Tourism Destinations Begin Transition to a Green Economy

Above: Mombo Wilderness Safari© camp, Botswana

Travel in the 21st century is managed on a vast scale by a range of interlocking industry sectors with a value in the trillions of dollars. The total travel and tourism industry employs 100s of millions of people and represents over 10% of the global economy. The sectors’ overall business model depends on steady growth, with cruise lines, hotels, and on-line booking engines playing an ever more dominant role in marketing the tourism economy.¹ While industry builds demand and manages their customers, the entire supply chain of tourism is dependent on the place of visit, the destination and its environmental and socio-cultural assets. Such assets define the difference between a get-away and a travel experience which becomes a reflection of travelers’ personal values, an area of the travel economy which is in increasing demand.²

Scholars have linked the value of destinations to the level of cultural, environmental and historic preservation that has been achieved. This leads to many good questions about how the travel and tourism economy can finance the protection of well-managed destinations worldwide. Without action, tourism destinations do lose value per tourist as documented in our publication, Destinations at Risk, The Invisible Burden of Tourism. 

Global Efforts to Manage Tourism with Lower Impacts

Travel and tourism was extremely hard hit by the global downturn caused by COVID 19, which erased years of historic growth and raised questions about how to navigate choppy waters ahead, which are coming, due to geopolitical strains between nations, climate threats, and the invisible burden of tourism, which leaves destinations frequently in debt.³ In 2021, the global travel and tourism international market was down nearly 70%, making many painful situations for local people, employers, and small businesses.⁴ Some countries, such as Belize and Barbados saw double digit declines in their incoming foreign exchange and now seek to rebuild and expand their markets to respond to local employment needs. Both have transacted “debt-for nature” swaps with the Nature Conservancy to lower the cost of their debt and secure their marine environments.^{5 6} This allows them to refinance some of their most onerous debt, preserve natural capital and build climate resilience. 

The hotel industry has set out ambitious goals to lower industry related impacts via the Sustainable Hospitality Alliance which produced a Net Positive Hospitality pathway document this year, which stresses “taking a holistic approach” which can reduce costs and enhance value for companies, destinations, and customers. The goals in the report for hotels are to measure and manage the impacts of tourism uses of water, waste, production of Greenhouse Gas (GHG) emissions, and impacts on biodiversity; while delivering protection of human rights, fair labor practices, diversity and inclusion, and employee engagement.⁷

If any industry has a reason to invest in both protecting the planet and lowering impacts, it would be the travel industry as it benefits directly from the preservation of destinations, which are central to their business. But investment in sustainability of tourism has historically always been low and the financing of sustainable destinations remains a rare pursuit. 

Investment Concepts for Sustainable Tourism

Eddie Lubbers, CEO of the Travel Impact Lab in the Netherlands, researched general venture capital investments in tourism as part of his new role in launching a rebirth of the Travel Impact Lab post-COVID 19. Based on a 2022 report from Skift Research, he found about $6 billion USD going to the travel economy with 1% targeted at sustainability.⁸ The Lab seeks to generate positive, measurable social and environmental impacts with a financial return, helping to accelerate the ability of enterprises to measure, manage and achieve business impact. Lubbers believes the global target should be to reach $600 million USD in total investments in sustainable tourism or 10% of total travel investment by 2030. Travel Impact is launching this May with their first round at 100K USD for up to 10 startup companies specializing in making a social or environmental impact.⁹

Wilderness Safaris, a luxury ecotourism company in Africa with safari operations in eight countries, took a $60 million USD impact investment in 2018 from the Rise Fund to buy out two large private investors. Rise is the largest private impact fund in the world, with more than $14 billion USD under management in 2023.¹⁰ Keith Vincent, CEO of Wilderness Safaris viewed the investment as vital to meet their conservation goals, while at the same time helping to secure profitable growth. His thinking was that his company needed to secure critical ecosystems in Africa, such as the Okavango Delta in Botswana, to allow the company to operate into the future without growing risks.¹¹  

Ulrich John, investment banker and developer reviewing and integrating the hospitality market in the field of consciousness and sustainability, is an innovative thinker from Sweden. He believes the idea of developing conscious luxury havens will attract purpose driven visitors to take extended stays in areas of high quality natural and social value, to be part of a greater “social development exchange.” He has been working during the pandemic with the Nobel Sustainability Trust, founded in 2011, a family endeavor by the descendants of Alfred Nobel, who seek to promote sustainable economic growth which preserves and enhances living systems to accelerate the transition to sustainable societies.¹² Ulrich sees that a collaboration with the Nobel Sustainability Trust can offer options for investors to develop a new Impact Fund which could secure high value ecotourism destinations, related natural areas and rich agricultural zones. 

Destination Investment of the Future

Pioneers in sustainable tourism investment like Ulrich John, Wilderness Safaris and the Travel Impact Lab know that the management of vital natural and social assets at the destination level will be invaluable for the future of local residents and their visitors. And they are well aware that the careful management of core destination assets will pay off for the country involved. 

It is true however that the private sector and consumers can only achieve so much, even with the most enlightened thinking. In my work at Harvard and Cornell Universities, we have found that trained destination management units can play a pivotal role in gathering information already available at the destination level to report regularly to local decision makers on essential socio-cultural, climate and environmental systems linked to future economic well-being.