For too long, tourism has been dominated by multinational heavyweights – it’s time to put it back in the hands of locals and travelers.
Every time we visit a new city, or country, we participate in a global exchange of wealth that dwarves almost any other industry. These individual transactions occur millions of times each day, as tourists seek out services, products and experiences in a foreign nation.
Therefore, it’s little surprise that travel remains one of the world’s biggest industries. In 2016 alone, it contributed $7.6 trillion to the global economy, or 10.6% of the world’s total GDP. It’s also the world’s third largest employer, responsible for 1 in 10 workers, or 292 million people, who serve an estimated 1.3 billion international tourists. That’s a lot of money, and considerable manpower. The rise of tourism has been remarkable, not only as it continues to outpace the global economy, but also as it provides a direct interface between rich and poor.
Yet, staggeringly, the majority of wealth generated by tourism does little to benefit local economies—a recent UN study revealed that in Thailand, 70% of all tourist revenue ends up outside the country; in the Caribbean, this figure is as high as 80%, while in India it sits at 40%. Across all nations, this paints a bleak picture: for every $100 spent, only $5 actually remains within the local economy. That’s a retention rate of just 5%.
So, where does this money go? Currently, governments, transportation providers and multinational hotel and tourism companies all reap the largest reward, benefiting from what has been termed the ‘leakage effect’. Globalism has enabled companies to operate across borders, offering homogenous products and corporate shopfronts masquerading as local equivalents: the so-called tourist traps. This phenomenon has an obvious detrimental impact on genuine independent businesses and the locals who operate them, who see little, if anything, in return from this lucrative industry. But the multinational reach and standardised offering of these tourist-traps also does little to benefit local economies. Products and services demanded by discerning tourists are often unavailable in developing countries, and must be imported, at high cost.
And it’s bad news for travelers, too, as this homogenizes our experiences abroad. Authentic experiences are harder to come by, drowned out by a cacophony of corporate marketing budgets. This phenomenon starts before we’ve even left our hometown. The internet has revolutionised our ability to explore new cities, by facilitating a virtual store of recommendations, anecdotes and advertisements. But the current market, dominated by dotcom heavyweights like Yelp and TripAdvisor, makes it impossible to source information without hours of research, and even then, it’s not possible to identify genuine recommendations from this heap of disjointed fragments. We have no way of verifying the identity of those who write them, of understanding their motivations or even knowing if they are real.
It’s time to rethink the game. Innovative firms like AirBnB have already revealed the possibility of decentralising the provision of accommodation, as well as tours or other ‘experiences’ in a new city, by establishing a peer-to-peer exchange of services. AirBnB has taken on the lucrative hotel industry with its unique model of decentralisation, offering affordability and authenticity by enabling a direct exchange between two individuals. Thus they provide travelers with information and services that cannot be manipulated or commodified for the gain of a conglomerate: unique, bespoke, and ever-changing.
But there is one not inconsiderable caveat to current peer-to-peer services: the trustworthiness of listings (and the properties, or tours themselves) is guaranteed solely by user reviews. Travelers rely on these, as well as the pictures and descriptions provided, when making their selection—neither of which can be guaranteed.
Trying to solve this problem, we realized the possibilities of blockchain technology. Instead of being controlled by a central power, trustworthy information on the platform will be protected by this technology, which prevents commercial interests from compromising the service’s authenticity and reliability.
Rather than selling lucrative advertising space and monetising user data, we will fund our service via a small commission. A commission-based system safeguards the validity and truthfulness of the information and services provided; and unlike advertising, it is transparent and does not impact the content or service provided.
And for the locals who provide their services, it ensures that funds flow directly from visitor to provider. No more fake recommendations, no more tourist-traps, and no more leakage. Rather than fitting into the tourist mould, we should see ourselves as travelers and explorers of the world.
Tourism is over. Let's travel.
Callum Hale-Thomson is Cool Cousin's Global Community Manager and an English Scholar at Cambridge University.