Jon Mitchell and Caroline Ashley: The Power of Tourism to Fight Poverty

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By Jon Mitchell, Tourism Programme Leader, Overseas Development Institute, and Caroline Ashley, Independent Consultant on Business and Development


Belief in the power of business to fight poverty unites this on-line community. But when the business in question involves flying affluent tourists into places full of poor people - and organising the high quality food, excursions and entertainment that they need to enjoy themselves - does your belief in the power of business falter?

Our new book, Tourism and Poverty, Pathways to Prosperity, drawing on a plethora of research suggests that - if you want to base your opinion on evidence rather than assertion - then ‘yes’ tourism can fight poverty. Note, we say ‘can’, not that it always does. The share of spending by tourists within a destination that reaches poor people can vary from less than 10% to a high of 30%.

The tourism sector seems to attract an unusually large share of both condemnatory critics and enthusiastic proponents. To some, islands of luxury in poor countries combine the worse aspects of colonialism with commoditisation of local culture. Others are on a mission to reveal the size of the tourism-related economy, through years of in-depth modelling, using the argument that if the sector is big, it must be good for the hosts.

In over a decade of research at the Overseas Development Institute (ODI), we have built an evidence base that challenges positions based on assumptions. Economics, fortunately, gives us a lens that does not analyse the attitudes, colour or waistline of international tourists, but on where the money goes: who gets what from international tourism? The ODI has explored this question in a dozen destinations across Africa and Asia.

Our findings have surprised many. When it works, international tourism is actually a very good way of channelling resources from rich to poor. In destinations as diverse as hiking on Mount Kilimanjaro in Tanzania, business tourism in Vietnam and cultural tourism in Ethiopia, between one quarter and one third of all in-country tourist spending accrues to poor households in an around the destination. Evidence from the distributional performance of ethical trade in agricultural commodities suggests that the share of final retail price which accrues to poor producers from trade in tourism services compared favourably with ethical trade in many agricultural commodities.

However, sometimes tourism works much less well as a Robin Hood strategy. Around the Angkor Wat temples in Cambodia, gorilla tourism in Central Africa and beach tourism in The Gambia, the poor see little of the tourism dollar. (That said, when we first discovered that 13% of tourism spending on package holidays run by 7 international tour companies on a short strip of beach in The Gambia reached the poor, people were surprised that the number was not a lot lower).

So what explains the difference in the earnings of the poor in different destinations? How business behaves – who is employed, at what rate of pay, where goods are sourced – is an important factor. Business practice interplays with three other factors to shape pro-poor impact. First, the sophistication of the economy: more developed economies can readily link farmers and furniture-makers to the tourism sector. Second, the behaviour of tourists: when tourists shop in local markets and hire local guides, the amount may seem small but the total effect can be huge. Third, government decisions influence the shape of the economy, from whether the poor can get hospitality training and qualifications, to whether functioning markets enable the poor to provide their products and services to hotels and their guests.

What does this mean for tourism business? Whether it’s a mainstream package holiday company or a specialist niche tour operator, there are some common messages, that we could summarise as the 4Ps: pay, procurement, persuasion and partnership: pay a living wage to local employees; take a hard look at procurement and potential to source locally (which in turn can enhance the product offer to tourists); persuade –or at least inform – your clients how to take up opportunities to spend in the local economy – and partner with government on destination development in which tourism is well integrated with the local economy.

Our new book pulls together many strands of knowledge that exist so far. More work is needed to incorporate climate change impacts. Work developing market-based and evidence-based interventions is proceeding apace. The issue of the impact of tourism on local development is not going to go away. As a result of the hammering of Sterling on foreign exchange markets, the major destinations for British tourists are changing from traditional markets in southern Europe to more affordable tourism beyond the Euro-zone – to Egypt, Turkey and Morocco. So destination impact in transition economies is not just an issue for adventurous backpackers, business travellers and retired couples on safari. It is now core to the business of mainstream tour operators.


Add your comments below.

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Tourism and poverty provide an interesting study for development policy… for this is usually where money meets face-to-face with no money. Thank you for providing careful research to enlighten our assumptions.

From from the index and contents pages of your book, I tried to discern whether health impacts on the poor from tourism jobs might be addressed. Sometimes in economic discussions health impacts are left out, but these are really crucial considerations, especially in developing countries where health care for the poor is so limited. For example, a woman/mother being exposed daily, for long hours, to cleaning agents in tourist hotels creates a potential for serious impact on child health, future livelihood, family cohesiveness, etc.

There are likely some interesting disparities in tourism jobs with regards to health impacts. I wonder if tourism planners would/could use such information to encourage safer practices, such as with green hotels. If anyone needs protecting from harm on the job site it is the poor. The entire culture and economy eventually suffers when the poor are unhealthy.

If one believes that wealth creation and enterprise development are the most direct route to addressing poverty, it becomes even more important to factor in the health impacts of chosen development strategies. Nations tend to place their costs of poor health in budget columns that seldom get cross-referenced with development issues, except in the case of pervasive problems such as HIV or malaria. But at the level of everyday life, health affects everything that a society does. And as we in America now know, poor health and health costs can eventually become major contributors to overall social and economic distress.

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As a company, we work closely with small to medium scale tour operators based in West Africa who have already implemented or are working towards implementing Responsible Tourism policies to their current and future tourism projects. As we carefully scrutinise these operators to determine whether they have a positive impact on the destination they operate in, we have come accross a large number of facts which show how tourism, if managed properly, can help reduce poverty for local communities based around these projects.

All of the operators we deal with source their food products locally, local transport is used when deemed safe, staff are locally employed and involved within the business, tourists are encouraged to meet the locals and spend their money within the locality, locally owned guest houses are used when accommodation is required on tours, and that is only the tip of the iceberg. All of this is done whilst taking into account the tourists needs for comfort and a safe environment. But that is not all! Measures are taken not only to respect the needs of the local communities in destinations, but also to preserve and respect the local heritage of the locality (natural, cultural and historical).

This model for tourism is a winner, in terms of providing economic benefits to local communities, but also in terms of raising the tourists and locals awareness towards the importance of sustainably managing the environment they live in. Of course, it has to be managed efficiently.

Responsible or Sustainable Tourism is also linked with sustainable development. All the lodges that we list (not many for the moment, but the list will soon grow) use renewable energy as a source of electricity, waste is recycled where possible (grey water used for watering plants and vegetables, compost toilets) and water is used efficiently.

So in terms of reducing poverty and promoting a better place for local communities to live in whilst at the same time providing unique and unforgettable experiences for the tourists and educational opportunites for local inhabitants and tourists alike, we feel that the Responsible/Sustainable Tourism is a great model for success, provided it is managed properly (I can’t stress this enough!).

If you want to learn more about Responsible/Sustainable Tourism and how it is being implemented in West Africa, please visit our website, follow us on twitter or join us on Facebook.

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In a speech in Kampala in December, to an audience of business people, bishops and the Prime Minister of Uganda, I said: “With some investment in infrastructure, tourism could have more positive impact on more people more quickly than any other sector.”
I had recently met Amos, an orphan from a care home who started Great Lakes Safaris with $50 and now has a turnover of $1m p.a. Through his many staff and contractors, his business is creating local wealth faster and in a more sustainable way than any other business that could be attempted by a capital poor entrepreneur.
The audience clapped when I (recklessly) promised to take my family to Uganda on holiday. We are now booked through Amos. What is attractive is that, although Great Lakes offers high end accommodation, the company also offers tours for those of us who value experience and connection with local people more than luxury hotels. This is an underexplored market that needs professional marketing and development.
My organisation, Transformational Business Network (TBN) are a network of entrepreneurs and business people than don’t just talk about it, we do it.
Tourism projects established by TBN members include: Kuzuko, a new national park in the poorest part of SA with beautiful lodges and a range of social programmes, opened by Archbishop Desmond Tutu; a lodge in a stunning setting in Swaziland which helps support orphan care and high quality education; and even a member developing trekking and climbing in the Wakhan corridor, Afghanistan.
One outcome of the Uganda experience is a desire to set up a UK for-profit pro-poor agency that develops business for these and the many good quality local companies in the developing world that often lack Western marketing capabilities. Anyone out there with travel sector experience want to join me?
Meanwhile, I look forward to reading this book.
Jerry Marshall, www.tbnetwork.org

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I don’t know whether the book covers ‘voluntourism’, that is, overseas trips that combine tourism with an element of volunteering. This trend is getting very popular and there are both good and bad exponents. Many NGOs will tell you that any short-term volunteering is likely to have an overall negative impact because of the cost and hassle involved for the host community, and the limited help that the volunteer can give in a limited timeframe. This is undoubtedly true in some instances, but there are examples of schemes where properly planned assignments that match an appropriately qualified person with well researched, demand-driven projects can make a significant impact.

Will Snell

Skills Venture
http://www.skillsventure.com

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Reply to Will:

Voluntourism is definately on the rise in terms of an alternative option for tourists seeking a more fulfilling experience and to share their skills with those in need, and yes you are right that some of the shorter term projects can risk causing negative effects on local communities in the destination. However, if managed efficiently whilst taking into consideration the needs of local communities and those of the ‘tourists’ on an equal basis, then these kind of projects can have extremely positive benefits.

Take an example on this award winning voluntourism project based in the Gambia which helps with the training of teaching staff. In the Gambia, like most of West Africa, teachers are lacking, and resources to train these teachers in order to benefit the younger generations are quasi non-existant. The beauty of this project is that 3/4 of the money spent stays in the destination.

It will be interesting to see how voluntourism develops, however it is essential that the needs, desires and limitations of the host communities in destinations are taken into consideration as well as those of the voluntourists.

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This may be a little here and there, there’s so much that can be said, and I am intrigued, to say the least, by the title of this book. So, here goes.

Growing up and living in the Caribbean - St. Lucia to be exact, and working in development of crafts, I see this conflict-filled marriage of tourism and development is ever present; growing up in the 70s, there was hardly any tourism, there was rich and poor indeed, and by far more of the latter. There was malnourishment for sure, from people having ground provisions as the overwhelming part of their diet. There was rich and poor then as there is now, but despite the differences in levels of wealth, there was relatively little evidence of envy and the social unrest driven by wondering why you don’t have what they have, why you are the servant, still serving a ‘master’.

Now we have a thriving tourism product-we’ve come a long way for sure - better healthcare, universal education, beginnings of a local university, smoother, straighter roads, even one or two local owned hotels and heritage tourism spots. But we have not managed to create those marriages that make tourism work for the true alleviation of poverty across the board, it’s tempting to say that the trickle down effect has been a seepage of confusion and resentment, but as I type that, I feel I am being a bit too cynical.

But it is fair to say that there’s much, much more that can be done and isn’t being done. In my area- development of handmade items, crafts primarily, I hear the talk about how our work supports the tourism industry, not just by keeping more of the tourist dollar in the island, but by enriching the tourism experience. Yet the reality is that most souvenirs are imported, most producers struggle with sky-high costs of production, lack of training, difficulty in securing prime marketing and selling real estate. There is no co-ordinated programme, no dedicated government department, the Arts & Crafts Co-op recently went into receivership.

I think it all stems from the concept that tourism is something for ‘them’ not us. When we talk about keeping x-island beautiful, it needs to be for us and then ‘them’. We need to value our own and to recognize the potential - as your note says - is huge. On top of that, in the Caribbean, we deal with a unique history and we need to get past the social conflict that comes naturally with the huge foreign owned super high-end projects. I’ve always felt very strongly that if we develop our true selves and give equal importance to who we are and get to love that, and see good standards of living can come from that, then we will have created something more sustainable, genuine and attractive indeed to the tourists who granted, hold great potential for a wealthy future for us.

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In Ecuador, the indigenous farmer organization Unorcac from Imbabura province has been engaged in rural tourism since the year 2000. During a visit of the then chairman of the organization to some on-farm tourism initiatives in the Netherlands the idea came up to apply the same concept in Ecuador by developing farmer home stays (similar to B&B) and by designing tours to allow tourists to get a good picture of everyday life in the countryside of the Ecuadorean Andes. The result? Before, farmers only saw tourists passing by but since the foundation of its tourism agency Runa Tupari www.runatupari.com more than 10000 tourists from all parts of the world have been hosted in home stays with the farmers and more than 15000 tours and excursions have been organised. After a initial start-up subsidy provided by Agriterra through Unorcac, Runa Tupari is already for more than 5 years financially independent. The secret of this success? To my opinion it is the business model that has been chosen plus good coaching by a tourism expert and a tight focus on promotion and marketing from the start.

To me Runa Tupari is the mother of all farmer-led tourism initiatives and unfortunately its success remains still exceptional compared to most other so-called community based tourism initiatives. It is striking to see that community based tourism is flooded with good intentions but is clearly lacking knowledge of tourism often without not even a remote focus on tourism as a business. Apart from that it proves also not easy for a peasant organization to get engaged in the highly dynamic and complex tourism sector. But I think staying out of the tourism business is not an option to farmers and rural people. If farmers and their organisations don’t get engaged, others will take the lead but definitely with much less focus on rural development and employment.

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Thank you for providing this empriical based research in the very complex area of poverty and tourism. Coming from a developing country myself, growing up and living in the Caribbean I have seen first hand both the benefits and ills of tourism on small island developing states, I believe that tourism has a very strong potential to fight poverty and there are some great examples in the region. I appreciate the importance of the 4 Ps however the reality in the region is that the smaller properties/organizations are usually the ones who have the closes link to the communities and the poor and therefore a greater potential to reach them, but in the same vein it is the small businesses that suffer the most from limited resources coupled with the volatility of the sector, both in terms of global economic downturn as well as damage from natural disasters for example. This means that while the larger properties who have perhaps more potenital but less actual impact on the poor are the one who can act upon these 4Ps (and often don’t), many smaller properties struggle for survival and unfortunately these 4P end up being less of a priority in thier day to day operations. How then do we deal with this paradox? How do we encourage and make larger properties be more socially responsible and increase thier impact on the poor as well as support the small properties so that they too can expand their impact. I look forward to reading you book.

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Yes, this is indeed a paradox. In my own experience also, the smaller operators supporting the tourism industry have more problems being paid by the larger operators, who as you noted, have the capacity. This means the positive effects possible from the sector often don’t materialize. There is much that needs to be done to educate stakeholders and find common ground.