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Managing changes: the public-private sector partnership as a key factor in the success of the sustainable development of tourism Mr. Peter KELLER - President of the Scientific Committee of the Tourism Summits, Chamonix Mont-Blanc, France - Director of tourism policies and promotion, Secretary of State for Economic Affaires (SECO), Bern, Switzerland
Can the Sustainable Development of Tourism Be Managed?
Introduction
One year ago, the President of the Tourism Summits Association and mayor of Chamonix Mont-Blanc gave me an interesting report from the Mouvement des Entreprises de France (MEDEF) entitled “For France to remain at the top: recommendations from the tourism industry”. It is currently available on the Internet.
In their conclusion, the business representatives write that “reviving the public-private sector partnership [is the] key to a sustainable, ambitious and responsible policy”. According to them, such a partnership is the best way to reconcile tourism development and environmental protection.
Following these remarks, and after an in-depth analysis of the ecological, economic, social and cultural dimensions of tourism, we decided together with the mayor of Chamonix Mont-Blanc to consider the implementation of the strategy of sustainable development and to examine critically this partnership between the State and the economy.
Accordingly, we have chosen the following topic: “Managing change: the public-private sector partnership, a key factor in the success of the sustainable development of tourism”. We are quite aware that this subject deserves some explanation. Furthermore, we would like to address the following question right from the beginning of this conference: can sustainable development really be managed?
Tourism Realities
Fleeting phenomenon
Tourism is a volatile phenomenon. If a person is happy to travel, he also likes returning home. The choice of a tourist destination is generally attached to reasons of an emotional and irrational nature. Tourist motivation is fragile. One might just as well spend the vacation on the balcony.
Tourists’ needs constantly change. The value of existing infrastructure depends on them and they compel innovation and continual renewal of what is offered.As with products, tourist attractions have a life cycle. Some destinations may go out of style. It is difficult to say whether tourism is disposable or sustainable. Only the dream of travelling seems to endure.
Volatile demand
Economic analysis confirms tourism’s volatility. Tourism demand has seen multiple fluctuations; it depends on numerous periodic or cyclical risks such as climactic changes or exchange rates.
Since the world has been shrinking through globalisation, political crises spread. They lead to sudden drops in demand which, most of the time, can be quickly overcome once the crisis has passed. On graphs, this is reflected by a V-shaped curve.
Despite fluctuations and difficulties, tourism remains a sector marked by growth. In the countries of the OECD, a large part of the increase of households’ revenue is devoted to travel; tourism is described as “paramount”. Demand fluctuates, but the general trend is to growth.
Crisis and change
The pronounced jumps in tourism demand are a source of day-to-day stress for businesses. The State is often confronted with requests for help from the tourism economy.
Managing tourism is often similar to navigating through chaos. Faced with international terrorism, crisis management now makes up an integral part of businesses’ tasks.
Things happen for the State in much the same way as for the economy. The majority of the measures taken by States came into being following serious political crises. In this sort of situation, the State becomes a crisis manager. But unlike the economy, the State’s tasks have a tendency to survive a crisis and become perpetuated.Hence, short-term thought and action make their mark on economic and political daily life. However, all human institutions aspire to avoid crises and achieve development that is as continuous as possible without interruption. There is a recognized need for long-term thinking.
Businesses are trying to manage change proactively. They have invented “change management” that aims to influence the overall general trends. Likewise, since Montesquieu the State has wanted to obey the principle that “governing is planning”. It tries to reorient the evolution in a favorable direction.
Sustainable Development as a Political Concept
The logic of consensus
The strategy of sustainable development focuses on the long-term reorientation of the trend. It is also obliged to manage change. Above all, it has something of the nature of a policy line.
Politicians have decided to end the wasting of raw materials. They intend to reduce environmental pollution. They are aware that sustainable development is doomed to failure if it is not accompanied by a rise in prosperity and the quality of life of the population.
Since that time it has appeared obvious that the implementation of the concept of sustainability cannot avoid conflicts of interest. Hence the question: how do we resolve such conflicts in a democracy?
The answer is simple. The logical principle of the policy is not rationality or efficiency to the utmost degree. It is consensus, which explains why the best politician is not necessarily the one who has the best ideas. A good politician is one who has the ability to put together a majority. However, it is necessary to live with the fact that the solutions found are often only stopgaps. Consequently, we cannot expect miracles from implementing a sustainable development strategy.
Fundamental conflict of interest
A fundamental conflict of interest clearly exists between the economy and the environment. For environmental protection to gain ground, it must prove its economic profitability. The economy has a de facto supremacy in the matter.
For a long time, the job of resolving environmental problems was left to the market. The idea that a shortage of raw materials would mean a rise in prices and would reduce waste thus became widespread. Markets confronted with competition should discipline their participants.
In the field of tourism, the “scorched earth theory” was at one time championed. It says that an overdeveloped locality must bear higher costs for the entire built-up area and that this leads to rejection and the loss of its visitors. The latter return as soon as the locality completes its ecological clean-up.
Later, it was thought that the market had failed—that its short-term approach was preventing it from solving the environmental problems that were increasing in scale. The negative externalities of economic activity were fought with wastewater treatment plants, air filters and various installations focused on repair. Individuals’ behaviours were to be changed through green taxes.
Today, some economists question the supremacy of the economy. They no longer place economic growth and prosperity on the same level. Priority is given to protecting the environment. Sustainable development is being discussed.
Limits of Promethean man
Some doubts exist as to the applicability of ecological sustainability. If the images of the earth brought back by astronauts were able to make some people believe at one time that the blue planet could be managed like a business, no one believes this anymore. Ecological problems are complex. The laws of thermodynamics come to mind: entropy destroys the planet.
Further, practice shows that it is extremely difficult to manage global environmental problems and their consequences on the local level. It is difficult to intervene in time and to avoid crisis. For it is necessary to optimise the costs of errors caused by actions that weren’t carefully considered, and the costs of waiting linked to inertia.
Recall the deterioration of forests due to the large-scale displacement of masses of polluted air. Today we know that forests’ ailments are above all intensified by local biological processes. In another way, climactic changes are already producing their effects in the Alpine Arc with the rising of the snowline and the melting of glaciers.
The Roles of the Actors
Individual liberty and satisfying the needs of tourism
The concept of sustainable development cannot be valued to the detriment of human beings’ essential needs. One of the post-industrial society’s essential needs is tourism. Travelling, leaving daily life behind, is one of the ultimate possibilities that the citizen has to take full advantage of his individual liberty.
The visitor finds himself in an exceptional situation. He views his vacation as distant from the constraints of daily life. He wants to enjoy all the forms of liberty. Thus, outdoor leisure sports are seeing fewer and fewer limits. Adventure is replacing inactivity. Modern tourist sports utilise space and the environment more intensely.
However, totally satisfying tourism needs and maintaining an intact environment are not compatible. The limit of the visitor’s individual liberty is reached if waste and pollution are disproportionate. There is no sustainable development in the field of tourism without the willingness of the visitors to respect natural and ecological values.
Struggle for survival
Businesses and economic branches centred around tourism are forced to adjust their offering continually to the needs of their visitors. To do this, they must have room to manoeuvre. If they restrict what is offered, they will need to increase prices in order to last. In a globalised setting, price increases are ever more difficult to impose. They can translate into losses in market share.
Increase in the “shareholder value” and the defence of assets are then not the only obstacles to sustainable development. There are also economic constraints. Numerous economic branches and businesses struggle for their survival. Tourism is no exception: on account of the higher risks connected with demand, it could not, generally speaking, be counted among the most profitable economic branches.
In the field, the small and medium-sized tourist-related businesses of traditional destinations are fighting for their survival. Not without difficulty, they are overcoming the handicaps inherent to their small size. Their capabilities are often insufficient. Their resources do not permit them to undertake necessary modernisation. Because of competition, for the most part they are not able to integrate into their rates the environmental costs that they cause.
The volatility of tourism demand also severely tests large businesses in the travel industry. Even TUI, the worldwide leader in travel, realizing a sales figure of 14 billion Euros, is like an idol with feet of clay. No one knows if this enormous vertically integrated group will some day collapse. Margins are narrow. This means imposing limits on the division of the group responsible for questions of sustainable development.Need for the State’s intervention
When giving concrete expression to the concept of sustainable development, the State must respect the interest of all socio-economic groups. Authorities must cautiously determine if they want to intervene and if so, at what level. By following the subsidiarity principle, the State must act on the lowest level, but only if the citizen or entrepreneur cannot resolve the problems themselves.
Tourism is one of the areas of life and the economy that depend on the State. The State is a sort of co-producer of tourism that makes available a series of public goods such as transportation infrastructure or attractions like museums. It manages the territory and protects landscapes. It determines the legal framework of tourism activities. In many countries, it encourages tourism.
The competitiveness in tourism of a territory or country also depends on the State-service provider. If the services offered by the State function and guarantee a high level of quality, the tourism economy can draw competitive advantages from them.
Courses to Follow
Principles of implementation
The most successful State isn’t the smallest or the one with the lowest taxation. The “night watchman” concept is outmoded. It neither guarantees prosperity nor quality of life. A strong State is compatible with a market economy. For implementing the concept of sustainable development, it is inevitable that the State play an important role. Its job is to stimulate sustainable development. It must make sure that growth is neither too strong nor too weak.
Some fundamental principles have proved effective for implementing the concept of sustainable development; they are just as valid for tourism development. It is customary to evaluate the effects of large investments by instruments such as a “cost-benefit” analysis. Prior planning is the most efficient form of carrying out the goals of town and country planning and protecting the landscape.
The “polluter pays” principle must guide the behaviour of visitors and tourism-related businesses. When a conflict arises, it is a recognized fact that amicable negociations and solutions are more effective than a plethora of bans and obligations.
The public-private sector partnership
Authorities are aware that the State cannot do everything itself. They sub-contract jobs by granting concessions and by signing service contracts. From these institutionalized forms of cooperation they expect results that are closer to practice and more successful. These cooperations are much sought-after if the two parties are pursuing complementary goals.
Tourism is a classic area of cooperation between the State and the private operational sector. Thus, the majority of States consider promoting tourism as a necessary task of economic policy. The authorities know that a fragmented tourism economy formed of small and medium-sized businesses is not in a position to access international markets. They are also aware that national tourism boards do not have the necessary expertise in the field of destination marketing. This job is sub-contracted; it is performed by the National Tourism Offices, which are often semi-private entities.
The public-private sector partnership is often somewhat glorified. However, it is necessary to take into account the fact that there are institutional risks for the two parties. The authorities are often confronted with opportunistic behaviour. The managers of semi-private institutions can use their better familiarity with the market to accomplish personal goals rather than those planned through cooperation. They do not guarantee an efficient performance of services in every case.
Some economists regret that the “public-private sector partnership” engulfs the competition. They challenge the argument of better performance of state tasks through outsourcing them. They deem that the private sector tends toward the socialisation of losses and the privatisation of benefits. They also regret that the surveillance exercised by the State over outsourced sectors results in a politicisation of the institutions involved. This is the reason for which efforts are deployed in the United States under the “re-invent government” slogan to re-establish some outsourced jobs in the State.
Urgent problems for the public sector and the private operational sector to solve
Following the Chamonix and Geneva conferences, the Chamonix Mont-Blanc Tourism Summits finalized a system of goals favouring the sustainable development of tourism.
The system assumes that in the field of tourism, it is necessary as much as possible to limit pollution and the waste of resources. It pleads for qualitative growth that presupposes larger receipts per customer. The endogenous potential of added value that different destinations harbour must be exploited better still in the interest of prosperity and the quality of life of the local population. The existing cultural treasures must be integrated further into an event-driven tourism dynamic.
The possibilities for developing these major goals are the theme of the 5th Tourism Summits. The round tables allow for the discussion of urgent problems that cannot be resolved without the collaboration of authorities and economic circles.
It is important to protect the very last natural spaces still intact, which also represent major tourist poles of attraction. The third world can especially benefit from this, having at its disposal an immense natural patrimony. This is why one can go off-track in curbing the desire to travel. One year after the “international year of ecological tourism”, it is fitting to show how to use these as-yet untouched natural spaces on the level of tourism, while still preserving the landscape and the environment.
It is necessary to bring an end to the scorched earth policy. Enhancing existing destinations is a more “sustainable” approach than feverishly seeking out new destinations in the same area. It is fitting, then, to discuss the means of preventing existing destinations from going out of style and what is offered from becoming obsolete.
In many places, there is potential for tourism growth that could be even better exploited without resorting to enormous investment. It is appropriate to determine how tourism can contribute to stimulating the endogenous growth of problem economic areas, such as rural space or the abandoned centres of built-up areas.
In the last few years, the appeal of urban areas has strongly risen. Even famous tourism centres are emptying out and are losing their best elements. This is why it is also necessary to discuss the possibilities of reconciling urban civilisation and cultural specificities in the interest of sustainable tourism.
Faced with the process of globalisation, it is also fitting to debate the plans to put the redistributive function of tourism more in the service of the poorest countries. This entails showing how these countries can better exploit the advantages connected with their slow economic growth (the “advantages of backwardness”) within the framework of the international division of labour.
Conclusions
There are no ready-made solutions for managing sustainable development in the field of tourism.
The pronounced fluctuations in demand absorb tourism management capacities. They require managers and authorities to react immediately. Long-term thought does not sufficiently influence daily decisions.
The strategy of sustainable development is part of change management. It is furthermore based on a political concept. It can only be implemented if economic and social forces are ready to accept consensus to resolve existing problems.
In market economies there is a fundamental conflict between economic growth and sustainable development. Economic constraints do not allow one to give a priority to ecological premises, which limits the chances of conferring on development a sustainable character. Moreover, it is necessary to take into account the fact that the environmental problems that spring up on the global level can only be managed at the local level in a limited and non-globalizing manner.
Applying the concept of sustainable development is not possible without the State. It must organize and encourage tourism development. It is obliged to take into account the tourist leisure activity needs of its citizens and the interests of the tourism economy, which is struggling to survive.
The State cannot dictate sustainable development. Implementing this idea is not possible without institutional cooperation between the authorities and the forces of the economy’s civil society. Quite simply, the public-private sector partnership is essential.
