What Is Sustainable Tourism and Why Is It Important?

Sustainable management and socioeconomic, cultural, and environmental impacts are the four pillars of sustainable tourism

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What Makes Tourism Sustainable?

The role of tourists, types of sustainable tourism.

Sustainable tourism considers its current and future economic, social, and environmental impacts by addressing the needs of its ecological surroundings and the local communities. This is achieved by protecting natural environments and wildlife when developing and managing tourism activities, providing only authentic experiences for tourists that don’t appropriate or misrepresent local heritage and culture, or creating direct socioeconomic benefits for local communities through training and employment.

As people begin to pay more attention to sustainability and the direct and indirect effects of their actions, travel destinations and organizations are following suit. For example, the New Zealand Tourism Sustainability Commitment is aiming to see every New Zealand tourism business committed to sustainability by 2025, while the island country of Palau has required visitors to sign an eco pledge upon entry since 2017.

Tourism industries are considered successfully sustainable when they can meet the needs of travelers while having a low impact on natural resources and generating long-term employment for locals. By creating positive experiences for local people, travelers, and the industry itself, properly managed sustainable tourism can meet the needs of the present without compromising the future.

What Is Sustainability?

At its core, sustainability focuses on balance — maintaining our environmental, social, and economic benefits without using up the resources that future generations will need to thrive. In the past, sustainability ideals tended to lean towards business, though more modern definitions of sustainability highlight finding ways to avoid depleting natural resources in order to keep an ecological balance and maintain the quality of environmental and human societies.

Since tourism impacts and is impacted by a wide range of different activities and industries, all sectors and stakeholders (tourists, governments, host communities, tourism businesses) need to collaborate on sustainable tourism in order for it to be successful.

The World Tourism Organization (UNWTO) , which is the United Nations agency responsible for the promotion of sustainable tourism, and the Global Sustainable Tourism Council (GSTC) , the global standard for sustainable travel and tourism, have similar opinions on what makes tourism sustainable. By their account, sustainable tourism should make the best use of environmental resources while helping to conserve natural heritage and biodiversity, respect the socio-culture of local host communities, and contribute to intercultural understanding. Economically, it should also ensure viable long-term operations that will provide benefits to all stakeholders, whether that includes stable employment to locals, social services, or contributions to poverty alleviation.

The GSTC has developed a series of criteria to create a common language about sustainable travel and tourism. These criteria are used to distinguish sustainable destinations and organizations, but can also help create sustainable policies for businesses and government agencies. Arranged in four pillars, the global baseline standards include sustainable management, socioeconomic impact, cultural impacts, and environmental impacts.

Travel Tip:

The GSTC is an excellent resource for travelers who want to find sustainably managed destinations and accommodations and learn how to become a more sustainable traveler in general.

Environment 

Protecting natural environments is the bedrock of sustainable tourism. Data released by the World Tourism Organization estimates that tourism-based CO2 emissions are forecast to increase 25% by 2030. In 2016, tourism transport-related emissions contributed to 5% of all man-made emissions, while transport-related emissions from long-haul international travel were expected to grow 45% by 2030.

The environmental ramifications of tourism don’t end with carbon emissions, either. Unsustainably managed tourism can create waste problems, lead to land loss or soil erosion, increase natural habitat loss, and put pressure on endangered species . More often than not, the resources in these places are already scarce, and sadly, the negative effects can contribute to the destruction of the very environment on which the industry depends.

Industries and destinations that want to be sustainable must do their part to conserve resources, reduce pollution, and conserve biodiversity and important ecosystems. In order to achieve this, proper resource management and management of waste and emissions is important. In Bali, for example, tourism consumes 65% of local water resources, while in Zanzibar, tourists use 15 times as much water per night as local residents.

Another factor to environmentally focused sustainable tourism comes in the form of purchasing: Does the tour operator, hotel, or restaurant favor locally sourced suppliers and products? How do they manage their food waste and dispose of goods? Something as simple as offering paper straws instead of plastic ones can make a huge dent in an organization’s harmful pollutant footprint.

Recently, there has been an uptick in companies that promote carbon offsetting . The idea behind carbon offsetting is to compensate for generated greenhouse gas emissions by canceling out emissions somewhere else. Much like the idea that reducing or reusing should be considered first before recycling , carbon offsetting shouldn’t be the primary goal. Sustainable tourism industries always work towards reducing emissions first and offset what they can’t.

Properly managed sustainable tourism also has the power to provide alternatives to need-based professions and behaviors like poaching . Often, and especially in underdeveloped countries, residents turn to environmentally harmful practices due to poverty and other social issues. At Periyar Tiger Reserve in India, for example, an unregulated increase in tourists made it more difficult to control poaching in the area. In response, an eco development program aimed at providing employment for locals turned 85 former poachers into reserve gamekeepers. Under supervision of the reserve’s management staff, the group of gamekeepers have developed a series of tourism packages and are now protecting land instead of exploiting it. They’ve found that jobs in responsible wildlife tourism are more rewarding and lucrative than illegal work.

Flying nonstop and spending more time in a single destination can help save CO2, since planes use more fuel the more times they take off.

Local Culture and Residents

One of the most important and overlooked aspects of sustainable tourism is contributing to protecting, preserving, and enhancing local sites and traditions. These include areas of historical, archaeological, or cultural significance, but also "intangible heritage," such as ceremonial dance or traditional art techniques.

In cases where a site is being used as a tourist attraction, it is important that the tourism doesn’t impede access to local residents. For example, some tourist organizations create local programs that offer residents the chance to visit tourism sites with cultural value in their own countries. A program called “Children in the Wilderness” run by Wilderness Safaris educates children in rural Africa about the importance of wildlife conservation and valuable leadership development tools. Vacations booked through travel site Responsible Travel contribute to the company’s “Trip for a Trip” program, which organizes day trips for disadvantaged youth who live near popular tourist destinations but have never had the opportunity to visit.

Sustainable tourism bodies work alongside communities to incorporate various local cultural expressions as part of a traveler’s experiences and ensure that they are appropriately represented. They collaborate with locals and seek their input on culturally appropriate interpretation of sites, and train guides to give visitors a valuable (and correct) impression of the site. The key is to inspire travelers to want to protect the area because they understand its significance.

Bhutan, a small landlocked country in South Asia, has enforced a system of all-inclusive tax for international visitors since 1997 ($200 per day in the off season and $250 per day in the high season). This way, the government is able to restrict the tourism market to local entrepreneurs exclusively and restrict tourism to specific regions, ensuring that the country’s most precious natural resources won’t be exploited.

Incorporating volunteer work into your vacation is an amazing way to learn more about the local culture and help contribute to your host community at the same time. You can also book a trip that is focused primarily on volunteer work through a locally run charity or non profit (just be sure that the job isn’t taking employment opportunities away from residents).

It's not difficult to make a business case for sustainable tourism, especially if one looks at a destination as a product. Think of protecting a destination, cultural landmark, or ecosystem as an investment. By keeping the environment healthy and the locals happy, sustainable tourism will maximize the efficiency of business resources. This is especially true in places where locals are more likely to voice their concerns if they feel like the industry is treating visitors better than residents.

Not only does reducing reliance on natural resources help save money in the long run, studies have shown that modern travelers are likely to participate in environmentally friendly tourism. In 2019, Booking.com found that 73% of travelers preferred an eco-sustainable hotel over a traditional one and 72% of travelers believed that people need to make sustainable travel choices for the sake of future generations.

Always be mindful of where your souvenirs are coming from and whether or not the money is going directly towards the local economy. For example, opt for handcrafted souvenirs made by local artisans.

Growth in the travel and tourism sectors alone has outpaced the overall global economy growth for nine years in a row. Prior to the pandemic, travel and tourism accounted for an $9.6 trillion contribution to the global GDP and 333 million jobs (or one in four new jobs around the world).

Sustainable travel dollars help support employees, who in turn pay taxes that contribute to their local economy. If those employees are not paid a fair wage or aren’t treated fairly, the traveler is unknowingly supporting damaging or unsustainable practices that do nothing to contribute to the future of the community. Similarly, if a hotel doesn’t take into account its ecological footprint, it may be building infrastructure on animal nesting grounds or contributing to excessive pollution. The same goes for attractions, since sustainably managed spots (like nature preserves) often put profits towards conservation and research.

Costa Rica was able to turn a severe deforestation crisis in the 1980s into a diversified tourism-based economy by designating 25.56% of land protected as either a national park, wildlife refuge, or reserve.

While traveling, think of how you would want your home country or home town to be treated by visitors.

Are You a Sustainable Traveler?

Sustainable travelers understand that their actions create an ecological and social footprint on the places they visit. Be mindful of the destinations , accommodations, and activities you choose, and choose destinations that are closer to home or extend your length of stay to save resources. Consider switching to more environmentally friendly modes of transportation such as bicycles, trains, or walking while on vacation. Look into supporting locally run tour operations or local family-owned businesses rather than large international chains. Don’t engage in activities that harm wildlife, such as elephant riding or tiger petting , and opt instead for a wildlife sanctuary (or better yet, attend a beach clean up or plan an hour or two of some volunteer work that interests you). Leave natural areas as you found them by taking out what you carry in, not littering, and respecting the local residents and their traditions.

Most of us travel to experience the world. New cultures, new traditions, new sights and smells and tastes are what makes traveling so rewarding. It is our responsibility as travelers to ensure that these destinations are protected not only for the sake of the communities who rely upon them, but for a future generation of travelers.

Sustainable tourism has many different layers, most of which oppose the more traditional forms of mass tourism that are more likely to lead to environmental damage, loss of culture, pollution, negative economic impacts, and overtourism.

Ecotourism highlights responsible travel to natural areas that focus on environmental conservation. A sustainable tourism body supports and contributes to biodiversity conservation by managing its own property responsibly and respecting or enhancing nearby natural protected areas (or areas of high biological value). Most of the time, this looks like a financial compensation to conservation management, but it can also include making sure that tours, attractions, and infrastructure don’t disturb natural ecosystems.

On the same page, wildlife interactions with free roaming wildlife should be non-invasive and managed responsibly to avoid negative impacts to the animals. As a traveler, prioritize visits to accredited rescue and rehabilitation centers that focus on treating, rehoming, or releasing animals back into the wild, such as the Jaguar Rescue Center in Costa Rica.

Soft Tourism

Soft tourism may highlight local experiences, local languages, or encourage longer time spent in individual areas. This is opposed to hard tourism featuring short duration of visits, travel without respecting culture, taking lots of selfies , and generally feeling a sense of superiority as a tourist.

Many World Heritage Sites, for example, pay special attention to protection, preservation, and sustainability by promoting soft tourism. Peru’s famed Machu Picchu was previously known as one of the world’s worst victims of overtourism , or a place of interest that has experienced negative effects (such as traffic or litter) from excessive numbers of tourists. The attraction has taken steps to control damages in recent years, requiring hikers to hire local guides on the Inca Trail, specifying dates and time on visitor tickets to negate overcrowding, and banning all single use plastics from the site.

Traveling during a destination’s shoulder season , the period between the peak and low seasons, typically combines good weather and low prices without the large crowds. This allows better opportunities to immerse yourself in a new place without contributing to overtourism, but also provides the local economy with income during a normally slow season.

Rural Tourism

Rural tourism applies to tourism that takes place in non-urbanized areas such as national parks, forests, nature reserves, and mountain areas. This can mean anything from camping and glamping to hiking and WOOFing. Rural tourism is a great way to practice sustainable tourism, since it usually requires less use of natural resources.

Community Tourism

Community-based tourism involves tourism where local residents invite travelers to visit their own communities. It sometimes includes overnight stays and often takes place in rural or underdeveloped countries. This type of tourism fosters connection and enables tourists to gain an in-depth knowledge of local habitats, wildlife, and traditional cultures — all while providing direct economic benefits to the host communities. Ecuador is a world leader in community tourism, offering unique accommodation options like the Sani Lodge run by the local Kichwa indigenous community, which offers responsible cultural experiences in the Ecuadorian Amazon rainforest.

" Transport-related CO 2  Emissions of the Tourism Sector – Modelling Results ." World Tourism Organization and International Transport Forum , 2019, doi:10.18111/9789284416660

" 45 Arrivals Every Second ." The World Counts.

Becken, Susanne. " Water Equity- Contrasting Tourism Water Use With That of the Local Community ." Water Resources and Industry , vol. 7-8, 2014, pp. 9-22, doi:10.1016/j.wri.2014.09.002

Kutty, Govindan M., and T.K. Raghavan Nair. " Periyar Tiger Reserve: Poachers Turned Gamekeepers ." Food and Agriculture Organization.

" GSTC Destination Criteria ." Global Sustainable Tourism Council.

Rinzin, Chhewang, et al. " Ecotourism as a Mechanism for Sustainable Development: the Case of Bhutan ." Environmental Sciences , vol. 4, no. 2, 2007, pp. 109-125, doi:10.1080/15693430701365420

" Booking.com Reveals Key Findings From Its 2019 Sustainable Travel Report ." Booking.com.

" Economic Impact Reports ." World Travel and Tourism Council .

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Global Future Council on the Future of Sustainable Tourism Global Future Council on the Future of Sustainable Tourism

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Council mission and objectives

Against the backdrop of the intertwined climate and biodiversity crises, tourism stakeholders have an opportunity to redesign sustainable destinations and practices throughout the industry. The Global Future Council on the Future of Sustainable Tourism will focus on how the sector can be rebuilt with new models and insights to ensure its sustainable future and advance pathways towards net-zero, nature-positive tourism that benefits local communities.

Co-Chairs Jacqueline Gifford, Editor-in-Chief, Travel+Leisure

Joseph Martin Cheer, Professor of Sustainable Tourism and Heritage, University of Western Sydney (UWS) Council Managers Hanh Nguyen, Ocean 100 Dialogues Project Specialist, World Economic Forum

Rosaline Mouget, Community Engagement Specialist, Future of Mobility Net Zero, World Economic Forum

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The Global Future Councils serve as a brain trust for leaders from government, business and civil society, and support the Forum’s mission by bringing together experts bound by a shared mission to discuss the most critical issues, generate insights and analysis, and collaborate in shaping agendas.

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The Contribution of Sustainable Tourism to Economic Growth and Employment in Pakistan

Faiza manzoor.

1 Department of Agricultural Economics and Management, School of Management, Zhejiang University, Hangzhou 310029, China; moc.oohay@5881aziaf or

Longbao Wei

Muhammad asif.

2 School of Public Affairs, Zijingang Campus, Zhejiang University, Hangzhou 310058, China; [email protected] or

Muhammad Zia ul Haq

3 School of Management, Zhejiang University, Hangzhou 310029, China; moc.oohay@111msaiz

Hafiz ur Rehman

4 Department of Economics, Hazara University, Mansehra 21120, Pakistan; moc.liamg@kattahkzifah

In the global economy, tourism is one of the most noticeable and growing sectors. This sector plays an important role in boosting a nation’s economy. An increase in tourism flow can bring positive economic outcomes to the nations, especially in gross domestic product (GDP) and employment opportunities. In South Asian countries, the tourism industry is an engine of economic development and GDP growth. This study investigates the impact of tourism on Pakistan’s economic growth and employment. The period under study was from 1990 to 2015. To check whether the variables under study were stationary, augmented Dickey–Fuller and Phillips–Perron unit root tests were applied. A regression technique and Johansen cointegration approach were employed for the analysis of data. The key finding of this study shows that there is a positive and significant impact of tourism on Pakistan’s economic growth as well as employment sector and there is also a long-run relationship among the variables under study. This study suggests that legislators should focus on the policies with special emphasis on the promotion of tourism due to its great potential throughout the country. Policy implications of this recent study and future research suggestions are also mentioned.

1. Introduction

The tourism industry has emerged as a key force for sustainable socioeconomic development globally [ 1 , 2 ]. The idea behind sustainable tourism is to visit the locations without harming the local community and nature and also having some constructive impact on the environment, society, as well as the economy of the country [ 3 ]. Tourism can include transportation to the general place, local transportation, accommodations, leisure, entertainment, shopping, and nourishment. It can be linked to travel for recreation, business, family, and/or friends [ 4 , 5 ]. Currently, there is a widespread consensus that tourism growth should be sustainable, although the question of how to achieve this is a subject of debate [ 6 ].

Tourism and the travel sector are important economic activities all over the world [ 7 ]. In many countries, the tourism industry remains an important source for the generation of employment and income in formal and informal sectors [ 8 ]. For instance, Hwang and Lee [ 9 ] claimed that economic growth and development is rapidly increasing in Korea due to the increase in elderly tourism. This increase shows that tourists feel inner satisfaction, which positively affects their future behavioral intentions [ 10 ]. Similarly, developing countries can engender a huge amount of foreign exchange from tourism that could also boost their sustainable growth and development [ 11 ]. In developing countries, it is the main source and a foundation for a country’s economic development and growth [ 12 ]. Tourism revenue complements the exchange derived from the overseas trade of goods and services. This sector also finances capital good imports in the development of the economy’s industrial sector. Alternatively, economic expansion in the developed nations influences business travel (overseas visits), which can lead to a rise in the nation’s overseas reserves [ 13 ].

International tourism has become increasingly important in several nations around the globe [ 14 ]. As per the report of the WTO (World Tourism Organization) in 2018, international tourists spent $1.3 billion per day and in total $462 billion in the year 2001 only. In most of the countries, the revenue from tourism is considered as a substitute for export earnings and contributes a lot to their balance of payment [ 15 ]. The government can generate revenue and also enhance household income through development of this sector and easing austere visa policies for international visitors/tourists. There are a lot of examples where tourism has a very positive impact on the economy of any country [ 16 ].

In the globalization era, third world nations started tourism to advance their economy, promote peace, develop human resources, and reduce the poverty level [ 17 ]. Tourism helps to “enhance employment opportunities and earnings, which can be of major economic significance to the local population” [ 18 ]. In terms of employment, the local community could expand their earnings and socio-economic condition, which could lead to an improved standard of living. Tourism improves local community development and helps to reduce poverty [ 19 ].

Tourism in South Asia

South Asia is recognized as a distinctive region with a substantial contiguous landmass, and diverse physical features from grasslands to forests, and swamplands to deserts. It has a large variety of natural resources, coastal areas, mountains, scenic beauty, and rivers, and assorted climatic conditions, which makes this region even more attractive [ 20 ]. In South Asia, there are eight counties, namely: Pakistan, Bangladesh, Sri Lanka, Nepal, Maldives, India, Afghanistan, and Bhutan. In these countries, the economic base is still weak despite such great potential for tourism. The tourism industry is also a tool of economic development in South Asia like other developing countries.

In the South Asian region, the share of the tourism sector in GDP was 8.9% ($281.6 billion) in 2017 with the speculation of further growth of 7.2% in 2018. It will be 9.0% of GDP ($301.8 billion) with auxiliary income of 6.2% by the year 2028 to reach 9.4% of GDP ($579.6 billion), as presented in Figure 1 . In 2017, tourism contributed 7.5% of jobs to the employment sector (49,931,500 jobs) and a speculated increase of 3.0% or a total share of 7.6% of the job market in 2018 (51,436,500 jobs). By the year 2028, the share of tourism in the job market is expected to touch 7.8% of the job market (63,006,000 jobs), as presented in Figure 2 [ 5 ].

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Source: World travel and tourism council, 2018. SOUTH ASIA: Total contribution of travel and tourism to GDP.

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Source: World travel and tourism council, 2018. SOUTH ASIA: Total contribution of travel and tourism to employment.

In the South Asia region, Pakistan is well known for its tourism. Pakistan is a very beautiful country, and the tourism industry is growing [ 21 ]. Pakistan offers much allure in the developing world. The cultural and historical inheritance is very evident in this ancient region. The country receives much tourist attraction at Jaba, Kalam, Swat, Balakot, Malam, Shangla, Murri, Ayubia, Gilgit, Chitral, Paras, Sharan, Shinu, Lulusar, Dudupatsar, Naran, Shogran, and Kaghan valleys, Lake Saif ul muluk, Malika Parbat (highest mountain of Kaghan valley and also called Queen of the Mountains), Supat valley, and other historical mountain ranges in the country [ 22 ]. In the Northern Area of Pakistan, there are a lot of places that are comprised of majesty and grandeur. These areas have relics of distinct lands exclusive to its heritage and it is hallowed as a top destination with an astonishing collection of many attractive rivers, mountains, lakes, and valleys [ 23 ]. The Karakoram, Hindukush, Himalaya, and Pamir mountain ranges create formidable areas in the northern regions. They bring trekkers, climbers, hikers, and mountaineers. They also contain numerous unheeded rocks and flowing streams that bring hundreds of thousands of tourists every year. Only a few regions in the world can present a high-class combination of magnificent natural attraction, a rich variety of socio–economic systems, and history as offered by Himalayan and Hindukush regions of Pakistan [ 20 ].

International tourism in Pakistan has achieved record growth. The number of tourists has reached 808,000 from all tourist producing market places. This figure is a 24.4% rise from the previous two years. According to the report, in 2017, 1.75 million visitors traveled to Pakistan. The Pakistan Tourism Development Corporation (PTDC) confirmed that 30% of tourists were national (domestic) and almost 90% of the tourists preferred to journey by road; only 8.5% and 1.8% traveled by train and air, respectively. In 2017, the WTTC (World Travel and Tourism Council) mentioned that Pakistan’s tourism revenue was 19.4 billion US dollars and made up 6.9% of the GDP. The WTTC expects that amount to rise to 36.1 billion dollars by 2030. In 2016, tourism contributed 6.0% to total employment and in 2017 it increased to 6.3%. This total is expected to rise in 2018. The success of tourism in Pakistan hopes to contribute to the reduction of its poverty level. Tourism has an encouraging influence on Pakistan’s economic growth and still continues to grow [ 24 , 25 ].

The current study observed how the tourism industry supported the economy and also increased employment in South Asia. In South Asia, there are eight countries, but we have chosen Pakistan only for this study. In other countries, many studies have been conducted by other scholars [ 26 , 27 , 28 , 29 ]. However, in South Asia, less research attention has been paid towards the tourism sector and the growth of the economy. Therefore, the present study examines the relationship of sustainable tourism to economic growth and employment in Pakistan. The data was available for Pakistan but missing for other Asian countries.

This article contains six sections. The first section is the introduction of the study. The second section contains theories and hypotheses development. The third section provided the research methodology of the study. The fourth is the results section. The fifth section comprises the conclusions and discussions. The final section includes policy implications, limitations, and future research directions.

2. Development Theories

Since the 1960s, the tourism sector has been considered an effective developmental growth pole, and many countries have enhanced their tourism sector to improve their economic development [ 30 ].

Todaro and Smith (2011) proposed in their study that it is a multidimensional process as far as development is concerned, and it comprises positive changes not only in economic growth and national institutions but also in poverty reduction. Modernization theory (MT) is one of the most popular developmental paradigms to have gained admiration from the late 19th till the mid-20th century. This theory is thought to be an extension of another theory called growth theory, which is grounded in Keynesian economics [ 31 ]. For justification of MT, the theorists used it as a key social indicator for economic development, which trickles down to the grassroots level of society in the form of plentiful economic and employment prospects. Wealthy and powerful modernized economies usually provide a high-quality of life and modern technology to their citizens. Modernization becomes more favored due to its bold and effectual production methods. Moreover, from the tourism perspective, the modernization strategies of development not only engender foreign capital but also smooth the way for the transfer of technology and create greater employment opportunities than before. The main focus of tourism development is these economic paybacks, and whenever other economic resources trickle down, the tourism multiplier acted as a growth-pole [ 26 ].

Dependency theory (DT) became popular in the 1960s and 1970s. It is a composite of numerous interrelated theories and mainly focuses on the inequalities of core capitalist and southern developing countries [ 32 ]. According to this theory, historically poor countries are kept deprived of development by developed and rich countries. The economic reliance of developing countries on development projects is based on: (1) transfer of advanced technology from industrialized countries; (2) creation of massive debts and dependency on foreign investment; and (3) interest on debts transmitted back to the developed countries [ 33 ].

In response to the huge criticism of this theory in the 1970s and 1980s, neoliberalism theory (NL) was formed. NL is a theory of free global markets without any economic and political influence. The dogma behind this theory is to remove all barriers constructed by developed countries. There should be a free flow of capital and trade globally and slight consideration should be given to the market traits like privatization, market development, de-regularization, self-determination, and self-sufficiency [ 34 ]. In the above-mentioned era, it was widespread that governments had the capabilities to earn foreign capital. As far as neoliberal tourism is concerned, hotel chains could play a primary role to magnetize foreign capital. By developing infrastructure in tourist attraction areas, the local and national economies could get a boost, although the decrease in state participation in social welfare programs and limiting trade unions, the spending on education, health, environment, and other welfare also decreased. In Neoliberal, tourism not only pauses the development of the state but also humiliates and exploits the labor to set off its own self-interest. Due to the many consequences, state representatives hesitate to start projects of human development as well as programs for the local community’s well-being [ 30 ].

Eventually, in the decades of the 1970s and 1980s, it was realized that rather than benefiting the poorest of the world, policies were tilted, i.e., global top-down approaches were in favor of the west only. To enrich and uplift the standard of living of the poorest, aid and development organizations started searching for causes of poverty [ 35 ]. Instead of getting rid of the root causes of poverty, the new alternative development (AD) or bottom-up style was launched only to minimize the symptoms. A basic needs approach (BNA) only concentrated on basic needs and did not focus on economic development.

According to neoliberal development and general modernization theories, the standard of living is measured by economic growth. However, DT and AD theories of economic development interrogated this approach. The DT approach demonstrated the negative effects of Western development on the poorest communities of the south and AD theory swung development to bottom-up from the top-down approach.

Sustainable development (SD) is the combination of two different objectives of sustainability and development. In simple words, this theory is a mixture of development and sustainability theories [ 36 ]. Until the end of the 20th century, ecologists were concentrating on the ideas of the conservation movement of the 19th century [ 37 ]. Tourists with environmental knowledge loathe ecological and social damage. The sustainability factor has been appropriated irrespective of the fact that the tour operating companies were motivated by promoting ecological vacations. Ioannides [ 38 ] was of the opinion that the International Federation of Tour Operators (IFTO) used sustainability as a marketing tool with the intention to maximize profit. Currently, efforts are being made for a reduction in poverty through pro-poor tourism. In attaining the UN Millennium Development Goals, the UN WTO (2005) report blatantly supports the role of community tourism through the local private sector.

Empirical Literature Review and Hypotheses

Researchers have a variety of views concerning how tourism contributes to economic expansion and employment in many developed and underdeveloped countries. A number of scholars have the same opinion on the significant role of tourism and how it relates to the growth of the economy. According to the World Tourism Organization, tourism is an activity of traveling for the purpose of leisure outside the day to day environs. The benefits received by local and national economies should be analyzed accordingly [ 39 ]. For economic development, tourism has been considered one of the driving forces. It has a positive impact in creating a foreign exchange and generating employment opportunities and local revenue [ 40 , 41 , 42 ]. Numerous studies in different less-developed nations around the world have found a significant correlation between tourism and economic expansion [ 41 , 43 , 44 ].

Ayeni et al. [ 39 ] explored the growth of sustainable tourism in Nigeria. According to the authors, tourism has become an instrument for diversifying the economy for several countries. This has supported the service sector and has created a major connection with Nigeria’s economy, by promoting new employment opportunities and creating new sources for revenue generation. However, the developed nations have a higher ratio of world tourism in comparison to less-developed nations; but still, there are a lot of opportunities for less developed countries to get maximum benefits from this industry. The researchers analyzed through the qualitative technique of research the potential of Nigeria’s tourism on its economy and found that the industry has great potential but is yet to be explored. They were of the opinion that given the endeavors of the government to eradicate poverty and diversify the economy, tourism could contribute a lot.

Manwa [ 45 ] posited that in order for tourism to be sustainable for society they must gain economically from it. This would allow them to protect and maintain the popular tourist areas. This is also highlighted by Smith [ 46 ]: that the economic benefits of tourism depend on the country’s aptitude to offer appropriate and adequate amenities.

Brida [ 47 ] emphasized the impact that tourism had on economic expansion in Chile. The purpose was to examine a probable causal association between exchange rate, tourism expenditure, and economic expansion for the period 1986 to 2007. The hypotheses were empirically analyzed by employing the Johansen Cointegration Test. The author found that tourism and economic expansion had a positive correlation and that tourism was the main contributing factor to economic expansion. Pavlic et al. [ 48 ] revealed the impact of tourism on employment in Croatia. According to the authors, the tourism sector contributed to the promotion of employment after examining quarterly data from 2000−2012 through Johansen Co-integration Test and Granger Causality Test. The researchers also found a positive impact of tourism on employment and co-integration showed a long-term correlation amongst the variable.

Wang et al. [ 49 ] investigated the correlation between GDP and tourism revenues in Guizhou, China. Findings of their study showed a significant and positive correlation between tourism and GDP. Akan et al. [ 50 ] demonstrated causal relationships among the tourism sector and economic development of Turkey. The researchers used the Granger Causality test, Phillips–Perron test, the co-integration approach, and a Vector Autoregression (VAR) model for the time period 1985–2007. Findings of the test revealed that the tourism industry in Turkey was positively affected by economic development. The analysis indicated that a long-term steady correlation among economic development and tourism growth exists.

Kreishan [ 51 ] analyzed the causality association among tourism revenues and economic development (GDP) for Jordan. The author covered the annual time series data of 1970–2009 for analysis. To check the causal association, the researcher used the Augmented Dickey–Fuller (ADF), Johansen Co-Integration, and Granger Causality tests. The results showed that there was a positive relationship in the long term among economic expansion and tourism growth. The existence of a direct connection among tourism revenue and economic growth was also observed through the Granger Causality test.

Adnan et al. [ 23 ] estimated the long-run relationship amongst tourism revenue and economic development in Pakistan. The authors used the annual data from 1971 to 2008 for analyses. The findings confirmed the long-term relationship among revenue from tourism and economic development, and in their study, they explained that revenue from tourism led to increasing economic growth in Pakistan, except between 2006 and 2008.

Sr et al. [ 52 ] explained the connection among eradication of poverty, tourism growth, and economic development in Nicaragua. The researchers found a direct relationship between tourism growth and poverty eradication. The authors characterized the association amongst the variables under study as they related to “democratization of the dollar”. They highlighted the employment and income opportunities that are derived from a transfer of income and wealth from the inhabitants of developed countries compared to less-developed countries. According to the Shan et al. [ 53 ] and Kulendran et al. [ 43 ] in their analyses of China and Australia, they observed that there is a strong association between international travel and trade. A Korean case suggests that economic development can attract many business tourists. The case also suggests that economic growth can lead to tourism expansion.

Several studies have shown the direct connection between international trade (particularly export expansion) and economic growth [ 54 , 55 , 56 ]. The authors have seen a robust relationship between international trade and economic development and also a strong correlation between exports and economic growth. Moreover, tourism extensions are connected to economic development. However, export-oriented economic development caused tourism income to drop. Lastly, the strategies of continuous promotion of tourism may not be as effective as perceived by decision makers, if no direct relation was found between tourism development and economic growth, because it generally happens when tourism development has a positive impact on the economy [ 45 ]. In the South Asian region, especially in Pakistan, studies of tourism’s effects on economic growth have been less evident in tourism related literature. Therefore, we examined the relationship between growth of tourism, economic development, and employment in the context of Pakistan. Hence, our research is based on the following hypotheses:

There is a positive association between annual tourism growth and GDP.

There is a positive association between annual tourism growth and an increase in the employment rate.

3. Research Methods

Data and variables.

To study the contribution of sustainable tourism to economic growth and employment in Pakistan, the annual time series data from 1990 to 2015 was taken for analysis. In this study, the annual growth of tourism was taken as an independent variable and both employment and GDP were used as dependent variables. Due to the time series data, this study may exhibit some stationary or non-stationary variables. In this study before determining that all the series were integrated, a unit root test (i.e., ADF) was applied.

Firstly, the bivariate regression model was used for quantitative analysis to investigate the empirical relationship between two variables and hypothesis testing [ 57 ]. Secondly, to find a long-run relationship between variables, we used co-integration analysis. For statistical analysis and also for econometrics model estimation, E-view 9 was used. For data collection, different sources were used, i.e., Tourism Year Book, Economic Survey of Pakistan, Ministry of Tourism Government of Pakistan, World Travel and Tourism Council, and Tourism Economic Impact annual reports.

4.1. Descriptive Statistics and Correlation Matrix

The variables’ descriptive statistics and correlation matrix are presented in Table 1 . Means, standard deviation, and correlations are revealed in the table. These results of the correlation matrix aligned with the previous study [ 58 , 59 ]. Generally, multicollinearity was very low and did not present a serious concern [ 60 ].

Variable descriptive statistics and correlation matrix.

Note: EMP: Employment rate; GDP: Gross Domestic Product; Tour_g: Tourism growth; * Correlation is significant at the 0.05 level(2-tailed); ** Correlation is significant at the 0.01 level (2-tailed).

4.2. Unit Root Test Results

Testing for a unit root of the variables was necessary in order to rule out the possibility of non-stationarity of the data. Therefore, the commonly accepted ADF and Dickey and Fuller unit root test was adopted to check the stationarity of the GDP, employment, and annual tourism growth (Tour_g) series. The test was based on an estimate of the following regression:

where Δ is the first difference, Y is the time series, t symbolizes linear time trend, α denote a constant, n is the number of lags on predicted variables, and e represents the error term.

In Table 2 , the results show that the level value of all three sequences was non-stationary and further tested signposted that GDP, EMP, and Tour_g were stationary at the first-order difference. The first-order difference was made on three sequences to reduce fluctuations of the data. Then three new series, ∆GDP, ∆EMP, and ∆Tour_g, were obtained and their unit root test results are shown in Table 3 .

Root test results of sequence level values.

ADF: augmented Dickey–Fuller test; PP: Phillips–Perron test.

Root test results of the sequence first-order difference.

Note: null hypothesis rejected at 5% significance level.

In Table 2 and Table 3 the results of ADF and PP both indicated that GDP, employment, and annual tourism growth were not stationary in their level form but stationary at first level. Thus, both test variables were integrated of the same order1 (1).

4.3. Regression Analysis Technique

To examine the contribution of tourism to economic growth and employment, a regression analysis technique was used and the same technique was employed as in [ 61 ].

The model can be expressed as:

where Y i = dependent variable, X i = independent variable, β 0 = intercept, β i = coefficient to be estimated.

The proposed modified regression model is represented by the following equation:

Model Specification

where Δ = first difference, GDP = gross domestic product, Emp = employment rate, Tou_g = annual tourism growth, β 0 = intercept, β S = coefficient to be estimated, and ε = error term.

From Table 4 the results show that the p -value was 0.000, which is less than 0.05 ( p < 0.05), which indicates that there was a significant contribution to the annual growth of tourism to the GDP. Moreover, the values of t -statistics were also above the cutoff value of 1.96 [ 62 , 63 ]. The R-squared value meant that there was a 5% variation in GDP due to annual tourism growth. There was also a significant and positive relationship between explanatory variables and the predicted variables because the T -values were greater than 1.96. These results also aligned with the study of Kim et al. [ 56 ].

Regression analysis of tourism growth and GDP.

Table 5 shows that the dependent variable was employment rate and annual tourism growth was the independent variable. According to the analysis, the p -value (0.04) was less than 0.05. The findings demonstrate that annual tourism growth contributed significantly to the employment rate. The R 2 value implies that 15 percent variation in employment rate was due to tourism growth. The beta coefficient was positive, which entailed that annual tourism growth and employment rate had a significant and positive relationship; consequently, we accepted the alternative hypothesis and rejected the null. Richardson [ 64 ] confirmed the same patterns results in his study.

Regression analysis of tourism growth and employment.

4.4. Findings of Cointegration Test

To investigate the stable long-run relationship between annual GDP, employment, and annual growth of tourism, Johansen’s Cointegration test was selected amongst several other techniques available for time series data. The main objective of the variables under study was to estimate the stationary linear combination.

Johansen and Johansen and Juselius used maximum eigenvalue and trace statistics to test whether there was a long-term relationship between the variables. There are numerous methods for the determination of the lagging length and the most commonly used is the Schwarz criterion. This is because Schwarz criterion has been scientifically proven [ 65 ], and the critical values are more unbiased relative to other criteria. Therefore, this study determined the lagging length based on Schwarz critical values.

For the Johansen test of cointegration, the precondition was that variables must be non-stationary at level, but our three variables were integrated of the same order.

Table 6 shows that the result of the trace test indicated a solid cointegrating relationship between the variables. The value was less than 5% so we could not reject the null hypothesis, which meant that there was cointegration amongst variables; these variables had long-run associations and in the long run, they moved together. Furthermore, the maximum eigenvalue test demonstrated all the variables co-integrated and in the long run they had an association.

Johansen cointegration. Series: EMP, GDP, Tour_g Lags interval (in first differences): 1 to 4.

Source: Author’s calculation by using E-view 9. Eqn (equation), CE (cointegrating equation).

Both test trace and max-eigenvalues indicated the same thing: that variables (GDP, EMP, Tour_g) were co-integrated. They had a long-run association, and for the long run, they could move together.

5. Discussion

Tourism is one of the fastest growing industries and also a driving force for so many developed as well as developing economies. It is the largest source of employment opportunities and a huge wealth originator and a greater contributor to the diversified economy. Weaker regions or regions in decay could be developed through the tourism sector easily. For the tantalizing economies of the South Asian countries, tourism is professed as a dynamic tool to get rid of the scarcity of development resources, such as finance and expertise.

The goal of the current study is to examine the relationship between tourism, employment, and economic development in Pakistan. We explored the positive connection between the annual tourism growth and employment and economic growth. Tourism growth can improve the employment rate as well as GDP. Kim et al. [ 66 ] demonstrated causal associations among tourism growth and economic expansion in Taiwan. The findings of their study showed a long-term equilibrium association. Sanchez et al. [ 67 ] revealed that tourism expenses primarily had caused the economic deficit, but that a positive and significant economic impact on economic expansion was found. The empirical studies highlighted the impact of the tourism demand on employment pointed out that tourism had a significant effect on employment rate [ 68 , 69 ]. According to Archer [ 70 ] and Mathieson [ 71 ], tourism creates direct and indirect employment opportunities. However, studies in this context are inadequate in Pakistan. As a result, we investigated this gap and found a positive impact that tourism had on employment and economic development. Findings of our study showed that tourism growth has a positive correlation to employment and GDP. Our results are compatible with the previous research findings of Khalil and Pavlic [ 48 , 72 ]. Moreover, the main outcomes of the present study are in line with previous research outcomes [ 67 , 70 ]. The result of the cointegration analysis suggests the existence of a relationship between annual tourism growth and GDP, a finding that aligns with the prior study of Pedak [ 73 ]. Additionally, the results of the cointegration analysis show the long-run relationship between the annual tourism growth and employment; these results are in line with the previous study of Dimoska [ 74 ]. These findings suggest that growth in tourism has a major role in the economic growth as well as in creating employment opportunities. Findings supported the hypotheses.

Empirical and theoretical studies have discovered that the growth of the tourism sector has a positive impact on employment. In addition, its direct effect on travel and tourism can produce additional employment opportunities through its stimulating influence in many tourism sectors. The total economic impact of tourism is healthier when the tourism sector is encouraged to acquire domestic services and goods.

6. Policy Implications, Limitations, and Future Research Direction

For the Pakistani economy, tourism is a motivating force. The growing tourism sector can bring much optimism to the economy, mainly in terms of income, GDP, generation of employment, and economic growth. Pakistan is a popular tourist destination. Its array of natural beauty, as well as its traditional and cultural inheritance, will play an important role in Pakistan’s future if the tourism industry develops systematically and is supported well.

The tourism sector requires creative and talented people and well-developed infrastructure in place. Policies drawn from this study are that the government should create employment opportunities, income sources, and revenue for the local inhabitants as well as economic activities in the country through the development of tourism. The government can develop the tourism industry by providing the incentive to the tourism sector in the form of basic infrastructures such as a high-quality transportation system, roads, immense airports, and tax incentives to the tourism-related industries (i.e., hotels). Political stability must be established to improve Pakistan’s image to the world. The government should also ensure the security of all tourists and formulate sustainable tourism policies. This ensures a stable, secure, and steady tourism demand for the country.

The main emphasis of the state legislators should be on a law and order situation and a quality education. Terrorist attacks not only destroy the tourism sector but also abolish the soft image of Pakistan. Globally, the country was declared as insecure for traveling. Irrespective of the poverty, unemployment, inflation, and infrastructure development, still northern areas have attracted the maximum share of tourists as compared to other areas of Pakistan. Hence, to alleviate poverty and enrich the standard of life, an international level promotion of tourism in the northern areas is needed.

There are some limitations to this study. These limitations can lead to further research. First, the recent study applied secondary data. So, future studies may focus on primary data for investigating the effect of the tourism sector on economic growth. Secondly, the present study is conducted in the context of Pakistan; future research studies should be carried out in other developing countries in terms of generalizability of the findings. Further research could also be based on a sector-driven approach in order to distinguish the direct and indirect impacts of tourism on employment. Finally, future research should encourage examining other dependent variables, specifically revenue and foreign exchange earnings, etc. Furthermore, future research is needed to additionally recognize the short-term relationship between the variables through the Johansen Cointegration and Vector Error Correction Model (VECM).

7. Conclusions

The main purpose of the current study is to examine the relationship between tourism to employment and economic development in Pakistan. For this study we have used time series data from the year 1990 to 2015. The annual growth of tourism was used as an explanatory variable and both employment and GDP were taken as outcome variables. Bivariate regression and Johansen cointegration technique employed for the analysis. We have investigated the positive connection between the annual tourism growth, employment and economic growth. Findings of the study showed that tourism growth plays important role in the economic development of the country.

Acknowledgments

F.M. would like to express special gratitude to my academic supervisor Longbao Wei for his guidance, constant support, and orientation. His important guidance, advice, and suggestions are invaluable.

Author Contributions

F.M. and L.W. have equal contribution to writing the original draft; M.A. reviewed and revises the paper. M.Z.u.H. and H.u.R. contributed to the methodology part.

This research received no external funding.

Conflicts of Interest

The author(s) declare that there is no conflict of interest regarding the publication of this article.

The impact of economic and environmental factors and tourism policies on the sustainability of tourism growth in China: evidence using novel NARDL model

  • Research Article
  • Published: 14 October 2022
  • Volume 30 , pages 19326–19341, ( 2023 )

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  • Qin Chen 1  

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Recently, sustainability of tourism growth has become an international issue due to environmental and economic uncertainty that needs recent researchers’ focus and also requires the policymakers’ attention. Therefore, the present research has examined the role of economic and environmental factors and tourism policy related to tourist arrival on the sustainability of tourism growth in China. The economic factor includes the gross domestic product (GDP), national income, and foreign direct investment (FDI), while environmental factors include carbon dioxide (CO 2 ) emission, greenhouse gas (GHG) emission, and nitrous oxide emission. The study has extracted the data from World Development Indicators (WDI) from 1990 to 2020. The present research has employed nonlinear autoregressive distributed lagged (NARDL) to check the linkage among variables. The current study also examines the unit root using Augmented Dickey-Fuller (ADF) and Phillips-Perron (PP) tests. The results revealed that GDP, national income, tourism policy related to tourist arrival, and FDI have a positive linkage with the sustainability of tourism growth. The results also exposed that environmental factors such as CO 2 emission, GHG emission, and nitrous oxide emission have a negative linkage with the sustainability of tourism growth. This study provides the guidelines to the relevant authorities and regulators in developing and implementing the regulators regarding the sustainability of tourism growth by promoting economic and environmental conditions and effective tourism policies in the country.

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Introduction

The sustainability of tourism growth is a significant factor in a country’s development as it assures sustainability in social and economic well-being. The tourism industry, with all related activities like transportation, lodging, feeding, and entertainment venues, can be taken as the source of economic development. It in itself provides a complete mechanism to create employment opportunities, increase production levels, and generate income in both the formal and informal economic industries. Sustainability of tourism growth creates sustainability in the foreign exchange earnings that are generated from international trade in goods and sometimes from the act of financing the purchases of capital goods from foreign countries, availability of the goods that are necessary for the manufacturing or service sectors in the economy (Ainou et al. 2022 ; Streimikiene et al. 2021 ). The sustainability of tourism growth is also a source of sustainable social growth in the country, which ends with a sustainable rise in economic growth. The sustainability in growth in the tourism industry of the country keeps on attracting many foreign travelers, often businesses travelers, to the country and giving them a chance to get familiar with the businesses operating within countries, their characteristics like their risks and opportunities, and develops social relations among them (Bianchi 2018 ; Chien et al. 2021 ). These social relations come to an end with the commercial dealings or contracts among the travelers and the particular firms’ representatives. Moreover, when the travelers meet with the local people, they exchange their ideas and culture, which brings improvement to their lives. Hence, tourism growth enhances the human capital within the country and provides efficient human resources to the business firms within the country (Chien et al. 2022a ; León-Gómez et al. 2021 ).

Economic growth, environmental quality, and tourism policies are crucial factors in developing sustainability in tourism growth. The sustainability of tourism growth depends on the development of transportation, accommodation, food production and processing, innovative shopping centers, recreational parks, or other sort of entertainment. For all these tourism practices, financial resources are required in a sufficient amount; it also requires increased and sustainable productivity in other related economic sectors as well and needs improved human capital that not only develops tourism but also sustains this development (Chien et al. 2022b ; Kyrylov et al. 2020 ). Economic growth like the increase in GDP, NNI, and FDI enhances financial resources, increases productivity in all economic sectors, and improves human capital. So, the increase in GDP, NNI, and FDI, along with favorable and effective tourism policies related to tourist arrival, enhances tourism growth and helps to sustain it (Hall 2019 ). The natural environment provides a setting for tourist destinations; it determines the quality of natural resources, food, and water facilities for the tourists and the work efficiency of human resources performing their services for the tourism industry. If the country is confronted with environmental pollution like CO 2 emissions, GHG emissions, and nitrous oxide (N 2 O) emissions, it becomes difficult to develop tourism destinations and other tourism practices there as the quality of natural resources, food, and water facilities for the tourists, and health and work efficiency of human resources, etc. (Huang et al. 2021 ; Kapera 2018 ). In addition, Covid-19 is also a significant factor that affects the tourism growth around the globe. The travelling restrictions due to the Covid-19 had dramatic effects on tourism, but the current study has taken the data from 1990 to 2020; thus, only the year 2020 suffered from this disaster so Covid-19 did not affect the study results.

The tourism policy is the collection of decisions, discourses, and practices driven by governments alone or governments in collaboration with some social or private actors with the motive to achieve objectives regarding tourism. The content of the tourism policy is subject to copyright. The tourism policy provides a collection of rules, regulations, directives, guidelines, development goals, and strategies that offer a framework within which the group, as well as individual, decisions directly influence daily activities within a destination and sustainable tourism development. For instance, if the tourism policy designed by the government declares that the tourism firms must undertake environmentally friendly activities, the quality of the atmosphere, land resources, food products, transportation, and all other things are kept clean and not damage the tourist, employees, or general public health. This ensures a clean tourism environment, healthy labor, social support, and the preference of potential customers. So, the firm can enjoy sustainable tourism development (Adu-Ampong 2019 ; Kamarudin et al. 2021 ; Lan et al. 2022 ).

This study examines the influences of economic factors; GDP, GNI, and FDI; and environmental factors, CO 2 emissions, GHG emissions, and N 2 O emissions, on tourism growth in China. The tourist industry in China is one of the fastest-growing sectors of the economy and one of the industries with a particular worldwide competitive advantage. In terms of worldwide tourist competitiveness, China's tourism industry rose from 71st in 2007 to 13th in 2019 (Li et al. 2021a , b ; Scheyvens and Biddulph 2018 ). China has established itself as a major player in the global tourism industry. Following the formation of the world’s largest domestic tourism market, China has become the state that generates tourists in the largest number in the country for outbound tourism. Moreover, inbound tourism maintains its position as a global leader (Liu et al. 2020 , 2022a ). The domestic tourist industry keeps on growing at a rapid pace. In 2019, there were 6.01 billion domestic tourists, up 8.4% from the previous year; of these, 4.4710 billion were urban people, up 8.5%, and 1535 million were rural people, up to 8.1%. Domestic tourism revenue increased by 11.7% to 5.73 trillion yuan (the US$1.36 trillion). Urban people made have made expenditures of 4.75 trillion yuan (the US$ 1.13 trillion), an 11.6% increase, while rural people made expenditures of 0.97 trillion yuan (the US$ 0.23 trillion), a 12.1% increase (Liu et al. 2022b ; Wang and Yotsumoto 2019 ).

Domestic tourism consumption per capita climbed from 511 yuan (US$ 160.59) in 2008 to 945 yuan (US$ 225.11) in 2019, and it is still growing. The disparity in per capita spending between urban and rural populations is diminishing. In 2019, urban people spent 1062.6 yuan (US$ 253.12) per capita, while rural residents spent 634.7 yuan (US$ 155 33) per capita on domestic tourism. From 574.1 yuan (the US$ 180.42) to 427.9 yuan (the US$ 101.93), the difference between urban and rural populations has decreased (Li et al. 2021a , b ; Moslehpour et al. 2022a ). China’s outbound tourism industry increased gradually in 2019 as a result of tourism consumption increase and income growth. The number of Chinese people who traveled abroad in 2019 was 155 million, up 3.3% from the previous year. In general, China’s inbound tourist market is gradually growing. As per the 2018 statistics, 47.95 million foreign tourists visited the country. The number of international visitor arrivals in China was steady from 2008 to 2018 (Moslehpour et al. 2021 ; J. Zhang and Cheng 2019 ). International tourism receipts totaled the US$127.102 billion, a 3.0% increase from the last year. China rose three times in terms of international tourism earnings, and its share of global tourism continues to rise. It can be seen that international tourists’ consumption levels have increased in China, indicating that the country’s tourism market is maturing. Inbound tourism in China has a lot of potentials (Moslehpour et al. 2022b ; Yu et al. 2020 ). The State Council unveiled a development strategy for the tourism industry during the 14th Five-Year Plan period on January 20 (2021–2025). According to this plan, by 2025, China will have a more robust contemporary tourism system that integrates cultural development and boasts enhanced services and a barrier-free environment. The nation wants to be a global tourism powerhouse by 2035, with a greater range of tourist hotspots, such as national cultural parks, top-notch resorts, and tourist attractions and state-level cities and blocks that cater to tourism and leisure. Many policies for technological advancements, cultural development, infrastructure, and special tourism zones have been made (Haibo et al. 2020 ; Sadiq et al. 2022a ). Some statistics related to the tourism growth in China is given in Fig.  1 .

figure 1

Tourism Growth in China

The majority of China’s tourist-generating countries are located in its immediate vicinity. South Korea has been the leading source of tourists to China these years. Despite the fact that Japan is the second most popular tourist destination after China, the visitors’ strength has decreased, which may be because of the China-Japan tension (Gao et al. 2021a , b ; Sadiq et al. 2022b ). Since China presents a mysterious, unique culture, tourists from America, Russia, Malaysia, Mongolia, Singapore, and other neighboring countries feel interested in China (Sadiq et al. 2022c ; Zhang et al. 2021 ). Though the tourism industry in China has been growing at a significant rate, it is still required that information on the threats which are feared to become a hurdle to getting high tourism growth is acquired, and these threats must be removed. This is the main concern of the present study so that the Chinese tourism industry can be led to sustainable growth. The objective of the study is to explore the influences of three economic factors, GDP, GNI, and FDI; tourism policy; and three environmental factors, CO 2 emissions, GHG emissions, and N 2 O emissions, on tourism growth.

This study is a great contribution to the literature on tourism. First, in the past literature, the authors have written about the role of economic conditions and environmental elements in tourism growth. But it is rare in the existing literature that the role of economic and environmental conditions in the sustainability of tourism growth has not been checked through single research. The study of Cave and Dredge ( 2020 ) has examined only economic condition impacts on sustainable tourism development and shows the need for environmental factor impacts on sustainable economic development. Moreover, little attention is paid to tourism policies’ impacts on sustainable tourism growth. The present article, which amalgamates the role of economic conditions, environmental conditions, and tourism policies on sustainable tourism growth, makes a contribution to literature. Second, CO 2 emissions and N 2 O emissions are hazardous gases that cause GHG effect and degrade the environment. These gases and their impacts on sustainable tourism growth have been examined as GHG emissions like D. Liu et al. ( 2021 ). The study, which individually checks CO 2 and N 2 O emission impacts on tourism growth with ample detail, adds to the literature. Third, the economy of China significantly relies on tourism practices and earnings from this sector. China is one of the largest countries causing environmental pollution, which is a hurdle to sustainable tourism growth. But little study has been done on sustainable tourism growth for economic conditions, environmental conditions, and tourism policies. The present article adds much to the literature by analyzing the impacts of economic conditions, environmental conditions, and tourism policies on sustainable tourism growth in the context of China.

The present paper has several parts: The 2nd one analyzes the relationship between the GDP, GNI, FDI, tourism policy related to tourist arrival, CO 2 emissions, GHG emissions, and N 2 O emissions and tourism growth with a review of past literature. The 3rd part is about the process adopted for the collection of data and the analysis of the information in hand for the nexus among the factors under consideration. The analysis provides the study findings of the nature of the relationship among the study constructs. The results after analysis are compared with the relevant findings of previous studies. Thereafter, the conclusion of the study, its implications, and limitations are given.

Literature review

In any country, the tourism industry has great significance to economic development and social prosperity. It creates revenues for the country in the form of national currency or foreign exchange from the tourists, generates taxes from tourism, and stimulates the productivity of other related commercial enterprises (Xu and Gu 2018 ). It can achieve many progressive opportunities from economic growth. For example, with economic growth like the increase in GDP, GNI, FDI, and favorable tourism policies, there is a better financial position, technological development, increased productivity, production quality improvement, and new ways to attract tourists. On the other hand, tourism has some environmental threats, such as CO 2 emissions, GHG emissions, and N 2 O emissions. As the environment and its elements provide resources for different economic activities, pollutants like CO 2 emissions, GHG emissions, and N 2 O emissions by destroying environmental quality retard tourism growth (Shen et al. 2019 ; Tan et al. 2021 ). The relationship between economic factors like GDP, GNI, FDI, and tourism policy and three environmental factors like CO 2 emissions, GHG emissions, and N 2 O emissions and tourism growth has frequently been discussed in the existing literature. The present study examines the relation of economic growth like GDP, GNI, and FDI, and tourism policy related to tourist arrival and environmental pollutants like CO 2 emissions, GHG emissions, and N 2 O emissions with tourism growth in the light of previously conducted studies.

In a research article, Ben Jebli and Hadhri ( 2018 ) wrote about the impacts of real GDP, energy use, and CO 2 emissions from transport on international tourism. A survey was conducted on ten international tourism destinations over the the period from 1995 to 2013, with the help of the Granger causality and error correction model, the relationship between the real GDP, energy use, CO 2 emissions from transport, and international tourism. The study implies that real GDP has a positive relation to international tourism growth. With the increase in the GDP, the capacity of the country to arrange for the resources to be used in tourism practices increases as it raises the productivity of the goods and services that are essential in tourism and also assists in improving the quality of tourism resources and services. A study was conducted by Ghosh et al. ( 2020 ) to investigate the nexus between a country’s per capita GDP and the growth of marine tourism in the Oceania region, the area of the South Pacific Ocean containing many different collections of islands. A panel of data was acquired from a sample of 11 nations of Oceania spanning the period from 1995 to 2018. The study implies that when it is prosperous with high GDP, marine development is likely to grow within the country as it can invest in the implementation of tourism activities like accommodation, recreation, restaurant, and food services to coasts along with other coastal and marine tourism infrastructure including retail system, transport hubs, activity suppliers, and marinas. Tian et al. ( 2021 ) also find a positive link between a country’s GDP and tourism growth as it is the source of investment and essential resources available for tourism. Through an in-depth investigation, León-Gómez et al. ( 2021 ) examine the relationship of economic growth measured by GDP with sustainable tourism growth. The authors collected the required information for GDP and sustainable tourism growth from 668 articles on the topic of economic growth and sustainable tourism development published in the Web of Science database. The research states that when a country is making high economic growth, the tourism firms are able to utilize sustainable technologies in tourism practices. This leads the tourism industry towards sustainable growth. Hence, GDP has a positive link with sustainable tourism growth.

Many foreigners with an intention to expand their source of earnings make an investment in domestic business projects, construction, or developmental projects. FDI may be directly in the tourism firms, tourism destination development projects, or tourism construction works. It may also be in the firms engaging in natural development, tourism resource production, and providers of tourism-related facilities like tourism infrastructure, transportation, communication, and information system. So, when the FDI increases, the tourism firms have the chance to add value to the existing tourism destination and services and expand the tourism scope (Paramati et al. 2018 ; Zhao et al. 2021 ). The study by Fauzel ( 2020 ) analyzes the influences of FDI on tourism growth. By employing a panel vector error correction model (PVECM), the authors analyzed the FDI impacts on tourism development in the selected collection of 17 small island economies for the time from 1995 to 2018. The authors found a positive and direct relation between FDI and tourist arrivals or tourism growth. This study implies that FDI plays a vital role in tourism development. When the countries can successfully attract FDI and growth economically, the tourism sector can grow soon in the future as it depends much on economic growth. The research by El Menyari ( 2021 ) examines the impacts of FDI on international tourism growth. The authors collected data from the economy of Morocco for the period from 1983 to 2018. Using the autoregressive distributed lag (ARDL) approach and causality tests, the authors found a positive relationship between FDI and international tourism growth. The increase in the amount of investment from foreign sources clears the way for the tourism industry to place its feet beyond the state boundaries. The study conducted by Amin et al. ( 2020 ) investigates the influences of FDI on sustainable tourism development. The annual time series data for FDI and sustainable tourism development were acquired from Bangladesh for the period 1972–2017. Standard econometric techniques, like ADF, PP, and Zivot-Andrews unit root tests; Granger causality test; Johansen cointegration test; VECM, DOLS, and ARDL estimation methods; and cumulative sum (CUSUM) stability test have been applied to check the relationship among factors. The study results reveal that with the increase in FDI, the technological and managerial capital gets improved in the tourism industry. With the improved technologies and managerial capital, tourism growth can be sustainable. Thus, there is a positive relation between FDI and sustainable tourism development.

The tourism industry is a wide economic sector, and it is based on many other economic practices carried on within the country as it requires a large number of products and services that others produce. It is also dependent on the financial position of the country and its inhabitants. The country’s GNI increase refers to the increase in the production of goods and services within the country and also determines the financial strength of the country and the financial prosperity of the individuals. So, the country’s GNI has a positive link to tourism growth within the country (Razzaq et al. 2021 ). Empirical research by Zhang and Cheng ( 2019 ) analyzes the relation of national income with the sustainability of tourism growth. It highlights that when a country’s national income is high, the economy is stable, and business firms are engaged in their production activities. Because of their stronger financial position, they are able to focus not only on the marketing of existing items but also on the enhancement of product and service quality. In the tourism industry, enterprises’ own concentration on providing high-quality services to visitors, as well as the procurement of high-quality resources and products from other businesses, enables them to match the tourists’ quality expectations. Gao et al. ( 2021a , b ) identify the relationship between economic growth measured by national income, environmental protection, and sustainable tourism development with the evidence through a panel from 18 Mediterranean countries for the period from 1995 to 2010. The study implies that with the rise in the national income, a stronger financial position allows the ecological friendly initiatives on the part of government and individual firms. The improved atmosphere and better quality of natural resources help the growing tourism industry and getting sustainability of tourism firms. The literary article of Umurzakov et al. ( 2022 ) throws light on the economic development measured by national income and sustainable tourism growth. The information for national income and sustainable tourism development was acquired from 57 BRI countries for the time from 2000 to 2018, and the GMM estimator was applied to extract results that indicated a positive link between national income and sustainable tourism growth.

Empirical research was conducted by Kapera ( 2018 ) to examine the role of tourism policies in developing the sustainability of tourism growth. The standardized questionnaire was applied in this research, and it was distributed to 2500 municipal offices in Poland either through the empirical survey or through electronic ways in order to collect data regarding the tourism policy for providing clean tourism destinations and other tourism facilities and the sustainability in tourism growth. The data were collected from 600 end respondents. The study posits that when the policies regarding the tourism destination and practices are favorable and effectively implemented, it brings improvement in tourism facilities. For instance, if the tourism policy related to tourist arrival improvements is effectively implemented, it maintains the quality of accommodation and recreational destinations established by tourism firms maintain the clean environment for the tourists, and also assists the production of other economic products. So, favorable tourism policies enhance the sustainability of tourism growth. A study presented by Guo et al. ( 2019 ) identifies the relationship between tourism policy and the sustainability of tourism growth. The study is based on a previous research review. A total of 515 observations were taken from this literary research survey. The research survey proves that different tourism growth policies were formulated by government authorities and tourism firms for enhancing the social and environmental development of the tourism industry within the country and to develop sustainability in tourism growth. So, tourism policy and sustainable tourism growth are positively linked. The study presented by A. Khan et al. ( 2020 ) focuses on tourism policy influences on sustainable tourism growth. It examines the tourism policies regarding capital, investment, energy consumption, and environmental management in developing countries with greater attention to Pakistan. Various econometric techniques and procedures were employed to check the proposed hypotheses. The results convey that positive tourism policies encourage sustainable tourism growth. Likewise, the article by Hall ( 2019 ) also affirms that the tourism policy that is a set of specific rules, regulations, practices, strategies, and decisions automatically leads the tourism industry towards sustainable growth.

CO 2 emissions are one of the hazardous gases that could adversely affect the environment’s capacity to produce natural resources, the quality of natural resources, and the heath of living creatures, including human beings (Koçak et al. 2020 ). Tourism is the economic sector that is directly or indirectly linked to the natural environment and its elements. When in a country, because of households or operations of many commercial entities, there are a large amount of CO 2 emissions into the air, the practices of tourism become paralyzed, the tourism services may lose quality, and tourists’ attraction becomes a difficulty. So, there is downward tourism growth as a result of CO 2 emissions, and sustainability of tourism growth becomes difficult (Fethi and Senyucel 2021 ). Liu et al. ( 2019 ) intended to explore the relationship between energy consumption, CO 2 emission, and sustainability of tourism growth with respect to international tourism. The data for the nexus between these factors and tourism growth was taken from the economy of Pakistan over the years from 1980 to 2016 by using the autoregressive distributed lagged (ARDL) model. Furthermore, Granger causality and the DOLS model were applied for robust analysis. The findings show that economic growth and energy consumption are major causes of CO 2 emissions in a country. In this situation, there are adverse changes in the climate balance, weather pattern, soil condition, and ocean level. Consequently, the natural scenery and natural resources that are used as recreation sources or food for tourists are adversely affected and weaken tourism growth. Hence, sustainability in tourism growth is disturbed because of the increase in CO 2 emissions. Dogru et al. ( 2020 ) proclaim that the increasing amount of CO 2 emissions into the air pollutes the atmosphere, disturbs the water level, and traps the heat in over quantity. The environmental deterioration can endanger the health of human resources and tourists; thus, it reduces the tourism growth rate and becomes a threat to the sustainability of tourism growth. In a literary workout, Zha et al. ( 2020 ) examine the relation between CO 2 emissions and sustainable tourism growth. The nexus among the understudy factors was analyzed in developing economies like China for the period of 2005 to 2016. The results showed a negative relation between CO 2 emissions and sustainable tourism growth. In a literary article, Ozturk et al. ( 2021 ) investigates the relationship among economic growth, energy consumption, CO 2 emissions, and sustainable tourism growth. The data was acquired from Saudi Arabia for the period from 1968 to 2017. The DOLS and FMOLS methods were applied to analyze the proposed hypotheses. The study finds that when the huge amount of non-renewable energy is being utilized, the CO 2 gas is emitted in large amount, and it damages the natural parks, islands, and natural beauty serving as tourism destinations. So, the tourism growth is jeopardized as well as the relationship between CO 2 emissions and sustainable tourism growth.

GHG emissions refer to the emissions of toxic gases like H 2 O, CO 2 , N 2 O, methane, ozone, HFCs, HCFCs, and perfluorocarbons, which, whenever they exceed the balanced quantity, destroy the layer protecting the earth from sun heat, and the excessive heat into earth disturbing the weather pattern, soil and water quality, and production capacity directly affects the health of the living creatures. These environmental factors and environmental productivity provide resources for the tourism industry and affect its growth. The lack of environmental quality, adverse quality natural resources produced by the environment, and the weak and inactive labor all create problems in the performance of tourism activities and its future growth. So, sustainability in tourism growth is restricted (Usman et al. 2021 ). Lasisi et al. ( 2020 ) examine the impacts of GHG emissions on the sustainability of tourism growth. It posits that natural resources such as greens, grass, crops, trees, flowers, various plants, marine creatures, animals, and birds all fulfill the tourism industry’s demands for housing, recreation, and feeding. However, as a result of GHG emissions, the quality of these natural resources is projected to deteriorate, putting tourism expansion in jeopardy. Therefore, the increase in GHG emissions creates hurdles to sustainability development in tourism growth. The study of Ahmad et al. ( 2019 ) is an investigation of the relation of GHG emissions with the sustainability of tourism growth. According to the authors’ views, the GHG emissions and tourism growth are bound in a reciprocal relationship where when the country is making rapid growth and expansion, there are a large amount of GHG emissions, but on the other side, the increasing GHG emissions by destroying the environments resists the sustainability in tourism growth. A study of Banga et al. ( 2022 ) investigates the influences of energy consumption patterns and GHG emissions on sustainable tourism development. The research survey was conducted in 38 OECD countries from 2008 to 2019, and the nexus among the factors was analyzed with the help of a dynamic GMM model. The study finds that GHG emissions because of the excessive use of fossil fuels destroy the natural beauty and put sustainable tourism development in danger.

N 2 O is the most significant GHG after CO 2 and methane. It is the biggest human-sourced threat to the ozone layer, gathering heat from the sun into the earth. It destroys the atmospheric quality of the environment, the environment’s capacity to produce natural resources, the quality of natural resources, and the heath of living creatures, including human beings (Zhang et al. 2019 ). The tourism industry of a country has sound relations to the natural environment and its features. When there is a huge amount of GHG emissions into the air in a country due to households or operations of many commercial entities, tourism practices become stopped thoroughly, tourism services may lose quality, and the number of tourists decreases. As a result of GHG emissions, tourism growth is declining. In this case, the sustainability of the tourism facilities and their marketing are disturbed (Chien et al. 2022c ; Haseeb and Azam 2021 ). Villanthenkodath et al. ( 2021 ) proclaim that the work environment for tourism staff is ruined, and the labor quality is affected as a result in the region where substantial volumes of N2O are released by fuel combustion, agriculture, industrial activities, and wastewater management. The poor performance of human resources, which are critical to total tourist performance, constitutes a roadblock to tourism expansion. Hence, there is a negative relation between N 2 O emissions and sustainable tourism growth. The literary article of Pan et al. ( 2018 ) throws light on the N 2 O emissions and sustainable tourism development. The study suggests that N 2 O is a great environmental pollutant that could restrict the undertaking of tourism activities in the future as it is destructive to the natural beauty of destinations and increasing health risks. Hence, there is a negative relation between N 2 O emissions. Khan et al. ( 2019 ) check the nexus among GHG emissions, energy use, financial development, renewable energy, and tourism growth. The authors collected evidence on the relationship among GHG emissions like CO 2 , N 2 O, methane, and others; energy use; financial development; renewable energy; and tourism, from 34 high-income developing countries from the continents of Asia, Europe, and America from 1995 to 2017. The results showed that the increase in N 2 O emission into the air does not allow the tourism industry to grow with sustainability because it deteriorates the natural environment and the natural assets of the industry.

Research gaps

Sustainable tourism growth is not a new topic of research or discussion. It has been discussed and debated by many authors in the previously conducted research articles. Despite this, the current research article secures a distinctive position in the literature by removing several literary gaps. First, in the past literary articles, different authors have presented their views in different directions while analyzing the relationship between economic factors like GDP, FDI, and GNI, environmental factors like CO 2 emissions, GHG emissions, and N 2 O emissions as well as tourism policies with sustainable tourism growth. The present study shows the positive relation of economic factors like GDP, FDI, and GNI and tourism policies with sustainable tourism development while the negative relation of environmental factors CO 2 emissions, GHG emissions, and N 2 O emissions with sustainable tourism growth. Second, the majority of the previous literature has either analyzed the influences of economic factors like GDP, FDI, and GNI or environmental factors like CO 2 emissions, GHG emissions, and N 2 O emissions on sustainable tourism growth. However, the current literary article is about the impacts of economic factors and environmental factors along with tourism policies for sustainable tourism growth. Thus, it adds to the literature. Third, the previous research studies have analyzed the role of GDP, FDI, GNI, CO 2 emissions, GHG emissions, and N 2 O emissions and tourism policies in sustainable tourism growth in different world economies such as Mediterranean countries, the South Ocean Pacific region, Morocco, Poland, small Island economies, Pakistan, Bangladesh, and Bri economies. The current article removes this literary gap and examines these factors’ impacts on sustainable tourism growth in China. In past literature, different statistical and econometric approaches are applied to check the nexus between GDP, FDI, GNI, CO 2 emissions, GHG emissions, and N 2 O emissions and tourism policies in sustainable tourism growth. The present article adds to the literature as it finds data from the WDI and applies the ADF and PP model for analyzing these factors and their relationship.

Research methodology

The research has examined the role of economic and environmental factors and tourism policy related to tourist arrival on the sustainability of tourism growth in China. The economic factor includes the GDP, national income, and FDI, while environmental factors include CO 2 emission, GHG emission, and nitrous oxide emission, so there is no need to add further factor of environment. The study has extracted the data from WDI from 1990 to 2020. The present research has employed NARDL to check the linkage among variables. The current study also examines the unit root using ADF and PP tests. The equation is given below:

tourism growth

time period

gross domestic product

foreign direct investment

net national income

tourism policy

carbon dioxide emission

greenhouse gas emission

nitrous oxide emission

The present article has taken sustainability of tourism growth as the main construct of the study and measured the international tourism expenditures (% of total imports). In addition, the current article has taken three economic and three environmental factors and tourism policy related to tourist arrival as predictors. The economic factor includes the GDP measured as GDP growth (annual percentage), NNI measured as NNI (annual % growth), and FDI measured as a net inflow (% of GDP). Moreover, the environmental factors include CO 2 emission measured as CO 2 damage (% of GNI), GHG emission measured as GHG emission (% change from 1990), and nitrous oxide emission measured as NO emission (% change from 1990). Finally, tourism policy related to the tourist arrival is measured as the international tourist, the number of arrivals. The variables with measurement and sources are given in Table 1 .

The present research has examined the descriptive statistics that show the standard deviation, total observation used, minimum values, mean values, and maximum values of the constructs. Moreover, the study has also run the year-wise descriptive statistics that show the details of variables with respect to years. In addition, the current article also runs the correlation matrix that exposes the directional linkage among variables. Moreover, the unit root among the variables has also been examined using ADF and PP tests. The equation is given below:

The ADF and PP tests exposed guidelines for the suitable model for the study. The current study has adopted the NARDL co-integration technique because it is preferable when dealing with variables that are integrated of a different order, I(0), I(1), or a combination of both and robust when there is a single long-run relationship between the underlying variables in a small sample size. In addition, it permits us to examine asymmetries nonlinearly and thus violates linearity assumption. Moreover, the NARDL model examines for the possibility of asymmetric negative and positive impact of the independent variable(s) on the predictive variable in the long and short runs. Finally, the NARDL model also permits to capture co-integration for single equation framework compared with the linear ARDL model. The ARDL equation is mentioned below:

In addition, the current study has also examined the asymmetric role of GDP, national income, and FDI. For this purpose, the equation is given as

The current study has estimated the positive and negative role of GDP, national income, and FDI on the sustainability of tourism growth. The individual asymmetric equation is given as below:

Finally, the positive and negative role of GDP, national income, and FDI on the sustainability of tourism growth have been added to the ARDL model and converted into the NARDL. The equation is given below:

Findings of the study

The present research has examined the descriptive statistics that show the standard deviation, total observation used, minimum values, mean values, and maximum values of the constructs. The findings indicated that the mean value of TG was 8.978%, and the average value of GDP was 9.116%. In addition, the outcomes also revealed that the mean value of FDI was 3.302%, while the average value of NNI was 10.306%. In addition, the mean value of TP related to the tourist arrivals was 97,915,333 arrivals. Moreover, the output also exposed that the average value of CO2E was 5.240%, while the mean value of GHGE was 85.047, and the average value of NOE was 27.360. Finally, a total of 31 observations were used in the study. Table 2 shows these details.

Moreover, the study has also run the year-wise descriptive statistics that show the details of variables with respect to years. The results exposed that the maximum value of TG was in 2020 (16.652), while the minimum value of TG was in 1990 (2.766). Moreover, the outcomes also exposed that the highest value of GDP was 14.225% in 2014, while the lowest value of GDP was 2.348% in 1990. In addition, the results exposed that the maximum value of FDI was in 2010 (6.187) while the minimum value of FDI was in 2013 (0.966). Moreover, the outcomes also exposed that the highest value of NNI was 15.513% in 2016, while the lowest value of NNI was 4.631% in 2020. The lowest value of TP related to tourism arrivals was 14,332,500 arrivals in 1990, and the maximum value of TP was 162,538,000 arrivals in 2018. The results also exposed that the maximum value of CO 2 E was in 2012 (8.554), while the minimum value of CO 2 E was in 1992 (2.984). Moreover, the outcomes also exposed that the highest value of GHGE was 209.922 in 2020, while the lowest value of GHGE was 2.611 in 2013. Finally, the results exposed that the maximum value of NOE was in 2020 (67.052) while the minimum value of NOE was in 2013 (− 2.036). Table 3 shows the year-wise descriptive statistics figures.

In addition, the current article also runs the correlation matrix that exposes the directional linkage among variables. The results revealed that GDP, national income, and FDI have a positive linkage with the sustainability of tourism growth. The results also exposed that environmental factors such as CO 2 emission, GHG emission, and nitrous oxide emission have a negative linkage with the sustainability of tourism growth. Table 4 shows these outcomes.

Moreover, the unit root among the variables has also been examined using ADF and PP tests. The results exposed that GDP, NNI, TP, GHGE, and NOE have no unit root at the level, but TG, FDI, and CO 2 E have no unit root at the first difference. Table 5 shows the PP and ADF results.

In addition, the current article has also run the NARDL bound test that shows the cointegration, and the findings exposed that the 5.91 value of f-statistics calculated is larger than the critical value and exposed cointegration exists. Table 6 exposes these outcomes.

The NARDL results revealed that GDP, national income, and FDI have a positive linkage with the sustainability of tourism growth. The results also exposed that environmental factors such as CO 2 emission, GHG emission, and nitrous oxide emission have a negative linkage with the sustainability of tourism growth. Finally, the tourism policies related to tourist arrivals have a positive impact on the sustainability of tourism growth. Table 7 shows the NARDL results.

Discussions

The results stated that GDP is in a positive relation to the sustainability of tourism growth. These results are supported by Lee et al. ( 2021 ), which show that tourism is a combination of multiple activities, including many resources that can be acquired from different other firms, such as the firms which give infrastructure facilities, transportation facilities, and food processing, all things which are available at shopping centers serving the tourists. In the countries having high GDP, the production level in almost all the business enterprises rises. Thus, the availability of different resources to be used in tourism practices accelerates tourism growth and develops sustainability in it. These results are also in line with Scarlett ( 2021 ), which examines the GDP’s role in developing sustainability in tourism growth. This study posits that when there is high GDP growth, the firms have economic prosperity and enough resources that they can develop variety in the tourism practices like improvement in the accommodation facilities on an innovation basis, variety of food items provided at the restaurants, and availability of innovative, quality products at malls and increase in the number of recreational activities. Thus, the increase in GDP successfully adds to sustainability in tourism growth.

The results revealed that FDI has a positive relation to the sustainability of tourism growth. These results agree with Sou and Vinnicombe ( 2021 ), which highlight that the investment from persons or firms from abroad in the tourism industry increases the financial resources, economic and physical resources, and regulations and provides efficient management. Thus, the encouragement of FDI for tourism firms enables them to broaden the scope of their business, improve the quality of their services as well, and keep on growing well over time. So, these results match with the past study of Zhuang et al. ( 2021 ), which states that when domestic firms accept investment from both domestic and foreign sources, their financial position is strong, and they have considerable funds to utilize in order to keep the tourism services innovative. The use of heavy innovative technologies, technologies, and resources with high quality and novel design attracts more tourists both at the national and international levels. Thus, the tourism industry within the country can grow at a sustainable rate as a result of employing FDI. These results match with Sheng Yin and Hussain ( 2021 ), where the authors wrote about the role of FDI in tourism growth. This study shows that the firms which have high investments from foreigners are accountable to them and must disclose their operations and financial position. This motivates them to form and enforce social and environmental regulations, which ultimately improve their overall performance and enable them to grow with high sustainability.

The results indicated that GNI has a positive relation to the sustainability of tourism growth. These results are supported by Eyuboglu and Eyuboglu ( 2020 ), which reveals that in case the country has a high national income, there is peace in the economy, and business firms are active in their production practices. Because of their better financial position, they not only focus on the marketing of the existing goods but quality improvement in the products and services. In the tourism industry, the firms’ own focus on the quality services to tourists and the acquisition of quality resources and products from other firms allow them to meet the quality requirements of the tourists. Thus, tourism growth can be sustainable in the country. These results match with Aslan et al. ( 2021 ); when the GNI of a country is increasing at a consistent rate, the employment rate is high. When the large population has employment and has high salaries as determined by high production and marketing on the part of employers, their living standard is high, and they can afford big tours. This sustainable demand and marketing for tourism services give rise to sustainability in tourism growth.

The results also showed that tourism policy has a positive relation to the sustainability of tourism growth. These results are supported by Higgins-Desbiolles ( 2018 ), which highlights that the positive favorable tourism policies regarding the environmentally friendly quality of tourism, if it is effectively implemented, help improve the quality of the environment to tourists, improve attraction in recreational destinations, and provide healthy diet during the survey. When tourists have a clean and pleasant environment and good quality food and beverages in the tourism destinations, they retain the same industry and also become a mouth of share for the tourism destinations and their services. Thus, tourism firms, with consistency in the marketing of tourism services, can make sustainable environmental and economic growth. These results are in line with Sharpley ( 2020 ), which checks the tourism policies for the accommodation and hospitality to tourists and sustainability in tourism growth. If these policies include the terms that accommodation facilities and hospitality must be based on innovation and these policies are effectively implemented, the tourism firms continue to improve its accommodation and hospitality services to tourists and succeed in attracting more tourists from national and international sides. The effective implementation of tourism policies develops sustainability in tourism growth.

These results demonstrated that CO emissions have a negative relation to the sustainability of tourism growth. These results are supported by Teng et al. ( 2021 ), which show that the environment of a country is a crucial factor in tourism development within that country. But when the economic activities are smooth and social practices are at their peak and cause CO 2 emissions into the air in large amounts, global warming is high, and environmental condition degrades. Environmental degradation as a result of CO 2 emissions adversely affects the health of the tourists. In the countries where the CO 2 emissions are larger than others, tourists hesitate to visit the destination. The decrease in the marketing of tourism services reduces the rate of the tourism firms’ growth. These results agree with Sghaier et al. ( 2019 ), which examine the influences of CO 2 emissions on tourism development. The authors argue that the increasing amount of CO 2 emissions into the air pollutes the atmosphere, disturbs the water level, and traps the heat in over quantity. Thereby, it destroys the quality of natural resources as well as the living creatures which are found on the land, underwater, and in the sky. All these resources are used in different tourism services like food or water supplies, accommodation, and recreation. Consequently, it becomes difficult for the tourism industry to grow at sustainable rate.

The results indicated that GHG emissions have a negative impact on the sustainability of tourism growth. These results agree with Liu et al. ( 2021 ), which ponder the influences of GHG emissions on tourism growth. The study shows that the emissions of GHG like water vapor, CO 2 , N 2 O, CFCs, HCFCs, and perfluorocarbons are very harmful to the environment. Because of the excessive heat and suffocation in the environment affect the breathing power and physical health of the people who are the human resources of tourism firms, different service providers, and tourists. So, the lack of healthy and efficient labor in the tourism industry reduces the quality (agility, responsiveness, and level of amusement) of the tourism services, which does not allow the concerned firms to perform effectively and grow hastily as time passes. Similarly, the lack of tourists reduces the marketing level in the tourism industry. Hence, GHG emissions do not allow the tourism firm to grow. These results are also supported by Dube and Nhamo ( 2021 ), which highlight that in the tourism industry, natural resources like greenery, grass, trees, flowers, different plants, sea creatures, animals, and birds and the crops and trees used for food all serve the industry for accommodation, recreational, and feeding needs. But as in the existence of GHG emissions, the quality of these natural resources is likely to reduce, and thus, eventually, tourism growth is in danger, and sustainability in tourism growth is not possible.

The results indicated that N 2 O emissions have a negative impact on the sustainability of tourism growth. These results are supported by Larsson et al. ( 2018 ), which state that the N 2 O is a harmful gas that destroys the ozone layers, contributes to global warming, and brings climate change. It is more damaging to the ecosystem than other GHGs and has fast, destructive influences on the environmental elements, which are part of the resources in the tourism firms. Environmental degradation as a result of N 2 O reduces tourism growth. These results are in line with Lu et al. ( 2018 ), which state that in countries where fuel combustion, agriculture, industrial processes, and wastewater management release N 2 O in large amounts, the work environment for the tourism employees is destroyed and affects the labor quality. The weak performance of the human resources, who are the key to the overall tourism performance, becomes a hurdle in the way to sustainable tourism growth.

Implications

The present study has both theoretical and empirical implications. With the literary contribution, this study gives avenues to authors how they must conduct studies on sustainability in tourism growth. The present study has much theoretical significance because of the contributions it makes to the theory of tourism. This study addresses the global concept of the tourism growth in great detail. It analyzes the influences of three economic factors, GDP, GNI, FDI, and tourism policy, and three environmental factors, CO 2 emissions, GHG emissions, and N 2 O emissions, on tourism growth. In the previous studies, the impacts of both economic and environmental factors on a country’s tourism growth have been explored. But, a study is scarcely found which have thrown light on both economic and environmental factors for determining tourism growth. The present study, which examines the impacts of both economic and environmental factors on tourism growth, is an extension of the literature. Moreover, the present study seeks the facts and figures regarding the impacts of GDP, GNI, FDI, tourism policy, CO 2 emissions, GHG emissions, and N 2 O emissions on tourism growth in the Chinese economy, which in itself is a great contribution to literature.

The present study carries empirical implications as well, as the tourism industry, which has a lot of social, cultural, and economic significance, is the main concern of this study. This study is not only significant for the Chinese economy but also for the emerging economies which are interested in tourism development through some measures and particular precautions. (1) This study provides the guidelines to the relevant authorities and regulators in developing and implementing the regulators regarding tourism growth by promoting economic and environmental conditions in the country. (2) This study reveals that the government, economists, and other entities involved in providing tourism practices must take benefit from economic factors like GDP, GNI, and FDI, through effective decisions-making and promote the country’s tourism industry. (3) It also guides the audience, which would be government, economists, and tourism firms, that must try to struggle for environmental regulations so that the CO 2 emissions, GHG emissions, and N 2 O emissions can be controlled to gain high tourism growth. (4) It guides the government and tourism firms that they must try to formulate favorable tourism policies to put the tourism industry on the track to sustainable growth. The policies must be formulated to promote sustainable technologies in tourism and relevant industries, force to employ renewable energy sources, to bring improvement in tourism infrastructure, or convert the specific regions into tax-free zones for tourism. The execution of such policies improves the environmental and social performance of tourism and thus develops sustainability in tourism growth.

Conclusions and limitations

China has long been involved in providing tourism practices and takes many social, cultural, and economic benefits from these practices. Though the tourism industry in the country has been making progress over the previous years, still, the progress rate is low, and there are many threats to the sustainable development of this industry. As the authors felt the issue and needed to resolve it, they aimed to explore the measures to grow the tourism industry and the reasons which create hurdles in the way to get high tourism growth. The study was to examine the role of economic factors like GDP, GNI, FDI, and tourism policy in increasing the tourism growth rate and checking the impacts of environmental factors like CO 2 emissions, GHG emissions, and N 2 O emissions on tourism growth. The Chinese tourism industry was sought out to collect information about the influences of GDP, GNI, FDI, tourism policy, CO 2 emissions, GHG emissions, and N 2 O emissions on tourism growth. The results showed a positive relationship between GDP, GNI, FDI, tourism policy, and tourism growth. The results indicated that when a country’s GDP growth rate is high, the tourism firms can acquire quality resources in abundance and an effective and efficient labor force, which brings improvement in the tourism practices and the large marketing for tourism services as well. Similarly, in a country making high GNI, value additions, newness, and creativity can be developed in tourism practices, and marketing also increases. The increase in FDI enhances the financial resources, information, regulations, and marketing which all ultimately improve tourism growth. The results indicated that the careful formation and effective implication of tourism policies regarding different aspects like green tourism, digital tourism, hospitality sector skills, tourism small, micro and medium firms, and destination administration helps to develop sustainability in tourism growth. The results indicated a negative relation among environmental factors like CO 2 emissions, GHG emissions, N 2 O emissions, and tourism growth. These results mean that the sustainable growth of the tourism industry depends on the quality of natural tourism destinations, the quality of the food, the comfort of tourists, and the health of the employees and when there is a rapid increase in CO 2 emissions, which destroys the environmental quality, natural resources, and the health of the stakeholders, and sustainability in tourism growth is impossible. Likewise, N 2 O emissions, a more destructive gas than CO 2 emissions, disturb sustainable tourism growth because they affect the natural environment and resources that are the soul of any tourism destination. The results revealed that GHG emissions are hazardous gases that deplete the ozone layers, trap heat into the earth, and raise the environment’s temperature. These gases change the weather pattern and deteriorate the quality of all forms of nature and the health of the living bodies on all which the tourism industry is based.

Some specific limitations are associated with this study. These limitations are required to be removed in future studies. The present study examines a limited number of economic and environmental factors for the analysis of tourism growth within the country. The future authors are recommended to increase the factors which help to enhance tourism growth and the factors which restrict the tourism growth within the country so that a study that could be a better guideline for tourism growth can be presented. Moreover, the present study finds the relations between the GDP, GNI, FDI, tourism policy, CO 2 emissions, GHG emissions, and N 2 O emissions and tourism growth through research on the Chinese economy. China has specific economic policies, economic conditions, environmental circumstances, and geographical areas separate in nature from those in other countries. So, the reliability of the study may not be equal in different countries, so a general study that is based on the data from multiple countries is required from future authors.

Data availability

The data that support the findings of this study are attached.

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A sustainable tourism model transforms economic development: the Egypt case study

Yomna Mohamed, Head of Experimentation

September 12, 2022

economic sustainable tourism

Egypt is a world-renowned touristic destination. Tell someone you are visiting Egypt, and the pictures immediately come into focus: the iconic pyramids of Giza, with the mysterious Sphinx standing guard; the beautiful beaches along the coast, warm and inviting; the vibrant and bustling bazaars, infused with the legacy of the pharaohs, teeming with the rich cultures of its people.

As the top destination for tourists visiting North Africa, how might Egypt evolve its tourism industry into a sustainable engine for economic development – particularly as the world emerges from the pandemic?  More fundamentally, might tourism sector provide an opportunity to rethink the development model capable of withstanding & thriving in the context of interlinked, largely unpredictable and fast-moving crises – from food security and changing climate, to rapid inflation, polarization, economic downturn & inequality?

This is the critical question facing UNDP Egypt, one of nine country offices selected by UNDP’s Strategic Innovation Unit to join the second cohort of Deep Demonstrations, an initiative financed by the Government of Denmark.

In this post, we detail the context for tourism in Egypt, consider emerging trends in the economic model, and share progress to date in shaping broader system transformation.

The Egyptian Context

Egypt is best characterized as a Low-Cost Mass Tourism Magnet. According to the IMF , the tourism industry employed 10 percent of the population and contributed to about 12 percent of GDP pre-pandemic. Egypt ranks first in Africa, fifth in MENA, and 51 st globally in the travel and tourism development index (TTDI). It is a top performer in the MENA region with regards to environmental sustainability (31), natural and cultural resources (33), and business and cultural travel (22). With over 100 million in population, Egypt is both a prime destination for nature-based activities and a home to rich cultural diversity.

While the pandemic has definitely been an accelerant, the combination of economic factors and new norms that underpin global tourism raise fundamental questions about long-term viability (see fig 1). Even as the global airline industry recovers from the pandemic, the costs of long-haul travel have become increasingly unaffordable – not only in the rising price of fuel but also in its contributions to climate change. The unexpected benefits of lockdown, improved environments and ecosystems, have countries questioning whether they want to return to the risky, crowded, over-reaching pre-pandemic world. And COVID-19 has magnified the vulnerability of local communities who already do not benefit from unsustainable tourism.

economic sustainable tourism

fig 1. Macro Trends, or the Opportunity Space for Change

This requires rethinking the model entirely. The circumstances call for collective effort that transforms the system to one based on sustainability, resilience, and putting local communities first.

Looking at the adjacent possible and entry points for unlocking systems transformation

In response, UNDP Egypt has embarked on a journey to rethink the tourism model and develop a portfolio of policy options on sustainable tourism that align with national priorities.

This approach relies not on a singular discrete intervention but a full system-wide transformation. The adaptive framework is designed to continuously learn from experience and detect new opportunities or needs in the system. A portfolio-based approach serves as a dynamic repository of strategic ideas that frame policy, an investment pipeline for funders, and a coordinating mechanism for relevant stakeholders.

In order to design this portfolio, it is necessary to start with strategic intent. This involves three specific actions –

1. Create a shared vision at the national level: 

This frames the possibilities for a transformative agenda and mobilizes stakeholders to build sustainable, innovative tourism in Egypt. A critical mindset shift is seeing investment in the population and nature as an investment in tourism, where tourism becomes an entry point for rethinking the country’s existing development paradigms.

2. Reimagine a tourism industry that benefits all: 

These include activities that strengthen climate resilience and deliver sustainable benefits to local communities at the forefront.

3. Expand the diversity of business models: 

By focusing on innovative and integrated experiences for tourists, Egypt can accelerate and drive sustainable growth in the industry.

Informed by this strategic intent, existing models, and portfolio ambitions, we have identified three main shifts to create in conjunction with our partners and stakeholders, showcased in fig 2.

economic sustainable tourism

fig 2. Three Shifts in the Model

As innovation advisors, we have learned to trust the process. Through this system transformation framework, two parallel but complementary pathways have emerged –

1. Continuously exploring and deeply learning the needs and opportunities in the system; and

2. Identifying key policy options that accelerate the investment pipeline

We are taking these shifts and translating them into specific and coherent offers to be pursued with partners. A sample of these is shown in fig 3.

economic sustainable tourism

fig 3. Three Shifts, in Practice

A system transformation is premised on collective action and stakeholder engagement around a coherent approach. In this deep demonstration on sustainable tourism, we embarked on a journey to learn about the problem space, design a portfolio of policy options, and activate a set of evidence-based interventions.

We have yet to determine where best to introduce this portfolio of interventions, but we invite all potential partners to learn alongside and act with us as we work together to make tourism a sustainable economic engine in Egypt.

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  • Published: 31 May 2023

Eco-tourism, climate change, and environmental policies: empirical evidence from developing economies

  • Yunfeng Shang 1 ,
  • Chunyu Bi 2 ,
  • Xinyu Wei 2 ,
  • Dayang Jiang 2 ,
  • Farhad Taghizadeh-Hesary   ORCID: orcid.org/0000-0001-5446-7093 3 , 4 &
  • Ehsan Rasoulinezhad   ORCID: orcid.org/0000-0002-7726-1757 5  

Humanities and Social Sciences Communications volume  10 , Article number:  275 ( 2023 ) Cite this article

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  • Environmental studies

Developing ecotourism services is a suitable solution to help developing countries improve the status of sustainable development indicators and protect their environment. The primary purpose of this paper is to find out the effects of green governance variables and carbon dioxide emissions on ecotourism for 40 developing economies from 2010 to 2021. The results confirmed a uni-directional causal relationship between the green governance indicator and the inflation rate of the ecotourism indicator. In addition, with a 1% improvement in the green governance index of developing countries, the ecotourism of these countries will increase by 0.43%. In comparison, with a 1% increase in the globalization index of these countries, ecotourism will increase by 0.32%. Moreover, ecotourism in developing countries is more sensitive to macroeconomic variables changes than in developed economies. Geopolitical risk is an influential factor in the developing process of ecotourism. The practical policies recommended by this research are developing the green financing market, establishing virtual tourism, granting green loans to small and medium enterprises, and government incentives to motivate active businesses.

Introduction

The challenge of climate change has become a primary threat to living on the Earth in the last centuries (Rasoulinzhad and Taghizadeh-Hesary, 2022 ). Many meetings of the countries at the regional and international level are held on the topics of environment and climate change. Regardless of environmental issues, population growth, and the lack of control of greenhouse gas emissions, industrialization has been the most crucial cause of the climate change crisis. Chao and Feng ( 2018 ) address human activity as the leading cause of climate change and express that this challenge is a potential threat to living on Earth. Woodward ( 2019 ) argued that climate change threats include the rise in global temperature, the melting of polar ice caps, and unprecedented disease outbreaks. Therefore, urgent policies and solutions are essential to control and lower the risk of global change. One of the signs of climate change is the increase in the average temperature of the Earth’s surface. Figure 1 shows the temperature data from 1910 to 2021 for the four continents of Asia, Europe, Africa, and North America.

figure 1

Source: Authors from NOAA ( https://www.ncei.noaa.gov/access/monitoring/climate-at-a-glance/global/time-series ).

The data in Fig. 1 shows that the air temperature has increased significantly over the past century, which has been more prominent in Asia and Europe. In 2021, we saw a decrease in temperature changes due to the spread of the Corona disease and a decrease in the rate of greenhouse gas emissions. However, the role of the Asian continent in increasing the global temperature has been more than other continents due to its large population and excessive consumption of fossil fuels.

During the past decades, the world’s countries have tried to formulate and implement various environmental policies collectively in the form of agreements or separately to fight environmental threats. Regarding international agreements, such things as the Paris Agreement of 2015, the Kyoto Protocol of 1997, the Montreal Protocol of 1987, and the Vienna Convention on the Protection of the Ozone Layer in 1985 can be addressed whose primary purpose is to integrate the goals and motivation of the international community to the world’s environmental threats. However, a group of earlier studies, such as Zheng et al. ( 2017 ), Takashima ( 2018 ), and Roelfsema et al. ( 2022 ), emphasized the inefficiency of these global agreements, especially after the left the USA from the Paris Agreement on 1 June 2017. The most important cause of this inefficiency has been the need for more motivation of countries to fulfill their international obligations towards environmental issues. However, many governments consider the threat of climate change only within their geographical boundaries and have tried to formulate and implement green policies to advance their environmental protection goals. These policies include green financial policies (green taxes, green subsidies), monetary policies (such as green loans and green financing), and cultural and social policies in line with sustainable development. The ultimate goal of these green policies is a green economy, an environmentally friendly economy, a zero carbon economy, or a sustainable economy. Lee et al. ( 2022 ) define the green economy as a broad concept comprising green industry, agriculture, and services. Centobelli et al. ( 2022 ) express that environmental sustainability should be more attention in the service sector owing to its penetration into social life and interactions.

Tourism and travel-related services are among countries’ main parts of the service sector. By creating the flow of tourists, tourism services can lead to capital transfer, job creation, cultural exchange (globalization), and increasing welfare in the country hosting the tours. According to the Yearbook of Tourism Statistics published by the World Tourism Organization, international tourism has increased from 522.2 billion US dollars in 1995 to nearly 1.86 trillion US dollars in 2019. This increase shows the importance of tourism services in generating income for countries, especially in the era of Corona and post-corona. Casado-Aranda et al. ( 2021 ) express that tourism services can be a central driver of economic growth recovery in post COVID era. Jeyacheya and Hampton ( 2022 ) argue that tourism can make high incomes for host countries leading to job creation and economic flourishing in destination cities for tourists.

An important issue mentioned in the corona era and relies on the post-corona era is the revitalizing of green economic growth. An important issue mentioned in the corona era and relying on the post-corona era is the revitalizing green economic growth (Bai et al., 2022 ; Werikhe, 2022 ), an opportunity that countries should pay more attention to in order to rebuild their economic activities. In other words, countries should plan their return to economic prosperity with environmental issues in mind. To this end, the issue of tourism finds a branch called Ecotourism or sustainable tourism which has environmental concerns and tries to help countries to improve environmental protection policies. Ecotourism is an approach based on environmental criteria, which is opposed to over-tourism (a type of tourism that disrupts the protection of the environment and destroys natural resources). The International Ecotourism Society defines Ecotourism as an efficient way to conserve the environment and improve local people’s well-being. It can be said that Ecotourism, along with various economic advantages (income generation, job creation, globalization, poverty alleviation), will bring environmental protection to the world’s countries, achieving the goals of green economic growth recovery and sustainable development. Xu et al. ( 2022 ) consider Ecotourism as one of the essential components of achieving sustainable development in the post-corona era.

Ecotourism in developing countries has more priorities compared to developed economies. Firstly, developing countries are often countries with financial problems of the government, and the governments in these countries need more capital to advance sustainable development goals. Therefore, developing ecotourism services can be a suitable solution to help these countries improve the status of sustainable development indicators and protect their environment. Second, due to the spread of the Corona disease, developing countries have experienced numerous bankruptcy in the tourism services sector. Therefore, promoting ecotourism in these countries is of great importance in the post-corona era. Third, developing countries have a high share in the emission of greenhouse gases in the world due to their high dependence on fossil fuels and the lack of advanced green technologies. Fourth, due to bureaucratic processes, high cost, and lack of market transparency, greenwashing may happen in developing economies’ ecotourism industry, meaning that a company serving ecotourism services makes its activities seem more sustainable and ethical than they are. The term “greenwashing” can harshly impact the future development path of the ecotourism industry in developing economies. According to the reasons mentioned above, developing ecotourism in developing countries can be an essential factor in controlling and reducing greenhouse gas emissions in these countries.

This paper tries to contribute to the existing literature from the following aspects:

Calculating the ecotourism index for selected countries based on the criteria for measuring sustainable tourism stated by the World Tourism Organization in the United Nations. Considering that there is no specific index for ecotourism, the calculation of ecotourism in this article will be innovative.

Measuring the green governance index as a proxy for environmental policies for selected countries based on the Environment Social and Governance (ESG) data.

Selecting a sample of 40 developing countries from different geographical regions to calculate the interconnections between ecotourism, green governance, and climate change

Making a further discussion to address the role of uncertainty and the developing level of countries in the relationship between ecotourism and explanatory variables.

The main results confirm the existence of a uni-directional causal relationship running from the green governance indicator and inflation rate to the ecotourism indicator. In addition, with a 1% improvement in the green governance index of developing countries, the ecotourism of these countries will increase by 0.43%. A 1% increase in the globalization index of these countries accelerates ecotourism by 0.32%.

Moreover, ecotourism in developing countries is more sensitive to macroeconomic variables changes than in developed economies. Geopolitical risk is an influential factor in the developing process of ecotourism. The practical policies recommended by this research are developing the green financing market, establishing virtual tourism, granting green loans to small and medium enterprises, and government incentives to motivate active businesses.

The paper in continue is organized as follows: section “Literature review” provides a short literature review to determine the gaps this research seeks to fill. Section “Data and model specification” argues data and model specification. The following section represents empirical results. Section “Discussion” expresses discussion, whereas the last section provides conclusions, policy implications, research limitations, and recommendations to research further.

Literature review

This part of the article analyzes and classifies the previous literature on ecotourism and sustainable development in a rational and structured way. The importance of tourism in economic growth and development has been discussed in previous studies. However, the study of the effect of tourism on climate change has received little attention. Especially the relationship between sustainable tourism, climate change, and environmental policies is a problem that has yet to receive the attention of academic experts.

A group of previous studies has focused on the place of tourism in economic development and growth. Holzner ( 2011 ) focused on the consequences of tourism development on the economic performance of 134 countries from 1970 to 2007. They found out that excessive dependence on tourism income leads to Dutch disease in the economy, and other economic sectors need to develop to the extent of the tourism sector. In another study, Sokhanvar et al. ( 2018 ) investigated the causal link between tourism and economic growth in emerging economies from 1995 to 2014. The main results confirmed that the linkage is country-dependent. Brida et al. ( 2020 ) studied 80 economies from 1995 to 2016 to determine how tourism and economic development are related. The paper’s conclusions highlighted tourism’s-positive role in economic activities.

Another group of previous studies has linked tourism to sustainability targets. Sorensen and Grindsted ( 2021 ) expressed that nature tourism development has a positive and direct impact on achieving sustainable development goals of countries. In a new study, Li et al. ( 2022 ) studied the impacts of tourism development on life quality (as one of the sustainable development goals defined by the UN in 2015) in the case of Japan. They found that tourism development positively impacts the quality of life of age groups in the country. Ahmad et al. ( 2022 ) explored the role of tourism in the sustainability of G7 economies from 2000–2019. The primary findings revealed the positive impact of tourism arrivals on sustainable economic development. Zekan et al. ( 2022 ) investigated the impact of tourism on regional sustainability in Europe. They concluded that tourism development increases transport, leading to increased carbon dioxide emissions. Therefore, tourism development causes environmental pollution.

Tourism that can pay attention to environmental issues is called “ecotourism.” Many new studies have studied different dimensions of ecotourism. Lu et al. ( 2021 ) expanded the concept of the ecotourism industry. The significant results expressed that smart tourist cities are essential for efficient ecotourism in countries. Thompson ( 2022 ) expressed the characteristics of ecotourism development through survey methodology. The results confirmed the importance of transparent regulations, government support, and social intention to promote ecotourism. In another study, Heshmati et al. ( 2022 ) employed the SWOT analysis method to explore the critical success factors of ecotourism development in Iran. They found that legal documentation and private participation are major influential factors in promoting ecotourism in Iran. In line with the previous research, Hosseini et al. ( 2021 ) tried to explore the influential factors in promoting ecotourism in Iran by employing a SWOT analysis. They depicted that attracting investors is essential to enhance ecotourism projects in Iran. Hasana et al. ( 2022 ) reviewed research to analyze the earlier studies about ecotourism. The conclusions expressed that ecotourism is necessary for environmental protection. However, it is a challenging plan for the government, and they should carry out various policies toward ecotourism development. Kunjuraman et al. ( 2022 ) studied the role of ecotourism on rural community development in Malaysia. The significant results confirmed that ecotourism could transfer-positive impacts.

Several earlier studies have concentrated on the characteristics of ecotourism in different developed and developing economies. For example, Ruhanen ( 2019 ) investigated the ecotourism status in Australia. The paper concluded that the country could potentially make a larger share of ecotourism to the entire local tourism industry. Jin et al. ( 2022 ) studied the role of local community power on green tourism in Japan. They concluded that the concept of agricultural village activity and regional support positively influences the development of green tourism in Japan as a developed economy. Choi et al. ( 2022 ) sought to find aspects of ecotourism development in South Korea. The preliminary results confirmed the importance of green governance and efficient regulation to promote a sustainable tourism industry. Baloch et al. ( 2022 ) explored the ecotourism specifications in the developing economy of Pakistan. They found that Pakistan’s ecotourism needs government support and the social well-being of the visited cities. Sun et al. ( 2022 ) studied ecotourism in China. They concluded that there is imbalanced development of ecotourism among Chinese provinces due to the need for more capital to invest in all ecotourism projects throughout the Chinese cities. Tajer and Demir ( 2022 ) analyzed the ecotourism strategy in Iran. They concluded that despite various potentials in the country, insufficient capital, lack of social awareness, and political tension are the major obstacles to promoting a sustainable tourism industry in Iran.

Another group of earlier studies has drawn attention to promoting eco-tourism in the post COVID era. They believe that the corona disease has created an excellent opportunity to pay more attention to environmental issues and that countries should move towards sustainable development concepts such as sustainable (eco) tourism in the post-corona era. Soliku et al. ( 2021 ) studied eco-tourism in Ghana during the pandemic. The findings depicted the vague impacts of a pandemic on eco-tourism. Despite the short-term negative consequence of the pandemic on eco-tourism, it provides various opportunities for developing this sector in Ghana. Hosseini et al. ( 2021 ) employed the Fuzzy Dematel technique to find solutions for promoting eco-tourism during COVID-19. They found out that planning to increase the capacity of eco-tourism and incentive policies by governments can help promote the eco-tourism aspect under the pandemic’s consequences. Abedin et al. ( 2022 ) studied the consequence of COVID-19 on coastal eco-tourism development. The primary findings confirmed the negative impacts of a pandemic on the development of eco-tourism.

A review of previous studies shows that tourism can positively impact green growth and sustainable development. Sustainable tourism can be used as a policy to deal with the threat of climate change. This issue needs more attention in the corona and post-corona eras. Because in the post-corona era, many countries have sought to revive green economic growth, and ecotourism can be one of the tools to achieve it. As observed, a detailed study of the relationship between climate change, ecotourism, and environmental policies has yet to be done. Therefore, this research will address and fill this literature gap.

Data and model specification

Data description.

The paper seeks to find the relationship between climate change, ecotourism, and environmental policy for the panel of 40 developing economies from different regions from 2010 to 2021 (480 observations). The sample size could have been more extensive due to the lack of information on some variables. However, there are 480 observations in the data analysis of the data panel; therefore, the number of samples selected is acceptable.

To determine the proxies for main variables, CO2 emissions per capita are selected as the proxy for climate change. Many earlier studies (e.g., Espoir et al., 2022 ) have employed this variable as an appropriate variable representing the status of climate change. Regarding ecotourism, the World Tourism Organization proposed some measurements of sustainable tourism, and also following Yusef et al. ( 2014 ), the entropy weight method is employed to calculate a multi-dimensional ecotourism indicator comprising per capita green park area (square meters), gross domestic tourism revenue (US dollars), the ratio of good air quality (%), green transport, renewable water resources (km3) and deforestation rate (%). It is a novel ecotourism indicator that can show the ecotourism status in countries.

In addition, the green governance index is calculated as a proxy for environmental policy. Principally, the Environment, Social, and Governance (ESG) data from World Bank are gathered to calculate this variable. With the improvement of the Green Governance Index, the quality of environmental policies will also increase, and vice versa. With the adverseness of the Green Governance Index, the efficiency of environmental policies will decrease.

Regarding control variables, the inflation rate as an influential factor in tourism flows is selected. The importance of this variable to promoting/declining tourism flows has been drawn to attention by some earlier studies, such as Liu et al. ( 2022 ). The inflation rate can raise the total cost of travel, causing a reduction in tourism flows, while any reduction in the inflation rate can increase the intention of tourists to travel. In addition, the KOF globalization index provided by the KOF Swiss Economic Institute is another control variable. A country with a higher degree of globalization means more readiness to accept tourists from countries with different cultures and religions.

Model specification

According to the variables mentioned above, 40 examined developing countries from 2010 to 2021, the panel co-integration model can be written as Eq. 1 :

ETOR indicates the ecotourism index, while CO2, GGI, INF, and GLOB denote Carbon dioxide emissions per capita, green governance index, inflation rate, and globalization index, respectively. i is 1,2,…,40 and shows examined developing economies, while t is time and contains 2010, 2011,..,2021.

Prior to the estimation of coefficients of Eq. 1 , the panel unit root tests are employed to find out whether the series is stationary. To this end, three tests of LLC (Levin et al., 2002 ), Breitung’s test ( 2000 ), and the PP-Fisher test (Philips and Perron, 1988 ). If all the variables are stationary at the first level of difference (I(1)), a panel co-integration test can be conducted to explore whether the model is spurious. To this end, Kao’s co-integration test ( 1999 ) and Pedroni’s residual co-integration test ( 2004 ) are conducted. If the co-integration relationship exists among variables, the panel causality test can be run to determine the causal linkages among variables. In this paper, the two steps of Engle and Granger (1987)‘s test, which is based on the error correction model (ECM) is used as Eqs. 2 – 6 :

In the above Equations, Δ is the first differences of variables, while θ and ECT represent the fixed country effect and error correction term.

The next step is the long-run panel co-integration estimations. To this end, Fully Modified OLS (FMOLS) and Dynamic OLS (DOLS) as robustness checks are conducted, which are two famous panel co-integration estimators (Rasoulinezhad, 2018 ). The FMOLS estimator has various advantages. It allows serial correlation, endogeneity, and cross-sectional heterogeneity (Erdal and Erdal, 2020 ).

Empirical results

In this section, we will implement the experimental research model. The purpose of implementing an econometric model based on panel data is to find the effects of green governance variables and carbon dioxide emissions on ecotourism. As the first step, the panel unit root tests are conducted. The results are reported in Table 1 as follows:

According to Table 1 , all three-panel unit root tests depict that all series are non-stationary at the level and become stationary after a first difference. Next, the panel co-integration tests are conducted, and their results are represented in Tables 2 and 3 :

The two-panel co-integration tests’ findings confirm the presence of co-integration linkages among variables.

The panel causality test studies the short-term and long-term causal relationship among variables. Table 4 reports the results of the panel causality check as follows:

According to Table 4 , there is a uni-directional causal relationship between the green governance indicator and the inflation rate of the ecotourism indicator. At the same time, there is a bi-directional causal relationship between carbon dioxide emissions and ecotourism indicators, confirming the existence of the feedback effect. In addition, there is only short-term causality from the green governance indicator to carbon dioxide emissions. In contrast, ecotourism and the globalization index have a uni-directional causal linkage. In the short term, improving ecotourism can cause globalization and reduce carbon emissions in developing economies. Regarding the long-term causality, it can be concluded that the ECT of ecotourism, green governance index, and globalization index are statistically significant. These three variables are major adjustment variables when the system departs from equilibrium.

In the last stage, the long-run estimations are done through FMOLS and DOLS estimators. Table 5 lists the results of the estimations by these two-panel co-integration estimators:

Based on FMOLS estimation, it can be concluded that the Green Governance index has a positive and significant coefficient in such a way that with a 1% improvement in the green governance index of developing countries, the ecotourism of these countries will increase by 0.43%. By improving the state of green governance, the quality of formulated and implemented green policies in these countries will increase, improving the conditions of ecotourism development. This finding aligns with Agrawal et al. ( 2022 ) and Debbarma and Choi ( 2022 ), who believe that green governance is essential to sustainable development. In the case of carbon dioxide emissions, the coefficient of this variable is not statistically significant. In other words, the variable of carbon dioxide emissions per capita has no significant effect on ecotourism in developing countries. The inflation rate has a significant negative effect on ecotourism. With a 1% increase in the general prices of goods and services in developing countries, ecotourism will decrease by 0.34%. This finding aligns with Rahman ( 2022 ), who showed a negative relationship between inflation and sustainable development in their research. An increase in inflation means an increase in the total cost of a tourist’s trip to the destination country, inhibiting the growth of tourist services.

Regarding the globalization variable, this variable has a significant positive effect on the ecotourism of developing countries. With a 1% increase in the globalization index of these countries, ecotourism will increase by 0.32%. Globalization means more interaction with the world’s countries, acceptance of different cultures and customs, more language learning in society, more acceptance of tourism, and development of tourist services in the country. This finding is consistent with the results of Akadiri et al. ( 2019 ), who confirmed that globalization is one of the crucial components in tourism development.

The DOLS estimator was also used to ensure the obtained findings’ validity. The results of this method are shown in Table 5 . The signs of the coefficients are consistent with the results obtained by the FMOLS method. Therefore, the validity and reliability of the obtained coefficients are confirmed.

In this section, we will briefly discuss the relationship between ecotourism and climate change and the environmental policy considering the uncertainty and the relationship between variables in developed and developing countries.

Consideration of uncertainty

Uncertainty as a primary reason for risk has become a research issue in recent decades. Uncertainty can make the future unpredictable and uncontrollable, affecting economic decision-making. Regarding tourism, the impacts of uncertainty have been drawn to attention by several earlier studies (e.g., Dutta et al., 2020 ; Das et al., 2020 ; and Balli et al., 2019 ; Balli et al., 2018 ). In general, uncertainty in the tourism industry reflects tourists’ concerns and consumption habits in the way that by increasing uncertainty, it is expected that tourists make sense of risks and postpone their tourism activities, and vice versa; in the sphere of certainties, the various risks are clear, and tourists can make rational decisions for their tourism plans and activities. In order to explore the impacts of uncertainties on eco-tourism of the examined developing economies, the geopolitical risk index (GPR) as a proxy for economic policy uncertainty index is gathered and added as a control variable to Eq. 1 . The estimations results by FMOLS are reported in Table 6 as follows.

According to Table 6 , the uncertainty (geopolitical risk) has a negative coefficient meaning that with a 1% increase in geopolitical risk, the eco-tourism industry in the examined developing countries decreases by approximately 0.69%. The signs of coefficients of other variables align with the earlier findings, represented in Table 5 . In addition, the magnitude of the impact of geopolitical risk is larger than the impacts of other variables highlighting the importance of lower geopolitical risk in these economies to reach sustainable tourism targets.

Difference in developed and developing economies

Considering the different structures and financial power of these two groups of countries, the relationship between the variables mentioned in these two groups is expected to be different. In the previous section, the results for the group of developing countries showed that the Green Governance index has a positive and significant coefficient. In the case of carbon dioxide emissions, the coefficient of this variable is not statistically significant. The inflation rate has a significant negative effect on ecotourism. Regarding the globalization variable, it can be mentioned that this variable has a significant positive effect on the ecotourism of developing countries. In order to analyze the relationship between variables in the developed countries, the top 10 countries with the highest HDI in 2021 are selected (Switzerland (0.962), Norway (0.961), Iceland (0.959), Hong Kong (0.952), Australia (0.951), Denmark (0.948), Sweden (0.947) and Ireland (0.945)). The selected variables, explained in section “Data and model specification”, are collected from 2010 to 2021. The panel unit root tests confirmed that all series are non-stationary at the level and become stationary after a first difference. In addition, the presence of co-integration linkages among variables is revealed by the panel co-integration test. The panel co-integration estimator of FMOLS is employed to study the long-term relationship among variables. The findings are reported in Table 7 as follows:

According to the estimated coefficients, the green governance indicator positively and statistically significantly impacts ecotourism in the examined developed economies. However, the magnitude of the impact of this variable is more considerable for developing countries because these countries have more imbalances in markets and regulations. Therefore, the presence of good green tourism can have a more positive effect on advancing the goal of ecotourism. Contrary to the findings of developing countries, carbon dioxide emission in developed countries has a negative and significant effect, meaning that with an increase of 1% in carbon dioxide in developed countries, the level of ecotourism becomes more unfavorable by 0.034%. Moreover, inflation and globalization variables have significant negative and positive coefficients, respectively. However, the magnitudes of these two variables’ coefficients are also higher in developing countries. Ecotourism in developing countries is more sensitive to changes in macroeconomic variables such as green governance, globalization, and inflation.

Another difference between eco-tourism in developed and developing economies may be interpreted through the term “greenwashing,” introduced by Westerveld in 1986 (Maichum et al., 2016 ). In developing countries, due to the economic structure, limited knowledge, bureaucratic process, lack of legal eco-certification, and imperfect competition, a company involved in the eco-tourism industry makes an unsubstantiated claim to deceive consumers into accepting the company’s services are in line with environmental protection policies. Hence, green governance in developing countries should have another role in regulating the eco-tourism market to lower the threat of greenwashing in eco-tourism services.

Conclusions and policy recommendations

Concluding remarks.

The findings of econometric modeling revealed the relationship between environmental policies, climate change, and ecotourism. Based on the findings of the econometric model, the following conclusions can be presented:

A uni-directional causal relationship runs from the green governance indicator and inflation rate to the ecotourism indicator, which means that any changes in green governance and inflation rate cause changes in ecotourism, which is vital for developing economies where governance and inflation rate are two crucial issues.

There is a bi-directional causal relationship between carbon dioxide emissions and ecotourism indicators, confirming the existence of the feedback hypothesis, expressing that in developing economies, any policies related to ecotourism cause changes in CO2 emissions and vice versa.

There is only short-term causality from the green governance indicator to carbon dioxide emissions, whereas there is a uni-directional causal linkage from ecotourism to the globalization index. In other words, in the short term, improving ecotourism can cause globalization and reduce carbon emissions in developing economies.

By improving green governance in developing economies, the quality of formulated and implemented green policies in these countries will increase, improving the conditions of ecotourism development.

An increase in the inflation rate raises the total cost of a tourist’s trip to developing economies, inhibiting the growth of eco-tourist services.

Globalization means more interaction with the world’s countries, acceptance of different cultures and customs, more language learning in society, more acceptance of tourism, and development of tourist services in developing countries.

Policy implications

In order to achieve the promotion of ecotourism in developing countries, the implementation of integrated and effective strategic and practical policies is of great importance. According to the concluding remarks mentioned, practical policies are presented as follows for enhancing ecotourism in developed countries. The development of ecotourism requires the improvement of various infrastructures and mechanisms, which depends on the implementation of projects related to ecotourism in developing countries. Because most countries do not have enough financial power to invest in such projects, developing the green financing market can be one of the critical practical solutions. The green financing tool can increase the investment risk and return on investment in such projects, and as a result, the participation of the private sector in these projects will increase. With information and communication technology development, virtual tourism can solve many environmental issues related to human physical presence. Virtual tourism is one of the branches of tourism services that provide people with destinations, places of interest, and tourist attractions with full quality but in virtual form. Another practical policy is granting green loans to small and medium enterprises active in ecotourism. Despite the organizational agility, these companies do not have the significant financial power to develop different sectors of ecotourism; therefore, the cooperation of the banking industry of developing countries by providing green loans (with low-interest rates) can motivate small and medium-sized companies in the field of activities related to ecotourism. Government incentives to motivate businesses active in ecotourism and government deterrent policies (green tax) from businesses active in the field of tourism to lead them to increase the share of ecotourism in their activities can be a proper operational strategy. In developing countries, the role of government and green governance is vital in advancing the goals of ecotourism. By improving the level of its green governance, the government can create efficient policies, regulations, and social tools to create motivation and desire to accept ecotourism, an essential and undeniable issue in developing societies. Creating a guarantee fund for ecotourism companies in developing countries is another practical policy to support these companies financially. Guarantee funds can be established with the participation of the people of ecotourism destinations in order to strengthen the financial strength of ecotourism companies in these destinations.

Limitations and recommendations to further research

This research had a practical and innovative contribution to the literature on ecotourism in developing countries. The findings obtained from the econometric model analysis provided appropriate practical and strategic policies to the policymakers of countries interested in the development of ecotourism. However, access to data related to the ecotourism index and sustainable development of developing countries due to the lack of community in a specific database is considered one of the critical limitations of this research. This limitation caused many developing countries to be excluded from the research sample, which may have created a deviation in the research. Adding more countries to the test sample in future research is suggested to obtain complete and accurate results. Also, due to the outbreak of the Corona pandemic at the end of 2019 and the Russia-Ukraine war since the beginning of 2022, it is suggested that these two variables be included in the econometric model as an illusion in order to analyze their effects on the ecotourism of the countries of the world. Using other econometric methods, such as artificial neural networks, is suggested to model ecotourism in different countries. Complex modeling by taking into account trends and trends to predict the relationship between variables in the future will be an essential step in formulating effective programs in ecotourism.

Data availability

The datasets generated during and/or analyzed during the current study are available from the corresponding author on reasonable request.

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Shang, Y., Bi, C., Wei, X. et al. Eco-tourism, climate change, and environmental policies: empirical evidence from developing economies. Humanit Soc Sci Commun 10 , 275 (2023). https://doi.org/10.1057/s41599-023-01777-w

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economic sustainable tourism

Tourism Teacher

10 Economic impacts of tourism + explanations + examples

Disclaimer: Some posts on Tourism Teacher may contain affiliate links. If you appreciate this content, you can show your support by making a purchase through these links or by buying me a coffee . Thank you for your support!

There are many economic impacts of tourism, and it is important that we understand what they are and how we can maximise the positive economic impacts of tourism and minimise the negative economic impacts of tourism.

Many argue that the tourism industry is the largest industry in the world. While its actual value is difficult to accurately determine, the economic potential of the tourism industry is indisputable. In fact, it is because of the positive economic impacts that most destinations embark on their tourism journey.

There is, however, more than meets the eye in most cases. The positive economic impacts of tourism are often not as significant as anticipated. Furthermore, tourism activity tends to bring with it unwanted and often unexpected negative economic impacts of tourism.

In this article I will discuss the importance of understanding the economic impacts of tourism and what the economic impacts of tourism might be. A range of positive and negative impacts are discussed and case studies are provided.

At the end of the post I have provided some additional reading on the economic impacts of tourism for tourism stakeholders , students and those who are interested in learning more.

 Foreign exchange earnings

Contribution to government revenues, employment generation, contribution to local economies, development of the private sector, infrastructure cost, increase in prices, economic dependence of the local community on tourism, foreign ownership and management, economic impacts of tourism: conclusion, further reading on the economic impacts of tourism, the economic impacts of tourism: why governments invest.

Tourism brings with it huge economic potential for a destination that wishes to develop their tourism industry. Employment, currency exchange, imports and taxes are just a few of the ways that tourism can bring money into a destination.

In recent years, tourism numbers have increased globally at exponential rates, as shown in the World Tourism Organisation data below.

There are a number of reasons for this growth including improvements in technology, increases in disposable income, the growth of budget airlines and consumer desires to travel further, to new destinations and more often.

economic sustainable tourism

Here are a few facts about the economic importance of the tourism industry globally:

  • The tourism economy represents 5 percent of world GDP
  • Tourism contributes to 6-7 percent of total employment
  • International tourism ranks fourth (after fuels, chemicals and automotive products) in global exports
  • The tourism industry is valued at US$1trillion a year
  • Tourism accounts for 30 percent of the world’s exports of commercial services
  • Tourism accounts for 6 percent of total exports
  • 1.4billion international tourists were recorded in 2018 (UNWTO)
  • In over 150 countries, tourism is one of five top export earners
  • Tourism is the main source of foreign exchange for one-third of developing countries and one-half of less economically developed countries (LEDCs)

There is a wealth of data about the economic value of tourism worldwide, with lots of handy graphs and charts in the United Nations Economic Impact Report .

In short, tourism is an example of an economic policy pursued by governments because:

  •      it brings in foreign exchange
  •      it generates employment
  •      it creates economic activity

Building and developing a tourism industry, however, involves a lot of initial and ongoing expenditure. The airport may need expanding. The beaches need to be regularly cleaned. New roads may need to be built. All of this takes money, which is usually a financial outlay required by the Government.

For governments, decisions have to be made regarding their expenditure. They must ask questions such as:

How much money should be spent on the provision of social services such as health, education, housing?

How much should be spent on building new tourism facilities or maintaining existing ones?

If financial investment and resources are provided for tourism, the issue of opportunity costs arises.

By opportunity costs, I mean that by spending money on tourism, money will not be spent somewhere else. Think of it like this- we all have a specified amount of money and when it runs out, it runs out. If we decide to buy the new shoes instead of going out for dinner than we might look great, but have nowhere to go…!

In tourism, this means that the money and resources that are used for one purpose may not then be available to be used for other purposes. Some destinations have been known to spend more money on tourism than on providing education or healthcare for the people who live there, for example.

This can be said for other stakeholders of the tourism industry too.

There are a number of independent, franchised or multinational investors who play an important role in the industry. They may own hotels, roads or land amongst other aspects that are important players in the overall success of the tourism industry. Many businesses and individuals will take out loans to help fund their initial ventures.

So investing in tourism is big business, that much is clear. What what are the positive and negative impacts of this?

economic impacts of tourism

Positive economic impacts of tourism

So what are the positive economic impacts of tourism? As I explained, most destinations choose to invest their time and money into tourism because of the positive economic impacts that they hope to achieve. There are a range of possible positive economic impacts. I will explain the most common economic benefits of tourism below.

man sitting on street near tree

One of the biggest benefits of tourism is the ability to make money through foreign exchange earnings.

Tourism expenditures generate income to the host economy. The money that the country makes from tourism can then be reinvested in the economy. How a destination manages their finances differs around the world; some destinations may spend this money on growing their tourism industry further, some may spend this money on public services such as education or healthcare and some destinations suffer extreme corruption so nobody really knows where the money ends up!

Some currencies are worth more than others and so some countries will target tourists from particular areas. I remember when I visited Goa and somebody helped to carry my luggage at the airport. I wanted to give them a small tip and handed them some Rupees only to be told that the young man would prefer a British Pound!

Currencies that are strong are generally the most desirable currencies. This typically includes the British Pound, American, Australian and Singapore Dollar and the Euro .

Tourism is one of the top five export categories for as many as 83% of countries and is a main source of foreign exchange earnings for at least 38% of countries.

Tourism can help to raise money that it then invested elsewhere by the Government. There are two main ways that this money is accumulated.

Direct contributions are generated by taxes on incomes from tourism employment and tourism businesses and things such as departure taxes.

Taxes differ considerably between destinations. I will never forget the first time that I was asked to pay a departure tax (I had never heard of it before then), because I was on my way home from a six month backpacking trip and I was almost out of money!

Japan is known for its high departure taxes. Here is a video by a travel blogger explaining how it works.

According to the World Tourism Organisation, the direct contribution of Travel & Tourism to GDP in 2018 was $2,750.7billion (3.2% of GDP). This is forecast to rise by 3.6% to $2,849.2billion in 2019.

Indirect contributions come from goods and services supplied to tourists which are not directly related to the tourism industry.

Take food, for example. A tourist may buy food at a local supermarket. The supermarket is not directly associated with tourism, but if it wasn’t for tourism its revenues wouldn’t be as high because the tourists would not shop there.

There is also the income that is generated through induced contributions . This accounts for money spent by the people who are employed in the tourism industry. This might include costs for housing, food, clothing and leisure Activities amongst others. This will all contribute to an increase in economic activity in the area where tourism is being developed.

economic sustainable tourism

The rapid expansion of international tourism has led to significant employment creation. From hotel managers to theme park operatives to cleaners, tourism creates many employment opportunities. Tourism supports some 7% of the world’s workers.

There are two types of employment in the tourism industry: direct and indirect.

Direct employment includes jobs that are immediately associated with the tourism industry. This might include hotel staff, restaurant staff or taxi drivers, to name a few.

Indirect employment includes jobs which are not technically based in the tourism industry, but are related to the tourism industry. Take a fisherman, for example. He does not have any contact of dealings with tourists. BUT he does sell his fish to the hotel which serves tourists. So he is indirectly employed by the tourism industry, because without the tourists he would not be supplying the fish to the hotel.

It is because of these indirect relationships, that it is very difficult to accurately measure the economic value of tourism.

It is also difficult to say how many people are employed, directly and indirectly, within the tourism industry.

Furthermore, many informal employments may not be officially accounted for. Think tut tut driver in Cambodia or street seller in The Gambia – these people are not likely to be registered by the state and therefore their earnings are not declared.

It is for this reason that some suggest that the actual economic benefits of tourism may be as high as double that of the recorded figures!

All of the money raised, whether through formal or informal means, has the potential to contribute to the local economy.

If sustainable tourism is demonstrated, money will be directed to areas that will benefit the local community most.

There may be pro-poor tourism initiatives (tourism which is intended to help the poor) or volunteer tourism projects.

The government may reinvest money towards public services and money earned by tourism employees will be spent in the local community. This is known as the multiplier effect.

The multiplier effect relates to spending in one place creating economic benefits elsewhere. Tourism can do wonders for a destination in areas that may seem to be completely unrelated to tourism, but which are actually connected somewhere in the economic system.

economic sustainable tourism

Let me give you an example.

A tourist buys an omelet and a glass of orange juice for their breakfast in the restaurant of their hotel. This simple transaction actually has a significant multiplier effect. Below I have listed just a few of the effects of the tourist buying this breakfast.

The waiter is paid a salary- he spends his salary on schooling for his kids- the school has more money to spend on equipment- the standard of education at the school increases- the kids graduate with better qualifications- as adults, they secure better paying jobs- they can then spend more money in the local community…

The restaurant purchases eggs from a local farmer- the farmer uses that money to buy some more chickens- the chicken breeder uses that money to improve the standards of their cages, meaning that the chickens are healthier, live longer and lay more eggs- they can now sell the chickens for a higher price- the increased money made means that they can hire an extra employee- the employee spends his income in the local community…

The restaurant purchase the oranges from a local supplier- the supplier uses this money to pay the lorry driver who transports the oranges- the lorry driver pays road tax- the Government uses said road tax income to fix pot holes in the road- the improved roads make journeys quicker for the local community…

So as you can see, that breakfast that the tourist probably gave not another thought to after taking his last mouthful of egg, actually had the potential to have a significant economic impact on the local community!

architecture building business city

The private sector has continuously developed within the tourism industry and owning a business within the private sector can be extremely profitable; making this a positive economic impact of tourism.

Whilst many businesses that you will come across are multinational, internationally-owned organisations (which contribute towards economic leakage ).

Many are also owned by the local community. This is the case even more so in recent years due to the rise in the popularity of the sharing economy and the likes of Airbnb and Uber, which encourage the growth of businesses within the local community.

Every destination is different with regards to how they manage the development of the private sector in tourism.

Some destinations do not allow multinational organisations for fear that they will steal business and thus profits away from local people. I have seen this myself in Italy when I was in search of a Starbucks mug for my collection , only to find that Italy has not allowed the company to open up any shops in their country because they are very proud of their individually-owned coffee shops.

Negative economic impacts of tourism

Unfortunately, the tourism industry doesn’t always smell of roses and there are also several negative economic impacts of tourism.

There are many hidden costs to tourism, which can have unfavourable economic effects on the host community.

Whilst such negative impacts are well documented in the tourism literature, many tourists are unaware of the negative effects that their actions may cause. Likewise, many destinations who are inexperienced or uneducated in tourism and economics may not be aware of the problems that can occur if tourism is not management properly.

Below, I will outline the most prominent negative economic impacts of tourism.

woman holding tomatoes

Economic leakage in tourism is one of the major negative economic impacts of tourism. This is when money spent does not remain in the country but ends up elsewhere; therefore limiting the economic benefits of tourism to the host destination.

The biggest culprits of economic leakage are multinational and internationally-owned corporations, all-inclusive holidays and enclave tourism.

I have written a detailed post on the concept of economic leakage in tourism, you can take a look here- Economic leakage in tourism explained .

road landscape nature forest

Another one of the negative economic impacts of tourism is the cost of infrastructure. Tourism development can cost the local government and local taxpayers a great deal of money.

Tourism may require the government to improve the airport, roads and other infrastructure, which are costly. The development of the third runway at London Heathrow, for example, is estimated to cost £18.6billion!

Money spent in these areas may reduce government money needed in other critical areas such as education and health, as I outlined previously in my discussion on opportunity costs.

glass bottle of cola with empty bottle on white surface

One of the most obvious economic impacts of tourism is that the very presence of tourism increases prices in the local area.

Have you ever tried to buy a can of Coke in the supermarket in your hotel? Or the bar on the beachfront? Walk five minutes down the road and try buying that same can in a local shop- I promise you, in the majority of cases you will see a BIG difference In cost! (For more travel hacks like this subscribe to my newsletter – I send out lots of tips, tricks and coupons!)

Increasing demand for basic services and goods from tourists will often cause price hikes that negatively impact local residents whose income does not increase proportionately.

Tourism development and the related rise in real estate demand may dramatically increase building costs and land values. This often means that local people will be forced to move away from the area that tourism is located, known as gentrification.

Taking measures to ensure that tourism is managed sustainably can help to mitigate this negative economic impact of tourism. Techniques such as employing only local people, limiting the number of all-inclusive hotels and encouraging the purchasing of local products and services can all help.

Another one of the major economic impacts of tourism is dependency. Many countries run the risk of becoming too dependant on tourism. The country sees $ signs and places all of its efforts in tourism. Whilst this can work out well, it is also risky business!

If for some reason tourism begins to lack in a destination, then it is important that the destination has alternative methods of making money. If they don’t, then they run the risk of being in severe financial difficulty if there is a decline in their tourism industry.

In The Gambia, for instance, 30% of the workforce depends directly or indirectly on tourism. In small island developing states, percentages can range from 83% in the Maldives to 21% in the Seychelles and 34% in Jamaica.

There are a number of reasons that tourism could decline in a destination.

The Gambia has experienced this just recently when they had a double hit on their tourism industry. The first hit was due to political instability in the country, which has put many tourists off visiting, and the second was when airline Monarch went bust, as they had a large market share in flights to The Gambia.

Other issues that could result in a decline in tourism includes economic recession, natural disasters and changing tourism patterns. Over-reliance on tourism carries risks to tourism-dependent economies, which can have devastating consequences.

economic sustainable tourism

The last of the negative economic impacts of tourism that I will discuss is that of foreign ownership and management.

As enterprise in the developed world becomes increasingly expensive, many businesses choose to go abroad. Whilst this may save the business money, it is usually not so beneficial for the economy of the host destination.

Foreign companies often bring with them their own staff, thus limiting the economic impact of increased employment. They will usually also export a large proportion of their income to the country where they are based. You can read more on this in my post on economic leakage in tourism .

As I have demonstrated in this post, tourism is a significant economic driver the world over. However, not all economic impacts of tourism are positive. In order to ensure that the economic impacts of tourism are maximised, careful management of the tourism industry is required.

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The economic benefits of Sustainable Tourism

economic sustainable tourism

Sustainable Tourism not only benefits the environment and the local communities: it has also economic advantages. Let’s go to discover why choose eco-friendly accommodations is so important today.

Sustainable Tourism is of primary importance to our planet and its future. Even the UN has dedicated the year 2017 the International Year of Sustainable Tourism . Let’s go to find out what are the benefits of sustainable tourism which are not only environmental and social, but also economic .

Contributing 80% of GDP and 12% of employment creation, Tourism is the third economic activity in Europe, according to data from EU. Every year a billion people travel throughout the world (one in nearly six people) and continue to grow. The forecast maintain that, in 2030, the number of tourists will increase to 1.8 million , doubling the number of a few years ago.

UNWTO-Tourism-Higlights-2014-2030

In a period of fundamental questions about sustainability for our development model, we are also asking what the environmental, economic and social impacts will be.

Tourism and environmental pollution

On the one hand, tourism represents one of the biggest economy sectors in the world, which makes it an important growth opportunity for the least developed countries. On the other hand, tourism is one of the major causes of pollution and carbon dioxide production. For example, EU data tells us that tourism is one of the first causes of the carbon dioxide production in Europe, and that over 20% of polluting emissions are associated with accommodations (hotels, etc).

Contributors-of-various-tourism-sub-sectors-in-CO2-emissions

The growing awareness of the issue of environmental limits of the tourism development is leading us to experiment alternative methods of tourism and accommodations that are environmentally safe and benefit places and local economies.

yoga-3

How is the demand for sustainable tourism increasing?

“ Green is no longer just a trend. It’s a way of life ” (Fran Brasseux, Executive Director, Hotel Sales and Marketing, Association International (HSMAI) Foundation).

Sustainability is no longer just a trend, it’s a lifestyle. Awareness is increasing of environmental and climatic problems in the same way that knowledge grows of how much each one of us could contribute to solutions to global problems by modifying our way of life .

The number of people choosing vegetarian food , using public transport and buying in a responsible manner grows.

A survey prepared a few years ago indicates that two thirds (66%) of consumers over the world prefer to buy products and services to conscious businesses and 46% are willing to pay an extra for products or services from socially responsible companies (Nielsen Wire, 2012).

The results of the Observatory SANA-ICE 2016 “All Bio’s numbers”, report increased biologicals purchases in Italy. The Italian families as high as 7 out of 10, prefer organic products at least once a year.

Ospitalità-verde

How are the demand for eco-friendly accommodation increasing?

Those who travel is more aware of environmental problems and seek to play his part choosing an eco-friendly accommodation.

According to a survey from many years ago by Travelzoo, more than 90% of interviewed american travellers prefer an eco-friendly hotel, for the same price and services that once no eco-friendly (Travelzoo 2010).

According to the CMIGreen Traveler Study Report, the “eco-aware” customers travel more frequently than average customers . In the 2009 the 75,6% spent at least two time away from home and the 22% spent from 5 to 8 times away. The same report of 2010 asked to responsible travellers how the global economic crisis has affected on their travel programmes. The 54% answered that they spent a green-travel in the last 12 months. The 43% of interviewed are prepared to spend until a 5% more to reduce his ecological footprint in the next travel.

Other survey by World Tourism Organization (UNWTO) tells us that a percentage between 10 and 15% of travellers are looking for the unusual and unique . The growth of this type of tourist is much higher than traditional customer segments. These new tourists are described as people “well educated, matures, wealthy, with travel experience, environment-aware and sensitive to social issues and traditional culture, system and costumes of travel destinations” (UNTWO, Responsible Travel ).

3 good reasons to aim to sustainability

As we have observed, the demand of sustainability tourism is growing up. So, many tourist activities are implementing good environmental and social practices and choosing ecological certifications and brands.

Invest in sustainability is not only necessary, but it is also beneficial . Make eco-friendly choices in a tourist accommodation is useful for three reasons at least:

  • It is created an added value for the guests more interested in this issue.
  • It is reduced the costs and consumptions (energy, water and wasted in general), the CO2 emissions.
  • Attention for the environment is contagious and allow to do network. It’s a positive energy to be able to innovate our business. The latter aspect is told effectively in this short video

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Trip.com Group CEO tackles overtourism for sustainable travel at World Economic Forum

PR Newswire

DAVOS, Switzerland, Jan. 22, 2024

CEO shares multifaceted approach to overtourism challenges, with sustainable travel practices as a key strategy

Focusing on high-quality tourism could disperse tourists from hotspots for a more sustainable tourism framework

E-commerce marketing and social media can be innovative ways to drive tourism in atypical destinations

DAVOS, Switzerland, Jan. 22, 2024 /PRNewswire/ -- Trip.com Group, a leading global travel service provider, has set its sights on tackling key challenges surrounding the tourism industry. This is evidenced by CEO Ms Jane Sun's participation in the panel discussion "Sorry, We're Full: Tackling Overtourism" at the prestigious World Economic Forum in Davos, Switzerland. The forum invited influential dignitaries, from political elites to business leaders, to tackle the challenges facing our world, in the hope of finding common ground and united solutions, aligning with this year's theme of "Rebuilding Trust".

Davos comes as the world looks forward to forging a new normal for sustainable travel in the post-pandemic era. Over 75% of respondents in Trip.com Group's sustainability report agreed that sustainable travel is vital. However, the industry faces obstacles to sustainable travel, particularly as the rise in visitor numbers approaches pre-pandemic levels. Consequently, destinations contend with multiple challenges, such as preserving heritage sites, combating pollution, and looking after their ecosystems.

Trip.com Group CEO Ms Jane Sun speaks on overtourism at the World Economic Forum, Davos, Switzerland. Source: World Economic Forum

At the forum, Ms Sun shared her views on the challenges of overtourism for multiple stakeholders across the industry. Ms Sun spoke alongside a distinguished panel of guests, including Ms Sithembile Ntombela, Acting Chief Executive Officer of Brand South Africa; Mr Stephen Cotton, General Secretary of the International Transport Workers' Federation (ITF); and Mr Tony Fernandes, Chief Executive Officer of Capital A Berhad (AirAsia). The forum was moderated by CNN International's anchor and correspondent Richard Quest.

From left to right: Mr Richard Quest, CNN International's anchor and correspondent; Ms Jane Sun, CEO of Trip.com Group; Ms Sithembile Ntombela, Acting Chief Executive Officer of Brand South Africa; Mr Tony Fernandes, Chief Executive Officer of Capital A Berhad (AirAsia); and Mr Stephen Cotton, General Secretary of the International Transport Workers' Federation (ITF). Source: World Economic Forum

Ms Sun also met with government officials from various countries to build upon the success of the region's travel growth momentum.

Tackling overtourism can only work if sustainability is embedded across the travel and tourism industry. Trip.com Group addresses this challenge through a multifaceted approach, with initiatives to promote sustainable travel practices, improve infrastructure, and combat the environmental and social implications.

"We need to approach the issue of overtourism with a balanced view. Destinations can become overcrowded without proper management, and the overall experience suffers. It's imperative to find ways for supply and demand to grow sustainably," said Ms Sun.

Investing in high-quality tourism is a viable approach to attract visitors to less well-travelled destinations. Several key markets, such as Thailand and Malaysia, have endorsed the idea of attracting "high-value" tourists to redirect demand away from hotspots. Simultaneously, other regions aim to diversify tourist influx by offering niche forms of tourism unique to under-visited regions. This mitigates overtourism and holds the potential for economic gains, with destinations such as Dubai successfully expanding their wellness tourism industry to an estimated value exceeding USD 108 billion.

To alleviate pressure on popular destinations, another strategy involves the promotion of lesser-known destinations, known as long-tail tourism. Advancements in technology and social networking have made marketing approaches that focus on lesser-known locales more effective. For instance, Trip.com Group employs content marketing strategies, including e-commerce campaigns and leveraging its social travel platform, Trip Moments, to showcase less visited areas. Daegu – a lesser-known destination in Korea – was highlighted in a successful digital campaign which garnered over 29 million views, resulting in an 87% increase in product sales compared to the same period in the previous year.

Beyond promoting lesser-known destinations, targeting lull periods or traditionally low travel seasons can help to address overtourism during peak travel periods. To make this possible, Trip.com Group provides advanced and flexible booking options to ensure customers have the freedom to adapt their travel plans whenever necessary.

The Group is also keen to collaborate with partners and industry stakeholders to find sustainable solutions over the long run.

"The complex challenges of overtourism demand more than quick fixes – it will not be resolved overnight. However, through unwavering dedication from multiple stakeholders, we believe that every effort contributes to shaping a future where travel harmonises seamlessly with sustainable principles. This goes beyond a goal; it's a powerful commitment to redefine the very essence of responsible travel," stated Ms Sun.

About Trip.com Group

Trip.com Group is a leading global travel service provider comprising of Trip.com, Ctrip, Skyscanner, and Qunar. Across its platforms, Trip.com Group helps travellers around the world make informed and cost-effective bookings for travel products and services and enables partners to connect their offerings with users through the aggregation of comprehensive travel-related content and resources, and an advanced transaction platform consisting of apps, websites and 24/7 customer service centres. Founded in 1999 and listed on NASDAQ in 2003 and HKEX in 2021, Trip.com Group has become one of the best-known travel groups in the world, with the mission "to pursue the perfect trip for a better world". Find out more about Trip.com Group here: group.trip.com .

Follow us on: Twitter , Facebook , LinkedIn , and YouTube .

Trip.com Group Logo (PRNewsfoto/Trip.com Group)

SOURCE Trip.com Group

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UNWTO SDGs Global Startup Competition

World tourism organization (unwto) ( united nations / multilateral body ), #sdgaction33508.

  • Description
  • SDGs & Targets
  • SDG 14 targets covered
  • Deliverables & timeline
  • Resources mobilized
  • Progress reports

The UNWTO SDGs Global Startup Competition is the UNWTO programme supported by UNIN and 21 corporate and institutional partners to identify the most innovative startups whose projects help accelerate the achievement of the Sustainable Development Goals by companies and destinations. The worldwide COVID-19 outbreak has brought the world to a standstill. Against this backdrop, tourism's proven resiliency, dynamic nature and capacity to create jobs and increase inclusiveness, this programme calls for a cross-sector approach to boost sustainable development all over the world. Target audience: startups from all walks of life, from all over the world and all economic sectors.

The Competition has followed the below calendar of execution: Call period: • 14 July 2020: Launch at the UNWTO Event within the High-level Political Forum • 14 July – 10 October 2020: Call for candidatures • 10 October – 22 December 2020: Evaluation Process by a technical committee comprised by partners of the programme. It was ensured that each startup was evaluated at least from 3 jurors of different backgrounds (public, private, sustainability, technology, tourism) • 23 December 2020: announcement of 35 finalists • 17 February 2020: announcement of winning startups (25 projects from 18 countries, covering the SDGs and all global regions) Programme of Benefits: From 2 March 2020 Startups are receiving: • Curated Mentorship Programme by partners such as Amadeus, BBVA, ClarkeModet, Google, IE University, Mastercard, Telefonica and the UNWTO Tourism Online Academy • Access to technological support by Amazon Web Services (AWS) Activate • Connection to Member States, partners of the competition and investors for opening the doors of funding and pilot projects opportunities • Inclusion in a UNWTO official publication on the Top 25 SDGs Startups • Pitching final event in a UNWTO forum in May 2020 within the framework of Spain’s International Tourism Fair • Eligibility to participate in additional innovation forums The programme will continue until summer 2021. Afterwards, winning, finalist and shortlisted startups will continue to be part of the UNWTO Innovation Network, meaning a careful follow up to provide support and track their impact on the advance of the SDGs.

• Over 10.000 participants from 138 countries, covering all UNWTO Regions • TOP 5 SDGs per number of submissions: 1. SDG 8 - Decent work and economic growth 2. SDG 11 - Sustainable cities and communities 3. SDG 9 - Industry, innovation and infrastructure 4. SDG 3 - Good health and well-being 5. SDG 4 - Quality education • 28% of total submissions were women-led startups • TOP 10 Countries per number of submissions: 1. Nigeria 2. Spain and USA 3. India 4. Colombia 5. Kenya 6. Brazil and Uganda 7. United Kingdom 8. Ghana and Iran 9. France and Tanzania 10. Indonesia • 25 winners feature enough traction and proven business models and technologies. Currently, they are ready to partner and UNWTO will be able to provide an impact report after the end of the Programme of Benefits. • Other editions of the competitions have helped Top 100 startups to reach a compiled amount of over 74.5 million USD in funding support from partners of the UNWTO Innovation Network. Meet the winners here: shorturl.at/nNOQ1

The most highlighting factors have been the support of the United Nations Innovation Network, from a set of collaborators that cover the whole array of stakeholders of the global tourism innovation ecosystem and the commitment of UNWTO Member States. It has ensured a successful sourcing of startups, diversity in their approach to the SDGs and high-quality projects. These same factors are allowing a strong Programme of Benefits to deliver impact on the SDGs.

The Competition is totally scalable: while being a global project, it is intended to provide not only benefits to global winners but to engage runner-ups and shortlisted startips from all regions and bring them into UNWTO Innovation Forums. In the same vein, pilot projects will be encouraged in local geographies, ensuring the adaptability of projects and a higher impact. The format is flexible both for beneficiaries and for partners. The Competition will have a second edition in 2021, to be launched in October in UNWTO’s General Assembly.

• Official website: https://www.unwto.org/sdgs-global-startup-competition • Announcement: https://www.unwto.org/news/unwto-invites-startups-to-pitch-ways-to-acce… • Finalists: shorturl.at/kyPR1 • Winners: shorturl.at/nNOQ1 • Launch at HLPF 2020: https://www.unwto.org/events/innovation-and-sustainability-as-the-new-n… • Event with UNSSC: https://www.unssc.org/featured-themes/unssc-live-unwto-un-innovation-to… • One of UNIN’s actions: https://www.uninnovation.network/challenges-and-calls/2020/9/20/f9uoj6u…

The worldwide COVID-19 outbreak has brought the world to a standstill. Consequently, the pandemic jeopardizes all of the progress achieved thus far in terms of sustainability. Against this backdrop, tourism's proven resiliency and dynamic nature can be harnessed to support and reinforce recovery. Given the sector's capacity to create jobs and increase inclusiveness, the Competition calls for a cross-sector approach to boost sustainable development all over the world (including other value chains such as agriculture, gastronomy, creative industries, etc.). In this regard, top startups help address challenges not only limited to the current pandemic but to global sustainability. It means, that they work to build resilience in the tourism sector, both advancing the SDGs and thinking even beyond 2030.

End poverty in all its forms everywhere

Goal 1

End hunger, achieve food security and improved nutrition and promote sustainable agriculture

Goal 2

Ensure healthy lives and promote well-being for all at all ages

Goal 3

Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all

Goal 4

Achieve gender equality and empower all women and girls

Goal 5

Ensure availability and sustainable management of water and sanitation for all

Goal 6

Ensure access to affordable, reliable, sustainable and modern energy for all

Goal 7

Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all

Goal 8

Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation

Goal 9

Reduce inequality within and among countries

Goal 10

Make cities and human settlements inclusive, safe, resilient and sustainable

Goal 11

Ensure sustainable consumption and production patterns

Goal 12

Take urgent action to combat climate change and its impacts

Goal 13

Conserve and sustainably use the oceans, seas and marine resources for sustainable development

Goal 14

Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss

Goal 15

Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels

Goal 16

Strengthen the means of implementation and revitalize the Global Partnership for Sustainable Development

Goal 17

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SDG Good Practices logo

Other beneficiaries

Beneficiaries: 25 winning startups from 18 countries and 35 finalists Collaborators: Wakalua by Globalia, Qatar Airways, Government of Colombia, Qatar National Tourism Council, Moscow City Committee for Tourism, Amazon Web Services Activate, Globant, ClarkeModet, Google, Amadeus, BBVA, Mastercard, IE University, Inter-American Development Bank Innovation Lab, Impact Hub, Telefonica, Plug and Play, Advanced Leadership Foundation, FarCo, MentorDay.

More information

Spain

Contact Information

World Tourism Organization (UNWTO), World Tourism Organization (UNWTO)

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Tourism statistics

Data extracted in December 2023.

Planned article update: December 2024.

62 % of EU residents made at least one personal tourism trip in 2022.

Half of EU residents' trips in 2022 were short domestic trips.

In 2022, Spain was the most popular EU destination for international tourists, with 271 million nights spent in tourist accommodation, or 22 % of the EU total.

Share of population participating in tourism, 2022

  • Source: Eurostat (online data code: tour_dem_totot)

This article presents a general introduction to statistics on tourism in the European Union (EU) . The data shown here are discussed in more detail in several other articles . Tourism plays an important role in the EU because of its economic and employment potential, as well as its social and environmental implications. Tourism statistics are not only used to monitor the EU’s tourism policies but also its regional and sustainable development policies.

Full article

More than three out of four residents of the netherlands, luxembourg, finland, france and austria participated in tourism.

Tourism participation: 62 % of EU residents made at least one personal trip in 2022

It is estimated that 62 % of the EU population aged 15 or over took part in tourism for personal purposes in 2022, in other words they made at least one tourism trip for personal purposes during the year (such as holidays, leisure, visiting friends and relatives). However, large differences can be observed between the EU Member States , as this participation rate ranged from 27.8 % in Bulgaria to 83.7 % in the Netherlands (see Figure 1 and Table 1). The participation rate of 62 % was higher than in 2020, the first year affected by the pandemic (52 %) and 2021 (56 %), but still below the pre-pandemic level of 2019 (65 %).

Horizontal bar chart showing share of population participating in tourism as percentage of population aged 15 years and over in the EU, individual EU Member States and Norway for the year 2022.

More information can be found in the following article:

  • Tourism statistics - participation in tourism

Tourism trips: Residents of Luxembourg, Belgium, Malta, Slovenia and the Netherlands made more foreign than domestic trips

75 % of all trips made by EU residents were inside their own country

EU residents (aged 15 and above) made nearly 1.1 billion tourism trips in 2022, for personal or business purposes. The number of trips increased by 51 % compared with 2020 and by 23 % compared with 2021, but was still 6 % below the pre-pandemic year 2019. More than half (56.4 %) of these trips were short trips of one to three nights (see Table 1). 75.5 % of all trips made were to domestic destinations, while 24.5% to destinations abroad.

Table showing tourism trips of Europeans aged 15 years and over in thousands of trips, percentage destination type and duration and percentage share of population in the EU and individual EU Member States for the year 2022.

In 2022, 94.5 % of the total number of tourism trips made by residents of Luxembourg were to destinations abroad, followed by Belgians with 74.5 %, residents of Malta (60.6 %), Slovenia (53.3 %) and the Netherlands (51.9 %). However, less than one out of ten trips taken by residents of Romania (8.1 %) and Spain (9.8 %) were abroad. These figures appear to be influenced by both the size of the Member States and their geographical location (smaller and more northerly countries tended to report a higher propensity for their residents to travel abroad).

In 2022, EU residents showed a preference to travel in the summer months with one fourth of their trips made in July or August.

More information can be found in the following publication:

  • Tourism trips of Europeans (online publication)

Nights spent abroad by EU residents: Luxembourg leads in nights per inhabitant

Residents of Germany and the Netherlands spent nearly half of the total number of nights spent abroad by EU residents in 2022

EU residents spent an estimated 2.2 billion nights abroad on tourism trips in 2022 (see Figure 2). German residents spent 786 million nights on trips outside of Germany in 2022, while residents of the Netherlands spent 221 million nights abroad; residents from these two EU Member States accounted for nearly half (46.7 %) of the total number of nights spent abroad by EU residents.

Pie chart showing nights spent during foreign trips of Europeans by share of the tourist’s country of residence in percentage of total nights spent abroad by residents of the EU. Countries shown are Germany, Netherlands, France, Poland, Sweden, Spain, Belgium, Austria, Italy and rest of EU, for the year 2022.

When taking into account a country’s size in terms of its population, Luxembourg was the EU Member State whose residents spent the most nights abroad per inhabitant (an average of 38 nights in 2022), followed by the Netherlands (with 15 nights spent abroad per inhabitant) and Sweden (with 14 nights spent abroad per inhabitant). At the other end of the spectrum, residents of Romania, Bulgaria, Greece, Italy and Portugal spent, on average, less than two nights abroad in 2022 (see Figure 3).

Horizontal bar chart showing country of origin for foreign tourism trips as average number of nights spent abroad per inhabitant aged 15 years and over in the EU and individual EU Member States for the year 2022.

Bed places in the EU: Italy and France predominate

In 2022 35 % of all bed places in the EU were concentrated in Italy and France

It is estimated that there were more than 621 000 tourist accommodation establishments active within the EU in 2022 and together these provided 28.9 million bed places (see Table 2). More than one third (35.5 %) of all the bed places in the EU were concentrated in just two of the Member States, namely Italy (5.2 million bed places), and France (5.1 million), followed by Spain (3.8 million) and Germany (3.6 million).

Table showing tourist accommodation establishments in the EU, individual EU Member States, EFTA countries, Montenegro, North Macedonia, Albania, Serbia, Türkiye and Kosovo for the year 2022. Shown are number of establishments in units, number of bed places in thousands and total nights spent in millions.

  • Tourism statistics - annual results for the accommodation sector

Nights spent by international guests in the EU: Spain on top

Nearly two out of five nights spent by international guests in the EU were spent in Spain and Italy

The number of nights spent at EU tourist accommodation establishments in 2020 dropped by more than 50 % compared with 2019. 2021 showed clear signs of recovery (see Figure 4), reaching nearly two thirds of pre-pandemic 2019 levels, while the upward trend continued in 2022, when it reached nearly 96 % of the pre-pandemic level. Short term indicators for monthly data showed that 2023 exceeded pre-pandemic levels (see Tourism statistics - nights spent at tourist accommodation establishments ).

Line chart showing trends in nights spent at EU tourist accommodation establishments. Three lines represent total nights spent, nights spent by international guests and domestic nights spent over the years 2009 to 2022. The year 2009 is indexed at 100.

In 2022, Spain was the most visited tourism destination in the EU for international tourists (people travelling outside their country), with 271 million nights spent in tourist accommodation establishments, or 22.4 % of the EU total (see Figure 5 and Figure 6). Half of these 271 million nights spent in Spain were concentrated in five NUTS 3 regions : Mallorca, Tenerife, Barcelona, Gran Canaria and Malaga.

The second most popular EU destination for international tourists in 2022 was Italy (201 million nights), followed by France (125 million nights), Greece (112 million nights) and Croatia (82 million nights). These five countries together accounted for nearly two thirds (65.5 %) of the total nights spent by non-residents in the EU. On the other hand, the least common EU destinations in terms of nights spent, were Latvia, Luxembourg, Lithuania and Estonia with less than 3 million nights spent by international tourists in each of these countries in 2022.

Horizontal bar chart showing tourism destinations, nights spent by international guests at tourist accommodation in million nights spent in the country by non-residents in individual EU Member States, EFTA countries, Montenegro, North Macedonia, Albania, Serbia, Türkiye and Kosovo for the year 2022.

The number of total nights spent (by domestic and international guests) can be put into perspective by making a comparison with the size of each country in population terms, providing an indicator of tourism intensity . In 2022, using this measure, the Mediterranean destinations of Croatia (23 nights spent per inhabitant), Malta and Cyprus (16 nights spent per inhabitant each) were on top (see Figure 7), followed by Austria and Greece (both with 13 nights spent per inhabitant).

Horizontal bar chart showing tourism intensity as nights spent by domestic and international guests at tourist accommodation establishments per inhabitant in the EU, individual EU Member States, EFTA countries, Montenegro, North Macedonia, Albania, Serbia, Türkiye and Kosovo for the year 2022.

More information can be found in the following articles:

  • Tourism statistics - nights spent at tourist accommodation establishments
  • Tourism statistics - seasonality at regional level

Tourism expenditure: highest spending by German residents

Germans were the biggest EU spenders on international travel, totalling €85.2 billion in 2022

The economic importance of international tourism can be measured by looking at the ratio of international travel receipts relative to GDP; these data are from balance of payments statistics and include business travel, as well as travel for pleasure. In 2022, the ratio of travel receipts to GDP was highest, among the EU Member States, in Croatia (19.3 %), Cyprus (9.9 %), Malta (8.8 %), Portugal (8.7 %) and Greece (8.6 %), confirming the importance of tourism to these countries (see Table 3). In absolute terms, the highest international travel receipts in 2022 were recorded in Spain (€69.2 billion), followed by France (€56.7 billion), Italy (€44.3 billion) and Germany (€30.0 billion).

Table showing travel receipts and expenditure in balance of payments as millions euro and percentage relative to GDP of receipts, expenditure and balance of the EU, individual EU Member States, Iceland, Norway, Switzerland, Montenegro, North Macedonia, Albania, Serbia, Türkiye and Kosovo for the years 2010, 2015 and 2022.

Germany recorded the highest level of expenditure on international travel, totalling €85.2 billion in 2022, followed by France (€39.2 billion). When analysing this expenditure relative to the population, Luxembourg's residents spent on average €5 011 per inhabitant on travel abroad in 2022, far ahead of the second and third ranked countries, Ireland and Cyprus (€1 592 and €1 432 per inhabitant respectively), which were followed by Denmark, Belgium, Austria, Sweden, Germany and the Netherlands (all above €1 000 per inhabitant).

Spain was the EU Member State with the highest level of net receipts from travel in 2022 (€48.4 billion), while Germany recorded the biggest deficit (-€55.2 billion).

  • Tourism statistics - expenditure

Source data for tables and graphs

Excel.jpg

Data sources

Tourism, in a statistical context, refers to the activity of visitors taking a trip to a destination outside their usual environment, for less than a year. It can be for any main purpose, including business, leisure or other personal reasons other than to be employed by a resident person, household or enterprise in the place visited.

In July 2011, the European Parliament and the Council of the European Union adopted a new Regulation (EU) No 692/2011 concerning European statistics on tourism and repealing Council Directive 95/57/EC ; this came into force for reference year 2012 and requires EU Member States to provide a regular set of comparable tourism statistics.

Tourism statistics in the EU consist of two main components: on the one hand, statistics relating to capacity and occupancy of collective tourist accommodation; on the other, statistics relating to tourism demand. In most EU Member States, the former are collected via surveys filled in by accommodation establishments, while the latter are mainly collected via traveller surveys at border crossings or through household surveys.

Statistics on the capacity of collective tourist accommodation include the number of establishments, the number of bedrooms and the number of bed places. These statistics are available by establishment type or by region and are compiled annually. Statistics on the occupancy of collective tourist accommodation refer to the number of arrivals (at accommodation establishments) and the number of nights spent by residents and non-residents, separated into establishment type or region; annual and monthly statistical series are available. In addition, statistics on the use of bedrooms and bed places ( occupancy rates ) are compiled.

Statistics on tourism demand are collected in relation to the number of tourism trips made (and the number of nights spent on those trips), separated by:

  • destination country;
  • length of stay;
  • accommodation type;
  • departure month;
  • transport mode;
  • expenditure.

The data are also analysed by the socio-demographic characteristics of the tourist:

  • educational attainment level (optional);
  • household income (optional);
  • activity status (optional).

Up to 2013, tourism statistics were limited to at least one overnight stay; as of reference year 2014, foreign same-day visits are also covered by official European statistics.

Data from a range of other official sources may be used to study tourism. These statistics include:

  • structural business statistics (SBS) and short-term business statistics (STS) which may be used to provide additional information on tourism flows and on the economic performance of certain tourism-related sectors;
  • data on employment in the tourism accommodation sector from the labour force survey (LFS) , analysed by working time (full/part-time), working status, age, level of education, sex, permanency and seniority of work with the same employer (annual and quarterly data);
  • data on personal travel receipts and expenditure from the balance of payments ;
  • transport statistics (for example, air passenger transport).

According to a United Nations World Tourism Organisation (UNWTO) publication titled ‘ International Tourism Highlights ’, the EU is a major tourist destination, with four of its Member States among the world’s top 10 destinations. Tourism has the potential to contribute towards employment and economic growth, as well as to development in rural, peripheral or less-developed areas. These characteristics drive the demand for reliable and harmonised statistics within this field, as well as within the wider context of regional policy and sustainable development policy areas.

Tourism can play a significant role in the development of European regions. Infrastructure created for tourism purposes contributes to local development, while jobs that are created or maintained can help counteract industrial or rural decline. Sustainable tourism involves the preservation and enhancement of cultural and natural heritage, ranging from the arts to local gastronomy or the preservation of biodiversity .

In 2006, the European Commission adopted a Communication titled ‘ A renewed EU tourism policy: towards a stronger partnership for European tourism ’ (COM(2006) 134 final). It addressed a range of challenges that will shape tourism in the coming years, including Europe’s ageing population, growing external competition, consumer demand for more specialised tourism, and the need to develop more sustainable and environmentally-friendly tourism practices. It argued that more competitive tourism supply and sustainable destinations would help raise tourist satisfaction and secure Europe’s position as the world’s leading tourist destination. It was followed in October 2007 by another Communication, titled ‘ Agenda for a sustainable and competitive European tourism ’ (COM(2007) 621 final), which proposed actions in relation to the sustainable management of destinations, the integration of sustainability concerns by businesses, and the awareness of sustainability issues among tourists.

The Lisbon Treaty acknowledged the importance of tourism — outlining a specific competence for the EU in this field and allowing for decisions to be taken by a qualified majority. An article within the Treaty specifies that the EU ‘shall complement the action of the Member States in the tourism sector, in particular by promoting the competitiveness of Union undertakings in that sector’. ‘ Europe, the world’s No 1 tourist destination — a new political framework for tourism in Europe ’ (COM(2010) 352 final) was adopted by the European Commission in June 2010. This Communication seeks to encourage a coordinated approach for initiatives linked to tourism and defined a new framework for actions to increase the competitiveness of tourism and its capacity for sustainable growth. It proposed a number of European or multinational initiatives — including a consolidation of the socioeconomic knowledge base for tourism — aimed at achieving these objectives.

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UNWTO Tourism Data Dashboard

The UNWTO Tourism Data Dashboard – provides statistics and insights on key indicators for inbound and outbound tourism at the global, regional and national levels. Data covers tourist arrivals, tourism share of exports and contribution to GDP, source markets, seasonality and accommodation (data on number of rooms, guest and nights)

Two special modules present data on the impact of COVID 19 on tourism as well as a Policy Tracker on Measures to Support Tourism

The UNWTO/IATA Destination Tracker

Unwto tourism recovery tracker.

International Tourism Results

  • International tourist arrivals and receipts and export revenues
  • International tourism expenditure and departures
  • Seasonality
  • Tourism Flows
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  • Tourism GDP and Employment
  • Domestic Tourism

International Tourism and COVID-19"

International Tourism and COVID-19

  • The pandemic generated a loss of 2.6 billion international arrivals in 2020, 2021 and 2022 combined
  • Export revenues from international tourism dropped 62% in 2020 and 59% in 2021, versus 2019 (real terms) and then rebounded in 2022, remaining 34% below pre-pandemic levels.
  • The total loss in export revenues from tourism amounts to USD 2.6 trillion for that three-year period.
  • International tourist arrivals reached 87% of pre-pandemic levels in January-September 2023

COVID-19: Measures to Support Travel and Tourism

economic sustainable tourism

Family travel 5: Sustainable tourism

A s temperatures rise, hurricanes whirl and wildfires burn, the conversation about climate change and our role in it is intensifying. And, with increased documentation about the environmental, economic and social impact of travel, families may be wondering how best to be a responsible traveler.

Here are five ideas to consider:

1. Choose wisely

Popular vacation spots like the Machu Picchu, Venice, Italy and many National Parks have begun taking steps to protect their destinations from the effects of overcrowding by managing access, establishing visitor fees and sharing information about responsible practices.

If you still plan to visit tourism hot spots, consider a shoulder or off-season trip when the impact may be less. When researching your next family adventure, review second-tier cities, parks with fewer visitors, uncrowded beaches or other locations not currently experiencing a high profile, as your holiday possibilities. Consider visiting a location that is rebuilding after a natural disaster. For example, Florida beach communities hard hit by hurricanes are grateful for the return of visitors as they recover. While vacation travel to Maui is strongly discouraged in the short term, the other Hawai’ian islands like Kauaʻi, Oʻahu, Lānaʻi, and Hawaiʻi Island, are not affected at this time.

When choosing a tour operator, opt for those that give back to their communities and make a strong effort to tread softly in each destination. Companies like G Adventures, a small group adventure firm that helps develop rural tourism projects, Country Walkers, Lindblad Expeditions and Abercrombie & Kent are among those striving to find a healthy balance in the travel equation.

For more: www.GAdventures.com ; www.Expeditions.com ; www.CountryWalkers.com ; www.GoHawaii.com ; www.AbercrombieKent.com

2. Opt for outside

A young person’s experiences in the natural world can strongly influence their view of the wider world and instill a desire to preserve and protect it. As you hike, bike and paddle, discuss the environmental changes that might be underway in your location. Share your knowledge and encourage kids to research areas of specific interest on their own.

Explain how small changes can have a big impact when enough people are in the mix. For example, using proper sunscreen can help protect important coral reefs around the world. Skin protection that contains oxybenzone or octinoxate washes off beachgoers, swimmers and divers and has been found to cause bleaching, deformities and potentially death to coral. Palau, Hawaii and other destinations are taking steps to ban these chemicals. Check for products that do not use these harmful substances and consider the use of clothing that blocks harmful rays from the body.

3. How will you roll?

Consider exploring close to home or plan trips that don’t require air travel. If you fly, limit emissions by taking direct flights. Travel by train, a boat or other forms of public or human-powered transportation. You might also research buying carbon offsets. In doing so, you would effectively pay others to plant or not cut trees or to embark on other projects that reduce greenhouse gases. Organizations like Cool Effect offer options with more than “90 percent of every dollar going to directly to projects” in Oregon, Tennessee, Indonesia and Guatemala. Combine your adventure with a local volunteer experience. Join a beach clean-up, read to kids at a local school, or assist at a wildlife sanctuary.

For more: www.cooleffect.org ; www.volunteeringsolutions.com ; www.Beaches.com

4. Conserve to preserve

Just as you might at home, keep water usage low, avoid unnecessary packaging, plastics and shopping bags. Recycle and turn the lights out when departing your hotel room or vacation rental. Reuse towels and other linens. Encourage each member of the family to bring their own reusable water bottle and refill from large containers if the local water is not safe to use. Hop on board local transportation, use bikes or walk whenever possible.

Pay attention to local signs and customs. Follow Leave No Trace principles to minimize your impact. When we all do our part, we stand a better chance of protecting our parks, keeping forests healthy and our wildlife strong.

For more: www.LNT.org

5. Support locals

Before your trip, research the destination, its culture and discuss the importance of spending your travel dollars in ways that can support sustainable tourism. Hire a resident guide to introduce your family to the local ways and when possible, explore on two wheels or on foot. Choose local outfitters for your adventures. Buy indigenous crafts, pull up chairs in neighborhood restaurants to sample fare from the region and peruse what’s possible at a farmer’s market. If relevant, encourage everyone in your group to learn a few phrases of the language and to understand local traditions.

For example, in Hawaii, “Aloha” is more than a slogan. It refers to a way of life passed down through generations, according to locals. So greeting others with a sincere “Aloha” is meaningful. Be respectful and ask permission to take photos of people and private spaces. Be thoughtful about how and what you share on social media. The World Tourism Organization encourages travelers to always “be tolerant and respect diversity.”

Note: Anyone who would like to make donations to help communities and families recover on Maui can do so through the Maui Strong Fund established by the Hawaiʻi Community Foundation. The Fund is providing resources that can be deployed quickly, with a focus on rapid response and recovery.

©2023 FamilyTravel.com. Distributed by Tribune Content Agency, LLC.

When we all do our part, we stand a better chance of protecting our parks, keeping forests healthy, and our wildlife strong, writes Lynn O’ Rourke Hayes.

Is tourism a social or economic?

travel-faq

Is Tourism a Social or Economic Activity?

Tourism can be seen as both a social and economic activity. On the one hand, it provides opportunities for cultural exchange and interaction between people from different backgrounds, fostering social understanding and appreciation. On the other hand, it is a significant driver of economic growth, generating revenue for businesses and creating job opportunities within the travel and hospitality industry. The balance between these two aspects depends on various factors such as government policies, infrastructure development, and the overall impact on the local community.

How Does Tourism Impact Local Communities? Tourism can have both positive and negative effects on local communities. While it can contribute to economic development by creating employment opportunities and increasing the demand for local goods and services, it can also lead to environmental degradation, cultural commodification, and social inequality if not managed sustainably. Therefore, it is crucial for local governments and stakeholders to implement responsible tourism practices that prioritize the well-being of the community and the preservation of natural and cultural assets.

What are the Social Benefits of Tourism? Tourism can bring about various social benefits such as fostering cultural exchange, promoting cross-cultural understanding, and enhancing social cohesion. Through interactions with visitors from different parts of the world, local residents can gain valuable insights into other cultures, traditions, and lifestyles, creating a sense of global interconnectedness and appreciation for diversity. Additionally, tourism can facilitate the preservation of local traditions and heritage, as communities seek to showcase their unique cultural offerings to visitors.

How Does Tourism Contribute to Economic Growth? The tourism industry plays a significant role in driving economic growth by generating revenue, creating job opportunities, and stimulating investment in infrastructure development. From hotels and restaurants to tour operators and transportation services, tourism-related businesses contribute to the overall economic activity of a destination, benefiting a wide range of sectors such as hospitality, retail, and transportation. Moreover, tourism can also attract foreign investment and stimulate the growth of small and medium-sized enterprises, further boosting the local economy.

What are the Challenges Faced by the Tourism Industry? Despite its many benefits, the tourism industry faces several challenges such as seasonality, over-tourism, and the environmental impact of travel. Seasonal fluctuations in visitor arrivals can lead to uneven economic benefits for destinations, whereas over-tourism can strain local resources, create social tensions, and degrade natural and cultural sites. Additionally, the carbon footprint of travel and the depletion of natural resources are pressing environmental concerns that the tourism industry must address through sustainable practices and responsible tourism development.

How Can Sustainable Tourism Practices Benefit Both Society and the Economy? Sustainable tourism practices aim to minimize the negative impact of tourism on the environment and local communities while maximizing the positive social and economic benefits. By promoting responsible travel behavior, supporting local businesses, and conserving natural and cultural heritage, sustainable tourism can contribute to the well-being of both society and the economy. Furthermore, sustainable tourism initiatives can create long-term economic opportunities, improve the quality of life for local residents, and preserve the unique assets that attract visitors in the first place.

– Balancing economic growth with social and cultural preservation – Implementing sustainable tourism practices for long-term benefits – Collaborating with local communities to ensure inclusive development – Adapting to changing travel trends and consumer preferences – Empowering local businesses and entrepreneurs to participate in the tourism industry

Overall, the relationship between tourism and society is complex, with the potential to bring about both positive and negative impacts. It is essential for stakeholders in the tourism industry to prioritize sustainable and responsible development, taking into account the social, economic, cultural, and environmental aspects of tourism to create a balanced and beneficial outcome for all involved parties.

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