Encouraging sustainable and inclusive tourism

By Sir Suma Chakrabarti and Zurab Pololikashvili

Aerial view of Tbilisi, capital of Georgia

Georgia is an EBRD country which has benefited from major growth in tourism

International tourism represents a vitally important and fast growing sector of today’s global economy, worth €8 trillion and supporting 1 in 10 jobs worldwide.

But tourism goes far beyond numbers alone. Foreign visitors create value by exchanging goods and ideas with their hosts. They bring people closer together, promoting better understanding between both individuals and whole countries. And tourism can also benefit poorer, more remote regions, opening up job opportunities, promoting economic inclusion for all and facilitating the transfer of valuable skills. 

These are all objectives central to the mission of the European Bank for Reconstruction and Development (EBRD) to build open and sustainable market economies. These goals are shared with the World Tourism Organization (UNWTO), the UN agency mandated with promoting tourism’s huge benefits for people and societies around the world.

These shared objectives are prominent in several of the Sustainable Development Goals which must be the focus of all our activity in the years ahead. The fact is that we will not be able to deliver the Paris Agreement on climate without making tourism more sustainable. And we cannot make economic inclusion a reality unless tourism helps us create more quality jobs for young people and women.

Understanding the broader contribution of tourism to the global economy is more important than ever given the pace at which the sector is expanding. Rising levels of income, a newly emerging global middle class, the increasing affordability of travel and new business models resulting from technological disruption are driving growth in tourism in an unprecedented way.

Fuelled by these forces, tourism regularly outpaces economic and trade growth and also rebounds much faster than most economic sectors in times of crisis. The number of international tourist arrivals has more than tripled in the past three decades, propelling tourism into the third global export category, after chemicals and fuels, even before food and automotive products.

In some of the regions where both the EBRD and UNWTO work, tourism accounts for anything from 10 to 25 percent of GDP, creates significant amounts of jobs and is a major source of foreign currency revenue.

But the sector is also vulnerable to overconcentration, high volatility mirroring geopolitical and security challenges and poor management of natural resources and can be held responsible for high waste impact.

We must ensure that tourism contributes to the local economy and local communities as it should. This opportunity should not be wasted as it can hold the key to the creation of so called backward linkages, ensuring, for example, that local producers of goods and services are integrated into the overall value chain.

In Montenegro, for instance, hotels used to import most of their food because there were no storage facilities for local produce, however high its quality. This was hardly a ‘green’ way of feeding the country’s tourists! So, through an equity investment, the EBRD financed a new state of the art warehouse in Podgorica to allow the industry to source excellent local produce sustainably.

The big themes

Sustainability and inclusion are central themes of the EBRD’s new Property and Tourism Strategy, which is launched today in Athens. While investments will continue to focus on cultural heritage and creating more backward linkages, the bank will also be raising its game in providing green solutions to the challenges tourism faces in the future. Matching  a central pillar of UNWTO’s work, the focus will be on promoting more and better employment and skills opportunities for young women and men.

The EBRD wants to launch more projects along the lines of its work in Greece, teaming up with the host authorities to promote sustainable tourism in two of its most popular holiday islands – Rhodes and Santorini. That EU-funded destination management initiative aims to help the islands’ businesses and local communities diversify destinations, reduce their dependence on the ‘sun and sand’ model and combat the threat from over-tourism.

On the inclusion side, both tourism and economic policy makers can also learn from the success of the involvement with the Abdali Mall in Amman, capital of Jordan, one of the largest brownfield sites in the Middle East. That site features a new training centre which helps young people and women – both Jordanians and Syrian refugees– to master the skills they need to find jobs in the retail and hospitality sector.

Of course, refugees are very different from tourists. They leave their home countries because they have no choice but to do so. But by retraining them for work in Jordan’s tourism sector, which requires well trained staff to cope with rising numbers of visitors, we can make a contribution to inclusion in the country - and stability in the region as a whole. This is a clear example of tourism’s presence along the social value chain, not just the economic one. Tourism is a reliable partner for social cohesion.

A shared mission

It is often said that travel broadens the mind. Tourism has certainly contributed to the free flow of ideas which has characterised the last few decades. Indeed, many of the first significant wave of Eastern Europeans breaching the Iron Curtain 30 years ago were essentially tourists.

The European Band for Reconstruction and Development was set up soon afterwards precisely to bring people closer together and help them enjoy the benefits of open, market economies.

Tourism has been a major factor in making that vision come true. Against this backdrop, the teaming up of the EBRD and the World Tourism Organization of the United Nations is a logical step in that same direction: we will focus our joint efforts on making the sector more sustainable and encouraging economic inclusion, for tourism to make an even greater contribution to our future prosperity.

Sir Suma Chakrabarti is the President of the EBRD

Zurab Pololikashvili is the Secretary-General of the UNWTO