How Business Ecosystems Can Drive Sustainable Tourism

Forbes Leadership Leadership Strategy How Business Ecosystems Can Drive Sustainable Tourism London Business School Contributor Opinions expressed by Forbes Contributors are their own. Following May 30, 2023, 07:58pm EDT | Press play to listen to this article! Got it! Share to Facebook Share to Twitter Share to Linkedin Economically, tourism unhindered can create an uneven distribution of benefits and risk the . .

. [+] strategic viability of the areas it depends on. Today’s model is unsustainable.

We need a paradigm shift—and quickly. Shutterstock Tourism is booming. Destination countries, like Greece, Italy and Spain, are jubilant and revenues are up.

What is there not to like? The answer is quickly found if you look behind the revenue numbers: in short, our accounting is off. Environmentally, the mass tourism model is damaging the planet through rampant CO2 emissions, ill-thought-out construction projects—easily spotted in Southern Europe—and the depletion of natural resources. Societally, tourism can result in local cultural identities being diluted—and the more predominant tourism becomes, the smaller the benefits to host communities.

And, economically, tourism unhindered can create an uneven distribution of benefits and risk the very strategic viability of the areas it depends on. Today’s model is unsustainable. With too many travellers cramming into the same destinations on the same days the benefits accrue to large investors rather than local societies.

Life in areas like Venice, Mykonos and Santorini is becoming difficult as resources are tied to tourism and infrastructure suffers. We need a paradigm shift—and quickly. The good news is that awareness is growing.

Local authorities are enacting more limitations and regulations to restrict access to popular sites and protect against reckless short-term exploitation—as has happened in Venice and Machu Picchu . According to the European Travel Commission , there is a gradual shift in tourists’ expectations (especially among younger generations) towards a more purposeful and diversified travel experience that honours the authenticity of local communities and culture. Change is slow but, based on our research and advisory work, we believe that business ecosystems , coordinated groups of firms, locals, and authorities, might hold the key to change.

The pioneering tourism model of Valencia in Spain is a case in point. By embracing an ecosystem approach, Valencia’s collaborative model better integrates the tourist flow with the local territory and economy, preserving cultural and environmental richness while using pioneering technologies. Orchestrated by a dedicated non-profit foundation , the Valencia tourism ecosystem encompasses more than 400 companies and bodies that share the same vision: joining the European vanguard of cities that improve the lives of citizens and of visitors.

Members participate in the promotion of the city as a destination, access tourist data as well as partner information, and market their products through various channels. MORE FOR YOU There’s Something Fishy About ‘The Little Mermaid’ Audience Review Scores — Update — The Critics Must Be Crazy Here Is The Leaked Allegedly Final MCU Fantastic Four Cast It s A Big Deal Crypto Suddenly Braced For A Huge China Earthquake After Bitcoin Ethereum BNB XRP Cardano Dogecoin Polygon And Solana Price Swings Like a business ecosystem orchestrator, the local administration curates a wide and sustainable offering, which includes seven “product programs”, including gastronomy, culture tourism and film office. Managed by a multi-stakeholder committee, each program is built around a specific tourism ecosystem journey.

The regional and provincial administrations contribute to the public-private dialogue shaping product design and complementary offerings. Drawing on Valencia, we have identified four areas in which business ecosystems , orchestrated sets of interacting actors, can accelerate the shift towards more sustainable, purpose-driven tourism. 1.

Bring everyone together around a shared purpose Before we can change tourism, we must decide what we want to change it to— and everyone involved must agree on that destination. Sustainable tourism needs an aligned village: a myriad of different players, from hoteliers, restaurateurs and property developers to governments, tour operators, and airlines—but also those in other sectors (exemplified by agrotourism) that cooperate to create more value and simultaneously reduce systemic waste and promote more efficient use of resources. How can we bring together these many disparate actors under one mission? In contrast to traditional, more rigid approaches, ecosystems involve many different organizations and actors collaborating to provide complementary products, services, or innovations, bound together by a common purpose.

Clarifying that purpose is foundational and everyone has a role to play in ensuring alignment. Central governments must set the right incentives (for example, encouraging the renovation of rural houses ). Municipalities must coordinate independent actors within the local economic community (for instance, entrepreneurs, retailers, and farmers).

Tourism agencies must think in terms of journeys and leverage a denser network to co-create new, more integrated experiences (think of rural tourism and cycling tourism). Meanwhile, digital providers can match and merge various touchpoints for a richer and deeper experience, and hotel chains can rethink their value propositions and business models—for example, by offering a range of curated propositions throughout the year. 2.

Offer a basket of sustainable tourism options Our experience and research suggest the need for a radical approach: reframing all traditional forms of tourism to offer a wider choice of sustainable-by-design options, taking into account the needs of visitors, the environment and host communities. The trend of curating sustainable tourism choices has yet to happen in most destinations. However, there are a few trailblazers.

Consider an alpine example. Climate change is having a significant impact in the Alps with winters with little snow and only on higher peaks. In response, regions such as the Dolomites in northern Italy have expanded the experiences offered from skiing-only vacations to more diversified experiences encompassing the whole local territory and off-peak stays.

The experience is more diversified, open to other outdoor activities (like walking or wildlife watching), indoor activities (such as wellness spas and wine tasting), or other leisure and cultural initiatives (such as visiting castles and holiday markets). The regional promotion agency continuously adds new experiences. These require new infrastructure and professional services that activate a virtuous circle where local entrepreneurs can generate economic and social value.

Diversification acts not only on the experience but also on the de-seasonality of tourism. For example Visit Trentino, in the Dolomites, has conducted a media campaign promoting Autumnal visits. For Summer, as well as hiking, they promote new local walking and biking routes taking people to alpine pastures where old huts have been revitalized with innovative services (like adopt a cow ) that have become popular.

Diversification and de-seasoning go hand in hand with different transportation and accommodation strategies—such as no-car zones, electric vehicle charging stations, and shuttle buses or intermodal cards for all public transport. 3. Ensure fairness, trust and mutual value in the system Ecosystems can provide new ways of realizing both private benefit and public good, while building the transactional trust needed among participants who don’t know each other and are vulnerable to fraud or misbehaviour.

Opportunistic behaviours might undermine the long-term sustainability of a business ecosystem. Venice is notorious for a few opportunistic restaurateurs who undermine the image of the whole city. In the last few years, the local government has turned the screw with high fines and penalties.

That’s why the public sector (at both central and local level) should play a significant role in crafting the right rules and incentives. If a party tries to take advantage of the system, the administration should take immediate action to protect the reputation and long-term sustainability of the ecosystem. In the orchestration of the local tourism ecosystem, the City of Valencia juggles multiple tasks: rule maker, gatekeeper, and ecosystem jury.

In practice, it vets its ecosystem members, monitors the sustainability impact of tourism, from measuring and certifying the carbon footprint of its tourism activity, to controlling irregular accommodations, monitoring noise pollution through a network of sensors in leisure areas, up to collecting statistics on the current state of sustainability in water management. Citizens are also actively involved through surveys and direct participation in the Municipal Tourism Council , a body with 60 representatives from the tourism ecosystem, residents and institutions. Valencia, like the Italian Dolomites, confirms that when trust is instilled in a system, actors are more likely to collaborate in more productive and fair ways, and follow through on commitments.

This is particularly important for sustainability: ensuring that multiple actors can cooperate in an orchestrated way to support local economy and local communities, while also trying to achieve key sustainable development goals. 4. Boost digital interactions and data sharing Digital platforms can be powerful ally.

Take the Tourism Exchange Australia (TXA) platform which acts as a matchmaker, connecting suppliers with distributors to create different packages for specific segment of tourists, then uses tourist engagement to provide further data and insights to the providers of services (Exhibit 3). This generates a wider basket of experiences (especially off the beaten track) and gives SMEs better access to customers. The power of digitalization also works at a more local level.

ELLET , with the support of the Greek authorities, is working to create a dedicated app for Greek destinations, starting with the Plaka area of Athens and the island of Kea to boost environmental and cultural preservation, while drawing on technologies such as gamification. Other best practices include, for example, facilitating information exchange for specific target groups— Valencia’s Tourism Intelligence System is a comprehensive database of tourism data made available to relevant stakeholders and businesses to help them provide optimized offerings—collecting data for sustainable tourism management, and improving the accessibility of tourism services through innovation (Valencia has adopted Visualfy, an AI system that collects audio information from the environment and mobile devices to adapt to visual and sensory signals, which also include video messages in sign language). Conclusion Today’s tourism paradigm is built on a view of customer satisfaction as speed, immediacy, and everything-all-the-time.

But tourism as a checklist is no longer sustainable—and some early signals suggest that things have begun to change. Now, we need ecosystem thinking to foster the participation and commitment of all stakeholders. We also need to ensure stronger public-sector leadership to enlist wide participation, curate a richer basket of sustainable tourism options and ensure a high-trust environment.

Pioneering cases show that a different paradigm is not only desirable, but feasible and viable. It is time to apply ecosystem logic on a broader scale to make sustainable tourism the new normal. Michael Jacobides , Sir Donald Gordon Professor of Entrepreneurship and Innovation; Professor of Strategy and Entrepreneurship at London Business School, and Strategy Advisor (pro bono) at ELLET .

Elisa Farri is Vice President, Co-Lead of Capgemini Invent’s Management Lab. ELLINIKI ETAIRIA (Society for the Environment and Cultural Heritage – ELLET ) has since 1972 been active in the fight for the preservation of Greece’s natural environment and cultural heritage. London Business School Editorial Standards Print Reprints & Permissions.