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BRIEFSeptember 26, 2024

The Economic Benefits of Nature-Based Tourism

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Video credit: ÐÓ°ÉÂÛ̳ / Piehole TV

Nature-based tourism can help countries achieve their development goals while promoting biodiversity conservation. In destinations with rich natural assets but limited economic opportunities, nature-based tourism can create jobs and diversify rural economies. Money spent by tourists on activities, transportation, food, and accommodation ripple through local communities ¨C generating jobs, income, and indirect impacts, benefiting poor and nonpoor households alike. By stimulating investment and economic activity in and around protected areas, tourism provides benefits to local communities and strengthens incentives to support and engage in conservation, which may otherwise create opportunity costs for them.

Nature-based tourism can also generate financing for biodiversity conservation. In many countries, visitor entrance fees, tourism concessions and leasing fees, and other financial mechanisms account for a substantial proportion of the budgets of protected and conserved areas. As a result, more and more countries are prioritizing nature-based tourism to fuel economic development and conservation.

ÐÓ°ÉÂÛ̳ is investing in projects that help countries protect their natural assets, grow and diversify nature-based tourism businesses, and share the benefits from tourism with local communities. ÐÓ°ÉÂÛ̳ also invests in new tools and knowledge to measure the local economic impacts of nature-based tourism, to help inform policies for sustainable development and conservation of protected areas.

Nature based Tourism framework infographic ÐÓ°ÉÂÛ̳
Estimating the economic impact of tourism in protected areas on local economies

Banking on Protected Areas Book Cover
There is a significant lack of data and methodologies that measure the impacts of tourism at the local level. Furthermore, most cost-benefit studies of tourism projects focus only on activities that are directly affected by tourism, like hotels and lodges, restaurants, tour operators, and souvenir shops. Economic spillovers, or indirect impacts, are an important part of how tourism affects local economies and create income multipliers. Yet they are rarely considered in policy design or cost-benefit analysis for new tourism operations.

Local economy-wide impact evaluation (LEWIE) models can be used to quantify both the direct and indirect impacts of tourist spending on economies around protected areas. These approaches measure visitor numbers and tourist spending in protected areas and gather data from surveys of local households and businesses. The resulting data can make the case for greater investments in natural areas and tourism and inform policies that improve tourism and refine business models. Assessments can also help identify those protected areas that are generating high returns from government investments. 

In Banking on Protected Areas, the ÐÓ°ÉÂÛ̳ published a LEWIE approach for protected area tourism, presenting data from assessments in Brazil, Fiji, Nepal, and Zambia (see country tabs below). The results documented how protected area tourism can be an engine for development, providing economic benefits to communities living around these areas.

The report showed that tourism generated jobs for:

  • 30 percent of the working age population around Zambia¡¯s South Luangwa National Park
  • 14 percent around Zambia¡¯s Lower Zambezi National Park
  • 13 percent in Nadroga-Navosa and the Mamanuca Islands in Fiji
  • 12 percent around Brazil¡¯s Whale Coast, home to Abrolhos Marine National Park
  • 3 percent around Nepal¡¯s Chitwan National Park

A new LEWIE-LITE methodology for protected area tourism provides a more accessible and user-friendly methodology to assess the impacts of tourist spending on local economies. ÐÓ°ÉÂÛ̳ piloted LEWIE-LITE in Madagascar and Uganda (see country tabs below). Both studies revealed that the economic impacts of tourism spending were higher on nontourism activities than on tourism activities; these additional impacts should be considered in country economic development plans, policy design, or cost-benefit studies before undertaking new tourism projects.

The LEWIE-LITE studies found that:

  • Every tourist dollar boosts local incomes and revenues, benefiting not only tourism businesses (hotels, restaurants, tour operators) but also retail, services, and agriculture. 
    • In Uganda, each tourist dollar generates $2.03 in local income near Queen Elizabeth National Park and $0.37 near Bwindi Impenetrable National Park. 
    • In Madagascar, each tourist dollar generates $2.48 in local income near Nosy Tanikely National Marine Park and $0.71 near Ranomafana National Park.
  • Public investments in park management and nature-based tourism generate economic benefits for local communities.
    • In Uganda, an investment of $3 million in Queen Elizabeth National Park generated $69.9 million in economic benefits to surrounding communities through tourism. Tourism in Bwindi Impenetrable National Park generated $31.7 million in economic benefits, compared to a park budget of $2.3 million.
    • In Madagascar, an investment of $352,000 in Nosy Tanikely Marine National Park generated $23.2 million in economic benefits to surrounding communities through tourism.
  • In both countries, tourism-related jobs employ a higher percentage of women than nontourism sectors, reinforcing the global trend of tourism as a key job-entry point for women.

Funding for the studies was provided by PROBLUE, , , the Global Wildlife Program, and .

Brazil

Assessing Economic Impacts Protective Areas in Brazil
Brazil is the most megadiverse country in the world. However, tourists visit only a small number of the parks in Brazil¡¯s protected area network, and federal and state parks are substantially underfunded. This study took place in Abrolhos Marine National Park and found that spending by tourists generates significant income multipliers for households in the local economy: a Real spent by visitors at Abrolhos raises the income of households around the park by 1.74 Reals. There is much potential for Brazil¡¯s protected areas to improve their performance, further contribute to development, and to maintain the country¡¯s rich natural assets.

For summary of results: Banking on Protected Areas: Promoting Sustainable Protected Area Tourism to Benefit Local Communities

Read the country report: