Developing country tourism is not the preserve of middle-income countries. Some of the lowest income countries, such as Ethiopia, The Gambia, and Tanzania, have small tourist flows by international standards, yet depend on international tourism for a quarter to a third of their exports. Mounting empirical evidence shows that such “pro-poor tourism” can transfer significant benefits to local economies and communities around tourist destinations. In these and other low-income countries, tourism can be a considered a mechanism for poverty reduction.
Around the time of the Millennium Development Summit, a small group of researchers coined the term “pro-poor tourism” (PPT).
PPT was based on three assertions:
- Tourism can be pro-poor;
- Tourism can be made more pro-poor; and
- Any type of tourism can be pro-poor.
These simple assertions were a revelation a decade ago. At the time, the development sector tended to see tourism as a private sector activity that had little relationship with poverty reduction, while the commercial tourist sector saw poverty reduction at destinations as the responsibility of others. Ultimately, PPT aimed at putting tourism on the development agenda and development on the tourism agenda. Has this worked?
Behind “alternative” tourism
Analysis by the Overseas Development Institute (ODI) suggests that it is very important for mainstream tourism to develop and maintain tourism/poverty linkages. But from a development perspective, the quest for an “alternative” tourism that benefits local communities by excluding mainstream tourist operators has largely failed. Small-scale tourist interventions are unable to reduce poverty at the scale required by the Millennium Development Goals. Large-scale poverty reduction implies working with large-scale tourist activity. Improvements made by development agencies and governments to the enabling environment for tourism are more likely to be effective if the private sector is involved in identifying problems and articulating solutions.
From a tourist company perspective, PPT can result in rapidly improved profitability. Expanding the tourist sector while spreading the benefits of tourist spending throughout the destination economy is also the most effective mechanism for increasing the scale of benefit flows to the resource poor. This results in a confluence of interest between the tourist industry and the population living around the destination.
Developing countries are littered with well-intentioned community-based tourism and eco-tourism projects which, with notable exceptions, are delivering limited benefits to few people.
The results are in
Where this confluence of interests is recognized, PPT has been successful. An assessment would include its impact on the donor community. Several multilateral donors (notably the World Bank, IFC, Asian Development Bank, and UN), some bilateral ones, and a number of NGOs have provided significant support for PPT projects over recent years. One of the more successful examples has been the partnership between the private sector and NGOs in The Gambia through its International Centre for Responsible Tourism. This initiative linked low-income communities with tourism, and improved the pro-poor impact of tourism in one of Africa’s smallest, and poorest, destinations.
Some researchers still believe—despite the mounting evidence—that the destination impacts of international tourism are almost always negative.
Some key mainstream commercial tourist operators have recognized their responsibility for destination impacts and are seeking to enhance those impacts. The emergence of sustainability initiatives at the major European tourism fairs is evidence of this. For example, the Federation of Tour Operators—the umbrella organization for the largest tour operators in the U.K.—encourages suppliers to respect minimum wage legislation, to create corporate social responsibility and sustainable development structures in mainstream corporations, and to establish sustainability accreditation and award systems for suppliers.
However, there is still a great deal to do before there is consensus among the development, commercial, public, and research domains concerning PPT. In the development sector, some agencies remain skeptical about including tourism projects in their portfolios for a variety of reasons. Among the enthusiastic supporters of tourism projects, like NGOs and external donors, many are still seeking their own alternative to mainstream tourism. Developing countries are littered with well-intentioned community-based tourism and eco-tourism projects which, with notable exceptions, are delivering limited benefits to few people. Developed in isolation from private sector and commercial distribution channels, they lack the client volumes needed for commercial sustainability, and generally fail soon after the supply of concessionary funding dries up, as research has shown.
The view that mainstream tourism should have a prominent place in poverty reduction programs for low-income countries with a competitive tourist sector is probably not even held by the majority in the development sector—let alone a consensus view.
Mainstream tourism has been timid in adopting PPT principles, and its embrace of social and environmental sustainability has been late and piecemeal. With the majority of European mainstream customers being unwilling to pay for more pro-poor holidays, according to industry evidence, mainstream operators have understandably taken destination impacts into account.
Glimpsing the future
An important driver for change has been the flurry of recent mergers and acquisitions that has resulted in some organizations becoming listed on Western stock exchanges. Several outbound tour operators and hotel chains have a market capitalization of $2.6 billion to $5.2 billion, subjecting them to onerous review and reporting responsibilities. Corporate management is aware of the impact of negative stories emerging from developing country destinations. In this context, PPT initiatives can play a strategic role in reducing reputational risk. As tourist companies work in complex environments, they appreciate that positive socio-economic benefits can increase their “social license” to operate.
In the research community too, PPT does not yet play the role it may eventually assume. While there have been many academic articles and several special editions of tourism journals focusing on PPT, researchers concerned with the destination impacts of tourism operate in contested territories. In addition to PPT, many use alternative terms—such as “responsible,” “inclusive,” and “sustainable” tourism. There is no harm in this trend continuing—in fact, it can be helpful, as researchers with similar principles and goals operate under different labels.
Some researchers still believe—despite the mounting evidence—that the destination impacts of international tourism are almost always negative. However, tourism researchers generally have not yet fully encompassed mainstream development economics, the tourist industry, and the general public. This is another change that is anticipated.
Following this reasoning, ODI concludes that the tourism sector in its current incarnation is failing to capitalize on the good news story that tourism may already be benefiting destinations. Where tourism is not yet pro-poor, improving performance can only be achieved with an awareness of the problems and solutions. In the medium term, PPT can improve monitoring of business impacts on development, reduce reputational risk, and increase social licenses to operate in developing countries.
In the longer-term, when most mainstream tourists start to demand enhanced socio-economic performance in developing country destinations, the companies that have anticipated this change in demand will reap significant early mover commercial advantages.
Adapted from “An unconventional but essential marriage: pro-poor tourism and the mainstream industry,” Private Sector & Development, Issue 7, September 2010.