We must consider what can be done to manage tourism so that it does not overwhelm its community – Venice, Barcelona, Paris, London, Prague, Rome, Iceland, Machu Picchu, Cancun – where the sheer mass of tourism is considered a problem.

We aren’t the only ones to ask this question, and some destinations are clearly on board. New Zealand is one country that focuses on not only yield, but the distribution of their visitors. Prime Minister and Tourism Minister John Key put it this way, “New Zealand needs tourists who spend more money, rather than just more people through the airport gates.”

The Seoul Declaration on Fair Tourism declared, “More emphasis must be placed on the yield that the city gets from tourism, the jobs and sustainable development created, rather than on simply arrivals and bed nights.”

The Destination’s Responsibility

Strong destination management is the answer, just letting ‘tourism happen’ is a sure path to failure. Governments and destinations need to understand strong, thoughtful tourism management and marketing. In some respect we are already seeing this shift, with the move from away products to experiences (even from mass market players), the integration of residents into campaigns and awareness building, and the acceptance of a sharing based economy.

1)    Know what makes your place a destination

2)    Appreciate the consequences of low-cost airlines stop-over & pricing policies before implementing them

3)    Consider your targets – they are impactful

4)    Community inclusion is integral

5)    Consider available infrastructure today, and how rapid expansion may impact your destination’s community

At the end of the day, a strong correlation between destination promotion and destination management is the surest way to ensure that one does not outpace the other. Smart destination management is not just for planners anymore – it’s time for the marketers to get on board.

For more information on smart destination planning and promotion, contact Bannikin Director Shannon Guihan at shannon@bannikin.com