Planeta Forum

[planeta]

Project proposal
Economic Significance of Park Tourism: A Global Perspective

Background

This project is part of an initiative of UNEP/GRID-Arendal and the Secretariat of the Convention on Biological Diversity (CBD), based on the results of a workshop on “Linking Tourism and Conservation: A Finance Initiative for Protected Areas”, organized in May 11-13, 2007, in Arendal, Norway. The overall goal of the initiative is to establish and support mechanisms to secure long term and meaningful funding for the management of the world’s protected area network – consistent with the goals of the CBD– by means of significant support from the tourism sector. This should be in particular relevant to the CBD goal “to achieve by 2010 a significant reduction of the current rate of biodiversity loss at the global, regional and national level as a contribution to poverty alleviation and to the benefit of all life on earth”.

As a follow up to the workshops, three projects were developed:

1. One focuses on identifying and disseminating best practices on the contribution of the tourism sector to protected areas [1];

2. The second proposes to evaluate the economic significance of Park tourism as a means to convince decision makers of the importance of allocating sufficient resources for their protection as assets;

3. And the third will work with resort developers, investors, governments and other players to create optimal conditions for win-win situations where sustainable tourism development leads to the creation, establishment and management of new and additional protected areas.

Their overall objective is to mobilize the industry and governments to set aside tourism revenue streams to finance the implementation of the CBD's Protected Areas programme of Work (as an asset protection strategy). This paper focuses on the second project, on the economics significance of park tourism. Separate concept papers are available for the other two proposals.

Justification

One of the aims of the CBD (in the Programme of Work on Protected Areas, adopted through decision VII/28, see http://www.cbd.int/protected/default.shtml) is the establishment of a representative global network of protected areas. Estimates of the annual cost for the successful management of protected areas in developing countries are on the order of US 1.1 billion to 2.5 billion [2]. The current total turnover of the entire global tourism business is calculated to be in the vicinity of 6 trillion US dollars, and may reach as much as 10 trillion by the year 2010 [3]. Protected areas, particularly national parks, are often one of the main tourism attractions, and the tourism industry is arguably one of the economic sectors interested in well-managed parks that will allow clients to experience nature and enjoy unique landscapes. It is natural, therefore, for stakeholders interested in the long-term sustainability of parks and in the implementation of the CBD programme of work on protected areas, to identify and strengthen ways for the tourism industry to increase its contribution to protected areas overall.

However, research has shown [4] that direct revenues from tourism in parks (through entrance and user fees, for instance) and public investments in park maintenance and management are significantly lower than the economic benefits derived from visitation and tourism. Public and private decision makers often allocate funds for park management that are several orders of magnitude lower than their actual capacity to invest which arose from tourism itself, leading to a situation of neglect and underinvestment which is often unsustainable. The direct economic impact could be extended to include other benefits such as generation of employment, investments in tourism product development, etc – all of which benefit the tourism destination indirectly, and depend at least partially on the parks which attracted the investment. In other words, public and private executives allocating funds to protected areas seriously underestimate the economic significance of the assets they should protect. Furthermore, most of the world’s protected areas do not charge entrance fees due to customary rights and “freedom of access” legislation. This often leads to insufficient data collection on visitor numbers and their spending power.

All economic impact or benefit calculations of tourism must start with comprehensive visitor use data. Already, the World Commission on Protected Areas (WCPA) [5] Tourism Task Force undertook an economic impact study aimed at adding visitor use data to the UN List of National Parks and Protected Areas . The use of visitation data allows for an efficient evaluation of the intensity and patterns of visitor use which can help justify the formulation of public use policies and management strategies related to conservation and sustainable tourism. As such, the work of the Tourism Task Force can serve as a complementary tool to the project.

On another level, direct measurements of the contribution of tourism to the economies of destinations (aggregated revenues from tourism businesses, direct taxes collected from tourism businesses, direct jobs, etc) fail to recognize what is called the “capillarity” of tourism (tourists also spend in non-tourism businesses), or its multiplying effect (money spent in tourism circulates repeatedly to all other sectors of the local economy, and tourism creates jobs serving the industry indirectly) – statistics and more detailed economic measurements indicate that for every dollar spent in a hotel, at least another one is spent indirectly, and that for every ten tourism jobs, at least three others are created indirectly. Even considering economic leakages (money transferred from a destination to pay for goods and services not available locally, or profits redirected elsewhere), the net result is often several times more significant to the local economy than direct revenues could indicate. For example, out of 280 millions park recreational visits in 2001 in the United States, park visitors spent US$10.6 billions in local regions around national parks for which a mere 10% is spent on admissions and fees. The other 90% of their spending is distributed to lodging (28%), restaurants (25%), gas and oil (12%), (10%), groceries (9%) and other retail purchases (16%) [6].

In order to correct these distortions between direct and indirect tourism revenues at the level of national accounts, and apply the existing data at the global scale, the UN World Tourism Organization and the World Travel & Tourism Council developed an economic measurement methodology called Tourism Satellite Accounting (TSA), applied for national accounts, and now widely used for collection of economic data. This project considers applying the same methodological principles at the scale of protected areas and park tourism. Moreover, since the financial losses of biodiversity damage caused by tourism are not included in national accounts, the project should also examine expanding this approach to account for environmental economics at the global level and examine alternative approaches, by addressing not only the economic impact of park tourism but also the valuation of environmental factors that link tourism and conservation in natural parks (ecosystem service payments, direct compensation payments, use rights). Finally, the project should take into account not only the consumer spending associated with a protected area but also the consumer spending which is dependent on a protected area (for example, if a person primarily goes to Kenya for a beach vacation, but spends an additional 3 days on safari at Amboseli or Masai Mara, the aggregated economic impact to those areas should be credited to the parks) [7].

Economic and financial analyses are essential to protected areas and public land management. Decision-makers and stakeholders have to understand the public preferences and interests in natural resources and consider the consequences of resource allocation. A variety of financial and economical tools help support national managers in making strategic and informed decisions with regards to conservation in protected areas. The challenge lies in linking the existing tools to economical, financial, environmental, social, political and other aspects of a global protected areas network. Some important work has been done on the issue, notably the development of the Money Generating Model (MGM) in National Parks in the US [8], and can serve as a basis for the discussion.

Goal

This project aims to increase public and private awareness of the global economic significance of protected areas linked to their tourism use, and to increase investment in their establishment and maintenance in order to ensure their financial sustainability [9], in particular from the tourism industry in developing countries with significant biodiversity resources. It proposes to achieve this by collecting, consolidating, extrapolating and analyzing existing data at a global level on the actual economic significance of park tourism, and by disseminating this information to decision makers and to the public in general.

Questions addressed

· What is the actual economic contribution of parks, as tourism attractions, to tourism destinations? What type of economic impact is to be measured? What approaches should be used for measurement?

· How can the contribution of national parks be measured in a cost-efficient way? Where is significant data available? How can local/national results be extrapolated to generate international data to influence decision-makers? What are the current barriers to such measurement?

· Are park revenues from tourism, and park management budgets, compatible with their economic contribution? If not, why are the asset maintenance investments so much smaller that the societal economic impacts from tourism?

· How can decision makers be convinced to allocate investments to protected areas at a level compatible with their value, and what mechanisms can be developed to link economic benefits derived from sustainable park tourism to payback mechanisms that ensure their sustainability?


Components

· Identify, through the research of a network of specialists in tourism and protected areas, existing data on park visitation, tourism volumes and revenues, as well as case studies on comprehensive valuation of park tourism. Preliminary results indicate that significant data is already available in Costa Rica, Australia, Canada, South Africa, Kenya, Tanzania and some other countries.

· Consider TSA-like and other inductive environmental economics methodologies (Travel Cost Method, Contingent Valuation Method, Unit day value, Hedonic Pricing Method, Alternative costs, Benefit Transfer Method, etc) to extrapolate results to global levels, using existing data.

· Disseminate results to decision makers and the public in general, through Internet, relevant events, awareness campaigns and publications. Results could be used in setting up future indicators for decision makers.

Outputs/expected results

· Case studies
· Scientific papers presented at key events
· Web-based content
· Publications and brochures

Proposed Partners

· Secretariat of the CBD: Oliver Hillel, Chantal Robichaud
· UNEP’s Division on Technology, Industry and Economics: Stephanos Fotiou
· IUCN/WCPA’s Task Force on Tourism: Paul Eagles, Robyn Bushell
· IUCN: Giulia Carbone
· UN World Tourism Organization: Eugenio Yunis
· Other experts: Kreg Lindbergh, Lee Thomas, Stephen Smith, etc.

Budget/Resources

To be developed. Apart from research time and consultations, a planning workshop could be necessary to ensure uniform methodology and to engage key partners.

Your opinion

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Footnotes

[1] IUCN defines a protected area as “an area of land and/or sea especially dedicated to the protection and maintenance of biodiversity, and of natural and associated cultural resources, and managed through legal or other effective means”. http://www.unep-wcmc.org/protected_areas/index.html
[2] UNEP/CBD/WS-PA/SWA/1/2, February 2007, Note by the Executive Secretary
[3] Reference UNEP GC Dubai 2006, from WTTC
[4] Eagles, P.F.J. – “International Trends in Park Tourism: The emerging role of finance”, George Wright papers, volume 20, number 1, 2003
[5] World Database on Protected Areas: http://sea.unep-wcmc.org/wdbpa/
[6] Stynes, Daniel J. “Economic Significance of Recreational Uses of National Parks and Other Public Lands”, Vol.5.no.1 Winter 2005, Michigan State University, p.19.
[7] Impact of National Park Visitation on Rural Economies and Government Revenue in Queensland, Examples of Girraween, Eungella, Daintree and Carnarvon, By Kreg Lindberg and Jon M. Denstadli, Sustainable Tourism Cooperative Research Centre, 2004, on line: http://www.crctourism.com.au/CRCBookshop/page.aspx?page_id=2&productID=363
[8] See the Nature Conservancy surveys: http://www.prr.msu.edu/mgm2/ as well as Stynes, Daniel J. “Economic Significance of Recreational Uses of National Parks and Other Public Lands, Vol.5.no.1 Winter 2005, Michigan State University.
[9] Financial sustainability can be defined as the ability to secure sufficient, stable and long-term financial resources, and to allocate them in a timely manner and in an appropriate form, to cover the full costs of PAs and to ensure that Pas are managed effectively and efficiently with respect to conservation and other objectives. http://www.iucn.org/dbtw-wpd/edocs/PAG-013.pdf (p.5)

[zoltkun]

Hello,
I'd address another question as part of this proposal. The question relates to an issue which was discussed in Arendal on May. Is it possible to have one park per country, which has the potential to get significant financial contribution through tourism? I suggest selecting 5 countries per continent and analyse this potential.

[chantal.robichaud]

Dear Zoltan,

Thank you for your comment -this is is an important issue and we agree on the fact that such case studies would bring more consistency to the project, create greater interest and attract financial support. However, our budgets do not allow us to further research and study specific cases at this point. Nevertheless, we will look into existing secondary financial sources and see how to make priorities in terms of location (continents/countries/parks) and of course, we would very much appreciate receiving any extra information that you might want to share with us in this regard.