E N V I R T N M E N T b 3 ~D E P A R T M E N T -T *^ P PAPERS PAPER NO. 55 TOWARD ENVIRONMENTALLY AND SOCIALLY SUSTAINABLE DEVELOPMENT ENVIRONMENTAL ECONOMICS SERIES Economic Perspectives on Nature Tourism, Conservation and Development Michael P. Wells September 1997 A Environmentally Sustainable Development The World Bank ESD Pollution and Environmental Economics Division Economic Perspectives on Nature Tourism, Conservation and Development Michael P. Wells September 1997 Papers in this series are not formal publications of the World Bank. They are circulated to encourage thought and discussion. The use and citation of this paper should take this into account. The views expressed are those of the authors and should not be attributed to the World Bank. Contents Acknowledgments iii Summary iv 1. Introduction 1 2. Economic Analysis of Nature Tourism 5 3. What Has Nature Tourism's Economic Impact or Contribution Been? 11 Multipliers and Leakages 12 Value Added 13 4. What are the Net Economic Benefits of Nature Tourism? 17 Willingness to Pay 17 Other Economic Benefits from Nature Tourism 18 Cost of Nature Tourism 21 Comparing Cost and Benefits 22 5. What are the Options for Capturing More of the Net Benefits of Nature Tourism 25 Higher User Fees for Nature Tourism Destinations 25 Higher Economic Rents for the Tourism Private Sector 27 6. How Can Nature Tourism Contribute More to Local Economic Development 33 7. What are the Options for Mitigating Nature Tourism's Environmental Impacts 39 8. Conclusions 43 9. Future Research 45 Definition and Characterization 46 Measurement 46 Policy Issues 47 References 49 Boxes Box 4.1 Property Rights and Opportunity Costs of the Mara Area, Kenya 24 Box 6.1 Factors Influencing the Feasibility of Community Involvement in Nature Tourism 36 Figures Figure 2.1 Components of Demand for Nature Tourism 9 Figure 5.1 Key Indicators at Sharm el Sheikh and Hurghada Coral Reef Resorts, Egypt 29 Environmental Economics Series Economic Perspectives on Nature Tourism, Conservation and Development Tables Table 2.1 Financial and Economic Studies of Nature Tourism 6 Table 3.1 Leakage of Gross Tourism Expenditure by Country 13 Table 3.2 Gross Revenues and Net Return to the Kenya Wildlife Tourism Sector in 1989 14 Table 4.1 Results of Nature Tourism Willingness-to-Pay Studies 19 Table 4.2 Components of the Total Economic Value of Nature Tourism Destinations 21 Table 5.1 Rates of Return on Different Land Uses at Different Scales in Namibia 31 Table 6.1 Ways for Communities to Receive Greater Benefits from Protected Area Tourism 34 ii Environment Department Papers Acknowledgments Agi Kiss originally proposed this work in Barnes, David Cassells, Herman Cesar, Geert connection with the Protected Area and Wildlife Creemers, Agi Kiss, Kreg Lindberg, Hemanta Project in Kenya, for which she is the Task Mishra and John Wagner. All of these plus Manager. Emst Lutz wrote the request for a Douglas Southgate and Mike Norton-Griffiths research preparation grant with which this work made helpful suggestions. Geert Creemers also was funded. John Dixon and Emst Lutz guided generously provided access to unfinished work. the research. Valuable comments on earlier Francis Grey kindly provided copies of two drafts were received from Bruce Aylward, Jon important unpublished documents. Enviromnental Economics Series Sulmmary Nature tourism is particularly important in the accompanied by negative environmental impacts context of sustainable development because it from uncontrolled construction, as well as the offers the potential of mobilizing resources abuse and overuse of destinations by through the private sector which can contribute inadequately regulated tour operators. to local and national economic development while providing an incentive for conservation land uses Relatively few local communities have realized and helping to finance biodiversity conservation. significant benefits from nature tourism on their But analysts have argued that there is a own lands or in nearby protected areas. Local significant gap between nature tourism's actual communuities' participation in nature tourism has and potential contribution to sustainable been constrained by a lack of relevant knowledge development. and experience, lack of access to capital for investment, inability to compete with well- While nature tourism only accounts for a small established commercial operations and simple fraction of the overall global tourist industry, it is lack of ownership rights over the tourism reported to be one of the fastest-growing tourism destinations. Nature tourism on privately-owned markets. Nature tourism's continued expansion lands has in some cases been penalized by offers opportunities to generate increased income landowners' or residents' lack of effective tenure and employment, both nationally and in remote over wildlife and other natural attractions, or by rural areas, and to provide increased incentives policy distortions favoring land use alternatives for biodiversity conservation in state protected such as agriculture, livestock or mining. Of areas and on private lands. These must be course, these reservations are at least as balanced with the risks of continued applicable to many other private sector activities environmental degradation and greater pressure competing with tourism for land or other on protected areas, many of which lack the resources. resources for effective management and are unprepared for significant growth in visitor From a conservation perspective, protected areas numbers. charging relatively low entry and use fees often supply the most valuable part of the nature Most of the economic benefits linked to tourist tourism experience but capture little of the expenditures have so far been captured by economic value of tourism in return. While commercial tourism operators in the richer many governments have successfully increased countries (where most tourists originate) and in tourist numbers by marketing their country's the larger cities of the host countries. This does nature tourism destinations, most have not little to support social and economic development invested sufficient attention or resources in in the remote rural areas where nature tourism managing the natural assets which attract tourists destinations are located. Nature tourism has or in the infrastructure needed to support nature catalyzed local or regional economic development tourism. This has exposed sensitive sites of in a few cases, but these have often been ecological or cultural value to the risk of Environmental Economics Series iv Economic Perspectives of Nature Tourism, Conservation and Development degradation by unregulated tourism development, Efforts to develop effective national policies for too many visitors and the impact of rapid nature tourism have been frustrated by the lack immigration linked to new jobs and business of economic analysis of the options as well as the opportunities. need to appreciate and reconcile the diverse stakeholder perspectives. This indicates the need Despite these problems, the overall growth for applied economic research in selected case potential and some promising individual cases do study countries which is not only targeted to suggest that nature tourism is an important sector provide usable insights but also sufficiently where environmental conservation may grounded in an appreciation of the perspectives effectively be combined with economic of the various stakeholders to produce results development in remote rural areas of developing which are usable in cross-sectoral governmental countries on a meaningful scale. The policy- decisionnaking. In other words, stakeholder making priorities generally lie in four areas: (1) involvement needs to be combined with technical increasing and capturing more of the net analysis for policy development. An overall economic benefits, (2) contributing more to local menu of key research questions for evaluating economic development, (3) mitigating options and strategies for optimizing the environmental impacts, and (4) helping to finance economic and ecological benefits associated with biodiversity conservation (recognizing that only a nature tourism is identified. Country-specific small fraction of ecologically-important areas policy research could prioritize from such a have the potential to attract significant tourism). menu. v Environment Department papers ' Introduction Tourism has expanded to such an extent that it is Unfortunately there is no widely-agreed definition now claimed to be the world's largest industry of nature tourism, ecotourism or other related and provider of jobs, although measurement is forms of tourism (Goodwin 1996), although notoriously difficult and accurate statistics are ecotourism is recognized as a subset of nature scarce. The World Travel and Tourism Council tourism (Brandon 1996). A largely prescriptive (WTTC) has estimated that international tourism literature describes what nature tourism, generated about 10% of global GDP in 1994, ecotourism, and so on should consist of, often in accounted for over 10% of all consumer terns of visitor motivation, philosophy and spending, created more than 12 million new jobs behavior. Another body of literature describes and provided more than $650 billion in tax the negative results when such alternative forms revenues to governments (WTTC 1995). Even if of tourism fails to follow these ideals (e.g., Butler these figures are little more than educated 1991; Hawkins & Roberts 1994; King & Stewart guesses, their sheer magnitude explains why 1996; Pleumarom 1994). The tourism industry tourism is, or should be, a priority concern of itself has opportunistically used very broad governments worldwide. interpretations of nature tourism and ecotourism to exploit these terms' suggestion of responsible This paper is specifically concerned with consumerism. economic perspectives on one sector of this vast industry - nature tourism in developing countries. Nature tourism is defined here as those forms of All forms of tourism can make substantial tourism where natural attractions of ecological contributions to national income, foreign significance are the destination, leading to a exchange earnings, employment and government principal focus on tourism in state-run protected revenues. But nature tourism is particularly areas and land which is privately owned or under important in the context of sustainable communal tenure. Although there are development because it offers the potential of considerable overlaps between nature tourism mobilizing resources through the private sector destinations and protected areas, it is important which can contribute to local and national to recognize that the terms are far from economic development while providing an synonymous. Protected areas are only rarely incentive for conservation land uses and helping established because of their tourism potential and to finance biodiversity conservation. This is a by no means all - or even most - protected areas very appealing prospect, particularly in are viable nature tourism destinations. developing countries where economic Conversely, nature tourism often takes place development alternatives in remote rural areas outside protected areas. are very limited, where biodiversity investments are invariably inadequate, and where public A focus on tourist destinations of ecological funds to support either are usually scarce. significance is not particularly restrictive, since this embraces activities as diverse as wildlife Environmental Economics Series Economic Perspectives on Nature Tourism, Conservation and Development viewing, mountain trekking, exploring trends of higher personal disposable incomes, rainforests, diving on coral reefs and watching more leisure time, greater interest in nature and whales. It includes small groups of independent outdoor activities as well as falling transportation and environmentally-sensitive travelers to remote costs all tend to support such positive growth and little-known areas as well as the thousands of forecasts. perhaps less environmentally-concerned visitors to such acclaimed destinations as Kenya's Given the credible and optimistic projections for Maasai Mara National Reserve, South Africa's nature tourism's future growth, it is not Kruger National Park, Egypt's Red Sea coast, surprisingly that high levels of interest have been Ecuador's Galapagos National Park, Caribbean aroused among government finance and economic marine reserves or Nepal's Royal Chitwan planning ministries and conservation agencies, National Park. commercial tourism operators, private landowners, local governments, NGOs and local Reliable data on nature tourism are very elusive, communities. But nature tourism's continued partly because of the lack of concensus on expansion will inevitably expose more defining the term. However, the few reliable ecologically-important areas to the opportunities estimates of the scale of the economic impact of and risks associated with greater numbers of nature tourism are impressive. Five World visitors. The opportunities are to generate Heritage Areas in Australia are estimated to increased income and employment, both generate an annual gross economic impact of nationally and in remote rural areas, and to more than $1,000 million, excluding travel costs provide increased incentives for biodiversity (Driml 1994). Annual expenditures of park conservation in state protected areas and on visitors in British Columbia, Canada have been private lands. The risks are continued estimated at $310 million (Coopers & Lybrand environmental degradation and greater pressure 1995). In developing countries, Kenya's wildlife on protected areas, most of which lack the tourism industry generates about $400 million in resources for effective management and are gross revenues annually (Norton-Griffiths & unprepared for significant growth in visitor Southey 1995). In Ecuador, $54 million of numbers. annual tourist expenditures have been attributed to Galapagos National Park (De Miras 1994, Analysts have argued that there is a significant cited in Southgate 1996). Nature tourism in gap between nature tourism's actual and Costa Rica generated over $600 million in potential contribution to sustainable development foreign exchange in 1994, while the Monteverde (e.g., Boo 1990; Brandon 1996; Hunter & Green Cloud Forest Biological Preserve alone has been 1995; Lindberg 1991; Ziffer 1989). While estimated to generate $10 million in gross tourist nature tourism in developing countries does receipts each year (Aylward et al. 1996). seems to be generating substantial opportunities Caution does need to be exercised in interpreting for the private sector, there is considerable doubt these figures due to some important limitations as to whether it is stimulating genuine social and and variations in the methodologies used to economic development among rural communities estimate them. or providing stronger incentives for biodiversity conservation. It is also not clear whether, or While nature tourism only accounts for only a under what circumstances, nature tourism in less- small fraction of the overall global tourist visited areas has more or less environmental industry, it is reported to be one of the fastest- impact than conventional or "mass" tourism growing tourism markets. A study for the which is concentrated in areas where Economist Intelligence Unit has forecast a environmental damage from uncontrolled doubling of expenditure on environmentally- development has already taken place. sensitive tourism and ecotourism between 1995 and 2000 (Jenner & Smith 1992). Long-tern 2 Environment Department Papers Introduction The objectives of this review are to explore the tourism? (2) How can nature tourism contribute use of economic analysis to help develop policies more to local economic development? (3) How which can enhance nature tourism's contribution can economic policies and instruments contribute to sustainable development, and to inquire into to mitigating nature tourism's environmental the conditions under which nature tourism is impact? The final section highlights gaps in the financially and economically viable as well as literature and identifies priority areas for further environmentally sustainable. After a general research. discussion of the economic analysis of nature tourism in the next section, the paper proceeds by Readers are referred to Hoagland et al. (1995) addressing two methodological and measurement for a methodological review of the net economic questions: (1) What has nature tourism's benefits associated specifically with the creation economic impact or contribution been? (2) What and operation of marine reserves, to Brandon are the net economic benefits of nature tourism? (1996) for a more general review of the The next three sections explore three principal ecotourism literature, and to Goudberg et al. policy issues: (1) What are the options for (1991) for a review of site-specific ecotourism capturing more of the net benefits of nature planning issues. Environmental Economics Series 3 Economic Perspectives on Nature Tourism, Conservation and Development 4 Environment Department Papers 2 Economic Analysis of Nature Tourism Tourism's contribution to the economy can be measured (Dixon & Sherman 1990; McNeely very difficult to estimate. This is mainly because 1988; Pearce & Moran 1994). Such studies are the diverse types of businesses selling goods and described in Section 4. services to tourists do not constitute an easily separable economic sector and, as a result, very Key studies of nature tourism's economic few countries treat tourism as a separate category impacts as well as its economic value are in the national income accounts. It is also summarized in Table 2.1. Whether an economic difficult to isolate the economic impact of nature impact and/or a economic valuation study is tourism from other types of tourism. As a result appropriate or feasible depends on the priority of these complications, many economic studies of issues under consideration, the availability of nature tourism are based on uncertain data and adequate data and the cost-effectiveness of use a variety of methodologies to produce results generating new data. Economic impact which are not easily comparable. assessments of tourism have been much more influential with government policymakers due to Many so-called "economic" studies examine the their emphasis on money flows in the economy as contribution of nature tourism to the economy well as job creation and foreign exchange based on the amount of money which tourists earnings - all politically sensitive considerations. spend on various aspects of their recreational Welfare analyses, although analytically more experience (travel, accommodation, food, comprehensive, have received much less attention souvenirs, and so on). This is equivalent to from decision makers who tend to be less measuring the proportion of transactions in the interested in economic benefits which they are economy which are dependent on nature tourism. unable to capture or use in practical terms. Such studies of the financial values of specific nature tourism destinations are an important but The critical distinction between nature tourism's incomplete step towards more complete economic economic impact and its economic value is analysis. Appropriately described as "economic illustrated in Figure 2.1. AD is the tourism impact assessments" (CNPPA 1996), such demand function showing how many visits will studies are described in Section 3. be made at each price and reflecting declining marginal benefits from additional visits to a In contrast, an economic welfare analysis destination. Tourists' direct expenditures at measures the value which society places on price B are equivalent to the area OBCE. nature tourism destinations, i.e., the economic Consumer surplus, the amount which tourists benefits less costs over time. Welfare analysis would have been prepared to pay over and above requires not only market benefits (such as the prevailing price B, is equivalent to ABC. tourism) but also non-market benefits (such as This is foregone income to the owners of the watershed protection and existence values) to be destination. The gross economic value of Environmental Economics Series 5 Economic Perspectives on Nature Tourism, Conservation and Development TABLE 2.1: FINANCIAL AND ECONOMIC STUDIES OF NATURE TOURISM FINANCIAL & ECONOMIC IMPACTS ECONOMIC VALUATION STUDY BENEFITS COSTS & Direct Multiphers & Value Tourists' Other Values Direct Indirect & COMMENTS SCOPE Expenditures Leakages Added Consumer (Market & Non- Management Opportunity Surplus Market) Costs Costs Aylward et aL 1996 x Examines reserve sustainability Monteverde PR, Costa Rica Reviews national tourism & PA data Barnes 1992 x x x Develops financial and economic Botswana models for wildlife tourism. Barnes 1996 x Visitor survey. Developed demand PAs in Botswana function Barnes & de Jager 1996 x x x Develops financial and economic Private lands, Namibia models for private & community wildlife tourism operations. Brown et aL 1994 x Airport survey. Al PAs in Kenya Brown et aL 1995 x x x Airport survey. Estimated leakages 2 NPs in Zimbabwe using industry survey. Chase et aL 1996 x Considered impact of a PA's 3 NPs in Costa Rica pricing policies on other PAs Clark et al 1995 x x Infomal community surveys of Tarangire NP, Tanzania revenue-sharing programs Creemers et al 1995 x Estimated possible impact of tourism St. Lucia Wetland, South Africa due to mining operations Dixon & Sherman 1990 x x x x BCA approach Khao Yai NP, Thailand Dixon et aL 1995 x x x Considered sustaiability of diving Bonaire Marne Park tourism Drlml 1994 x x x Collated financial impacts on 8 PAs Great Barrier Reef WHA Echeverria et al. 1995 x x x x BCA approach Monteverde PR, Costa Rica 6 Environment Department Papers Economic Analysis of Nature Tourism FINANCIAL & ECONOMIC IMPACTS ECONOMIC VALUATION STUDY BENEFITS COSTS & Direct Multipliers & Value Tourists' Other Values Direct Indirect & COMMENTS SCOPE Expenditures Leakages Added Consumer (Market & Non- Mnagement Opportunity Surlus Market) Costs Costs Engelbrecht & van der Walt x BCA approach 1993 Kruger NP, South Africa Hodgson & Dixon 1988 X x x BCA approach to compare logging Palawan with tourism. Hugo 1992 x Used input-ouput tables to analyze South Africa impacts of all S. Africa tourism Kaosa-ard, M. eta. l199S x x x x BCA approach Khao Yai NP, Thailand Kramer et aL 1995 x x x CV included non-use values to non- Madagascar residents. Lindberg & Enriquez 1994 x x x Constructed input-output tables. Belize: All tourism + 3PAs Assessed damage form tourism. Maille & Mendelsohn 1993 PA visitor survey Beza Mahafaly SR, Madagascar Mak & Moncur 1996 x x Descrbes overuse and industry Hanauma Bay, Hawaii resistance to entry fee increases Medio 1996 x x x x Case histories of unregulated and Ras Mohamed NP, Egypt regulated marine diving tourism sites Meis & Lapierre 1995 x x x Describes 'Satellite Account' for All tourism in Canada tourism in the National Accounts Menkhaus & Lober 1996 x PA visitor survey Monteverde PR, Costa Rica Moran 1994 x Multiple PA visitor survey All PAs in Kenya Navrud & Mungatana 1994 x PA visitor survey Lake Nakuru NP, Kenya Norton-Griffiths 1995 x x x x Analyzes property rights regimes Mara Area, Kenya and returns from wildlife tourism Norton-Griffith & Southey 1995 x x x x x Analysis combining GIS results All Pas in Kenya with fnancial and economic analysis. Environmental Economics Series 7 Economic Perspectives on Nature Tourism, Conservation and Development FTNANCIAL & ECONOMIC IMPACTS ECONOMIC VALUATION STUDY BENEFITS COSTS & Direct Multipliers & Value Tourists' Other Values Direct Indirect & COMMENTS SCOPE Expenditures Leakages Added Consumer (Market & Non- Management Opportunity Surplus Market) Costs Costs Swanson et al. 1996 x x x x Describes financial & economic models Southern African conservancies of privatized wildlife operations Tobias & Mendelsohn 1991 x PA visitor survey Monteverde PR, Costa Rica Vorhies & Vorhies 1993 x x x BCA of lion introduction to a PA Pilanesberg NP, S. Africa adjacent to a major tourist resort Wagner 1996 x x Developed detailed Social Guaraquecaba BR, Brazil Accounting Matrix Wells 1993 x x Reviewed benefits/costs at 3 PA sites All NPs in Nepal & nationally. Wells 1996 x x x x Analyzed B/C distribution. Adapted All NPs in S. Africa input-output tables. KEY BCA = BENEFIT-COST ANALYSIS PR = PRIVATE RESERVRE BR = BIOSPHERE RESERVE SR = SPECIAL RESERVE CV = CONTINGENT VALUAIION METHOD TC = TRAVEL COST METHOD NP = NATIONAL PARK WHA = WORLD HERITAGE AREA PA = PROTECTED AREA 8 Environment Department Papers Economic Analysis of Nature Tourism Figure 2.1: Components of Demand for Nature Tourism A ~~Pnce~~~ e BC F 0 E D Number of Visitors tourism is then OACE. If the proportion of that it does not describe the broader economic tourist receipts from tourism that leak out of the benefits of conservation which can be associated economy (for example, by purchasing imported with a nature tourism destination. Direct use by inputs) is OF/OB, the retained gross impact of tourists is only one of the economic values which direct tourist expenditures on the economy is flow from nature tourism destinations. The other FBCG and leakages are OFGE (multipliers are values, although often substantial, are very excluded). difficult to quantify. These are described in section 4. While the model in Figure 2.1 illustrates the economic value of tourism, it is important to note Environmental Economics Series 9 Economic Perspectives on Nature Tourism, Conservation and Development 10 Environment Department Papers 3s What Has Nature Tourism's Economic Impact or Contribution Been? The economic impact of tourism is usually (Wells 1993). These indicative figures suggest measured in terms of tourists' overall spending that Nepal's parks may represent an attractive on accommodation, food, travel, souvenirs and public sector investment opportunity (higher user other expenditures. Assembling this data usually fees were subsequently collected, although park requires estimates of the total number of visitor- management budgets have remained modest). days as well as average tourist spending per day. Although surveys may be needed to generate this Estimating the proportion of tourist expenditures data, many countries gather such information attributable to nature tourism or to a particular routinely for at least some categories of visitors. nature tourism destination can be problematic, While economic impact data is not strictly especially in countries which offer a range of comparable with the costs of protected area conventional tourist attractions as well as nature management, the contrast between the two can tourist destinations. Wells (1996) found a range sometimes be used to argue for higher of credible estimates that attributed between 10% management budgets. For example, the budgets and 90% of all international arrivals in South for managing five Australian World Heritage Africa to wildlife tourism. Other attractions in a Areas studied by Driml (1994) totaled less than complex set of visitor motivations included 4% of the estimated tourist expenditures in 1991, climate, scenery, post-apartheid curiosity, visits while revenues raised through user fees were less to relatives and add-ons to business trips. than one third of one per cent of estimated tourist Similar complications can be found in many of expenditures. the major nature tourism destination countries. In Nepal, protected area tourism has expanded Theoretically, the key question in estimating the dramatically while the parks are becoming economic impacts of tourism attributable to a degraded and the financial resources provided for destination such as a protected area is: How their management have been inadequate. The much would tourism spending (and its related government collected less than $1 million in user impacts) decline if the protected area in question fees from protected area visitors in 1988, while was no longer available as a tourist destination? reluctantly spending about $5 million in The answer depends partly on the extent to which managing these areas. This suggests a $4 million other destinations provide acceptable substitutes, net expense, a significant amount in one of the and partly on the scale of the analysis. Creemers world's poorest countries. But tourism is (1996) has pointed out that the economic impact Nepal's largest foreign exchange earner and it of a nature tourism destination depends on the has been conservatively estimated that $27 geographic scale to which tourism spending million of 1988 tourist expenditures can be would be redirected if that destination was no attributed to the country's protected area network longer available. A thorough analysis would Environmental Economics Series 11 Economic Perspectives on Nature Tourism, Conservation and Development require information on where and how visitors that benefit from direct or indirect effects. The would spend the money which they would no direct, indirect and induced effects are used to longer be able to spend if a certain destination calculate economic multipliers which can then be became inaccessible, information which could be used to estimate the impacts of tourism. elicited through surveys. By definition, there can only be multiplier effects The economic impact studies described above if there are unemployed or under-employed have measured tourist spending at existing resources in an area (Ulph & Reynolds 1981). If destinations. In contrast, a recent South African there is full employment the resources purchased study considered the potential loss of tourism for the tourism sector must either have come revenues if the Greater St. Lucia Wetland Park from another sector or been attracted from was to allow mining instead of being developed elsewhere in the same economy. This is rarely an for conservation and tourism (Creemers et al. issue in most economies, where unemployment 1995). Earlier estimates of the amounts of levels are so high as to place a considerable money which tourists were likely to spend in the premium on job creation. Park were, unsurprisingly, orders of magnitude less than mining revenues projected for the Positive multiplier effects are limited by private sector. But a broader analysis using leakages, which reduce the positive economic reasonably conservative assumptions suggested impacts of tourism. At a national level, tourism that at least 20,000 fewer international tourists leakages are the proportion of the receipts would visit South Africa each year if mining derived from incoming foreigners which leave the went ahead at St. Lucia, a unique and highly country. Indicative values are shown in Table marketable attraction. At $3,750 per visit, the 3.1. Leakage is often higher during start-up or foregone annual revenue to the national tourist rapid growth phases of tourism, when the local industry would be about $75 million, an amount economy is generally unable to provide many of comparable to the expected revenues from the goods and services demanded by visitors. mining. Had the study had focused on High leakage rates for nature tourism are likely local/provincial as well as national impacts, the to persist in relatively undeveloped locations and potential deflection of domestic and international at those sites providing more luxurious and tourists to other destinations within South Africa expensive facilities. would also have needed to be taken into account. Brown et al. (1995) analyzed the expenditures of MULTIPLIERS & LEAKAGES international visitors to Hwange and Mana Pools National Parks in Zimbabwe. As expected, the Estimating the aggregate or gross value of all largest component of visitor expenditures was transactions attributable to nature tourism at a international air fares, whose external component specific site does not take multiplier effects or (excluding Air Zimbabwe) averaged 40% of total leakages into account. Economic multipliers spending. Commissions paid to agents and to result from the process by which tourist spending ground operators in foreign currencies accounted stimulates further spending and increased for a further 7.4% and 5.8%, respectively. This economic activity. There are three categories of meant that $53 out of every $100 spent by multiplier effects: (1) Direct effects are economic visitors did not enter Zimbabwe and primarily impacts directly related to nature tourism; (2) benefited the visitors' home countries (this might Indirect effects are expenditures incurred by a be referred to as pre-leakage). Of the $47 out of business or other entity when it re-spends its every $100 which was spent in Zimbabwe, gross income on wages, operating expenses or further foreign exchange leakages from agents' capital items; and (3) Induced effects arise from commissions and ground operator costs averaged the re-spending of wages earned in businesses 12 Environment Department Papers What Has Nature Tourism's Economic hnpact or Contribution Been? Table 3.1. Leakage of Gross Tourism Expenditure by Countrv Leakage as a % of Country Year Gross Tourism Receipts Seychelles 1973 60 Fiji 1979 56 Cook Islands 1979 50 St Lucia 1978 45 Aruba 1980 41 Jamaica 1991 40 US Virgin Islands 1979 36 Sri Lanka 1979 27 Antigua 1978 25 Cyprus 1991 25 Korea 1978 20 New Zealand 1977 12 Philippines 1978 11 Source: Compiled by Smith & Jenner (1992). The figures come from a variety of studies and may not be strictly comparable with one another. $12. This left $35 in Zimbabwe out of every Multiplier models vary greatly in their $100 spent by visitors on their entire trip, sophistication and rigor, inadequate data are equivalent to 65% leakage. Indirect and induced often a major drawback, and multiplier analysis multiplier effects were estimated to expand the in general appears to have fairly low credibility impact of this $35 by 56% to about $55. (Mathiesen & Wall 1982). Even when adjusted for multipliers and leakages, estimates of total The items commonly included in analyses of tourist expenditures do not take into account the leakages are the import of materials and capital costs of the inputs to the tourism industry, and goods for the tourism industry, the import of thereby overstate tourism benefits. Gross consumables (food, drink, film, etc.), the tourism expenditures are not comparable to gross employment of foreigners and the repatriation of domestic product (GDP), which is calculated on profits by foreign companies involved in the a value-added basis. Relatively few studies have industry. But Smith & Jenner (1992) have attempted to directly estimate value-added for the argued that leakages should also include interest nature tourism sector, although Norton-Griffith charges on foreign debt incurred for tourism & Southey (1995) estimated the value-added of development, overseas promotion by the national Kenya's wildlife tourism sector, an essential step tourism organization and by individual tourism in comparing nature tourism to alternative land companies, the depreciation of infrastructure use options (Table 3.2). (roads, airports and sewerage systems) due to international tourism, as well as damage to the In the mainstream tourism literture, the most built and natural environment, popular method of estimating indirect and Value Added induced effects has been input-output analysis. Input-output tables usually require Estimating multiplier effects and leakages with a an extensive amount of work, which may not reasonable degree of accuracy is difficult. be justified by the practical applicability of Environmental Economics Series 13 Economic Perspectives on Nature Tourism, Conservation and Development Table 3.2. Gross Revenues and Net Retum to the Kenya Wildlife Tourism Sector in 1989 Gross revenues from tourism $ 419.0 million Attributed to the wildlife sector (50%) 209.5 Foreign exchange retention (82.4%) 173.0 Operating surplus (30% of retained foreign exchange) 51.9 Gross capital charges 58.2 Net return (loss) to the wildlife sector (6.3) Foreign exchange premium (FEP - 20%) 34.6 Net retums to wildlife sector with FEP $ 27.2 million Source: Norton-Griffiths & Southey (1995) Notes: 1. The average foreign visitor came to Kenya for about 14 days, spent 6.1 nights in a coastal hotel, 1.9 nights in a Nairobi hotel, 1.1 nights in a game park and 4.5 nights elsewhere. The authors question the presumption that game parks drive the tourist trade in Kenya, estimating that tourism might decrease as little as 29% if there were no parks and by as much as 67% if there were no coast. But they use a relatively high estimate of 50% as the proportion of tourist revenues attributable to the wildlife parks and reserves. The rate of foreign exchange retention (i.e., net of leakages), the percentage operating surplus and the gross capital charges (reflecting the opportunity cost of capital) were based on estimates by a 1977 Economist Intelligence Unit study. 2. If no allowance is made for persistent over-valuation of the Kenyan shilling, the net loss to the Kenyan economy from wildlife tourism is $6.3 million. But using a 20% premium on net foreign exchange earnings gives a net gain of $27.2 million, or 6.4% of the gross revenues from all tourism. Using 1977 data in 1989 requires some qualification, as the authors' point out. Largely due to devaluation of the Kenyan shilling, the constant dollar cost of foreign visits in 1990 was only 42% of what it was in 1977, while the real cost of resources provided in Kenya for each visitor have risen by 54%. Such dramatic shifts reinforce the tentative nature of these calculations. the results. Another possibility is to build a output tables for Belize, where nature tourism model of the economy around input-output predominates, and Wagner (1996) used a Social methodology, but this is likely to be a highly Accounting Matrix to examine the regional demanding exercise and only worthwhile under economic effects of ecotourism in a conservation unusual circumstances (Briassoulis 1991; area in Brazil. Canada has developed a Tourism CNPPA 1996). An input-output model Satellite Account (TSA) as an extension of the traditionally only accounts for production when System of National Accounts (SNA). Using the determining economic impacts, while a Social SNA's input-output framework, the satellite Accounting Matrix accounts for production, account allows the demand and supply sides of demand and income distribution when tourism to be examined within a balanced determining economic impacts. Very little work accounting system which describes the has been done on the multiplier and leakage production and demand functions of the whole effects of nature tourism specifically, although economy. The first prototype Canadian TSA Lindberg & Enriquez (1994) constructed input- was completed in 1994 but related to 1988, the 14 Enviromnent Department Papers What Has Nature Tourism's Economic Inpact or Contribution Been? latest year for which needed data were available. the Canadian economy, equivalent to 3% of Inputs included tourism expenditure surveys, a GDP, and supported 467,000 full-time jobs, national family expenditure survey, surveys of equivalent to 5% of all business sector travel agencies, tour operators and tour employment. These results indicated a much wholesalers, as well as the consumer price index greater tourism impact than earlier estimates. and national input-output tables. The TSA Filion et al. (1994) report estimates that as much indicated that total 1988 tourist expenditures in as one quarter of tourist expenditures in Canada Canada were $24.2 billion, 22% of which was can be attributed to wildlife tourism, suggesting spent by foreign tourists (Meis & Lapierre very substantial impacts on the national 1995). These expenditures generated an economy. estimated $10.7 billion of direct value-added in Environmental Economics Series 15 Economic Perspectives on Nature Tourism, Conservation and Development 16 Environmental Department Papers What are the Net Economic Benefits of Nature Tourism? The total economic benefit from tourism is pay but did not have to. In the context of nature represented by visitors' aggregate willingness to tourism, it is vital to distinguish between visitors' pay for their experience. Willingness to pay willingness to pay to visit a destination and their includes tourist expenditures, as discussed in the willingness to pay to conserve the destination. previous section. But tourist expenditures are an The latter value can be expected to be much incomplete measure of the economic value of higher. nature tourism. This is because many visitors to nature tourism destinations pay a total amount The design, analysis and interpretation of CVM for travel, accommodation, park entry, and so on, surveys has improved greatly in recent years, which is less than the maximum amount that although the method is still controversial and individual would have been prepared to pay needs to be used cautiously (Brown 1996). The (Dixon & Sherman 1990; Lindberg 1991). This basic problem with CVM is that it does not use difference between what an individual actually people's actions to discover how much they value pays and the maximum amount they would be something, and the replies people are prepared to prepared to pay is known as consumer surplus. give to a survey questionnaire may be different Willingness to pay, or total economic value, from how they behave in practice. People's therefore includes both actual expenditures and answers are likely to vary depending on how consumer surplus. Methods have been developed questions are framed and even when they are to estimate willingness to pay and consumer asked. surplus, and these have been applied in several developing country studies since 1990. Indirect approaches try to elicit preferences from actual, observed market-based information. The WILLINGNESS TO PAY travel cost method has often been used to value consumer surplus in relation to parks, using There are two broad approaches to valuing expenditures incurred on travel to develop a willingness to pay (WTP). Direct approaches demand curve for a recreational experience. The attempt to elicit preferences by the use of survey approach typically uses information on time and techniques. People are asked directly to state money spent by people in getting to a site as a their strength of preference for a proposed basis for estimating WTP for a site visit (Pearce change, such as protecting a natural area, & Moran 1994). This method only applies to use increasing an entry fee, or using a park for values. Multi-purpose trips an the need to mining. The contingent valuation method (CVM) estimate the cost of visitors' time both present asks people how much they are willing to pay. challenges to use of the travel cost method which The aggregate measure of consumer surplus, as have yet to be solved. As with CVM, the travel elicited from a CVM study, represents the cost method can measure the total value of amount that tourists would have been prepared to tourism as well as consumer surplus. Environmental Economics Series 17 Economic Perspectives on Nature Tourism, Conservation and Development Table 4.1 summarizes the results of recent WTP Chase and colleague's (1996) consumer surplus studies for protected area tourism. These studies estimate of $21-25 per visitor only considered used CVM and/or travel cost methods to estimate WTP to enter three other parks in Costa Rica. annual consumer surplus. The studies are not The sophisticated entry fee policies at easy to compare because of differences in Monteverde are discussed further in Section 5. sampling procedures and questionnaire design, as well as the characteristics of the sites themselves. Despite the recent popularity of willingness-to- Most of the studies focused on one or a few pay surveys of park tourism, their practical value protected areas, although Moran (1994) remains questionable. In theory, such studies estimated consumer surplus for wildlife tourism enable a tourism demand function to be in Kenya at $450 million. This seems broadly estimated. But the variety and complexity ofthe compatible with Navrud & Mungatana's (1994) methods used, combined with the volatility of estimate of $15 million for Lake Nakuru tourist preferences, do not make single willing- National Park. Extrapolation of results in ness-to-pay surveys a reliable basis for setting neighboring Tanzania by Clark et al. (1995) park entry fees. The most valuable function of yielded an estimate of foregone revenues of $6 these studies has undoubtedly been to alert million annually for the entire park system, policymakers and park managers that they could although the focus here seems to have been on charge higher, sometimes much higher, prices for park entry fees rather than total tourist park entry, thereby capturing a greater propor- expenditures. Kaosa-ard et al. (1995) estimated tion of tourism's economic value. The results of consumer surplus for Khao Yai National Park in some of the efforts to increase tourist user fees Thailand at over $20 million, virtually all of for park entry are discussed in Section 5. which is attributed to Thai, rather than international, visitors. Only Brown et al. (1995) OTHER ECONOMIC BENEFITS FROM estimated tourist expenditures ($42 million) as NATURE TOURISM well as consumer surplus ($8 million), enabling them to sum the two for a $50 million estimate of While tourism itself will often provide the most tourism's total economic benefit at two protected obvious and readily-measurable economic areas in Zimbabwe. This study also used a benefits, a range of other benefits are also likely combination of travel cost and contingent value to be present. Dixon et al. (1995) refer to these surveys to estimate consumer surplus at $68-101 as 'joint products' of nature tourism attractions. per visitor day. Chase et al (1996) showed with The Total Economic Value (TEV) approach is a econometric analysis the possibility of using useful way to classify these values (Table 4.2). price variations to direct tourists away from Conceptually, the TEV of a protected area heavily-used sites in Costa Rica. consists of its use value (UV) and non-use value Three independent WTP studies have been (NUV). A use value, as the name suggests, carried out at Monteverde Cloud Forest arises from the actual use made of a given Biological Preserve in Costa Rica. Using the resource. Use values are further divided into travel cost method, annual consumer surplus was direct use values (DUV), such as subsistence or estimated at $35 for each Costa Rican visitor trophy hunting, livestock grazing and collection (Tobias & Mendelsohn 1991) and $1,150 for of medicinal plants, and indirect use values each US visitor (Menkhaus & Lober 1996). (IUV), which refer to the benefits deriving from Echeverria et al. (1995) used CVM to estimate ecosystem functions such as nutrient cycling, annual consumer surplus for all visitor categories watershed protection, waste assimilation, climate at $121. The results from such studies do regulation, store of genetic materials (Pearce & require very careful analysis before even limited Moran 1994). conclusions can be drawn. For example, Echeverria et al. (1995) measured visitors' Non-use values (NUV) are more difficult to willingness to pay to conserve Monteverde while define, and there are at least two types. Option 18 Environment Departnent Papers What are the Net Economic Benefits of Nature Tourism? TABLE 4.1: RESULTS OF NATURE TOURISM WILLINGNESS-TO-PAY STUDIES _ ELEMENTS OF ECONOMIC VALUE (US$) STUDY YEAR NUMBER OF CONSUMER SURPLUS ANNUAL PA AREA OF & STUDIED VISITORS PER IN COLLECTED BUDGET SITE COMMENTS SCOPE VISITOR AGGREGATE IN ENTRY FEES (US$) (ha) Barnes 1996 1992 64,000.00 $307 (CV) Tot $20 million S7-1S per visitor na na All visitors surveyed PAs in Botswana $437 (CV) Foreigners (mainly international) Brown et al. 1994 1993 na $499-858 (TC) na na na na International visitors All PAs in Kenya $332-550 (CV) surveyed Brown et al. 1995 1993 20,000.00 $326485 $6.5-9.7 million $250,000 na na International visitors 2 NPs in Zimbabwe (TC + CV) surveyed Chase et al. 1996 1995 na $21-25 (CV) na na na na International visitors 3 NPs in Costa Rica surveyed Clark et al 1995 1993 14,911 NR $16.63 NR (CV) $243,944 NR $298,220 NR na 260,000.00 Deducted use fees from Tarangire NP, Tanzania 15,409 NNR $6.37 NNR (CV) $98,155 NNR $154,090 NNR authors' CS estimates NR = Nonresident Extrapolated across all 1993 na na $2.0 million NR $2.4 million NR $2.6 million na NNR = Non-national NPs in Tanzania na na $0.8 million NNR $1.2 million NNR resident Dixon et al. 199S 1991 18,700.00 $17.40 (CV) $325,000 $187,000 $668,000 na International visitors Bonaire Marine Park ($10/visitor) surveyed Echeverria et al. 1995 1991/92 32,213.00 $121 (CV) $2,380,000 na $3-600,000 10,000.00 Costa Rican and intnl Monteverde PR, Costa (39% had CS of (Aylward 1996) visitors surveyed Rica zero) Kaosa-ard, M. et al. 1995 199? 600,000.00 $34.80 (TC) $20,880,000 $120,000 na 217,000.00 Thais surveyed. Option Khao Yai NP, Thailand $0.68 (CV) $408,000 ($0.20/visitor) (see full study) ($7/non-visitor) & (diff. unexplained) existence ($291visitor) values estimnated. Kramer et al. 1995 1990 3,900.00 $24 (RD) $93,600 na na 9,875.00 Intnl visitors. Non-use Mantadia NP, Madagascar $65 (CV) $253,500 values est. at $24-31 per .___________________ US household Maille & Mendelsohn 1991 na $276-360 (TC) na $1 1/visitor na 640 International visitors 1993 surveyed Besa Mahafaly SR, Madagascar Enviromnental Economics Series 19 Economic Perspectives on Nature Tourism, Conservation and Development ELEMENTS OF ECONOMIC VALUE (US$) STUDY YEAR NUMBER OF CONSUMER SURPLUS ANNUAL PA AREA OF & STUDIED VISITORS PER IN COLLECTED BUDGET SITE COMMENTS SCOPE VISITOR AGGREGATE IN ENTRY FEES (USS) (ha) MedIo 1996 1994t95 500,000.00 $15.45 $7,725,000 $590,000 na na Egyptian and intnl Ras Mohamed NP, Egypt (MW estimates visitors surveyed from study report) Moran 1994 1992 na na $450 million (CV) na na na hitni visitors surveyed All PAs in Kenya at PAs and airport Navrud & Mungatana 1991 141,332.00 $53 (CV) $7.5 million $720,000 na 18,800.00 1994 Lake Nakuru NP, Kenya 52,803 (KR) $68-85 (TC) $3.6 -4.5 million KR = Kenya residents 88,529 (NR) $114-120 (TC) $10.1-10.6 million NR = Non-Kenya $13.7-15.1 million residents Tobias & Mendelsohn 1988 3,000/15,000 $35 (TC) $97,500-116,200 na $75,000 10,000.00 Costa Ricans surveyed. 1991 (Aylward 1996) Foreign visitors' CS Monteverde PR, Costa from C. Rica estimated at $400,000- Rica 500,000.. KEY BCA = Benefit-Cost Analysis BR = Biosphere Reserve CS = Consumers' Surplus CV = Contingent Valuation Method NP = National Park PA = Protected Area RD = Recreation Demand (an adaptation of the travel cost method) TC = Travel Cost Method 20 Environment Department Papers What are the Net Economic Benefits of Nature Tourism? value (OV) is like an insurance value, the amount these benefits, and how to share them more that individuals would pay to safeguard an asset equitably. for the option of using it at a future date. Existence value (EV) is unrelated either to Cost of Nature Tourism current use or to the possibility of future use. Its intuitive basis is easy to understand because a Three different types of costs are involved in great many people reveal their willingness to pay establishing and maintaining nature tourism for the existence of natural assets through destinations: direct, indirect and opportunity wildlife and other environmental charities, even costs (Sherman & Dixon 1991). without experiencing wildlife directly (Pearce & Moran 1994). Assembling these components, Direct costs TEV can then be expressed as follows: These include the purchase of land, preparation TEV = UV + NUV of management plans, capital expenditures, development and maintenance of roads and TEV = DIV + IUV + OV + EV facilities, and all recurrent management and administration costs. Some of the most-visited Many of these benefits are extremely difficult to protected areas include significant tourist quantify with any degree of reliability. But TEV operations. In such cases, it is important to does at least give a framework for thinking about distinguish the costs of biodiversity conservation different protected area benefits, how to increase from the costs of operating tourism facilities and Table 4.2. Components of the total economic value of nature tourism destinations USE VALUES Direct Use Values Recreation/tourism Sustainable use of plant and animal products Education Research Indirect Use Values Diverse ecosystems, species and genetic resources Maintenance of ecological processes Essential life support systems of the biosphere Fixing and cycling nutrients Watershed protection (forest function, erosion and sedimentation control) Evolutionary processes NON-USE VALUES Option Values Future use values Existence Values Aesthetic, spiritual, cultural and bequest values Sources: Adapted from Dixon & Sherman (1990); Pearce & Moran (1994). Environmental Economics Series 21 Economic Perspectives on Nature Tourism, Conservation and Development managing tourism's environmental impacts. For plants and animals, including hunting and example, South Africa's National Parks Board livestock grazing by local communities (Sherman runs sophisticated tourism operations inside its & Dixon 1991). These two categories arise from parks. The National Parks Board's 1994/95 different land uses and are not additive. budget anticipated net tourism earnings of $8.8 million on gross revenues of $32.8 million, Agricultural development is likely to be the most providing 54% of the direct park management economically-attractive alternative to nature costs of $16.3 million. Government grants, tourism in rural areas of developing countries. which are being reduced in real terms each year, Most alternative uses will not be complementary are needed to finance the remainder (Wells with nature tourism, although wildlife tourism, 1996). Relatively few park agencies in other trophy hunting and extensive livestock grazing do developing countries are able to contemplate have the potential to co-exist in some arid parts financing such a large proportion of their own of Africa. direct management costs through tourism. COMPARING COST AND BENEFTITS In developing countries, the amounts being spent on park management usually understate direct The Total Economic Value framework can be costs because there is an almost-universal used to illustrate how policy makers can evaluate underinvestment in nature protection. Nature nature tourism as a land use option. Net benefits tourism can also require substantial public (NB) are equal to benefits less direct and indirect investments in infrastructure. For example, costs, and opportunity costs (OC) are equal to Southgate (1996) argues that nature tourism's the benefits less costs of the most attractive continued success and rapid growth in Costa development alternative: Rica will require major improvements - i.e., expensive investments, in the rural road network. NBcvt, - NBTom + NBOthr DirecUe + In such cases, actual expenditures understate the NBIndrcttU.e & N. Us - OCC.eauo true costs of nature tourism. Indirect costs The net benefits of indirect use and nonuse will usually be very difficult to estimate. Decisions T'hese measure the value of adverse impacts will therefore tend to be based on a comparison attributable to protected areas, including property of the net benefits of conservation (of which damage or personal injuries caused by wildlife, tourism is often the easiest to measure) with T'hese local costs have not been estimnated but opportunity costs - the net benefits of foregone they are widely agreed to be substantial development opportunities. In this case, nature throughout many parts of Africa, Asia and Latin tourism will be considered preferable when: America, particularly where large mammals are + NBth.Diet U OCC ti. present. Opportunity Costs Very few studies have attempted to measure nature tourism's opportunity costs for cornparison with the value of tourism and These are the value of benefits foregone as a .. . ~~~~~~~~conservation. Engelbrechit &van der Walt result of the decision to protect an area and itS (1993)aconcluded ht t ecnomic valu resoures. 'ere ar two ategores of(1993) concluded that the economic value of resources. There. airestw cathegies ecofc wildlife tourism at Kruger National Park in opportunity costs. Fs thenet eoom ic g South Africa substantially exceeded the net b i h o b i f c rbenefits from converting the park to livestock and a park to an alternative use - such as forestry, maize roduction. In Kenya Norton-Griffiths & mining or intensive livestock ranching; second, y the benefits foregone from potential harvestmg of 22 Envirounent Department Papers What are the Net Economic Benefits of Nature Tourism? systems to integrate information on land use costs which is used as a benchmark by the Global potential, land use surveys and farm budgets to Environment Facility. estimate that Kenya could be foregoing $161 million each year from potential agricultural Comparisons of partial costs and benefits can development in its parks and forests, equivalent also yield useful results. An interesting benefit- to 2.2% of GDP (some observers argue that this cost study evaluated the economic impact of estimate of agricultural potential is unreasonably introducing lions into Pilanesberg National Park, high). This does not look very promising for South Africa (Vorhies and Vorhies 1993). The conservation when compared to the wildlife presence of lions in the park was considered tourism sector's estimated value added of only critical if more foreign visitors were to be $27 million (Table 3.2). But Moran (1994) attracted to the nearby Sun City Resort Complex. estimated the economic value of wildlife tourism The study examined the annualized net returns to in Kenya to be $450 million per annum. As the park (a financial analysis) and to the region Pearce (1996) points out, the two assessments (an economic impact analysis). It was projected are quite consistent: financial returns can be less that the park would incur additional direct than opportunity cost while economic value can costs of $250,000 a year from introducing be greater than opportunity cost. The pessinmsm lions, including extra fencing and security, of the former conclusion is offset by the latter plus the value of the animals which the lions were finding, but only if ways can be found to capture ' ~~~~~~~~~~~expected to eat (which otherwise could have been the broader economic value. Of course, most sold). At the regional level, additional net markets function by dividing net benefits among revenues of $4-9 million to the resort complex producers and consumers and it would be were anticipated each year, showing how a public unreasonable to expect suppliers of tourism to investment in wildlife can be repaid by generating capture all of the consumer surplus (Aylward, higher private sector income. personal communication). In one of the most comprehensive studies of its Full or partial benefit-cost comparisons of nature type, Norton-Griffiths (1995) examined the tourism can yield important and useful financial and economic costs and benefits of information. But a variety of different tourism vs. agricultural development on Maasai- approaches have been used, and relatively little owned grazing lands adjacent to the Maasai of this information has been estimated in ways Mara National Reserve, part of the Serengeti which facilitate comparisons between different ecosystem (Box 4.1). He calculated the areas case studies, whether these are site-specific or at which would need to be protected from a national scale. From a policymaking development in order to maximize both national perspective, the most useful analyses are usually and global net economic benefits. For an those which carry out both financial analysis (of equitable solution, the former case would require the private returns to the entrepreneur or compensation for foregone development profits to landowner) and economic analysis (of the returns the Maasai landowners of $2.5 million annually - to society as a whole). For a discussion of the equivalent to $80 per tourist per day. The latter differences between a financila analysis and an case would require an additional $12 million in economic welfare analysis, see Sherman & Dixon annual compensation payments to secure global (1991). benefits estimated at $17 million. This $12 million approximates the concept of incremental Environmental Economics Series 23 Economic Perspectives on Nature Tourism, Conservation and Development Box 4.1 Property Rights and Opportunity Costs of the Mara Area, Kenya The Mara Area forms part of the Serengeti ecosystem. At its core are the 1,368 km2 Maasai Mara National Reserve (MMNR), owned and operated by the Kenyan Government, surrounded by 4,566 km2 of Group Ranches which are owned by pastoral Maasai people. The Maasai are denied traditional access to the MMNR, where tourism is the only permitted use. The Mara Area has become Kenya's premier tourist destination, with the MMNR attracting 10% of all tourist bednights and generating $20 million in gross revenues (Douglas-Hamilton 1988, cited in Norton-Griffiths 1995). Wildlife tourism, agriculture and livestock on the Group Ranches generate gross annual revenues of $10 million, $3.8 million and $2.4 million, respectively. The Mara Area's principal conservation value is to provide critical seasonal grazing for the Serengeti migratory wildebeest population, currently about 1.5 million animals, which spill out in huge numbers over the grazing lands of the Group Ranches during the dry season. The Maasai are increasingly developing their land and converting from traditional pastoralism, which is generally compatible with wildlife conservation and tourism, to agriculture and ranching, which are not. Loss of dry season grazing lands will also lower the wildebeest population and reduce biodiversity in the Mara Area. Tourism's net opportunity costs to the Maasai landowners was estimated at $26.8 million annually, split between the Inner Ranches ($2.5 m) and the Outer Ranches ($24.3 m). This is a significant sum, equivalent to $80/tourist/day. Separate benefit-cost analyses of the MMNR and the Inner and Outer Ranches were carried out. While the national benefits from tourism and conservation exceeded costs for the MMNR and Inner Ranches, the Outer Ranches only provided net benefits if global values were taken into account. The global values were estimated at $120/ha on the basis of tourist consumer surplus, existence values evidenced by debt-for-nature swaps and carbon sequestration values. On this basis, it would not be socially profitable for Kenya acting alone to prevent development of the high potential land of the Outer Group Ranches, and halting development of the Inner Ranches would require a $2.5 million annual transfer to the landowners to compensate them for foregone development opportunities. Conserving the 1,419 km2 of the Outer Ranches considered optimal for conservation would require $12 million in annual compensation payments to secure global benefits estimated at $17 million. Justification for the Kenyan Government to finance this amount is currently lacking. Source: Norton-Griffith (1995) 24 Environment Departnent Papers What are the Options for Capturing 5 More of the Net Benefits of Nature Tourism? The previous section described how various parks and reserves (Moran 1994). Overall, studies have attempted to estimate the net KWS estimates that it collects as little as 3% of economic value of nature tourism. But it is a all tourist expenditures. Since most wildlife further challenge for nature tourism destinations conservation agencies face steady or declining to capture a substantial proportion of these budgets, setting an appropriate park entry fee to values. If the economic benefits associated with maximizing their fee income is critical. In fact, nature tourism are to provide an increased for park management agencies in many countries, incentive for conservation, then realizable charging higher entry fees to visitors is the only benefits will need to outweigh costs at national as way they can capture a larger share of the well as local levels. One way to increase benefit economic value of protected area tourism. capture is by increasing prices, either for protected area entry or for goods and services Lindberg (1991) has shown how the societal net supplied by the private sector (transport, benefits for a nature tourism destination are not accommodation, food and drink, guides, and so maximized where the number of tourists is on). Other ways to increase benefit capture are greatest, but where net benefits (total benefits through developing new tourist facilities, offering less total costs) are maximized, a point which can complementary services and minimizing leakages only be achieved either by charging higher prices (Lindberg 1991). to the point where some visitors are deterred or by imposing a physical limit on visitor numbers. HIGHER USER FEES FOR NATURE Raising entry fees usually offers the dual TOURISM DESTINATIONS advantage of increasing net revenues while reducing the numbers of visitors, thereby also Entry fees for protected areas in developing reducing visitors' total environmental impact. countries have traditionally been very low, with a few exceptions. Recommending higher entry fees The managers of truly unique and appealing has become a standard recommendation for locations with a clearly-differentiated product economists studying protected areas (Dixon & should be able to charge much higher prices than Sherman 1990; Lindberg & Huber 1993). This their competitors. Rwanda's Parc National des recommendation is critical where gate entry fees Volcans and Ecuador's Galapagos National Park are the most significant source of revenue for are often cited as examples. By the late 1980s, parks and reserves. For example, as much of the Parc National des Volcans was charging 90% of the income of the Kenya Wildlife Service $170 per visit to see its celebrated gorillas, with (KWS) comes from gate receipts, which in 1991 the maximum number of visitors per year set at amounted to about $8 million from 22 national 6,000 (Lindberg 1991). Even somewhat less Enviromnental Economics Series 25 Economic Perspectives on Nature Tourism, Conservation and Development unique locations can often increase their fees for managers to develop parks as viable nature dramatically without discouraging visitors. tourism destinations and collect higher revenues. Efforts to capture a greater share of Galapagos While economists and others may point out the National Park tourism's economic value have gains in economic and environmental efficiency only intensified recently, as described by associated with higher user fees, persuading the Southgate (1996). A 1986 study suggested the private sector to accept fee increases through a prospect of dramatically increasing total revenues political process can be problematic, particularly while significantly reducing visitors' when private operators have become accustomed environmental impacts if the prevailing entry fee to fees which are very low. Mak & Moncur of $40 per visit was increased to $214 per day (1996) describe an example from the USA. for foreigners (Edwards 1991, cited in Southgate Hanauma Bay in Hawaii, a 10-acre coral reef 1996). The entry fee for foreigners was park, received about half a million visitors in eventually increased from $40 to $80 per visit in 1975. By the late 1980s it was attracting 2.8 1993. Many visitors to the Galapagos take million visitors annually, averaging over 7,500 cruises, and the fees assessed on boat operators per day, an increase entirely due to non-resident have been very low. A ship carrying 90 guests in tourists. This huge increase threatened both the 1992 paid a total fee of about $600, while natural environment, with ample evidence of generating as much as $4 million in operator damage to the reef, and the quality of the visitor gross revenues. Ship fees were increased in experience, particularly since the public funds 1993, however. Following the 1993 fee made available for management were minimal. increases, park revenues of $3.7 million were As a response to overcrowding, non-price collected in 1995, compared to $2.2 million in rationing was first introduced: limiting hours of 1992. The Galapagos National Park kept a part access, restricting tour vehicles and closing the of these funds (30% in 1991) while the rest were park for half a day each week. Admission was used to cross-subsidize mainland parks. on a first-come, first-serve basis. Then a $5 admission fee was added for non-residents and in This sounds like a success story for Ecuadorian six months generated $2 million, more than parks. But by 1996 the Ministry of Finance was enough to finance park management. But the prepared to allow a totally inadequate budget of tourist industry (principally the taxi and bus only $1.2 million for the entire park system, operators bringing tourists to the park) mounted while planning to use the remaining funds a powerful, sophisticated and largely successful generated by Galapagos National Park for other political campaign opposing any form of national priorities. This suggests that local restriction or user fee. As a result, the use governments, local businesses, and the mainland restrictions were relaxed and the fee was parks in Ecuador now face a new and powerful rescinded, only to be reinstated later at a lower competitor for scarce financial resources level which had virtually no effect on visitor (Southgate 1996). numbers, although it did at least provide funds for management. This experience highlights the Revenues from tourism are not re-invested in difficulty for natural resource managers in conservation in many developing countries where balancing efficiency criteria with political park entry and other tourism user fees are passed feasibility, and illustrates the capacity of tourism directly to the central government for pooling industry interest groups to rally opposition with other public sector revenue sources. While against use restrictions, price or otherwise. governments are fully entitled to decide on national priorities for public sector spending, this One of the specters commonly raised by the does have the effect of destroying the incentive private sector in response to proposed increased entry fees is that tourists will be discouraged 26 Environment Department Papers What are the Options for Capturing More of the Net Benefits of Nature Tourism? from visiting or a country or a specific region period. Most 1994/95 visitors to Costa Rica within a country. This fear may have received would already have committed to their travel insufficient attention from environmental plans before the price increase became known, economists. The financial benefit to an attraction while visitors in later years might choose a from increasing its fees may be outweighed by different type of travel experience (in contrast, the cost of reduced visitor spending in the Barnes (1996) reported exactly the opposite broader economy. This has been one of the following a sharp entry fee increase in Botswana: dilemmas encountered in setting fee levels for the growth in visitor numbers initially slowed and national park entry in Costa Rica, where park then recovered). Concern that higher park entry fees issues have probably received more entrance fees might be deterring visitors to Costa attention than in any other country. Rica led to another revision in fee structure in July 1995, when advance purchase tickets for Several studies show that visitors' willingness-to- foreign visitors to the less-popular parks were pay for access to Costa Rica's protected areas reduced to $5 or $7 (Southgate 1996). exceeds the nominal admission fees charged as recently as late 1994 (e.g., Balderas & Laarman Multiple pricing policies have been implemented 1990, cited in Southgate 1996; Tobias & in several countries, usually charging relatively- Mendelsohn 1991; Echeverria et al. 1995). But affluent foreigners a higher fee than locals and fee increases introduced in 1994 aroused the thereby meeting the twin objectives of raising anger of tourism operators and many of their revenues from those with the ability to pay more, clients, who not only had grown accustomed to without denying citizens access to their natural paltry charges but doubted that the additional heritage (Lindberg 1991; Lindberg & Huber revenues would be reinvested in trail maintenance 1993). Such price discrimination is practiced and visitor facilities. It was also feared that the with great precision at the Monteverde Cloud new higher prices might discourage foreigners Forest Biological Preserve in Costa Rica, where from visiting Costa Rica and/or exceed the levels a variable entrance fee policy is followed, required to maximize revenues (Southgate 1996). designed to charge higher fees to those tourists most willing and able to pay more (and vice Park fees for both Costa Ricans and foreigners versa). Fees were as follows in 1995: a token fee were $1.25 per day until September 1994. Fees of <$1 for Costa Rican students; $1.50 for Costa for foreigners were then adjusted to $10 per day Rican nationals and residents; $4 for foreign payable at least one day in advance or $15 per students; $8 for foreigners (not on package day payable on entry. Travel agents were sold tours); and $16 for foreigners on tours. tickets for $5 each. A brisk trade in discounted Foreigners have recently accounted for 80% of tickets emerged quickly. Some park the visits and 97% of the revenues. The fee administrators resented the new fees and did not policy thus effectively raises revenues for enforce their collection (Chase et al. 1996). But management while keeping the reserve accessible the policy change still appeared to have a major to some (if not all) local and other Costa Rican impact on park use, cutting the number of foreign residents (Aylward et al 1996). visitors by 43% during the following tourist season. For a four- to twelve-fold increase in HIGHER ECONOMIC RENTS FOR admission fees to cause visits to decline by less THE TOURISM PRIVATE SECTOR than half suggests that international demand for admission to Costa Rica's parks is price- The ability of private sector tourism operators to inelastic, and that the park service's financial earn higher economic rents (i.e., long-term position - if not that of the private sector -would profits) through increased prices will largely be strengthened by the increases (Southgate depend on whether access to the market for a 1996). But Chase et al. (1996) cautions that particular nature tourism destination is limited. demand might be more elastic over a longer Environmental Economics Series 27 Economic Perspectives on Nature Tourism, Conservation and Development As natural resources, nature tourism destinations common interest by investing in conservation. have scarcity or rental value. But if a popular Sharm hoteliers have provided more mooring attraction permits open access to unlimited sites and diver briefings to spread impacts and numbers of tourists and tour operators, this can reduce unnecessary damage. They have also not only result in environmental degradation and invested in sewage control and underwater overcrowding but is economically inefficient. visibility is far greater. As a result, Sharm hotels Unlimited competition forces prices down to a are able to charge almost double those at point where the scarcity value of the site is lost to Hurghada. Government restriction of resource the tourists as consumer surplus and competition use (and monitoring to ensure compliance with between local suppliers' dissipates the profits. the restriction) has allowed economic rents to be This is because the prospect of any remaining created and established incentives for operators profits will tend to attract new market entrants to invest in protecting the reef. Further growth at charging lower and lower prices until average Sharm will have to be counterbalanced by revenues are driven down to the value of average maintaining current incentives to protect the reef costs, and profits are thereby eliminated due to at the tour operator level. This will depend on price competition and excess capacity (like an the enforcement capacity of the management open-access fishery). This is in contrast to a authority as well as the continued existence of situation with regulated entry, where access is positive rents to be gained from conservation limited to a fixed number of operators which can investments. act as partial monopolists and charge prices above marginal cost to earn positive profits Private reserves and privately-owned nature (Steele 1995). Unfortunately many nature tourism destinations have received only moderate tourism destinations, and especially protected attention in the literature. Most of the areas, are controlled by one or a few information on privately-owned reserves comes monopolists, often including the government. from two comparable surveys carried out in 1989 These tend to be no more successful than other (Alderman 1994) and 1993 (Langholz 1996). In nationalized industries. 1993, questionnaires were sent to 97 private reserves in Latin America and sub-Saharan The environmental and economic gains from Africa. Of the 32 reserve managers who limiting and regulating access to nature tourism responded, more than half reported making a destinations is clearly illustrated in a study by profit, with average profits having risen 21% Medio (1996) of Hurghada and Sharm el Sheikh, since 1989. Tourism provided 67% of operating two Red Sea diving resorts in Egypt. Hurghada income and private grants another 19%. The has allowed unlimited reef use for tourism and reserves varied in size from 6 ha to 80,000 ha, fishing, as well as unrestricted coastline with an average of about 8,000 ha. About 70% development. In contrast, Sharm has carefully of the respondents had recovered their initial managed coral reef use, has restricted coastal investment by 1993, compared with 25% by development and uses an effective compliance 1989, and 72% believed they could generate monitoring program. The contrast in results at more income through tourism than alternative these Red Sea diving resorts has been dramatic land uses. Many reserves did not expect to be (Figure 5.1). With Hurghada's "mass" tourism, profitable, being motivated more by conservation development density is nearly three times greater than personal or economic goals. The managers and the reef suffers from overuse (three times as attributed most of their successes to the presence many visitors and twice as many boats), reckless of 'interesting ecological features' and considered exploitation (unnecessary damage from hotel government involvement the least important construction and unmanaged diving) and factor. Local employment and community pollution (leading to poor visibility). With relations were repeatedly emphasized as Sharm's "specialized" tourism, the restricted important concerns. number of operators have recognized their 28 Environment Department Papers What are the Options for Capturing More of the Net Benefits of Nature Tourismn? Figure 5.1. Key indicators at Sharm el Sheikh and Hurghada coral reef resorts, Egypt Sharm Hurkhada Government Intervention Urban Planning yes no Monitoring Program yes no Public Awareness Program yes no Fishing Regulations yes no Development Density Indicators Hotels 40 127 Dive Centers 27 85 Boats 220 400 Investment for Conservation Dive Sites 37 30 Fixed Moorings 108 65 % of Divers Briefed 65 4 Conservation Benefits Sewage Pollution no yes Infilling 1/40 64/75 Underwater Visibility (m) 15-30 1-2 Anchor Damage negligible significant Rents from Conservation Average Price of Tour Package US$45 US$27 Source: Medio (1996) The Monteverde Cloud Forest Biological Aylward et al. (1996) report that entrance fees Preserve, one of Costa Rica's most popular raised $376,000 (45%/o) of the Monteverde tourist destinations, is one of the most successful Preserve's $841,000 total revenues in 1993. and well-known private reserves. Originating Other revenue sources included a natural history from a 500 ha plot set aside by a group of program, a gift store and a snack bar. Total American Quakers in the 1950s, the reserve 1993 costs were $772,000, leaving net revenues reached its current size of 10,000 ha in 1991 of $69,000. The Preserve has generated a after a lengthy and complex series of land surplus each year since 1988. Tourism has acquisitions made possible through voluntary supported management of the reserve, financed efforts, fundraising and litigation against illegal substantial capital improvements, met the costs users (Tosi 1991, cited in Aylward et al. 1996). of a sophisticated environmental education The Tropical Science Center (TSC), a non-profit program and provided annual contributions to an NGO, has owned and managed the reserve since endowment fund. The Preserve thus appears to it was established in 1972, when there were 471 be financially sustainable (the Preserve's efforts visitors. Visitation grew slowly at first, then to ensure ecological sustainability and accelerated rapidly during the 1980s as Costa contribution to local development are discussed Rica became a popular tourist destination. The in later sections). reserve received almost 50,000 visitors in 1994. Environmental Economics Series 29 Economic Perspectives on Nature Tourism, Conservation and Development In South Africa there are about 9,000 privately- pioneered the involvement of the private sector in owned game reserves and game farms covering 8 developing and managing lodges in Pilanesberg million ha. Many of these private reserves have National Park and Madikwe Game Reserve. been proclaimed as protected areas through Unlike most other parks, the objectives of provincial legislation, usually at the initiative of Madikwe are primarily social and economic, to private landowners. Covering as much as 20,000 diversify the economy and to provide jobs and ha, many of these operations provide hunting other economic benefits for the impoverished and/or tourism facilities. Even though they communities in this sparsely-populated area. consist mostly of a myriad of small operations, The conservation agency fenced a 70,000 ha these private reserves and ranches are so large in semi-arid area formerly providing a marginal aggregate that they make up an important income for livestock owner and stocked it with component of wildlife conservation in South wildlife. The private sector will develop and Africa. There is a concentration of private game manage luxury safari camps and lodges while the reserves in the Eastern Transvaal both near and public sector conservation agency manages the bordering Kruger National Park, including well- land and the animals (Wells & Davies in prep). known examples such as Londolozi, Phinda and Sabi Sabi. Many of these reserves provide There is understandable concern that allowing luxury accommodation and charge relatively high private firms to bring profit-maximizing prices. The profitability of such operations is operations into the parks will have a negative difficult to estimate, partly because these are impact on wildlife conservation. But this may be private businesses under no obligation to disclose an unduly cautious position to take. Legally- financial information, and partly because no enforceable regulations and contracts can be used serious effort has yet been made to study them to ensure that private sector operators cannot from a financial or economic perspective. introduce practices which threaten the Discussions with industry experts suggest that enviromnent. Concession arrangements are the tourist operations in these reserves are only certainly open to abuse, and there are many profitable if recent land acquisition costs are examples of concessionaires getting "sweetheart" ignored. This probably means that escalating deals with few restrictions and little supervision. land values are the major financial incentive for Experience from the USA suggests that too-large at least some newly-established ventures. concessions should not be granted to single firms, Although many of these private reserves have which can then establish a near-monopoly and now established international recognition in their become difficult to control or dislodge, as in own right, most have at some point benefited Yosemite National Park in the United States. substantially from their proximity to Kruger But with adequate attention to compliance, National Park (Wells 1996). private sector tourism operations could offer lower costs, greater efficiencies and a broader Some countries give concessions to private sector range of market-responsive tourism services. operations to operate facilities inside or linked to government-owned protected areas. This is It is often difficult to extract sufficient relevant common practice in Kenya, Tanzania and data from the private sector to analyze the Uganda. Among other countries, the Tiger Tops financial or economic performance of nature Hotel in Nepal's Royal Chitwan National Park is tourism operations. An exception is the work of one of the earliest and best-known examples. In Barnes and colleagues in Southern Africa. In South Africa, both the National Parks Board and Botswana, Barnes (1992) constructed a the Natal Parks Board have cautiously financial/economic model of an up-market 30- experimented with restaurant concessions, but bed wildlife tourism game lodge in northern not with accommodation. South Africa's North Botswana which was assumed to require 21,000 West Environmental Conservation Agency ha of land stocked with high value wildlife (formerly Bophuthatswana Parks Board) has 30 Environment Department Papers What are the Options for Capturing More of the Net Benefits of Nature Tourism? species. Recurring annual net cash income after (7.3-10.0%). Even more importantly, when the start-up was $173,400 based on 33% occupancy, real social costs of the factors used in these yielding a financial rate of return (FRR) of operations are evaluated (rather than the prices 17.5% and an attractive economic rate of return actually paid) the rates of return to a conservancy of 27.5%. Sensitivity analysis showed the lodge reach impressive levels (12.9-19.5%). The would become financially unattractive privatization of wildlife within Namibia (FRR<12%) at occupancies below 28%. contributed to a significant increase in wildlife numbers (70%/6) and biomass (85%) between In Namibia, the establishment of private property 1972 and 1992, and a 44% increase in species rights in game species has led to the diversity. This appears to provide solid evidence establishment of wildlife ranches and for the effectiveness of the incentives created by conservancies. Here, 10-20 private landowners wildlife privatization. with 10,000-15,000 ha ranches have joined together to establish a common outer boundary to In a review of several African studies, Pearce their combined properties, and drawn up (1996) has pointed out some of the implications contracts for the joint management and use of of the results of economic, as opposed to their wildlife. Four conservancies of 100,000- financial, appraisal of land use options involving 150,000 ha had been established by early 1996. wildlife tourism. Adjusting revenues and costs Barnes & de Jager (1996) compared these for their shadow prices tends to increase the rate conservancies' rates of return with individual of return of wildlife investments. Such private ranches (Table 5.1). The results show a investments at least include modifications for positive return to game ranching in Namibia at overvalued exchange rates and for the true cost the individual landowner level, although the of labor, which tends to be significantly less than financial rates of return (3.9-5.8%) are lower the market cost in a high unemployment context. than the economic rates of return (8.5-13.6%). This suggests that wildlife tourism should be The economies of scale achievable when better treated by national governments, for landowners work together through conservancies example, with favorable tax regimes. give much more attractive commercial returns Table 5.1. Rates of return on different land uses at different scales in Namibia FRR ERR Individual Farm Scale (9,000-14,000 ha) Southern mixes sheep/game 5.8% 10.8% Northern mixed cattle/game 3.9% 8.5% Northern game lodge 4.2% 13.6% Conservancy Scale (90,000-101,000 ha) Northern mixed cattle/game viewing 7.3% 12.9% Northern game lodge 10.0% 19.5% Source: Barnes and de Jager (1996) Environmental Economics Series 31 Economic Perspectives on Nature Tourism, Conservation and Development 32 Environment Denartment Paners 6 How Can Nature Tourism Contribute More to Local Economic Development? Comparing the overall benefits and costs of effective integration between tourism, local protected areas and nature tourism enterprises economic development and protected area can provide useful information. But there is management. About 40,000 people of diverse growing acknowledgment that many of the ethnic backgrounds inhabit this rugged, benefits of conserving wildlife go to the world as mountainous region, mostly poor rural farmers. a whole, while the costs are usually borne at Tourism has grown rapidly and 45,000 foreign national and local levels (McNeely 1988; Wells trekkers now visit the area each year, virtually all 1992). These costs usually result from loss of of them traveling along one of two trails, and access to protected lands and damage caused by there has been a proliferation of small tea shops wildlife. The heaviest burden tends to be borne and lodges in villages along these trails. by poorer countries and especially by Management of the Annapurna Conservation impoverished people living in rural areas of these Area Project (ACAP) has been delegated to the countries in the proximity of protected areas. King Mahendra Trust for Nature Conservation, This often proves a powerful disincentive to local Nepal's pre-eminent NGO. ACAP has support for conservation, and many parks and encouraged local participation in natural resource reserves are unlikely to be able to secure their management. Discussions with local people had future without finding a significant role to play in revealed that establishment of a national park supporting local social and economic would meet hostility based on the fear of development (McNeely & Miller 1984; Wells substantial local costs as well as skepticism 1992). towards the prospect of local economic benefits (a reaction amply justified by the history of many Improving relations between protected areas and of Nepal's other protected areas), and an neighboring communities has therefore become alternative was needed. Special legislation one of the highest priorities on the international established the multiple-use Conservation Area - conservation agenda. This has led to increasing permitting hunting, collection of forest products, efforts by protected area managers and and the delegation of management authority to conservation organizations to obtain local the village level. High priority has been given to cooperation, and to the introduction of what reducing the environmental impact of visiting Wells & Brandon (1992) have referred to as trekkers and increasing the local economic integrated conservation-development projects benefits from tourism. ACAP has been (ICDPs). In principle there are a variety of authorized to collect - and retain - a visitor entry tangible ways in which local communities could fee, helping the conservation project to become receive greater benefits from protected area financially self-sufficient. The Government does tourism (Table 6.1). not provide any staff or funds to manage this protected area (Wells 1993, 1994). The Annapurna Conservation Area in Nepal is one of the few examples where there are signs of Environmental Economics Series 33 Economic Perspectives on Nature Tourism, Conservation and Development Table 6.1. Ways for communities to receive greater benefits from protected area tourism. 1. Compensation or restitution for park-caused problems Land claims by the dispossessed Damage and injuries caused by wild animals 2. Direct financial benefits for local individuals and organization Revenue sharing (from hunting, culling or other plant/animal product sales) Employment Purchasing more goods and contracting more services locally 3. Use of natural resources in parks or in buffer zones Hunting Livestock grazing Collection of natural products (medicinal plants, wood, construction materials, etc.) 4. Direct participation in tourism enterprises Employment Revenue sharing and joint ventures Selling goods and services directly to tourists - see Healey (1994) New market niches emphasizing traditional cultures Providing affordable services to low-income visitors 5. Institutional support for community projects (schools, clinics, roads, etc.) Fund raising Direct financial support Facilitation (enlisting other government agencies and NGOs for support) Technical expertise 6. Capacity building Trainng individuals with the skills needed for employment and small businesses Supporting local institutional development Source: Adapted from Wells (1996) In another positive example, tourism at Costa wide planning process helps to maintain balance Rica's Monteverde Cloud Forest Biological between local development and management of Preserve has had a substantial positive economic the Preserve (Aylward et al. 1996). influence on the local community. The two neighboring towns contain over 30 well- But other cases are less positive. In Ecuador, established hotels. Over 90% of visitors stay in many residents of the Galapagos Islands have these local hotels, for an average of two nights, found it difficult to benefit from ecotourism. and patronize local shops and restaurants. In Recent trends suggest the Galapagos are addition, tourists use local tour agencies, gas becoming a premium nature tourism destination, stations, outfitters and souvenir shops, and visit visited mainly by well-off people. Fewer the local cheese factory, sugar mill, art gallery Ecuadorians and fewer foreign backpackers seem and butterfly farm. Virtually all of these to be visiting the islands, possibly in response to enterprises are locally owned, and a community- affluent residents of more wealthy nations seems 34 Environment Departnent Papers How Can Nature Tourism Contribute More to Local Economic Development? to be price-inelastic. The earnings of many to offer. In a demand- or industry-driven hotels, shops and restaurants are diminishing as framework, commercial operators choose a the Ecuadorian and foreign backpacking visitors particular tourism product based on an who tended to patronize on-shore facilities are assessment of the potential market demand for being displaced by the gentrification of tourism. such services in a given region. But in the Power and water services are superior to other supply- or capacity-driven model most relevant Ecuadorian coastal towns but prices are high, to communities, potential tourism enterprises especially for food and consumer goods which must identify those services they are able to offer must come from the mainland. Less than 15% of tourists based on local resources and then foreigners' expenditures are estimated to reach attempt to market these products. The former, the islands. Most affluent visitors prefer to demand-driven, approach is important for cruise on a ship, requiring few local inputs. minimizing the risk of financial failure and for Higher minimum wages and restrictive work exploiting untapped market potential; the latter, rules for Galapagos residents means that few are supply-driven approach helps ensure an employed on these ships (Southgate 1996). enterprise is feasible, fits the local physical, ecological and cultural context, and develops the In practice, local benefits from nature tourism local and national comparative advantage. But have often been limited to employment on a very limited access to information, skills and capital modest scale, with most tourism benefits leaking can make it difficult for aspiring community- out to the national or international level. Some of levels providers of tourism services to meet the the most important constraints facing increased demands of the established industry (Ashley & local involvement in tourism, including Garland 1994). Communities can also suffer community-based tourism enterprises, are the from a lack of information about tourist markets lack of required skills and experience, lack of and other local suppliers, leading to examples of access to markets, lack of capital for investment, over-production of local handicrafts in different lack of legal tenure or ownership rights over communities within a region which are targeting tourism attractions, inability to compete with the same groups of tourists (A. Kiss, personal larger enterprises, lack of official recognition or communications). support for the informal sector and simple lack of financial viability (Ashley 1995). Few countries Ashley & Garland (1994) recently compared the have systematically attempted to address or potential benefits from four types of wildlife overcome these constraints. tourism enterprise in communal areas in Namibia (Box 6.1): (1) a privately-owned lodge; (2) a One of the most significant barriers to privately-owned lodge voluntarily sharing community involvement in tourism is the lack of revenue with the community; (3) a joint venture affordable financing. Without low-interest lodge, usually where the community owns the financing through direct and workable land and is entitled to lease payments or profit- mechanisms, rural communities' opportunities to sharing in a privately-run lodge on their land; and participate in tourism ventures are likely to (4) a community owned and managed tourism remain very limited. Community participation in enterprise (e.g., campsites, craft sales or cultural nature tourism may best be achievable through attractions). This study concluded that an up- joint ventures with the private sector or park market lodge will usually make a larger management authorities. This will often require contribution to the regional or national economy capacity building in the communities, a potential simply because of its scale, although the role for NGOs. community enterprise's contribution can also be Communties ae genrally n a vry diferentsubstantial if the social benefits of skill Communities are generally in a very different acquisition, institutional development, and equity situation from tourism industry entrepreneurs in of benefit distribution are valued in economic deciding what kind of tourism product they wish term.Bt iftheufou dre enterpris terms. But If the four different enterprises are Environmental Economics Series 35 Economic Perspectives on Nature Tourism, Conservation and Development Box 6.1. Factors influencing the feasibility of community involvement in nature tourism The financial viability of any tourism lodge in a communal area depends on the tourism product, prices, occupancy rates, and the balance between government taxes and government services (roads, water, power, airports). The scale of communities' benefits and costs from private lodges depends on the number of local jobs and wage levels, and the local resources used by the lodge. The feasibilitv of revenue-sharing from a private lodge depends on: * Overall lodge profitability * The extent to which revenue-sharing costs can be passed on to customers, perhaps by attracting specialized tourists with an ethical/ecological focus. * The value of reciprocal benefits to the tourism enterprise from the community (goodwill, resource conservation, land-use agreements). * Awareness among entrepreneurs and communities of potential mechanisms and benefits of revenue- sharing. * Government incentives (taxes, subsidies, promotion, publicity). The feasibility of establishing joint ventures between communities and entrepreneurs depends on: * The extent to which above-average prices can be charged to compensate entrepreneurs for giving up a share of profit and achieving a lower return on their investment. * The value of community rights over tourism resources (wildlife and land) * Transaction costs of negotiating and establishing joint ventures, and the extent to which NGOs and government can help reduce these (e.g., by providing expertise). * Awareness, interest and objectives of entrepreneurs and communities. The feasibilitv of community enterprises depends on: * Prices and occupancy/usage rates (which depend on competitors as well as promotion and marketing). * Secure access to a valuable site * Skills in business, languages, marketing, management, and so on. * Changes in local land use and tourism development which are beyond the community's ability to influence * Availability of capital Source: Adapted from Ashley & Garland (1994) ranked according to the revenue which they likely to generate benefits which are sufficiently generate for a community, then a joint venture large and widely dispersed to be perceived as lodge is preferable, followed by community depending on wildlife conservation. A enterprises, then revenue-sharing private lodges. community enterprise could have similar effects But even a private lodge which does not share but the financial benefits would be smaller. revenues can inject income into the community Opportunities for active community participation through employee wages (Ashley & Garland and empowerment are greatest in community 1994). Joint venture lodges appear to offer the enterprises and joint ventures, while the best chance of strengthening the critical linkage community's role in revenue sharing tends to between community development and wildlife be passive. A private lodge without revenue conservation. Only a joint venture lodge seems sharing generally does little to encourage 36 Envuronment Department Papers How Can Nature Tourism Contribute More to Local Economic Development? community participation (Ashley 1995; Ashley & deciding how to distribute these revenues within a Garland 1994). Even when significant revenues community presents a further challenge. for the community are generated by tourism, Environmental Economics Series 37 Economic Perspectives on Nature Torunsm, Conservation and Development 38 Environment Departnent Papers What are the Options for Mitigating 7 Nature Tourism's Environmental Impacts An economic approach to the management of et al. 1996). (Ecological carrying capacity can protected areas and other nature tourism be contrasted with economic carrying capacity destinations can help to identify ways of where net economic value is maximized, as maximizing net financial or economic benefits. discussed in section 5.) Unfortunately, the many But one of the most important challenges in definitions offered for a destination's ecological managing tourism is to reach a balance between carrying capacity provide little useful guidance the benefits from visitor use and the maintenance for practical implementation. For example, of the natural environmental features of the area. carrying capacity has been defined as "the level When the use of a nature tourism destination is of visitor use an area can accommodate with high uncontrolled, maximizing net economic benefits levels of satisfaction for visitors and few impacts may result in irreversible damage to the on resources" (WTO/UNEP 1992, cited in environment. The market system would be likely Lindberg et al. 1996). It is unclear what to deliver too many tangible benefits at the constitutes either "high levels" or "few impacts". expense of intangibles, such as non-use benefits (Driml & Common 1995). Carrying capacity might be a more useful concept if the negative environmental impact of So the economic solution poses a dilemma for visitors was a linear or other simple function of destination managers. The dilemma arises some easily-measured variable, such as the because the economic approach sets values based number of visitors. Then carrying capacity could on the summed preferences of individuals' be defined reliably in terms of that variable. But, willingness to pay, and these are unlikely to as Aylward and colleagues (1996) have argued, coincide with the social and political values in reality environmental deterioration due to which generally underlie the establishment of tourism overuse often occurs in mysterious conservation priorities. The optimal economic increments so that predicting or assessing the solution will probably only coincide with the point at which irreversible damage begins is a conservation objectives of a protected area when difficult task. Given the problem of determining constraints are added to maintain a defined environmental thresholds, calculating the exact standard of environmental quality (Driml & carrying capacity of a nature tourism attraction is Common 1995). often not feasible (Aylward et al. 1996; Dixon et al. 1995; Driml & Common in press; Lindberg et Limitation of visitor numbers is perhaps the most al. 1996). obvious method for managing negative impacts and this has led to a focus on ecological carrying Recognition that effective application of the capacity within the tourism literature (Lindberg carrying capacity concept is difficult, if not Enviromnental Economics Series 39 Economic Perspectives on Nature Tourism, Conservation and Development impossible, has led to a shift in focus from the press). Monitoring such a wide range of "how many is too many?" question to one of variables and adjusting visitor numbers and "what are the desired (social and environmental) activities in response to the results of such conditions?" (Lindberg et al. 1996). This shift in monitoring is obviously a massive and expensive emphasis has led to the development of management undertaking. alternative planning and management frameworks, including the Limits of Acceptable Damage done is not just as a result of the volume Change system, Visitor Impact Management and of tourists (taking into account both numbers and Visitor Experience Resource Protection. length of visit), but also as a result of the dgmage Lindberg et al. (1996) cite references which gives done per tourist (Steele 1995). This means that details of these iterative frameworks, which allow carrying capacity (however defined) can be for the identification of use-impact relationships. increased by investing in more effective management to mitigate damage (Swanson 1992, In the Monteverde Cloud Forest Biological cited in Steele 1995). Improved management Preserve, Costa Rica, visitor numbers are limited might, for example, include increasing spatial during the two annual peak visitation periods, to and temporal dispersion of tourists (or even 100 people at a time on the 20 km of visitor trails concentration of visitors in resilient or even which cover a small fraction of the reserve, and already damaged areas). For example, Medio these trails are periodically moved. Visitors are (1996) showed how educating divers in advance not permitted to step off the designated paths on the fragility of coral reefs led to significant and, if acute deterioration is noted, trails are reductions in damage per diver at a Egyptian closed for restoration. This approach combines diving resort. Dixon et al. (1995) reported careful monitoring with adaptive management. similar findings from the Bonaire Marine Park, The non-profit Preserve was originally intended suggesting that it may be possible to double the to protect nature and provide a site for biological estimated present usage level of 200,000 dives research. It remains to be seen what action will per year with improved management and more be taken if the 100-person limit becomes a effective diver education. binding constraint on visitor numbers and revenue generation. A commercially-operated Private sector tourism operators will only have reserve would presumably solve this constraint an incentive to support and invest in additional by extending the trail network. One alternative management to reduce environmental damage would be to simply cap development and let other where market access is limited and regulated. If private reserves take the overflow (Aylward et al. market access is unlimited or unregulated, free 1996). riders - operators who decline to incur the extra costs of additional management - will still be able But tourism impacts can be very diverse and to share in the benefits without regard for difficult to monitor. For example, the types of environmental damage, and the incentive to impact identified for the Great Barrier Reef cooperate and reduce environmental damage for World Heritage Area in Australia include: site the common good will be lost. Kenya's Maasai impacts from structures, mooring and Mara National reserve provides an example. anchorings; coral damage from diving and reef Illegal, but virtually unregulated, off-road driving walking; removal of coral and shells; garbage by tour operator vehicles anxious to provide their disposal and littering; sediment disturbance and clients with close-up wildlife views have dredging; water pollution from nutrients, heavy significantly scarred the landscape. Together metals and oil; sewage discharge from vessels with the failure to limit tourist or vehicle and from island resorts; fishing impacts; fish numbers, this has led to environmental damage, feeding impacts; and impacts of research and modified wildlife behavior and diminished the monitoring activities (Driml & Common in visitor experience. 40 Environment Department Papers What are the Options for Mitigating Nature Tourism's Enviromnental hmpacts? So far the discussion has been limited to direct of the residents do not succeed in finding environmental damage to a nature tourism permanent work and take up fishing. This is attraction. Indirect environmental damage is unregulated, and several fish species have been often more serious. Aylward et al. (1996) refer severely depleted, with unknown effects on the to an unplanned development "free for all" on the local food chain (Southgate 1996). fringes of some popular nature tourism destinations in Costa Rica. And, of course, most Environmental damage to a nature tourism forms of transport, even to the most destination should ideally be monitored with environmentally-sensitive ecotourism reference to carefully-selected environmental destinations, impose substantial environmental indicators, which will usually be site-specific and costs through air pollution and carbon dioxide will often be difficult to measure. 'Leading' emissions. indicators to identify impending environmental damage are most needed. Adaptive management In Ecuador's Galapagos National Park, controls of visitors in response to the signals from such on damage per tourist include careful zoning, careful and regular monitoring would ideally regulations that tourists must be accommodated focus on infrastructure and other development as on boats, registration of naturalist guides and well as visitor numbers, duration of stay and strict rules of shore visits (de Groot 1983, cited activities. Unfortunately, few developing country in Steele 1995). But there have been no controls nature tourist attractions have the financial or on the number of tourists. The volume of visitors institutional capacity to manage tourism in such to this formerly-remote and isolated archipelago a sophisticated fashion. In the absence of such has increased dramatically, from about 5,000 in capabilities, local expert opinion backed up with 1970 to more than 55,000 (40,000 foreigners) in the legal authority and institutional capacity to 1995. As a result, thousands of unrestricted regulate may be the next-best option. Economic migrants have been attracted to the Galapagos by analysis and instruments become most useful in the prospect of working in a souvenir shop or on helping to work out how to extract the maximum a cruise ship. The resident population increased net benefits from tourism once the acceptable from 2,400 in 1962 to almost 10,000 in 1990. environmental conditions have been defined. The towns are now sources of pollution. Many Environmental Economics Series 41 Economic Perspectives on Nature Tourism, Conservation and Development 42 Environment Departnent Papers 8 Conclusions Nature tourism has made important contributions capital for investment, inability to compete with to GDP, foreign exchange earnings and other well-established commercial operations as well as traditional indicators of economic development in simple lack of tenure or ownership rights over the many developing countries - and these tourism destinations. As a result, relatively few contributions show every sign of continuing to local communities have realized significant expand. But nature tourism's contribution to benefits from nature tourism on their own lands sustainable development is less clear. or in nearby protected areas. Lack of education and training often limits people from rural Most of the economic benefits linked to tourist communities to the lowest-paying jobs in tourism expenditures have been captured by commercial enterprises. Even though such jobs can support tourism operators in the richer countries (where large households in local rural economies, they most tourists originate) and in the larger cities of usually do not involve local people in the host countries. This is largely a consequence decisionmaking or taking control over their own of the high leakage rates which are inevitable future development. Nature tourism on when tourism expands rapidly in economies privately-owned lands has in some cases been which lack the capacity to produce the goods and penalized by landowners' or residents' lack of services which visitors are ready to spend their effective tenure over wildlife and other natural money on. But this concentration of economic attractions, or by policy distortions favoring land benefits among international hotel groups, use alternatives such as agriculture, livestock or airlines and mainly foreign tour operators, as mining. Of course, these reservations are at least well as shops and restaurants in the host as applicable to many other private sector countries' capital cities, does little to support activities competing with tourism for land or social and economic development in the remote other resources. rural areas where nature tourism destinations are located. Nature tourism has catalyzed local or From a conservation perspective, protected areas regional economic development in a few cases, charging relatively low entry and use fees often but these have often been accompanied by supply the most valuable part of the nature negative environmental impacts from tourism experience but capture little of the uncontrolled construction, as well as the abuse economic value of tourism in return. While and overuse of destinations by inadequately many governments have successfully increased regulated tour operators. tourist numbers by marketing their country's nature tourism destinations, most have not Local communities' participation in nature invested sufficient attention or resources to tourism has been constrained by lack of relevant managing the natural assets which attract tourists knowledge and experience, lack of access to or in the infrastructure needed to support nature tourism. This has exposed sensitive sites of Enviromnental Economics Series 43 Economic Perspectives on Nature Tourism, Conservation and Development ecological or cultural value to the risk of contribution of nature tourism to sustainable degradation by unregulated tourism development development. Why is this? and the impact of too many visitors. Indirect environmental impacts can also be substantial. There are two main reasons. First is that few Expectations of new jobs and business countries have recognized nature tourism as a opportunities from rapidly-expanding nature separate sector of their economy requiring tourism destinations have, in some cases, distinct policies, often perceiving the separate attracted rapid immigration and catalyzed the labeling of nature tourism, ecotourism and other uncontrolled expansion of nearby settlements at specialized forms of tourism as no more than a rates beyond the absorptive capacity of the local marketing tactic to increase overall visitor environment. numbers. This situation is beginning to change as more countries recognize nature tourism's Despite these problems, the overall growth potential and the need to provide a constructive potential and some promising individual cases do policy framework for this potential to be realized. strongly suggest that nature tourism is one of the most important sectors where environmental Second is the fact that nature tourism conservation may effectively be combined with encompasses activities as diverse as viewing economic development in remote rural areas of wildlife in semi-arid areas from vehicles, coral developing countries on a meaningful scale. The reef diving, mountain trekking and exploring rain policy-making priorities generally lie in four forests on foot. These experiences can be areas: (1) increasing and capturing more of the packaged en masse by large and sophisticated net economic benefits, (2) contributing more to tour operators or can result from the impulses of local economic development, (3) mitigating independent travelers. Access rights to environmental impacts, and (4) helping to finance destinations can be controlled by corporations, biodiversity conservation (recognizing that only a public agencies or local communities. small fraction of ecologically-important areas Accommodation can vary from large luxury have the potential to attract significant tourism). hotels to private homes in rural settlements. As a result of this variety, the economic, social, But very few countries have established cultural and political processes and the funetional policy or institutional frameworks to environmental impacts involved are often so optimize the economic and environmental diverse that they resist simple characterization, analysis and generalization. 44 Environment Department Papers 9 Future Research Economic studies of nature tourism in developing There appear to be two main reasons why nature countries were few and far between as recently as tourism research studies have generally had only five years ago. But important progress has a modest influence on government policymaking. recently been made in demonstrating nature First, very little research has been policy- tourism's significant contribution to several oriented. Financial resources for research have countries' economies, and in showing that nature often been limited and these resources have often tourism can generate substantial economic been mobilized by academic researchers who are benefits. One clear result has been the growing more interested in testing a specific tendency for protected areas and some other methodological approach rather than broad sets nature tourism destinations to increase user fees, of policy questions. Even when supported by to try to capture a greater share of these international development agencies, such economic benefits. Some progress has also been research has tended to focus on theoretical made in demonstrating that gains in economic aspects of single issues, such as destination entry and environmental efficiency can result from fee policies, or on general thematic reviews regulating development and use at nature tourism unsupported by detailed analysis. Relatively few destinations, although unequivocal examples researchers have been able to access useful data remain limited. Practical efforts to regulate on private sector tourism operations. As a result private sector operators' access to nature tourism of these constraints, practical policy attractions, to avoid either unlimited entry or reconmnendations usable by government dominant and inefficient cartels, remain rare. decisionmakers have typically not emerged, even in the most-studied countries such as Costa Rica Nature tourism has complex and important and Kenya. linkages with a wide range of environmental and developmental processes across several different The second reason is related to the diverse sectors. But a comprehensive analytical priorities and expectations of the different synthesis of the lessons from experience and their stakeholder groups with an interest in nature implications for government policymaking has tourism. Finance and economic planning yet to be carried out, even in a single country. So ministries usually perceive the opportunities in far even the most technically sophisticated and terms of foreign exchange earnings, jobs and insightful studies of one or a few aspects of economic growth; conservation agencies in terms nature tourism have generally proven insufficient of increased park entry fees (offset by new as a basis for helping developing country management challenges); commercial tourism governments identify and evaluate their overall operators and private landowners in terms of nature tourism policy options. financial profit; and local communities in terms of jobs and opportunities for local businesses. NGO expectations depend on their orientation Environmental Economics Series 45 Economic Perspectives on Nature Tourism, Conservation and Development but often combine local community and - Which government departments or ministries conservation agency views. Understandably, have a significant direct or indirect impact (or these stakeholders have very diverse views on the potential impact) on nature tourism? most appropriate policy and institutional arrangements for achieving their own sets of Definition and characterization of nature tourism goals. Very few financial or economic studies of in case study countries will be an important first nature tourism have seriously attempted to step before a detailed research program is understand, let alone measure, the impacts of undertaken (B. Aylward, personal different policy options on more than one of these communication). Characterization is likely to diverse stakeholder groups. involve several different aspects of nature tourism: the type of ecosystem (e.g., semi-arid Efforts to develop effective national policies for areas, coral reefs, wetlands, tropical forests, nature tourism have thus been frustrated by the mountain areas), the types of commercial lack of prioritized economic analysis of the operations comprising the industry (size, options as well as the need to appreciate and distribution, horizontal and vertical linkages, reconcile the diverse stakeholder perspectives. ownership, relationships with 'mainstream' This indicates the need for applied economic tourism, and so on), the types of visitors (e.g., research in selected case study countries which is countries of origin, income levels, types of not only targeted to provide usable insights but experiences sought), ownership and management also sufficiently grounded in an appreciation of arrangements of the nature tourism destinations the perspectives of the various stakeholders to (national conservation agencies, provincial produce results which are usable in cross-sectoral conservation agencies, NGOs, private sector, governmental decisionmaking. In other words, indigenous communities, and so on), and the key finding more effective ways for stakeholder govermment departments or ministries. involvement to be combined with technical analysis for policy development. MEASUREMENT The remainder of this section consists of sets of - What have been the principal economic impacts an overall menu of key research questions for of nature tourism, and how have these impacts evaluating options and strategies for optimizing been distributed geographically? the economic and ecological benefits associated - What financial and economic benefits and costs with nature tourism. Country-specific policy (including opportunity costs) have been research could prioritize from such a menu. associated with nature tourism, both directly and indirectly, and how are these benefits distributed DEFINITION AND at local, national and international levels? CHARACTERIZATION Estimates of the economic impacts of tourism - How can nature tourism best be defined or have usually been considerably more influential characterized as a subset of all domestic and over government decisionmaking than estimates international tourism? of the economic benefits and costs. The former requires an estimate of the magnitude of financial - Who ownsand determines access rights to transactions attributable to tourism destinations Whoure townism aestind tions? while the latter requires an economic welfare nature tourism destinations?anls. analysis. - What is the structure of the nature tourism Other important measurement questions include: industry, who arc the key actors and how has the - What financial and economic rates of return industry developed? have been earned by the major types of nature tourism enterprises? 46 Environment Department Papers Future Research - What government revenues have been generated by nature tourism? - What are the options for mitigating nature tourism's environmental impacts and how can the - What have been the principal government environmental and social impacts of nature policies and instruments for encouraging or tourism be monitored and regulated in ways regulating nature tourism, and what impact have which are cost-effective and useful to protected these had? area managers? - How have the financial and economic viability - What are the appropriate institutional of nature tourism been affected by government arrangements for managing and regulating the intervention (e.g., taxes and subsidies) in sectors use of nature tourism destinations (including which are competing land use options, such as limiting and regulating market access to agriculture, forestry or mining? destinations, privatizing state protected areas or tourism operations within these areas)? POLICY ISSUES - What are the benefits from expanding nature Policy issues on which research is needed tourism on private lands, through incentives for include: landowners and other mechanisms, and to what extent is tourism compatible with alternative land - What are the options for increasing and uses? capturing a greater proportion of the net economic benefits associated with nature tourism - What tpes of nature tourism should be (including new tourism destinations, expansion of promoted by governments under various tourism facilities at existing destinations, higher conditions (e.g., high costAlow volume vs. low access fees and/or multiple pricing policies, cost/high volume) and what policy instruments reduction of leakages from the local or national should be used as incentives? economy)? - What overall sets of ecological, socio-economic - How can nature tourism contribute more to and institutional conditions are most likely to local economic development and what are support nature tourism's contribution to realistic options for overcoming the often biodiversity conservation and sustainable significant barriers to local participation in development? nature tourism? 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