Five Good Reasons Why Latin American and Caribbean Governments Should Prioritize Tourism in Their Development Agendas

In 2017, tourism generated more than 10% of global GDP, 1 in 10 jobs, 6.5% of total exports and 4.5% of total investment.

That same year, Latin America and the Caribbean received more than 114 million international visitors. However, the market share of LAC worldwide remains low, similar to the level ten years ago (around 8%).

Given the region´s tourism potential, and the prospects of growth for the tourism sector worldwide, it is crucial that LAC governments strengthen their commitment to tourism and its sustainable development. Below are additional reasons that reinforce the importance of this:

1. Tourism is a solid engine of growth. Tourism is an important driver of development, especially in the case of emerging countries. The sector stimulates growth through the generation of income, employment, investment and exports. Beyond its significant direct impact, on average, for every dollar spent on tourism, an additional $2.2 are generated; that is, the multiplier effect of tourism is substantial and above most other sectors. At the same time, the sector has proven to be resilient to external shocks, having for example quickly recovered from the impact of 2008 international financial crisis. Indeed, in 2017, for the seventh consecutive year, the sector grew above the global average, registering a growth of 4.6% (almost twice the growth of the financial sector).

2. Tourism is a human capital-intensive industry. In 2018, around 320 million jobs depend on the tourism activity. Over the last 10 years, one in every five jobs in the world has been created by the tourism sector and, with an adequate regulatory framework and government support, during the next decade the sector is expected to generate around 100 million new jobs worldwide.

3. Tourism contributes to the reduction of poverty and inequality. Several studies have shown that, when the sector development is adequately supported and planned, tourism contributes on average, more than other sectors to the reduction of extreme poverty, poverty and inequality -in particular regional inequalities.

4. Tourism is one of the main export categories worldwide. As an export category, tourism ranked third in the world in 2016, only behind chemical and fuel products, and ahead of the automotive and food industries. The sector represents 30% of worldwide service exports, and its relevance in the export basket is especially higher in developing countries. The tourism sector represents 75% or more of the total service exports for 15 Small Islands Developing States, and more than 50% in other 13.

5. Tourism is a highly innovative sector. If there is a sector that has been affected by the technological revolution, it is tourism. In tourism, there is simultaneity of production and consumption, where the consumer (the demand) travels to the place of production (supply). This has led to a revolution in product distribution, boosting innovation and the proliferation of highly technologically advanced companies such as global distribution systems,  online travel agencies, meta-search engines, etc., as well as the emergence of new ways of doing business (such as the shared economy). In addition, the new distribution protocol in the world of airlines and intermediaries represents an important technological change that will allow us to create and customize the offer at  levels unknown today. In parallel, Big Data has provided important opportunities for the design of more efficient and effective policy frameworks, for improving the management of natural and cultural resources or improving travel experiences. An example of this are mobile applications that capture real-time data on tourists’ itineraries.

However, in order to maximize the positive impacts of tourism, and to take advantage of its full potential, it is crucial to prioritize the sector in the public policy agendas, and to guide public-private action towards an inclusive and sustainable tourism development model.

The prioritization of tourism in any given government public agenda is especially relevant in the case of countries that predominantly rely on nature and cultural tourism, as it is the case of most LAC countries. If the development of the sector is not done in a planned, strategically adequate way, focusing on preserving the natural and cultural resources of the destination, the impact will not only fail to reach its full potential, but could be even negative and irreversible.

If we add to this the impact of climate change and the exponential technological transformation, it is clear that today, more than ever, we need to think carefully about tourism strategies, mainstream them across sectors and levels of governments, and adequately support them with the resources they need to be effective.  to satisfactorily implement them.

It is either that or we may lose a unique opportunity to transform millions of lives and to contribute to preserving our natural capital and historical heritage.

Today more than ever we need #sustainabletourism.