From Local Businesses to Worldwide Ecosystems: A Global Perspective on Tourism’s Influence
With international tourism expected to surpass pre-pandemic levels in 2024, Dr. Michael Froehls shares his thoughts on the importance of a global mindset and global tourism as a powerful economic force.
When we think about tourism, what first comes to mind is our own travel — upcoming summer vacations, our complaints about high air and hotel fares, and when and where to finally spend our dream vacations with our spouse. We might also notice the recovery in tourism numbers after the dry spell of the Covid years. But tourism is so much more than our own little universe. It is an economic force, full of economic and social benefits.
A good start is looking at different kinds of tourism — fun and sun, medical, volunteering, learning (e.g., languages), event-based (think weddings in the Caribbean), religious (like hiking the St. James Way), eco-tourism, business conventions, sports (e.g., biking, diving), and many more. Each sector allows specialization of local service providers and the creation of its own global eco-system with international marketing, sourcing of foreign tourists, and business verticals (e.g. bikes, bike transport, bike tours, bike magazines, biker friendly hotels).
We can also look at the origin of travelers. There you have a long history of travel by Europeans, for example, and over the last decades the explosive growth of the Chinese tourist. You might have hotels in Greece targeting just Scandinavians or exclusive group tours for Japanese travelers. Whatever your local hospitality business is, you need to respect language needs and manage the intersection of different cultural norms. No wonder that hotels employ foreign, often multi-lingual staff. Preparing your tourist business for different international travelers creates a derivative demand for consultants, translators, and cultural coaches.
The direct economic benefits of tourism are easy to see — employment in airlines, hotels, and restaurants. What about infrastructure? Somebody needs to build hotels, put furniture in, and train staff. Somebody builds the airplanes and manages the airports. Then there is technology and innovation in dealing with tourists as you can see from the transformation to automatic check-in processes to the modern comfort of using Uber and AirBnB. Thus, the US traveler to Mexico supports all the local and foreign companies that have been involved in getting her there and having a great time.
Let’s not forget about secondary benefits. Often associated with gentrification or what some call the “path of progress”, tourism can be part of a vicious cycle of economic local advancement that benefits local communities beyond employment. Local crime rates might go down due to the presence of tourists and the government now having an interest in creating a safe environment to not endanger their tax revenues. Yes, tax revenue, as tourists help communities and the country with tourist taxes and sales / added value taxes on everything they consume. Moreover, when a certain threshold of tourist numbers is reached in a locale, all of the sudden the economics might be right to build a museum or invest in a better hospital. Schools to train locals for jobs in tourism might spring up, from bartender to English as a second language. This in turn will attract even more demand from visitors. A virtuous cycle.
Then there is the newly-found appetite to get long-term tourists in, be it retirees who spend 5 months in off-season in Turkey, or cool coders aka Digital Nomads in Portugal. Many cities and countries have realized that long-term tourism not only brings in money but also fresh business ideas that might lead the start-up of local companies; the mushrooming of start-up cities everywhere is no accidence.
Finally, there are some positive forces at play when it comes to environment and social aspects. Tourists might demand recycling or better treatment of animals and children, thus affecting change in habits. Local providers might use better pay for women or sustainable buildings in their marketing efforts, thereby differentiating themselves from the competitions, again creating a virtuous cycle. In countries like Peru with its rich cultural heritage, tourists might help the local (re-) appreciate and guard their priceless cultural treasures, thereby leading to conversation efforts benefitting all of mankind.
It would be incorrect to deny that tourism can have its downsides, just witness the housing shortages in some cities caused by an imbalance of short-term rentals and affordable rentals for locals. But these negatives, more a question of how to distribute the winnings of tourism and to ensure sensible regulations for the various stakeholders, should be manageable. In fact, these issues can create their own business opportunities like new housing concepts (tiny homes, co-living, innovative senior citizen housing)
