Tourism is good, actually. By Matthew Yglesias

Don’t listen to the haters

MATTHEW YGLESIAS

FEB 7, 2024

Tourists are annoying. As a kid growing up in New York City, I was raised to look down on slow-walking visitors, with their eyes pointed upward in amazement at the tall buildings rather than watching where the hell they were walking. At Harvard, the first-year dorms are right in Harvard Yard, meaning that you’re essentially living inside a tourist attraction with random visitors annoyingly gawking at your hungover self as you try to drag your ass to class. In DC, when tourist season strikes, all these people are suddenly in your way, standing on the left side of the Metro escalators, blocking commuters from going about our day.

In addition to being annoying, tourists are cringe.

Tourists are so cringe that veteran travelers know you’re not supposed to go to places that are “touristy.” You want to find the real stuff. Last summer, we went to Paris, then Antibes on the Mediterranean coast. But on our way back to Paris, we stopped for a few days in Lyon. Lyon is not as nice as Paris or as interesting as Paris, but it has its virtues, one of which is that it’s much less touristy than Paris. The summer before, we spent some time with friends in a Tuscan town called Montalcino, which was lovely but also very touristy. One day, the other dad and I took a bus to Buonconvento nearby, which is much less nice… but no tourists! It was a refreshing break from the cringe.

But I’m afraid these undeniably cringe aesthetic considerations motivate a lot of bad policy commentary.

Everywhere you look, people are arguing not just that tourists are cringe or annoying, but that tourism itself — the act of people traveling for leisure — is harmful. There are takes about how beach resorts are bad and about how remote workers visiting Mexico City is bad. Takes about how “over tourism” is destroying tourist attractions, and takes about how it’s bad when college alumni like to visit their former college town to watch football games. And, of course, tons of cities are trying to curtail AirBNB and other short-term rentals. The stated reason is never “hotel owners don’t like competition, so we’re doing them a favor.” It’s always something about how it’s undesirable to have more tourists coming to your city.

And I think people need to get a grip on this.

Visitors who don’t know how to use the Metro are annoying. But if all the tourists vanished from DC, the city would have to raise property taxes or lay off teachers. And we should distinguish more clearly between genuine ecological harms — people visiting unspoiled wilderness can cause actual problems — and the cringe factor, where heavy tourist traffic makes Siem Reap kind of tacky.

Most of all, we should try to think pragmatically about the related policy questions, adjusting policy to maximize the benefits of tourism and minimize the downsides rather than convincing ourselves that demand to visit a place is bad. Because just as with topics like immigration and housing, whatever the downside of being a place that everyone wants to go, it’s a lot worse to be a place that nobody wants to go.

Tourists pay taxes

Probably the most straightforward benefit of tourism is that tourists pay taxes while consuming relatively few public services. Of course, exactly which taxes tourists pay and to whom varies by jurisdiction. But in the United States, it’s common to have retail sales taxes that are paid by tourists, and often the taxes on restaurant meals — something that tourists consume a lot of — are higher than the normal retail sales tax. In Europe, tourists are technically allowed to get their VAT payments refunded on large retail purchases. But in practice, they don’t always jump through the required hoops. And you can’t get a VAT refund on your restaurant meals or bar tabs.

Of course, tourists do place some burden on the host jurisdiction’s public services. Ocean City, Maryland hires seasonal police officers to help deal with the summertime crowd of beachgoers. That’s a bit of an unusually clear-cut case, but it’s not unusual for an influx of tourists to increase the need for law enforcement services.

That being said, tourists aren’t indigent. They don’t have kids in public school. They don’t collect pension or retirement benefits. And while they use your city’s transportation infrastructure, they are often traveling at non-peak times, free riding on infrastructure that would be there anyway, or paying mass transit fares that help cover operating costs for everyone. Jurisdictions typically also levy special taxes on things like hotel rooms and rental cars. Because while politicians generally like tax revenue, they also know that constituents prefer not to pay taxes. So a really great kind of tax is a tax that is mostly paid by non-residents.

It’s easy to ignore these benefits and think of tourists as parasites who leech off the communities they visit. But to whatever extent that’s true, it’s mostly a question of vibes. In economic terms, it’s the exact opposite — temporary visitors allow full-time residents to enjoy a more favorable balance of taxes and public services than they otherwise would.

An anti-tourism Foreign Policy article compared it to the “resource curse,” where sometimes oil wealth can keep a despotic and corrupt government in power. And I do, actually, think the analogy makes some sense. But I think that, in general, it’s clearly better to have natural resources than to not have them. If there’s a gold mine just outside of town and you have reasonable policies in place, that’s a financial benefit to your town. You could, of course, mismanage your natural resources, which would be bad. But that’s different from the resources themselves being bad. And a lot of tourism is driven by literal natural resources — beaches, ski slopes, or other geographic features. Other times it’s driven by cultural heritage, but the basic dynamic is similar. Notre Dame and Angkor Wat aren’t natural features of the landscape, but they were arbitrarily inherited by the current generation of locals and need to be managed prudently.

Manage tourism, don’t hate it

I’ve never been to Peru. But I did read a lot of articles 10-15 years ago about “overtourism” at Machu Picchu. The basic premise of the stories wasn’t crazy. Even though Machu Picchu is very old, it’s pretty new as a tourist attraction. An American explorer rediscovered it in 1911, it became a UNESCO World Heritage Site in 1983, and as recently as 1996 it was getting fewer than 400,000 visitors per year. Tourist traffic increased roughly four-fold over the next 20 years, though, and that generated a lot of stress on the site.

All these “overtourism” articles were driving me crazy, though, because clearly there was a lot of demand to visit Machu Picchu, so the government should ration access, charge visitors, and use the financial surplus to invest in preserving the location.

It turns out, per this 2018 Condé Nast piece by Tyler Moss, the Peruvian government also thought of this and it worked out just fine. They moved on from a crisis over the conservation of a priceless part of their cultural legacy to banal concerns about whether the bathrooms were too inconvenient.

While he thinks the new stipulations have been successful in maintaining and conserving the site, Raul Ccolque, a native of the region and owner of Alpaca Expeditions, thinks there are still some kinks to work out. For instance, the only bathrooms at the site lie outside the ticketed entry, and a strict no re-entry policy prohibits mid-tour bathroom breaks: “Imagine that you want to use the toilet while at Machu Picchu. You have to walk outside [the park], but you are not allowed to re-enter,” Ccolque says. “That doesn’t work for us—I think they should allow people to enter again. Sometimes people get sick [from the altitude].”

UNESCO seems pleased by the progress—a 2017 report deems the majority of previous issues plaguing Machu Picchu “resolved.” Miginiac agrees, crediting measures taken by the government to coax tourists to alternative sites of Incan ruins—such as Choquequirao outside of Cuzco and Kuelap in northern Peru—with easing the burden.

The latest development is that ticket prices are going to go up. Nobody likes rising prices, of course, but part of the world becoming more prosperous is that more people have the opportunity to visit humanity’s great cultural treasures. It’s natural that the price of admission to great sites would rise. Prudent management of access is how you maximize the value of having a great tourist attraction. And it often seems to me that one of the problems we have with tourism is that public officials are insufficiently ruthless about their pricing. A full-price ticket to the Louvre, for example, costs €22, with free admission for anyone under 18 and for 18-25 year-old European Union residents. The museum is also very crowded. Why not make the ticket for non-EU adults more expensive? It’s true that it’s already non-cheap at €22, but that’s a small fraction of the total cost of visiting Paris from Asia or North America.

France is leaving a potentially large amount of money on the table here and degrading the quality of the experience for true art lovers by making it easy to get tickets. And one thing they could do with the extra revenue is keep the museum open for longer hours. They could even have lower prices for people who visit at lower-demand times. Fundamentally, a cultural treasure that’s really popular should be an economic asset, whereas a cultural treasure with few visitors is an expensive white elephant that’s hard to preserve.

But more broadly, I’d like to see tourist-heavy destinations think even bigger. Because I’m a boring person who likes to think about tax policy, every time I go to Maine I find myself thinking that they should charge a higher sales tax in the summer than during the off-season. Maine residents would be able to save money by timing durable goods purchases for the low season, while visitors would make a larger contribution to the state budget.

The wider economy benefits from visitors

Even the relatively optimistic article about Peru claimed that foreigners visiting Machu Picchu might be bad because it pushes up restaurant prices.

“The residents of Aguas Calientes also face a lingering overtourism problem,” Moss writes. “On one hand, visitors coming to see Machu Picchu are vital to their livelihood. But on the other hand, because it’s so dense with wealthy travelers, the locals face constant crowds and rising prices at restaurants and grocery stores.”

This strikes me as a somewhat implausible theory of economic dynamics. One of the reasons that it’s bad luck to be born in a poor country is that the range of possible ways you could make money is limited by the fact that you don’t have any customers. In a typical Peruvian village, even the hardest-working cook just isn’t going to be able to make very much money. If a bunch of rich people start coming to town looking for things to do, there is suddenly an opportunity for your skill and effort to pay off. Then, because those opportunities exist, people also have more incentive to spend time and effort on honing their skills. Opportunities in the hotel and restaurant sectors make people less-poor, which in turn means there’s a bigger market for services — dentists, random stores — that don’t primarily serve tourists.

Tourism is a limited ladder of economic opportunity compared to industrialization, but it absolutely helps.

Back in the late-1960s and early-1970s, a bunch of technocrats in the Mexican government used computer models and decided to try to foster the construction of resorts in Cancun. As a result, the population of the state of Quintana Roo more than doubled between 1970 and 1980. Then it doubled again between 1980 and 1990, and again between 1990 and 2005. And it almost doubled between 2005 and 2020. All in all, Quintana Roo’s population has increased at 10 times the rate of the overall Mexican population. Even with that influx, it’s maintained a GDP per capita that’s 15 percent higher than the Mexican average. That’s a significant engine of development that shouldn’t be sneered at.

But of course, one reason it works is they didn’t just welcome visitors, they built a ton of stuff. Cancun has resort after resort after resort. It’s got a big upscale shopping mall. It’s got a whole town that’s separate from the Hotel Zone, where people who work in the tourism industries live and shop and dine. Growth begets growth, if you let it.

In the end everything is about housing

This is always what ends up annoying me about the discourse around AirBNB and housing costs. Years ago, when AirBNB was new and I was known as a neoliberal shill sympathetic to startups, someone who worked there reached out to pitch me on a study purporting to show that AirBNB’s impact on housing prices was minimal. I didn’t think there was anything wrong with the study; it just, from my vantage, sort of missed the point. Of course taking units off the market to become short-term rentals pushes up rental prices. What’s weird is that this often seems to be the only context in which people acknowledge that the supply of housing units is a major determinant of prices.

If you think it’s bad to curtail the supply of houses, then I’m absolutely on your side.

But the parsimonious solution is to roll back the numerous regulations that are in place almost everywhere that prevent building more houses. Which is to say, it’s a pretty normal question of economic growth. If more people around the world want to buy more BMWs, they build more BMWs, and the German economy prospers. If Germany refused to build more cars in response to an increase in car demand, then the price would rise and people might develop the opinion that automobile exports were killing the German economy.

One brand of crank anti-tourism that I think gets it right is this eco-doomer take The New Republic ran in January of 2020, which made the point that CO2 emissions would be lower if nobody ever traveled for fun. That is clearly true — the world would be poorer, which would make emissions lower. Degrowth is not a good policy agenda, but it’s true that anti-tourism is decent degrowth policy, just like anti-immigration politics and NIMBY politics. And we should reject it all.