Tourist Trap
Higher prices and restricted access are coming to some of the world’s top destinations
Tourism is gearing up for an overhaul as local activists, and governments push back on short-term rentals, cruise ships, and day-trippers, all in a bid to increase housing affordability and improve the environment and quality of life for locals. These actions could disrupt the global tourism industry, which accounts for roughly 10% of GDP and one out of ten workers — even higher in places like Greece. Get ready for higher prices and restricted access in the coming years.
MYKONOS—Perched atop Mykonos, the Greek island renowned for its stunning beaches (and beach clubs), pulsing nightlife, and iconic windmills, I can’t help but focus my attention on the five cruise ships anchored in its harbor this morning. These ships, which belong to Costa, Royal Caribbean, MSC, and Norwegian Cruise Lines, have brought roughly 12,000 passengers today, more than the island's full-time population. It’s a crush of people who clog the streets, some only about three feet or half a meter wide, making it impossible to traverse comfortably.
“The most visited destinations are experiencing more concentrated flows of tourists; 80 percent of travelers visit just 10 percent of the world’s tourist destinations,” McKinsey reported earlier this year. “Mass tourism can encumber infrastructure, frustrate locals, and even harm the attractions that visitors came to see in the first place.”
The other evening, while watching the sunset at Scarpa, a popular bar on the water’s edge in its Little Venice neighborhood, our waitress bemoaned the tourists this year, sharing that the “quality and consistency” of visitors to the island had diminished. “No one wants to spend money,” she said. She also noted concerns about “bad behavior,” including increasing public drunkenness and rising criminality, including petty theft, highlighting a possible rift between the tourists, those serving them and the local population. It’s an issue not unique to this island.
Mykonos has long been a jewel of the Aegean Sea, drawing visitors from across the globe, including some storied names, like Jackie Kennedy Onassis, the wife of former U.S. president John F. Kennedy, and Greek shipping magnate Aristotle Onassis. Famed supermodel Naomi Campbell is here this week, along with Emmy award nominee Liza Colón-Zayas from The Bear (Yes, I said hello. Yes, I fangirled). However, this idyllic island paradise is grappling with the growing pains that celebrity attention brings, a reality that other popular tourist destinations face worldwide. These places face the delicate balancing act of preserving cultural heritage, natural beauty and economic sustainability for their local population while trying to accommodate the demands of a growing global tourism industry.
Tourism is Back, Baby
By all accounts, this is the year when global tourism will finally meet or exceed pre-pandemic levels. According to the UNWTO World Tourism Barometer, “The unleashing of remaining pent-up demand, increased air connectivity, and a stronger recovery of Asian markets and destinations are expected to underpin a full recovery by the end of 2024.”
In Greece, which exceeded its pre-pandemic levels last year, tourism is set to break its record with 35 million arrivals and $24.6 billion (€22 billion) in revenue—up 10% from 2023, also a record year—according to a survey by the National Bank of Greece. For reference, the total population of Greece is just over 10 million.
According to the World Economic Forum, tourism now accounts for about 10% of global GDP and employs one in ten people worldwide, roughly the population of the United States. Here in Greece, it accounts for 18% of GDP and employs more than 900,000 people, accounting for one-fifth of the workforce, according to the Association of Greek Tourism Enterprises (SETE) and the Bank of Greece.
“The recovery of the sector is very welcome news for our economies and the livelihoods of millions,” said UN Tourism Secretary-General Zurab Pololikashvili. “Yet it also recalls the need to ensure adequate tourism policies and destination management, aiming to advance sustainability and inclusion, while addressing the externalities and impact of the sector on resources and communities.”
Various estimates exist of travel and tourism’s impact on carbon emissions and the environment, but a recent study puts the industry's impact at 8% of global carbon emissions. Tourism may also negatively impact biodiversity and ecological habitats due to overbuilding, increased waste production, and, of course, overutilization of natural resources such as water. It’s also been blamed for driving up the cost of housing.
Destinations face difficult choices because the greater their reliance on tourist spending, the greater their challenges in addressing long-term tourism sustainability on multiple fronts.
Pushing Back on Visitors
Not everyone is thrilled with tourism’s growth; perhaps no people have been more vocal than the Spanish.
In early July, in the center of Barcelona's popular La Barceloneta neighborhood, thousands campaigning for tourism degrowth protested over concerns that mounting tourism harms the city, including many Americans who have made it their destination of choice this summer. Their weapon: the humble squirt gun, which they shot at visitors eating at tourist-friendly restaurants. Images and videos from the short-lived protest immediately went viral.
The groups leading the Barcelona protests argued that tourism is responsible for a myriad of challenges facing the city, chiefly among them driving up housing prices and the cost of living, making city-center apartments unavailable or unaffordable for locals. According to the Barcelona Association of Tourist Apartments (APARTUR), tourist apartments account for only 0.77 percent of the city's housing stock, yet they comprise about 40% of tourist accommodations city-wide.
This weekend, visitors to Manacor on the island of Mallorca were met with red tape and ‘beach closed’ signs in an effort by protestors to block tourists from visiting popular beaches, reserving them for locals. This small action, which gained media attention across the continent, came on the heels of massive protests on the island last month, led under the slogan, “Let’s change course and set limits on tourism.” About 40% of Mallorca’s population is employed by the tourism industry.
But Spain isn’t the only European destination where anti-tourism protests have flared. Countries like Greece, Italy, the Netherlands, and Portugal have also seen their share. The core complaints have revolved around rising rents and housing prices. However, other issues are at hand, including the impact on the local population, culture and the environment.
Smoother Sailing?
Charting a path towards sustainable tourism, where a positive impact is seen on the environment, society and the economy may be possible, but there will be trade-offs, notably access and prices for tourists. Some destinations have already taken action.
In 2016, Barcelona became the first major European city to fine Airbnb for its users renting unregistered properties. Since then, no new short-term licenses have been granted, and nearly 10,000 illegal apartments have been closed. On June 21 this year, Barcelona mayor Jaume Collboni announced plans to ban short-term rentals in the city starting in November 2028.
Other cities, like New York, San Francisco, Berlin, and Amsterdam, have followed suit in some fashion, citing housing affordability, neighborhood integrity, tax revenue, and regulatory compliance for the shift in short-term rental policy. Amsterdam and New York City have also gone so far as to restrict or effectively ban new hotel construction, further exacerbating the issue. Fewer short-term rentals, in short, will likely mean higher hotel prices for tourists as the supply of options dwindles (or stays the same) and demand remains high.
But it’s not just short-term rentals and hotels that have caught the attention of local activists and governments. The cruise industry and day-trippers are also under increased scrutiny for their environmental impact and strains on local resources.
In 2021, Venice barred large cruise ships from anchoring in its historic center, citing pollution and eroding the city's foundations, which already suffer from regular flooding. However, ports worldwide have since taken action and implemented new fees or restricted cruise ship access altogether.
This year, Venice also took the bold step of charging tourists a fee to visit the historic center. The goal was to reduce crowds, encourage longer visits, and improve the quality of life for residents. The pilot program ran in July and is widely regarded as a success and a model for other cities grappling with tourist overcrowding.
Buying Local Begets Sustainability
Tourists also have a role to play, most notably where they spend their money.
Last month, Norwegian CEO Harry Sommer told analysts in an earnings call, “We are witnessing robust demand with strong pricing and booking volumes leading to record-breaking advanced ticket sales.” Yet that cruise spending doesn’t always make it into local communities where these ships dock.
Several studies have shown that passengers disembarking from ships don’t contribute as much to the local economy as others, including one from the Bank of Greece, which found that cruise passengers to Greece spend an average of $224 (€200) compared to more than $783 (€700) by other travelers. With all the food and drink on board that they’ve already paid for, who’s to blame them?
For those staying at a destination for more than a day on a cruise ship, the best advice comes from locals working in the tourism industry, like those here on Mykonos. Their constant refrain is to buy local and avoid purchasing coffee at Starbucks or hailing a ride with UBER. Products and services are likely cheaper from local establishments and may be higher quality. Most importantly, the money spent stays local, contributing to the local economy and sustainability.
Studies in the U.S. have found that for every dollar spent at a locally owned business, about 70 cents stay local, and for every dollar spent at a national corporation, less than 40 cents stay local. The American Independent Business Alliance further claims that money spent at locally owned and independent businesses instead of a chain store or online giant recirculates 2-4 times more through the local economy than at a non-local company.
“Travel can be a force for good and travelers themselves are proving to be today’s changemakers, adopting more sustainable travel habits and seeking responsible experiences,” according to Glen Fogel, Booking.com’s CEO. “More sustainable travel is an investment for the world.”