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8 Solutions for Overtourism

• Jeff Borman and Matt Brown

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Overtourism is one of those sprawling topics that everybody in the travel business has opinions on. Solutions are a bit more complicated, but let's dig in with tourism taxes, diversionary tactics, bans on cruise ships, the rise of "de-marketing," tax credits for better business practices, caps on hotel construction, and other tools that make our lives and our travel plans a bit less frantic.

Speaker 1:

Hi everybody. It's no Show. I'm Matt Brown, joined as always by Jeff Borman. We are talking today about overtourism. It's a sprawling topic that everybody in the travel business has opinions on. Tourism as an industry makes up around 10% of global GDP. In 2023, 27 million new jobs were in the travel and tourism sector alone. According to the World Travel and Tourism Council. Much of overtourism you know, as we've been talking about this leading up to this episode is marketing. Right, you know Venice, it's amazing, but it sort of got enshrined as amazing Things that you think you have to do when you visit a place. I have to go to Times Square, and I always beg people when they come to New York City do not go to Times Square. Most New Yorkers universally recognize it as the least attractive place to visit. That doesn't stop a single person from wanting to go see Times Square when they come here. They have to go. Jeff, what do you think about us? What do you think about overtourism?

Speaker 2:

I think, first of all, the 27 million new jobs we need to identify. These are not just jobs. These are very meaningful jobs. Most Americans may not always see it this way, but when a hotel is built outside the US, these are jobs that directly lift people from poverty. They require no degree, no skill set beyond a great smile or work ethic. Opening a large hotel in Barranquilla, colombia, would directly pull a thousand people, and indirectly many more, into a better existence right, a better life for those people. As global brands reach those destinations, a culture of racial and gender equality are often introduced. Health benefits and education programs and things we take for granted in the West are introduced. So it's not just 27 million jobs. There are 27 very significant jobs for affecting lives. I think that needs to be at the start of the conversation over tourism recognizing that the massive humanitarian benefits of tourism are really what's driving what we're now calling a problem.

Speaker 1:

Let's dig into some of the ways that regions and cities and public-private groups are trying to tackle over tourism. Let's just get some of these. Let's do a little table setting here before we dive in, and one of those ways is tourism tax. Now, I'm not opposed to a tourism tax per se. If you're going to visit Venice, you pay an extra $20 at the city gates to come in and I think on paper that sounds like an easy way to generate revenue, but it does squeeze budget travelers even more and it makes expensive places even more expensive, and I feel like it's a band-aid. What do you think about tourism tax?

Speaker 2:

I think we kind of have to step up a level. On the tourism tax. I'm not against it. Why are you doing it right? What are you trying to affect by creating a tax In New York City? I was recently at the fabulous CWA Hotel and I got my bill. It was a 20% tax when you added up all the New York City taxes and especially the Javits Center tax, I think, or something like that that they're calling it right.

Speaker 2:

So directly pulling money from non-locals into the local coffers? It's a classic way to do it. Listen, florida has no state income tax, mainly because they have a sales tax and tourism taxes. Well, if you're a local in Florida, a resident of Florida, many people move there for the reason of not paying a state income tax. You can't have it both ways. So I think you just got to recognize the two together, right? How are you going to fund all of this wonderful infrastructure that people come to visit? It's either out of the locals' pockets or out of the tourists' pockets, and it's a lot easier to tax the person that doesn't get to vote.

Speaker 1:

There are three destinations that we've been reading a lot about that are handling over tourism in three very different ways, Jeff. Let's talk a little bit about those. First up is Venice.

Speaker 2:

Right, they recently introduced an entry fee for those who want to visit just one day and see its iconic canals, and the overnight tax is also in effect. Supposedly it's been about a year. There's been zero impact to the amount of foot traffic, and that's what concerns Venetians on a daily basis. Right, they've raised money to deal with the infrastructure toll that tourism takes on its fragile little city, but it's not reducing tourism, it's not reducing foot traffic and so it's not improving their lifestyle.

Speaker 2:

Other places are trying similar approaches. Right, they're setting limits in Marseille, in France, introducing a reservation system, to the number of people who can visit national parks. They're aiming to protect a cove because it's sensitive and vulnerable and degraded right. But then in Europe you go the other direction. You have what Amsterdam is doing, where, instead of a tax, they are simply reducing flight capacity at Schiphol Airport. Right, fewer people coming in. That's how you do it. They have put an outright ban on new hotel construction. Those things like Malaga. Spain is doing something similar, only they're banning short term rentals completely. So those different measures are more likely, I think, to give the locals what they're looking for, whereas perhaps the tax just raises the funds, but it's not helping day-to-day Venetians.

Speaker 1:

Right Like if you're traveling. If you decided you want to go to Venice, an extra 20 bucks is not going to stop you for the-.

Speaker 2:

No.

Speaker 1:

Right.

Speaker 2:

Not a chance and in fact, most people don't realize they're paying it because if you arrive by cruise, it's a part of the cruise ticket, right, when you book the package that's there. If you arrive by plane into Schiphol, if you're still lucky enough to get on one of the reduced flights, you're going to pay that, and in fact, we actually pay this everywhere. I think we did an episode with Matt Cornelius years ago and I think we talked on that episode about how all these fees and airport fees they're in the price of your airline ticket anyway. Right, it's already bundled up, so you don't have to pay an airport tax on arrival, but you're still paying one.

Speaker 2:

I like what Amsterdam is doing, but I think their measure directly attacks what they're trying to do. Right, and one of the reasons Amsterdam and locals are frustrated with too much tourism is also the type of tourists that they're getting. It's not just the volume the volume is a problem but it's the type of tourists who are coming specifically for the red light district and they're looking to pull back on that. And so one of the things they've done too even though there's a little bit outside of, you know, over tourism is they're only allowing residents now or at least this was proposed, I don't know if it actually happened they're proposing that only residents could buy cannabis to reduce the cannabis tourism. They don't want that crowd coming from all around America and Europe to have that sort of fun, and similarly with prostitution. Again, I don't know how you regulate this, but they've put a couple of different ideas out there to make the city more livable for themselves.

Speaker 1:

The third way here that we want to talk about that's being deployed in Europe is just straight up aggression, and I think this has gotten a fair amount of coverage in the US. But Barcelona I think the citizens of Barcelona have sort of, I guess how would you describe it? They've taken up arms, shall we say.

Speaker 2:

Spring tourists with water guns when they dine in cafes and lobbing paint-filled balloons. I heard that one. This is clearly not how you want to welcome guests of your city, which is honestly not the point. They want to make them feel unwelcome and stop other people from coming in. It's not the right way to do it. Not only is there an ethical concern that I don't think we need to go down the path of you should probably not be throwing paint-filled balloons at anyone for any reason but it's directly not going to stop the foot traffic that gets off these large cruises.

Speaker 2:

I think cruises are something we should get into because it's a different kind of tourism. I think we'll talk about Juneau, maybe, where this is a town of 22,000 people in Alaska and on any given day the town's population can double when four big boats arrive. Right, that makes the infrastructure absolutely unlivable for those people, and so there's a couple different approaches that are going on around the world. Juneau's is quite interesting. I think they know that the $30 million in passenger-affiliated revenue that they need in Juneau, they can't just turn that off. Their town goes bankrupt without it. Their lives change, the education system for their children changes. It lives on those tourism dollars, at the same time to enjoy living there. They've proposed what they call ship-free Saturdays. I think this is a really good hybrid, right, you still expose the beauty of your town to people, you still gain the local tax dollars that you want for your people, but you give them at least one day of break where they can actually enjoy living there and diversion as solutions here.

Speaker 1:

Earlier this year, miami Beach actually made headlines for quote-unquote breaking up with spring break. They did this video where the city officials urged the longtime crowd of spring breakers, who descend upon Miami Beach like vultures, to just stay away. To enforce this message, miami Beach implemented curfews. They prohibited alcohol consumption and loud music on the beaches. That's pretty radical if you've ever been to Miami Beach. They reinforced its ban on short-term rentals, imposed strict traffic regulations during peak travel days in March I was thinking a little bit about this in the context of demarketing, you know, and it doesn't necessarily have to mean negative marketing or not accepting tourists. It simply means directing tourism demand to alternative destinations Around 80% of France's 37 million annual visitors, all those people that congregate in just 20% of the country. So France is trying to kind of divert people away from Paris and spread the money around, which, frankly, is better for the country's economy as a whole when you don't have a million people each day trying to get into the.

Speaker 2:

Louvre. There's only so much regulation you can do, though, right? I mean to the Juneau example. The day after the community voted to restrict the number of ships or restrict the days of week to protect Saturdays for locals, royal Caribbean announced that it would open a new port on the other side of the island and shuttle people to town. Right, so there you go. Juneau commerce figured it out, and it took all of ours. Right they were ready for it.

Speaker 2:

I don't know if you, let's say, matt, in your example, the demarketing, uh, if you can't fly as often into skip hole in Amsterdam, do people start flying more often to the Hague and then just training up? Right, I mean, where people want to go, they will. Where there's a dollar to be made, people will. Business people will figure it out. When we get to the idea of what to do about these things, in my mind it starts with an understanding of what are you trying to solve here. Right Is the existence of a place threatened. Right and Machu Picchu, a place I've been twice. I would say no one should ever be allowed to go more than once. Right, it's a very fragile place. It has too many footsteps and it's literally ruining what was built. You won't be at this pace. Someday soon I don't know if it's 20 years from now you will not be able to see Machu Picchu. It won't exist. Not be able to see Machu Picchu it won't exist.

Speaker 2:

The Galapagos Islands belongs to Ecuador. The policy there is a very hard number of people who can visit the islands At any given time. There's a hard cap. Being in the middle of the Pacific, you can do that. It's much easier to control, but to protect the fragile ecosystem of the Galapagos. That is an absolute must, it's non-negotiable. Right you start unleashing tourism on the Galapagos? There will be no Galapagos, so you must do it.

Speaker 2:

So I think number one is how do you deal with preventing the destruction of a place because too many people are there? The second thing, though, is if you're trying to impact the reduction in quality of life for the inhabitants, human or animal, like in a place like Barcelona, the city is not being threatened Like the structure of the city, gaudi's wonderful architecture, right. It's not being threatened by so many people being there, but the lives of locals is, and the infrastructure of the city is not meant for it. So you have to deal with that in a very different way, and I think maybe the third section, or kind of category, is if it hurts the product or the authenticity of a place, how you go about making sure that each of those threats is addressed appropriately. The solution is probably very different.

Speaker 1:

Tourism is a growth-driven industry, but supporting that growth demands investment. It demands infrastructure, beyond just adding more hotel rooms and pools. It requires spending on water systems and sewers and roads and public transportation, law enforcement, waste management, the upkeep of public spaces. These aspects of government aren't as glamorous and aren't as easy as putting up a new hotel, frankly, and the tourism industry often overlooks those things as priorities because they're big and expensive and, on the best of days, incredibly slow to get done. Plus, you have to find time to do them. Let's say you're going to build a new road, you got to find time to build it and then not interrupt the flow of tourists that are keeping the money coming in.

Speaker 2:

If you look at who would support a moratorium on new hotels, you'd find an unusual advocate among existing hotel owners. We don't want more supply, right, right. I think Key West is one, maybe one of the best examples of tiny Island. I don't know how many hotel licenses there are, but call it maybe a dozen or two dozen right. A dozen big ones, maybe a couple dozen real small boutique B and Bs Right, but there are no more to be had. And that's not just an over tourism, that's not a reaction to recent over tourism passions. It's been that way for a very long time.

Speaker 1:

Okay, so. So wait a minute, so I will. Okay, I'm going to corner you a little bit. So, true or false hospitality brands ignore over tourism, because over tourism is great for business.

Speaker 2:

Uh, false. You asked the wrong question. You said hospitality brands. I said hospitality hotel owners. Right? The owner of a hotel.

Speaker 2:

If I'm one of 10 hotels in Key West, I don't want there to be an 11th or a 12th. I want that demand to be constrained. It helps me drive pricing right. You start creating more supply. Pricing power decreases. You share the occupancy that comes in your occupancy the whole thing's bad right. You want a concentration. Occupancy that comes in your occupancy the whole thing's bad right. You want a concentration In New York City.

Speaker 2:

Let's go from maybe the tiniest example like Key West to New York City, maybe the largest, probably the largest hotel market in the US. In the last 15 years it went through a 20% supply boom, right, and it's because people, city officials and other business people realized there was so much money to be made by putting more hotels in Manhattan. But what it did initially was not great. It was, in fact, terrible for the existing hotel owners, right. Instead of being able to charge $700 a night for a shoebox room in Times Square, now there are well more hotels in Times Square and I can only get 500 or 400 for it right Now. Airbnb and the sharing economy is the total opposite of this. Right, I think there is a very easy way to enact some of the over-tourism complaint or to address some of the complaints of over-tourism by locals, because the sharing economy can grow exponentially. Right, it takes years to build a hotel. Right, you'll be in planning stage and financing and construction and like, from the minute somebody, a developer, has an idea that I'm going to buy that land to build a hotel, from the minute they think that to the minute the hotel doors open it's going to be five years. Right, especially in a place like New York where you've got, you know, a hundred different licenses you have to acquire. Right, it takes a long, long time. It takes about 10 minutes to put your place up on Airbnb. And so what you've seen in the supply side and New York City is again a great example of this this boom in non-hotel but overnight stay supply has exacerbated these problems.

Speaker 2:

One of the things that they are doing, besides throwing paint-filled balloons at people in Barcelona Barcelona is going to cut back on and maybe even a total, outright ban on short-term rentals, because their neighborhoods are feeling degraded and you can't get into local coffee shops. So I think there is probably a lot more immediate. I'm certain there's a more immediate solution in addressing the short-term rental economies. It's probably a better long-term solution also, and I'm going to be accused of saying that as a hotel guy. I understand the accusation, but hotels have to operate very differently and I think more likely we'll go along with a long-term solution that balances out valuable amounts of transit in and out of a place, valuable amounts of transit in and out of a place.

Speaker 2:

To the economics of who says there's a problem with over tourism. You do have very good examples out there. The greek prime minister recently said we do not have a problem with over tourism. That economy relies on it. But what they're going to do is they're going to try to spread it out and, matt, you mentioned this in different ways spreading In your example you mentioned trying to disperse the number of places people go, where these hundreds of millions of tourists to France only concentrate in the same places. They want to spread them out across France.

Speaker 2:

Right, I think Greece is doing something kind of like that, only it's over the course of a year. Everyone wants to go to Mykonos and Santorini when they're in Greece, but the way the prime minister presented this was it isn't a problem with them taking too many places, people. It's that they all come in March, april, may, and these are wonderful destinations in six of the other nine months of the year too. If you're taking the approach that we're going to spread this out over a greater period of time, it's a much harder thing to do than an outright ban or a cap. Listen, the libertarian in me hates the idea that I'm going to make a parallel with carbon offsets. But what happens if you travel off-season? Well, is your footprint in this case, I mean it literally less invasive? How do we reward that in a way that's not just cash? If it's only a matter of cash and prices, then travel just goes back to being a luxury for the wealthy, and I don't think we want that.

Speaker 1:

Let's go lightning round. Where should people definitely not go?

Speaker 2:

This is a subject where I hold a few inconsistent beliefs, but my answer here, very clearly a few inconsistent beliefs, but my answer here very clearly, unequivocally, is Antarctica. I think it should be strictly, totally banned from non-science visitation. The only reason humans even go there is to join the Seven Continents Club. It's a box-checking exercise. People want to come back and tell the stories and say they did it. I don't think that's a good enough reason for people to allow, you know, to allow people to spoil the last pristine place on the planet.

Speaker 1:

What's a touristy place you secretly like?

Speaker 2:

Guilty pleasure, fort Worth stockyards. I mean, it's the Disneyfication of cowboy culture, but I love it. It's so much fun. I go every chance I can. I live in Dallas now and it's only an hour away. I was there a week ago and that was not by choice, it was a work event that brought me there. But, man, I was happy to go. I love it.

Speaker 1:

Okay, so that's domestic, International. What's a touristy international place you like? What's a touristy international place you like?

Speaker 2:

That I like Touristy. You know I've said Amsterdam so many times today already. I do love Amsterdam, bali. I love Bali, but it's kind of manufactured and it's sadly so. Right, it has a very authentic Hindu culture in the middle of the Pacific, but it has also, then you know, that culture has been so exploited for tourists. It's kind of like Hawaii in that way, where you know, yes, there is culture you can go back 100 years, 200 years to find, but it's been so Disney-fied that you kind of question what's really real anyway? What's?

Speaker 1:

the most overrated tourist destination in the world.

Speaker 2:

I try to talk everyone out of the Maldives every chance I get. There's no reason to go to the Maldives. You're resort locked, literally. You fly into Mali and from there anywhere from 45 minutes to another two-hour flight because these islands are so spread out and you fly a tiny little atoll that is essentially just a resort. So it has amazing hotels, some of the most amazing resorts in the world, but it is, if you care about sustainability, awful, and not just because, as a Europeanan or an american, you're flying 24 hours to get there, but on your way there from europe or america you have probably flown over a thousand better places to be I have a hot take the caribbean.

Speaker 1:

I think the caribbean is really overrated you know, in relation to the maldives.

Speaker 2:

I'll go to the Caribbean a hundred times. There are beautiful islands in the Caribbean. St Lucia is gorgeous right. Jamaica is incredibly beautiful. I love Puerto Rico. It has rainforest and mountain right, so I don't think the two really Maldives can't compare. There's so much more in the Caribbean.

Speaker 1:

The Caribbean is a hot exploitative mess.

Speaker 2:

If I could, live there now I'd already be there. I'd be recording this from about an hour outside of San Juan.

Speaker 1:

Wow, over-tourism, jeff. We solved it Once again.