Economics: How To Deal With Overtourism

 

(Drivebycuriosity) - There is a lot talk about overtourism. Especially the residents of Rome, Barcelona, Venice and other European tourist magnets complain about rising tourist masses who congest their streets, places, subways & buses. I can understand the protests. I live in Manhattan where streets & subway are packed with tourist crowds. And I am a frequent tourist myself.  In the spring I visited Rome as a tourist and was part of the crowds.

But there is the other side of the coin. The citizens of Rome, Barcelona, Paris, New York - and all other popular tourist destinations - also benefit from the tourists. In Rome - and many other cities - I had to pay a tourist tax which was added to my hotel bill. So the cities have an additional tax income  which they can use to pay for their employees and to spend for public services. Visitors also create jobs & income in hotels, restaurants, bars, shops and other businesses. When the employees in the tourist businesses and their families spend their incomes in their home towns the money spreads all over the city. Rising tourism brings more money for public services like subways, schools, parks, libraries and more. 

The tourist money partly compensates the residents of Rome & Co. for the inconveniences, at least partly.  Many cities depend on tourism and the jobs & incomes they create. I remember my visit in Rome. It seemed that the large city mostly lives from the past. The classical Roman places and the legion of medieval & renaissance cathedrals attract tourist masses which bring a lot money into the city, keeping her going.

Btw. it is very expensive to conserve & to save the Colosseum, Angkor Wat, Taj Mahal, Machu Picchu and all other historical wonders. Before the beginning of tourism in the 19th century, nobody cared much about them. Without tourist money many historical sites would still decay. And what would the people in Venice live on without tourists?

I understand that there could be too much tourism. Being an economist I see an economic solution. When the demand for goods & service rises usually their prices go up which is curbing the demand. Cities could respond to the growing tourist stream and hike the price of visiting them. They could raise the tourist tax and other fees & taxes and use the additional money for investments into infrastructure like better streets, subways & bus networks and create more museums, parks and other attractions. They could even give their residents money. So the citizens would get a higher compensation and a better city. More subways, buses, better streets etc. would also reduce the congestion problems.

I believe that popular cities have to brace for a tourism tsunami thanks to the rising global wealth. The Brookings Institution expects that already by 2020, more than half of the world’s population will be "middle class" (pressherald). Then there will be more than 3 billion people who have enough money to cover basic needs, such as food, clothing and shelter, and still have enough left over for a few luxuries, including travel. Some cities are already building for tourism such as Las Vegas and Palm Springs, both in the US southwest. Other cities - like Dubai - are setting up in order to benefit from the tourism boom.  I assume that Rome & Co will adapt to the changes and will invest the tourist money to become even more attractive - which also means a better standard of living for their residents.

Above you can see a picture I took at Rome´s Fontana di Trevi in April.