Happy 2020 Bahamas! May the peace and joy of the new year stay with you all year long. As I pen my first opinion piece for the year, I thought it would be most appropriate to give a broad perspective of the global tourism landscape in this new decade. This two-part piece will highlight the challenges that world tourism will face in this decade and the challenges that will also apply to the Caribbean and The Bahamas.
According to the OECD (Organization for Economic Co-operation and Development) Tourism Trends and Policies report 2018, addressing the multi-faceted challenges faced by the tourism industry in this decade demands an integrated approach to policy development across many government departments. Previously, the OECD report of 2010 detailed the challenges countries across the globe will face in 2020 and beyond. Allow me to highlight some of the salient points that are critical for us as a nation to comprehend and strategize accordingly. We are confronted with many key challenges that will influence tourism development’s longer-term success and set the agenda for public policy action. These challenges include: (a) globalization and changing markets; (b) economic-wide impact of tourism; (c) climate change and sustainability; (d) the knowledge economy; (e) human resources; and (f) productivity and competitiveness.
In part one of the article, allow me to deliberate on the first three issues of globalization, economic impact and climate change.
Issue 1: globalization and changing markets
Globalization is the process of interaction and integration among people, companies and governments worldwide. The liberalization of international trade regimes will allow a reduction in the barriers for international tourism businesses that we have to accept. Tourism has to operate in this new global economy. The Bahamas too has to confront the challenges to be more competitive especially with globalization and its impact on the economy. There is more dynamism in the international tourism flow with globalization as access across borders, in terms of trade and travel, is reduced. Countries that are still skeptical of reducing barriers to trade (and travel) will be left behind as far as economic development is concerned. Globalization and the changing markets arising from it will result in dramatic changes in the cost efficiency of transport and the liberalization of economic policies. In addition, this decade will also experience an ever-growing global middle-class shift (3.7 billion people in 2018) with rising living standards demanding a shift in the tourism industry which is vulnerable to changing market realities. With the right adaptation strategies, globalization can certainly bring more benefits for the nation.
The changes in the market will continue in 2020 and beyond. Many decades ago, Japan was the leading tourism outbound market for the world. Today, China, Russia and India dictate the changing pattern of travel flows and demands. Hence, changes are required in appropriate product development and enhancement to satisfy this new travel market. There are also changes in tourism demands across the globe as changes happen continuously in developed countries in terms of social values, lifestyles and demographics. Niche markets are booming with the fragmentation of tourism markets. This includes retired travellers, health and wellness tourism, annual family travel, active and higher involvement adventure tourism, authentic community-based tourism, indulgent and luxury travel, gastronomy tourism, responsible tourism and many more. Hence, for The Bahamas to continue to be relevant in terms of providing a high-quality tourism product, we need to evolve based on the changing market.
Issue 2: economic impact of tourism
The importance of economic development in The Bahamas cannot be denied. Tourism, the leading contributor to the gross domestic product (GDP), contributes to virtually every industry across the economy. As indicated in the OECD report, “The process by which the consumer (visitor) comes to the product (the destination), consumes identifiable tourism products and also incurs normal day-to-day living expenses in that destination is unique among traded goods and service markets. The wide-ranging nature of the products and services consumed by tourists presents particular issues which are not common to other product markets. In addition, tourism has social effects in areas as diverse as crime, health, congestion, land and other prices and urban amenities.”
Hence, tourism is indeed vital for the development of other economies especially in countries like The Bahamas where tourism is the main contributor to the economy. Designing tourism-related policies and programmes is more complicated than in other economies due to the multiplicity of stakeholders in tourism which require the government to address both horizontal issues (across related agencies, i.e., immigration, customs, education, transport, infrastructure, etc.) and vertical issues (from the local, national and regional levels to the international level).
Thus, tracking tourism spending in tourism destinations can be a challenge as many of the enterprises and businesses may not be directly related to tourism but rely on tourism for survival. Many may have little understanding of the extent to which their sales are actually generated from tourism demand. As indicated in the OECD report, “The complex web of stakeholders in the tourism industry creates a fragmented structure that governments can find hard to serve through general policy measures.”
The report further added, “As a consequence, tourism will require a complex set of mutually supporting infrastructure, policy and planning decisions if the broad-ranging nature of tourism’s benefits are to be realized and potential costs managed.”
The economic impact of tourism can also bring social benefits to destinations. In an archipelago like The Bahamas, the Family Islands rely on tourism and spinoffs that come from tourism to sustain the social well-being of the local and regional communities. Hence, in 2020 and beyond, a framework for tourism policy making is important and must be encouraged. Only by having a well-thought-out framework can the nation extract maximum economic and social benefits from the tourism sector that is vulnerable to internal and external shocks.
Issue 3: climate change and sustainability
The National Oceanic and Atmospheric Administration (NOAA) reported in early 2019 that global warming is making hurricanes more deadly – in part because warmer air can hold more water. The El Nino and La Nina conditions, as well as 25 to 40-year cycles that affect ocean surface temperature, can impact hurricane forecasts from year to year. The report further suggested that the Atlantic has experienced warmer surface temperatures since 1995 and, as a result, the region has been experiencing a “high activity era”.
The world economy and society are challenged by escalating changes happening to the climate. Climate change and global warming are not “fake news”. Over the past year, we have witnessed the worst weather phenomena across the globe that have resulted in unimaginable hurricanes, typhoons, storm surges and summer heat waves resulting in forest fires. Hence, in a country reliant on travel and tourism, the impact of climate change presents a significant challenge to the sustainability of the economy and the society on the whole. The lack of effective mitigation or adaptation measures by the government will result in a catastrophic impact to the nation.
According to the OECD 2018 report, tourism is estimated to contribute up to 5.3 percent of global anthropogenic greenhouse gas emissions with transport (which includes airlines and cruise liners) accounting for about 75 percent of this. Nonetheless, there are positive outcomes as a result of this stress to the climate. In 2020 and beyond, the awareness in terms of the importance and potential for “green jobs”, the promotion of lower-carbon activities and the efficient use of energy, offers the tourism industry an opportunity “to adapt its operating practices and to participate in the expansion of green collar jobs which are seen as a major growth opportunity for global employment in the years to come”.
As a small island developing state, tourism in The Bahamas is exposed to the direct effect of climate change. This includes sea-level rise, increasing air and sea surface temperatures, changing rainfall patterns, changes to ocean currents and the frequency or intensity of extreme weather events like hurricanes. Further, climate change can result in the loss of biodiversity – both in the ocean and terrestrial flora and fauna including corals. It can also impact both the natural and built environment which supports tourism-related infrastructure, like island beach and dive resorts. These are all critical for the sustainability of tourism as an industry to the nation. Health and safety implications due to heat stroke, spread of disease and increase in crime, especially in regions impacted by extreme weather, also have some bearing on the sustainability of the tourism industry. Key brand tourism icons and images can be lost due to the rapid changes taking place as a result of climate change. In short, many tourism destinations across the globe could suffer serious, costly and irrevocable impact.
The OECD report suggests that changes in consumer behavior are vital to respond to climate change and global warming. This includes “the wider adoption of voluntary or compulsory carbon offset schemes, possible modal shifts in transport use and demand for environmentally responsible behavior”. Hence, with these changes, there is bound to be rapid shifts in the magnitude and direction of international tourism flows. Subsequently, tourism “has to become even more closely concerned with the broad environmental sustainability of its own actions”. Today’s responsible tourists demand the protection of the environment when determining the viability and attractiveness of a tourism destination.
In conclusion, government, businesses and local communities must collaborate to implement workable regulatory instruments to ensure community and environment friendly outcomes for the sustainability of a destination. Integration of economic, social and environmental objectives into the planning and development of environmental management strategies in tourism is critical for its long sustainability.
• Dr. Vikneswaran Nair is the dean of graduate studies and research and a professor of sustainable tourism at the University of The Bahamas.