Tourism - a driver of inequality and displacement

Promoted as a strategy for poverty reduction and sustainable development, tourism is in reality fuelling the gentrification of the developing world.

Anita Pleumarom

ON the occasion of the Third International Conference on Financing for Development (Addis Ababa, Ethiopia, 13-16 July), the World Tourism Organisation (UNWTO) called for higher support for tourism in international financing for development flows in order 'to maximise the sector's contribution to sustainable development across the globe'. UNWTO Secretary-General Taleb Rifai said: 'For an increasing number of developing countries tourism means jobs, poverty eradication, community development, and the protection of natural and cultural heritage. Yet, in order to maximise tourism's contribution to the development objectives, it is critical to address the disparity between the sector's capacity to foster development and the low priority it has been given so far in terms of financial support in the development cooperation agenda.'1

What needs to be emphasised here is that contemporary tourism development is very much a political process and in sync with neoliberal development strategies that primarily benefit big business interests without properly addressing poverty and equity aspects. This approach is also favoured by global lending agencies and bilateral donors that fund development projects in return for reforms that allow unfettered market-oriented growth.

The idea of fighting poverty in the developing world by ploughing grants, loans and investments into luxury tourism schemes appears bizarre, but that is exactly what has become the order of the day.

The International Finance Corporation (IFC, the World Bank's private sector arm) has long attracted criticism for its notorious history of investing in five-star hotels in some of the world's poorest countries. In August 2014, the IFC revealed that across the world it had invested $2 billion in over 270 hotel projects. According to the Bretton Woods Project, the IFC in 2014 approved investments in a Marriott hotel in Bolivia, in India's SAMHI Hotels Private Limited (whose hotel properties are operated by Hyatt, Marriott, Accor and Starwood), and in other high-end hotels in Burma, Vietnam, Ethiopia, Tanzania and Zambia. This follows previous investments in high-class tourism infrastructure in Vietnam and Guinea and deluxe hotels in Haiti and Jamaica.2 The IFC thus seems to prefer working with big corporations to fulfil its goal of making profit for the World Bank, rather than targeting its investments at helping the poor.

Similarly, the UK Department for International Development (DfID) through its investment arm CDC primarily supports the private sector, despite growing criticism of projects without a focus on poverty reduction. CDC was recently found to have invested more than $260 million of 'aid' money for battling poverty in 44 property and construction companies in Latin America, Africa and Asia. At least 20 of these can be classified as dubious projects as they benefit companies that build or manage hotels, gated communities and commercial centres. For instance, CDC helped to finance the Garden City luxury housing and shopping complex in Kenya and a luxury hotel in Lagos, Nigeria, which costs $400 a night to stay in. Alex Scrivener of the UK-based action group Global Justice Now that monitors CDC commented: 'These projects are an insult to the millions of people who live in these places without decent housing.'3

EuropeAid, the European Union's foreign aid organisation, gave over $1.1 million for the establishment of the luxurious L'Oasis de Noria tourist water park in Marrakech, M orocco - a vast holiday complex comprising a lagoon complete with waves, a golf course, almost 1,000 apartments and villas, a spa, tennis courts, theatre, shops and restaurants. Locals wondered why so much EU 'aid' money was spent on a project that only benefits the rich whereas poverty remains a rampant problem in surrounding villages.

Another blatant case of misplaced 'pro-poor' funding was reported from Haiti in the aftermath of the devastating January 2010 earthquake.  As part of the country's reconstruction programme, the Clinton-Bush Haiti Fund - set up by former US Presidents Bill Clinton and George W Bush to channel donations into projects that 'help Haitian people reclaim their country and rebuild their lives' - invested in May 2011 $2million in the Royal Oasis Hotel, owned by a Haitian-Canadian-American joint venture company (SCIOP SA)and managed by the Spanish chain Occidental Hotels & Resorts.4 The 10-storey deluxe hotel was builtin the heart of Port-au-Prince, where people were suffering from extreme hardship. While the Fund portrayed the creation of some 300 jobs in the hotel as key to helping poor earthquake victims, hundreds of thousands of displaced destitute Haitians persevered in makeshift shelters of cardboard, scrap metal and old bedsheets, with many of them facing evictions and struggling to have water to drink and food on their table.

No 'passport to development'

Already in the 1970s, there were significant debates about the uneven and colonial-style relations 'Third World' tourism creates: the 'rich' tourists who demand and who are served, and the 'poor' locals who supply and serve. After more than a decade of the World Bank financing massive tourism projects in the developing world, the Bank and the UN Educational, Scientific and Cultural Organisation (UNESCO) co-published a ground-breaking study by de Kadt which raised serious questions about tourism as a 'passport to development'. The other researchers in the volume pointed out the high financial leakages in this industry dominated by transnational corporations and expressed concerns about tourism creating new forms of dependency for poor nations as tourism development was closely interlinked with international debt politics.5

Tourism researchers Turner and Ash labelled tourism a 'dismal science', arguing that 'the economics of tourism are totally deceptive' and the industry had the potential to seriously harm traditional economies and overexploit natural and cultural resources. They described how local peasant communities were disrupted and displaced by tourism schemes, living costs skyrocketed and property values soared beyond the reach of ordinary people. They also illustrated well the substantial opportunity costs of tourism: 'The locals build the resorts and serve in them which, if fully controlled by foreigners, will contain few really worthwhile jobs. In the meantime, the fields return to weeds; the locals lose their ability to produce anything of direct practical use to themselves. While they've been building the resorts, they haven't been building the schools, the irrigation systems or the textile factories which would educate, feed or clothe them ... For the sake of this industry, they can lose their land, their jobs and their way of life - for what?'6

Even within the World Bank, there was growing discontent over using development aid to fund luxury tourism projects in poor countries because they 'inject the behaviour of a wasteful society into the midst of a society of want, but the profits go to the elites - those already wealthy, and those with political influence'.

Under increasing pressure from critics, the Bank management closed down its Tourism Project Department in 1978 and stopped financing tourism projects, reasoning that it was 'not a good fit with development policies'. However, the IFC as well as regional development banks continued to fund tourism schemes as before.

New concepts of environmentally and socially friendly tourism that emerged in the late 1980s and 1990s in response to the burgeoning tourism critique movement were an opportunity for the World Bank to justify its re-entry into tourism-related activities. Since then, international financial and aid agencies have initiated and supported a plethora of programmes and projects under euphemisms such as 'eco-', 'sustainable' and 'pro-poor' tourism. In tandem with the UNWTO, they have played a crucial role in engineering consent among international, government, non-governmental and private sector organisations that tourism - if properly planned and managed - is a key driver of poverty reduction and sustainable development.

With a global army of tourism actors promoting the ideology of a 'new', benign tourism and offering assistance to develop tourism in the right way, it is not surprising that governments of poor nations have embraced tourism as a strategy to boost their economies. But without addressing the unjust economic structures and power relations that are the root causes of poverty, inequality and environmental degradation, tourism remains basically 'business-as-usual', with large foreign companies implementing tourism projects without proper scrutiny and accountability and maximising profits that are repatriated to headquarters and shareholders in developed countries.

Touristification and gentrification

While sustainability and pro-poor development have become defining themes in mainstream tourism discourses, tourism has actually become one of the major forces for gentrification. When the term 'gentrification' was first used in the 1960s, it referred specifically to the influx of upper-class residents into traditionally working-class neighbourhoods in European and North American cities, and the subsequent renovation and upgrading of buildings. But in recent years, it has increasingly been examined in the context of neoliberal globalisation and related economic restructuring not only of cities but suburban and rural areas as well.7 

A particular characteristic of gentrification is that it has become linked with global systems of finance, real estate and tourism. With most countries opening up to direct foreign investments, public land in cities and other attractive locations has been privatised on a massive scale for upmarket housing and commercial developments including hotels, casinos, golf courses, theme parks, shopping malls and special economic zones. Often, the monopolisation of land ownership by a few, as well as the absence of effective regulatory frameworks, has spawned disastrous land speculation and led to unreasonable and oppressive land prices and rentals that are beyond the reach of the poor. Land grabs, displacement, inequality and social injustices have been identified as constitutive elements of gentrification, particularly in developing countries, and vulnerable groups like women, children and ethnic minorities are most affected.

In Hawaii, which has often been hailed as a model of tourism development, inequalities created by gentrification are clearly visible. While some local residents may enjoy the benefits that tourism-related gentrification brings, such as better public services, job creation and improved infrastructure, the majority of Native Hawaiians and long-time Hawaii residents can hardly cope with the rising costs of living. Hawaii is home to the highest percentage of millionaires in the nation, has the highest median housing costs for renters, and is one of the top three most expensive states in the United States. Meanwhile, almost 15% of Native Hawaiians live in poverty when compared to the national average of 9.8%.8  Homelessness is at a crisis point in Hawaii, with the number of homeless persons rising 24% over the past year. While wealthy tourists are warmly welcomed with greetings of 'Aloha', social justice and respect for human rights appear to be alien concepts. In July 2013, Hawaii's state legislature approved a three-year pilot project to remove homeless people living in parks and on beaches as they could be considered an eyesore by visitors that come to enjoy Hawaii's exotic environment and luxury tourist facilities.9

Tourists play a role not only as consumers of destinations, but also as actors in the real estate market and purchasers of vacation apartments, second homes and retirement homes. An increasing number of affluent people who originally came seasonally for short-stay vacations have become year-round 'residential tourists', often living in high-end gated communities that form a stark contrast to traditional settlements. There has been a dramatic increase in migration of North Americans and Europeans resulting in the gentrification of coastal destinations and historical city centres in the Mediterranean, Latin American and South-East Asian regions. This booming 'real estate tourism' has in many cases led to conflicts with pre-existing communities over the appropriation of land and resources and eventually to the outmigration of locals who are usually the losers in such struggles.

In an attempt to climb the hierarchy of competitive global cities and tourist attractions, the state has often instigated gentrification under the rhetoric of beautification, urban renewal and urban revitalisation, with governments acting as enablers to encourage private investors and developers to implement projects. In the process, green urban spaces are overbuilt, slums demolished and traditional low-income residential and mixed-use districts replaced by luxury hotels, apartments and commercial complexes that cater to the consumeristic and wasteful lifestyle of the rich. Bangkok, for example, with its high-end consumer culture and tourists coming especially for the city's reputation as a shoppers' paradise, has seen 'super-gentrification' in recent years with the rapid proliferation of extravagant tourism complexes and shopping malls that boast expensive foreign brands. According to a recently published survey, just one of these oversized malls with its massive air-conditioning systems consumes nearly twice as much power annually as all of Thailand's Mae Hong Son province that is home to about 250,000 people!10

Supranational policy regimes such as UNESCO heritage policies have played a significant role in establishing fundamental bases for gentrification in historical centres that are of special cultural and architectural value. For instance, the renovation of World Heritage towns like Lijiang in China's Yunnan Province, Luang Prabang in Laos and George Town on the Malaysian island of Penang has been subjected to criticism as it has led to the museumisation and commodification of heritage. The renovated town centres have lost much of their distinct character, as old family households and businesses have gradually been forced out in the drive to convert properties into hotels and other businesses specifically catering to the needs and tastes of international tourists.

In Latin America, it has also been common for local administrations to give major concessions to investors that transform architectural heritage into high-end commercial businesses, while small shop owners and street vendors are expelled.11 Now, in view of the restoration of bilateral ties between the US and Cuba, there are serious concerns about Havana's unspoilt cultural heritage and social fabric as it is questionable as to how the city will handle the expected onslaught of foreign investments and tourists. Opening up the private sector in Cuba has already increased inequality, and as Cuban Americans begin to buy properties in Havana and elsewhere on the island, socioeconomic divisions are likely to increase.12

Touristification and related gentrification has also begun in poverty-stricken Burma that has recently begun to liberalise its economy and now considers tourism as a priority industry. The government has drawn up a 'responsible tourism' policy with the help of foreign consultants and civil society groups and put in place a Tourism Master Plan supervised by the Asian Development Bank in order to ensure 'sustainable tourism' development. But the rush to establish so-called 'hotel zones' in many parts of the impoverished country, where large tracts of land are compulsorily acquired for multiple hotels and other tourist facilities, has become a cause for grave concern. As the reform of Burma's land policy and laws is still incomplete, land grabs and disputes with local communities are likely to happen more frequently. Reports have already surfaced about increasing human rights violations as the government confiscates land for 'hotel zones' from villagers despite documentation proving their land ownership and rights to use land. In some cases, landowners who are expropriated receive little or no compensation from the government.

It is worth noting that amid a general laissez-faire orientation in most public policies, local and national governments have shown unusual decisiveness in preparing the ground for state-led tourism gentrification. One reason is their eagerness to boost their countries' image as 'world-class' tourist destinations. As tourism is widely accepted as a modern and benign growth industry, it is often used as a justification for the implementation of expensive mega-projects in preparation for major events. Rio de Janeiro, the host city of the 2014 World Cup and the 2016 Olympic Games, illustrates this well. The city currently represents a highly contested scenario for the gentrification of favelas located in inner-city areas or in the vicinity of beaches and the coastline - both prime locations for real estate and tourism development. Undoubtedly, the tourism industry is a main beneficiary of the huge government infrastructure spending for the World Cup and the Olympics, but local people are up in arms as their rights to housing and public services are being violated and threatened.

The Rio city government in unison with private investors takes the sports events as an opportunity to redevelop the city for the privileged few - rich locals and tourists - while pushing residents to the inhospitable periphery and taking harsh repressive measures against all who stand in the way. Carlos Carvalho, one of the city's biggest landowners and the developer of Rio's main Olympic site at Barra da Tijuca, bluntly stated that the 'new' Rio has to 'represent on the global scene as a city of the elite, of good taste', so poor residents have to go.13 On a nearby plot, Carvalho is building a tourism complex which includes a 3,000-room five-star hotel and 100-metre-wide boulevards that, according to Carvalho, 'will be the envy of New York'. Meanwhile, citizens have been facing a protracted 'state of exception' as the so-called Olympic Act allows massive development projects to be fast-tracked through special decrees and provisional measures in disregard of existing laws and without public participation and scrutiny.

In metropolitan areas of poor countries, from Sao Paulo to Mumbai and Manila, the frequency of unexplained slum fires points to the likelihood that combustion is not spontaneous but is often linked to increased property values and redevelopment programmes. There are claims by human rights defenders that authorities and developers are behind the fires to clear the way for projects and force out slum dwellers who resist eviction.

How tourism-related gentrification manifests itself in this capitalist era unfettered by state regulation and unions is well described in the book Dreamworlds of Neoliberalism: Evil Paradises (Mike Davis/Daniel Bertrand Monk, 2008).14 It notes that the 'new luxury cities' are nothing less than a utopian frenzy that 'enflames desires' for infinite consumption, total social exclusion and architectural monumentality. Probably the most famous 'luxury palace' is Dubai, with gated communities where elite groups live in a privatised heaven amid the public squalor that lies just beyond their enclosures. With only 1.5 million people, Dubai has been one of the world's biggest construction sites in the last decade, with dozens of outlandish mega-projects, including the artificial archipelagoes of private islands known as 'The World' and 'The Palm', the earth's tallest building, an underwater luxury hotel, a domed ski resort and hyper-malls. But Dubai depends upon a vast international immigrant indentured working class. It is people largely from poor Asian countries who toil in the construction and tourism industries - and who are very poorly paid, badly housed, subject to racism and to sexual abuse, and living without rights.

Mega-infrastructure projects such as super-highways, airports and cruiseship ports play a significant role in tourism gentrification. A new urban form enabling explosive growth in aviation-dependent tourism and trade is the airport city or so-called aerotropolis, which comes as a giant development package including, besides an airport and other related infrastructure, luxury hotels, shopping and entertainment facilities, convention, trade and exhibition complexes, golf courses and sport stadiums, and industrial parks. Super-modern aerotropolis schemes are even planted in remote rural areas and indigenous peoples' territories. They are not settlements for people to live in but only cater to a small privileged minority of clientele - the hypermobile frequent-flyer elite.15 Aerotropolis protagonists promise these developments will boost local economies, attract aviation- and tourism-related investments, and generate jobs and income for locals. The main beneficiaries, however, are transnational corporations like airlines, hotel chains, large-scale retail businesses as well as construction and real estate companies.

Across the world, pristine natural areas that are often the territories of indigenous peoples are now for sale to the multi-billion-dollar 'ecotourism' and 'remote real estate' industries. Tourism-cum-conservation projects turn into tools to accelerate economic growth and public-private development threatening the rights of local people and exacerbating the loss of their ancestral lands and resources for livelihood. 'Gentrification of nature' has arrived with high-end multinational-owned resorts - or 'eco-lodges' - built in the middle of rainforests, wildlife habitats or on ecologically fragile islands.

In Tanzania, protected areas have increased dramatically since colonial times and become destinations for VIP 'eco-' and hunting tourists, while small-scale farmers, pastoralists and fisherfolks become homeless in their homeland. Chambi Chachage reports about Vilima Vitatu village: 'So here we are with a village that has 19,800 hectares out of which 12,829.9 hectares are conserved within a Wildlife Management Area (WMA). A French investor, Un Afrique En Lodge (ULEA), is welcomed to build a tourist lodge/camp within this WMA as if s/he is not a threat to the wild. Yet, the pastoralists have to raze their shelters, abandon their little farms and let the animals in peace so that tourists can … gaze at them.'16

In recent years, ultra-luxurious 'ecotourism' featuring private islands and super-yachts has experienced a major boom from Hawaii to Costa Rica and Belize to Greece. Private Island News posted in July 2015: 'What do Johnny Depp, Brad Pitt and Warren Buffett all have in common? They're all said to be buying islands in Greece.'17 A Marine Protected Area status increases the value of a private island, as well as its privacy. In 2014, billionaire Larry Ellison purchased Lanai, the sixth largest Hawaiian island, for around $500 million, one of the most expensive island purchases in history. Leonardo DiCaprio, who has been celebrated by many for his environmental activism, purchased a private island off Belize in 2005 and enjoys super-yachts.  He has also teamed up with the Four Seasons hotel group to 'create a five-star luxury resort based on sustainable design and environmental conservation'.18 


The concept of gentrification is useful to explain major trends in contemporary tourism development and how it one-sidedly benefits the wealthy and privileged, while corroding urban, rural and indigenous peoples' communities. Yet, the public is led to believe that tourism has the potential to eradicate poverty because it adds value to places and generates huge amounts of money. What is omitted is that most of the profits actually 'trickle up and away' and not down to the poor, and what is not appreciated at all is what local people lose.

Impartial and realistic tourism cost-benefit analyses are practically non-existent, but what can be evidenced clearly is that tourism is partially responsible for two defining features of our times: worsening inequality and displacement. Economic inequality has become extreme, with about half of global wealth concentrated in the hands of the richest 1%, while the other half is being shared by the remaining 99%. The world's richest 20% earn about 50 times as much as the world's poorest 20%. The ongoing massive displacement of people within countries and across borders is another feature of the human drama unfolding with egregious human rights violations and suffering wreaking havoc on populations. The underlying causes of both inequality and displacement are conflicts over power, wealth and resource sharing.

In tourism development, the private sector and governments all too often collaborate to acquire land, water and other natural resources without the free, prior and informed consent of local residents and communities, resulting in impoverishment and disempowerment of people in the process.  Tourism has definitely not changed for the better since the World Bank decided in the 1970s to stop lending to tourism schemes when evidence was produced that the Bank's tourism model involved deleterious social, cultural and environmental impacts and added to the already apparent divide between developed and developing countries. In fact, the situation has worsened alarmingly over recent decades due to the explosive tourism growth and the radically deregulated business environment.

After years of steady pronouncements by tourism promoters that 'sustainable', 'pro-poor' and 'people-centred' tourism is well underway, the widespread evidence of tourism-induced hardship for local people exposes the underbelly of neoliberal globalisation usually hidden from the public eye.  The notorious conglomerate of  financial, real estate and tourism industries fuels corruption and speculative bubbles worldwide and reflects the greed, excess and self-delusion of so-called 'casino capitalism'. In the name of tourism development, unnecessary mega-projects are implemented and luxurious private paradises created for the wealthy and privileged few, while the vast majority of the population must carry the burden of debt repayment and austerity schemes.

People may not oppose tourism as such, but local resistance is mounting against misguided tourism-related development and gentrification schemes that fail to deliver on all fronts: the fight against inequality, eradication of poverty, environmental sustainability, protection of human rights and the promotion of social justice and democracy. Recent protests - from indigenous peoples defending their ancestral territories and global campaigns against land grabs to the Occupy and European anti-austerity movements to mass demonstrations in Turkey and Brazil - are clear signs that people in different places reject the current neoliberal development model of which tourism is an integral part, and are rising up for secure livelihoods, livable wages, education, public services and democratic freedoms.

With the United Nations' commitment to a transformative and people-centred post-2015 development agenda, it is urgent not only to reject the UNWTO's request for higher support for tourism in international financing for development. In view of the many problems tourism causes, financial support for tourism programmes and projects should be eliminated altogether. What the World Bank could do in 1978 for the common good, can be done again.

As tourism is fraught with ideology, a comprehensive and sincere review and public debate on tourism development is needed at all levels. For the post-2015 development agenda to succeed, it is of utmost importance to restore public rights over the privileges of big business and wealthy consumers and tourists. Moreover, it is imperative to put in place regulatory frameworks that effectively protect local citizens and communities from harmful tourism development, as well as mechanisms that require travel and tourism businesses to provide redress for losses and to clean up the damage they created. Clear, transparent and accessible mechanisms of accountability are also needed to empower people to monitor and hold governments, financial institutions, development agencies and the private sector engaging in tourism accountable for their actions.                                        

Anita Pleumarom is the coordinator of the Bangkok-based Tourism Investigation & Monitoring Team (tim-team) and member of the Tourism Advocacy and Action Forum (TAAF).







5     De Kadt, E. (ed.) (1979), Tourism: Passport to Development?  A joint World Bank-UNESCO study, New York: Oxford University Press

6     Cited in Pleumarom, A. (2012), The politics of tourism, poverty reduction and sustainable development, Third World Network,

7     Moore, R. (2013), Understanding gentrification in Southeast and East Asia, Interdisciplinary Studies Journal, Vol. 13, pp. 116-127, Faculty of Social Sciences and Humanities, Mahidol University

8     Macfarlane, I.L. and Conway, F. (2013), Development and gentrification in the Hawaiian Islands, Conway.pdf



11   Janoschka, M.; Sequera, J. and Salinas, L. (2013), Gentrification in Spain and Latin America - a Critical Dialogue,




14   Davis, M. and Monk, D.B. (eds.) (2008), Dreamworlds of Neoliberalism: Evil Paradises, New York: The New Press


16   Chachage, C. (2011), Tanzania: Land grabs cum acquisitions, http://www.commercialpressuresonland




*Third World Resurgence No. 301/302, September/October 2015, pp 5-10