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SERIES ECONOMICS ENVIRONMENTAL
TOWARD ENVIRONMENTALLY AND SOCIALLY SUSTAINABLE DEVELOPMENT
Economic Perspectives on Nature Tourism, Conservation and Development
Michael P. Wells
September 1997
A
Environmentally Sustainable Development TheWorld Bank
ESD
Pollution and Environmental Economics Division
Economic Perspectives on Nature Tourism, Conservationand Development
Michael P. Wells
September 1997
Papers in this series are not formal publications of the World Bank. They are circulated to encourage thought and discussion. The use and citation of this paper should take this into account. The views expressed are those of the authors and should not be attributed to the World Bank.
Contents
Acknowledgments Summary iv 1 5 11 1. Introduction iii
2. EconomicAnalysisof NatureTourism
3. What Has NatureTourism's Economic Impactor Contribution Been? Multipliersand Leakages 12 ValueAdded 13 4. What are the Net Economic Benefitsof NatureTourism? Willingness Pay to 17 Other Economic Benefitsfrom NatureTourism 18 Cost of Nature Tourism 21 ComparingCost and Benefits 22 17
5. What are the Optionsfor CapturingMoreof the Net Benefitsof NatureTourism HigherUser Feesfor NatureTourismDestinations 25 HigherEconomic Rents for the TourismPrivateSector 27 6. How Can Nature TourismContributeMoreto LocalEconomic Development 7. What are the Optionsfor Mitigating NatureTourism'sEnvironmental Impacts 8. Conclusions 43 46 9. Future Research 45 Definitionand Characterization Measurement 46 PolicyIssues 47 References Boxes 49 33 39
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Box 4.1 PropertyRights and Opportunity Costsof the Mara Area, Kenya 24 Box 6.1 Factors Influencing Feasibility Community the of Involvement Nature Tourism in Figures Figure 2.1 Components Demandfor NatureTourism of 9 Figure 5.1 Key Indicatorsat Sharmel Sheikhand HurghadaCoralReefResorts,Egypt 29
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Tables
Table 2.1 Table 3.1 Table 3.2 Table 4.1 Table 4.2 Table 5.1 Table 6.1
Financialand EconomicStudiesof NatureTourism 6 Leakageof GrossTourismExpenditure Country 13 by Gross Revenues Net Returnto the KenyaWildlifeTourismSectorin 1989 14 and Resultsof Nature TourismWillingness-to-Pay Studies 19 Components the Total Economic of Valueof NatureTourismDestinations 21 Rates of Returnon DifferentLandUsesat DifferentScalesin Namibia 31 Ways for Communities Receive to GreaterBenefitsfrom ProtectedArea Tourism
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Acknowledgments
Agi Kiss originally proposedthis work in connection with the ProtectedArea and Wildlife Projectin Kenya,for whichshe is the Task Manager. Emst Lutz wrotethe requestfor a researchpreparationgrant withwhichthis work was funded. JohnDixonand Emst Lutzguided the research. Valuablecommentson earlier drafts were received from BruceAylward,Jon Barnes,DavidCassells,HermanCesar, Geert Creemers,AgiKiss, KregLindberg,Hemanta Mishraand JohnWagner. All of these plus DouglasSouthgateand MikeNorton-Griffiths madehelpfulsuggestions.GeertCreemersalso generously providedaccessto unfinishedwork. FrancisGreykindlyprovidedcopiesof two importantunpublished documents.
Enviromnental Economics Series
Sulmmary
Naturetourismis particularlyimportant the in contextof sustainabledevelopment becauseit offersthe potentialof mobilizing resources throughthe private sectorwhichcan contribute to local and nationaleconomic development while providingan incentivefor conservation uses land and helpingto financebiodiversity conservation. But analystshave arguedthat there is a significant betweennaturetourism's actual gap and potentialcontribution sustainable to development. Whilenature tourismonly accountsfor a small fractionof the overallglobaltourist industry,it is reportedto be one of the fastest-growing tourism markets. Naturetourism's continued expansion offersopportunitiesto generateincreasedincome and employment, nationallyand in remote both rural areas, and to provideincreasedincentives for biodiversityconservation state protected in areas and on private lands. Thesemust be balancedwith the risksof continued environmental degradation greaterpressure and on protectedareas, manyof whichlack the resourcesfor effectivemanagement are and unpreparedfor significant growthin visitor numbers. Most of the economicbenefitslinkedto tourist expenditures haveso far beencapturedby commercial tourismoperatorsin the richer countries(wheremost tourists originate) in and the largercities of the host countries. This does littleto supportsocialand economic development in the remoterural areaswherenaturetourism destinationsare located. Naturetourismhas catalyzedlocalor regionaleconomic development in a few cases, but thesehaveoftenbeen accompanied negativeenvironmental by impacts fromuncontrolled construction, well as the as abuseand overuseof destinationsby inadequately regulated tour operators. Relatively localcommunities few haverealized significant benefitsfrom naturetourismon their ownlandsor in nearbyprotectedareas. Local communuities' participationin naturetourismhas beenconstrained a lack of relevantknowledge by and experience, of accessto capital for lack investment, inabilityto competewith wellestablished commercial operationsand simple lackof ownership rights overthe tourism destinations.Naturetourismon privately-owned landshas in somecases beenpenalizedby landowners' residents'lackof effectivetenure or overwildlifeand othernaturalattractions,or by policydistortions favoringlanduse alternatives suchas agriculture,livestockor mining. Of course,thesereservations at least as are applicable manyotherprivate sectoractivities to competing tourismfor land or other with resources. From a conservation perspective, protectedareas chargingrelativelylowentryand use fees often supplythe mostvaluablepart of the nature tourismexperience capturelittle of the but economic valueof tourismin return. While manygovernments havesuccessfully increased touristnumbersby marketing their country's naturetourismdestinations, most havenot investedsufficientattentionor resourcesin managingthe naturalassets whichattract tourists or in the infrastructure neededto supportnature tourism. This has exposedsensitivesites of ecological culturalvalueto the risk of or
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degradation unregulated by tourismdevelopment, too manyvisitorsand the impactof rapid immigration linkedto newjobs and business opportunities. Despitetheseproblems,theoverallgrowth potentialand somepromisingindividual casesdo suggestthat naturetourismis an important sector whereenvironmental conservation may effectivelybe combined with economic development remoterural areas of developing in countrieson a meaningfulscale. Thepolicymakingprioritiesgenerallylie in fourareas: (1) increasingand capturingmoreof the net economicbenefits,(2) contributing moreto local economicdevelopment, mitigating (3) environmental impacts,and (4) helpingto finance biodiversity conservation(recognizing only a that smallfractionof ecologically-important areas havethe potentialto attract significant tourism).
Effortsto developeffectivenationalpoliciesfor naturetourismhavebeenfrustratedby the lack of economic analysisof the optionsas wellas the needto appreciateand reconcilethe diverse stakeholder perspectives.This indicatesthe need for appliedeconomic researchin selectedcase studycountrieswhich is not only targetedto provideusableinsightsbut also sufficiently groundedin an appreciationof the perspectives of the variousstakeholders produceresults to whichare usablein cross-sectoral governmental decisionnaking.In otherwords, stakeholder involvement needsto be combinedwith technical analysisfor policydevelopment.An overall menuof key researchquestionsfor evaluating optionsand strategiesfor optimizing the economic ecologicalbenefitsassociatedwith and naturetourismis identified.Country-specific policyresearchcouldprioritizefrom sucha menu.
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Introduction
Unfortunately thereis no widely-agreed definition of naturetourism,ecotourism otherrelated or formsof tourism(Goodwin1996),although ecotourism recognized a subset of nature is as tourism(Brandon1996). A largelyprescriptive literaturedescribes what naturetourism, ecotourism,and so on shouldconsist of, often in terns of visitormotivation, philosophyand behavior. Anotherbodyof literaturedescribes the negativeresultswhensuch alternativeforms of tourismfailsto followthese ideals(e.g., Butler 1991;Hawkins& Roberts 1994;King & Stewart 1996;Pleumarom1994). Thetourismindustry itselfhas opportunistically very broad used interpretations naturetourismand ecotourism of to exploittheseterms' suggestionof responsible consumerism. Naturetourismis definedhere as those formsof tourismwherenaturalattractionsof ecological significance thedestination,leadingto a are principalfocuson tourismin state-runprotected areasand landwhichis privatelyownedor under communal tenure. Althoughthereare considerable overlapsbetweennaturetourism and destinations protectedareas, it is important that to recognize the terms are far from synonymous.Protectedareas are onlyrarely establishedbecauseof their tourismpotentialand by no meansall - or evenmost - protectedareas are viablenaturetourismdestinations. Conversely, naturetourismoftentakes place outsideprotectedareas. A focuson touristdestinationsof ecological is significance not particularlyrestrictive,since this embracesactivitiesas diverseas wildlife
Tourismhas expanded such an extentthat it is to nowclaimedto be the world's largestindustry and providerof jobs, althoughmeasurement is notoriously difficultand accuratestatisticsare scarce. The WorldTraveland TourismCouncil (WTTC)has estimatedthat international tourism generatedabout 10% of globalGDP in 1994, accountedfor over 10%of all consumer spending,createdmorethan 12millionnewjobs and providedmorethan $650billionin tax (WTTC 1995). Evenif revenuesto governments thesefigures are littlemorethan educated guesses,their sheer magnitude explainswhy tourismis, or shouldbe, a priorityconcernof worldwide. governments This paper is specifically concerned with economic perspectives one sectorof this vast on countries. industry- naturetourismin developing All formsof tourismcan makesubstantial to contributions nationalincome,foreign and exchangeearnings,employment government revenues.But naturetourismis particularly importantin the contextof sustainable development becauseit offersthe potentialof resourcesthroughthe privatesector mobilizing to whichcan contribute local and national economic development whileprovidingan land incentivefor conservation uses and helping conservation.This is a to financebiodiversity very appealingprospect,particularlyin developing countrieswhereeconomic development alternativesin remoteruralareas are very limited,wherebiodiversityinvestments are invariablyinadequate,and wherepublic fundsto supporteither are usuallyscarce.
EconomicsSeries Environmental
Economic PerspectivesNature on Tourism, Conservation Development and viewing,mountaintrekking,exploring rainforests,divingon coral reefs and watching whales. It includessmallgroupsof independent and environmentally-sensitive travelersto remote areas as wellas the thousandsof and little-known visitors perhaps less environmentally-concerned to such acclaimeddestinations Kenya's as MaasaiMara NationalReserve,SouthAfrica's KrugerNationalPark, Egypt's Red Sea coast, Ecuador's GalapagosNationalPark, Caribbean marinereservesor Nepal's RoyalChitwan NationalPark. Reliabledata on naturetourismare very elusive, partly becauseof the lack of concensus on the few reliable definingthe term. However, estimatesof the scale of the economic impactof naturetourismare impressive.FiveWorld HeritageAreas in Australiaare estimatedto generatean annualgross economic impactof travel costs morethan $1,000 million,excluding (Driml1994). Annualexpenditures park of visitors in BritishColumbia,Canadahavebeen estimatedat $310 million(Coopers& Lybrand 1995). In developing countries,Kenya'swildlife tourismindustrygeneratesabout$400millionin & gross revenuesannually(Norton-Griffiths Southey1995). In Ecuador,$54 millionof annualtouristexpenditures havebeenattributed to Galapagos NationalPark (De Miras 1994, cited in Southgate1996). Naturetourismin Costa Rica generatedover $600 millionin foreignexchangein 1994,whilethe Monteverde Cloud ForestBiological Preservealonehas been estimatedto generate$10 millionin gross tourist receiptseachyear (Aylwardet al. 1996). Cautiondoes needto be exercisedin interpreting thesefigures due to someimportantlimitations and variationsin the methodologies to used estimatethem. Whilenature tourismonly accountsfor onlya smallfraction of the overallglobaltourist industry,it is reportedto be one of the fastestgrowingtourismmarkets. A studyfor the Unit has forecasta EconomistIntelligence doublingof expenditure environmentallyon sensitivetourismand ecotourism between1995 and 2000 (Jenner& Smith 1992). Long-tern
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trendsof higherpersonaldisposableincomes, moreleisuretime, greaterinterestin nature and outdooractivitiesas wellas fallingtransportation costsall tend to supportsuchpositivegrowth forecasts. Giventhe credibleand optimisticprojectionsfor naturetourism's futuregrowth,it is not surprisingly high levelsof interesthavebeen that arousedamonggovernment financeand economic planningministriesand conservation agencies, tourismoperators,private commercial landowners, localgovernments, NGOs and local communities.But naturetourism's continued expansion inevitablyexposemore will areas ecologically-important to the opportunities and risksassociatedwith greaternumbersof visitors. The opportunities to generate are both increasedincomeand employment, nationally in remoterural areas, and to and for provideincreasedincentives biodiversity conservation state protectedareas and on in privatelands. The risksare continued environmental degradation greaterpressure and on protectedareas,most of which lack the resourcesfor effectivemanagement are and growthin visitor unpreparedfor significant numbers. Analystshave arguedthat there is a significant gap between naturetourism's actualand potentialcontribution sustainabledevelopment to (e.g.,Boo 1990;Brandon 1996;Hunter & Green 1995;Lindberg1991;Ziffer 1989). While naturetourismin developing countriesdoes seemsto be generatingsubstantialopportunities for the privatesector,there is considerable doubt as to whetherit is stimulating genuinesocial and economic development amongrural communities or providing strongerincentives biodiversity for conservation.It is also not clear whether,or underwhat circumstances, naturetourismin lessvisitedareas has moreor less environmental impactthan conventional "mass" tourism or in whichis concentrated areas where environmental damagefrom uncontrolled development alreadytaken place. has
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Introduction The objectives this revieware to explorethe of use of economicanalysisto help develop policies whichcan enhancenaturetourism's contribution to sustainabledevelopment, to inquireinto and the conditions under whichnaturetourismis financiallyand economically viableas wellas environmentally sustainable. Aftera general discussionof the economic analysisof nature tourismin the next section,the paperproceedsby and addressingtwo methodological measurement questions:(1) What has naturetourism's economic impactor contribution been?(2)What benefitsof naturetourism? are the net economic Thenext three sectionsexplorethree principal policyissues: (1) What arethe optionsfor capturingmoreof the net benefitsof nature tourism?(2) How can naturetourismcontribute moreto localeconomic development?(3) How can economic policiesand instruments contribute to mitigating naturetourism's environmental impact? Thefinal sectionhighlightsgaps in the literatureand identifies priorityareas for further research. Readersare referredto Hoaglandet al. (1995) reviewof the net economic for a methodological benefitsassociatedspecificallywiththe creation and operationof marinereserves,to Brandon (1996)for a moregeneralreviewof the ecotourism literature,and to Goudberget al. ecotourism (1991)for a reviewof site-specific planningissues.
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measured(Dixon& Sherman1990;McNeely 1988;Pearce& Moran 1994). Such studiesare described Section4. in Keystudiesof naturetourism's economic impactsas wellas its economic value are summarized Table 2.1. Whetheran economic in impactand/ora economic valuationstudyis appropriateor feasibledependson the priority issuesunderconsideration, availabilityof the adequatedata and the cost-effectiveness of generating data. Economicimpact new assessments tourismhavebeenmuchmore of influential with government policymakers to due theiremphasison moneyflowsin the economyas wellas job creationand foreignexchange earnings- all politicallysensitiveconsiderations. Welfareanalyses,althoughanalyticallymore comprehensive, received have much lessattention from decision makerswhotend to be less interested economic in benefitswhichthey are unableto captureor use in practicalterms. Thecriticaldistinction betweennaturetourism's economic impactand its economicvalueis illustratedin Figure2.1. AD is the tourism demandfunctionshowing howmanyvisits will be madeat each priceand reflectingdeclining marginalbenefitsfrom additionalvisits to a destination.Tourists' direct expendituresat priceB are equivalent the area OBCE. to Consumer surplus,the amountwhichtourists wouldhavebeenpreparedto pay over and above the prevailing price B, is equivalent ABC. to This is foregone incometo the ownersof the destination.Thegross economic value of 5
Tourism's contribution the economy be to can very difficultto estimate. This is mainlybecause the diversetypes of businesses sellinggoodsand servicesto tourists do not constitutean easily separableeconomic sectorand, as a result,very few countriestreat tourismas a separatecategory in the nationalincomeaccounts. It is also difficultto isolatethe economic impactof nature tourismfrom othertypes of tourism. As a result of thesecomplications, manyeconomic studiesof naturetourismare based on uncertaindataand use a variety of methodologies produceresults to whichare not easilycomparable. Many so-called"economic" studiesexamine the contribution naturetourismto the economy of based on the amountof moneywhichtourists spendon various aspectsof their recreational experience (travel, accommodation, food, souvenirs,and so on). This is equivalent to measuringthe proportionof transactionsin the economywhichare dependent naturetourism. on Such studiesof the financialvaluesof specific nature tourismdestinationsare an importantbut incomplete towardsmorecomplete step economic analysis. Appropriatelydescribed "economic as impactassessments"(CNPPA1996),such studiesare describedin Section3. In contrast,an economic welfareanalysis measuresthe valuewhichsocietyplaceson nature tourismdestinations,i.e.,the economic benefitsless costs over time. Welfareanalysis requiresnot only marketbenefits(suchas tourism)but also non-market benefits(suchas watershedprotectionand existence values)to be Environmental Economics Series
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TABLE 2.1: FINANCIAL AND ECONOMIC STUDIES OF NATURE TOURISM
STUDY & SCOPE Aylward et aL 1996 MonteverdePR, Costa Rica Barnes 1992 Botswana Barnes 1996 PAs in Botswana Barnes & de Jager 1996 Private lands, Namibia Brown et aL 1994 Al PAs in Kenya Brown et aL 1995 2 NPs in Zimbabwe Chase et aL 1996 3 NPs in CostaRica Clark et al1995 TarangireNP, Tanzania Creemers et al 1995 St. Lucia Wetland,SouthAfrica Dixon & Sherman 1990 Khao Yai NP, Thailand Dixon et aL 1995 BonaireMarne Park Drlml 1994 GreatBarrier Reef WHA Echeverria et al. 1995 MonteverdePR, Costa Rica x x FINANCIAL ECONOMIC IMPACTS & ECONOMICVALUATION BENEFITS COSTS Direct Multiphers& Value Tourists' Other Values Direct Indirect& COMMENTS Expenditures Leakages Added Consumer (Market& NonManagement Opportunity Surplus Market) Costs Costs x Examinesreservesustainability Reviewsnationaltourism& PA data x x x Develops financialand economic modelsfor wildlifetourism. x x Visitorsurvey. Developeddemand function Developsfinancialand economic modelsfor private & community wildlifetourismoperations. Airportsurvey. Airportsurvey. Estimatedleakages usingindustry survey. Considered impact of a PA's pricingpolicieson other PAs Infomal community surveysof revenue-sharing programs Estimatedpossibleimpact of tourism due to mining operations BCA approach Consideredsustaiability of diving tourism Collatedfinancialimpactson 8 PAs x BCA approach
x x x x x x x x x x x x x x x x x x x x x
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STUDY
&
SCOPE Engelbrecht& van derWalt 1993
Kruger NP, South Africa Hodgson & Dixon 1988
ECONOMIC VALUATION FINANCIAL& ECONOMIC IMPACTS BENEFITS COSTS Direct Multipliers& Value Tourists' Other Values Direct Indirect& COMMENTS Mnagement Opportunity Added Consumer (Market& NonExpenditures Leakages Costs Costs Surlus Market) BCA approach x
X
x
x
BCA approach to compare logging
Palawan Hugo 1992 SouthAfrica Kaosa-ard, M. eta. l199S Khao Yai NP, Thailand Krameret aL 1995 Madagascar Lindberg& Enriquez1994 Belize: All tourism + 3PAs Maille & Mendelsohn 1993 Beza MahafalySR, Madagascar Mak & Moncur1996 HanaumaBay,Hawaii Medio 1996 Ras MohamedNP, Egypt Meis & Lapierre1995 All tourism in Canada Menkhaus & Lober 1996 MonteverdePR, Costa Rica Moran 1994 All PAs in Kenya Navrud& Mungatana1994 LakeNakuruNP, Kenya Norton-Griffiths 1995 MaraArea, Kenya Norton-Griffith & Southey 1995 All Pas in Kenya x
x x x x x x x x x x
with tourism. Used input-ouput tables to analyze impactsof all S.Africa tourism BCA approach CV includednon-usevaluesto nonresidents. Constructed input-outputtables. Assesseddamageform tourism. PA visitorsurvey Descrbes overuseand industry resistanceto entry fee increases and Case historiesof unregulated regulatedmarinedivingtourism sites Describes'SatelliteAccount' for tourism in the NationalAccounts x x x PA visitorsurvey MultiplePA visitorsurvey PA visitorsurvey x x x x x Analyzespropertyrights regimes and returnsfrom wildlifetourism AnalysiscombiningGIS results with fnancial and economic analysis.
x x x x x x x
x x
x x
x x
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VALUATION ECONOMIC IMPACTS & FTNANCIAL ECONOMIC COSTS BENEFITS COMMENTS Indirect& Direct Other Values Tourists' & Value Multipliers Direct Opportunity Management Consumer (Market& NonAdded Expenditures Leakages Costs Costs Market) Surplus models Describesfinancial& economic x x x x Swanson et al. 1996 of privatizedwildlifeoperations SouthernAfrican conservancies PA visitorsurvey x Tobias& Mendelsohn 1991 MonteverdePR, Costa Rica to BCA of lion introduction a PA x x x Vorhies& Vorhies1993 adjacentto a major touristresort PilanesbergNP, S. Africa DevelopeddetailedSocial x x Wagner 1996 Matrix Accounting BR, Brazil Guaraquecaba at Reviewedbenefits/costs 3 PA sites x x Wells 1993 & nationally. All NPs in Nepal STUDY & SCOPE Wells 1996 All NPs in S. Africa x x x x AnalyzedB/C distribution.Adapted input-outputtables.
KEY ANALYSIS BCA = BENEFIT-COST RESERVE BR = BIOSPHERE VALUAIIONMETHOD CV = CONTINGENT PARK NP = NATIONAL
PA = PROTECTED AREA
RESERVRE PR = PRIVATE RESERVE SR = SPECIAL COSTMETHOD TC = TRAVEL AREA HERITAGE WHA= WORLD
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Figure2.1: Components Demandfor NatureTourism of
A
e
~~Pnce~~~ BC
F
0
E Numberof Visitors
D
tourismis then OACE. If the proportionof tourist receiptsfromtourismthat leak out of the economy(for example,by purchasingimported inputs)is OF/OB,the retainedgross impactof directtourist expenditures the economyis on FBCG and leakagesare OFGE(multipliers are excluded). Whilethe modelin Figure 2.1 illustrates the economic value of tourism,it is important note to
that it doesnot describethe broadereconomic benefitsof conservation whichcan be associated with a naturetourismdestination.Directuse by tourists is onlyone of the economic valueswhich flowfromnaturetourismdestinations.The other values,althoughoftensubstantial,are very difficult quantify. Theseare describedin to section4.
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3s Has Nature Tourism's Economic What
Impact or Contribution Been?
The economic impactof tourismis usually measuredin terms of tourists' overallspending on accommodation, food,travel, souvenirsand this other expenditures.Assembling data usually requiresestimatesof the total numberof visitordays as wellas averagetouristspendingper day. Althoughsurveysmay be neededto generatethis data, manycountriesgather such information of routinelyfor at least somecategories visitors. While economic impactdata is not strictly comparablewith the costsof protectedarea the management, contrastbetweenthetwo can be sometimes usedto argue for higher management budgets. For example,the budgets for managingfiveAustralianWorldHeritage Areas studiedby Driml(1994)totaledlessthan 4% of the estimatedtouristexpenditures 1991, in whilerevenuesraisedthroughuser fees wereless tourist than one third of one per centof estimated expenditures. In Nepal, protectedarea tourismhas expanded dramatically whilethe parks are becoming degradedand the financialresourcesprovidedfor have beeninadequate.The their management governmentcollectedless than $1 millionin user fees fromprotectedarea visitorsin 1988,while reluctantlyspendingabout$5 millionin managingthese areas. This suggestsa $4 million net expense,a significantamountin one of the world's poorest countries. But tourismis Nepal's largest foreignexchangeearnerand it has beenconservatively estimatedthat $27 millionof 1988tourist expenditures be can attributedto the country's protectedarea network (Wells1993). Theseindicativefigures suggest that Nepal's parks mayrepresentan attractive publicsectorinvestment opportunity(higheruser fees were subsequently collected,althoughpark management budgetshave remainedmodest). Estimating proportionof tourist expenditures the attributable naturetourismor to a particular to can naturetourismdestination be problematic, in especially countrieswhichoffer a rangeof conventional touristattractionsas wellas nature touristdestinations.Wells (1996)founda range that of credibleestimates attributedbetween10% arrivals in South and 90%of all international Africato wildlifetourism. Other attractionsin a included complexset of visitormotivations curiosity,visits climate,scenery,post-apartheid to relativesand add-onsto businesstrips. Similarcomplications be foundin manyof can the majornaturetourismdestination countries. the the Theoretically, key questionin estimating economic impactsof tourismattributableto a destination such as a protectedarea is: How muchwouldtourismspending(and its related impacts)declineif the protectedarea in question was no longeravailableas a tourist destination? The answerdependspartly on the extentto which otherdestinations provideacceptablesubstitutes, andpartly on the scale of the analysis. Creemers (1996)has pointedout that the economicimpact of a naturetourismdestination dependson the geographicscaleto whichtourismspending wouldbe redirectedif that destination no was longeravailable. A thoroughanalysiswould
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Economic PerspectivesNature on Tourism, Conservation Development and requireinformation whereand howvisitors on wouldspendthe moneywhichtheywouldno longerbe able to spendif a certaindestination becameinaccessible, information whichcouldbe elicitedthroughsurveys. The economicimpactstudiesdescribed above havemeasuredtourist spendingat existing destinations.In contrast,a recentSouthAfrican studyconsidered potentiallossof tourism the revenuesif the Greater St. LuciaWetlandPark was to allowmininginsteadof beingdeveloped for conservation tourism(Creemers al. and et 1995). Earlierestimatesof the amountsof moneywhichtourists were likelyto spendin the Park were, unsurprisingly, ordersof magnitude less than miningrevenues projectedfor the private sector. But a broaderanalysisusing reasonablyconservative assumptions suggested that at least 20,000 fewerinternational tourists wouldvisit SouthAfricaeach year if mining went ahead at St. Lucia, a uniqueand highly marketableattraction. At $3,750per visit,the foregoneannualrevenueto the nationaltourist industrywouldbe about $75 million,an amount comparable the expectedrevenues to from mining. Had the studyhad focusedon local/provincial wellas nationalimpacts,the as potentialdeflection domesticand international of tourists to otherdestinations withinSouthAfrica wouldalso haveneededto be takenintoaccount. MULTIPLIERS & LEAKAGES Estimatingthe aggregateor gross valueof all transactionsattributableto naturetourismat a specificsite doesnot take multipliereffectsor leakagesinto account. Economic multipliers resultfrom the processby whichtourist spending stimulatesfurtherspendingand increased economicactivity. Thereare three categories of multipliereffects:(1) Directeffectsare economic impactsdirectlyrelatedto naturetourism;(2) Indirecteffectsare expenditures incurredby a businessor otherentitywhenit re-spendsits gross incomeon wages,operatingexpensesor capital items;and (3) Inducedeffectsarise from the re-spending wagesearnedin businesses of that benefitfrom director indirecteffects. The direct,indirectand inducedeffectsare usedto calculateeconomic multiplierswhichcan thenbe used to estimatethe impactsof tourism. By definition, there can onlybe multipliereffects if thereare unemployed under-employed or resourcesin an area (Ulph& Reynolds1981). If there is fullemployment resourcespurchased the for thetourismsectormust eitherhave come from anothersectoror beenattracted from elsewhere the sameeconomy.This is rarelyan in issuein most economies, whereunemployment levelsare so high as to place a considerable premiumonjob creation. Positivemultipliereffectsare limitedby leakages,whichreducethe positiveeconomic impactsof tourism. At a nationallevel,tourism leakagesare the proportionof the receipts derivedfrom incomingforeigners whichleavethe country. Indicative valuesare shownin Table 3.1. Leakageis oftenhigherduring start-upor rapidgrowthphasesof tourism,whenthe local economyis generally unableto providemanyof the goodsand servicesdemanded visitors. by Highleakagerates for naturetourismare likely to persistin relativelyundeveloped locationsand at those sites providing moreluxuriousand expensive facilities. Brownet al. (1995)analyzedthe expenditures of international visitorsto Hwangeand Mana Pools NationalParksin Zimbabwe. As expected,the largestcomponent visitorexpenditures of was international fares, whoseexternalcomponent air (excluding Zimbabwe)averaged40% of total Air spending. Commissions to agentsand to paid groundoperatorsin foreigncurrenciesaccounted for a further7.4%and 5.8%, respectively.This meantthat $53 out of every$100 spentby visitorsdidnot enterZimbabweand primarily benefited visitors' homecountries(this might the be referredto as pre-leakage).Of the $47 out of every$100whichwas spentin Zimbabwe, furtherforeignexchangeleakagesfrom agents' commissions groundoperatorcosts averaged and
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What Has Nature Tourism'sEconomichnpact or Contribution Been?
Table 3.1. Leakageof GrossTourismExpenditure Countrv by Country Seychelles Fiji CookIslands St Lucia Aruba Jamaica US VirginIslands Sri Lanka Antigua Cyprus Korea NewZealand Philippines Year 1973 1979 1979 1978 1980 1991 1979 1979 1978 1991 1978 1977 1978 Leakageas a % of GrossTourismReceipts 60 56 50 45 41 40 36 27 25 25 20 12 11
Source: Compiledby Smith& Jenner(1992). Thefigurescomefrom a varietyof studiesand maynot be strictly comparablewith one another. $12. This left $35 in Zimbabweout of every $100 spentby visitorson their entiretrip, equivalentto 65% leakage. Indirectand induced multipliereffectswere estimatedto expandthe impactof this $35 by 56% to about $55. The itemscommonlyincludedin analysesof leakagesare the importof materialsand capital goodsfor the tourismindustry,the importof consumables (food,drink, film,etc.),the employment foreignersand the repatriationof of in profits by foreigncompaniesinvolved the industry. But Smith& Jenner(1992)have arguedthat leakagesshouldalso includeinterest chargeson foreigndebtincurredfor tourism development, overseaspromotionby the national tourismorganizationand by individual tourism companies,the depreciation infrastructure of (roads, airportsand seweragesystems)due to international tourism,as wellas damageto the built and natural environment, Value Added Estimatingmultipliereffectsand leakageswith a reasonabledegreeof accuracy is difficult. Multipliermodelsvary greatly in their sophistication rigor, inadequatedata are and oftena major drawback,and multiplieranalysis in generalappearsto havefairly low credibility (Mathiesen Wall 1982). Evenwhenadjusted & for multipliersand leakages,estimatesof total touristexpenditures not take into accountthe do costs of the inputsto the tourismindustry,and therebyoverstatetourismbenefits. Gross tourismexpenditures not comparable gross are to domesticproduct(GDP),whichis calculatedon a value-added basis. Relativelyfew studieshave attemptedto directlyestimatevalue-added the for naturetourismsector,although Norton-Griffith of & Southey(1995)estimatedthe value-added Kenya'swildlifetourismsector,an essentialstep in comparing naturetourismto alternativeland use options(Table3.2). In the mainstream tourismliterture, themost popularmethodof estimatingindirectand induced effects has been input-output analysis. Input-output tables usually require an extensive amount of work, which may not be justified by the practical applicability of
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Table 3.2. Gross Revenues and Net Retum to the Kenya Wildlife Tourism Sector in 1989 Gross revenues from tourism Attributed to the wildlife sector (50%) Foreign exchange retention (82.4%) Operating surplus (30% of retained foreign exchange) Gross capital charges Net return (loss) to the wildlife sector Foreign exchange premium (FEP
-
$ 419.0 million 209.5 173.0 51.9 58.2 (6.3) 34.6 $ 27.2
20%)
Net retums to wildlife sector with FEP Source: Norton-Griffiths & Southey (1995)
million
Notes: 1. The average foreign visitor came to Kenya for about 14 days, spent 6.1 nights in a coastal hotel, 1.9 nights in a Nairobi hotel, 1.1 nights in a game park and 4.5 nights elsewhere. The authors question the presumption that game parks drive the tourist trade in Kenya, estimating that tourism might decrease as little as 29% if there were no parks and by as much as 67% if there were no coast. But they use a relatively high estimate of 50% as the proportion of tourist revenues attributable to the wildlife parks and reserves. The rate of foreign exchange retention (i.e., net of leakages), the percentage operating surplus and the gross capital charges (reflecting the opportunity cost of capital) were based on estimates by a 1977 Economist Intelligence Unit study. 2. If no allowance is made for persistent over-valuation of the Kenyan shilling, the net loss to the Kenyan economy from wildlife tourism is $6.3 million. But using a 20% premium on net foreign exchange earnings gives a net gain of $27.2 million, or 6.4% of the gross revenues from all tourism. Using 1977 data in 1989 requires some qualification, as the authors' point out. Largely due to devaluation of the Kenyan shilling, the constant dollar cost of foreign visits in 1990 was only 42% of what it was in 1977, while the real cost of resources provided in Kenya for each visitor have risen by 54%. Such dramatic shifts reinforce the tentative nature of these calculations.
the results. Another possibility is to build a model of the economy around input-output methodology, but this is likely to be a highly demanding exercise and only worthwhile under unusual circumstances (Briassoulis 1991; CNPPA 1996). An input-output model traditionally only accounts for production when determining economic impacts, while a Social Accounting Matrix accounts for production, demand and income distribution when determining economic impacts. Very little work has been done on the multiplier and leakage effects of nature tourism specifically, although Lindberg & Enriquez (1994) constructed input-
output tables for Belize, where nature tourism predominates, and Wagner (1996) used a Social Accounting Matrix to examine the regional economic effects of ecotourism in a conservation area in Brazil. Canada has developed a Tourism Satellite Account (TSA) as an extension of the System of National Accounts (SNA). Using the SNA's input-output framework, the satellite account allows the demand and supply sides of tourism to be examined within a balanced accounting system which describes the production and demand functions of the whole economy. The first prototype Canadian TSA was completed in 1994 but related to 1988, the
14
EnviromnentDepartmentPapers
What Has Nature Tourism'sEconomicInpact or Contribution Been?
latest year for whichneededdata were available. Inputs includedtourismexpenditure surveys,a nationalfamilyexpenditure survey,surveysof travel agencies,tour operatorsand tour wholesalers,as wellas the consumerpriceindex and nationalinput-outputtables. TheTSA indicatedthat total 1988touristexpenditures in Canadawere $24.2billion,22% of whichwas spentby foreigntourists (Meis& Lapierre 1995). Theseexpenditures generated an in estimated$10.7 billionof direct value-added
the Canadianeconomy, equivalentto 3% of GDP,and supported467,000full-time jobs, of all businesssector equivalent 5% to employment.Theseresultsindicateda much greatertourismimpactthan earlierestimates. Filionet al. (1994)reportestimatesthat as much as one quarterof tourist expenditures Canada in can be attributedto wildlifetourism,suggesting very substantialimpactson the national economy.
Environmental Economics Series
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EconomicPerspectivesonNature Tourism,Conservation Development and
16
Environmental DepartmentPapers
What are the Net Economic Benefits of Nature Tourism?
The total economic benefitfrom tourismis representedby visitors' aggregate willingness to pay for theirexperience.Willingness pay to includestourist expenditures, discussedin the as previoussection. But tourist expenditures an are incomplete measureof the economic valueof naturetourism. This is becausemanyvisitorsto naturetourismdestinations a total amount pay for travel, accommodation, entry,and so on, park which is lessthan the maximumamountthat individual wouldhave beenpreparedto pay (Dixon& Sherman1990;Lindberg1991). This difference betweenwhat an individual actually pays and the maximumamounttheywouldbe preparedto pay is knownas consumersurplus. Willingness pay, or total economic to value, thereforeincludesboth actual expenditures and consumersurplus. Methodshavebeendeveloped to estimatewillingness pay and consumer to surplus,and thesehavebeenappliedin several developing countrystudiessince 1990. pay but did not haveto. In the contextof nature tourism,it is vitalto distinguish betweenvisitors' willingness pay to visita destinationand their to willingness pay to conservethe destination. to Thelattervaluecan be expectedto be much higher. Thedesign,analysisand interpretation CVM of surveyshas improved greatlyin recent years, although methodis still controversial the and needsto be used cautiously(Brown1996). The basicproblemwith CVM is that it does not use people'sactionsto discoverhowmuchtheyvalue something, the repliespeopleare preparedto and giveto a surveyquestionnaire be different may from howthey behavein practice. People's answersare likelyto vary dependingon how questionsare framedand evenwhentheyare asked. Indirectapproachestry to elicitpreferencesfrom actual,observedmarket-based information.The travel cost methodhas oftenbeenused to value consumersurplusin relationto parks, using expenditures incurredon travelto developa demandcurvefor a recreational experience.The approachtypicallyusesinformation time and on moneyspentby peoplein gettingto a site as a basis for estimating WTP for a site visit (Pearce & Moran 1994). This methodonly appliesto use values. Multi-purpose trips an the needto estimate cost of visitors' timeboth present the challenges use of the travel cost methodwhich to haveyet to be solved. As with CVM, the travel costmethodcan measurethe total valueof tourismas wellas consumersurplus.
WILLINGNESS TO PAY
Thereare two broad approachesto valuing willingness pay (WTP). Directapproaches to attemptto elicitpreferences the use of survey by techniques. Peopleare askeddirectlyto state their strengthof preference a proposed for change,such as protectinga natural area, increasingan entryfee, or usinga park for mining. The contingent valuationmethod(CVM) askspeoplehowmuchtheyare willingto pay. Theaggregatemeasureof consumersurplus,as elicitedfrom a CVM study,represents the amountthat tourists wouldhavebeenpreparedto
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EconomicPerspectiveson Nature Tourism,Conservation Development and
Table 4.1 summarizesthe resultsof recentWTP studiesfor protectedareatourism. Thesestudies used CVM and/ortravel cost methods estimate to annualconsumersurplus. The studiesarenot easy to comparebecauseof differences in samplingproceduresand questionnaire design,as well as the characteristics the sites themselves. of Most of the studiesfocusedon one or a few protectedareas,althoughMoran(1994) estimatedconsumersurplusfor wildlifetourism
in Kenya at $450 million. This seems broadly
Chaseand colleague's(1996)consumersurplus estimateof $21-25per visitoronlyconsidered WTP to enter three otherparks in Costa Rica. The sophisticated entry feepoliciesat Monteverde discussedfurtherin Section5. are Despitethe recentpopularityof willingness-topay surveysof park tourism,theirpracticalvalue remainsquestionable.In theory,such studies enablea tourismdemandfunctionto be
estimated. But the variety and complexity ofthe
compatiblewith Navrud& Mungatana's(1994) estimateof $15 millionfor LakeNakuru NationalPark. Extrapolationof resultsin neighboring Tanzaniaby Clarket al. (1995) of yieldedan estimateof foregonerevenues $6 millionannuallyfor the entire park system, althoughthe focus hereseemsto havebeenon park entryfees rather thantotal tourist expenditures.Kaosa-ardet al. (1995)estimated consumersurplusfor KhaoYai NationalPark in Thailandat over $20 million,virtuallyall of whichis attributedto Thai, ratherthan international, visitors. OnlyBrownet al. (1995) ($42million)as estimatedtourist expenditures wellas consumersurplus($8 million), enabling themto sumthe two for a $50 millionestimateof tourism's total economic benefitat two protected areas in Zimbabwe. This studyalso used a combination travel cost and contingent of value surveysto estimateconsumersurplusat $68-101 per visitorday. Chase et al (1996)showed with econometric analysisthe possibilityof using price variationsto direct touristsaway from heavily-used sites in Costa Rica. Three independent WTP studieshavebeen carried out at Monteverde CloudForest BiologicalPreservein CostaRica. Usingthe travel cost method,annualconsumersurpluswas estimatedat $35 for each Costa Ricanvisitor (Tobias& Mendelsohn1991)and $1,150for each US visitor(Menkhaus& Lober 1996). Echeverriaet al. (1995)used CVMto estimate annualconsumersurplusfor all visitorcategories at $121. The results from such studiesdo requirevery careful analysisbeforeevenlimited conclusions be drawn. For example, can Echeverriaet al. (1995)measuredvisitors' willingness pay to conserve Monteverde to while 18
methods used, combined with the volatilityof touristpreferences,do not makesinglewillingness-to-paysurveysa reliablebasis for setting park entryfees. The most valuablefunctionof thesestudieshas undoubtedly beento alert policymakers park managersthat they could and chargehigher,sometimes muchhigher,prices for park entry,therebycapturinga greater proportion of tourism's economic value. The resultsof someof the effortsto increasetouristuser fees for park entryare discussedin Section5. OTHER ECONOMIC BENEFITS FROM NATURETOURISM Whiletourismitselfwill oftenprovidethe most obviousand readily-measurable economic benefits,a rangeof otherbenefitsare also likely to be present. Dixonet al. (1995)referto these as 'joint products' of naturetourismattractions. TheTotal Economic Value(TEV) approachis a usefulway to classifythese values(Table4.2). Conceptually, TEV of a protectedarea the consistsof its use value(UV) and non-usevalue (NUV). A use value, as thename suggests, arises fromthe actualuse madeof a given resource. Usevaluesare furtherdividedinto directuse values(DUV),such as subsistence or trophy hunting,livestockgrazingand collection of medicinalplants,and indirectuse values (IUV),whichreferto the benefitsderivingfrom ecosystem functionssuch as nutrientcycling, watershed protection, waste assimilation, climate regulation, store of geneticmaterials(Pearce& Moran 1994). Non-usevalues(NUV)are moredifficultto define,and thereare at leasttwo types. Option Environment Departnent Papers
What are the Net Economic Benefitsof Nature Tourism?
TABLE 4.1: RESULTS OF NATURE TOURISM WILLINGNESS-TO-PAY STUDIES ELEMENTS OF ECONOMIC VALUE (US$)
STUDY & SCOPE Barnes 1996 PAs in Botswana Brown et al. 1994 All PAs in Kenya Brown et al. 1995 2 NPs in Zimbabwe Chase et al. 1996 3 NPs in Costa Rica Clark et al 1995 Tarangire NP, Tanzania Extrapolated across all NPs in Tanzania Dixon et al. 199S Bonaire Marine Park Echeverria et al. 1995 Monteverde PR, Costa YEAR STUDIED
_
NUMBER OF
VISITORS
CONSUMER SURPLUS PER VISITOR IN AGGREGATE COLLECTED IN ENTRY FEES
ANNUAL PA BUDGET (US$) na na na na na
AREA OF SITE (ha) na na na na COMMENTS
1992 1993 1993 1995 1993
64,000.00 na 20,000.00 na 14,911 NR 15,409 NNR na
$307 (CV) Tot $20 million $437 (CV) Foreigners $499-858 (TC) $332-550(CV) $326485 (TC + CV) $21-25 (CV) $16.63 NR (CV) $6.37 NNR (CV) na na $17.40 (CV) $121 (CV) na $6.5-9.7 million na $243,944 NR $98,155 NNR $2.0 millionNR $0.8 million NNR $325,000 $2,380,000 (39% had CS of
S7-1S visitor per
na $250,000 na $298,220 NR $154,090 NNR $2.4 millionNR
All visitors surveyed (mainly international) International visitors
surveyed
International visitors surveyed International visitors surveyed
260,000.00 Deducted use fees from authors' CS estimates NR = Nonresident na NNR = Non-national resident
1993
$2.6 million
na
1991
$1.2 millionNNR
$187,000 ($10/visitor) na $668,000 na
18,700.00 32,213.00
International visitors surveyed
1991/92
$3-600,000 10,000.00 Costa Rican and intnl (Aylward 1996) visitors surveyed na 217,000.00 Thais surveyed. Option (see full study) ($7/non-visitor) &
Rica
Kaosa-ard, M. et al. 1995 Khao Yai NP, Thailand 199? 600,000.00 $34.80 (TC) $0.68 (CV)
zero)
$20,880,000 $408,000 $120,000 ($0.20/visitor)
(diff.unexplained)
Kramer et al. 1995 Mantadia NP, Madagascar Maille & Mendelsohn 1990 3,900.00 $24 (RD) $65 (CV) $276-360 (TC) $93,600 $253,500 na na
.___________________
existence ($291visitor) valuesestimnated.
na 9,875.00 Intnl visitors. Non-use values est. at $24-31 per US household Internationalvisitors
1991
na
$1 1/visitor
na
640
1993
Besa Mahafaly SR, Madagascar
surveyed
Enviromnental Economics Series
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and on EconomicPerspectives Nature Tourism,Conservation Development
ELEMENTS OF ECONOMIC VALUE (US$)
STUDY &
SCOPE
YEAR STUDIED 1994t95
NUMBEROF VISITORS 500,000.00
CONSUMER SURPLUS PER IN
VISITOR AGGREGATE
COLLECTED
IN ENTRY FEES
ANNUALPA AREA OF SITE BUDGET
(USS) (ha)
COMMENTS Egyptianand intnl visitorssurveyed hitnivisitors surveyed at PAsand airport
MedIo 1996 Ras Mohamed NP, Egypt Moran 1994 All PAs in Kenya Navrud & Mungatana 1994 Lake Nakuru NP, Kenya
1992 1991
na 141,332.00 52,803(KR) 88,529(NR)
$15.45 (MW estimates from studyreport) na $53 (CV) $68-85(TC) $114-120(TC) $35 (TC)
$7,725,000
$590,000
na
na
$450million(CV) $7.5 million
na $720,000
na na
na
18,800.00
Tobias & Mendelsohn 1991 Monteverde PR, Costa Rica
1988
3,000/15,000 from C. Rica
$3.6 -4.5 million $10.1-10.6million $13.7-15.1million na $97,500-116,200
KR = Kenyaresidents NR = Non-Kenya residents $75,000 10,000.00 CostaRicans surveyed. Foreignvisitors' CS (Aylward1996) estimatedat $400,000500,000..
KEY BCA = Benefit-Cost Analysis BR = Biosphere Reserve CS = Consumers' Surplus CV = Contingent Valuation Method NP = National Park PA = Protected Area RD = Recreation Demand (an adaptation of the travel cost method) TC = Travel Cost Method
20
Environment DepartmentPapers
What are the Net Economic Benefits of Nature Tourism?
value(OV) is likean insurancevalue,the amount that individualswouldpay to safeguardan asset for the optionof using it at a futuredate. Existence value (EV) is unrelatedeitherto currentuse or to the possibilityof futureuse. Its intuitivebasis is easy to understand becausea great manypeoplerevealtheir willingness pay to for the existence natural assetsthrough of wildlifeand otherenvironmental charities,even withoutexperiencing wildlifedirectly(Pearce& Moran 1994). Assembling thesecomponents, TEV can then be expressedas follows: TEV
=
thesebenefits,and howto sharethemmore equitably.
Cost of Nature Tourism
Threedifferenttypes of costsare involvedin establishing maintaining and naturetourism destinations: direct,indirectand opportunity costs (Sherman Dixon 1991). &
Direct costs
Theseincludethe purchaseof land,preparation of management plans, capitalexpenditures, development maintenance roads and and of
UV
+
NUV
TEV = DIV + IUV + OV + EV
facilities, and all recurrent management and
Many of thesebenefitsare extremely difficult to quantifywith any degreeof reliability.But TEV
does at least give a framework for thinking about
administration costs. Someof the most-visited protectedareasincludesignificanttourist operations.In such cases, it is importantto
distinguish the costs of biodiversity conservation
differentprotectedarea benefits,howto increase
fromthe costs of operatingtourismfacilitiesand
Table 4.2. Components the total economic of valueof naturetourismdestinations USEVALUES
Direct Use Values
Recreation/tourism
Sustainable use of plant and animal products
Education Research
Indirect Use Values Diverse ecosystems, species and genetic resources
Maintenance ecological of processes Essentiallife supportsystemsof the biosphere Fixingand cyclingnutrients Watershedprotection(forestfunction,erosionand sedimentation control) Evolutionary processes NON-USE VALUES OptionValues Future use values ExistenceValues Aesthetic,spiritual,culturaland bequestvalues Sources: AdaptedfromDixon& Sherman(1990);Pearce& Moran(1994).
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EconomicPerspectiveson NatureTourism,Conservation Development and
managingtourism's environmental impacts. For example,SouthAfrica's NationalParksBoard runs sophisticated tourismoperationsinsideits parks. TheNationalParks Board's 1994/95 budgetanticipated tourismearningsof $8.8 net millionon gross revenuesof $32.8million, providing54% of the directpark management costs of $16.3million. Government grants, whichare beingreducedin real termseachyear, are neededto financethe remainder (Wells 1996). Relativelyfewpark agenciesin other developing countriesare able to contemplate financingsuch a largeproportionof their own directmanagement costs throughtourism. In developingcountries,the amountsbeingspent on park management usuallyunderstatedirect costsbecausethere is an almost-universal underinvestment natureprotection.Nature in tourismcan also requiresubstantialpublic investmentsin infrastructure.For example, Southgate(1996)arguesthat naturetourism's continuedsuccessand rapidgrowthin Costa Rica willrequiremajorimprovements i.e., expensive investments, in the rural road network. In such cases, actual expenditures understate the
plants and animals,includinghuntingand livestock grazingby local communities (Sherman & Dixon 1991). Thesetwo categoriesarisefrom differentlanduses and are not additive. Agricultural development likelyto be the most is economically-attractive alternative nature to tourismin rural areas of developing countries. Mostalternative uses willnot be complementary with naturetourism,althoughwildlifetourism, trophyhuntingand extensivelivestockgrazingdo havethe potentialto co-existin somearidparts of Africa. COMPARING COST AND BENEFTITS The Total Economic Valueframework be can usedto illustratehowpolicymakerscan evaluate naturetourismas a land use option. Net benefits (NB)are equalto benefitsless directand indirect costs,and opportunity costs (OC)are equal to the benefitsless costs of the most attractive development alternative:
NBcvt, NBTom + NBOthr DirecUe +
-
NBIndrcttU.e&N. Us
OCC.eauo
true costs of nature tourism. Indirect costs T'hese measurethe valueof adverseimpacts attributableto protectedareas, including property damageor personalinjuriescausedby wildlife, T'heselocal costs havenot been estimnated but they are widelyagreedto be substantial throughoutmanyparts of Africa,Asia and Latin
America, particularly where large mammals are present.
Thenet benefitsof indirectuse and nonusewill usuallybe very difficultto estimate. Decisions willthereforetendto be based on a comparison of the net benefitsof conservation(of which tourismis oftenthe easiestto measure)with opportunity costs - the net benefitsof foregone development opportunities.In this case, nature tourismwill be considered preferablewhen:
+ NBth.Diet
U
OCC
ti.
Opportunity Costs Theseare the value of benefitsforegoneas a .. . resultof the decisionto protectan area and itS
resoures. ar two 'ere ategores of(1993)
Veryfew studieshaveattemptedto measure naturetourism'sopportunitycosts for cornparison the value of tourismand with ~~~~~~~~conservation. &van der Walt Engelbrechit (1993)aconcluded ht ecnomic valu t
concluded that the economic value of
resources. There.airestwcathegies ecofc opportunitycosts. Fs thenet eoom
ic
g
wildlifetourismat KrugerNationalPark in SouthAfricasubstantially exceeded net the
a park to an alternativeuse - suchas forestry, miningor intensivelivestockranching;second,
the benefits foregone from potential harvestmg
b i h o b i f c rbenefitsconverting park to livestockand from the maize roduction. In Kenya Norton-Griffiths & y
of
22
Envirounent DepartmentPapers
What are the Net EconomicBenefitsof Nature Tourism?
systemsto integrateinformation landuse on potential,land use surveysand farmbudgetsto estimatethat Kenya couldbe foregoing $161 millioneachyear from potentialagricultural development its parks and forests,equivalent in to 2.2% of GDP (someobserversarguethat this estimateof agriculturalpotentialis unreasonably high). This doesnot lookvery promisingfor conservation when comparedto the wildlife tourismsector's estimatedvalue addedof only $27 million(Table3.2). But Moran (1994) estimatedthe economic valueof wildlifetourism in Kenyato be $450 millionper annum. As Pearce(1996) pointsout, thetwo assessments are quite consistent:financialreturnscan be less than opportunitycost whileeconomic valuecan be greaterthan opportunitycost. The pessinmsm of the formerconclusion offsetby thelatter is finding,but only if wayscan be foundto capture ' the broadereconomicvalue. Of course,most marketsfunctionby dividingnet benefitsamong producersand consumersand it wouldbe unreasonable expectsuppliersof tourismto to capture all of the consumersurplus(Aylward, personalcommunication). In one of the most comprehensive studiesof its type,Norton-Griffiths (1995)examined the financialand economic costsand benefitsof tourismvs. agriculturaldevelopment Maasaion ownedgrazinglandsadjacentto the Maasai Mara NationalReserve,part of the Serengeti ecosystem(Box4.1). He calculated areas the whichwouldneedto be protectedfrom development orderto maximizebothnational in and globalnet economic benefits. For an equitablesolution,the formercasewouldrequire compensation foregonedevelopment for profitsto the Maasai landowners $2.5 millionannuallyof equivalentto $80 per touristper day. Thelatter casewouldrequirean additional$12 millionin annualcompensation payments secureglobal to benefitsestimatedat $17 million. This $12 millionapproximates conceptof incremental the
costswhichis usedas a benchmark the Global by Environment Facility. Comparisons partialcosts and benefitscan of also yieldusefulresults. An interesting benefitcost studyevaluatedthe economic impactof introducing lionsintoPilanesberg National Park, SouthAfrica(Vorhiesand Vorhies1993). The presenceof lions in the park was considered criticalif moreforeignvisitorswere to be attractedto the nearbySun CityResort Complex. The studyexamined annualizednet returnsto the thepark (a financialanalysis)and to the region (an economic impactanalysis). It was projected that the park would incur additional direct costs of $250,000 a year from introducing lions, including extra fencing and security, plusthe valueof the animalswhichthe lionswere ~~~~~~~~~~~expected to eat (whichotherwisecouldhave been sold). At the regionallevel,additionalnet revenues $4-9 million the resort complex of to were anticipated eachyear, showinghow a public investment wildlifecan be repaidby generating in higherprivatesectorincome. Full or partialbenefit-cost comparisons nature of tourismcan yieldimportantand useful information.But a varietyof different approaches havebeenused, and relativelylittle of this information beenestimatedin ways has whichfacilitatecomparisons betweendifferent case studies,whethertheseare site-specific at or a nationalscale. Froma policymaking perspective, most useful analysesare usually the thosewhichcarry out both financialanalysis(of the privatereturnsto the entrepreneur or landowner) economic and analysis(of the returns to societyas a whole). For a discussionof the differences betweena financilaanalysisand an economic welfareanalysis,see Sherman& Dixon (1991).
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EconomicPerspectiveson NatureTourism,Conservation Development and
Box 4.1 Property Rights and Opportunity Costs of the Mara Area, Kenya
2 The Mara Area formspart of the Serengetiecosystem.At its core arethe 1,368km Maasai Mara NationalReserve(MMNR),ownedand operatedby the KenyanGovernment, 2 surrounded 4,566 km of GroupRancheswhichare ownedby pastoral Maasaipeople. by TheMaasai are deniedtraditionalaccessto the MMNR,wheretourismis the onlypermitted use. TheMara Area has becomeKenya's premiertouristdestination, with the MMNR attracting 10%of all tourist bednights generating millionin gross revenues and $20 (Douglas-Hamilton 1988,citedin Norton-Griffiths 1995). Wildlifetourism,agricultureand livestockon the GroupRanchesgenerate gross annualrevenuesof $10million,$3.8 million and $2.4 million,respectively.TheMara Area's principalconservation value is to provide criticalseasonalgrazingfor the Serengeti migratorywildebeest population,currentlyabout 1.5 millionanimals,whichspillout in hugenumbersoverthe grazinglands of the Group developing their land and Ranchesduringthe dry season. TheMaasaiare increasingly
converting from traditional pastoralism, which is generally compatible with wildlife
conservation tourism,to agricultureand ranching,whichare not. Loss of dry season and grazinglands willalso lowerthe wildebeest populationand reducebiodiversityin the Mara Area. was Tourism's net opportunity coststo the Maasailandowners estimatedat $26.8 million annually,split betweentheInner Ranches($2.5m) and the Outer Ranches($24.3m). This analysesof the sum, equivalent $80/tourist/day.Separatebenefit-cost to is a significant MMNR and the Inner and Outer Rancheswerecarriedout. Whilethe nationalbenefitsfrom tourismand conservation exceeded costs for the MMNRand Inner Ranches,the Outer Ranchesonly provided benefitsif globalvaluesweretakeninto account. Theglobal net valueswere estimatedat $120/haon the basis of touristconsumersurplus,existencevalues evidenced debt-for-nature by swaps and carbonsequestration values. On this basis, it would of for not be sociallyprofitable Kenyaactingaloneto preventdevelopment the high potential of landof the Outer GroupRanches,and haltingdevelopment the InnerRancheswould themfor foregone to requirea $2.5 millionannualtransferto the landowners compensate 2 ofthe OuterRanches considered the development opportunities.Conserving 1,419km paymentsto wouldrequire$12 million annualcompensation in optimalfor conservation to at for secureglobalbenefitsestimated $17million. Justification the KenyanGovernment financethis amountis currentlylacking. Source:Norton-Griffith (1995)
24
Departnent Papers Environment
5
What are the Options for Capturing
More of the Net Benefits of Nature
Tourism?
parks and reserves(Moran 1994). Overall, KWS estimates it collectsas littleas 3% of that all touristexpenditures.Sincemost wildlife conservation agenciesface steadyor declining budgets,settingan appropriatepark entryfeeto maximizing their fee incomeis critical. In fact, for park management agenciesin manycountries, charginghigherentryfees to visitorsis the only way theycan capturea larger share of the economic valueof protectedarea tourism. Lindberg(1991)has shownhowthe societalnet benefitsfor a naturetourismdestinationare not maximized wherethe numberof tourists is greatest,but wherenet benefits(total benefits lesstotal costs)are maximized,a pointwhichcan onlybe achievedeitherby charginghigherprices to thepointwheresome visitorsare deterredor by imposing physicallimiton visitornumbers. a Raisingentryfees usuallyoffersthe dual advantage increasingnet revenueswhile of reducing numbersof visitors,therebyalso the reducingvisitors' total environmental impact. The managersof trulyuniqueand appealing locationswith a clearly-differentiated product shouldbe ableto chargemuchhigherpricesthan their competitors.Rwanda's Parc National des Volcansand Ecuador'sGalapagosNationalPark are oftencitedas examples. By the late 1980s, the Parc Nationaldes Volcanswas charging $170per visitto see its celebratedgorillas,with the maximum numberof visitors per year set at 6,000(Lindberg1991). Evensomewhatless
Theprevioussectiondescribedhowvarious studieshaveattemptedto estimatethe net economic valueof naturetourism. But it is a furtherchallengefor naturetourismdestinations to capture a substantialproportionof these values. If the economic benefitsassociatedwith naturetourismare to providean increased incentive conservation, realizable for then benefitswill needto outweighcostsat nationalas wellas local levels. One wayto increasebenefit capture is by increasingprices,eitherfor protectedarea entryor for goodsand services suppliedby the private sector(transport, accommodation, and drink,guides,and so food on). Otherwaysto increasebenefitcaptureare throughdeveloping touristfacilities,offering new complementary servicesand minimizing leakages (Lindberg1991). HIGHER USER FEES FOR NATURE TOURISM DESTINATIONS Entryfees for protectedareasin developing countrieshavetraditionally beenverylow, witha few exceptions. Recommending higherentryfees has becomea standardrecommendation for economists studyingprotectedareas (Dixon& Sherman1990;Lindberg& Huber 1993). This recommendation criticalwheregate entryfees is arethe most significantsourceof revenuefor parks and reserves. For example,as muchof 90% of the incomeof the KenyaWildlifeService (KWS)comesfromgate receipts,whichin 1991 amountedto about $8 millionfrom 22 national
Enviromnental Economics Series
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EconomicPerspectiveson Nature Tourism,Conservation Development and
uniquelocationscan oftenincreasetheirfees dramaticallywithoutdiscouraging visitors. Effortsto capture a greater shareof Galapagos NationalPark tourism's economic valuehave only intensified recently,as described by Southgate(1996). A 1986studysuggestedthe prospectof dramaticallyincreasing total revenues whilesignificantly reducingvisitors' environmental impactsif the prevailing entryfee of $40 per visit was increasedto $214 per day for foreigners(Edwards1991,cited in Southgate 1996). The entryfeefor foreigners was eventuallyincreasedfrom $40to $80 per visitin 1993. Manyvisitorsto the Galapagostake cruises,and the fees assessedon boat operators havebeenvery low. A ship carrying90 guestsin 1992paid a total fee of about $600,while generating muchas $4 millionin operator as gross revenues. Shipfees were increasedin 1993,however. Following 1993fee the increases,park revenuesof $3.7 millionwere collectedin 1995, compared $2.2 millionin to 1992. The Galapagos National Park kepta part of thesefunds (30% in 1991)whilethe rest were used to cross-subsidize mainlandparks. This sounds likea successstoryfor Ecuadorian parks. But by 1996the Ministryof Financewas preparedto allowa totallyinadequate budgetof only$1.2 millionfor the entirepark system, whileplanningto use the remaining funds generatedby GalapagosNationalPark for other nationalpriorities. This suggeststhat local governments, localbusinesses,and the mainland parks in Ecuadornow face a new and powerful competitorfor scarcefinancialresources (Southgate1996). Revenuesfrom tourismare not re-invested in conservationin many developing countrieswhere park entryand othertourismuser fees are passed directlyto the centralgovernment pooling for with otherpublic sectorrevenuesources. While governments fullyentitledto decideon are nationalprioritiesfor publicsectorspending, this doeshavethe effectof destroying incentive the
for managers developparks as viablenature to tourismdestinations collecthigherrevenues. and Whileeconomists othersmay pointout the and gains in economic environmental and efficiency associatedwith higheruser fees, persuadingthe privatesectorto acceptfeeincreasesthrougha politicalprocesscan be problematic,particularly whenprivateoperatorshavebecomeaccustomed to fees whichare very low. Mak & Moncur (1996)describean examplefromthe USA. HanaumaBay in Hawaii,a 10-acrecoral reef park, received about half a millionvisitorsin 1975. By the late 1980sit was attracting2.8 million visitorsannually,averagingover 7,500 per day, an increaseentirelydue to non-resident tourists. This huge increasethreatenedboth the naturalenvironment, ampleevidenceof with damageto the reef,and the qualityof the visitor experience, particularlysincethe publicfunds madeavailablefor management were minimal. As a responseto overcrowding, non-price rationingwas first introduced: limitinghours of access,restricting tour vehiclesand closingthe park for half a day eachweek. Admission was on a first-come,first-servebasis. Thena $5 admission was addedfor non-residents in fee and six monthsgenerated$2 million,morethan enoughto financepark management.But the touristindustry(principally taxi and bus the operatorsbringingtouriststo the park) mounted a powerful,sophisticated largelysuccessful and politicalcampaignopposingany form of restriction user fee. As a result,the use or restrictionswererelaxedand the fee was rescinded, onlyto be reinstatedlater at a lower levelwhichhad virtuallyno effecton visitor numbers,althoughit did at least providefunds for management.This experiencehighlights the difficulty naturalresourcemanagersin for balancing efficiency criteriawith political feasibility, illustratesthe capacityof tourism and industryinterestgroupsto rally opposition againstuse restrictions, price or otherwise. Oneof the specterscommonlyraisedby the private sectorin responseto proposedincreased entryfees is that tourists willbe discouraged
26
Environment DepartmentPapers
of Tourism? More for What theOptions Capturing oftheNetBenefits Nature are from visitingor a countryor a specificregion withina country. This fearmay havereceived insufficient attentionfrom environmental economists.The financialbenefitto an attraction by from increasingits fees may be outweighed the cost of reducedvisitorspendingin the broadereconomy.This has beenone of the dilemmas encountered settingfee levelsfor in nationalpark entry in Costa Rica,wherepark more entryfees issueshaveprobablyreceived attentionthan in any othercountry. Severalstudiesshowthat visitors' willingness-topay for accessto Costa Rica's protectedareas exceedsthe nominaladmission chargedas fees recentlyas late 1994(e.g., Balderas& Laarman 1990,cited in Southgate1996;Tobias& Mendelsohn1991;Echeverriaet al. 1995). But fee increasesintroducedin 1994arousedthe angerof tourismoperatorsand manyof their to clients,whonot onlyhad grownaccustomed paltry chargesbut doubtedthat the additional revenueswouldbe reinvestedin trail maintenance and visitorfacilities. It was also fearedthat the foreigners newhigherpricesmightdiscourage from visitingCosta Rica and/orexceedthe levels requiredto maximizerevenues(Southgate1996). Park fees for both Costa Ricansand foreigners were $1.25 per day until September1994. Fees were then adjustedto $10 per day for foreigners payableat least one day in advanceor $15 per day payable on entry. Travel agentswere sold ticketsfor $5 each. A brisk trade in discounted tickets emergedquickly. Somepark resentedthe new fees and did not administrators enforcetheir collection(Chaseet al. 1996). But the policychangestill appearedto have a major impacton park use, cuttingthe numberof foreign tourist visitorsby 43% duringthe following increasein season. For a four- to twelve-fold by admissionfeesto causevisits to decline less demandfor than half suggeststhat international admissionto Costa Rica's parks is priceinelastic,and that the park service'sfinancial position- if not that of the privatesector-would by be strengthened the increases(Southgate 1996). But Chaseet al. (1996)cautionsthat demandmightbe moreelasticover a longer
EconomicsSeries Environmental
period. Most 1994/95visitorsto Costa Rica wouldalreadyhavecommitted theirtravel to plans beforethe priceincreasebecameknown, whilevisitorsin later years mightchoosea different type of travel experience(in contrast, Barnes(1996)reportedexactlythe opposite following sharp entryfeeincreasein Botswana: a the growthin visitornumbersinitiallyslowedand then recovered).Concernthat higherpark entrancefeesmightbe deterringvisitorsto Costa Rica ledto anotherrevisionin fee structurein July 1995,whenadvancepurchasetickets for foreignvisitorsto the less-popular parks were reducedto $5 or $7 (Southgate1996). Multiplepricingpolicieshave beenimplemented in severalcountries,usuallychargingrelativelya affluentforeigners higherfee than localsand therebymeetingthetwin objectivesof raising revenues fromthose with the abilityto pay more, withoutdenyingcitizensaccessto their natural heritage(Lindberg1991; Lindberg& Huber is 1993). Suchprice discrimination practiced Cloud withgreat precisionat the Monteverde Preservein Costa Rica, where ForestBiological a variableentrancefee policyis followed, designed chargehigherfeesto thosetourists to mostwillingand able to pay more(and vice versa). Feeswere as followsin 1995:a tokenfee of<$1 for Costa Ricanstudents;$1.50 for Costa Ricannationalsand residents;$4 for foreign students;$8 for foreigners(not on package tours);and $16 for foreignerson tours. for Foreigners have recentlyaccounted 80%of the visits and 97%of the revenues. The fee raises revenuesfor policythus effectively whilekeepingthe reserveaccessible management to some(if not all) local and otherCosta Rican et residents(Aylward al 1996). HIGHER ECONOMIC RENTS FOR THE TOURISM PRIVATE SECTOR Theabilityof private sectortourismoperatorsto rents (i.e., long-term earnhighereconomic profits)throughincreasedpriceswill largely dependon whetheraccessto the market for a particularnaturetourismdestinationis limited.
27
and EconomicPerspectivesonNature Tourism,Conservation Development
As natural resources,naturetourismdestinations have scarcityor rental value. But if a popular attractionpermitsopen accessto unlimited numbersof tourists and tour operators,this can degradation and not only result in environmental inefficient. but overcrowding is economically competition forcespricesdownto a Unlimited pointwherethe scarcityvalueof the siteis lost to the tourists as consumersurplusand competition the betweenlocal suppliers' dissipates profits. This is becausethe prospectof any remaining profits willtendto attract newmarket entrants charginglowerand lowerpricesuntil average revenuesare drivendownto the valueof average due costs,and profits are therebyeliminated to price competitionand excesscapacity(likean open-access fishery). This is in contrastto a situationwith regulatedentry,whereaccessis limitedto a fixednumberof operatorswhichcan and act as partial monopolists chargeprices abovemarginalcost to earnpositiveprofits (Steele1995). Unfortunately manynature tourismdestinations,and especially protected areas, are controlledby one or a few monopolists, oftenincluding government. the Thesetendto be no moresuccessfulthan other nationalized industries. The environmental economic and gains from limitingand regulatingaccessto naturetourism destinationsis clearlyillustratedin a studyby Medio(1996) of Hurghadaand Sharmel Sheikh, two Red Sea divingresorts in Egypt. Hurghada has allowedunlimitedreef use for tourismand fishing,as wellas unrestricted coastline development.In contrast, Sharmhas carefully managedcoral reefuse, has restrictedcoastal development uses an effectivecompliance and monitoring program. The contrastin resultsat these Red Sea divingresortshas beendramatic (Figure5.1). With Hurghada's"mass"tourism, development densityis nearlythreetimesgreater and the reef suffersfrom overuse(threetimesas manyvisitorsand twice as manyboats), reckless exploitation(unnecessary damagefromhotel constructionand unmanageddiving)and pollution(leadingto poor visibility).With Sharm's "specialized" tourism,the restricted their numberof operatorshaverecognized
28
commoninterestby investingin conservation. more mooring Sharmhoteliershaveprovided sites and diverbriefingsto spread impactsand damage. Theyhavealso reduceunnecessary investedin sewagecontroland underwater visibilityis far greater. As a result,Sharmhotels are ableto chargealmostdoublethose at restrictionof resource Hurghada. Government to use (and monitoring ensurecompliancewith has the restriction) allowedeconomicrents to be for createdand establishedincentives operators the to investin protecting reef. Furthergrowthat by Sharmwillhaveto be counterbalanced to maintaining currentincentives protect the reef at thetour operatorlevel. This will dependon the enforcement capacityof the management authorityas wellas the continuedexistenceof positiverents to be gainedfromconservation investments. nature Privatereservesand privately-owned only moderate tourismdestinations have received attentionin the literature. Mostof the reservescomes information privately-owned on fromtwo comparablesurveyscarriedout in 1989 (Alderman1994)and 1993 (Langholz1996). In 1993,questionnaires were sentto 97 private reservesin LatinAmericaand sub-Saharan Africa. Of the 32 reservemanagerswho responded, morethan half reportedmakinga profit,with averageprofitshavingrisen 21% since1989. Tourismprovided67%of operating incomeand privategrants another 19%. The reservesvariedin sizefrom 6 ha to 80,000ha, withan averageof about 8,000ha. About 70% of the respondents recoveredtheir initial had investment 1993,comparedwith 25% by by 1989,and 72%believedtheycouldgenerate moreincomethroughtourismthan alternative land uses. Manyreservesdid not expectto be profitable,beingmotivatedmoreby conservation than personalor economic goals. Themanagers attributedmostof their successesto the presence of 'interesting ecologicalfeatures' and considered government involvement least important the factor. Local employment community and relationswere repeatedly emphasized as importantconcerns.
Papers Environment Department
What theOptions Capturing oftheNetBenefits Nature are for More of Tourismn? Figure 5.1. Key indicatorsat Sharmel Sheikhand Hurghadacoral reefresorts,Egypt Sharm Government Intervention UrbanPlanning Monitoring Program PublicAwarenessProgram FishingRegulations Development DensityIndicators Hotels Dive Centers Boats Investmentfor Conservation Dive Sites Fixed Moorings % of DiversBriefed Conservation Benefits SewagePollution Infilling
Underwater Visibility (m)
Hurkhada no no no no 127 85 400 30 65 4 yes 64/75
1-2
yes yes yes yes 40 27 220 37 108 65 no 1/40
15-30
AnchorDamage Rentsfrom Conservation AveragePrice of Tour Package Source:Medio(1996)
negligible US$45
significant US$27
The Monteverde CloudForestBiological Preserve,one of Costa Rica's mostpopular touristdestinations,is one of the most successful and well-known private reserves. Originating from a 500 ha plot set asideby a group of AmericanQuakersin the 1950s,the reserve reachedits current sizeof 10,000ha in 1991 after a lengthyand complexseriesof land acquisitionsmadepossiblethroughvoluntary and efforts, fundraising litigationagainstillegal users (Tosi 1991,cited in Aylwardet al. 1996). The TropicalScienceCenter(TSC),a non-profit NGO, has ownedand managedthe reservesince it was establishedin 1972,whentherewere 471 visitors. Visitationgrewslowlyat first, then acceleratedrapidlyduringthe 1980sas Costa Rica becamea populartouristdestination.The reservereceivedalmost 50,000visitorsin 1994.
Aylwardet al. (1996)reportthat entrancefees raised$376,000(45%/o) the Monteverde of Preserve's$841,000total revenuesin 1993. Otherrevenuesourcesincludeda naturalhistory program,a gift store and a snack bar. Total 1993costswere $772,000,leavingnet revenues of $69,000. The Preservehas generateda surpluseachyear since 1988. Tourismhas supportedmanagement the reserve,financed of substantialcapitalimprovements, the costs met environmental education of a sophisticated programand providedannualcontributions an to endowment fund. The Preservethus appearsto be financiallysustainable(thePreserve's efforts to ensureecological sustainabilityand contribution localdevelopment discussed to are in later sections).
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EconomicPerspectiveson Nature Tourism,Conservation Development and
In SouthAfricathere are about 9,000privatelyownedgamereservesand gamefarms covering8 millionha. Many of these privatereserveshave beenproclaimedas protectedareas through provinciallegislation,usuallyat the initiative of private landowners.Coveringas muchas 20,000 ha, manyof theseoperationsprovidehunting and/ortourismfacilities. Eventhoughthey consistmostlyof a myriadof smalloperations, theseprivatereservesand ranchesare so largein aggregatethat they makeup an important componentof wildlifeconservation South in Africa. Thereis a concentration privategame of reservesin the EasternTransvaalboth nearand borderingKrugerNationalPark, including wellknownexamplessuchas Londolozi, Phindaand Sabi Sabi. Many of thesereservesprovide luxuryaccommodation chargerelativelyhigh and prices. The profitabilityof such operationsis difficultto estimate,partly becausetheseare private businessesunderno obligation disclose to financialinformation, partly becauseno and seriousefforthas yet beenmadeto studythem from a financialor economic perspective. Discussionswith industryexpertssuggestthat the touristoperationsin thesereservesare only profitableif recent landacquisition costsare ignored. This probablymeansthat escalating landvaluesare the majorfinancialincentive for at least some newly-established ventures. Althoughmanyof theseprivatereserveshave nowestablishedinternational recognition their in ownright,most haveat somepointbenefited substantially from their proximityto Kruger NationalPark (Wells 1996). Somecountriesgiveconcessions privatesector to operationsto operatefacilitiesinsideor linkedto government-owned protectedareas. This is commonpracticein Kenya,Tanzaniaand Uganda. Amongothercountries,the TigerTops Hotelin Nepal's Royal ChitwanNationalPark is one of the earliestand best-knownexamples. In SouthAfrica,both theNationalParks Boardand the Natal ParksBoard havecautiously experimented with restaurantconcessions, but not with accommodation.SouthAfrica's North West Environmental Conservation Agency (formerlyBophuthatswana Parks Board)has
30
pioneered involvement the private sectorin the of developing managinglodgesin Pilanesberg and NationalPark and MadikweGameReserve. Unlikemost otherparks,the objectives of Madikweare primarilysocialand economic, to diversify economyand to providejobs and the othereconomic benefitsfor the impoverished communities this sparsely-populated in area. Theconservation agencyfenceda 70,000ha semi-aridarea formerlyprovidinga marginal incomefor livestockownerand stockedit with wildlife.The private sectorwill developand manageluxurysafari campsand lodgeswhilethe publicsectorconservation agencymanagesthe landand the animals(Wells& Daviesin prep). Thereis understandable concernthat allowing privatefirms to bringprofit-maximizing operationsintothe parks willhave a negative impacton wildlifeconservation.But this maybe an undulycautiouspositionto take. Legallyenforceable regulationsand contractscan be used to ensurethat private sectoroperatorscannot introducepracticeswhichthreatenthe enviromnent.Concession arrangements are certainlyopento abuse, and there are many examplesof concessionaires getting"sweetheart" dealswith few restrictionsand little supervision. Experience fromthe USA suggeststhat too-large concessions shouldnot be grantedto singlefirms, whichcan thenestablisha near-monopoly and becomedifficultto controlor dislodge,as in Yosemite NationalPark in the UnitedStates. But with adequateattentionto compliance, privatesectortourismoperationscouldoffer lowercosts,greater efficiencies a broader and rangeof market-responsive tourismservices. It is oftendifficult extractsufficientrelevant to datafrom the privatesectorto analyzethe financialor economic performance nature of tourismoperations.An exceptionis the work of Barnesand colleagues SouthernAfrica. In in Botswana,Barnes (1992)constructeda financial/economic modelof an up-market30bed wildlifetourismgamelodgein northern Botswanawhichwas assumedto require21,000 ha of landstockedwith high valuewildlife
Environment Department Papers
What theOptions Capturing oftheNetBenefits Nature are for More of Tourism? species. Recurringannualnet cash incomeafter start-upwas $173,400basedon 33%occupancy, yieldinga financialrate of return (FRR)of 17.5%and an attractiveeconomic of return rate of 27.5%. Sensitivityanalysisshowed lodge the wouldbecomefinanciallyunattractive (FRR<12%) occupancies at below28%. In Namibia,the establishment privateproperty of rights in game specieshas ledto the establishment wildliferanchesand of conservancies.Here, 10-20privatelandowners with 10,000-15,000 rancheshavejoined ha togetherto establisha commonouterboundaryto their combinedproperties,and drawnup contractsfor thejoint management use of and their wildlife. Four conservancies 100,000of 150,000ha had beenestablishedby early 1996. Barnes & de Jager (1996)compared these conservancies'rates of returnwith individual private ranches(Table 5.1). The resultsshowa positivereturnto gameranchingin Namibiaat the individuallandowner level,althoughthe financialrates of return(3.9-5.8%)are lower than the economic rates of return(8.5-13.6%). The economiesof scale achievable when landowners worktogetherthroughconservancies givemuchmoreattractivecommercial returns (7.3-10.0%).Evenmoreimportantly, whenthe real socialcosts of the factorsused in these operations evaluated(ratherthan the prices are actuallypaid)the rates of returnto a conservancy reachimpressive levels(12.9-19.5%). The privatization wildlifewithinNamibia of contributed a significant to increasein wildlife numbers(70%/6) biomass(85%)between and 1972and 1992,and a 44% increasein species diversity. This appearsto providesolidevidence for the effectiveness the incentives of createdby wildlifeprivatization. In a reviewof severalAfricanstudies,Pearce (1996)has pointedout someof the implications of the resultsof economic,as opposedto financial,appraisalof landuse optionsinvolving wildlifetourism. Adjustingrevenuesand costs for their shadowpricestends to increasethe rate of returnof wildlifeinvestments.Such investments leastincludemodifications at for overvalued exchangerates and for the true cost of labor,whichtends to be significantly than less the marketcost in a high unemployment context. This suggeststhat wildlifetourismshouldbe bettertreatedby nationalgovernments, for example,withfavorabletax regimes.
Table 5.1. Rates of returnon differentlandusesat differentscalesin Namibia FRR IndividualFarm Scale(9,000-14,000 ha) Southernmixessheep/game Northernmixedcattle/game Northerngame lodge ConservancyScale(90,000-101,000 ha) Northernmixedcattle/game viewing Northerngamelodge Source:Barnes and de Jager (1996) 7.3% 10.0% 12.9% 19.5% 5.8% 3.9% 4.2% 10.8% 8.5% 13.6% ERR
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DenartmentPaners Environment
6 How Can Nature Tourism Contribute
More to Local Economic Development?
Comparingthe overallbenefitsand costsof protectedareasand naturetourismenterprises can provideuseful information.But thereis growingacknowledgment manyof the that benefitsof conserving wildlifego to the worldas a whole,whilethe costs are usuallyborneat nationaland local levels(McNeely1988;Wells 1992). Thesecostsusuallyresultfromloss of accessto protectedlandsand damagecausedby wildlife. The heaviestburdentendsto be borne by poorercountriesand especially by impoverished peoplelivingin rural areasof these countriesin the proximityof protectedareas. This oftenprovesa powerfuldisincentive local to supportfor conservation, manyparks and and reservesare unlikelyto be ableto securetheir futurewithoutfindinga significant to play in role supportinglocal socialand economic development (McNeely Miller 1984;Wells & 1992). Improving relationsbetweenprotectedareasand neighboring communities thereforebecome has one of the highestprioritieson the international conservation agenda. This has ledto increasing efforts by protectedarea managersand conservationorganizations obtainlocal to cooperation,and to the introduction what of Wells & Brandon(1992)have referredto as integratedconservation-development projects (ICDPs). In principlethere are a varietyof tangibleways in whichlocalcommunities could receivegreaterbenefitsfromprotectedarea tourism(Table 6.1). The AnnapurnaConservation Area in Nepalis one of the few exampleswherethere are signsof
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effectiveintegration betweentourism,local economic development protectedarea and management.About40,000 peopleof diverse ethnicbackgrounds inhabitthis rugged, mountainous region,mostlypoor rural farmers. Tourismhas grownrapidlyand 45,000 foreign trekkersnow visitthe area each year, virtuallyall of themtravelingalongone of two trails, and therehas beena proliferationof smalltea shops and lodgesin villagesalongthese trails. Management the AnnapurnaConservation of Area Project(ACAP)has beendelegatedto the KingMahendraTrust for Nature Conservation, Nepal's pre-eminent NGO. ACAP has encouraged local participation natural resource in management.Discussionswith local peoplehad revealed establishment a nationalpark that of wouldmeet hostilitybasedon the fear of substantiallocal costsas wellas skepticism towardsthe prospectof local economic benefits (a reactionamplyjustifiedby the historyof many of Nepal's otherprotectedareas),and an alternative needed. Speciallegislation was established multiple-use the Conservation Area permitting hunting,collectionof forestproducts, andthe delegation management of authorityto the villagelevel. Highpriorityhas beengivento reducing environmental the impactof visiting trekkersand increasingthe local economic benefitsfromtourism. ACAPhas been authorized collect- and retain - a visitorentry to fee,helpingthe conservation projectto become financially self-sufficient.The Government does not provideany staff or funds to manage this protected area (Wells 1993, 1994).
EconomicPerspectiveson Nature Tourism,Conservation Development and
Table 6.1. Ways for communities to receive greater benefits from protected area tourism. 1. Compensation or restitution for park-caused problems Land claims by the dispossessed Damage and injuries caused by wild animals 2. Direct financial benefits for local individuals and organization Revenue sharing (from hunting, culling or other plant/animal product sales) Employment Purchasing more goods and contracting more services locally 3. Use of natural resources in parks or in buffer zones Hunting Livestock grazing Collection of natural products (medicinalplants, wood, construction materials, etc.) 4. Direct participation in tourism enterprises Employment Revenue sharing and joint ventures Selling goods and services directly to tourists - see Healey (1994) New market niches emphasizing traditional cultures Providing affordable services to low-income visitors 5. Institutional support for community projects (schools, clinics, roads, etc.) Fund raising Direct financial support Facilitation (enlisting other government agencies and NGOs for support) Technical expertise 6. Capacity building Trainng individuals with the skills needed for employmentand small businesses Supporting local institutional development Source: Adapted from Wells (1996) In another positive example, tourism at Costa Rica's Monteverde Cloud Forest Biological Preserve has had a substantial positive economic influence on the local community. The two neighboring towns contain over 30 wellestablished hotels. Over 90% of visitors stay in these local hotels, for an average of two nights, and patronize local shops and restaurants. In addition, tourists use local tour agencies, gas stations, outfitters and souvenir shops, and visit the local cheese factory, sugar mill, art gallery and butterfly farm. Virtually all of these enterprises are locally owned, and a communitywide planning process helps to maintain balance between local developmentand management of the Preserve (Aylward et al. 1996). But other cases are less positive. In Ecuador, many residents of the Galapagos Islands have found it difficult to benefit from ecotourism. Recent trends suggest the Galapagos are becoming a premium nature tourism destination, visited mainly by well-off people. Fewer Ecuadorians and fewer foreign backpackers seem to be visiting the islands, possibly in response to affluent residents of more wealthy nations seems
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Environment Departnent Papers
How CanNature TourismContributeMore to LocalEconomicDevelopment?
to be price-inelastic.The earningsof many hotels,shops and restaurantsare diminishing as the Ecuadorianand foreignbackpacking visitors who tendedto patronizeon-shorefacilitiesare beingdisplacedby the gentrification tourism. of Powerand water servicesare superiorto other Ecuadoriancoastaltownsbut pricesare high, especiallyfor foodand consumer goodswhich must comefrom the mainland.Less than 15%of foreigners'expenditures estimated reach are to the islands. Most affluentvisitorspreferto cruiseon a ship, requiringfew localinputs. Higherminimum wagesand restrictive work rules for Galapagosresidentsmeansthat feware employedon these ships(Southgate1996). In practice,local benefitsfromnaturetourism have oftenbeen limitedto employment a very on modestscale,with mosttourismbenefitsleaking out to the nationalor international level. Someof the most importantconstraintsfacingincreased local involvement tourism,including in community-based tourismenterprises, the are lack of requiredskillsand experience, of lack accessto markets,lack of capitalfor investment, lack of legaltenure or ownership rightsover tourismattractions,inabilityto compete with larger enterprises,lackof officialrecognition or supportfor the informalsectorand simplelack of financialviability(Ashley1995). Few countries have systematically attempted addressor to overcometheseconstraints.
to offer. In a demand- industry-driven or framework, commercial operatorschoosea particulartourismproductbased on an assessmentof the potentialmarketdemandfor suchservicesin a givenregion. But in the supply-or capacity-driven modelmost relevant to communities, potentialtourismenterprises must identifythose servicestheyare able to offer touristsbased on localresourcesand then attemptto markettheseproducts. The former, demand-driven, approachis importantfor minimizing risk of financialfailure and for the exploiting untappedmarketpotential;the latter, supply-driven approachhelps ensurean enterpriseis feasible,fits the local physical, ecological culturalcontext,and develops and the localand nationalcomparativeadvantage. But limitedaccessto information, skillsand capital canmake it difficultfor aspiringcommunitylevelsprovidersof tourismservicesto meetthe demands the establishedindustry(Ashley& of Garland1994). Communities also suffer can from a lack of information abouttourist markets and otherlocal suppliers,leadingto examplesof over-production localhandicraftsin different of communities withina regionwhich are targeting the samegroupsof tourists (A. Kiss, personal communications).
Ashley& Garland(1994)recentlycomparedthe potentialbenefitsfrom four types of wildlife tourismenterprisein communalareas in Namibia (Box6.1): (1) a privately-owned lodge;(2) a One of the most significant barriersto privately-owned lodgevoluntarilysharing community involvement tourismis the lack of in revenuewiththe community; a joint venture (3) affordablefinancing. Withoutlow-interest lodge,usuallywherethe community ownsthe financingthroughdirectand workable landand is entitledto leasepaymentsor profitmechanisms,rural communities' opportunities to sharingin a privately-run lodgeon their land; and participatein tourismventuresare likelyto (4) a community ownedand managedtourism remainvery limited. Community participation in enterprise(e.g.,campsites,craft sales or cultural naturetourismmay best be achievable through attractions). This studyconcluded an upthat joint ventureswiththe private sectoror park marketlodgewillusuallymake a larger management authorities. This will oftenrequire contribution the regionalor nationaleconomy to capacitybuildingin the communities, potential a simplybecauseof its scale, althoughthe rolefor NGOs. community enterprise'scontribution also be can ae if CommunitiesCommuntiesn a vry diferentsubstantial acquisition, the socialbenefitsof skill equity are genrally in a very different generally institutionaldevelopment, and situationfromtourismindustryentrepreneurs in of benefitdistributionare valuedin economic decidingwhat kind of tourismproducttheywish term.Bt iftheufou dre enterpris terms. But If the four different
enterprises are Environmental EconomicsSeries 35
EconomicPerspectivesonNature Tourism,Conservation Development and
Box 6.1. Factors influencing feasibilityof community the involvement naturetourism in The financialviabilityof any tourismlodgein a communal area dependson thetourismproduct,prices, occupancyrates, and the balancebetweengovernment taxes and government services(roads,water,power, airports). The scale of communities' benefitsand costsfromprivatelodgesdependson the numberof localjobs and wage levels,and the local resourcesusedby the lodge. The feasibilitvof revenue-sharing from a privatelodgedependson: * Overalllodgeprofitability * The extentto whichrevenue-sharing costs can be passedon to customers, perhapsby attracting specialized tourists with an ethical/ecological focus. * The valueof reciprocalbenefitsto the tourismenterprise from the community (goodwill,resource conservation, land-useagreements). and * Awarenessamongentrepreneurs communities potentialmechanisms benefitsof revenueand of sharing. * Government incentives (taxes,subsidies,promotion, publicity). and dependson: The feasibilityof establishingjointventuresbetweencommunities entrepreneurs pricescan be chargedto compensate entrepreneurs givingup a for * Theextentto whichabove-average share of profit and achieving lower returnon theirinvestment. a * The value of community rights overtourismresources(wildlife land) and * Transactioncosts of negotiating establishing and joint ventures,and the extentto whichNGOs and expertise). government helpreducethese (e.g.,by providing can * Awareness,interestand objectives entrepreneurs communities. of and The feasibilitvof community enterprisesdependson: * Prices and occupancy/usage rates (whichdependon competitors wellas promotionand marketing). as * Secureaccessto a valuablesite * Skillsin business,languages,marketing, management, so on. and * Changesin local landuse and tourismdevelopment whichare beyondthe community'sabilityto influence * Availabilityof capital Source:Adaptedfrom Ashley& Garland(1994) rankedaccordingto the revenuewhichthey generatefor a community, then a joint venture by lodgeis preferable,followed community enterprises, then revenue-sharing privatelodges. But evena private lodgewhichdoesnot share can revenues injectincomeintothe community throughemployee wages (Ashley& Garland 1994).Jointventurelodgesappearto offerthe best chanceof strengthening criticallinkage the development wildlife and betweencommunity conservation.Onlya joint venturelodgeseems likelyto generatebenefitswhichare sufficiently largeand widelydispersedto be perceivedas depending wildlifeconservation.A on community enterprisecouldhave similareffects but the financialbenefitswouldbe smaller. for participation Opportunities activecommunity and empowerment greatestin community are and enterprises joint ventures, while the community's role in revenue sharing tends to be passive. A private lodge without revenue sharing generally does little to encourage
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Envuronment DepartmentPapers
How CanNatureTourismContributeMore to LocalEconomic Development?
community participation(Ashley1995;Ashley& Garland1994). Evenwhensignificant revenues for the community generated tourism, are by
deciding to distributethese revenues how withina community presentsa furtherchallenge.
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Environment Departnent Papers
7 Nature Tourism's Environmental Impacts
of An economicapproachto the management protectedareas and othernaturetourism destinations helpto identifywaysof can benefits. maximizingnet financialor economic in of the most importantchallenges But one managingtourismis to reacha balancebetween the benefitsfrom visitoruse and the maintenance featuresof the area. of the natural environmental is Whenthe use of a naturetourismdestination benefits maximizing economic net uncontrolled, damageto the may resultin irreversible environment.Themarket systemwouldbe likely to delivertoo manytangiblebenefitsat the suchas non-usebenefits expenseof intangibles, (Driml& Common1995). solutionposes a dilemmafor Sothe economic managers. The dilemma arises destination approachsets valuesbased becausethe economic on the summedpreferencesof individuals' to to willingness pay, and theseare unlikely coincide with the socialand politicalvalues of whichgenerallyunderliethe establishment priorities. The optimaleconomic conservation withthe solutionwillprobablyonly coincide objectivesof a protectedarea when conservation constraintsare addedto maintaina defined quality(Driml& standardof environmental Common1995). Limitationof visitornumbersis perhapsthe most obviousmethodfor managingnegativeimpacts carrying and this has ledto a focus on ecological capacitywithinthe tourismliterature(Lindberg
What are the Options for Mitigating
carryingcapacitycan et al. 1996). (Ecological be contrastedwith economic carryingcapacity wherenet economic valueis maximized,as the discussedin section5.) Unfortunately, many definitions offeredfor a destination'secological carryingcapacityprovidelittleuseful guidance for practicalimplementation.For example, carryingcapacityhas beendefinedas "the level with high of visitoruse an area can accommodate levelsof satisfactionfor visitorsand few impacts on resources"(WTO/UNEP1992,cited in Lindberget al. 1996). It is unclear what constitutes either"high levels"or "few impacts". Carryingcapacitymightbe a moreuseful conceptif thenegativeenvironmental impactof visitorswas a linearor other simplefunctionof variable,such as the someeasily-measured numberof visitors. Thencarryingcapacitycould be definedreliablyin terms of that variable. But, (1996)have argued, as Aylwardand colleagues deteriorationdue to in realityenvironmental tourismoveruseoftenoccurs in mysterious so increments that predictingor assessingthe damagebeginsis a pointat whichirreversible difficulttask. Giventhe problemof determining thresholds,calculatingthe exact environmental carryingcapacityof a naturetourismattractionis oftennot feasible(Aylwardet al. 1996;Dixon et in al. 1995;Driml& Common press; Lindberget al. 1996). applicationof the that Recognition effective carryingcapacityconceptis difficult,if not
EconomicsSeries Enviromnental
39
Economic PerspectivesNature on Tourism, Conservation Development and impossible,has ledto a shift in focusfromthe "how manyis too many?"questionto one of "what are the desired(socialand environmental) conditions?" (Lindberget al. 1996). This shift in emphasishas ledto the development of alternativeplanningand management frameworks,including Limitsof Acceptable the Changesystem,VisitorImpactManagement and VisitorExperience ResourceProtection. Lindberget al. (1996)cite referenceswhichgives detailsof theseiterativeframeworks, whichallow for the identification use-impactrelationships. of In the Monteverde CloudForest Biological Preserve,Costa Rica, visitornumbersare limited duringthe two annualpeakvisitationperiods,to 100peopleat a time on the 20 km of visitortrails which covera smallfraction ofthe reserve,and thesetrails are periodically moved. Visitorsare not permittedto step off the designated paths and, if acute deteriorationis noted,trails are closedfor restoration. This approachcombines carefulmonitoringwith adaptivemanagement. The non-profitPreservewas originally intended to protect natureand providea site for biological research. It remainsto be seenwhat actionwill be taken if the 100-person limitbecomes a bindingconstrainton visitornumbersand revenuegeneration. A commercially-operated reservewouldpresumablysolvethis constraint by extending trail network. Onealternative the wouldbe to simplycap development let other and private reservestake the overflow(Aylwardet al. 1996). But tourismimpactscan be very diverseand difficultto monitor. For example, types of the impactidentifiedfor the Great BarrierReef WorldHeritageArea in Australiainclude:site impactsfrom structures,mooringand anchorings;coral damagefrom divingand reef walking;removalof coral and shells;garbage disposaland littering;sedimentdisturbance and dredging;waterpollutionfrom nutrients,heavy metalsand oil; sewagedischargefromvessels and from islandresorts;fishingimpacts;fish feedingimpacts;and impactsof researchand monitoringactivities(Driml& Common in press). Monitoring such a wide rangeof variablesand adjustingvisitornumbersand activitiesin responseto the results of such monitoring obviouslya massiveand expensive is management undertaking. Damagedoneis not just as a resultof the volume of tourists (takinginto accountboth numbersand lengthof visit),but also as a resultof the dgmage doneper tourist(Steele1995). This meansthat carryingcapacity(however defined)can be increasedby investingin moreeffective management mitigatedamage(Swanson1992, to cited in Steele1995). Improvedmanagement might,for example,includeincreasingspatial and temporaldispersionof tourists (or even concentration visitorsin resilientor even of alreadydamagedareas). For example,Medio (1996)showedhoweducatingdivers in advance on the fragilityof coral reefs ledto significant reductions damageper diverat a Egyptian in divingresort. Dixonet al. (1995)reported similarfindingsfromthe BonaireMarinePark, suggesting it maybe possibleto doublethe that estimated presentusage levelof 200,000dives per yearwith improvedmanagement more and effective divereducation. Privatesectortourismoperatorswill only have an incentive supportand investin additional to management reduceenvironmental to damage wheremarketaccessis limitedand regulated. If marketaccessis unlimitedor unregulated, free riders - operatorswhodeclineto incurthe extra costsof additionalmanagement will still be able to sharein the benefitswithoutregardfor environmental damage,and the incentive to cooperateand reduceenvironmental damagefor the common goodwill be lost. Kenya's Maasai Mara Nationalreserveprovidesan example. Illegal,but virtuallyunregulated, off-roaddriving by tour operatorvehiclesanxiousto providetheir clientswith close-upwildlifeviewshave significantly scarredthe landscape. Together withthe failureto limittourist or vehicle numbers,this has ledto environmental damage, modifiedwildlifebehaviorand diminished the visitorexperience.
40
Environment DepartmentPapers
What are the Optionsfor Mitigating Nature Tourism's Enviromnental hmpacts?
So far the discussion beenlimitedto direct has environmental damageto a naturetourism attraction. Indirectenvironmental damageis oftenmore serious. Aylwardet al. (1996)refer to an unplanneddevelopment "free for all" on the fringesof somepopularnaturetourism destinationsin CostaRica. And,of course,most forms of transport,evento the most environmentally-sensitive ecotourism destinations,imposesubstantialenvironmental coststhroughair pollutionand carbondioxide emissions. In Ecuador's GalapagosNationalPark, controls on damageper touristincludecarefulzoning, regulations tourists must be accommodated that on boats, registration naturalistguidesand of strict rules of shorevisits (de Groot 1983,cited in Steele 1995). But therehavebeenno controls on the numberof tourists.The volumeof visitors to this formerly-remote isolatedarchipelago and has increaseddramatically, from about 5,000in 1970to morethan 55,000 (40,000foreigners) in 1995. As a result,thousandsof unrestricted migrantshavebeenattractedto the Galapagosby the prospectof workingin a souvenirshopor on a cruiseship. The residentpopulationincreased from 2,400 in 1962 to almost 10,000 in 1990. Thetowns are nowsourcesof pollution. Many
of the residentsdo not succeedin finding permanent workand take up fishing. This is unregulated, severalfish specieshavebeen and severelydepleted, with unknowneffectson the localfood chain(Southgate1996). Environmental damageto a naturetourism destination shouldideallybe monitoredwith reference carefully-selected to environmental indicators,whichwillusuallybe site-specific and willoftenbe difficultto measure. 'Leading' indicatorsto identifyimpendingenvironmental damageare most needed. Adaptivemanagement of visitorsin responseto the signalsfrom such carefuland regularmonitoringwouldideally focuson infrastructure other development and as wellas visitornumbers,durationof stay and activities. Unfortunately, developing few country naturetouristattractionshavethe financialor institutional capacityto managetourismin such a sophisticated fashion. In the absenceof such capabilities, local expertopinionbackedup with the legal authorityand institutionalcapacityto regulatemaybe the next-bestoption. Economic analysisand instrumentsbecomemostuseful in helpingto workout how to extractthe maximum netbenefitsfromtourismoncethe acceptable
environmentalconditions have been defined.
Environmental EconomicsSeries
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EconomicPerspectiveson Nature Tourism,Conservation Development and
42
Environment Departnent Papers
8
Conclusions
capitalfor investment, inabilityto competewith well-established commercial operationsas wellas simplelack of tenureor ownershiprights over the tourismdestinations.As a result,relativelyfew local communities have realizedsignificant benefitsfromnaturetourismon their ownlands or in nearbyprotectedareas. Lack of education and trainingoftenlimitspeoplefrom rural communities the lowest-paying in tourism to jobs enterprises.Eventhough suchjobs can support largehouseholds local rural economies, in they usuallydo not involvelocal peoplein decisionmaking takingcontrolover their own or futuredevelopment. Naturetourismon privately-owned landshas in some cases been penalized landowners'or residents' lack of by effective tenureover wildlifeand othernatural attractions,or by policydistortions favoringland use alternativessuch as agriculture,livestockor mining. Of course,these reservations at least are as applicable manyotherprivate sector to activitiescompeting with tourismfor land or otherresources. Froma conservation perspective, protectedareas chargingrelatively entryand use fees often low supplythe most valuablepart of the nature tourismexperience capturelittle of the but economic valueof tourismin return. While manygovernments have successfully increased touristnumbersby marketingtheir country's naturetourismdestinations, most havenot investedsufficientattentionor resourcesto managing naturalassets whichattract tourists the or in the infrastructure neededto supportnature tourism. This has exposedsensitivesites of
Naturetourismhas made importantcontributions to GDP, foreignexchangeearningsand other traditionalindicatorsof economic development in manydeveloping countries- and these contributionsshoweverysign of continuing to expand. But nature tourism's contribution to sustainabledevelopment less clear. is Most of the economic benefitslinkedto tourist expenditureshavebeencapturedby commercial tourismoperatorsin the richercountries(where most tourists originate)and in the largercities of the host countries. This is largelya consequence of the high leakagerates whichare inevitable whentourismexpandsrapidlyin economies which lackthe capacityto producethegoodsand serviceswhichvisitorsare readyto spendtheir moneyon. But this concentration economic of benefitsamonginternational hotelgroups, airlinesand mainlyforeigntour operators,as wellas shops and restaurantsin the host countries' capital cities,doeslittleto support socialand economicdevelopment the remote in rural areaswhere naturetourismdestinations are located. Naturetourismhas catalyzedlocalor regionaleconomic development a few cases, in but thesehave oftenbeenaccompanied by negativeenvironmental impactsfrom uncontrolled construction, well as the abuse as and overuseof destinationsby inadequately regulatedtour operators. Local communities'participation nature in tourismhas beenconstrainedby lackof relevant knowledge experience,lackof accessto and
Enviromnental Economics Series
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Economic Perspectiveson Nature Tourism,Conservation Development and
ecologicalor culturalvalueto the risk of degradation unregulated by tourismdevelopment and the impactof too manyvisitors. Indirect environmental impactscan also be substantial. Expectationsof newjobs and business opportunities from rapidly-expanding nature tourismdestinationshave,in somecases, attractedrapid immigration catalyzedthe and uncontrolled expansionof nearbysettlements at ratesbeyondthe absorptivecapacityof the local environment. Despitetheseproblems,the overallgrowth potentialand somepromisingindividual cases do stronglysuggestthat naturetourismis one of the most importantsectorswhereenvironmental conservation may effectively combined be with economic development remoteruralareas of in developing countrieson a meaningful scale. The policy-making prioritiesgenerally in four lie areas: (1) increasingand capturingmoreof the net economic benefits,(2) contributing moreto local economic development, mitigating (3) environmental impacts,and (4) helpingto finance biodiversity conservation (recognizing onlya that smallfractionof ecologically-important areas havethe potentialto attract significant tourism). But very few countrieshaveestablished funetional policyor institutional frameworks to optimize economic environmental the and
contribution naturetourismto sustainable of development. Why is this? Therearetwo mainreasons. First is that few countrieshaverecognized naturetourismas a separatesectorof their economyrequiring distinctpolicies,oftenperceiving separate the labelingof naturetourism,ecotourismand other specialized forms of tourismas no morethan a marketing tacticto increaseoverallvisitor numbers. This situationis beginningto change as morecountriesrecognize naturetourism's potentialand the needto providea constructive policyframework this potentialto be realized. for Secondis thefact that nature tourism encompasses activitiesas diverseas viewing wildlifein semi-aridareas from vehicles,coral reefdiving,mountaintrekkingand exploringrain forestson foot. Theseexperiences be can packageden masseby large and sophisticated tour operatorsor can resultfrom the impulsesof independent travelers. Accessrights to destinations be controlled corporations, can by publicagenciesor local communities. Accommodation vary from large luxury can hotelsto privatehomesin rural settlements.As a resultof this variety,the economic, social, culturaland politicalprocessesand the environmental impactsinvolved oftenso are diversethat theyresist simplecharacterization, analysisand generalization.
44
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Future Research
Thereappearto be two mainreasonswhynature tourismresearchstudieshavegenerallyhad only a modestinfluence government on policymaking. First, verylittleresearchhas beenpolicyoriented. Financialresourcesfor researchhave oftenbeenlimitedand theseresourceshave often beenmobilized academicresearcherswhoare by moreinterestedin testinga specific methodological approachratherthan broad sets of policyquestions. Evenwhensupportedby international development agencies,such researchhas tendedto focus on theoretical aspectsof singleissues,such as destination entry feepolicies,or on generalthematicreviews unsupported detailedanalysis. Relativelyfew by researchers havebeenable to accessusefuldata on private sectortourismoperations. As a result of these constraints, practicalpolicy reconmnendations usableby government decisionmakers typicallynot emerged,even have in the most-studied countriessuch as Costa Rica and Kenya. The secondreasonis relatedto the diverse prioritiesand expectations the different of stakeholder groupswith an interestin nature tourism. Financeand economicplanning ministriesusuallyperceive opportunitiesin the termsof foreignexchangeearnings, jobs and economic growth;conservation agenciesin terms of increased park entryfees (offset by new management challenges); commercial tourism operatorsand private landowners terms of in financialprofit;and localcommunities terms in of jobs and opportunities local businesses. for NGO expectations dependon their orientation
45
Economicstudiesof naturetourismin developing countrieswere few and far betweenas recentlyas fiveyears ago. But importantprogresshas recentlybeenmade in demonstrating nature tourism's significant contribution several to countries'economies,and in showing nature that tourismcangeneratesubstantialeconomic benefits. One clear resulthas beenthe growing tendencyfor protectedareasand someother naturetourismdestinations increaseuser fees, to to try to capture a greatershare of these economicbenefits. Someprogresshas also been made in demonstrating gains in economic that and environmental efficiency resultfrom can regulatingdevelopment use at naturetourism and destinations, althoughunequivocal examples remainlimited. Practicaleffortsto regulate privatesectoroperators' accessto naturetourism attractions,to avoideitherunlimitedentryor dominantand inefficientcartels,remainrare. Naturetourismhas complexand important linkageswith a wide rangeof environmental and developmental processesacross severaldifferent sectors. But a comprehensive analytical synthesisof the lessonsfrom experience their and implications government for policymaking has yetto be carriedout, evenin a singlecountry. So far eventhe most technically sophisticated and insightfulstudiesof one or a fewaspectsof naturetourismhavegenerallyproveninsufficient as a basis for helpingdeveloping country governments identifyand evaluatetheir overall naturetourismpolicyoptions.
Environmental EconomicsSeries
Economic PerspectivesNature on Tourism, Conservation Development and but oftencombinelocalcommunity and conservation agencyviews. Understandably, these stakeholders havevery diverseviewson the most appropriatepolicyand institutional arrangements achieving for their ownsets of goals. Very few financialor economic studiesof nature tourismhave seriouslyattemptedto understand,let alonemeasure,the impactsof differentpolicyoptionson morethan one of these diversestakeholdergroups. Efforts to developeffectivenationalpoliciesfor nature tourismhavethus beenfrustratedby the lack of prioritizedeconomic analysisof the optionsas wellas the needto appreciateand reconcile diversestakeholder the perspectives. This indicates needfor appliedeconomic the researchin selectedcase studycountrieswhichis not onlytargetedto provideusableinsightsbut also sufficiently groundedin an appreciation of the perspectivesof the variousstakeholders to produceresultswhichare usablein cross-sectoral governmental decisionmaking. otherwords, In findingmoreeffectivewaysfor stakeholder involvement be combined to with technical analysisfor policydevelopment. The remainderof this sectionconsistsof sets of an overallmenuof key researchquestionsfor evaluatingoptionsand strategiesfor optimizing the economic ecologicalbenefitsassociated and with naturetourism. Country-specific policy researchcouldprioritizefrom sucha menu. DEFINITION AND CHARACTERIZATION - How can naturetourismbest be definedor characterized a subsetof all domesticand as international tourism? determines - Who ownsand rightsto access Whoure aestind tions? townism naturetourismdestinations?anls. -What is the structureof the naturetourism industry,who arc the key actors and howhas the industrydeveloped? -Whichgovernment departments ministries or havea significant director indirectimpact(or potentialimpact)on naturetourism? Definition characterization naturetourism and of in case studycountrieswillbe an importantfirst step beforea detailedresearchprogramis undertaken Aylward,personal (B. communication). Characterization likelyto is involveseveraldifferentaspectsof nature tourism:the typeof ecosystem(e.g., semi-arid areas,coral reefs,wetlands,tropicalforests, mountainareas),the types of commercial operationscomprising industry(size, the distribution, horizontaland verticallinkages, ownership, relationships with 'mainstream' tourism,and so on),the types of visitors(e.g., countriesof origin,incomelevels,types of experiences sought),ownershipand management arrangements the naturetourismdestinations of (nationalconservation agencies,provincial conservation agencies,NGOs, privatesector, indigenous communities, so on), and the key and govermment departments ministries. or MEASUREMENT - Whathavebeenthe principaleconomic impacts of naturetourism,and howhavethese impacts beendistributed geographically? - Whatfinancialand economic benefitsand costs (including opportunity costs)havebeen associatedwith naturetourism,both directlyand indirectly, how are thesebenefitsdistributed and at local,nationaland international levels? Estimatesof the economic impactsof tourism haveusuallybeenconsiderably more influential overgovernment decisionmaking estimates than of the economic benefitsand costs. The former requiresan estimateof the magnitudeof financial transactionsattributableto tourismdestinations whilethe latter requiresan economicwelfare
analysis.
Otherimportant measurement questionsinclude: - Whatfinancialand economic rates of return havebeenearnedby the majortypes of nature tourismenterprises?
Environment Department Papers
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FutureResearch
- What government revenues havebeengenerated by naturetourism? - What havebeenthe principalgovernment policiesand instrumentsfor encouraging or regulatingnaturetourism,and what impacthave thesehad? - How havethe financialand economic viability of naturetourismbeenaffectedby government intervention (e.g., taxes and subsidies)in sectors whichare competing landuse options,suchas agriculture,forestryor mining? POLICY ISSUES
- What arethe optionsfor mitigatingnature tourism'senvironmental impactsand howcan the environmental socialimpactsof nature and tourismbe monitoredand regulatedin ways whichare cost-effective usefulto protected and area managers? - What are the appropriateinstitutional arrangements managingand regulating for the use of naturetourismdestinations(including limitingand regulating market accessto destinations, privatizingstateprotectedareas or tourismoperations withinthese areas)?
- What are the benefits from expanding nature
Policyissueson whichresearchis needed include: - What are the optionsfor increasingand capturinga greaterproportionof the net economicbenefitsassociatedwith naturetourism (including tourismdestinations, new expansion of tourismfacilitiesat existingdestinations, higher accessfees and/ormultiplepricingpolicies, reductionof leakagesfrom the local or national economy)? - How can naturetourismcontribute moreto local economic development what are and realisticoptionsfor overcoming often the significant barriersto localparticipation in nature tourism?
tourismon privatelands,through incentives for landowners othermechanisms, to what and and extentis tourismcompatible with alternative land uses? Whattpes of naturetourismshouldbe promoted governments by undervarious conditions (e.g., highcostAlow volumevs. low cost/highvolume)and what policyinstruments shouldbe used as incentives? - What overallsets of ecological, socio-economic
-
and institutional conditions most likelyto are supportnaturetourism's contribution to biodiversity conservation sustainable and development?
Environmental Economics Series
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Environment Departnent Papers
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