Prospecting, pioneering & preparing

Mind your Ps AND Qs (17)

Tourism`s continuous and exponential growth - including its recovery since the COVID shutdown – has buoyed the investment community. With hotels in many regions experiencing an upsurge in occupancies and airlines close to capacity, investor intentions are upbeat. Revenues are on the rise, though operating costs are too. In certain places however, especially at the intersection tourism and geo-politics, the investment climate and environment remain fractious.

Fortunately, organizations, like the World Bank and UNWTO, provide some country-by-country guidance. But that advice rarely suffices. Investors need to undertake more current, localized and contextual research particularly when unsettling socio-economic and geo-political upheavals challenge the viability of investments that can negatively impact travel and tourism.

As this WTTC report highlights, investors usually are vigilant when examining market segment opportunities as well as the presence of any existing or potentially destabilizing factors. But it`s always the inviting incentives “...smart taxation, travel facilitation policies, diversification, innovation and the use of digital technology, the integration of health and hygiene protocols, effective communication, and the importance of a skilled and trained workforce” that grabs their attention, entices, and helps close the deal.

With so many options open to investors, due diligence in evaluating competing prospects and projects can be intense. Investors expect the world in terms of giveaways and forgiveness regarding taxes, duties, etc. They also abhor uncertainties and are always wary of unanticipated events that could undermine expectations for optimum short- to long-term return (ROIs) on investments.

In seeking, revitalizing, or responding to investment proposals, destination leaders – politicians, mayors, planners, tourism officials, economic planners, entrepreneurs – often do not know how best to evaluate or deal with developers and investment communities. They tend to be ill-equipped to negotiate because few are well-versed in all aspects of tourism’s vicissitudes and the upsides and downsides of its value creation/capture opportunities whether for organizations, guests, communities and their citizenry.

Part of the problem stems from not having considered or clarified the purpose of tourism and the ways in which it is supposed to serve the community in question…how it should embrace and protect local culture and the natural environment…reflect certain principles and norms…be in-line with a community’s articulated priorities and determinants for desired progress.

In their capacity as decision-makers, it’s essential that community leaders be better informed on the current state of, and prospects for, tourism within their regions. Reports and statistics are usually available from local government sources, ministries of tourism, educational institutes, consultants, NGOS, as well as international banks, e.g. the World Bank (Tourism Watch, Tourism for Development), the Inter-American Development Bank and their publications, IDB Invest and IDB Lab programs. Other notable sources of information include the UNWTO`s publications such as Evaluating Tourist Projects, as well as the OECD`s papers and publications.

Despite tourism being so prolific and self-promotional, however, it’s amazing why so many local, regional or national banks are reticent about making (sizable) loans for hospitality and tourism projects or to entrepreneurs. Unless you are a major, branded corporation, preferentially international, it`s difficult to obtain adequate financing. So, what do the financial institutions consider and know that destination leaders don’t? The quick answer:

· Too many community leaders and managers may be considered insufficiently astute or agile when it comes to strategic or financial management.

· Existing tourism infrastructures may be inadequate or out-of-date…and, depending on the locale, may require significant government or Foreign Direct Investment (FDI), or other means to drive economic success.

· Feasibility studies may not fully reflect current and longer-term realities, with projections for growth rarely based on best- to worst-case scenarios, and/or neglectful of the robustness and diversity of a community’s economy.

· The demand for tourism projects – convention centers, performing arts centers, hotels, restaurants – may be too seasonal, cyclical or unstable.

· The maturity of the local and regional tourism cluster may be lacking and insubstantial.

· Current assets aren’t being adequately managed.

· Locations, designs, layouts, functionalities and technologies easily become out-dated.

· There may be inadequate leeway or agility to keep up with trends, changing requirements and tastes of patrons, as facilities morph into `white elephants`.

· Inflation, travel costs, and restrictions to limit inventories of hotel rooms and Airbnb rentals, for example, may be escalating prices to a tipping point whereby market demand in some segments might soften or dissolve.

Without delving into other issues associated with the productivity of tourism clusters, my introduction to the world of tourism development began as a youngster growing up in the Bahamas where my father operated various tourism-dependent enterprises, including an interior design studio.

Suffice to say, his experiences and stories left me with a certain disdain for the shenanigans, fraud and bribery, well-recorded in these fragments of history from the Bahamas which paint a ‘wicked’ picture of the development process: The hucksters involved; the privileges they demand; the bills that aren’t paid; the subsidies provided; the gradual erosion of local cultures; the takeover of the most attractive coastlines, beaches, and natural resources (particularly in developing nations); the laying of waste and a dwindling of morale, all of which I have come face-to-face with in many well-known destinations, including Spain`s Costa Brava, the place in which my father finally retired.

It should come as no surprise but real estate, especially in sunbelt, recreational, culturally rich and historic locales, is considered the most attractive, magnetic of assets for the laundering of illicit gains. A precarious and sad state for communities-as-destinations that are prospecting for investment, pioneering for “nothing but the best”, yet are often ill-prepared for all eventualities, including catastrophes.

As Immanuel Kant quipped: “Avoid participating in the creation of a tragedy.” Yet, that`s what happens when there is a disregard for guardrails and when the rules, regulations and bylaws associated with planning, construction, design and business operations are bypassed or flagrantly ignored, making a mockery of planning and rules-based democracies.

Examine this audit of the re-development of Ontario Place in Toronto, Canada

Now is the time to see the past for what it was and

Imagine the future for what it could be.

The most diligent of leaders and managers must demand triumphs and seek to diminish tragedies when it comes to tourism development. But, the ability to undertake intentional change in an unpredictable world requires a fundamental understanding of, and appreciation for, three key concepts: Community…destination…communities-as-destinations and destinations-as-communities. Intentional change cannot proceed without understanding or being mindful of the metaphysical aspects, particularities and individualities of places.

The obligation to bring clarity to the purpose for pursuing tourism represents the basis for articulating and developing tourism strategies. Yet, when examining tourism strategies, it seems as if purpose is rarely or fully fleshed out. Read this Harvard Business Review article, Put Purpose at the Core of Your Strategy, to appreciate why it should lie at the core.

In establishing a rationale, it`s important to point out that tourism development differs in fundamental ways from community development, and yet tourism development is dependent upon, and often evolves from, a community`s notion of community development.

If tourism`s purpose hasn`t been sufficiently and wholly thought out, however, tourism development can unsettle community development by commandeering scarce resources, prioritizing the needs of visitors over citizens, dominating certain neighborhoods, being inflationary, and appearing (being) predatory.

Some developers, however, will argue that the mismatch or lack of fit often arises out of strict adherence to community or urban planning practices and policies that may be counter-productive and ill-suited to tourism`s development…causing disagreements and animosity among stakeholders. A view based on certain truths, yet remaining unresolved either because of legacy practices, an unwillingness to alter the status quo, or because there are suspicions of developers known for their guile and ability to weasel their way into the good graces of politicians.

Decades ago, when I undertook feasibility studies, I was too naïve to reflect on or consider these issues. The requirements for thorough analysis were generally based around the soundness of the economic and financial data. It was only when asked by government agencies to examine the presence and impacts of tourism on a community (whether contracts or obligations were being honored) that I began to recognize the shortcomings associated with certain tourism development initiatives. Valuable lessons that led to articulating the need for more responsive and responsible tourism planning which spurred my interest toward more considerate, community-wide involvement in community-based tourism.

Whether a destination be urban, rural, or remote, they are, as matter of fact, communities.

Every community a destination

Every destination a community

As a community-consumptive and community-intense phenomenon, I`ve come to realize that tourism deserves to be community led in accordance with pluralist principles, not only in the villages and towns of developing countries, but in the small, large, and diverse cities or communities in the more developed world. But is that happening; has it become the norm? NO, and whatever contrary evidence that exists it’s sparce to say the least.

Study the record of sustainable community tourism in your own community and you might discover a minimum of consultation but an unwilling interest in changing attitude, demeaner, or in engaging and involving the community in actual decision-making. And while arguments will be made in support of how a community`s citizenry already and inevitably derives benefits from tourism, the efforts to improve community shared net value, and make it meaningful for all stakeholders, so far seem shallow.

Of course, a lot depends on the community in question; how shared value is defined; how it is pursued, created, captured and experienced; including the pervasiveness in delivering the promised economic, functional, emotional, life improving and social value or improvements that serve to enhance the strength and passion for community, instead of what is solely or strictly monetary.

Yet, as a set of business endeavors, tourism prioritizes economic and financial performance. Certainly, there is a flow of direct benefits that goes toward wage and tax revenues and the prominent enterprises or corporations who set the overall touristic agendas, manage the tourism systems and services, provide employment opportunities, and create only those products, services and experiences that are demonstrably profitable.

What’s often fascinating about tourism development, however, is the fact that initial development is usually started by the local entrepreneurial class who valorized tourism`s growth and development potential. It`s only after the pedigreed brands have been invited in and given the prime locations and opportunities that the future class of entrepreneurs are allowed to capitalize on whatever meager opportunities and crumbs remain.

Having had a father and a mother who established and operated their own businesses, I`ve lived the hardships and heartaches of entrepreneurialism. SMEs overtly denied the competitive victories that go to the Goliaths who dominate over the Davids due to the privileges bestowed upon them – with emphasis, for example, given to the chain hotels as gateways to growth (not outdated as it might seem).

What’s seems obvious to many is that a form of elitism is being practiced by politicians who are committed to the big, bold and highly standardized, but are neglectful of supporting the development of the local, small, or family-run enterprises known for their ingenuity, creativity and craftmanship…an under-privileging of entrepreneurs who fashion the uniqueness and distinctiveness of destination economies, but who are given few inducements and incentives and, hence, struggle in their fight for fairness against stringent rules, regulations and policies.

If communities-as-destinations are to ‘imagine the future for what it could be’, the quest for real community shared value must be first be legitimized, then optimized. Intentional change in an unpredictable world – overcoming the scourge of income inequalities and climate change - must become the new norm.

Tourism has the potential to contribute to being a ‘golden light’ phenomenon as to what is possible. In doing so, it can’t afford to compromise the ideals of becoming even more trusted, welcoming, hospitable, caring, considerate, empathetic, generous, celebratory, conscientious, convivial, innovative, and accountable.

As I reveal in my e-book, Astonish! Smarter Tourism by design, MAGNIFICENCE, or the ‘golden light’, cannot shine unless it’s purposefully designed…design that represents the process through which desired ends become real. Whereas the purpose of scientific inquiry, utilized by tourism`s professoriate, researchers and some consultants, is to describe and explain things that already exist or be, the task associated with design involves the facilitation of intentional becoming.

As leaders and managers of ‘destinations’, our desire to fully integrate tourism within and for ‘communities’ has to become the ultimate quest…a renewed attempt to find authenticity in a post-authentic world. Such an intention, however, will only be realized when a well-established rationale or a “why” has been established for tourism…when a who the design(s) is for has been clearly identified…and when a who recognizes those people who may be most affected by the design(s). This is our call to action, Destinations-in-Action.

In looking back “to see the past for what it was”, the status quo and disingenuous behaviors need to be identified, unlearned or dismantled. Only then can a beginner’s mind start to take shape…a mind open to new learning, new possibilities, new insights, and new intentions, with full consideration for issues associated with ethics and the creation of value. For this to occur, everyone must commit to the specific conditions of situations and be open to identifying and selecting altered directions and desired outcomes (some of which might surprise).

Whether as designers or in directing designers, leaders and managers must then follow through by committing to accept, and take responsibility for, past digressions to bring the right things into existence, for the right reasons, for the right people, at the right time and place.

Because good designers rarely accept any situation as given, they are compelled to ask challenging questions to better understand the true nature of what they are dealing with. This means never accepting the problem as presented to them, nor for that matter the solution.

Instead, they undertake critiques or assessments that lead toward judgments concerning strategic paths that best serve the interests of the communities-as-destinations, destinations-as-communities, based on ‘what needs to be’ and ‘what is desired to be’.

As a long, drawn-out quest, their design process normally proceeds through a sequence of stages, fleshed out beyond the simplification of what follows:

· Everything begins with the initiation of intention and development of a communications EDGE with the community to engage in serious discussions and conversations about tourism, the ‘why’, ‘who’, ‘what’, and ‘when’.

· In determining who might comprise or be involved in a collaborative, the idea is to identify who, among various stakeholders, should be involved and have ‘agency’ to act and make decisions.

· One of the most difficult tasks requires figuring out what to ‘let go’ and encouraging ourselves and others how to ‘open up’, by observing, seeing, questioning, listening and hearing.

· In undertaking deep immersion into the issues and problems, the best designers radiate outwards to identify and pursue all patterns and lines of inquiry, while being conscious of not knowing.

· After divergence comes the necessity to converge to fully discern the nature and complexity of the environment, context, the relevant particulars and generalities.

· The tasks associated with formulating concepts, styles, prototypes, details, models, simulations and potential avenues for seeking solutions, with reference to the ‘why’ and ‘who’, comes next…what to bring into the world, what junk to get rid.

· In seeking realization, the innovation (or modification) of things, concepts, artifacts, technologies, services, experiences, including the necessary elimination of what pollutes and dehumanizes, takes place under the guidance of who has agency to make decisions for the good of the community.

Positing leaders and managers of destinations as designers and vice versa may seem a stretch. But by guiding people and communities-as-destinations into new and better realities, embracing inclusiveness, and becoming causal agents in merging the real with the ideal, they put their communities-as-destinations on pathways to excellence, thereby creating legitimate shared value and wealth that can manifest meaningful ‘wellth’.