Make or break: 4 reasons why countries should not dismiss domestic tourism

Posted: December 5, 2016 in general

Mention tourism, and it’s likely that most people will think of far away, exotic destinations: palm trees, snowy mountain tops, safaris…and so on.

In fact, most of the world’s tourism happens closer to home, in a traveller’s own country.

According to the World Travel & Tourism Council (WTTC) analysis, more than 7 out of every 10 dollars spent on tourism is spent domestically.

This means that in many parts of the world, money spent by national citizens is a much more important source of Travel & Tourism GDP than the visitors who come from abroad.

Out of twelve world regions, there are only three in which international tourism spending makes up a larger portion than domestic spending. Not surprisingly, international spending has the largest share in the island region of the Caribbean, where domestic spending makes up just over a quarter of the total. In the Middle East and Southeast Asia it is relatively balanced, with just over half of it coming from international visitors. In the rest of the regions, domestic spending is the main factor. In Latin America, over 82% of spending is domestic.

While it may be natural for discussions at a global level to tend toward focusing on international tourism, domestic tourism is clearly a key driving force in the sector. And it’s a strong force, which has several benefits and advantages that should not be neglected.

Seasonality

International tourism in many destinations can be quite seasonal, with high peaks in demands and low seasons when infrastructure is empty and workers struggle to find sufficient work. Domestic tourism can provide a useful stabilizing role, as it spreads more evenly through the year. Analysis in New Zealand has shown that domestic tourism there makes a substantial contribution to the industry’s overall financial resilience, sustainability, and functionality — in fact many tourism businesses would not survive if it were not for the year round patronage of domestic visitors.

Distribution of tourism

Likewise, domestic tourists often travel to places beyond the key highlights that are the mainstay of foreign travellers’ itineraries. As such, they also help in spreading the benefits of tourism through the country more evenly, rather than keeping them concentrated in a few tourism hotspots.

In Japan, the One Village One Product movement, which was first started in 1979, has promoted a programme that encourages individual villages and towns to focus on developing one specialized product or service. In addition to giving the locality an important source of income and quality of life, these specialisations have also created an attraction for Japanese tourists, who will often travel to the source of the products or services they have come to associate with a town or village. The Japanese custom of ‘omiage’, or the giving of souvenirs upon return from a trip, also ensures a market for these products.

So as foreign tourism is more concentrated in the large cities and iconic sites, these domestic tourists — who are the source of almost 90% of tourism spending in the country — make an important contribution in spreading much more widely across the country’s regions and towns, and in the process support the transfer of skills and pride of the craft through generations.

Precursor to international tourism development

For destinations that are working towards building up an offer as an international tourism destination, domestic tourists can serve as an important starting place. People working in Rwanda’s tourism industry have seen several advantages in the strengthening of domestic tourism for the industry as a whole. When domestic tourism begins to grow in the country, people are seen to develop a greater belief in it and gain a sense of national pride. This pride can encourage locals to go out of their way to ensure that tourists enjoy their stay by providing friendly service and knowledgeable information. Domestic tourism also has the potential to expand the industry through encouraging entrepreneurs to invest in industries and protecting local historical and cultural assets so that they become or remain tourist-generating sites.

Shock absorber

Especially in times when foreign tourists are staying away, domestic tourism can keep a destination going and cushion the effect of a crisis. Tourism product such as accommodation can be maintained with limited deterioration from disuse, and at least some of those employed in tourism can continue to earn a livelihood by providing services for domestic tourists. In this way, once the destination strengthens as an international destination, the products and services are already in place and ready. In Sri Lanka, for example, domestic tourists provided 64% of spending at the time of the end of the civil war in 2009. Since then, the country has resurged as a destination for foreign visitors, who now provide two thirds of spending in the country. The fact that some level of domestic tourism continued through the conflict years helped facilitate this rapid expansion in the past years.

As these examples show, there can be great value in a strong domestic sector. While in many countries domestic spending already contributes a large proportion of tourism spending, there is often potential to further develop the domestic market. This was recognized in Hungary a few years ago. The Hungarian tax system encourages employers to provide various non-wage benefits to employees, which can be given at more favourable tax conditions than salaries and are earmarked for specific purposes. Since 1997, this has included a holiday voucher system. In 2010 this was updated with a new electronic card system. At first this was limited to accommodation, but in 2012 the incentive was expanded to more tourism related activities. Within two years of the launch of this new programme, over 840,000 cards had already been issued. They were filled with over € 353 million, of which the majority had already been spend on domestic tourism services. Considering that domestic tourism was largely stagnant in previous years, the programme is proving to be a success in promoting more spending on tourism services in the country.

Travel & Tourism is repeatedly shown to be a force for good, and these examples show that within that domestic tourism has a special role in sustaining and developing the industry. Whether for its economic benefits — both directly and through the long-term stimulation of the industry — or for its social contribution towards strengthening communities, traditions, and pride, neglecting domestic tourism means missing important opportunities. Businesses, destinations, and governments should remember this in their strategies and ensure that their strategies for international tourism does not come at the cost of domestic tourism.

Courtesy: WTTC

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