Tourism Social Entrepreneurship: The Need and the Opportunity

The need and opportunity for social entrepreneurship within the global tourism and hospitality sectors is systemic, strategic and tactical. A major systemic challenge stems from its universal and virtually exclusive adoption of a profit maximizing industrial model of production and consumption. This model has created an economy based on the transport of over one billion international visitors and six to eight billion domestic tourists using overnight accommodation (UNWTO, 2015). The sector accounts for 10% of global GDP, one in eleven jobs and 29% of services exports globally. Tourism has played a major role in globalization, and the creation of employment and opportunities to earn foreign exchange in developing countries. But like the capitalist system on which it is based and that has supported unprecedented levels of growth and global expansion, the sector is now revealing significant flaws and market failures such as:

• 1. The net impact of tourism spending in host communities is low and insufficient to cover all the costs associated with current levels of visitation. UNEP estimates that in “all inclusive” resorts, only about five cents of every tourist dollar trickle into the local economy (UNEP, 2015). This is because most development and capital investment has come from enterprises located in the source markets. Widespread diffusion of niche tourism products (activities, experiences, locally owned accommodation, restaurants and transport providers) that are structured as either social enterprises or cooperatives could improve and increase the positive net impact of tourism to host communities.
• 2. The industry is highly labor intensive and supplies accessible jobs to people who might otherwise have difficulty finding employment. But it also suffers from a poor human resource (HR) relations record due to the prevalence of low wages, irregular hours, seasonal operations and poor working conditions. Much of this labor is controlled by profit seeking agencies, operating as intermediaries who have little interest in developing a positive HR image. Instead they benefit from the high rates of turnover, the mobility of the workforce, seasonality of employment and, in many cases, workers desperate to take work under any condition. Working in a social enterprise would change the nature of employment dramatically—albeit for a smaller number of employees.
• 3. The travel and tourism sector, like many others, has not always been required to pay for the externalities associated with its operations. This has led to significant over use and pollution that can also create opportunities for social enterprises— such as waste food management, recycling operations, water cleaning and renewable energy projects.
• 4. The non-mass market of travelers wishing to enjoy authentic experiences, interact more closely with locals and make a positive contribution (via philanthropy, voluntourism, micro-credit and crowd funding) is increasing and provides additional opportunities for social enterprise—e.g. tours and souvenirs designed and delivered by local residents using materials and suppliers procured from local sources; creation of niche experiences that engage visitors in local cultural, social, environmental and political issues.
• 5. In many destinations the resilience and future viability of tourism will depend on social ownership structures that ensure local control and enhanced local benefits from the visitor economy. The sector is characterized by low margins, limited barriers to entry and the perishable nature of the product. When these are combined they can accentuate and accelerate the process of commodification and, furthermore, diminishing returns further reduce any positive “trickle down” effect of visitor spending. As input costs of food, water, and energy climb, social enterprises and cooperatives could provide resilient and viable ways of sustaining local economies.

Despite these trends, few if any destinations have applied a focused systematic approach to the use of social entrepreneurial structures, including both social enterprise and cooperatives and other community owned initiatives (land trusts, micro credit operations) as a means of improving the livelihoods of people in host communities. In chapter “Institutional and Policy Support for Tourism Social Entrepreneurship in Tourism” Dredge addresses the policy options for destinations to develop their tourism social entrepreneurship sector. To realize these opportunities, an ecosystem of support is needed that should be delivered via host communities. A combination of global vision realized through place-based tactical execution is required. This means that a conceptual, systems perspective is needed to identify patterns of opportunity and interest in the opportunity stimulated. By understanding the “big picture”, dynamics and strategic change drivers, existing tourism practitioners and students of hospitality and tourism will be in a stronger position to both identify and evaluate the social enterprise potential.

Climate change, resource and water depletion, wealth disparity, casino financing, weakening democracies, and run-away-technology are not the causes of our present challenges but symptoms of a much deeper malaise—a fundamentally false and obsolete way of seeing the world. Unless humanity, social entrepreneurs, educators and tourism practitioners change the way we see ourselves, each other and our relationship with our planetary home no effort to address “the problem” will succeed.

This challenge has been defined in tighter, more rigorous language as an epistemological error by Boehnert (2010, p. 1) quoting the renowned anthropologist, Gregory Bateson who in ‘Steps to an Ecology of Mind’ (1972) wrote: “we are governed by epistemologies that we know to be wrong” writing at the same time: “the organism that destroys its environment destroys itself.” Most of our major systems and institutions are based on assumptions about how the world works that science has, over the time line of mass tourism, proved to be false.

Social entrepreneurs will find themselves operating in an economy and a culture transitioning between two different paradigms—the currently dominant model based on the importance of economic growth and money as the primary sign of success, and an emerging model that defines success in richer, qualitative terms associated with development and well-being as experienced by individuals, enterprises, communities and the planet as a whole.

Tourism has already played a significant role in diffusing the old model. There is virtually no corner of the planet that does not see tourism offering an economic opportunity for someone. But having been based on a production and consumption model whose use of resources (land, water, wildlife and cultures) and production of waste (landfill, sewage, greenhouse gases) is now outstripping the biosphere’s capacity to process and recycle safely, it is time to re-think how to sustain visitor economies that benefit all stakeholders and cope with huge increases in human demand.

The purpose of this book is to make a small contribution to that global challenge. It will attempt do this by focusing on changing from the corporate model of tourism development to one which thrives on the energy and vision of social entrepreneurs and the organizations and networks that they create. We hope the book will begin to develop a knowledge base for tourism social entrepreneurship into the future, focusing on the unique opportunities and challenges in the world’s destinations.