Destination-Wide Impact Tourism: A Strategic Model

By Ellen Rugh, Program Manager of the Center for Responsible Travel (CREST)

What is a Destination-Wide Impact Tourism Program?

In 1965, French philosopher Michel Foucault noted that “people know what they do; frequently they know why they do what they do, but what they don’t know is what what they do does.” Historically, travel has largely followed the same such pattern; though many undeniable benefits, the less-obvious impacts can be complex, and at times, even damaging. However, as travelers and the tourism industry now begin to better understand the impacts of our actions, we are beginning to ask ourselves: what is my role in improving this system? As a traveler and tourism practitioner, how can I make sure my actions 1) do no harm, and 2) and even give back in a meaningful way to the host destinations I visit and appreciate?

Destination-wide impact tourism programs provide a unique solution for supporting local communities, as they represent an organizational initiative that pools together funding from a variety of tourism-based revenue streams and/or grants in order to maximize impact and streamline the administrative and operational processes required to support community efforts. Building upon the models utilized in other case studies featured throughout the Handbook, which often involve a singular relationship between a tourism enterprise and a local community initiative or non-profit, destination-wide programs offer a collaborative, scalable solution to maximize the value of time, talent, and treasure provided by a collective of tourism businesses, organizations, and travelers. Projects supported by the programs are typically executed, though not always, through a sub-grantee process. Destination-wide programs further support strategic responsible travel practices and sustainable community development on the macro destination level and allow for a broad portfolio of fundraising strategies and project work to be carried out.

A few advantages of starting a destination-wide impact tourism program include:

Larger-scale initiatives: Projects that might be too extensive or expensive for a single business to spearhead can be supported from the collective efforts and resources of multiple stakeholders.
Multiple revenue streams: Destination-wide programs cast a wider net for the solicitation and collection of in-kind and monetary donations. Funds are not collected through one stream – a hotel, for example – but rather can be sourced from various stakeholders, with each approach customized to the needs of the parties. This approach also raises the profile of the destination-wide program among travelers, as there are more stakeholders sharing information about the program. This may increase the likelihood that traveler contributions will be made.
Shared costs: By scaling the impact tourism model to a collaborative approach, tourism enterprises reduce costs and save resources when implementing their program, given the ability to opt for shared marking material and centralized accounting and operational efforts.
Marketing and brand differentiation: Marketing your impact tourism program to travelers and highlighting its community benefits can significantly strengthen the destination brand to attract the growing number of travelers who are committed to sustainable practices and community development. Per a 2015 study, nearly half (48%) of all U.S. leisure travelers felt that it was very important for their spending and donations to positively benefit local communities within their vacation destinations.
Competitive Destination Advantage: Arguably, a destination-wide impact tourism program that reinvests in the local community and environment can produce cyclical benefits for the tourism industry, as healthy and well-supported human and natural capital may lead to increased resident and employee quality of life, improved quality of tourism product offerings, and higher visitor satisfaction with local services and the destination.

To capitalize on such benefits, the ideal destination-wide impact tourism program should support a diverse array of organizations or projects, establish equitable and transparent distribution of funding resources, and holistically support community needs through addressing the three main pillars of sustainable development—the local environment, community, and economy.

How to Build a Destination-Wide Impact Tourism Program

When organizing and launching a new impact tourism initiative, there certainly is not a one-size-fits all approach. Thus, while not every existing destination-wide impact tourism program follows these exact steps to a tee, the following information lays the groundwork for critical points of consideration. This framework is largely based around the experiences and insight of Dr. Martha Honey, Co-founder and Director Emeritus of CREST, and Janelle Wilkins, President of the Monteverde Fund Board of Directors, though it is evident that many of case studies exemplified throughout this section have drawn upon similar practices and elements outlined below:

Step 1: Evaluating the Potential for Success

Understanding the need and opportunity for impact tourism is the first critical step to creating a successful destination-wide program. First and foremost, the visionary champions of the new impact tourism program will need to analyze and evaluate the current challenges and gaps in the community for which a program could provide benefit. For example, the Torres del Paine Legacy Fund identified the vital need for supplemental resources to support the ecosystem and infrastructure within the national park system, which could not survive on public resource alone, as well as promote community and responsible tourism development within the surrounding gateway communities. However, prior to Legacy Fund’s formation, no formal structures were in place to mobilize and coordinate these additional investments needed to manage tourism impacts more sustainably around the park and gateway communities. Thus, the Legacy Fund identified a gap in the previous system to better understand the specific role that their impact tourism program could play in meeting needs.

Along with analyzing where the impact tourism program can fill needed gaps in community wellbeing, program champions need to take into consideration the feasibility of creating such an initiative: Is there a broad enough network of stakeholders (hotels, tour operators, and other businesses) that have a mutual interest in supporting the local environment, community, and economy? Are these stakeholders within close enough physical distance to share a similar vested interest within the local community? What is the anticipated time, money, and effort required to effectively organize stakeholders into unified network? Is there possible grant support for the program?

If leaders have not properly identified a network of stakeholders who share a unified interest in supporting the program, destinations run the risk of investing time, money, and efforts into a new program with little hope for long-term sustainability. In the Osa Peninsula of Costa Rica, for example, CREST carried out a field project in 2011 to assess interest in creating a destination-wide impact tourism program. To identify the potential for starting such a program in this destination, CREST conducted surveys with local tourism businesses to better understand the current practices and opinions related to business and client contributions in order to establish a baseline reference for developing an impact tourism initiative. The survey was also used to help identify businesses and organizations who were already involved in or most interested in becoming involved in impact tourism programs. While the project ultimately concluded that the Osa destination would require a much slower process to develop a successful impact tourism program, unlike in Monteverde, which is a smaller and more homogeneous community, the results of this due-diligence gave thoughtful insight and indicators to address the feasibility and approach of successfully investing time and resources into creating such an initiative.

Step 2: Establishing Organizational Structures & Governance

When planning for the new destination-wide impact tourism program, stakeholders must consider the governance structure, along with the roles and responsibilities of the new organization that is going to champion these impact tourism efforts. Almost all destination-wide impact tourism initiatives will require significant coordination to develop communications and administrative systems and build relationships among collaborators. Once the systems are in place, additional investment will be required to maintain these processes, along with facilitating project selection and funding disbursement processes. For this reason, a formalized organizational structure must be established.

There are numerous ways in which such a program can be organized. In the case of CARE for the Cape & Islands and the Torres del Paine Legacy Fund, programs are run under the fiscal sponsorship of CREST. Alternatively, progressive DMOs and governments with an interest in the holistic management and sustainable development of their destination may consider housing or officially aligning with an impact tourism program as part of their portfolio of duties. This was the case with Travel Oregon’s “Travel Oregon Forever Fund,” and with the Heart of St. Kitts Foundation, a collaboration between the St. Kitts Ministry of Tourism and tourism enterprises, and housed within Sustainable Travel International. Others, such as the Monteverde Community Fund, may initially be incubated under the umbrella of another stable institution, in this case the Monteverde Institute, but later blossom into its own independent organization once foundational processes have been established. Though all have varying end results, in all situations, being housed under an independent organization in the beginning stages can benefit the destination-wide impact program by providing foundational advantages, such as tax-exemption eligibility, reduced upfront administration costs, and staff support that will help you ease into your operations. Though no easy feat to identify and pitch your program to an outside organization, finding an existing organization either to permanently house or temporarily launch your impact tourism program can prove vital to success.

Apart from the advisory committee, the organization will ideally be run with at least one dedicated staff member. This position should be paid, even if only part time, in order to ensure consistent supervision and continuity when launching the program and working out the kinks in operation. Duties should include program administration and coordination, management of funds, development of communications materials, and project implementation and/or monitoring. By having a staff member spearhead these tasks it can free up time and resources for supporting businesses and organizations that may have been individually implementing impact programs or faced barriers to setting up these initiatives, thereby increasing their ease of participation. Volunteer assistance is also encouraged for additional hands-on-deck. Importantly, the new initiative should include staff or volunteers with fundraising and marketing expertise, since the staff will assist business owners and others in familiarizing themselves with the communication materials and available fundraising mechanisms. Regardless of skillset, having a dedicated point person to champion the program right from the beginning will be essential to the program’s success.

Step 3: Establishing Administrative & Fundraising Processes

Prior to launch, the new destination-wide impact tourism program should consider the funding structure and sound accounting principles that they will want to establish.

The organization must also determine channels for raising funds. Strategies for collecting funds must be considered and planned for, though of course, are adaptable and may be scaled-up over time. If the program is housed within another organization, a distinct account to exclusively hold the funds for impact tourism program is highly encouraged, as to not get mixed in and confused with broader organizational funds. At minimum, funds for the program should be uniquely coded in accounting systems so they are appropriately documented, especially when it comes to tracking for restricted and unrestricted funding. Donations from travelers, tourism enterprises, and other businesses should always go to support the selected projects. Only a minimum percentage (10% – 15%) of individual donations, if any, should be designated for operational support. It is advisable that, instead, grants, sales, membership fees (if applicable), special activities, and fundraisers should cover the operations budget (staff, office, equipment, transport, marketing materials, etc.). Some grantors, such as the Ford Foundation, have taken progressive measures in recent years to increase overhead funding allotment for recipient organizations to 20% in order to strengthen institutional support, which is critical for a successful program.

Programs must seek initial seed funding to cover initial administrative and operational costs. For the Monteverde Community Fund, the InterAmerican Community Foundation gave them the initial boost they needed to bring their program to fruition. With Torres del Paine Legacy Fund, it was the Fink Family Foundation that initially provided, and continue to provide, annual core operating support.

To raise money for direct project support, there are many creative ways to collect donations that can be tailored to the needs of both the impact tourism program and business. This overall strategy may be mix of specific solicitation points and strategies, such as sales of fundraising items, online donation through websites and apps, or ‘opt out’ programs, where small donations are incorporated into nightly hotel stays and the guest is given the option to have it removed, if preferred. Depending on the destination-wide impact programs legal status, traditional grant funding may also supplement these donation-pooling efforts. Regardless of method, it is pertinent to have multiple ‘touch points’ where visitors can learn about the fund – before, during and after their trip.

Step 4: Project Vetting & Monitoring

To ensure credible and transparent use of funds, the organization in charge of the impact tourism program must create a set of democratic processes and criteria for selecting projects that is framed around the established and verified needs of the community, as to avoid funding “pet projects.” While there may be a realistic need to grandfather inor make special provisions for projects already being run by individual businesses or organizations, these projects should have a transition plan in place to fit the criteria established for all projects.

Monitoring and evaluation principles should also be determined prior to launch. Once selected community environmental and/or social projects have been allotted funding, each project must be monitored regularly and be evaluated at least once a year. Though of course reporting and ongoing dialogue with project leaders is ideal, the process should not be overly onerous. With projects usually operating on a shoestring, it is important ensure efficient use of project time. As the impact tourism program also holds a stake in project success, it is important for sub-granters to share any feedback with the impact tourism program on their progress or final outcomes. Flexibility with projects, to a degree, should also be considered during the evaluation process, as circumstances may change at times for projects and funding may need to be reallocated within the same project to meet urgent needs. There should be a process in place should a need to reallocate funds arise. Regardless, at minimum, these annual processes help certify how the funding was used and whether the project has met, or is on track to meet, their stated objectives.

Step 5: Launching the Destination-Wide Impact Tourism Program

A soft-launch or pilot phase will help work out the kinks in the system. In Monteverde, the budding impact tourism program tested a small pilot project, during which time participating tourism businesses sought to raise funds via traveler donations for a pre-identified community project. Pilot phases will help quickly test various fund collection mechanisms, and the on-the-ground practicality and reception of your impact tourism program. It is also advisable for an outside evaluator, who can provide unbiased, objective input, to conduct structured consultation sessions with interested tourism businesses, local NGOs, visitors, and government officials during this pilot phase. By asking what systems are working best, what they would like to change, and where improvements are needed, the budding program can build confidence and show transparency and accountability among stakeholders. Above all, by evaluating the results and using these insights to inform a long-term strategic plan, impact tourism programs are better set up for success.

After the pilot phase, it will be time to officially announce the launch of the impact tourism program. As things progress, determine, based on its size, success, and budget, if it is appropriate to remain housed within the original umbrella organization, or if the destination-wide impact tourism program should become a legally constituted independent organization. If merited, the new independent organization must be established as honest, fair, and democratic and must be nimble enough to adapt and respond to new opportunities. It may be realistic for a new program to need several years before being ready to branch off on its own. As staff and volunteer support will need time to build up, program managers may benefit from the support and resources offered by an umbrella organization. It is also possible that a program will remain housed within another organization perpetually if the arrangement is agreeable to both parties.

Preparing for Challenges Throughout the Process

Though considering the above practices will better set a blossoming destination-wide impact tourism on the right path for success, it certainly cannot guarantee success every time. As with launching any major initiative, destination-wide impact tourism programs should expect to confront challenges and hiccups along the way. These challenges are rather unique from those encountered by impact programs from individual businesses, given the macro-level management involved. Such obstacles that visionary champions of the impact tourism program must be prepared to confront may include:

Motivating a variety of tourism enterprises in pursuit of a unified mission and set of objectives;
Selecting and tailoring a portfolio of fund collection mechanisms that work across a number of different tourism enterprises, all of which have varying business and accounting models (e.g. hotels versus tour operators);
Raising funds to cover core costs. While champions and supporters of destination-wide impact tourism are inherently good-hearted and willing to put in a lot of time and effort, it is unrealistic to expect them to work for free or for minimal wages to maintain the project. While foundation donors and investors frequently ask that their funds cover only program fees – which is understandable, given the purpose of the program – it must be recognized that those executing the project need to be paid a fair wage to do so. Instilling adequate overhead into project funds, general operating grants, and transparent and creative fundraising mechanisms should be pursued.
Selecting impactful community projects that best meet the needs of the community;
Building an effective destination-wide marketing campaign to raise awareness, to educate visitors about community needs, and to generate donations for designated projects;
Scaling up early initiatives so that they can impact a wider population;
And coordinating and uniting previously disparate efforts from multiple stakeholders in order to maximize impact.

It is clear through the above steps that establishing a destination-wide impact tourism program is no casual feat; however, based on the case studies featured throughout this chapter we also see evidence of the rewards. While launching an impact tourism initiative will come with its road bumps, the most important thing that we as tourism practitioners and visionary champions can do is remain positive, seek holistic collaboration, and take responsibility for creating for improved solutions. Though impact tourism in itself is still a budding model for bridging sustainable community development within the tourism industry, and the destination-wide impact tourism programs even lesser known and implemented, it is through the calculated risks of establishing such programs that we can become catalyzed for positive change.

A Summary: 10 Points for Creating a Destination-Wide Impact Tourism Program

Outlined by Martha Honey and Janelle Wilkins for the Inter-American Foundation:

Consensus Building: Discuss the impact tourism concept with a variety of stakeholders. It is critical to receive feedback, build trust, and rally support for a unified effort from the very beginning.
Find Support through Existing Organizations: Identify a strong existing organization to incubate your program throughout its pilot phase, or permanently. Contact these existing, tried-and-tested destination-wide impact tourism programs to learn more from their experiences.
Gather a representative advisory committee: The program should be overseen by a committee of carefully selected members, who should represent a wide array of stakeholders and include public, private, and civil society interests.
Hire a Dedicated Staff: A successful destination-wide impact tourism program needs at least one paid staff position, even if it is part time, to launch the program and establish smooth operations. Volunteers can provide additional support, but one paid staff member needs to ensure consistent day to day oversight.
Sound Accounting Practices: Within internal accounts, carefully distinguish unrestricted and restricted income. In cases where the program is housed within a larger organization, program funds and donations should be accounted separately from the organization’s other sources of revenue. Donations should always go to support the selected projects, with only a minimum percentage for operations. The operational budget should be covered by grants, special activities, and fundraisers.
Determine Channels for Raising Funds: Fundraising methods should be tailored to the needs of both the impact tourism program and supporting businesses. This overall strategy may be mix of specific solicitation points and strategies, and it should have multiple ‘touch points’ where visitors can learn about the fund – before, during and after their trip.
Establish Protocol for Project Selection: Create a set of democratic processes and criteria for selecting projects that is framed around the established and verified needs of the community, as to avoid funding “pet projects.”
Ensure Consistent Monitoring & Evaluation: Each project must be monitored regularly and be evaluated at least once a year in order to certify how the funding was used and whether the project has met, or is on track to meet, their stated objectives.
Test through a pilot phase: Doing a soft-launch helps identify and resolve the kinks in the system, and builds confidence with other stakeholders through greater transparency and accountability. These small, intentional steps set a solid foundation from which the impact tourism program can grow.
Officially Launch the Impact Tourism Program: After the pilot phase, determine if the destination-wide impact tourism program should become a legally constituted independent organization or remain housed within the original umbrella organization. If merited, the new independent organization must be established as honest, fair, and democratic and must be nimble enough to adapt and respond to new opportunities.

About the author:

Ellen Rugh, CREST Program Manager, conducts research and facilitates a range of sustainable tourism development projects in the Americas. While previously living in Costa Rica, Ellen participated in field studies related to the blue economy, analyzing the impacts of tourism and fisheries on local livelihoods, social conflict, and effective MPA and resource management. Since 2017, Ellen has taken a critical look at cruise industry’s impact on local communities and ecosystems in cruising destinations, with specific emphasis on Caribbean ports-of-call. She also spearheads the Destination Stewardship Center’s A1 Councils research, identifying and profiling exemplary cases of holistic destination management. Ellen is an LEED Green Associate and a specialist in project logistics, qualitative research analysis, capacity training, stakeholder outreach and engagement, and destination stewardship. She speaks Spanish and English and has completed a dual M.A. degree in International Affairs from American University in Washington, DC and in Natural Resources & Sustainable Development from the University for Peace in Costa Rica.

Sources:

Charuta Fadnis. (September 2015). Good Travels: The Philanthropic Profile of the American Traveler. Phocuswright Inc. p. 10.

CREST and Fundación Corcovado. (2011). Analysis of Travelers’ Philanthropy Survey: Osa Peninsula, 2011.

CREST. (March 2015). Manual for the Go Pure Grenada Community Fund: Pilot Phase. Unpublished report for the Grenada Hotel and Tourism Association (GHTA).

Justin Welch and Robert Bailes. (March 2013). The Quick Guide for Establishing a Destination- Wide Travelers’ Philanthropy Program: A synthesis of Best Practices from Around the World & Experiences from Monteverde, Costa Rica. The Monteverde Institute. PDF.

Martha Honey and Janelle Wilkins. (August 13, 2015). “Top 10 points to consider when creating a destination-wide Travelers’ Philanthropy Program.” Inter-American Foundation.

Robert Bailes. (2011). “Monteverde: A Destination-Level Travelers’ Philanthropy Initiative” in Travelers’ Philanthropy Handbook. CREST. pp. 94-98.

This Impact Tourism Handbook was made possible by generous financial support from Elevate Destinations, Hilton, Holbrook Travel, and Overseas Adventure Travel.