SUSTAINABLE TOURISM, ECONOMIC DEVELOPMENT AND QUALITY OF LIFE: AN IMPOSSIBLE MIX?

1
SUSTAINABLE TOURISM, ECONOMIC DEVELOPMENT AND
QUALITY OF LIFE AN IMPOSSIBLE MIX?

• Professor Larry Dwyer
• University of New South Wales, Australia
• Faculty of Economics, University of Ljubljana
• University of Zagreb
• President, International Academy for the Study of
  Tourism

2
Background

• Worldwide, tourism is associated with large
  growth and optimistic forecasts
• growing evidence that tourisms continued
  expansion is
• producing diminishing returns to providers and
  host communities that rely on volume growth to
  compensate for yield declines
• generating increasingly adverse social and
  environmental costs
• Despite huge descriptive and prescriptive
  literature highlighting best sustainability
  practice, things seem to be getting worse.
• Globally, the industry is not implementing
  strongly enough the measures necessary to reduce
  adverse impacts of tourism development
• This situation of profitless volume calls into
  question whether the benefits to destinations of
  continued tourism growth outweigh the costs
• raises concern that tourism has reached a
  tipping point of irreversible decline in
  quality (Pollock 2012).
• According to Pollock (2012), we have reached a
  Fork in the Road, where The Road to Decline
  meets The Road to Rejuvenation.

3

• Is Tourism at a tipping point?

4
Content of Presentation

• Identify key characteristics of the current
  mindset responsible for increasing costs (private
  and public) associated with tourism industry
  expansion globally (Road to Decline)
• Identify common elements of an alternative
  paradigm, contrasting its features with those of
  the established paradigm (Road to Rejuvenation)
• Discuss the implications of the new mindset for
  the attitudes and behaviour of major stakeholders
  in tourism
• Address some challenges associated with
  implementing strategies for tourism development
  consistent with the new paradigm
• Conclusion Sustainable tourism, economic
  development and quality of life is difficult to
  achieve but not impossible
• various enablers must be put in place

5
A Fork in the Road

• The Road to Decline
• The Road to Rejuvenation

6
Road to Decline

• The Road to Decline involves business as usual,
  saluting while the ship sinks.
• Despite the adoption of sustainability practices
  worldwide, (CSR, TBL etc), there is no indication
  that tourisms problems globally are being
  solved.
• Such practices simply inch firms toward reducing
  their negative impacts, and focusing on becoming
  less unsustainable, rather than operating
  more sustainably.
• the expansion of tourism globally means that the
  absolute volume of negative impacts will continue
  to increase.
• The attitude change necessary to support
  energetic and passionate implementation of
  sustainability practices seems to be more of an
  elusive ideal so long as the current mindset
  prevails.

7
Road to Rejuvenation

• Road to Rejuvenation involves a more serious
  effort on the part of all tourism stakeholders to
  adopt sustainability practices.
• this road is traversed by those stakeholders who
  have a different mindset from that which has
  dominated tourism firm strategies, destination
  planning and tourism policy.
• most initiatives associated with sustainable
  practices operate within the same mindset or
  paradigm that is responsible for ongoing
  generation of the adverse impacts in the first
  place.
• tourism stakeholders must expose the unexamined
  assumptions that have guided their behaviour and
  to take more responsibility for their actions.
• need for a paradigm shift whereby a new
  Sustainability Model replaces the mindset that
  underpins the destructive practices associated
  with tourism growth.

8
The Established Mindset for Tourism Development

• Called the Industrial Model (Anna Pollock) or
  Production Model (TII, 2012)
• provides the current mindset underpinning
  tourism development/research
• It is applied with enthusiasm in developed and
  emerging markets worldwide
• It underpins development of mass tourism
  globally
• Its implicit adoption is the underlying cause of
  tourisms negative impacts
• Characteristic Features
• Anthropocentric Ethic
• Product Maximisation
• Growth oriented/exploitative
• Product fixated
• Price
• Place
• Promotion

9
Anthropocentric Ethic

• The view that the resources of the earth are
  solely of instrumental value for human use, their
  value limited to the pleasure and profit they
  bring to humans
• drives tourism development word-wide
• influences the content of various environmental
  codes of conduct
• responsible for exploitation of nature, severe
  environmental degradation, global warming, loss
  of biological diversity etc.

10
Profit Maximisation

• A business firms purpose is to maximize returns
  to its shareholders-, firms are only responsible
  to their shareholders and not to society as a
  whole (Freidman)
• firms attempt to maximize profits with little
  thought to the costs experienced by other
  stakeholders (resource depletion, congestion,
  pollution, etc)
• initiatives such as CRS, TBL are treated as
  costs
• businesses have short term decision making
  horizons
• implicit assumption that it is (exclusive) role
  of government to address market failure

11
Growth Oriented/ Exploitative

• implicit assumption that the market requires
  increasing and unlimited economic growth
• underpinning this ethic is the myth of super
  abundance of infinite resources in a finite world
  
• eg. in WTTC Blueprint for New Tourism purporting
  to address sustainability issues, tourism growth
  is lauded as an important goal for all
  destinations
• Growth becomes exploitative
• linked to profit-maximisation assumption and
  short term business goals
• linked to anthropocentric ethic
• linked to economic impact analysis to allocate
  resources efficiently
• linked to failure to price goods and services
  correctly according to social costs and benefits
  (producers and consumers get wrong price
  signals)

12
Product Fixated

• Tourist experiences are less important than
  product creation and sale to customers.
• firms see themselves as producers who assemble,
  operate, package and price various travel
  products through complex value chains and
  distribute them via distribution channels
  involving multiple intermediaries
• firms seek economies of scale
• mass tourism
• helps to explain the sameness, uniformity and
  mediocrity associated with tourism offerings
  worldwide.

13
Price

• Products priced according to financial or
  private costs not social costs
• social and environmental costs regarded as
  externalities and not factored into price
  determination
• generates various market failures from the
  over-production and over-consumption of such
  goods and services.
• we destroy the beauty of the countryside because
  the unappropriated splendours of nature have no
  economic value. We are capable of shutting off
  the sun and the stars because they do not pay a
  dividend (Skiedlsky, 20091).

14
Place

• Established paradigm views space as real estate
  to be carved up and enhanced with amenities and
  infrastructure
• The Place is perceived to be less important than
  the Product
• Resident sense of place regarded as irrelevant
• Minimises role of interactive host community in
  generating tourism experiences

15
Promotion

• product fixation and financial cost
  pricing fashion tourism promotion.
• firms position and brand their products in the
  marketplace, identifying tourists not as people
  but as market segments to be targeted and
  persuaded to purchase a product at the best price
  the supplier can achieve
• ideal tourists are those willing to pay more
  than others to enhance sales and profits.
• As seen in the mission statements of DMOs
  worldwide, expenditure per day or per trip is the
  most common preferred attribute of the targeted
  tourist.
• little recognition that higher visitor
  expenditure is associated with higher
  environmental costs or that expenditure measures
  per se ignore the social and environmental costs
  and benefits associated with different visitor
  market segments.
• ignores issue of who is the ideal tourist?

16
Tourism will continue to grow worldwide

• World Economic Growth. The UNWTO (2002) projects
  tourism to grow at 4.1 annually at least to
  2030, fuelled primarily by economic growth
  internationally.
• a dynamic world economy creates the economic
  basis for continued growth in domestic and
  international tourism worldwide, as the new
  wealthy seek new experiences.
• as incomes grow, people shift their
  discretionary expenditure towards experiences as
  opposed to products, including tourism.
• World Population is growing at 1.14 pa.
• world population is expected to reach 9 billion
  by 2040, and 11 billion by 2100
• more people, a bigger world economy, means more
  tourists

17
Tourism will continue to grow worldwide

• Demand side
• increased longevity
• increasing urbanisation
• higher standards of health care
• changing work patterns with more flexibility of
  travel plans
• wider spread of education
• migration
• stress management through holiday escapes
• changes in peoples values and needs,
  aspirations.
• Supply side
• developments in ICT and transportation
• deregulation and liberalisation of air transport
  and open skies policy
• tourism is now a serious development strategy for
  the less developed world, with the support of
  institutions such as the World Bank and
  International Monetary Fund
• globalisation of social networks will drive
  further growth of tourism and travel

18
Is Tourism Successful? Yes if its only about
numbers!!!
19
What the Graph Doesnt Show

• Volatility
• Net revenues
• Net benefits
• Diminishing returns
• Value retention in the host community
• Concentration of wealth
• Social and Environmental degradation

90 of demand factors outside of the control of
anyone in tourism
20

• Can we handle another 400 million tourists in
  just 6 years?

How will we handle congestion?
How will we handle waste?
How will we handle emissions?
How will we manage our thirst for water and land?
How will avoid residents backlash?
How will we protect vulnerable people and
cultures?

• see?

21
Continuing along the Road to Decline?

• Given the forces that underpin continued tourism
  growth the business as usual approach to
  tourism development can be expected to lead to
  more adverse environmental and social impacts
• There are counteracting forces, however
• Changing Consumer Values
• Changing Business Values
• Changing World Values
• - - - But are they enough?
• A new Paradigm is needed - - - a new way of
  internalising the responsibilities of tourism
  stakeholders

22
New Consumer Values

• a new and growing demographic of individuals are
  values aspirational
• ethical consumerism places a higher value on
  healthy living, environmental and social justice,
  and ecological sustainability
• aspirational consumers make purchase decisions
  based on total value not lowest price, seeking
  meaningful experiences rather than more things
• willing to pay more for products with social and
  environmental benefits, to buy from, and invest
  in, responsible companies
• aspirational consumption is not a superficial
  change in consumer preferences but reflects much
  deeper more radical shift in worldview (2009
  Conscious Consumer Report).
• implies need for different tourism products,
  different services and experiences and different
  operator strategies.

23
The NEW Consumer
24
New Business Values

• Rise of Conscious, Responsible business
• Hybrid organisations are changing the notion of
  what a firm is and does, characterised by their
  emphasis on
• driving positive social/environmental change as
  an organizational objective
• attempt to generate net benefits to society
  rather than (just) company profits
• create mutually beneficial relationships with
  stakeholders
• mission statements characterised by higher
  purposes that serve, align and integrate the
  interests of all their major stakeholders.
• sustainability based organizational values,
  long-time horizons for slower growth, and
  positive leadership
• sustainability outcomes built into business
  models, rather than as optional extras.
• Two types of justification support this wider
  view of firms responsibilities.
• Ethical perspective. Its the right thing to
  do
• Pragmatic perspective. Its good for profits

25
Rethinking Business Values
26
Changing World Values (from World Values Survey)

• Traditional values emphasize the importance of
  religion, parent-child ties, deference to
  authority and traditional family values. People
  who embrace these values also reject divorce,
  abortion, euthanasia and suicide. These societies
  have high levels of national pride and a
  nationalistic outlook
• Secular-rational values have the opposite
  preferences to the traditional values. These
  societies place less emphasis on religion,
  traditional family values and authority. Divorce,
  abortion, euthanasia and suicide are seen as
  relatively acceptable.
• Survival values place emphasis on economic and
  physical security. It is linked with a relatively
  ethnocentric outlook and low levels of trust and
  tolerance
• Self-expression values give high priority to
  environmental protection, growing tolerance of
  foreigners, gays and lesbians and gender
  equality, and rising demands for participation in
  decision-making in economic and political life.

27
(No Transcript)
28
World Value Survey Findings

• transition to an industrialised and
  post-industrial knowledge society causes
  countries to move diagonally in the direction to
  upper-right corner
• multiple trends towards human empowerment
  converge in giving people control over their
  lives.
• most important among these trends is the spread
  of emancipative values, which emphasize free
  choice and equal opportunities.
• emancipative values involve priorities for
  lifestyle liberty, gender equality, personal
  autonomy and the voice of the people.
• emancipative values change peoples life
  strategy from an emphasis on securing a decent
  subsistence level to enhancing human agency.
• as the shift from subsistence to agency affects
  entire societies, the overall level of subjective
  well being rises
• the emancipative consequences of the human
  empowerment process are not a culture-specific
  peculiarity of the West.
• their role in tourism development seems to have
  been completely ignored
• ,

29
Wanted- - - a new paradigm for tourism research
and practice

• tourism development based on the standard
  mindset, is sowing the seeds of its own
  destruction (Pollock 2012, TII, 2012)
• the established paradigm is demonstrably
  failing.
• internally, as its driving assumptions do not
  reflect current attitudes of progressive thinkers
  and also inconsistent with the views of growing
  numbers of tourism stakeholders.
• externally, as its implications for tourism
  development and policy register increasing
  concern.
• BUT - - the types of New Values identified above
  can provide the foundation for a new
  sustainability mindset or paradigm that
  involves a fundamental shift in values and
  beliefs, needs to be applied by hosts, guests and
  residents

30
New Paradigm for Tourism Research and Development

• New Sustainability Model calls for
• Anthropocentric ethic replaced by Environmental
  ethic
• Profit replaced by Benefit
• Growth/exploitation replaced by Preservation
• Product fixation replaced by People fixation
• Price replaced by Value
• Place replaced by Landscape
• Promotion replaced by Pull

31
Environmental Ethic

• Environmental ethics recognize and takes
  responsibility for the impact of human activity
  on natural systems and habitat
• extends the traditional boundaries of ethics
  from solely including humans to including the
  non-human world.
• emphasises human responsibility to nature and
  the remote future and affirms the value of
  protecting, conserving, and efficiently using
  resources that the earth provides.
• Three main types of EE
• Enlightened (prudent) Anthropocentrism
• Biocentrism
• Ecocentrism

32
Three ethical worldviews
33
Prudential Anthropocentrism

• affirms that our moral duties towards the
  environment are derived from our direct duties to
  its human inhabitants
• advocates the wise use of global natural
  resources to ensure the sustained yield of those
  resources in perpetuity
• Prudent Anthropocentrism dissolves the People
  Vs Nature formulation that impedes communication
  by tourism stakeholders
• Prudent Anthropocentrism is necessary for
• Cost Benefit Analysis of planning/investment
  options
• Codes of conduct
• Responsibility Principle Access to
  environmental resources carries attendant
  responsibilities to use them in an ecologically
  sustainable, economically efficient, and socially
  fair manner.

34
(Net) Benefit

• Operator level
• net benefit includes the notion of higher
  returns to all stakeholders
• social and environmental impacts of firm
  operations can be built into firms business
  models,
• Destination level
• success of destinations must be redefined from
  volume of trips/expenditure to net benefit
  generated (Economic yield Vs Sustainable Yield).
• economic impact analysis too narrow a basis for
  assessing effects of tourism planning,
  development and public policy
• economic modelling minimally should estimate
  changes in economic welfare

35
Preservation

• Preservation encompasses environmental
  sustainability, social justice and cultural
  rejuvenation
• hybrid organizations consider that nature
  provides system-wide value that benefits society,
  and consider its integrity as a worthwhile
  pursuit
• Protective behaviour towards social and natural
  resources can be underpinned by the ethic of
  prudential anthropocentrism.
• not morally right for tourism providers to
  simply exploit landscapes, ecosystems, cultures
  in order to sell services to visitors.
• it is in the hosts best interest to become
  proactive champions, stewards and custodians of
  the natural environment and cultural context.

36
People

• instead of starting with a product we start with
  people and their experiences
• tourism isnt about objective things that can be
  produced but about experiences that can only be
  had by the person having the experience in a
  particular place
• as its all about people meeting, serving,
  taking care of, and entertaining other people
• the primary unit of activity is a relationship
  not a transaction.
• connectedness and interdependence are
  emphasised.
• guest is not seen as object, segment to be
  exploited or processed but respected as
  co-creator of value

37
Value

• Prices must cover total costs (financial plus
  social) associated with any tourist activity
• Resources should be valued at their TEV (use
  plus non use value)
• value of externalities should be factored into
  price
• overcomes boundary problem, looking at narrow
  range of impacts, thinking in silos
• operators should pay for many of the ecosystem
  services on which their business depends (user
  pays).

38
Landscape'

• Tourist destinations are places valued,
  celebrated, expressed and experienced
• emphasis on PLACE provides opportunity to
  sustain value because every place is unique.
• Tourist destinations are akin to Protected
  Landscapes
• need to recognise the critical links between
  nature, culture, and community for long-term
  sustainability of conservation.
• confirms that stewardship depends on people and
  recognises the importance of an inclusive,
  participatory, and democratic process for
  accomplishing conservation.
• implies greater responsibility for host
  communities

39
Pull

• PULL relates to the biggest challenge most
  hosts face on a daily basis
• attracting the right customer
• global connectivity has shifted power from
  producer to consumer and the marketing function
  has turned upside down.
• The passion of all hosts (employees, suppliers,
  residents) can combine to Pull in (attract) the
  kind of guest who will most value what is on
  offer (searchlight not floodlight)
• the challenge is to attract the right customer
  the one who truly values what the provider has to
  offer. The ideal tourist

40
OK - - - where to now?

• The above represents early steps towards
  creating a robust compelling vision of a better
  alternative and a route to realizing that vision
• We begin by defining a set of actions that
  characterise responsible behaviour by key tourism
  stakeholder groups

41
Consequences for major tourism stakeholders

• The Responsible Operator
• The Responsible Tourist
• The Responsible Government
• The Responsible Host Community

42
Responsible Operator

• Integrative integrates ethics, social
  responsibility, and sustainability practices into
  core business strategies
• Higher Purpose performance is judged by social
  and environmental as well as financial criteria.
• Stakeholder orientation creating mutually
  beneficial relationships (financial, social,
  environmental) with all stakeholders attempt to
  involve stakeholders who are in alignment with
  the core purpose and values of the company.
• Healthy Cultures organizational cultures
  manifest a strong sense of community with high
  levels of employee participation in decision
  making and the sharing of ownership and profits.
• Socially Responsible Investment integrates
  social, environmental, and ethical considerations
  into investment decision-making - exerts pressure
  on corporations to behave responsibly
• Customer Relationship Marketing sustaining
  trusted relationships with all stakeholders by
  listening, dialogue, collaboration and
  co-creation.
• Conscious leadership seek to diffuse acceptance
  of their business model throughout the
  institutions and markets in which they operate.
  Prosletisers, Evangelists

43
The Responsible Tourist

• greater social, cultural and environmental
  awareness regarding tourisms impacts.
• wants to learn and grow as a result of travel,
  with experiences that change, transform and
  enrich
• more responsible behaviour to nature and humans
• prefers to deal with environmentally and
  socially responsible operators
• recognises that health, happiness and well being
  cannot be achieved exclusively through
  acquisition of material goods
• increasingly seeks quality over quantity and
  experiences over products
• increased potential for tourist codes of conduct
  tailored to particular destinations

44
Responsible Government 5 functions of DMO

• Marketing function creating awareness of
  destination, brand, image
• success of destinations must be redefined from
  volume of trips/expenditure to net benefit
  generated (Sustainable Yield). Importance of Pull
  of ideal tourists. Creating community pride in
  respect of tourism industry (internal marketing)
• Development function robust tourism industry
  generating new income, employment, and taxes
  contributing to a more diversified local economy
  
• need internalisation of a sustainability ethic
  with wider set of driving values community
  consultation
• Assessment function project and policy
  evaluation
• must go beyond impact assessment CBA, EIA full
  cost allocation longer planning horizons
  precautionary principle identifying gainers and
  losers
• Coordination function effective governance with
  coherent policy framework to guide and drive
  action and appropriate bodies to implement
  policies.
• DMO must value community consultation
  facilitating a visioning process to imagine what
  they would like their community to be.
• Protection function Safeguarding, rejuvenating
  and interpreting the elements of a place that
  make it unique and attractive and that sustain
  its perceived value
• the destination as a Protected Landscape

45
The Responsible Host Community

• Communities can identify what is really valued
  or desired and including those elements in the
  shared image of their community.
• Communities must ask what type of tourism do we
  want (if any)?.
• Hosts (local residents) assume a broader range
  of responsibilities that include Safeguarding,
  protecting, rejuvenating, and interpreting the
  elements of a place that make it unique and
  attractive and that sustain its perceived value.
• Hosts can also be called upon to express what it
  means to their community to act as host (resident
  marketing of destination)
• Local residents should act as welcoming hosts
  given the potential disbursed benefits of tourism
  activity

46
How to Change?

• Bottom up (demand side). Change will come from a
  collective effort conducted at the grassroots
• in communities where tourism hosts commit to
  ensuring that their economic activity benefits
  all stakeholders
• where tourism stakeholders take responsibility
  for minimizing the environmental footprint and
  work actively to ensure that local cultural
  values are maintained.
• spread by connections and community and
  accelerated by passion and enthusiasm
• Tourists themselves have an important role to
  play
• Top down (supply side)
• tourism providers become effective agents of
  change and stewards of all that the local
  community value.
• governments lead from above

47
Conclusions

• Business as Usual in tourism development implies
  taking Road to Decline
• New ways of thinking are required if tourism is
  to develop sustainability with positive
  contribution to peoples quality of life (Road to
  Rejuvenation)
• Some positive trends are evident
• changing consumer values
• changing operator values
• changing world values
• Consistent with these changing values tourism
  needs a change of paradigm
• Different elements of the new paradigm have
  relevance for different tourism stakeholders
• We attempted to build a profile of the
  responsible operator, the responsible tourist,
  the responsible government and the responsible
  host
• Only if all stakeholder groups act consistently
  based on the identified values will economic
  development be compatible with sustainable
  tourism and quality of life

48

• Thank You
• Hvala