Update

Hotel size (guests) (0-2500)

Solid waste capacity (0-200%)

Waste education

No Yes

Water treatment

No Yes

Solid waste treatment financing (0-100%)

Fishermen working at hotel (0-20%)

Share of Government net revenue given back to fishermen (0-10%)

Tax rate (10-30%)

Secc

Bsecc

Chl

BChl

CB

BCB

Change in net government revenue over time

Hotel net profit

Bathing factor

The sustainable coastal tourism simulation tool

Exploring environmental-economic feedback loops in coastal tourism development in a small island context with a simple simulation tool.

Version 1.0- prototype version

Contents

1. Overview
2. The tool
3. Using the tool
4. Exploring the feedback loops and playing with policy options
5. Conditions of use
6. Bibliography

Overview

In spite of the importance of coastal tourism for the economies of many developing countries, tourism infrastructure has often been developed without full consideration of long-term impacts on the environment, resulting in adverse impacts on other sectors of the economy and eventually causing the decline of the very resource on which tourism is based.

In many countries coastal tourism infrastructure was developed in the absence of investments in solid waste treatment capacity and wastewater collection and treatments systems, which has resulted in pollution of water courses and coastal seawaters. In the process, fisheries and freshwater resources have been affected. Ultimately, the degradation in the water quality has caused losses of local marine biodiversity, declines in local fish stocks, and lower seawater quality, which in turn has impacted the attractiveness of local tourism.

Investment in tourism infrastructure, as the result of a politically determined process, may often be biased towards short-term profitability, neglecting long-term sustainability considerations .Decision-making processes that would give high priority to sustainability considerations and to the long-term health of ecosystems as providers of services would result in different investment decisions. Among the many reasons that have been identified for such disconnect three aspects stand out: lack of awareness, knowledge and capacity; conflicting objectives of the different stakeholders; and inadequate institutional framework to address the feedbacks between infrastructure development and ecosystem degradation. These three factors all relate to the political economy of decision-making in tourism infrastructure investment. More on this in the background paper.

The sustainable coastal tourism development training tool is an educational tool based on a generic model for integrated planning of coastal tourism infrastructure. The tool aims to address gaps in awareness and capacity for integrated decision-making and planning in tourism infrastructure development in a developing country context. The underlying model is a simple closed-loop model of tourism infrastructure investment, which integrates typical economic, social and ecological dimensions of the problem. The model includes several policy options that allow stakeholders to intervene at various places in the loop. The model allows stakeholders to explore how various combinations of policies perform in financial, environmental and social terms over the long period. It can therefore be used as support to an educational tool for training and capacity-building of stakeholders in various contexts.

The tool is built and parameterized in a way that allows one to:

• show how the different stakeholders are affected by tourism infrastructure decisions;
• show the interdependence between the impacts created by tourism development and local sustainability, through solid waste and water quality feedbacks;
• show how integrated strategies for solid waste and water quality management affect outcomes of interests for the different stakeholders, thus allowing users to explore other stakeholders’ perspectives and motives; and
• highlight the tradeoffs between long term and short term decisions, and between individual objectives of stakeholders and integrated sustainability strategies.

The simulation tool was kept deliberately simple, in order to be user-friendly and understandable by non-specialists. It is dynamic, i.e. covering a period of twenty years, in order for users to see the impacts of their decisions unfold over time; and it lends itself to negotiation role-playing games where participants can see the impacts of their decisions on a range of outcomes of interest.

The tool

The sustainable coastal tourism simulator is based on a simple model that illustrates a full loop of feedbacks between tourism infrastructure investment and ecosystems, and in particular the ones from the environmental side to the economic (and social) sides. Simulation results are presented over a time horizon of 20 years, allowing the feedbacks to develop over time.

Among a range of possible feedbacks that are relevant from the policy point of view, the tool focuses on factors that are, to a large extent, manageable by national and local stakeholders and decision-makers. Specifically we illustrate the necessary interconnectedness of strategies for tourism development, solid waste treatment, and wastewater management. These issues are relevant in particular for small islands around the world.

The setting

The setting for the simulation tool is a small island surrounded by a lagoon, with suitable attributes for attracting international tourists (pristine water suitable for swimming, abundant fish, etc.). A group of investors is proposing to invest in resorts on undeveloped beaches along the lagoon. There are four interest groups:

• Investors: this is simplified here and represented as an international hotel chain, whose objective is to establish a tourism resort;
• Local residents (represented by their local government) live in a small town upstream in the watershed, along rivers that discharge in the bay where the resort is planned.
• A small community of fishermen, which can also be thought of as indigenous people, live out of the fish caught in the lagoon;
• The central government

Baseline scenario – before development takes place

The baseline scenario is the default scenario that the user faces when opening the simulation tool, with all interactive policy parameters set to zero. It represents the situation before investment has taken place. The lagoon is weakly polluted, endowing the coastal area with abundance of fish, both in terms of quantity and marine biodiversity. Sea resources (fish) are exploited by local fishermen, who have limited outside opportunities to earn a living. Unemployment is high among local residents. The local town has no sewage system or solid waste treatment facilities, so that waste generated by local residents pollutes the lagoon. The sizes of the local town and the dimensions of the lagoon are parameterized in such a way that before the investment takes place, the waste generated by local residents can be absorbed by the lagoon and does not affect fish stocks or seawater quality and the projected resort development can count on and unspoiled beach, pristine water and large fish biodiversity to attract tourists.

Basic scenario -- development has taken place

The basic scenario reflects a situation in which every actor cares for their private interests, and no environmental regulation is in place. A resort has now been developed. The resort brings with it:

• Tourists, and associated income to the hotel chain and revenues for the government. The number of tourists is affected by the quality of the seawater and marine biodiversity in the bay.
• Solid waste and wastewater, proportional to the number of tourists;
• Workers in the hotel. Those are assumed to live among the local residents. Depending on the size of the hotel, they can be previous residents that have been hired by the hotel or new residents brought there by the tourism development;
• Local residents earn additional income, directly from the hotel and from induced activities (souvenir shops, traditional handcrafts, etc.). This translates into increased consumption and additional solid waste and effluents.

In this basic scenarios, the hotel discharges effluents directly in the lagoon. The hotel also chooses not to build a solid waste treatment plant, and instead dumps its waste in a nearby landfill. As a consequence of this and of the additional waste generated by local residents, solid waste increases, sea water gets more polluted, resulting in decreased marine biodiversity, and increasing health hazards for tourists and marine life. For large hotel sizes this has a negative impact on tourist arrivals, hotel income, and ultimately on the profitability of hotel operation in the area. Decreased marine life also negatively impacts local fishermen’s livelihoods. All these changes accelerate over the simulation period, due to threshold effects and feedbacks.

Scenarios in this class can be explored by varying the size of the hotel from 0 to 2,500. The implications for government, hotels, local residents and local fishermen are shown in different tabs.

The model is parameterized in a way that if a large size hotel is built without any simultaneous investment in water treatment and solid waste treatment facilities, fish stocks and water quality decline rapidly. After 20 years, fish stocks have collapsed and water quality is so poor as to cause a severe drop in tourist arrivals. This leads to deficits for the resort, decline in tax revenues, unemployment in the local town and loss of livelihoods for the fishermen community.

Alternative scenarios -- in search for sustainability

In alternative scenarios, policies and measures are introduced to address the adverse impacts of the hotel development. Those include:

• The hotel installs wastewater treatment for its operations (this can reflect government regulation);
• The development includes a solid waste treatment plant, whose capacity can be varied in the model;
• The hotel and the government agree on a rule for sharing the investment costs and functioning expenses of the solid waste treatment;
• The government can invest in education and awareness campaigns for local residents aiming to limit waste dumping and river pollution;
• Compensation policies for fishermen are introduced, in the form of quotas of local employment provisions in the hotels or through a share of government revenues generated by the development being allocated to the fishermen community.

These measures impact the quality of water and fish stocks over time, hotel profits, government revenues, and local incomes. The model allows users to explore different combinations of measures and see how they perform in financial, environmental and social terms over the long period.

It is important to note that the model underlying the simulator is generic. Although based on parameters taken from the scientific and economic literature, it does not reflect the specificities of any particular location. As such, model insights and results should not be taken literally. The goal is to raise awareness and enable cross-sector and multi-stakeholder dialogue, as a prerequisite to define shared visions of sustainable coastal tourism development.

You can read more about the motivations behind the tool and explore the tool itself by consulting the underlying paper on which the tool is based:

An educational simulation tool for integrated coastal tourism development in developing countries.

Using the tool

The tool is designed for self-use as well as for training and capacity building sessions. In the latter context it can be used to raise awareness, by letting trainees simulate a range of policies and exploring the feedback loops.

The sustainable coastal tourism simulator version 1.0 is a prototype version.

In order to work, the simulator will run on Microsoft Excel for PCs 2007 and 2010. Older versions of Excel will not open it. The simulator works in widely available browsers such as Internet Explorer, Mozilla Firefox and Google Chrome.

Exploring the feedback loops and playing with policy options

The simulator is built around a series of tabs that show the result of coastal infrastructure development and other policy choices over 20 years. The results of the model are presented in different tabs that focus on outcomes of interests to different groups : local residents, environment, fishermen, government, hotel.

A – TABS

Each tab focuses on outcomes of interest for specific groups or actors. Once the user has simulated a set of policy decisions, he can explore their impacts and wider implications on different groups’ outcomes of interest by looking at the different tabs.

B - INVESTMENT AND POLICY OPTIONS

Each of the controls represents a policy decision or action that users can implement. There are two types: discrete policies (doing something or not) and continuous policies (doing something to a certain extent, within a pre-defined range).

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