How to Measure Corporate’s Contribution to Sustainable Tourism Development

By Dripto Mukhopadhyay

Why sustainable tourism?

Tourism, for long, has been recognized as one of the most lucrative economic activities around the world. India as a country is well recognized as a global tourism hub with inflow of international tourists steadily increasing over the years.  According to the World Travel and Tourism Council (WTTC), tourism in India was a $230 billion industry in 2018, which is about 10.4% of the country’s GDP. Tourism also contributes to 8.1% of total countries employment as mentioned in WTTC’s India country report for 2019.

However, everything is not as rosy as tourism contribution to employment and income suggests. There are nuances that act as severe adverse impact agents unless the sector players and regulators play their respective roles. To note a few:

  1. Severe environmental impacts – Tourism contributes more than 8.5% of the total carbon footprints globally. This is also the highest among all economic sectors.
  2. Exploiting local economy than contributing to its growth – Studies suggest that the income generated from tourism activities in areas gets siphoned off in various means, while local people and resources are exploited in a big way.
  3. Distorts local culture and living – In most of the tourist destinations local cultures are gets distorted to a large extent impacting living of the local population. Also cost of living for local people are impacted dur to tourism activities.

All these along with over crowding etc. are considered as phenomenon that are not only impacting the destination areas physically, economically and environmentally, but also detrimental to the growth of tourism itself. Large number of attractive destinations have already been discarded by a large section of tourists as they are not able to provide the desirous experience to the tourists any further. Off beat destinations are looked for by the tourists who look for exciting tourism experiences.

Solution to this entire gamut of problems are sustainable tourism development. In various parts of the world, sustainable practices have stated long back. However, India is still lagging on this front, especially from implementation perspective. On paper, criteria are laid down for sustainable tourism development. But implementation of the same are not visible to a large extent. Two prime reasons seem responsible for non-implementation at least for those that are at least mentioned by ministries at the centre as well as at the states. Since tourism is in fact combination of activities that are looked after by different departments or ministries, responsibility and accountability are in question. Tourism industry players are also not sure about compliance and its benefits to them. The second important reason is no scientific impact assessment is done on how steps towards sustainable tourism are fulfilling the objectives (in quantitative terms) so that one can understand their contribution towards it.

This situation has created a complete opaque front that no one knows to what extent progress are made towards the goals of sustainable tourism except qualitatively that some steps are taken by certain industry players towards certain particular issue. Therefore, it is an area, especially due to negligence on regulatory front, where no one is clear about what to do and what would be the rewards of doing so. However, everyone knows that it is of utmost importance and it cannot be delayed any further.

Is there a way to measure tourism players’ contribution towards curbing negative impacts?

The answer is yes. In fact, this has a dual benefits. It can be a growth driver for business as well as fulfilling corporate role towards CSR related activities. We are highlighting only those that are relevant to hospitality sector. To understand simply, let’s again think sources of negative impacts.

  • Environment – Hospitality sector can reduce the adverse impact by:
    1. Following best practices regarding landuse related norms that is least harmful to existing ecology
    2. Optimal water usage including waste water recycle etc.
    3. Reduced electricity consumption
    4. Scientific waste management procedure
    5. Encouraging tourists to use less fossil fuel for transportation means
    6. Educating tourists on do’s and don’ts regarding conservation of environment and local ecosystem
  • Contribution to local economy
    1. Local procurement of goods used for various purpose including services to guests
    2. Employing local people for various works on and off campus and also skill upgradation mechanism for them
    3. Promoting local culture and other locally produced products among tourists
  • Conserving local human ecosystem
    1. Educating and encouraging tourists to learn about local people and their culture
    2. Respecting living of locals

While impact of first two points can be measured quantitatively and an economic equivalent value can be estimated, the third point can only be measured basis perception. However, all these measures should contribute to survival of tourism in destinations in future years.

Way to achieve these measurements

This can be done with the help of combination of analysis with data from various sources:

  • Activities undertaken by hospitality sector on any of the above points should come from the sector itself.
  • Activities by the tourists, their preference and their expenditures to be captured by a tourists’ survey
  • Remote sensing data would be used to understand the changes on development front of the location along with changes on physical environment front including climate parameters as well as other environment parameters.

Putting together all these data components would help in a real time impact assessment in quantitative terms and its economic and social value. This includes parameters ranging from carbon footprint reduction to contribution to local economy to conserving local ways of living.

What value does this add to industry players

For long years the tourism industry requesting the Government of India for the fiscal benefits including tax rebate and relaxations. Some of those are mentioned below:
– Weighted deduction of 200% in line with Research & Development sectors in India for expenditure incurred towards marketing and promotional activities of the country as inbound tourism destination.
– Lower withholding of tax and interest paid to foreign banks or financial institutions for loan taken in tourism sector.
– Deduction in respect of profit and gains from taxable income for business of hotels, convention centres and other tourism specific infrastructure.
– Foreign exchange earning linked deduction on profits for Income Tax computation.
– Exemption on Tax on room tariff to be increased.
– Service Tax to be exempted for unit to be set up within special tourism zones.
The argument behind such requests is incidence of high taxations on tourism sector and its impact in making Indian tourism industry products less competitive in world market. Studies like the present one can be best possible way to ask regulators to reward for actions taken for curbing negative impacts of tourism and for encouraging positive impacts. This would enable the sector to argue that the sector is not only making profit, but also extending significant benefits to environment and local economy and culture. Especially, suggesting the extent of benefits in terms of economic value enables to convey non-tangible benefits in a tangible manner which provides more purchasing power in for any fiscal benefit from government.

Also, developing local skills and promoting local cultures and crafts can also be part of CSR activities of the sector players. This is yet to happen in the country, while in many countries have already taken this path to concreate sustainable tourism within the scope of corporate social responsibility. It can serve dual purpose of promoting sustainable tourism and look for relevant benefits from the Government as well as fulfilling CSR mandates.

Apart from being benefited at Governmental front, the proposed survey would facilitate understanding tourists’ sentiments and their demand/desires in a more concrete manner and allow the sector towards strategy making to tap the right target consumers with right promotional campaigns. In both ways, this would be a growth driver for business while impacting the tourism activities in a positive manner.