strategy+business is published by PwC Strategy& LLC.
or, sign in with:
strategy and business
 / Autumn 2010 / Issue 60(originally published by Booz & Company)


Destination: Green Tourism

As the stakeholder with the most direct access to tourists, the private sector plays a key role in furthering a destination’s sustainability. Hotel owners, tour operators, and transport services can influence tourists to make environmentally friendly choices. By offering accommodations with a smaller carbon footprint and sustainable waste and water policies, hotels can do much to protect the environment.

Private-sector institutions, such as NGOs and universities, can provide critical research and advocacy, educating locals and visitors alike. For instance, a university-produced interactive exhibition on a destination’s unique environmental challenges can be marketed as an activity for tourists.

Funding and financing. Destinations contemplating a green initiative may be concerned about financing. However, many green programs, such as the implementation of energy-efficient technology, will have strong financial returns and can be easily and successfully implemented as private for-profit investments. Some of these initiatives pay off quickly through savings in operating costs. These savings can then be recycled into other green investment projects.

The ease and speed of recouping green investments depends on choosing the right investment plan and having appropriate political frameworks and local policies in place to support it. Setting the correct economic balance between the public and private sectors is key. If the incentives for attracting private investment are too generous, the result can be burgeoning but underfunded growth, with a high burden on taxpayers. On the other hand, if incentives are too low, the investment strategy will fail to attract enough businesses to be viable.

This balance is critically important for both small-scale, private incentive initiatives and larger infrastructure initiatives, and it can help determine the choice between them. Depending on a location’s climate and geography-driven opportunities, larger initiatives may make more economic sense — such as building a solar plant that can power an entire area rather than encouraging individual solar panels on homes.

Destinations can often generate revenue by leveraging their own unique resources, such as charging fees to visit protected sites. For instance, Belize has fixed entrance fees for its parks that it uses to maintain and protect these fragile areas. The fees are discounted for locals. Bhutan charges tourists mandatory tariffs to sustain its environment.

However, although many greening strategies do indeed bolster the double bottom line, not all are financially profitable. In addition, destinations cannot always generate the capital they need on their own. In these instances, external funding can provide seed capital for long-term sustainability efforts. Such funding includes global financing programs such as clean development mechanisms (CDM), which allow industrialized countries to invest in emissions-reducing projects in developing countries as an alternative to more expensive ones at home. For instance, in 1996 Costa Rica sold 200,000 tons of carbon offsets for $10 per ton to Norway. The $2 million Costa Rica received was used to finance reforestation initiatives.

In addition to CDM, public–private partnership financing models, biodiversity conservation funds (such as the World Wide Fund for Nature, also referred to as the World Wildlife Fund in the U.S.), and international tourism development funds (such as the U.S. Agency for International Development and the Tourism Sustainability Council) can all provide seed capital.

Capacity building and education. Beyond theory and policy, the transition to sustainability requires a variety of local residents to be involved: lawyers, park rangers, and cleaning staff will all be needed. So will educators and advisors: A destination that is seeking private-sector investment should ensure that critical information about the benefits and opportunities of green initiatives is prepared carefully for them, often by enlisting local experts for help. The design of educational and capacity-building campaigns must contain a training program that allows locals to achieve best practices and encourages them to implement and promote green policy. For example, these programs can train tour operators to choose environmentally friendly modes of transportation, limit tourists’ contact with protected areas, and discourage littering.

Follow Us 
Facebook Twitter LinkedIn Google Plus YouTube RSS strategy+business Digital and Mobile products App Store



  1. Jennifer Blanke and Thea Chiesa, editors, “Travel & Tourism Competitiveness Report 2009: Managing in a Time of Turbulence,” World Economic Forum: A comprehensive ranking and analysis, including detailed profiles for 133 countries.
  2. Ronald Haddock, Kevin Ma, and Edward Tse, “Tourism: China’s New Diaspora,” s+b, Spring 2007: How China’s economic growth — and its citizens’ increasing appetite for travel — will fuel the next tourism boom.
  3. Jürgen Ringbeck and Stephan Gross, “The Importance of Being a Must-See Destination,” s+b, 05/08/2007: How excellent travel and tourism policies, infrastructure, and services can translate into a vibrant economy.
  4. For more thought leadership on this topic, see the s+b website at:
Sign up to receive s+b newsletters and get a FREE Strategy eBook

You will initially receive up to two newsletters/week. You can unsubscribe from any newsletter by using the link found in each newsletter.