Towards a bright future - four key steps for managing tourism development

Worth $2.4 trillion annually and set to grow to $3.5 trillion by 2027, the travel and tourism sector is in fine health. It accounts for some 10% of global employment and nearly one-in-five of all new jobs created.

Growing middle classes, younger generations who travel far more than their parents, wider awareness of destinations due to social media and downward trends in the cost of air travel are all contributors. So the macro level data is clear. Growth is a given.

How do we plan for the future?

How do we find a balance between using the income tourism generates to grow economies and improve living standards whilst ensuring popular sights don’t become victims of their own success?

The destinations that will win out will be the ones that approach this opportunity in a strategic manner.

Here’s a run down of four key steps for successful tourism development. You can read more detail in the new WTTC & McKinsey&Co report: Managing overcrowding in tourism destinations.

One of the most fundamental problems is lack of useful data. Destinations need to get serious about developing data sets that don’t just monitor tourism numbers but provide the benchmarks for effective forecasting as well.

Encouraging the many players within the sector to share data like occupancy levels, arrivals numbers, seasonal variations and more and developing the expertise to analyse it and find trends are crucial to success.

DMOs (Destination Management Organisations) are particularly important here, as they connect with the entire value chain. They should be defining and then gathering relevant indicators from each party and sharing aggregated statistics. They can also serve as an honest broker, taking the lead in establishing data-sharing agreements that respect confidentiality and information-security concerns.

Remarkable though it sounds, only one-third of natural UNESCO World Heritage Sites have extensive tourism planning in place. And at destination level, there has often been a focus on driving tourism growth without considering the implications in the longer term.

To build a sustainable growth strategy, destinations need to consider a range of challenges and seek input from stakeholders across the sector.

Key questions include:

  • What’s the vision for our destination? How do we want people to perceive it and what do we want to achieve?
  • Who do we want to visit us and why?
  • What is it about our destination that will attract them?
  • What infrastructure do we need to accommodative them and to facilitate their visit?
  • How do we market to them?
  • How do we measure success and adjust our approach if needed?

Tourism touches myriad parts of a destination. Successful tourism management requires that all stakeholders are united under one strategy and none feel marginalised or disadvantaged. The DMO can play a crucial coordinating role here.

As highlighted in the first of our posts about managing overcrowding, Iceland offers useful insights.

Having experienced explosive growth in tourism and the problems that can arise from it, it was held up as an example of overcrowding by some parts of the media.

But the Icelandic tourist board had not stood still.

Prior to the headlines, it had already begun to develop a response. In 2015, it gathered together over 50 stakeholders to create a 2020 tourism roadmap.

From this process, working groups were created to plan for growth. Private sector stakeholders like lodging and tour operators, locally community groups, events organisers, urban planners and more were all included.

The result is a detailed plan for sustainable, managed tourism growth well into the next decade.

If destinations are serious about managing growth, they have to commit proper funds to the process. Local and national government can provide taxpayer funding, but with the focus on cost cutting at many levels of government in the UK and elsewhere, it makes sense to find other sources of funding.

The most obvious source is tourists themselves. Increasing numbers of destinations now levy tourism taxes and use these funds to maintain and develop the destination. This also means funding levels are directly tied to the volume of tourism arrivals. The more tourists, the more funds available to manage them.

Ensuring transparency so that tourists can see where these funds are being spent and finding a balance so the additional cost doesn’t become a disincentive are both important considerations which often get overlooked.

These then are the high level steps that destinations need to take to get serious about sustainable tourism development.

The WTTC and McKinsey&Company report offers more detail and also suggests immediate steps that destinations concerned about overcrowding can take in the short term.

Read the report now >

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