What tourism can learn from doughnut economics

In 2019, I was among the first to connect the doughnut economics model concretely with tourism. I wrote a blog post about the clear connections between the ideas about the doughnut and what is happening in tourism. The article received tons of reactions from people asking if I knew more about how it could translate to concrete projects? Or how it could aid in measuring sustainability in tourism?

At that time, I was halfway through my PhD project and started toying with the idea of investigating further how the model could be used in practice. In academic research, this usually means doing interviews or developing a survey. But as the doughnut model is designed to help foster change, I thought, why don’t I use it for exactly that? I designed a workshop in which I explored the potential of doughnut economics to help seven touristic destinations in the Netherlands become more sustainable. Here’s what tourism can learn from using doughnut economics in practice.

What is doughnut economics and how can it be used in tourism?
The doughnut economics model is an economic model developed by Kate Raworth which is shaped like a doughnut. The basic principle of doughnut economics is that it forms an alternative economic model that goes against the idea that we should always strive for growth in our society. Sustainability is represented in the model by 21 different aspects that are positioned in either the social foundation or the ecological ceiling. The inner ring of the doughnut represents the social foundation which consists of facilities that everyone should have access to, such as a fair income, a good living environment, and a safe environment. On the outer part of the doughnut, we find the ecological ceiling. The ecological ceiling consists of indicators such as air pollution and climate change and is often exceeded in our current society as a result of increasing prosperity. One of the most important principles of doughnut economics is to strive for a balance between prosperity and the climate as opposed to focusing primarily on wealth and economic growth. Growth of the economy, with this model, is only desired if it serves the purpose of maintaining this balance.

Credit: Kate Raworth and Christian Guthier. CC-BY-SA 4.0. Source: Raworth, 2017.

In tourism, the growth of destinations is also limited. No place can grow forever and host an unlimited amount of visitors. Doughnut economics challenges us to think about tourism in another way. Instead of focusing on growing visitor numbers or expenditure, the idea is to think about how tourism could contribute to social and ecological sustainability in the first place. With that, tourism is not a goal in itself, but a means to achieve other prioritized goals. The question then becomes: in what ways can tourism contribute to the social and ecological sustainability of a place? And are more or less visitors needed to achieve that?

How does applying doughnut economics to tourism work in practice?
During the workshops, the central question was how can tourism contribute to one or more aspects of the doughnut economics model. To know how tourism can contribute to the sustainability of a place, we should also know what is needed at the destination. The starting point is thus to investigate what the challenges of a given destination are and what is desired by its stakeholders, one of the most important ones being its residents. The next step is to think about in what ways tourism could be a response to these needs and challenges and to come up with specific projects or strategies that target them.

For example, if it is indicated that there are (too) little facilities like public transportation or shops, how can tourism contribute to that? If affordable living is at stake (partially) due to tourism, in what ways can tourism alleviate this pressure on the housing market? All of this belongs to the social foundation of doughnut economics in tourism. At the same time, looking at the ecological ceiling, we can include factors such as air pollution. How can tourism potentially add to improving air quality? Or play a part in reducing plastic pollution?

The strength of the doughnut model is that it holds to power to connect multiple aspects of the doughnut. One of the challenges is thus to look for ways to combine both social and ecological sustainability in projects. This could mean targeting at the same time air pollution and mobility (access to networks).  For example, at destination X, there is a lack of public transportation. This makes for a shortage in the social foundation because this causes reduced mobility for residents who cannot drive or do not have a car. By stimulating tourists to use public transportation more, the frequency of public transportation could be improved. Next to increasing mobility for its residents, this also contributes to reducing air pollution at the destination. In the first place because tourists are using public transportation, and second because the increased frequency might also stimulate residents to use this service more often.

What benefits are there in using doughnut economics in tourism?
The workshops aim at making destinations rethink their tourism strategies. The workshops give destinations a better idea of which aspects can be included when working on sustainable tourism development and how to link them to specific projects. As such, the doughnut economics model can serve DMOs, municipalities, and other industry players as a tool to envision sustainability in a more concrete and comprehensible way. 

The workshops enable destinations to develop concrete ideas that are aligned with multiple aspects of the doughnut model, combining both social and ecological sustainability. In previous workshops, there were, for example, plans that address sustainability in a broader sense where tourism is used as a means to achieve other goals. Examples of this are the restoration of nature through tourism or using tourism to improve infrastructure and facilities. At the same time, some plans focus mostly on industry-specific steps (for example, reducing plastic in hotels) or mitigating negative effects (such as compensating CO2). While these may be relevant, they should be seen as parts of the bigger picture, as in itself they do not necessarily address the destination-wide challenges related to sustainability.

For some destinations, the workshop serves as a first step into integrating more sustainability in their work on a day-to-day basis with smaller steps like adjusting website information about sustainable options or developing sustainable tours through the city. In other cases, the workshop forms the basis for a full sustainability plan or vision providing a concrete overview of all the steps to be taken by different stakeholders to achieve both social and ecological sustainability, based on the aspects of the doughnut economics model.

Interested in what doughnut economics can mean for your organisation? Contact me at shirley@paradisefound.nl

Business models that support regenerative practices in tourism

To be regenerative in nature, it is not only important to offer a sustainable service or product, but also to have an organizational structure that fits regenerative values, even if this is partly at the expense of profitability. Several pioneers within the tourism sector show that there are organizational structures that fit perfectly with a sustainable or regenerative mission. Read here about two alternative forms of governance that can support a company’s idealistic mission: the cooperative and steward ownership.

With regenerative tourism, the priority is not making a profit or growing tourism, but rather making a (net) positive impact on the environment. Sustainable values that give something back to nature and the community through tourism are central. Growth in the number of visitors and expenditure is therefore no longer the primary goal. Instead, tourism is used as a means to achieve other goals that are important for the environment or to the local community. The starting point is the needs of the destination and the people who live there. What does this place need? And how can tourism contribute to this? This is a different way of thinking about tourism that also requires a change in the way tourism companies organize themselves.

There are countless examples of organizations and companies within the tourism sector that started with great ideals where a positive contribution was paramount. However, these ideals often have to yield to the financial interests of shareholders in the long run. As a starting company, it seems almost impossible to avoid this. If you want to grow, you need investors. But it is precisely because of these investors that entrepreneurs cannot always hold on to their ideals as this does not necessarily generate the most profit immediately. How to ensure that values other than financial growth can be prioritized and be financially profitable at the same time? In other words: how can a company ensure that the organizational model is in line with regenerative principles?

The cooperative
The cooperative in itself is not a new organizational form and has been used for years in various sectors, but is currently undergoing a revival in the context of sustainability. The first officially registered co-operatives date back to 1844 when the Rochdale principles for co-operatives were drawn up in the United Kingdom. A cooperative is described as an independent organizational form in which different people have come together to achieve economic, social, and cultural ambitions. Initially, during the Industrial Revolution, cooperatives were often started to protect the rights of workers. Later we mainly saw cooperatives in the agricultural & horticultural sector to represent the interests of farmers and to strengthen their market position. Since the 1960s and 1970s, we have seen more and more cooperatives emerging with a social goal, especially in the field of food consumption. Cooperatives were started to, for example, make organic food accessible and affordable (Berkeley Economic Review). Nowadays we still see many cooperatives with a social purpose, but in a broader sense. For example, we see that companies start delivering a new product or service, but want to be able to continue to do so in line with the social mission without being dependent on external investors.

Important characteristics of a cooperative are that there is joint ownership (the cooperative is owned by all individual members), democratic management (each member has a vote), and focus on the interests of the members (instead of external investors) (Research Handbook on Sustainable Co-Operative Enterprise). Collectively, these qualities ensure a focus on shared values rather than maximizing individual profit. In addition, it also ensures transparency in decision-making because all members can check whether the cooperative is acting on its goals. For these reasons, it is seen as an organizational form that has the potential to contribute to social and sustainable missions. A cooperative is not dependent on external investors who can influence the direction of the company, because investors are also members of the cooperative. This reduces the risk of falling into revenue models that may (possibly) generate more money, but are not in line with the core values of the company and its members.

Cooperatives in tourism: Fairbnb and European Sleeper
A good example of a company that has chosen this way of working is the company Fairbnb, which officially started as a cooperative in Italy in 2018 to provide a fair counterpart to the Airbnb platform. While Airbnb, with its current policy, seems to have long deviated from the original idea of home-sharing and benefitting residents, Fairbnb wants to focus on this again. The importance of the destination and residents comes first by, among other things, working closely with local authorities. The policy is adapted to local circumstances, which means that in some places there is a ‘one-host, one-house’ policy, which means that rentals remain small-scale and local. Furthermore, Fairbnb ensures a fair income for hosts by not charging a (high) commission, and part of the income is invested in local projects – chosen by the local community. The cooperative model that has been chosen, with members who support these principles, guarantees that Fairbnb cannot take a different course in the future and puts profit maximization first.

The Belgian-Dutch company European Sleeper, which was founded in 2021 to revive night trains in Europe, has also opted for the cooperative as an organizational form. The establishment of the cooperative is a response to the social support that already seemed to exist at that time around the revival of the European night train network among a broad community. With a cooperative as an organizational form, various people from this community could become partial owners of the company and therefore also make an active contribution to the start of a sustainable initiative. At European Sleeper profit optimization is not the highest goal, but the social mission comes first as well. The cooperative as an organizational form was therefore a logical choice, with the members also (partly) making the investment for this initiative possible: in the first financing round of European Sleeper, all shares were sold within 15 minutes. The first night trains are now running to Berlin and Prague and Barcelona are also planned as destinations in the coming years.

Steward Ownership
Steward ownership is another alternative organizational form in which the accumulation of capital is not the priority. This organizational form is also sometimes called a ‘capitalism hack’. Steward ownership has been practiced for more than a century, but has only recently been given this official name and not much is known about it yet. The first company to apply the principles of steward ownership was the German company Zeiss, which established several principles in 1889 to safeguard the future course of the company, even after the death of Carl Zeiss. Profits could be reinvested in the company or donated to further general economic, scientific, and charitable interests and institutions.

In recent years, the model of steward ownership has been on the rise among impact-driven entrepreneurs who want to safeguard their sustainable and/or social intentions through steward ownership. The most important principle of the steward ownership model is that profit rights and voting rights are separated, this is also called self-determination. This means that investors do not get a say in the direction of the company – they have no voice in it. The direction of the company is determined by the ‘stewards’, the people who are involved in the organization but have no intrinsic interest in increasing profits. This way the different interests cannot become intertwined. A second important principle is ‘purpose-orientation’. Founders and investors are compensated fairly, but in principle, profits are reinvested in the company or donated in line with the company’s mission (Purpose). With steward ownership, profit is no longer a goal in itself, but rather a means to make a positive impact. This breaks the system in which shareholders are always the most important stakeholders in the end. This model could also fit well within the sustainable transition in tourism, where tourism is increasingly seen as a means to make a positive impact on the environment, rather than being an end in itself.

Steward Ownership in Tourism: Time to Momo
An example from the tourism sector that has embraced the steward ownership model is the Dutch start-up Moonback, which merged with Time to Momo last year. This platform is an alternative booking site for Booking.com, a company that now seems to be primarily interested in making as much profit as possible at the expense of entrepreneurs and the experience of travelers. Because Booking is the only (major) player, the sector has become dependent, and so Booking can charge increasingly higher prices and commissions. As a counterpart, Moonback was started (now Time to Momo), a platform where you can book accommodations while all providers pay the same low commission. This way, hotels and other accommodations receive a fair price for what they offer. As a traveller, you will also not be overwhelmed on the Time to Momo website with messages aimed at getting you to book as quickly as possible, such as ‘only one room left for this price’ or ‘only 16% of all accommodation available on these dates’. Time to Momo not only ensures a fairer playing field but also a better experience for the traveler. To prevent Moonback/Time to Momo from undergoing the same fate as a platform such as Booking, the steward ownership model was chosen. This prevents money from becoming the mission again in the future instead of the other way around.

Cooperative or steward ownership?
In a cooperative, there is shared ownership and a shared interest. This can fit in well with the regenerative principle in which the (local) community and its interests come first. The disadvantage of a cooperative may be that, unlike steward ownership, voting rights and profit rights are not separated. In a cooperative, it is assumed that members vote in the interests of the stated ideals and that profit is not the highest goal. However, this is not excluded. Members of a cooperative are paid out profits and in theory, they can still jointly decide that they consider profit more important than the original mission. With steward ownership, this is impossible because these rights are completely separated from each other. An advantage of a cooperative, on the other hand, is that a group of people with different expertise can work towards a common interest and can also provide (part of) the financing. An additional disadvantage may be that in some cases decision-making can be slow due to a large number of members.

With steward ownership, profit rights, and voting rights are separated, so profit always serves the mission and is not a goal in itself. This fits well with the principle of regenerative tourism, which makes tourism a means and not an end in itself. A disadvantage of steward ownership is that little is known about it, making it a relatively complicated model to set up. Moonback/Time to Momo, in collaboration with We Are Stewards, has now put all kinds of information about this online. Time to Momo has also made its legal documentation public so that it becomes easier for other organizations to choose this organizational form as well. An additional advantage of steward-owned companies is that they have a greater chance of survival in the long term and also perform better, but at the same time, they often grow more slowly (at the beginning).

Both forms of organizing have certain advantages that are consistent with regenerative practices, where the pursuit of a positive contribution to society is paramount. But both the cooperative, as well as the steward ownership model, have aspects to take into account when choosing a suitable organizational form. Although both forms have advantages and disadvantages, both organizational forms can contribute to a more sustainable and regenerative organization within the tourism sector. Which form fits best ultimately depends on the context and what goals are set.

Disclaimer: This article contains an affiliate link for Fairbnb and European Sleeper. This does not change the content of the article. I always write the article first and then see if one of the companies I already support has an affiliate program. In this way, it may provide a small financial compensation for the (unpaid) time I put into writing these types of articles.

Why sustainable tourism is not happening

Shows the dissertation of Shirley Nieuwland titled: Live like a local revisited. A study on sustainable tourism development in cities.

Five years ago I started my PhD research, investigating in what ways cities could develop tourism more sustainably. Cities were then (and still are) struggling with the pressure of growing tourism and finding ways for it to be more sustainable. I ended up with three reasons why sustainable tourism is not happening yet and recommendations on how to overcome this. 

When I talk about sustainable tourism, in the first place I mean social sustainability. How does the city remain a nice place to live in for its residents? How can we make sure the city remains affordable for the people that live there? How to make sure it is not all waffle places and souvenir shops? Later on in my research, I also included ecological sustainability considering things like green in the city and sustainable transportation in the city, as for example air quality just as much contributes to the liveability of the city.

My research specifically focused on recent forms of tourism in cities where local governments increasingly want to attract tourists that are looking for the local and off-the-beaten-track experience. This form of tourism is less about visiting the city’s highlights and more about local initiatives. It would benefit the city and its residents as tourism and local life are more intertwined. For that reason, it could be a more sustainable form of tourism for urban destinations as this form of tourism would not disrupt local life in the city. In my research, I have investigated if this is really the case and if this form of tourism could indeed lead to more sustainable forms of tourism. Here are the three main conclusions and recommendations for the future.

Connection between urban- and tourism development
During my research, I found that many urban- and tourism development processes are strongly connected. For example, tourism and the presence of STRs add up to existing housing issues in the city or neighbourhood. Tourism also has the potential to reinforce gentrification in the city. Especially because the tourists that seek the local experience are most often visiting those neighbourhoods that already experience high levels of gentrification. I have therefore concluded that while there may be benefits to this type of tourism, there are also negative sides. We can for example not say that tourism is sustainable if half of the people in the city cannot afford to live there anymore because of the increased popularity of the city and rising housing prices.

Because of this strong connection, we cannot separate the two fields in practice because tourism spans many fields of policy making including housing, retail, infrastructure, and clean energy, especially when it comes to sustainability. At the same time, it has become clear throughout the research that policymakers and other stakeholders do not often address this connection. Processes of gentrification are, for example, hardly ever mentioned in a tourism context. My first recommendation for urban tourism to develop more sustainably, is thus that destinations pay more attention to the relationship between urban- and tourism development and the role it plays in sustainable development. A more holistic approach that includes all the facets that tourism touches upon is needed.

Importance of perceived tourism impact
I have also stressed the importance of perceived impact when studying sustainable development of tourism. This can differ greatly based on the specific context. Often tourism is still measured in numbers (e.g. number of tourists, number of Airbnb’s, number of souvenir shops) but this does not always give a good impression of what the impact is like in reality. For example, a case study on the presence of Airbnb in Denver, showed that the negative impact was perceived the most in the neighbourhood with the least Airbnb apartments precisely because it is a residential neighbourhood where people are not used to tourists as much as in the city centre. Based on these and other findings I recommend that it would be useful to complement the quantitative metrics with more qualitative elements, including the lived experience of residents. This is important in understanding and developing urban tourism more sustainably and will also help destinations to set goals for developing tourism in a more sustainable way.

Neoliberal thinking underpinning the unsustainability of tourism development
One of the most important reasons I found in my research as to why sustainable development of urban tourism is not truly happening yet, is the prevalence of neoliberal thinking amongst different people involved with tourism. Policymakers and city marketeers have the aim of attracting more tourists and generating more profit for the city. Entrepreneurs want to make more money with their businesses, and tourists want to get the cheapest deals when booking accommodation and transportation. This way of thinking prevents sustainability in tourism as ‘making a profit’ or ‘increasing profit’ are almost always (unconsciously) put above other sustainable values. As long as strategies that aim at attracting any type of tourist are underpinned by a neoliberal ideology and motivated by making a profit, no form of tourism will in fact be sustainable. To develop tourism more sustainably, it is important that this way of thinking is countered with new ideas about the tourism industry and the value it has. Ideas about degrowth, alternative economic models such as doughnut economics, and regenerative tourism could help in making that transition. My final recommendation is thus to become familiar with those ideas and integrate them into daily processes, decision- and policymaking.

Are you working for a tourism organisation or destination and want to exchange thoughts on how to start working on this sustainable transition? Shoot me an e-mail at shirley@paradisefound.nl.

Do creative strategies lead to more sustainble urban tourism?

Many cities want to develop sustainable tourism using creative strategies. One way to do this is by attracting tourists that explore the city beyond its most touristic places, for example by visiting more local and creative areas. This blog post based on the research paper The consequences of being ‘the Capital of Cool’. Creative entrepreneurs and the sustainable development of creative tourism in the urban context of Rotterdam’ investigates if these strategies can truly lead to more sustainable forms of tourism.

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We’re all in it together: sustainable tourism post covid-19

By now we have all seen the discussions online about rethinking the future and moving towards a ‘new normal’. How can our world become fairer, more sustainable, slower? What do we want the world to look like after COVID-19? The tourism sector is no exception to this where issues such as overtourism and pollution are often mentioned. Can we do things differently and develop sustainable tourism now that we have hit the reset button? And who are involved with this?

Continue reading “We’re all in it together: sustainable tourism post covid-19”

Doughnut economics applied to overtourism

The ideas about doughnut economics and sustainability from economist Kate Raworth have been around for a while now, advocating that the economic models we use are outdated and we need a new doughnut-shaped one if we want a more sustainable future. This model takes into account the boundaries of our world and thus puts a limit to endless economic growth. In this blog post,  ideas about doughnut economics are applied to problems related to overtourism in cities, it explains why tourism growth should not always be the goal for destinations and it shows how the ideas about doughnut economics can help us change our thinking when it comes to sustainable tourism planning and city marketing.

Doughnut economics explained
The ideas we have about growth and endless maximization of money is where we need to start thinking in a different way. If we want to make our world more sustainable we should stop considering economic growth as the main objective of everything we undertake. According to Kate Raworth, if we keep on following the old economic traditions, we will end up reaching the ecological ceiling of our planet. This means we will have to deal increasingly with issues such as climate change, biodiversity loss, and air pollution.  In doughnut economics, these aspects are represented in the outer side of the doughnut. At the same time, we lose sight of the inner part of the doughnut, the place where essential living requirements such as housing, health, and social equality are located: the social foundation.

Doughnut economics applied to urban tourism
If we apply this theory to tourism, we can see that this unbridled growth in urban tourism causes problems that can be easily placed in the doughnut model as well.  Many cities aim at growing tourism because of the economic benefits it can bring to both the city and its residents. But at some point, the positive (economic) benefits are being outweighed by the negative ones. Due to overcrowding of the city, problems such as congestion, pressure on cultural heritage, conflicts over land use, and air pollution start to arise. This is what we can position in the outer part of the doughnut, the ecological ceiling that is being crossed. Simultaneously, aspects of the inner part of the doughnut are overlooked because residential living and affordable housing, for example, are at stake. The city falls short in the social foundation. Local governments across European cities are currently struggling with these problems and residents are more and more rising up against the ever-increasing influx of tourists.

From overtourism to a sustainable tourist destination
Despite the fact that many cities are being faced with the challenges of overtourism, most of them cannot seem to let go of the idea of continuous growth. For example, Copenhagen now has a tourism strategy to change tourism as it is, called ‘The end of tourism as we know it’. The aim is to attract a type of tourist that is good for the city and fits better with the identity of the city and local life. However, one of their main targets by which they measure success is still growth. The same goes for Barcelona, a city which has definitely been suffering under the pressure of tourism and therefore now has a strategy focused on becoming a sustainable destination. This means amongst other things that residential living is preserved by attracting the ‘good’ tourist. However, despite that the city wants to mitigate issues related to overtourism, growth is still pursued in the strategy as well.

Both cities have ambitious plans to create a more sustainable form of tourism and what both strategies furthermore have in common is that they focus on growth of ‘better’ tourism. In Copenhagen’s strategy, this is specifically described as people-based growth and sustainable growth. This, however, is still the wrong way of thinking, Kate Raworth argues, because calling something, for example, green growth or responsible growth is not the solution to a more sustainable future.  To truly become more sustainable, we should let go of the idea of growth altogether as a goal, and find alternative ways to measure success. Likewise, urban tourism can only be truly more sustainable when we shift our focus to other factors than economic growth.

Changing our way of thinking about growth
We cannot grow forever, not as humans, not as the world and not as a touristic destination. Sure, at first some growth is good, like all things in life grow. But, as Kate Raworth explains, at some point a flower flourishes and then it stops growing. This should also be the case with tourism. When a destination is emerging, growth can be good, but there should be a point when we realize a destination has flourished and at that point, the focus should not be to keep on growing. The key to a more sustainable and successful destination should then be sought in other parameters than tourist numbers and the amount of money they bring along with them.

Read more?
Kate Raworth (2017) – Doughnut Economics

Regulating Airbnb: the struggle of cities

Regulations Airbnb

Cities around the globe are breaking their heads on how to respond to Airbnb and other short-term rental platforms. And even though this player has been in the field for over a decade now, cities are still struggling with the question: what to do with Airbnb and how to regulate? But what is it that they are struggling with exactly? And why is regulating so hard? These and other questions will be answered in this article that is a short version of my earlier published article in Current Issues in Tourism.

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Gentrifiying neighbourhood Monti and tourism development

Right behind the Colosseum lies Monti, a small neighbourhood in Rome that for years was neglected by tourists. Why? It used to be an infamous red-light district with a lot of poverty and there was no reason to set foot in this area of Rome. This has now all changed since it started to gentrify. These days Monti is considered one of the ‘hippest hoods’ of Rome and draws in many tourists that come for its livelihood, quirky cafes and picturesque streets. Not everyone is happy though. Tourists might have found the next hidden gem of the city by going off-the-beaten-path, for some people living in Monti these changes affect them more than tourists might realize during their short visit. Continue reading “Gentrifiying neighbourhood Monti and tourism development”