Sustainable tourism, when done well, celebrates cultures, alleviates poverty, empowers women, enhances education, creates jobs, improves the wellbeing of local communities, and conserves natural resources. This is a cornerstone of Solimar International’s work. Understanding these transformative effects is mostly intuitive. For example, sustainable tourism development often showcases local culture and employs local people in doing so—this alleviates poverty and increases the wellbeing of the community, which in turn creates revenue that can be reinvested in education. The association between sustainable tourism development and conservation, however, is indirect and less intuitive. Many people associate any form of development with a bulldozer. So how can sustainable tourism development actually conserve natural resources? The answer involves a bit of economics so hold on tight.
The Economics Behind Sustainable Tourism Development and Conservation
Let us envision a fictitious (and yes, impossible) tropical rainforest in the middle of the United States. A thriving sustainable tourism industry has developed around this rainforest, attracting thousands of people from all over the world. Then reports come out indicating the high probability of a large oil deposit under the jungle. The government begins plans to develop an oil field, but before doing so conducts a cost-benefit analysis. In this situation, the government is a benevolent social planner, therefore accepting or rejecting the project is determined by the equations below; where Bp is Private Benefit, Cp is Private Cost, and Cs is Social Cost.
BP – (CP+CS) > 0 è Accept the Project
BP – (CP+CS) < 0 èReject the Project
The private benefits and costs for the owner of the project (the government in this case) are simply calculated using projections of sales, prices, costs and so on. The social cost, however, is much more difficult to calculate. This is because it is extremely difficult to quantify the indirect benefits of a jungle. A large benefit of a rainforest is the ecological services it provides—crop pollination (bee habitat), maintenance of soil quality, carbon sequestration, conserving biodiversity, providing habitat, etc. New technology and methods to capture these indirect benefits are continually emerging. NASA recently launched a satellite equipped to map the earth’s forests in 3D. These new maps will allow scientists to better estimate the amount of carbon stored in trees and monitor forest degradation.
Again, these ecological services are indirect values. Given there is an established tourism industry that relies on the jungle as an attraction there are also direct values. How much revenue is being generated from the tourism industry? How many jobs? These values can easily be accounted for and calculated into the social cost. Developing sustainable tourism therefore increases the social cost which increases the likelihood of the oil project being rejected and protects the jungle from deforestation.
Real World Examples
Many of the projects that Solimar is involved with aim to develop sustainable tourism around national parks. Take for example, Solimar’s role in developing an eco-lodge to Bale Mountains National Park in Ethiopia. Solimar spent the first months of this project conducting extensive market research and visits to numerous Ethiopian destinations to determine which was most promising for eco-lodge investment. The clear winner was an area outside Bale Mountains National Park because of its pristine natural beauty and relatively low tourism numbers. Building an eco-lodge here taps into the region’s potential. As a result of this project, tourism in and exposure to the Bale Mountains National Park increased, which raised its economic value (social cost) too.
In other projects, Solimar has worked with established sustainable tourism destinations to help promote and market them to the world. An example of this is our Nambia NADM campaign, where we pushed forward an innovative marketing campaign focused on increasing both arrivals from the North American market and the number of North American travel trade that offer tours and packages to Namibia. Again, effective marketing of Namibia as an ecological wonder has increased visitation to the country and in turn brought economic value to the land. Today, over 43% of Namibia’s surface area is under conservation management.