Understand and cherish the value of nature, says Oxford Economics’ Matthew Tinsley
Whilst visiting Thailand’s Phi Phi islands on a diving trip in 2017, I sat on a bobbing long-tail boat outside the entrance to its iconic Maya Bay. As we waited there before travelling to a neighbouring island for our next dive, dozens of boats came and went, transporting the tourists that visited in their thousands every day. While we watched this procession, our diving instructor explained why nobody dived in the bay or its vicinity anymore.
This mass of tourists had severely degraded the bay’s natural environment, with boats and visitors destroying corals and the marine life that would once have called the bay home long gone. The next year, with this ecological damage having reached critical levels, the local authorities felt they had no choice: the bay was closed for restoration and stayed that way for several years.
Maya Bay, whose golden sands, turquoise waters, and limestone cliffs were made famous by the Hollywood film The Beach, had become a victim of its own success. Its closure was felt acutely by the local tour operators and the communities that they supported as income was lost. These groups had become reliant on the revenues generated by the bay’s natural environment as it attracted tourists from around the world. As such, they too suffered once this natural environment was degraded to the extent that it needed to be closed.
The dependency of tourism on nature can be seen throughout the world, from exotic long-haul destinations to local attractions. National Parks across the United States receive a total of 300 million recreational visitors each year, with this leading to overcrowding, damage, and interrupting the animal species living in them. One of the casualties of this over-tourism is the experience of those tourists, which is negatively affected by increases in footfall and the damage visitors create.
This sentiment has also been observed by visitors to Australia’s Great Barrier Reef, where environmental degradation such as coral bleaching is recognised in the negative perceptions of visitors to the area. Similar concerns have been seen around the potential impact of fracking to release shale gas and how this might put tourists off visiting areas of beauty in the UK. Nor is it purely the natural habitats that people wish to enjoy that drive tourism, with poor air quality shown to have decreased inbound tourism in China.
Measure the benefits
Seeing it through this lens reveals that the natural environment is a valuable asset for the tourism industry. When tourists are attracted to an area by an unblemished scenery, abundant wildlife, or a thriving marine habitat, the tourism industry benefits, making it an economic asset as much as environmental one. This makes the economic value that the tourism industry can generate dependent on the preservation of these natural environments.
In order to truly understand the economics of tourism and what drives the value it can create for an economy, the economic value of these environmental assets must be considered. National and local governments have strong incentives to attract more tourists to support local jobs and tax revenues. However, such changes will be self-defeating if they damage environmental assets to the extent that those tourists stop coming. If granting planning permission for a new beachside hotel destroys a valuable natural habitat, then the overall appeal of the area will decrease, leaving tourists less willing to spend money to visit it. This should also be considered when other economic activity affects the attractiveness of a place for tourism, for instance when industrial activity pollutes an area of natural beauty.
Measuring the economic benefits that are generated by environmental assets is important as it provides us an understanding of the potential economic loss that environmental degradation would cause. Furthermore, it can be used to make the case for investment where new facilities or services will maintain and enhance the natural environment, improving the attractiveness for tourists and creating a knock-on economic boost to the wider community. This incentivises forms of tourism which preserve or regenerate nature and the environmental assets that the tourism industry relies upon.
The closure of Maya Bay allowed local environmentalists to restore corals, as well as giving time for the environment to recover naturally, with reef sharks and other species returning. Today, visitors are booked into slots to prevent overcrowding and are dropped off on another part of the island. This leaves the bay clear of boats and people so that its marine ecosystems can continue to improve. It also allows visitors to truly enjoy its beauty, substantially increasing the enjoyment that people can get from visiting it. Furthermore, the revenue generated from visitors is used to fund further restoration, creating a form of tourism that actively contributes to environmental regeneration.
This reveals the value of looking at our natural environment differently: by understanding and truly cherishing the value of nature and the way that environmental assets support tourism, both the environment and the tourism that relies on it can benefit.