The leakages of tourism in the Overseas Territories

It’s commonly believed that the only way for small island states like the British Overseas Territories to begin economic development is through increasing the number of tourists that visit their shores. Tourists from other countries, of course, bring money which props up the local economy. But the tourism industry also brings with it effects that are hidden and pernicious, and the damage often is not immediately obvious. In the British Overseas Territories, three major factors call into question whether tourism is the economic silver bullet that we think it is.

To begin, tourism does not generate the vast sums of revenue that we imagine. It is not at all the massive economic engine it may appear to be. This is because tourists are incentivized to spend as little as possible. Besides a few souvenirs and a couple of meals, the average tourist does not consume as much as one may have imagined. This is especially true of cruise tourists, who spend only a few hours on shore before siltering back to their ships for their pre-paid meals. This makes sense. The goal of a tourist, after all, is to see the place and spend as little as possible. Particularly in budget options like cruise tours, it would be completely irrational to do anything other than minimise your spending when you’ve already paid for the trip. When on vacation, no one is thinking about the macroeconomics of the country they’re visiting.

Moreover, the little income that tourism does generate is leaky. As explained by euronews, when large international companies provide accommodation and transport, much of the money spent goes back to them in the end. According to the UN World Tourism Association, as much as 80% of the money spent by tourists on vacations does not actually stay in the borders of the country visited. Tourism Leakage is a particular concern in the Caribbean British Overseas Territories, whose tourism product revolves around brand-name airlines, cruise-lines, hotels, and restaurants. For tourism to actually generate revenue for locals, the businesses servicing the tourists must be locally owned.

This is, of course, more easily said than done. It does, however, raise the question of how far international corporations control the tourism sector.

In addition, tourism is often pitched as a cultural exchange, but when tourists do engage with local culture, it is more akin to fetishization than encounter. The global corporations that push for increased numbers of tourists operate on a business model which commodifies, marketizes, and monetizes ‘different cultures’. ‘Culture’, then, is conceived of as something you can buy through a simple trip and souvenir. Many tourists believe mistakenly that the money they spend abroad “helps the locals”. As established, tourism is riddled with economic leakages that stop money from reaching them. Less obviously, however, the commodification of local culture actually infantilizes it. By reducing cultural traditions and dishes to a product, they are taken less seriously by visitors. They are seen as optional, exotic add-ons to their familiar name brand restaurants. Ultimately, this inhibits the development of the country in a much bigger sense than its GDP bottom-line.

Finally, there is the environmental question. Tourists famously litter and cruise ports destroy marine ecosystems. Not to mention that the average commercial aircraft emits 90kg of CO2 per hour of flight time and burns 4 litres of kerosene per second. That the development of small island states whose tourism products are largely based on their environments would be based on an industry that ravages said environments is self-defeating. Even more ironically, the countries most at risk of increased flooding from climate change have chosen to subsidise an industry that accelerates these changes. In the long run, tourism is highly damaging. In 2017, the British Virgin Islands even had to impose a levy on visitors for the purposes of environmental protection. Anguilla too called for an end to littering by visitors the following year.

This forces us to reconsider whether it is wise to continue to expand and facilitate a pernicious industry, or whether Overseas Territories should begin to look at various strategies of economic diversification. Of course, it’s easier to be critical than correct. No doubt policymakers in the Overseas Territories are already well on the way to finding ways to economically diversify and promote locally owned business in an effort to provide lasting, robust economic growth for all people within the Territories.