3 Estimates of leakage from tourist revenues in Third World countries

Box 7.3 Estimates of leakage from tourist revenues in Third World countries

• The World Bank estimates that 55 per cent of gross tourism revenues to the developing world actually leak back to developed countries (Frueh, 1988).

(Boo, 1990, vol. I: xv) •

The study on Antigua found high leakage of the tourist dollar, especially through the repatriation of profits, leakages from hotels in the form of commis- sions paid to travel agents, imports of food and beverages, interest payments to foreign banks, and repatriated earnings of foreign employees. Other money

13111 leaks were also through payments to foreign auditors, insurance companies, and other service companies.

(Hong, 1985: 22–3) •

In Nepal, . . . it has been estimated that approximately 69 per cent of the total expenditure of a mountaineering expedition . . . was spent outside Nepal and that only around 1.2 per cent of the total remained in the mountain communi- ties.

(Sharma, 1992; quoted in Kalisch, 2001: 2) •

In most of the Caribbean, the level of what are known as ‘leakages’ is very high, averaging at around 70 per cent, which means that for every dollar earned in foreign exchange 70 cents is lost in imports. In the Bahamas, a senior tourism official suggested in 1994 that the leakages for that country might be as high as 90 per cent. More diversified economies such as Jamaica’s have been more successful in blocking the leakages. The Organisation of American States assessed Jamaica’s leakage at 37 per cent in 1994, a far more respectable figure than is usual in the region.

(Pattullo, 1996: 38–9) •

A leakage of 77 per cent has been estimated for ‘charter operations’ to the Gambia. A study published in 1978 by the Economic and Social Commission for Asia and the Pacific estimated the leakage was between 75 to 78 per cent when both the airline and hotel were owned by foreign companies, and between

55 to 60 per cent in the case of a foreign airline, but locally-owned hotel. (Madeley, 1996: 18)

diversification by the large tour operators. Increasingly such companies are using local contacts, organisations and companies or their own couriers or staff to offer variations on the standard, conventional theme of hotel accommodation, hotel food, hotel bar, and hotel swimming pool. Through this process, even the most unashamedly hedonistic tourist (who wants nothing more than the swimming pool and the bar) can find them- selves lured, even if only for a short time, into the category of new tourists. In this small way, even the conventional mass forms of tourism are being affected by the new, alter- native and supposedly sustainable forms.

An important aspect of tourism TNCs and their attempts to address the issue of 11111

sustainability is their lack of accountability. Carothers quotes a former staff member of

176 • The industry

the United Nations Centre on Transnational Corporations (UNCTC, now defunct) who explains that the issues at stake were:

that multinationals fear even the semblance of public scrutiny. They shun any serious discussion of critical issues: their global market dominance, price fixing practices in small countries, wage cuts and job losses in the Third World, huge commercial debt repayments, and other ‘negative’ matters. A peak of absurd- ity was reached at the final preparations for the Earth Summit when there was heavy lobbying to remove the term ‘transnational corporations’ from the draft text of Agenda 21 . . . Third World debt, environmental destruction and the need for millions of new jobs cannot be addressed without understanding how multinationals operate. Governments and citizens need to know what trans- nationals are doing, within a legal framework that holds them accountable.

(1993: 15) With this unequal distribution of power in mind, the UNCTC aimed to increase the

TNCs’ contribution to development, to provide technical assistance to Third World countries on foreign investment issues and to produce an international code of conduct for TNCs. The world of industry, commerce and finance, however, assisted by organi- sations such as the ultra-conservative Heritage Foundation and by US President Ronald Reagan, continually attacked the UNCTC. Despite the fact that the centre had achieved very little beyond establishing a few non-binding principles for foreign investment, the United Nations relegated the importance of its work in 1992 and finally disbanded it in 1993.

In July 1999, a more recent example of corporate power against local control was exposed in Haines, Alaska, when Royal Caribbean Cruise Lines, one of the largest cruise lines, was convicted on many counts of bypassing purification systems, dumping oily bilge, illegal oil dumping, waste water discharge, forging documents and systematic obstruction of justice on numerous occasions in the Caribbean and Alaska. Much of the vocal opposition to this type of activity came from the town of Haines which had earlier built a new pier to accommodate cruise ships. In December 1999 after the judgment, Haines was dropped from all the itineraries run by Royal Caribbean. Scott (2001) reports that many Haines citizens saw this as a blatant attempt at punishment and quotes one person as saying: ‘Let all the other ports know that you can’t just raise head taxes and tour taxes without paying a price.’ Scott comments that: ‘the sudden unilateral removal of Haines from the cruise economy displays the power of multinational corporations to dictate the terms of business’ (2001).

With the disbanding of the UNCTC and with the recent push by the tourism industry for self-regulation (see ‘Re-defining sustainability’, pp. 179–99), we now appear to be further than ever from the legal framework mentioned above.

Independent travel and independent tour operators

To tap into and cater for the growth in independent travel, specialist tour operators have increased in number and significance. Since 1976 in the United Kingdom some of these operators have been represented by the Association of Independent Tour Operators (AITO), which now has 160 smaller specialist companies as its members who annually carry over two million holidaymakers.

The AITO describes its members as ‘owner-managed, specialising in particular desti- nations or types of holidays; . . . uniquely placed to provide personalised advice based on first hand experience. Every AITO member is passionate about its chosen destina-

The industry • 177

tions or activities’ (AITO website, 2002). All its members are financially vetted and bonded in compliance with European regulations, but ‘are also bound by AITO’s own code of business practice which includes provisions for the clear and accurate descrip- tions of holidays and the use of customer questionnaires for monitoring standards’ (2002). The AITO describes itself as having ‘long been in the lead as far as environ- mental initiatives are concerned’, and calls its members’ holidays ‘by their very nature, “green” in aspect’; their holidaymakers ‘live as part of the community and . . . their money benefits local businesses’ (2002).

The AITO first formally introduced its members to the notion of ‘Responsible Tourism’ in 1989, and set up a not-for-profit organisation called Green Flag International (GFI) to promote the idea. As the Green Globe initiative (see pp. 184–5) grew in impor- tance in the early and mid-1990s, the AITO disbanded GFI and joined the Green Globe

13111 initiative instead. It found, however, that ‘Green Globe, over the years, became too “corporate” in style for AITO’, and in 2001 it established its own Responsible Tourism Guidelines. These cover general good practice in ‘sales, marketing and pre-departure information’.

The AITO’s implicit criticism of the corporate agenda associated with the Green Globe initiative is repeated elsewhere in its website where it claims that its own members are ‘all independent of the vertically integrated groups within the industry’ (2002). This distinction is important to the AITO because it allows its members to distance them- selves from the widely perceived unsustainability associated with the practices of the large-scale mainstream tour operators. In turn, this distance gives them not only a status of specialists offering personal service but also allows them to claim, almost by default, environmental and ethical principles for their own.

There can be no doubt that the AITO values environmental sustainability, however it may be defined, highly. It lays considerable stress on its general environmental aim, its promotion of green tourism and its involvement in related debates. It promotes a code of conduct for tourists along with the Campaign for Real Travel Agents (CARTA), and it emphasises the importance of ethical considerations in the business practices of its members.

It is, however, an organisation designed to help its members market themselves and improve their performance (maximise their profits). In itself, this is fine, for it is clear and explicit and profits are not something to be avoided. But what we need to ask is whether this conflicts with its promotion of sustainability. One of its guidelines for tourists, for example, is ‘Get your holiday off to a green start – if possible, travel to and from your airport by public transport’ (1996b: 42), despite the fact that the most polluting element of the holiday is likely to be the air journey. The code of conduct ignores this leg of the journey because it is essential to the holidays it is selling, and the AITO chooses instead to focus attention on a relatively trivial leg of the journey. Long-haul operations overwhelmingly involve air travel, an environmentally damaging form of transport. As Drukier notes: ‘Hurtling across the world in metal cauldrons bubbling over with greenhouse gases looking for unspoiled vistas can hardly be defined as walking softly on the planet’ (2001). And as Hall and Kinnaird explain:

global travel to ecotourism destinations undertaken in fuel-hungry aeroplanes is in itself incompatible with ecological sentiments. As the very support upon which all life depends is under threat as a consequence of our Western lifestyles, it is acknowledged that patterns of consumption must shift away from fossil fuel burning and the use of non-renewable resources. The extolling of ecotourism development in faraway lands . . . may be thus viewed as paradoxical.

178 • The industry

This paradox calls into question the claims of sustainability made by operators of new forms of tourism. Of course, the AITO is unlikely to suggest to potential customers that they should stay at home. But the example illustrates both where its real interests lie and the limits placed on its ‘greenness’ by the nature of its business, purpose and ethos.

We would suggest that the ‘Independent’ in the AITO is a relative term which cannot

be defined without reference to the political and ideological contexts in which it is set. Likewise, the environmental sustainability it pursues is subject to constraints, not least of which is the fact that its definition varies with many factors, and should be inter- preted only with reference to its political, economic, ecological and social contexts.

The new tourist, the independent traveller, the backpacker or the trekker, is one whose image, fashion and consciousness necessitate a clear, and sometimes explicit, acknow- ledgement that they seek sustainability in their holiday pursuits, with a minimum of neg- ative impact. They may even be aware of the likely incidence of financial leakage from the destination country, and may well attempt to spend their cash in local shops rather than in the TNC-owned hotel parlours and kiosks. But for them too, the bulk of their holiday spending goes on the long-haul leg from home to Third World country. In terms of leakage, then, the new tourist is only marginally less associated with TNC control of the industry than the conventional mass tourist, and their money is only marginally less likely to leak out of the destination than that of the hedonist mass tourist enclave.

Consider the following two types of tour:

1 a Club 18–30 tour;

2 a trekking expedition to Nepal. Assume that two average tourists – one seeking sun, sand, sea and sex, the other seeking

something alternative, authentic and sustainable – live in the same town in England and earn similar amounts of money. Table 7.1 makes a qualitative assessment of the sustain- ability of each type of tour. The assessment is simple, intuitive and unscientific, and

Table 7.1 A qualitative assessment of some differences between a conventional mass tourist package and a typical trekking package

Trek Distance travelled to destination

Impacts often linked with sustainability

Level of pollution associated with mode of High

Club 18–30

1,000–2,000 km 7,000–8,000 km

High travel (air)

Length of visit

3–4 weeks? Cost of tour paid to operator in UK (£)

1–2 weeks

1,500–3,000 Daily money spent at destination (£)

Low–medium Contact with local population

Medium–high

Limited Number of jobs created in destination community

Limited

Low Quality of jobs created in destination community

Medium–high

Low Secondary production and services created in

Low

Medium destination community

Medium

Limited–very community – dependency on tourism

Social dislocation caused within destination

Possibly high–

dependent Cultural impacts

very dependent

Possibly high Direct ecological damage at area of contact

Limited

High Indirect ecological damage in surrounding areas

High

High (e.g., deforestation, changes in farming practices)

Low/medium/

high?

The industry • 179

many of the categories of impacts depend upon definition. It uses simple qualitative scales for each type of impact in order to provoke debate and precisely because we do not wish to imply that there exists an indisputable definition of sustainability.

The conventional but superficial wisdom might tell us that the trekking expedition makes less of a negative impact on the environment than the conventional hedonistic tour. Table 7.1 gives cause to question this conventional wisdom and the general perception that trekking, and possibly other new forms of tourism, are sustainable. Over- simplified this comparison may be, but it suggests the need for further research to give

a sounder footing for these highly generalised impact levels.

Re-defining sustainability

13111 We would not argue that the profit motive of private companies in capitalist countries necessarily negates or dominates other motives. There are many examples from around the world of good environmental practice allied with profitability; there are examples of unquestionable altruism on the part of profit-maximising companies. Moreover, the very idea of publicising and promoting examples of good practice is eminently sensible. But the profit maximisation motive does have a tendency to subvert and subjugate other considerations, ethical and environmental. It is essential to keep this in mind in any analysis of the tourism industry.

The industry has responded to the growing importance of the notion and use of the term ‘sustainability’ in a range of ways which are examined in this section. The frame- work for the analysis here includes, where appropriate, companies which cater for conventional mass types of tourism to Third World destinations as well as those offering new types of holidays and tours for the new middle classes. This is because the focus in this section is on the term sustainability, and it is not just new forms of tourism to Third World countries which claim to be sustainable. The mainstream industry is also attempting to green its image, and this attempt is linked with the process of diversifi- cation which some large tour companies are undertaking. This section therefore looks at the techniques employed by both these forms of tourism, if indeed the two are so easily distinguishable and so mutually exclusive.

Many of the techniques of relevance here have been briefly discussed in Chapter 4. Broadly, those listed in Box 4.9 which are under some degree of control by the industry rather than other bodies fall into the following categories: advertising; industry reg- ulation; corporate social responsibility (CSR); environmental auditing and EIAs; ecolabelling and certification; consultation techniques; codes of conduct; and internal management strategies.

Advertising

For members of the tourism industry advertising is a means of claiming sustainability. Here we do not intend to analyse the discourse of tourism advertising – this has already been covered elsewhere, especially in Chapters 3, 4 and 5. We shall, however, look at some of the claims, that the media used for the purpose of advertising and its effect on control over the industry.

Figures 2.1, 3.2, 3.3 and 5.1 illustrate some of the language of new tourism, as do Boxes 4.4 and 5.3. That language may be different in vocabulary from the language of mass tourism, but it is almost as narrow in its range. Instead of words like pleasure, relaxation, carefree, resort and so on, the new tourism plays heavily on words such

11111 as conservation, ecology, responsible, environmental and so on. Pratap Rughani’s

180 • The industry

description of tourist brochures as ‘pleasure propaganda, selling escapism in a tone of juvenile orgasm, where “the natives smile welcomingly”, everything is commodified, available and tremendous’ (1993: 12) seems to apply to new tourism as much as it does to conventional mass tourism.

The medium for advertising most commonly used by operators and exponents of the new tourism (apart from their own brochures) is that of magazines and journals. In particular, those magazines which will lend credibility to their claims of sustainability, environmental friendliness and cultural sensitivity are targeted as suitable vehicles for publicity: New Internationalist, Resurgence, Green Magazine, New World (newsletter of the United Nations Association, UK), the Geographical Journal, Geographical Magazine, NACLA Report on the Americas, Wanderlust and the publications of the Sierra Club and the National Audubon Society. Various solidarity organisations such as the Cuba Solidarity Campaign, Nicaragua Solidarity Campaign and the Central America Human Rights Committee also occasionally include with their newsletters advertise- ments or publicity fliers for tour operators which proclaim a solidarity association with their aims and objectives.

Associations with socio-environmental organisations allows operators or agents the chance to tap the conscience of the new middle-class tourists from the First World. Their advertisements offer the temptation of guilt-free, low-impact travel at the same time as providing a specific purpose to their tour, such as learning the language, researching the ecology, visiting specific development projects, promoting a solidarity twinning arrange- ment, joining a delegation on a specific study tour, or working in a brigade. In this way, the operators and agents are simply functioning in much the same way as the large-scale mass tourism operators who have identified their market population sector and then target their advertising at them through appropriate media channels. The market may be more specialised (niche) and fragmented and the operators may be smaller in scale, but the appeal to escapism (from the daily work routine) is similar, even if implicit rather than explicit, and the commodification of the tourism product (the wildlife, the national park, the scenery) is just as strong an appeal as mass tourism’s appeal to the sun, sand, sea and sex (Selwyn, 1993).

Many of the new operators deliberately align themselves with campaigning organi- sations which focus on environmental, social and ethical issues. Others produce their own newsletter or magazine, as distinct from their annual brochure, which feature arti- cles on general tourism issues as well as news about their tours. It is an important indi- cator of their credibility to be able to show that they support some pertinent international organisation such as WWF or a local conservation organisation at the destinations they visit. Table 7.2 lists various features associated with a number of British-based new tour operators – new in the sense that they cater for the new middle-class desire for trekking, travelling or trucking to Third World destinations.

One important characteristic of their tours which nearly all the new tour operators report on is the size of their groups. Small group sizes indicate an awareness of the impact of tourist groups and thereby add to the environmental credentials of the oper- ator. The practical considerations of managing a touring group may be a significant factor in group size, but it makes good public relations to show sensitivity by stipulating

a maximum group size regardless of this consideration. Some of the campaigning organisations themselves solicit the advertisements and

attentions of the new tour operators. The National Audubon Society, for example, has

a Marketing and Licensing Department which invites service providers and producers to use their name in a pamphlet entitled Looking for a New Niche . . . , in which it expounds upon ‘the Selling Power of the Audubon Name’ (Audubon, undated). As it states in the pamphlet, ‘The NATIONAL AUDUBON SOCIETY has been licensing

The industry • 181

Table 7.2 Selected characteristics of ‘new’ and specialised tour operators Tour operator

Specified group size Abercrombie & Kent

Links with/supports

Has own charitable foundation;

Maximum of 15 on

donations to local projects; ‘deeply

accompanied tours

involved in worldwide conservation’

Africa Exclusive

Projects associated with the Royal

Individual, tailor-made tours

Geographical Society (RGS); water pumps in Hwange Game Reserve (Zimbabwe)

13111 Bales

CERT; The Egyptian House

Specifies a minimum number

(£1 per person); The Galapagos

of 15; no maximum specified;

Foundation

takes older and disabled members

Dragoman

Recommends clients to Tourism

23 or 24 depending on truck

Concern; has own code of conduct

Exodus: biking;

Dependent on itinerary and walking; discovery

Intermediate Technology Development

Group; Nepal tree-planting nurseries;

activity; maximum 16 often

specified; absolute maximum 22 Explore

groups supported changes annually

Green Globe; WWF; Friends of

Depends on tour. Average

Conservation; Ecofac; IPPG;

15–16. A few tours specify a

Galapagos Conservation Trust;

maximum of 24

SOS Children’s Village

Guerba Expeditions:

Dependent on activity; truck Africa

CERT; African Foundation for

Endangered Wildlife; NSPCC; village

size maximum 22; trekking

education project, Kilimanjaro; has

tours maximum 16

own environmental policy

High Places

IPPG; recommends Tourism

Trekking maximum 12;

expeditions smaller Himalayan Kingdoms

Concern’s guidelines

Helped Tourism Concern with code of

Maximum of 12; average of

conduct; Shiva Charity; supports Free

around 8

Tibet Society; endorsed by the IPPG

J. & C. Voyageurs

Occasional sponsorship of NGOs such

Specialist groups in Africa

as WWF and local organisations; has

of up to 8

no charity budget

Naturetrek

World Environment Partner 1996

Minimum 4; maximum usually 16

Trips

Member of Tourism Concern;

Individual, tailor-made, but

Programme for Belize; World Land

have organised tours of up

Trust; Rainforest Adventure for

to 8

City Kids

Worldwide Journeys

Maximum group size 10; and Expeditions

Kasanka Trust; World Pheasant

Association; Galapagos Trust;

but 85% are tailor-made for

Friends of Conservation; Kidai

groups of 2–4

Rhino Trust

182 • The industry

its name for fifteen years. Now more than ever before, our name is a powerful marketing tool for increasing sales, strengthening brand loyalty, and enhancing corporate image.’ It would be difficult to find a clearer, more explicit confirmation that the new nature and conservation-associated forms of tourism are firmly rooted in capitalist accumula- tion than this. To question the sincerity of the ethical basis of this type of marketing and operation would not seem to be too surprising. As Wight says,

There is no question that ‘green’ sells. Almost all terms prefixed with ‘eco’ will increase interest and sales. Thus, in the last few years there has been a proliferation of advertisements in the travel field with references such as ecotour, ecotravel, ecovacation, ecologically sensitive adventures, eco(ad)- ventures, ecocruise, ecosafari, ecoexpedition and, of course, ecotourism.

(1994: 41–2) In their view of how (eco)tourist companies should set about ‘marketing their product’,

Ryel and Grasse (1991) give an even clearer prescription of how the new, environ- mentally friendly companies should fit into the prevailing mode of capitalist accumula- tion. In an article which at times reads rather more like an instruction manual to the new ecotourism companies than a supposedly objective analysis of the marketing of ecotourism, they state:

Nature travel companies should therefore invest in repeated advertising with their most productive advertising media . . . Advertising that complements editorial content also enhances the effectiveness of advertising . . . Ecotourism companies should keep abreast of upcoming editorial coverage in order to take advantage of special features that focus on their destinations.

(1991: 173–4) In-house brochures, newspaper supplements, magazines and journals are not the only

media available to the new tour companies. Increasingly, advertisements for specific tours are appearing on travel, tourism and environment-related bulletin boards on the internet (as noted in Box 2.2 and the Appendix). It is a particular feature of such adver- tisements that they appeal to the researcher or enquirer in the new middle-class tourist. Examples are given in Boxes 7.9 and 7.10 later in this chapter where ‘new academic tourism’ is discussed. Major advantages of this medium are its cheapness and its audi- ence, a population which contains a large body of potential and current ecotourists and ego-tourists (see Chapter 5).

Industry regulation

It was argued in ‘The tools of sustainability in tourism’ (Chapter 4) that the issue of regulation of the industry can be represented as a struggle for control of the industry between different interest groups. These may be many and varied – as has already been noted, the industry itself is highly fragmented with many associations of hoteliers, travel agents, tour operators, caterers, transport companies and so on, at local, regional, national and international levels. Some of these groups undoubtedly have a role to play in promoting the attainment of ethical standards of practice, for the fragmentation is such that it would be impossible for all but the most bureaucratic of governments to regulate for all related practices and to enforce the legislation as well. Moreover, there is a clear and undisputed place for national and international legislation on a number of matters, such as airline safety and safety matters relating to other aspects of tourism. In most

The industry • 183

other areas, regulation for sustainability is a concept as contested as sustainability itself. And this contest leads to the ongoing debate around the issue of self-regulation. It is essentially between two camps: those who believe that the industry should pursue volun- tary self-regulation on issues relating to sustainability; and those who believe that regu- lation should take the form of government imposed and enforced statutory legislation. It is not as simple as the descriptions of these two opposite camps would suggest – there are many combinations of company self-regulation, articles of association and govern- ment legislation which can be promoted – but the argument is often presented as a simple dichotomy.

Rebecca Hawkins and Victor Middleton of the World Travel and Tourism Environ- ment Research Centre (WTTERC), which was set up by the WTTC in 1991, have pointed out that ‘Despite concern about the environmental impacts of tourism . . . the

13111 industry overall has scarcely been affected by international regulation’ (1994: 104). In 1993, they identified six major categories of international environmental regulation and control which affect the tourism industry. These are listed in Box 7.4. Following their identification of these categories their general conclusion is that the effect of inter- national regulation on the tourism industry is very limited; and this leads them to a defence, or even promotion, of industry self-regulation based on their belief that this limited effect is due to the inability of governments and international bodies to regu- late. In this defence, their supposedly objective outline of the advantages of self- regulation (no disadvantages are listed) becomes part of the contest itself.