Campaign On Corporate Power In Tourism (COCPIT)

By Anita Pleumarom

Tourism Investigation & Monitoring Team

A growing alliance of citizens organizations and movements in the South and the North are fighting the current system of globalization that primarily serves to strengthen the power of big corporations and obstructs efforts to create a socially just and ecologically sustainable world.

However, the self-proclaimed 'world's biggest industry' called tourism has largely remained unchallenged in this global struggle, although it has contributed considerably to the deepening crises of poverty and debt, environmental degradation, cultural dissolution, exploitative labour, eroding democracy and human rights abuses. There is little recognition that the corporate tourism industry - more than probably any other industry - is not only an expression of globalization but also one of the most powerful driving forces towards progressive liberalization of the global economy that creates far more losers than winners the world over.

Tourism is the 'world's biggest and fastest growing industry': this is a cliche that is being repeated by all tourism players and the media like a mantra. Indeed, a whole global army of people and agencies has been mobilized to engage in relentless ideological and promotional work to persuade the world that tourism is the most magnificent phenomenon of our times, so all efforts must be directed towards making this industry grow without restrictions. It is this dominant doctrine envisioned by the STRONG tourism lobby, which needs to be exposed and opposed as part of the neo-liberal game that is being forced upon us.

Ironically, while tourism is undoubtedly one of the biggest money-spinners today, its economic value for large parts of the developing world has been seriously questioned. There are also the high social and environmental costs of tourism that are not calculated in economic balance sheets. The industry is known to be particularly deceptive because it is almost completely controlled by large foreign companies based in rich tourist-generating countries, so a large proportion of the tourist dollars either never reaches developing host economies or inevitably flows out in the form of repatriated profits and other payments. Even the World Bank and the World Tourism Organization (WTO-OMT), which have both encouraged many countries to rely on tourism as an economic growth strategy and a means to boost their foreign exchange earnings, acknowledge that added revenues from tourism undergo substantial “leakages”. Several academic case studies suggest that in small economies, the capital outflow can be higher than 80 per cent of tourism receipts. An independent research by Louis Turner and John Ash noted already a quarter of a century ago that:   "It may be odd that tourism, this brash modern industry, can be economically valueless - or even disadvantageous - to economies based even on virtual subsistence-level agriculture. But it can be true."

What happened that travel and tourism have nevertheless gained unprecedented importance in terms of both wealth and power? How come that even before the Uruguay Round of trade negotiations, tourism had emerged as the most centralized and most liberalized economic sector and that under the system of the General Agreement on Trade in Services (GATS) and the World Trade Organization (WTO-OMC), more liberalization commitments have been made in tourism than in any other sector?

One explanation is that the richest travel and tourism corporations have established huge international alliances and networks - consisting of global and regional business associations, foundations, research centers, institutes, publication agencies, etc. - to jointly push their ideas and interests at all levels. It is also noteworthy that the UN-affiliated WTO-OMT is the only inter-governmental organization that allows membership by the private sector. According to a recent WTO-OMT statement, the members of its Business Council (WTOBC) "have become more active and more vocal" in the organization's meetings and programmes (see appendix).

Due to the heterogeneous nature of tourism, another outstanding feature of the tourism industry is cross-sector mingling  - e.g. with the financial sector; the telecommunication sector; the construction, automobile and aerospace industries, the advertising and public relation industry. A good illustration is that members of the highly influential World Travel and Tourism Council (WTTC) consist not only chief executive officers of large hotel chains, tour operators, airlines etc., but also CEOs from heavyweights like American Express, Microsoft, PriceWaterhouse Coopers and Rolls Royce.

Big tourism-related companies are strongly represented in the World Economic Forum (WEF) - a very powerful and unaccountable body where global political and economic policies are often fermented. The WEF also played a key role in initiating the GATT and WTO-OMC. So it is no coincidence that at its 2000 annual meeting in Davos, Switzerland, the WEF gave special backing to tourism "as a contributor to global prosperity".

In addition, corporate industry lobbying for tourism promotion has been extraordinarily successful at supranational governance bodies such as the Organization for Economic Cooperation and Development (OECD), the World Bank and the International Monetary Fund (IMF) and the WTO-OMC. As tourism provides the logistics and the physical infrastructure for freer movements of people and goods across the globe, governments of developed countries and international institutions regard this industry as a particularly effective instrument to break down national barriers to achieve free trade in goods of services, free circulation of capital and freedom of investment in general.

According to a WTO-OMC report, the great level of commitments in tourism under the GATS reflects the "desire" of most countries to expand their tourism industry and to increase inward foreign direct investment (FDI). But this is not the full story, considering the way governments of developing countries have been bullied to adopt  the rules of the neo-liberal tourism order. In particular, countries that have been pushed into structural adjustment programmes (SAPs) by the IMF, have little choice but to deregulate and liberalize the travel and tourism sector, despite increasing recognition that there are many disadvantages.

For instance, most of today's FDI in tourism is not devoted to new job-creating investment but to mergers and acquisitions, which pave the way to growing monopolies. Predatory big corporations are rapidly snapping up local tourism-related firms. This invariably results in a massive transfer of wealth to foreign corporate hands and heavy lay-offs, leaving local tourism entrepreneurs and workers on the pavement. A 1998 UNCTAD report states: “The number of small independent and family-run hotels is falling, while the accommodation offered by hotel chains is growing rapidly.” So the widely accepted argument that tourism stimulates local business, generates employment and, thus, increases the standard of living of people worldwide is - more than ever - disputable and needs to be reassessed.

Developing countries are increasingly forced to sell cheap because of the limited capacity of local tourism-related businesses to negotiate profitable prices for their services. According to the UNCTAD report, large foreign tour operators “often exercise monopsonistic power over the local tourism suppliers”, and “the asymmetry of bargaining power is clearly revealed” in the content of contracts with local hotels, which usually contain various conditions favourable to tour operators. For example: “a substantial discount on the room price is provided; no deposit is required for the booking; payment may be made long after departure of the clients; and the tour operator retains the right to return unfilled rooms (“release back”) shortly before the arrival date, without any need to pay compensation.”

SAPs and corporate efforts are directed towards getting governments in developing countries to establish policies that promote the privatization of tourism-related state enterprises (national airlines and transport companies in particular), safety in law for foreign investment and non-intervention in companies' decision-making processes. This means that governments will be more and more unable to control and plan tourism on their own terms for the benefit of society and the environment. Their role will be restricted to making available public goods that the private sector cannot provide and to ensure political and economic stability to protect the wealth and hegemonic interests of foreign corporations. If countries do not make these necessary structural adjustments to allow the tourism industry to grow, they are threatened to be left behind on the sidelines as existing foreign companies will relocate elsewhere and no new FDI - tourism-related and otherwise - will come in.

Although aviation liberalization has been considered by many developing countries as a threat to their continued participation in international air transport, big industry has been using all means to get governments to adopt “open skies policies”, saying protectionist aviation policies would severely constrain the development of tourism and pull potential customers away from hotels, resorts, car rentals, computer reservation systems, entertainment and all the rest of the industry. The WTTC claims the gross receipts from hotels and other tourist activities are substantially greater than those of national airlines, and foreign exchange leakages are proportionately much less.

Despite the tremendous pressures towards more tourism and aviation liberalization, however, the recent negotiations on trade in services at the WTO-OMC indicate that there is no effective commensurate benefit to the developing countries from the liberalization commitments of the developed countries in the service sectors such as travel and tourism. There is growing awareness that developing countries that are tourist destinations have been pressured to make concessions without effectively getting any in return. In fact, bringing the agenda of tourism liberalization into the WTO-OMC has itself caused imbalance, and pushing developing countries to undertake obligations on liberalization in tourism-related services has resulted in further inequity in this sector.

Some trade experts have suggested that if developing countries are unable to block further negotiations in services, they should refrain from making further market opening commitments or restricting their right to autonomous actions in schedules at the GATS/WTO-OMC.

In view of all this, there is an urgent need for greater and more effective monitoring and regulation of travel and tourism as the 'world's biggest industry' that affects the livelihoods and well-being of many millions of people and contributes to environmental degradation at global scale.

Many parties concerned with tourism have been involved in efforts towards "better sharing the benefits" of globalization through the development of grassroots-oriented tourism. We are all for people-centred projects, but there are good reasons to argue that these are bound to fail if the macro-economic climate is detrimental and even hostile to those goals. In other words, there is no place for a fairer and more sustainable tourism in this world under corporate rule, and viable alternatives will never thrive where a globalized economy controlled by a minority dictates its rules to local societies. Hence, the corporate tourism industry and other concerned institutions must first fundamentally change their role and vision.

The United Nations can play a crucial role in effecting positive change. For the UN, the goal should not be partnerships with the world’s largest tourism companies and associations that are set to override the sovereignty of nations at the cost of an increasingly marginalized majority of resident people. UN and affiliated agencies - the WTO-OMT in particular - need to be stopped from providing image-enhancement services to the industry (e.g. through promotional campaigns, such as the International Year of Ecotourism 2002, which are likely to accelerate the corporate take-over of nature, cultures and people). Rather, they must be taken to task to help counter-balance the dangerously increasing power of corporations by providing programmes that prioritize human needs and rights and a healthy environment over commercial tourism interests.

The right way to go for non-governmental organizations and citizens focussing on tourism issues is to become part of the burgeoning people’s movements that are fighting to remove the ill-effects of globalization and corporate rule at local, national and international levels. If we join the worldwide ongoing civil society efforts to bring about new policies, which restore the power of communities and democratic nations and remove the sources of injustice, inequality and conflict in general, there is a real chance that the fundamental problems of tourism will eventually be tackled.

The time has come to launch a global Campaign On Corporate Power In Tourism (COCPIT), which aims to profoundly challenge the biggest players in this industry and their drive towards globalization, while it supports tourism-related people's struggles for human rights, democracy, economic equality, social justice and ecological integrity.



The World Tourism Organization - A Cheerleader of Big Corporations

The World Tourism Organization (WTO-OMT) has its origin in the International Union of Official Tourist Publicity Organizations, which was set up in The Hague, The Netherlands, in 1925. After World War II, it was renamed the International Union for Official Tourism Organizations (IUOTO), comprising national tourism organizations as well as associate members, primarily tourism-related companies and other tourism promoting groups.

In 1967, IUOTO was transformed into an inter-governmental organization concerned with all tourism matters worldwide in collaboration with other international agencies, particularly those of the United Nation system. In December 1969, the UN General Assembly recognized the “decisive and central role” the transformed IUOTO should play in the field of world tourism “in cooperation with the existing machinery within the UN.”  A resolution was adopted in 1974 by 51 UN member countries whose official tourism organizations were members of IUOTO.

IUOTO was renamed the World Tourism Organization in May 1975, and its headquarters has since then been in Madrid, Spain. In 1976, the WTO-OMT became an executing agency of UNDP, and in 1977, a formal cooperation agreement was signed with the UN itself. Over the last two decades, WTO-OMT’s membership and influence in international tourism has expanded substantially.

 In 1997, WTO-OMT represented 138 member countries and had more than 350 affiliate members, including large travel and tourism corporations, business associations and educational institutions. As such, this inter-governmental body not only embraces partnerships with corporations  - airlines and other transport companies, hotels, tour operators, banking institutions, and the world’s largest business associations such as the World Travel and Tourism Council (WTTC) -, but corporations are part of the WTO-OMT itself and play a significant role in promoting tourism to governments and the general public the world over. It boasts, “WTO is the only intergovernmental body that offers membership to the operating sector and in this way offers a unique contact point for discussion between government officials and industry.”

The agency also exercises its power through its pervasive control over data collection, economic impact studies and market research in the field of tourism. “Member governments, private tourism companies, consulting firms, universities and the media all recognize WTO as the world’s most complete and reliable source of global tourism statistics and forecasts,” it claims. In contrast, independent statistic experts and economists have argued that WTO-OMT’s statistics, forecasts and technical analysis are highly suspect and directed to hoodwink everyone about the supposed benefits of tourism. 

This debate recently flared up again in relation to the newly introduced  “Tourism Satellite Account” (TSA), jointly promoted to governments by WTO-OMT and the WTTC and approved in March 2000 by the UN Statistical Commission as an international standard. Whereas WTO-OMT claims that the TSA is a unique tool to measure tourism’s “true” contribution to national economies in terms of percentage of gross domestic product, capital investment and jobs, critics seriously question this new accounting system, saying it is a statistical exercise mainly aimed to improve the image and stature of the industry and to conceal the considerable economic losses tourist destination countries are experiencing in the face of worldwide growing volatility and progressive liberalization policies. There is also the concern that the TSA requires high technical skills and heavy financial resources that developing countries can hardly afford.

Over the last ten years, WTO-OMT has also become a vital force in building a public image of socially and environmentally responsible transnational tourism corporations. It states, “For example, former WTO-[OMT] Secretary General Antonio Enriquez Savignac attended the Rio Earth Summit in 1992 and was instrumental in getting tourism included in Agenda 21 as one of the only industry capable of providing an economic incentive for preservation of environment.”

One of the WTO-OMT’s major goals is “encouraging liberalization in tourism services”, which is seen as a way to improve the “quality of tourism development”. A major joint project of WTO-OMT, WTTC and the Earth Council led by Maurice Strong was the publication of “Agenda 21 For the Travel & Tourism Industry: Towards Environmentally Sustainable Development”, which clearly reflects corporate efforts to reconcile the conflicting notions of unstoppable growth of tourism and environmental protection, and to promote technocratic and managerial solutions to tourism-induced ecological problems associated with tourism under an industry-led and self-regulated regime.

Despite strong corporate lobbying at the 7th  Session of the UN Commission on Sustainable Development (CSD7) in 1999 to get approval for the industry’s environmental agenda, the CSD however gave preference to national and local regulatory initiatives and the establishment of appropriate monitoring and assessment frameworks with multi-stakeholder participation.

In conclusion, the WTO-OMT is an elitist and closed club, dominated by the interests of rich countries and tourism business leaders, and there is little, if any, space for critical voices, particularly voices from civic groups in the Third World. Although NGOs can apply for affiliate membership, the annual fee of US$1,700 is too high for grassroots organizations.

At CSD7, the WTO-OMT was mandated to coordinate a multi-stakeholder working group on tourism, but it has not done anything to promote this initiative and to enhance the role of civil society. In view of growing NGO criticisms in relation to the UN International Year of Ecotourism 2002, WTO-OMT, which in partnership with UNEP organizes activities relevant to the Year, first did not provide financial resources and then withdrew invitations to NGOs to participate in a preparatory meeting in February, which further underlines the agency’s  profoundly undemocratic attitude.

In the latter case, WTO-OMT’s Environment Chief, Eugenio Yunis, argued WTO-OMT is not a UN body and does not receive funding from the UN, even though money always appears to flow bountifully from Northern member states and industry sources for organizing costly international tourism conferences and other extravagant projects and events. The real reason for resisting more open and transparent processes of dialogue is not the lack of financial resources, but rather the agency’s fears to be confronted by critics for its narrow and biased tourism representations and policies.

The WTO-OMT portrays itself as the leader of the “world’s largest industry”, and the fact that the body is “entrusted by the United Nations towards the promotion and development of tourism” is played out to legitimize its leadership. But evidently, it does not feel obliged to adhere to the principles, aims and democratic procedures agreed at the UN level.

The burgeoning international citizens alliance working for a corporate-free UN has warned that the UN’s goals to enhance human dignity and capacity for self-governance must not be subordinated to the vested interests of big business. In their proposal for a ‘Citizens Compact’, a response to the UN’s Global Compact with the corporate world, it is stated: “The UN must find ways to ensure that other inter-governmental bodies, such as the IMF, World Bank and WTO-[OMC], do not depart from the principles and goals of the UN Charter.” This should also apply to the World Tourism Organization, which is the voice of the corporate tourism lobby.