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Tourism Investment Report 2020

In association with fdi intelligence from the financial times.

For the third year in a row, the UNWTO has partnered with the fDi intelligence from the Financial Times to develop a joint publication on Tourism Foreign Direct Investments (FDI) analyzing data on Greenfield investments trends. The relevance of this report is pivotal to governments and investors because it exposed data on flows of capital, and destinations for investments providing insight on market trends for the tourism recovery.

In times of uncertainty, expertise and trusted information is more important than ever. This report provides investment and market data that both investors and stakeholders will need to maximize their impact of the sector in terms of economic growth, job creation and sustainability. Especially when around 100-120 million direct tourism jobs are at risk, which threatens to roll back the progress we have made in establishing tourism as a driver towards achieving the Sustainable Development Goals (SDGs). For this edition, the UNWTO’ Innovation, Digital Transformation and Investments department has developed an interactive report using data (2015-2019) from the fDi Intelligence on Tourism FDI.

The COVID-19 pandemic has hit the tourism sector hard; the data suggests that global FDI into tourism plummeted by 73.2% in the first half of 2020, compared with a year earlier. This put an end to the sector’s record high years. This data has a close relationship with the UNWTO’ scenarios for international tourist numbers decline, which could fall between 60 and 80% this year depending on the speed with which travel restrictions are lifted. This could translate into a loss of 850 million to 1.1 billion international tourist arrivals and a fall of $910 billion to $1.2 trillion in export revenues.

If you want to learn more, please register here

Although, the investment cycle remained strong throughout 2019, with tourism mobilizing $61.8bn in global FDI, which, in turn, created more than 135,000 jobs. The trend appeared particularly consistent in Latin America and the Caribbean, where FDI reached new record levels. For example it created more than 56.000 jobs in Mexico from 2015 – 2019. Tourism FDI was also strong in the Middle East and Africa, where it rose to the highest level in a decade. However, almost half of all tourism investments globally (46.51%) are made at top 10 countries. From which around 30% of projects are concentrated in five countries: United Kingdom, United States, Germany, China, and Spain. It is important to notice that more than 30% of projects and of capital investment announced in the tourism cluster between 2015 and 2019 occurred in 2019.

The major sub sector that has led tourism investments are consider traditional investments, with construction as the main driver for around 57% of total Greenfield investments from 2015 to 2019. As such, the trends in accommodation are around
the sustainability where multinational companies are investing in green, and clean energy matrix of their operations. According to the fDi intelligence of the Financial Times, investors are paying increasing attention to the social and environmental footprint
of the projects they assess in tourism. They seem willing to prioritize developments that lift communities and preserve ecosystems, as long as financial sustainability is also taken into account.

Finally, there is also an increasing number of non-traditional investments related to services around software technologies that include: Travel arrangement & reservation services, Internet publishing, web search among other, which represent around 32% of total investments considering investments between 2015 - 2019. This data invites to research more about investments in technology as a source of FDI in the tourism sector. The Travel Tech startups have been introducing innovations in the tourism ecosystem, and they are constantly changing business models attracting more investors.

The COVID-19 pandemic has made clear that sustainable tourism requires that sustainable investments are at the center of new solutions, and not just of traditional investments that promote and underpin economic growth and productivity. It has also highlighted the importance of non-traditional investments that enhance innovation through the creation and diffusion of new solutions to decarbonize the sector. To harness the advantages of investments, it is critical that governments promote policies as well as new investment vehicles to recover, retain and attract foreign direct investments. Only this way can we reimagine tourism and enhance the sector’s positive impact on people and planet as we accelerate the achievement of SDGs.

The UNWTO is developing a series of investment guidelines to understand and generate sustainable investments and promote innovations in the tourism ecosystem. If you are interested in the UNWTO’ reports and guidelines to understand, enable and mobilize tourism investments , we invite you to register to receive the our investment updates.

Please feel free to download the full report:

TOURISM INVESTMENT 2020  

TOURISM INVESTMENT 2019  

TOURISM INVESTMENT 2018  

If you have questions about the report, or need more specific information about tourism investments white us an email to [email protected]

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10 Economic impacts of tourism + explanations + examples

There are many economic impacts of tourism, and it is important that we understand what they are and how we can maximise the positive economic impacts of tourism and minimise the negative economic impacts of tourism.

Many argue that the tourism industry is the largest industry in the world. While its actual value is difficult to accurately determine, the economic potential of the tourism industry is indisputable. In fact, it is because of the positive economic impacts that most destinations embark on their tourism journey.

There is, however, more than meets the eye in most cases. The positive economic impacts of tourism are often not as significant as anticipated. Furthermore, tourism activity tends to bring with it unwanted and often unexpected negative economic impacts of tourism.

In this article I will discuss the importance of understanding the economic impacts of tourism and what the economic impacts of tourism might be. A range of positive and negative impacts are discussed and case studies are provided.

At the end of the post I have provided some additional reading on the economic impacts of tourism for tourism stakeholders , students and those who are interested in learning more.

 Foreign exchange earnings

Contribution to government revenues, employment generation, contribution to local economies, development of the private sector, infrastructure cost, increase in prices, economic dependence of the local community on tourism, foreign ownership and management, economic impacts of tourism: conclusion, further reading on the economic impacts of tourism, the economic impacts of tourism: why governments invest.

Tourism brings with it huge economic potential for a destination that wishes to develop their tourism industry. Employment, currency exchange, imports and taxes are just a few of the ways that tourism can bring money into a destination.

In recent years, tourism numbers have increased globally at exponential rates, as shown in the World Tourism Organisation data below.

There are a number of reasons for this growth including improvements in technology, increases in disposable income, the growth of budget airlines and consumer desires to travel further, to new destinations and more often.

Here are a few facts about the economic importance of the tourism industry globally:

• The tourism economy represents 5 percent of world GDP
• Tourism contributes to 6-7 percent of total employment
• International tourism ranks fourth (after fuels, chemicals and automotive products) in global exports
• The tourism industry is valued at US$1trillion a year
• Tourism accounts for 30 percent of the world’s exports of commercial services
• Tourism accounts for 6 percent of total exports
• 1.4billion international tourists were recorded in 2018 (UNWTO)
• In over 150 countries, tourism is one of five top export earners
• Tourism is the main source of foreign exchange for one-third of developing countries and one-half of less economically developed countries (LEDCs)

There is a wealth of data about the economic value of tourism worldwide, with lots of handy graphs and charts in the United Nations Economic Impact Report .

In short, tourism is an example of an economic policy pursued by governments because:

•      it brings in foreign exchange
•      it generates employment
•      it creates economic activity

Building and developing a tourism industry, however, involves a lot of initial and ongoing expenditure. The airport may need expanding. The beaches need to be regularly cleaned. New roads may need to be built. All of this takes money, which is usually a financial outlay required by the Government.

For governments, decisions have to be made regarding their expenditure. They must ask questions such as:

How much money should be spent on the provision of social services such as health, education, housing?

How much should be spent on building new tourism facilities or maintaining existing ones?

If financial investment and resources are provided for tourism, the issue of opportunity costs arises.

By opportunity costs, I mean that by spending money on tourism, money will not be spent somewhere else. Think of it like this- we all have a specified amount of money and when it runs out, it runs out. If we decide to buy the new shoes instead of going out for dinner than we might look great, but have nowhere to go…!

In tourism, this means that the money and resources that are used for one purpose may not then be available to be used for other purposes. Some destinations have been known to spend more money on tourism than on providing education or healthcare for the people who live there, for example.

This can be said for other stakeholders of the tourism industry too.

There are a number of independent, franchised or multinational investors who play an important role in the industry. They may own hotels, roads or land amongst other aspects that are important players in the overall success of the tourism industry. Many businesses and individuals will take out loans to help fund their initial ventures.

So investing in tourism is big business, that much is clear. What what are the positive and negative impacts of this?

Positive economic impacts of tourism

So what are the positive economic impacts of tourism? As I explained, most destinations choose to invest their time and money into tourism because of the positive economic impacts that they hope to achieve. There are a range of possible positive economic impacts. I will explain the most common economic benefits of tourism below.

One of the biggest benefits of tourism is the ability to make money through foreign exchange earnings.

Tourism expenditures generate income to the host economy. The money that the country makes from tourism can then be reinvested in the economy. How a destination manages their finances differs around the world; some destinations may spend this money on growing their tourism industry further, some may spend this money on public services such as education or healthcare and some destinations suffer extreme corruption so nobody really knows where the money ends up!

Some currencies are worth more than others and so some countries will target tourists from particular areas. I remember when I visited Goa and somebody helped to carry my luggage at the airport. I wanted to give them a small tip and handed them some Rupees only to be told that the young man would prefer a British Pound!

Currencies that are strong are generally the most desirable currencies. This typically includes the British Pound, American, Australian and Singapore Dollar and the Euro .

Tourism is one of the top five export categories for as many as 83% of countries and is a main source of foreign exchange earnings for at least 38% of countries.

Tourism can help to raise money that it then invested elsewhere by the Government. There are two main ways that this money is accumulated.

Direct contributions are generated by taxes on incomes from tourism employment and tourism businesses and things such as departure taxes.

Taxes differ considerably between destinations. I will never forget the first time that I was asked to pay a departure tax (I had never heard of it before then), because I was on my way home from a six month backpacking trip and I was almost out of money!

Japan is known for its high departure taxes. Here is a video by a travel blogger explaining how it works.

According to the World Tourism Organisation, the direct contribution of Travel & Tourism to GDP in 2018 was $2,750.7billion (3.2% of GDP). This is forecast to rise by 3.6% to $2,849.2billion in 2019.

Indirect contributions come from goods and services supplied to tourists which are not directly related to the tourism industry.

Take food, for example. A tourist may buy food at a local supermarket. The supermarket is not directly associated with tourism, but if it wasn’t for tourism its revenues wouldn’t be as high because the tourists would not shop there.

There is also the income that is generated through induced contributions . This accounts for money spent by the people who are employed in the tourism industry. This might include costs for housing, food, clothing and leisure Activities amongst others. This will all contribute to an increase in economic activity in the area where tourism is being developed.

The rapid expansion of international tourism has led to significant employment creation. From hotel managers to theme park operatives to cleaners, tourism creates many employment opportunities. Tourism supports some 7% of the world’s workers.

There are two types of employment in the tourism industry: direct and indirect.

Direct employment includes jobs that are immediately associated with the tourism industry. This might include hotel staff, restaurant staff or taxi drivers, to name a few.

Indirect employment includes jobs which are not technically based in the tourism industry, but are related to the tourism industry. Take a fisherman, for example. He does not have any contact of dealings with tourists. BUT he does sell his fish to the hotel which serves tourists. So he is indirectly employed by the tourism industry, because without the tourists he would not be supplying the fish to the hotel.

It is because of these indirect relationships, that it is very difficult to accurately measure the economic value of tourism.

It is also difficult to say how many people are employed, directly and indirectly, within the tourism industry.

Furthermore, many informal employments may not be officially accounted for. Think tut tut driver in Cambodia or street seller in The Gambia – these people are not likely to be registered by the state and therefore their earnings are not declared.

It is for this reason that some suggest that the actual economic benefits of tourism may be as high as double that of the recorded figures!

All of the money raised, whether through formal or informal means, has the potential to contribute to the local economy.

If sustainable tourism is demonstrated, money will be directed to areas that will benefit the local community most.

There may be pro-poor tourism initiatives (tourism which is intended to help the poor) or volunteer tourism projects.

The government may reinvest money towards public services and money earned by tourism employees will be spent in the local community. This is known as the multiplier effect.

The multiplier effect relates to spending in one place creating economic benefits elsewhere. Tourism can do wonders for a destination in areas that may seem to be completely unrelated to tourism, but which are actually connected somewhere in the economic system.

Let me give you an example.

A tourist buys an omelet and a glass of orange juice for their breakfast in the restaurant of their hotel. This simple transaction actually has a significant multiplier effect. Below I have listed just a few of the effects of the tourist buying this breakfast.

The waiter is paid a salary- he spends his salary on schooling for his kids- the school has more money to spend on equipment- the standard of education at the school increases- the kids graduate with better qualifications- as adults, they secure better paying jobs- they can then spend more money in the local community…

The restaurant purchases eggs from a local farmer- the farmer uses that money to buy some more chickens- the chicken breeder uses that money to improve the standards of their cages, meaning that the chickens are healthier, live longer and lay more eggs- they can now sell the chickens for a higher price- the increased money made means that they can hire an extra employee- the employee spends his income in the local community…

The restaurant purchase the oranges from a local supplier- the supplier uses this money to pay the lorry driver who transports the oranges- the lorry driver pays road tax- the Government uses said road tax income to fix pot holes in the road- the improved roads make journeys quicker for the local community…

So as you can see, that breakfast that the tourist probably gave not another thought to after taking his last mouthful of egg, actually had the potential to have a significant economic impact on the local community!

The private sector has continuously developed within the tourism industry and owning a business within the private sector can be extremely profitable; making this a positive economic impact of tourism.

Whilst many businesses that you will come across are multinational, internationally-owned organisations (which contribute towards economic leakage ).

Many are also owned by the local community. This is the case even more so in recent years due to the rise in the popularity of the sharing economy and the likes of Airbnb and Uber, which encourage the growth of businesses within the local community.

Every destination is different with regards to how they manage the development of the private sector in tourism.

Some destinations do not allow multinational organisations for fear that they will steal business and thus profits away from local people. I have seen this myself in Italy when I was in search of a Starbucks mug for my collection , only to find that Italy has not allowed the company to open up any shops in their country because they are very proud of their individually-owned coffee shops.

Negative economic impacts of tourism

Unfortunately, the tourism industry doesn’t always smell of roses and there are also several negative economic impacts of tourism.

There are many hidden costs to tourism, which can have unfavourable economic effects on the host community.

Whilst such negative impacts are well documented in the tourism literature, many tourists are unaware of the negative effects that their actions may cause. Likewise, many destinations who are inexperienced or uneducated in tourism and economics may not be aware of the problems that can occur if tourism is not management properly.

Below, I will outline the most prominent negative economic impacts of tourism.

Economic leakage in tourism is one of the major negative economic impacts of tourism. This is when money spent does not remain in the country but ends up elsewhere; therefore limiting the economic benefits of tourism to the host destination.

The biggest culprits of economic leakage are multinational and internationally-owned corporations, all-inclusive holidays and enclave tourism.

I have written a detailed post on the concept of economic leakage in tourism, you can take a look here- Economic leakage in tourism explained .

Another one of the negative economic impacts of tourism is the cost of infrastructure. Tourism development can cost the local government and local taxpayers a great deal of money.

Tourism may require the government to improve the airport, roads and other infrastructure, which are costly. The development of the third runway at London Heathrow, for example, is estimated to cost £18.6billion!

Money spent in these areas may reduce government money needed in other critical areas such as education and health, as I outlined previously in my discussion on opportunity costs.

One of the most obvious economic impacts of tourism is that the very presence of tourism increases prices in the local area.

Have you ever tried to buy a can of Coke in the supermarket in your hotel? Or the bar on the beachfront? Walk five minutes down the road and try buying that same can in a local shop- I promise you, in the majority of cases you will see a BIG difference In cost! (For more travel hacks like this subscribe to my newsletter – I send out lots of tips, tricks and coupons!)

Increasing demand for basic services and goods from tourists will often cause price hikes that negatively impact local residents whose income does not increase proportionately.

Tourism development and the related rise in real estate demand may dramatically increase building costs and land values. This often means that local people will be forced to move away from the area that tourism is located, known as gentrification.

Taking measures to ensure that tourism is managed sustainably can help to mitigate this negative economic impact of tourism. Techniques such as employing only local people, limiting the number of all-inclusive hotels and encouraging the purchasing of local products and services can all help.

Another one of the major economic impacts of tourism is dependency. Many countries run the risk of becoming too dependant on tourism. The country sees $ signs and places all of its efforts in tourism. Whilst this can work out well, it is also risky business!

If for some reason tourism begins to lack in a destination, then it is important that the destination has alternative methods of making money. If they don’t, then they run the risk of being in severe financial difficulty if there is a decline in their tourism industry.

In The Gambia, for instance, 30% of the workforce depends directly or indirectly on tourism. In small island developing states, percentages can range from 83% in the Maldives to 21% in the Seychelles and 34% in Jamaica.

There are a number of reasons that tourism could decline in a destination.

The Gambia has experienced this just recently when they had a double hit on their tourism industry. The first hit was due to political instability in the country, which has put many tourists off visiting, and the second was when airline Monarch went bust, as they had a large market share in flights to The Gambia.

Other issues that could result in a decline in tourism includes economic recession, natural disasters and changing tourism patterns. Over-reliance on tourism carries risks to tourism-dependent economies, which can have devastating consequences.

The last of the negative economic impacts of tourism that I will discuss is that of foreign ownership and management.

As enterprise in the developed world becomes increasingly expensive, many businesses choose to go abroad. Whilst this may save the business money, it is usually not so beneficial for the economy of the host destination.

Foreign companies often bring with them their own staff, thus limiting the economic impact of increased employment. They will usually also export a large proportion of their income to the country where they are based. You can read more on this in my post on economic leakage in tourism .

As I have demonstrated in this post, tourism is a significant economic driver the world over. However, not all economic impacts of tourism are positive. In order to ensure that the economic impacts of tourism are maximised, careful management of the tourism industry is required.

If you enjoyed this article on the economic impacts of tourism I am sure that you will love these too-

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Economic Leakage in Tourism: What It Is and How to Prevent It

Tourism is a significant driver of economic and social development. It is responsible for generating income, employment, investment, and ultimately, improving the quality of life for locals. But local communities in different destinations are not fully experiencing the benefits of this activity due to economic leakage in tourism.

When it happens, all the investment and effort put into growing tourism doesn’t pay off once part of the money generated by this industry leaves the host city or country.

This blog covers what economic leakage in tourism is, its consequences and what actions to take in order to keep tourists’ expenditures inside your destination.

What is economic leakage in tourism?

Tourism leakage happens when the revenue generated through tourism is lost to other countries or economies.

Tourism is an activity that traditionally brings foreign currency into a country’s economy. But due to globalization and travel conglomerates , this money is likely to leave the host country preventing the economic and social development of touristic areas.

Historically, economic leakage in tourism is more significant in developing countries . Sometimes it can nearly neutralize the money generated by tourism activity.

In Fiji, it is estimated that 60% of the money earned through tourism ends up leaving the country . In another study, tourism leakage estimates range from 40% in India to 80% in the Caribbean .

What triggers economic leakage in tourism?

Leakage is intrinsic to tourism and is present in all countries. However, its intensity varies in degree depending on how developed the destination is and the actions taken in order to prevent it.

Basically, leakage occurs through six main mechanisms :

1) Good and Service

In order to supply travelers’ demands, many destinations import goods and services. This type of economic leakage in tourism is more noticeable in islands, which are highly dependent on imports.

2) Infrastructure

In this case, tourism leakage happens when the host country doesn’t have the ability or technology to build tourism-related infrastructure and depends on foreign companies for it. For example, to build airports and ports or to implement a new travel technology.

3) Foreign ownership

When the tourism industry is not well-developed in a destination, it’s common for governments to attract foreign investment in order to start the activity in that area. However, when foreigners have ownership of the touristic infrastructure, the profits generated by this activity are taken away from the host market. That is the case in a destination dominated by international resort chains, for example.

4) Promotional expenditures

Having an international presence is paramount for many destinations, on the other hand, it’s a source of tourism leakage. When a destination invests in attracting foreign visitors , the money spent on advertisement and publicity goes abroad.

5) Tax exemptions

When a destination gives tax exemptions to foreign investors it is giving up tourism income. This strategy to grow the tourism industry is common in developing destinations, but it should be well planned in order to not harm the local community.

6) Foreign employment

During the high season, the increase in demand leads to the opening of temporary job opportunities. This often attracts foreign workers interested in making money and leaving the destination after the end of the season.

Why is economic leakage in tourism an issue for destinations?

Although tourism has lots of benefits —it boosts the local economy, creates new jobs, promotes cultural exchange— on the other hand, it also has negative impacts :

• Puts pressure on the local infrastructure
• Impacts the environment
• Changes the daily life of residents
• Drains local resources
• Affects the local production chain
• Increases the demand for goods, services and accommodations, which rises their prices

When the money earned through tourism leaves the host destination, little or nothing can be done in order to mitigate these bad impacts and promote social, cultural and environmental well-being for the local community.

Hence, tourism stops being an attractive investment and turns into an issue for the destination.

How can tourism stakeholders prevent tourists’ expenditures from leaving a destination?

Tourism leakage is harmful to destinations, especially the ones that rely on tourism as the primary source of income.

In order to prevent it, the government, destination managers, travel companies, the local industry, residents and visitors should work together to make sure the money spent on this activity is reaching the right pockets.

Some actions that destination leaders can take in order to reduce economic leakage in tourism are:

• Support local suppliers

The host community is a great source of workforce, services, and products that should be integrated into the local tourism industry. Destination managers should incentivize travel companies to buy from local producers before searching for suppliers abroad.

• Attract conscious travelers

Destination marketers should invest in campaigns to attract conscious travelers . This type of traveler knows the importance of tourism as an economic and social driver for the host community. They make sustainable choices, support the local suppliers and protect the environment.

• Promote niche tourism

Travelers looking for a niched experience are interested in discovering the local culture, history, culinary and hidden gems. Unlike mass tourism, which is usually offered by international companies and associated with overtourism, niche tourism is often offered by locals to a small group of travelers.

• Incentivize local companies

Instead of giving tax exemptions to international companies, try reducing the taxes for local accommodations, operators and producers. A relief in taxes gives a chance for the local tourism ecosystem to flourish.

• Limitate the presence of multinational corporations

All-inclusive packages are very popular among travelers. The issue is that about 80% of travelers’ expenditures on these packages go to international corporations . By restricting the presence of these companies in a destination, travelers should turn to local providers in order to have a complete stay.

• Stimulate the diversification of the local economy

The more dependent on tourism a destination is, the bigger the tourism leakage. A destination with a diversified economy has more bargaining power when dealing with international investors.

• Digitalize the tourism offer

Increasing the online exposure of local travel providers is a way to drive them more bookings. Destinations that are digitalizing their tourism offer, such as Visit Zagorije , not only make local companies more competitive but also facilitate the booking process for visitors.

Tourism leakage is an issue all destinations have to deal with. When not addressed, tourism income is drained out of the local community, preventing its economic, social and environmental development.

In this article, we have presented seven initiatives to fight back economic leakage in tourism :

If you are a destination manager or marketer interested in empowering your local tourism stakeholders, SmartDestination is the right partner for you. They are a group of award-winning tech companies specialized in travel, tourism and hospitality with a complete solution to digitalize your tourism offer.

Contact them if you want to boost your travel and tourism product.

ORIOLY on August 17, 2022

by Felipe Fonseca

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Is Caribbean tourism in overdrive? Investigating the antecedents and effects of overtourism in sovereign and nonsovereign small island tourism economies (SITEs)

International Hospitality Review

ISSN : 2516-8142

Article publication date: 10 February 2021

Issue publication date: 21 June 2021

Drawing on theories of development economics and sustainable tourism, this research explores the differences between sovereign and nonsovereign small island tourism economies (SITEs) and identifies the antecedents and effects of overtourism in the Caribbean.

Design/methodology/approach

The research design is based on a comparative case study of selected Caribbean SITEs. Case study research involves a detailed empirical inquiry that investigates a contemporary phenomenon within its real-life context. The main purpose of a case study is to provide a contextual analysis of the conditions and processes involved in the phenomenon under study. A comparative case study is an appropriate research methodology to explore new multi-faceted concepts with limited empirical evidence.

The results confirm previous studies that nonsovereign SITEs have a distinctive overdrive toward tourism specialization. Moreover, the findings indicate that overtourism is driven by both global and domestic policy factors and generates significant economic volatility, social inequality and ecological stress. The paper discusses the tourism policy implications of the evolving economic disconnectedness, environmental decay and social tensions in SITEs in the Caribbean.

Originality/value

Policy recommendations are presented for transitioning toward a more inclusive development and strengthening the resilience of small island tourism development in the Caribbean.

• Small island tourism economy
• Overtourism
• Nonsovereign island states

Peterson, R. and DiPietro, R.B. (2021), "Is Caribbean tourism in overdrive? Investigating the antecedents and effects of overtourism in sovereign and nonsovereign small island tourism economies (SITEs)", International Hospitality Review , Vol. 35 No. 1, pp. 19-40. https://doi.org/10.1108/IHR-07-2020-0022

Emerald Publishing Limited

Copyright © 2021, Ryan Peterson and Robin B. DiPietro

Published in International Hospitality Review . Published by Emerald Publishing Limited. This article is published under the Creative Commons Attribution (CC BY 4.0) licence. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this licence may be seen at http://creativecommons.org/licences/by/4.0/legalcode

1. Introduction

It is a truism that international tourism is part and parcel of the Caribbean. Over the past century, tourism arrivals have grown tenfold, from less than five million visitors during the early 1970s to well over 36 million tourists in 2017 ( Statista, 2020 ). Since the turn of the century, Caribbean tourism growth tripled ( United Nations World Tourism Organization [UNWTO], 2019 ) and is expected to continue to grow over the next decade ( World Travel and Tourism Council [WTTC], 2019 ). Recent tourism industry reports indicate that the Caribbean is gearing up for another tourism growth burst, attracting new hotel investors and well over 31,000 new accommodations in the construction pipeline ( Britell, 2020 ). The Caribbean is indeed one of the most tourism-intense regions of the world with international tourism contributing, on average, to 20% of exports, 15% of GDP (gross domestic product) and 14% of labor ( WTTC, 2019 ). Likewise, accounting for at least 13% of capital investments ( WTTC, 2019 ), international tourism is one of the most resource-intense industries, including financial, human and natural resources ( McElroy, 2006 ). In the wake of the global COVID-19 pandemic, the unprecedented plunge in Caribbean travel and tourism is a clear and present sign of both the value and the vulnerability of tourism across the Caribbean ( International Monetary Fund – IMF, 2020 ).

Despite this significant and continued tourism growth, there are increasing signs that economic growth has largely stagnated across the Caribbean, especially in the smaller and more tourism-dependent island economies ( Acevedo et al. , 2017 ; Peterson, 2019 ; Leigh et al. , 2017 ). Initial evidence suggests that the surge in international tourism has not contributed significantly to the lackluster economic growth since the early 2000s ( Chamon et al. , 2017 ). Whereas tourism arrivals and accommodations have expanded and continue to grow across the Caribbean, tourism expenditures have not increased commensurately ( Acevedo et al. , 2017 ). Therefore, the purpose of this exploratory study is to (1) investigate the status and qualities of overtourism in sovereign and nonsovereign Caribbean small island tourism economies (SITEs) and (2) examine the antecedents and effects of overtourism in mature SITEs in order to determine implications for industry and academics to help create a more sustainable model for small island tourism development.

This reality of overtourism is consistent with previous studies reporting stagnant growth and diminishing productivity in Caribbean tourism economies ( Acevedo et al. , 2017 ; Peterson, 2017 ). Moreover, the performance of SITEs has lagged other (non-) Caribbean small island economies for at least a decade ( Acevedo et al. , 2017 ). Thus, the confluence of enduring tourism growth with diminishing economic development in SITEs raises questions about the role and contribution of tourism for sustainable and inclusive development in the Caribbean ( United Nations Sustainable Development Goals (UNSDG), 2018 ), especially considering the complex of economic and environmental shocks in addition to the longstanding social vulnerabilities and institutional weaknesses (International Monetary Fund [IMF], 2019 ; Peterson, 2019 ).

When a country has a focus on tourism as an economic advantage and a significant export industry, it is traditionally associated with economic production and growth ( Brida et al. , 2016 ; Cannonier and Galloway, 2019 ; Croes, 2006 ; Croes et al. , 2021 ; Marsiglio, 2018 ). There are also potential adverse externalities related to this tourism specialization ( Daye et al. , 2008 ; Dodds and Butler, 2019a ; Duval, 2004 ; Gossling, 2002 ; Hall and Williams, 2008 ; McElroy, 2003 ; Peterson, 2009 ; Wilkinson, 1989 ). The tourism-led growth hypothesis proposes international tourism drives economic growth ( Brida et al. , 2016 ). However, several studies indicate that this relationship is intermediated and moderated by several other contingency factors and tourism destination-specific conditions, including the capacity to adapt to and absorb large-scale, high-pace tourism construction and growth ( Bishop, 2010 ; Cole, 2007 ; McElroy, 2006 ). The relationship between tourism specialization and economic growth is moderated by absorptive capacities ( Acemoglu and Robinson, 2012 ; Baldacchino, 2006 ; Brautigam and Woolcock, 2001 ; Peterson, 2017 ), which describe the optimum level of tourism specialization that can be assimilated and absorbed by an economy before reaching an inflection point after which tourism specialization experiences diminishing returns and negative externalities ( Dodds and Butler, 2019a ; Marsiglio, 2018 ).

When reviewing the history of tourism in the Caribbean, it is increasingly apparent that growth rather than development remains the overriding focus, i.e. the quality of life for residents and, in turn, the quality of experience for visitors have not always met the various principles of sustainable tourism ( Daye et al. , 2008 ; Duval, 2004 ; Joppe, 2019 ; Scheyvens and Biddulph, 2017 ). In fact, economic considerations and benefits of tourism specialization tend to induce tourism myopia – a short-term growth orientation on tourism arrivals, receipts and (tax) revenues – and trigger a gradual tourism overshoot of socioecological ceilings with significant costs in the medium to long term ( Dodds and Butler, 2019b ; Ewing-Chow, 2019 ; Joppe, 2019 ; Marsiglio, 2017 ; Raworth, 2017 ).

Crandall (1994) concludes that while tourism is accepted as a significant boon to local economies, there is little realization on the part of government, tourism authorities and investors that tourism leads to economic spillovers, social changes and ecological challenges, especially when unplanned or uncontrolled. Although, certainly, this is not a new experience, this accelerating tourism spillover effect has recently been coined “overtourism” ( Dodds and Butler, 2019b ; Goodwin, 2017 ). Thus, coping with the short-term economic success of tourism growth is inextricably linked to managing and mitigating the risks of overtourism in contemporary tourism destinations ( WTTC, 2019 ).

Whereas previous research on international tourism in the Caribbean focuses almost exclusively on the sovereign (independent) small island tourism states, nonsovereign (dependent) island tourism economies are generally less scrutinized and often excluded, largely due to their nonsovereign political status. Ironically, these subnational island jurisdictions are oftentimes relatively more tourism intense and prone to overtourism ( Baldacchino, 2006 ; McElroy, 2006 ; Peterson, 2019 ; WTTC, 2019 ). Therefore, the heterogenous nature of Caribbean tourism economies, consisting of both sovereign island states and subnational jurisdictions, calls for the explicit acknowledgment and incorporation of subnational island jurisdictions in tourism studies, especially considering the political economic context of small island tourism development ( Armstrong and Read, 2000 ; Daye et al. , 2008 ; McElroy, 2006 ). In fact, over the past decade, several studies have called for research on the political economy of small island tourism development in the (British, Dutch and French) dependencies in the Caribbean ( Baldacchino, 2006 ; Bishop, 2010 ; Daye et al. , 2008 ; McElroy, 2006 ).

Consequently, this paper addresses the current state of overtourism in sovereign and nonsovereign SITEs in the Caribbean. The aim of this exploratory study is to (1) investigate the status and qualities of overtourism in sovereign and nonsovereign Caribbean SITEs and (2) examine the antecedents and effects of overtourism in mature SITEs. In Section 2 , the theoretical background of this study is discussed by reviewing the conceptual origins and mechanisms of overtourism. The research methodology is described in Section 3 , followed by a presentation of the main findings, while conclusions and recommendations are presented in the final part of the paper.

2. Theoretical background

In general, overtourism describes the adverse impacts of uncontrolled tourism growth – an overshoot of tourism – that influences the quality of life and the well-being of citizens and the degradation of natural habitats and ecologies, which result in diminishing visitor experiences and expenditures, and consequently stagnating economic returns ( United Nations World Tourism Organization – UNWTO, 2018 ). Overtourism portrays relentless, frequently unregulated, tourism growth that has moved beyond the level of acceptable change and absorptive capacity in a destination due to significant levels of tourism intensity (total visitors to population), tourism density (visitors per km 2 ) and tourism dependency (tourism exports to GDP) ( McElroy, 2006 ; World Travel and Tourism Council – WTTC, 2019 ). The compounding and composite effects result in significant pressures on infrastructure (i.e. congestion, transportation and energy), resource consumption and pollution (i.e. leakage and waste), spatial and cultural alienation (i.e. real estate and social identity) and visitors' experiences and residents' quality of life ( Center for Responsible Travel–CERT, 2018 ; World Travel and Tourism Council – WTTC, 2019 ).

The genesis of overtourism dates back to at least the 1970s and 1980s when initial concerns were raised about the potential adverse social and environmental impacts of uncontrolled tourism growth and consequently the long-run economic repercussions thereof ( Budowski, 1976 ; Butler, 1980 ; Cohen, 1978 ; Doxey, 1978 ; Dunkel, 1984 ; Farrell and Runyan, 1991 ; Getz, 1983 ; Holder, 1988 ; Mathieson and Wall, 1982 ; Richter, 1994 ; Wilkinson, 1989 ). By the early 2000s, several empirical studies reported on the negative externalities of tourism in SITEs ( Bishop, 2010 ; Duval, 2004 ; McElroy, 2003 , 2006 ; Sheller, 2003 ). Over the past decade, further evidence has been forthcoming on the role and rise of overtourism, albeit mainly focused on metropolitan areas and cities ( Capocchi et al. , 2019 ; CERT, 2018 ; Dodds and Butler, 2019b ).

As a concept, overtourism is rooted in development economics and discussions on overdevelopment, overdependency and overconsumption ( Kohr, 1977 ; Meier and Stiglitz, 2001 ). From a postdevelopment theoretical perspective ( Cowen and Shenton, 1996 ), overtourism refers to the social inequality and the environmental destruction due to excessive tourism consumption and tourism-related infrastructure expansion ( Raworth, 2017 ). Overtourism is conceptually embedded in the study of how economies grow and societies change over the course of history ( Meier and Stiglitz, 2001 ) and is frequently viewed in negative terms as the mutually constitutive reverse of inclusive development ( Gupta and Vegeling, 2016 ; UNSDG, 2018 ; World Bank, 2018 ).

In development economics, it is not only the rate of real GDP per capita growth that matters but also more importantly the pattern of labor force participation and income distribution in growth ( Meier, 2001 ). Inclusive development focuses on productive employment as a means of increasing income as well as raising standards of living and economic well-being ( Gupta and Vegeling, 2016 ; Ianchovichina and Lundstrom; 2009 ; Rainir and Ramos, 2013 ; Rauniyar and Kanbur, 2010 ). Gupta and Vegeling (2016) emphasize the social and ecological aspects of inclusive development. Whereas social elements address citizen well-being and participation in labor and consumption markets, ecological elements concentrate on the conservation of local ecosystems, the management of ecosystem services and the regulation of environmental resources. Inclusive development stems from the realization that relentless economic growth often gives rise to negative externalities, extractive resource depletions and exploitative labor practices ( Raworth, 2017 ), which are clear and present features of overtourism and readily acknowledged in SITEs ( Daye et al. , 2008 ; Duval, 2004 ; Island Resource Foundation, 1996 ; McElroy, 2006 ; Pattullo, 1996 ; Sheller, 2003 ).

According to Scheyvens and Biddulph (2017) , one of the most enduring critiques of tourism is its noninclusive development. They contend that tourism oftentimes provides opportunities for the privileged, creating profits for international (nonlocal) resorts and building exclusive enclaves for the rich, thereby excluding the indigenous community, marginalizing local cultures and lifestyles and depleting scarce natural resources ( Scheyvens and Biddulph, 2017 ). In reflecting on the tourism overdependency in the Caribbean, Daye et al. (2008) indicate that there is significant economic volatility and leakage due to the outflow of capital. Duval (2004) concludes that if left uncontrolled, Caribbean tourism often leads to environmentally extractive and socially exclusive developments, which in the long run undermine future economic development. It is the unbalanced and unequal distribution of benefits and costs amongst stakeholders that nourishes overtourism.

Overtourism extends previous theoretical frameworks and models of tourism lifecycles and complex adaptive tourism systems. The origins can be traced back to notions of the tourism destination life cycle ( Butler, 1980 ) and tourism carrying capacity ( Mathieson and Wall, 1982 ), which have been widely discussed in the Caribbean. The concept of overtourism underscores the nonlinear, interdependent and dynamic nature of tourism systems, which encompass several interacting social, political, economic, ecological and digital subsystems, especially within the small(er) scale of island economies ( Peterson et al. , 2017 ). These complex adaptive tourism systems are “nested” or embedded within social ecologies and often evolve in distinct ways with extensive cascades of uncertain and oftentimes path dependent and long-term effects ( Dodds and Butler, 2019b ; Farrell and Twining-Ward, 2004 ).

In reflecting on the growth of Caribbean tourism, McElroy (2006) contends that part of the problem in the Caribbean is that much of the tourism growth during the late 1990s was too fast and fragmented. According to Farrell and Runyan (1991) , this rapid and unbalanced growth of tourism produces an inherent propensity for environmental overrun and sociocultural disruption, which in due course would affect industry viability and economic sustainability. As the intensity and concentration of tourism growth increases, the capacity of delicate socioecological island systems to absorb these changes can be drastically exceeded and may produce undesirable resource degradation ( Farrell and Runyan, 1991 ).

Due to their relatively limited size and scale, small states and islands tend to be more susceptible to external pressures and internal disturbances. Unlike the tangible economic benefits (e.g. employment exports, and foreign exchange earnings) that accrue in the short term, the long-term costs (e.g. beach erosion, coastal pollution, congestion and social inequality and poverty) often remain concealed until critical thresholds are crossed ( McElroy, 2003 ). Whereas exogenous shocks occur in a sudden and disruptive manner, the externalities of overtourism cascade gradually over time until spilling over into the public domain.

The case in point is especially poignant in Caribbean SITEs that rely on their natural and social ecologies for safeguarding economic development and well-being. Whereas sustainable tourism requires the conservation of ecological integrity and environmental resources, its production is, paradoxically, largely dependent upon the consumption of nature-based tourism experiences ( Williams and Ponsford, 2008 ). Likewise, whereas much of Caribbean tourism is staged by its cultural authenticity and natural hospitality, its production is labor-intensive with exhaustive demands on emotional labor ( Shani et al. , 2014 ; Sönmez et al. , 2017 ). This ambiguity has epitomized much of the progress, pitfalls and perils of Caribbean tourism over the past century ( Duval, 2004 ).

Higher levels of overtourism in Caribbean SITEs are positively associated with lower labor force participation, more ecological stress and higher economic volatility.

The impact of overtourism in Caribbean SITEs is transmitted through both direct channels as well as indirect channels.

Previous studies indicate that overtourism stems from the complex dynamics of international tourism demand and local tourism supply ( Acevedo et al. , 2017 ; Capocchi et al. , 2019 ; Daye et al. , 2008 ; Cole, 2007 ; Dodds and Butler, 2019b ; Farrell and Twining-Ward, 2004 ; Joppe, 2019 ; Koens et al. , 2018 ; McElroy, 2006 . In reviewing the progressive development and potential challenges of tourism growth across SITEs, McElroy (2003 , 2006 ) discusses different interrelated causes of a tourism overrun, defined as high-density tourism with damaging levels of visitation due to tourism's sociocultural pressures and environmental footprint. The critical factors that spur overtourism in the Caribbean include the substantial inflow of foreign private tourism investments; the significant stock and rapid expansion of large-scale accommodation facilities; the growth in air traffic and cruise calls; the increase in labor immigration and the subsequent rise in unplanned coastal urbanization and real-estate infrastructures ( McElroy, 2003 , 2006 ). Previous studies indeed confirm that this system of an interlocked tourism supply chain, including the interlinked growth in tourism investments and airlift and the subsequent expansion of accommodations and required labor, contributes to surging levels of tourism intensity and density in the Caribbean ( Acevedo et al. , 2017 ), which gradually engender a state of overtourism in SITEs ( Cole, 2007 ; McElroy, 2006 ).

In comparison to nonsovereign Caribbean SITEs, sovereign Caribbean SITEs experience significantly higher levels of overtourism.

Cole (2007) indicates that an overshoot in Caribbean tourism arises from several interdependent factors, including growing tourism demand; surpassing physical limits of beachfront or coastal areas for resort construction; increasing labor migration due to limited local workforce; growing visitors' sense of overcrowding and an escalation in residents feeling overwhelmed or displaced by visitors and/or immigrant workers. The latter describes intensifying sentiments of visitor annoyance and apathy by local communities ( Doxey, 1978 ). The unfolding of these events triggers a spiral of demise where surging small island coastal tourism causes increasing crowding, congestion and contamination. Frequently, this leads to irreversible ecological destruction, social decay and aesthetic repulsion and a further uncontrolled spiraling effect ( Dehoorne et al. , 2010 ).

In addressing the dominance of political linkages in nonsovereign island economies ( Bertram, 2004 ) and the political economy of tourism development in small islands, several studies discuss the influence of (inter)institutional actors and networks of power and control that shape tourism policies and influence tourism developments adversely ( Baldacchino, 2006 ; Crandall, 1994 ; Duval, 2004 ; Bishop, 2010 ; Joppe, 2019 ; Richter, 1994 ). The political economy of Caribbean island tourism is oftentimes riddled by exclusion and extraction rather than inclusion and regeneration ( Bishop, 2010 ; Daye et al. , 2008 ; Duval, 2004 ; McElroy and Albuquerque, 2002 ). Crandall (1994) and Richter (1994) contend that these tensions stem from a combination of factors, including narrow and concentrated economic beneficiaries of tourism, land disputes, increasing public-sector infrastructure strains and taxes, rising costs of living, excessive migration with limited career opportunities and social dislocations. According to Baldacchino (2006) and Bertram (2004) , these features are closely intertwined with the political economy of nonsovereign island economies.

The confluence of these failures intensify the negative externalities due to several structural political economic conditions, including (1) a regulatory deficiency in environmental conservation and enforcement, (2) limited economic diversification and innovation, (3) lopsided (private) benefits and (public) costs of tourism growth, (4) marginal social inclusion and nongovernmental participation in tourism policy and development and (5) a strong and persistent bias toward short-term tourism promotion, expansion and growth ( Bishop, 2010 ; Cole, 2007 ; Daye et al. , 2008 ; Dodds and Butler, 2019b ; Joppe, 2019 ; McElroy, 2003 ). Moreover, Williams and Ponsford (2008) argue that politically-linked public institutions and agents tend to circumvent regulations and regulatory enforcement largely due to the economic “lock-in” of the tourism industry. Hall and Williams (2008) describe this tourism “lock-in” as path dependency, which is conducive to institutional failures (e.g. close personal and political ties and resource dependency), network failures (e.g. dissonance and ignorance of new developments) and capability failures (e.g. lack of institutional learning capabilities).

Higher levels of overtourism are associated with both international tourism demand as well as interdependent tourism supply factors.

In conclusion, whereas growing international tourism demand creates the conditions for overtourism, several interdependent domestic supply factors are regarded as the key determinants that drive overtourism ( Acevedo et al. , 2017 ; Bishop, 2010 ; Cole, 2007 ; Dodds and Butler, 2019b ; Duval, 2004 ; Joppe, 2019 ; Hall and Williams, 2008 ; McElroy, 2006 ; Richter, 1994 ; Williams and Ponsford, 2008 ). Overtourism is likely to ascend when both push and pull forces are mutually reinforcing, i.e. surging demand and expansionary supply. Consequently, the confluence and acceleration of multiple tourism demand and tourism supply forces shape the evolution of overtourism in Caribbean SITEs.

3. Research methodology

The aim of this exploratory study is to (1) investigate the status and qualities of overtourism in sovereign and nonsovereign Caribbean SITEs, and (2) examine the antecedents and effects of overtourism in mature SITEs. The two main research questions addressed are as follows: (1) how do sovereign and nonsovereign SITEs in the Caribbean differ? (2) what are the main drivers and impacts of overtourism in selected Caribbean SITEs?

3.1 Data compilation

Based on previous studies and available secondary historical data covering the years between 2000 and 2018 ( Caribbean Tourism Organization–CTO, 2020 ; United Nations World Tourism Organization–UNWTO, 2019 ; World Bank–WB, 2018 ; World Travel and Tourism Council–WTTC, 2019 ), sixteen (16) Caribbean SITEs were selected including both sovereign and nonsovereign SITEs (see Table 1 ). The sovereign SITEs comprise Antigua and Barbuda, The Bahamas, Barbados, Dominica, Grenada, St. Kitts and Nevis, St. Lucia and St. Vincent and the Grenadines. The nonsovereign SITEs consist of Anguilla, Aruba, Bermuda, British Virgin Islands, Cayman Islands, Martinique, St. Maarten and the US Virgin Islands. Several Caribbean island tourism-dependent economies were excluded due to their relatively larger population size and land mass (e.g. Jamaica) or limited/incomplete data (e.g. Turks and Caicos). Previous studies indicate that both population size and land mass influence the shape and style of (over)tourism growth ( Briguglio et al. , 1996 ; Cole, 2007 ; McElroy, 2006 ). Likewise, this study acknowledges that Caribbean SITEs differ in their style and stage of tourism development, and in fact, a key element of interest in this study is whether sovereign and nonsovereign SITEs differ in any systematic manner.

Building forth on previous studies, the following indicators and measurements were used subject to the availability of sufficient and complete data. The overtourism construct is formed by a composite of three sub-indicators including tourism intensity (total visitors to population), tourism density (visitors per km 2 ) and tourism dependency (tourism exports to GDP) ( Cole, 2007 ; Dodds and Butler, 2019b ; McElroy, 2006 ). The tourism arrivals, cruise visitor, population and trade data were drawn from the tourism publications and databases of the CTO, 2020 , the UNWTO, 2019 , the World Bank ( WB, 2018 ) and the WTTC, 2019 and used to calculated to sub-indices of overtourism tourism intensity, tourism density and tourism dependency. To test for heteroskedasticity under assumption of nonlinearity, the White test was conducted with no significant effects (Chi-Square = 20; p  > 0.05).

The dependent variables comprise the direct and indirect transmission channels of overtourism and are based on previously operationalized measurements by Capocchi et al. (2019) , Daye et al. (2008) , Dodds and Butler (2019b) , Duval (2004) , Gupta and Vegeling (2016) , Joppe (2019) , Koens et al. (2018) and McElroy (2003 , 2006 ). Data on economic growth, income inequality, labor force participation and environmental pollution data were compiled from several databases from the CTO (2019a, b) , the UNWTO (2019) and the WB (2018) .

Likewise, the variables describing international tourism demand and domestic tourism supply are based on previous tourism studies ( Acevedo et al. , 2017 ; Bishop, 2010 ; Cole, 2007 ; Dodds and Butler, 2019b ; Duval, 2004 ; Joppe, 2019 ; Hall and Williams, 2008 ; McElroy, 2006 ; Richter, 1994 ; Williams and Ponsford, 2008 ). Based on tourism data from the UNWTO (2018) , the WTTC (2019) and the WB (2018) , tourism demand and supply were measured by the relative destination market share of Caribbean tourism arrivals, amount of airlift, number of accommodations and the size of tourism labor force ( Acevedo et al. , 2017 ; Cole, 2007 ; McElroy, 2006 ; Richter, 1994 ). Furthermore, from an infrastructure perspective, the number and (spatial) concentration of cruise arrivals as well as resorts was measured. The number of rooms per resort was used as proxy measure for resort style ( McElroy, 2006 ). The degree of tourism export specialization was calculated by analyzing tourism receipts, the ratio of tourism exports to GDP and total imports and exports as percentage of GDP ( WTTC, 2019 ; WB, 2018 ).

3.2 Analyzing significant differences in overtourism

To identify the differentiating features of overtourism across sovereign and nonsovereign SITEs (see Proposition 3 ) and consistent with previous studies and measures ( McElroy, 2003 , 2006 ), the data were standardized across several indicators in order to normalize the data and facilitate comparative and inferential analyses. Available country data are standardized by using a min–max scaling method. The general formula for the min–max scaling (0, 1) is the following: y = ( x − min X ) ( max X − min X ) , where x is the original value, and y is the normalized value. For example, in terms of normalizing tourism intensity, the Cayman Islands received a standardized maximum score of 1 [(32–3)/(32–3)]. In similar fashion, the tourism density [(7,951–292)/(36,088–292)] and tourism dependency [(20–14)/(87–14)] scores are calculated and normalized. Subsequently, the normalized values of the different sub-indices are averaged to reach an overall composite overtourism index score. Due to data limitations and case sample constraints and based on previous studies ( Kinseng et al. , 2018 ), a nn-parametric test (Mann Whitney U test with Fisher exact significance test) was conducted to identify the significant differences between sovereign and nonsovereign Caribbean SITEs.

3.3 Analyzing regressors of overtourism

To explore the formative structure of the overtourism construct, in addition to reducing the number of individual variables and the potential multicollinearity, a principal component regression (PCR) analysis – a special form of partial least square regression – was applied ( Bair et al. , 2006 ), in which the formative overtourism construct was regressed on the newly identified components. The small case sample size and data limitations precluded the use of structural equation modeling or path analysis. In PCR and consistent with previous studies ( Li et al. , 2018 ), instead of regressing the dependent variable, i.e. overtourism, on all the explanatory variables directly, the principal components of the explanatory variables are used as regressors. In applying PCR, there are three basic steps ( Li et al. , 2018 ), i.e. to conduct a principal component analysis of the individual variables, identify the validity and reliability parameters of the principal components and run a stepwise multivariate regression analysis on the valid components to identify the significant regressors. In examining the main antecedents of overtourism (see Propositions 1 , 2 and 4 ), the applied PCR follows production-like logic consisting of the different identified principal regressors ( Du et al. , 2016 ). The production function form is estimated as a log-linear relationship using ln ( Y ) = a 0 + ∑ a i   ln   ( I i ) + ε , with Y  = overtourism composite index, I  = antecedent factors (i.e. the PCR predictors) and a  = coefficients.

4.1 How do sovereign and nonsovereign SITEs in the caribbean differ?

In examining the proposition that sovereign Caribbean SITEs experience significantly higher levels of overtourism, the findings indicate that there are significant differences between sovereign and nonsovereign SITEs (see Table 2 ). Caribbean nonsovereignties experience higher levels of tourism intensity, density and dependency. Their trade openness and tourism specialization underscore a strong outward economic orientation, which is also corroborated by relatively more airlift and cruise calls. Demographically, nonsovereign SITEs have a larger migrant labor stock and population density ratio, largely due to tourism labor immigration and their sub-national jurisdictional status. Conversely, their coastal length is smaller with less coastal beach space. Consequently, coastal density levels for resorts, visitors and pollution are relatively greater in nonsovereign tourism dependencies. While not being significant, the cruise intensity and average resort size is slightly larger in nonsovereign SITEs due to the establishment of comparatively more international and larger resorts, as well as having more cruise calls.

In terms of climate change impact, nonsovereign SITEs are comparatively less prone to the costs of climate change when compared to sovereign SITEs. From a geopolitical perspective, nonsovereign SITEs may have access to finance and international assistance due to their subnational jurisdictional ties, and therefore more likely to absorb the costs of climate change ( Baldacchino, 2006 ; Bertram, 2004 ; McElroy and Pearce, 2006 ). Alternatively, nonsovereign SITEs may be geographically dispersed and positioned on the peripheral of the Caribbean Hurricane belt, thereby reducing the direct exposure, risks and costs of extreme weather events. This would nurture the relatively uninterrupted and continuous expansion and growth of tourism. The findings indicate that climate change and tourism density are indeed negatively associated ( β  = −0.14; p  < 0.05).

These results corroborate previous studies that nonsovereign Caribbean SITEs share a unique overtourism profile consisting of high tourism intensity, density and dependency levels; mature and expansive port and tourism infrastructures; large-scale beach front accommodations and international luxury chains; significant tourism promotion and tourism labor immigration and tourism-induced ecological stress with increasing social crowding especially in coastal zones ( Budowski, 1976 ; Butler, 1980 ; Cohen, 1978 ; Dodds and Butler, 2019b ; Doxey, 1978 ; Dunkel, 1984 ; Farrell and Runyan, 1991 ; Getz, 1983 ; Holder, 1988 ; Mathieson and Wall, 1982 ; McElroy, 2006 ; Wilkinson, 1989 ) .

4.2 What are the main antecedents and effects of overtourism in selected Caribbean SITEs?

An unrestrictive principal component analysis with Kaiser normalization and varimax rotation was conducted to identify the main constructs of overtourism. The analysis yielded five (5) components with satisfactory loadings (>0.60), acceptable adequacy (KMO > 0.68; Bartlett's test of sphericity < 0.001) and reliability (Cronbach α  > 0.70) for an exploratory study (see Table 3 ). Consistent with previous studies ( Cole, 2007 ; Dodds and Butler, 2019b ; McElroy, 2006 ), the findings indicate that the status of overtourism component incorporates tourism intensity, tourism density and tourism dependency, reflecting the volume, concentration and contribution of tourism, respectively.

Based on the (unweighted) average of tourism intensity, density and dependency sub-indices, a general overtourism index was calculated (see Table 4 for sub-indices). The average overtourism index demonstrates that the propensity for overtourism is relatively higher in nonsovereign SITEs, i.e. St. Maarten, Aruba, Cayman Islands, British Virgin Islands, Anguilla and the US Virgin Islands, which indeed share a unique and significantly different overtourism profile (Chi-square = 7.27 and p  < 0.01), despite individual destination niche differences (see Table 4 ). These islands represent Dutch, British and US nonsovereign Caribbean SITEs. These results support the proposition that sovereign Caribbean SITEs experience significantly higher levels of overtourism.

Based on the results of the principal component analysis, three independent constructs – antecedents of overtourism – were identified, i.e. tourism supply chain, tourism architectural style and tourism export specialization. Whereas the tourism supply chain component describes the supply chain effect of the growth in airlift, accommodations and labor, the tourism infrastructure component describes the spatial concentration and design of cruise and accommodation infrastructures in a specific geographic area or coastal zone. The tourism export specialization component describes the outward (export-led) economic orientation and tourism specialization focused on, e.g. tourism investments and expansion, export earnings and revenues and promotion. The tourism ecological stress component consists of coastal resort stress, coastal visitor stress and coastal pollution and is an indirect effect of overtourism. It describes the stressors and pressures from land- and marine-based tourism activities in (concentrated) coastal areas, which are conducive to ecological decay and coastal erosion ( Duval, 2004 ; Ewing-Chow, 2019 ; Gossling, 2002 ; Hunter and Shaw, 2007 ; Marsiglio, 2018 ; McElroy, 2006 ; Williams and Ponsford, 2008 ).

The findings also indicated that several variables had insufficient factor loadings (<0.60) and were therefore disregarded and excluded from further analysis. These variables include relative tourism market share and population density and are both considered structural features of destination size ( McElroy, 2006 ).

To examine Proposition 1 , 2 , and 4 , regression analysis was conducted on the previously identified components to assess the relationship between the state of overtourism, tourism ecological stress and labor force participation. Due to the hypothesized nonlinear nature of tourism development ( Butler, 1980 ; Farrell and Twining-Ward, 2004 ), a quadratic multivariate regression analysis was applied. The findings (see Table 5 ) indicate that a quadratic function has superior fit ( F -test = 11.41 and p  < 0.001) with an adjusted R 2 of 0.64 and a significant curve-linear relationship ( p  < 0.01) between the state of overtourism and tourism ecological stress ( β 2  = 0.96 and β 1  = 0.02).

This concave relationship indicates that as the intensity and density of tourism increases, the ecological pressures grow and, more importantly, accelerate after exceeding a critical threshold, as measured by the inflection point. This underscores a tourism overshoot beyond the natural absorptive capacity of the local ecology, which generates negative pressures on real GDP growth in the long run. Furthermore, this adverse impact is compounded by the negative (nonlinear) effects of climate change ( β 2  = −0.75; adjusted R 2  = 0.28; p  < 0.10) on the real output. These results provide support for proposition that higher levels of overtourism in Caribbean SITEs are positively associated with relatively more ecological stress ( Proposition 1 ).

In terms of the labor market impact, the results of the quadratic regression analysis indicate that overtourism has a negative (curve-linear) effect on labor force participation ( β 2  = −2.14; adjusted R 2  = 0.29; p  < 0.05), which depicts a tourism overrun and exhaustion of the domestic labor market and tourism workforce capacity. Further analysis indicates that overtourism has a negative (curve-linear) effect on real GDP growth between 1995 and 2018 ( β 2  = −5.28; adjusted R 2  = 0.39; p  < 0.05) and is a significant source of output volatility – as measured by the output variance – in selected Caribbean SITEs ( β  = 0.84; adjusted R 2  = 0.23; p  < 0.05). The results suggest that beyond a certain optimum state of tourism intensity, density and dependency, there is an exponentially adverse effect on the socioecology of selected Caribbean SITEs, including Anguilla, Aruba, British Virgin Islands, Cayman Islands, St. Maarten and the US Virgin Islands. These findings provide support for proposition that higher levels of overtourism in Caribbean SITEs are positively associated with relatively lower labor force participation and higher economic volatility ( Proposition 1 ). Moreover, the results indicate that the impact of overtourism in Caribbean SITEs is transmitted through both direct as well as indirect channels ( Proposition 2 ).

Turning toward to the antecedents of overtourism (see Table 6 ), the results indicate that three supply-oriented components influence the state of overtourism (adjusted R 2  = 0.81; p  < 0.05). A significant association is found for tourism supply chain ( β  = 0.47; p  < 0.01). Likewise, tourism infrastructure ( β  = 0.30; p  < 0.05) and tourism export specialization ( β  = 0.25; p  < 0.05) show significant positive relationships with the state of overtourism. From an international tourism demand-based perspective, the relative tourism market share (in the Caribbean) has a significant positive effect on the state of overtourism ( β  = 0.26; p  < 0.05). Although the tourism supply chain effect shows a relatively stronger association, the findings indicate that there is no single factor that determines the extent or state of overtourism. Rather, it is a combination of mutually reinforcing supply and demand conditions and the multiplicative forces that shape the state of overtourism in selected Caribbean SITEs. These results provide support for proposition that higher levels of overtourism in Caribbean SITEs are positively associated with both international tourism demand and supply factors ( Proposition 4 ).

5. Discussion

In reviewing the overall findings of this study, the general results corroborate previous research ( Acevedo et al. , 2017 ; Baldacchino, 2006 ; Bishop, 2010 ; Capocchi et al. , 2019 ; Dodds and Butler, 2019b ; Duval, 2004 ; Joppe, 2019 ; McElroy, 2006 ; Scheyvens and Biddulph, 2017 ; Richter, 1994 ; Williams and Ponsford, 2008 ) and support the research propositions (see Table 7 ). More specifically, the research indicates that there are significant differences between sovereign and nonsovereign SITEs in the Caribbean.

Nonsovereign SITEs are more likely to experience a higher propensity for overtourism and the adverse effects and risks thereof. Their longstanding outward economic growth orientation is geared at increasing tourism exports and fostering tourism investments, with a constant focus on expanding airlift, cruise calls and related tourism infrastructures and services. These progrowth tourism policies usually entail numerous fiscal and economic incentives, including e.g. tax holidays, government guarantees and special concessions for international tourism investors and contractors. Furthermore, the private tourism sector is actively involved in the shaping of tourism policies and is an (in)direct beneficiary of tourism (tax) revenues.

The tourism infrastructure in nonsovereign SITEs is mainly characterized by large scale and international chain resorts, which are mostly concentrated in coastal areas. In addition, nonsovereign SITEs enjoy frequent cruise calls and experience higher cruise intensity levels. Their past tourism achievements have been rewarded with numerous destination marketing and branding awards, and they enjoy a relatively popular reputation among visitors, which reinforces further tourism intensity and export specialization.

Their subsequent demographic development is characterized by a comparatively large migrant labor stock and high population density, mainly due to tourism labor immigration stemming primarily from the increasing specialization in and style of tourism. The confluence of these factors generates higher coastal density levels and environmental pollution in nonsovereign tourism dependencies. Although not immune to the gradual “slow-burn” effects of global warming and sea level rise, nonsovereign SITEs are also comparatively less prone to the costs of extreme weather events when compared to sovereign SITEs.

These findings support previous studies that demonstrate an aggregate effect of multiple economic forces that shape and generate overtourism over time and space ( Cole, 2007 ; Dodds and Butler, 2019b ; Joppe, 2019 ; McElroy, 2006 ). More specifically, the results indicate that there are three main factors that engender a state of overtourism. These supply-driven factors are tourism export specialization, tourism supply chain and tourism infrastructure style. Furthermore, the propensity for overtourism is also influenced by international tourism demand and relative tourism market share. Thus, both tourism supply and tourism demand actively influence and shape the evolution of overtourism in select Caribbean SITEs; hence, supporting this study's proposition that both international tourism demand as well as tourism supply affect the propensity for overtourism in Caribbean SITEs.

In terms of the effects of overtourism in select Caribbean SITEs, the findings indicate that the state of overtourism has an adverse impact on environmental and social conditions, as well as fueling relatively lower and more volatile economic growth. These findings support previous studies that indicate that social, ecological and economic impacts of overtourism are likely to coalesce ( Budowski, 1976 ; Cole, 2007 ; Dodds and Butler, 2019b ; Duval, 2004 ; Farrell and Twinning-Ward, 2004 ; Joppe, 2019 ; Mathieson and Wall, 1982 ; Marsiglio, 2018 ; McElroy, 2006 ; Scheyvens and Biddulph, 2017 ). With regard to the quality of the environment, overtourism is positively associated with increased ecological pressures and stress due to the high concentration and density of (large) resorts and visitor hordes in specific coastal areas and delicate ecological zones. These negative environmental impacts accelerate exponentially over time upon exceeding local ecological absorptive capacities and surpass the ecological boundaries of Caribbean SITEs ( Farrell and Runyan, 1991 ; Marsiglio, 2018 ; Raworth, 2017 ; Williams and Ponsford, 2008 ).

With reference to social conditions, overtourism produces significant pressures on the local labor market, thereby generating a surge in labor demand and the subsequent influx of substantial foreign labor immigration, which bring about considerable urbanization and increased population density, thus generating increasing levels of crowding and congestion in coastal areas. In the long run, the rise in the labor force is conducive to downside pressures on income equality and labor force participation in addition to eroding social capital ( Bishop, 2010 ; Raworth, 2017 ; Richter, 1994 ; McElroy, 2006 ). Furthermore, decreasing levels of labor force participation can generate significant pressures on social costs and government expenditures ( Dodds and Butler, 2019b ).

From an economic perspective, the findings indicate that the state of overtourism has an adverse effect on economic stability due to several interrelated factors, including diminishing real GDP growth rates and increased output volatility. The results support previous studies and suggest that if persistent, these adverse conditions create downward pressures on real GDP per capita growth and abate economic well-being in the long run. This negative effect is, furthermore, exacerbated by the exhaustion of socioecological qualities in addition to accelerating climate change impacts.

6. Conclusions

This study explored the state, antecedents and effects of overtourism in sovereign and nonsovereign SITEs in the Caribbean. The aim of the exploratory research was to identify the differentiating overtourism qualities between sovereign and nonsovereign Caribbean SITEs and, subsequently, to examine the driving factors and impacts of overtourism in the Caribbean.

In terms of the first research question – how do sovereign and nonsovereign SITEs in the Caribbean differ? – the results indicate that (selected) Caribbean dependencies have a unique tourism profile that is relatively more conducive to overtourism. While politically and culturally diverse, these nonsovereign SITEs share several common features, including higher intensity, density and dependency levels on tourism service exports. They have a strong outward orientation toward trade and tourism specialization, which results in significantly more airlift and cruise calls, and relatively larger tourism market share in the Caribbean.

The expansive progrowth tourism policies in Caribbean dependencies are also conducive to more tourism labor immigration and higher population density, especially in coastal zones. Due to their relatively smaller coastal length and less beach space, in addition to relatively less (frequent and intense) extreme weather conditions, nonsovereign Caribbean SITEs also experience a higher density of (large-scale) coastal resorts, more beach visitors and amenities and the commensurate ecological pressures and environmental pollution that follow suit.

With reference to the second question – what are the main drivers and impacts of overtourism in select Caribbean SITEs? – the conclusions show that overtourism is shaped by both tourism supply and tourism demand forces, involving a combination of tourism export specialization, tourism supply chain and tourism architectural style. Conversely, international tourism demand and market share also influence the state of overtourism. Due to the dynamic, multifaceted and path dependent nature of overtourism, the adverse externalities and impacts are experienced across social and ecological dimensions as well as economic stability. In addition to generating social inequality and environmental decay, overtourism also engenders diminishing real GDP growth and significant output volatility.

These results support the theoretical assumptions of development economics and previous political economic tourism studies in the Caribbean. More specifically, the findings confirm the adverse economic, social and environmental impacts of uncontrolled tourism growth and the potential societal backlash that may follow against tourism and visitors. By focusing exclusively and systematically on the (rapid) pace of tourism expansion for short-term gains rather than the pattern and productivity of tourism development for the long run, overtourism spurs extractive and noninclusive growth.

Although restricted to an exploratory study of selected Caribbean SITEs, the findings of this investigation provide a theoretical expansion and empirically enriched framing of the overtourism concept, including the antecedents and effects of overtourism and the dynamic interrelationships. By employing a political economic lens on the prominence of overtourism in Caribbean SITEs, the findings of this study contribute to a relatively more contextualized framing of the complexity and dynamics of overtourism, especially within the context of small island tourism politics and politicking. This conceptual model of overtourism provides several avenues for future research, including, but not limited to, the application and validation of the model in large(r) Caribbean and nonCaribbean SITEs and continental cities and metropolitan areas. Moreover, contingent upon available data, the application of econometric analysis, such as structural equation modeling or path analysis would provide further empirical scrutiny. Likewise, future studies should aim to incorporate larger and more complete datasets for hypothesis modeling and testing.

Alternatively, in-depth case studies could be conducted with a specific emphasis on the market and institutional forces that shape overtourism over time, thereby providing a more qualitative and politically enriched understanding of overtourism in the Caribbean future research which is also required to assess and quantify the total costs of overtourism in Caribbean SITEs, especially from a future oriented perspective. Simulation and scenario studies are highly recommended to build robust and future-proof evidence-based policies for mitigating and adapting to the risks of overtourism and climate change. More importantly, future studies should explore and assess the effectiveness of different tourism policy measures and tourism governance mechanisms for mitigating the risks of overtourism and adapting tourism systems in SITEs.

Acknowledging the exploratory nature and the delimitations of this study, the findings hold several policy implications for strengthening the resilience of Caribbean SITEs in the wake of the COVID-19 pandemic and other structural vulnerabilities, such as climate change. First and foremost, the findings testify to the contextual and dynamic nature of overtourism and more importantly to the need to address social and ecological developments explicitly, extensively and urgently in economic policies and institutional arrangements, especially in nonsovereign and tourism-dependent small island economies in the Caribbean. From a tourism policy measurement perspective and in line with the principles of sustainable tourism, Caribbean tourism authorities should adopt noneconomic measures of tourism growth and development. More importantly, social, labor, educational and environmental data compilation and analysis should be integral to the governance of tourism, especially in Caribbean SITEs, which are significantly more at risk from the negative externalities of relentless tourism growth in a small open economy. Including a more balanced mix of tourism impact measures would also provide an important feedback and feed forward loop to future tourism developments. Moreover, the responsible and related diversification of these political tourism economies would also benefit less volatile economic growth.

Furthermore, the results indicate that in the absence of structural reforms and policy reorientations, including. labor market reforms, targeted social and education programs, environmental and urbanization policies and regulatory enforcement, the state of overtourism generates lower labor force participation, uneven income distribution and stagnant workforce development, in addition to rising environmental degradation and coastal erosion. To foster more inclusive and responsible forms of tourism and mitigate the risks of overtourism, Caribbean tourism authorities would benefit significantly from expanding the time horizons of current and future tourism developments by considering long-term developments in, e.g. social demographics, the labor force and economic well-being. Consideration should be given to strengthening labor force participation and equality, particularly of younger professionals. Likewise, to limit the adverse effects of overtourism, the enforcement of prudent tourism and environmental regulations is recommended, including the use and application of (geographic) zoning rules and maintaining capacity limits for fragile ecological areas. In addition, it is fundamental that the pacing of tourism development is incorporated in medium to long-term development.

In the long run, overtourism fuels diminishing economic growth and increasing economic volatility. Rather than simply devising buffers for absorbing shocks and bouncing back to previous dependent paths of stagnant economic growth, fostering 21st century resilience of Caribbean SITEs requires building innovation and institutional capabilities to anticipate shocks, to adapt and learn, and bounce forward toward new paths of development. Thereto, it is essential that Caribbean tourism destinations build and extend their collaborative platforms with multiple stakeholders, including social and environmental agencies and nongovernmental organizations. More critically, tourism governance matters, and the ability to govern judiciously matters even more in Caribbean SITEs that are now experiencing an unprecedented economic crisis in the wake of the global health pandemic.

Stylized indicators of selected sovereign and nonsovereign Caribbean SITEs ( CTO, 2020 ; UNWTO, 2019 ; WB, 2018 ; WTTC, 2019 )

Stylized differences between sovereign and nonsovereign Caribbean SITEs

Overtourism in selected SITEs in the Caribbean

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Further reading

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Leakage (Economic) in Tourism

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Economic leakage occurs in many industries and sectors, but it is a critical issue for the tourism industry. It takes place when revenues from its economic activities are unavailable for reinvestment or for consumption of goods and services within the same destination. Although tourism-generated income is abundant, the economic resources “leak away.” This predominantly occurs due to imports, foreign ownership of companies and facilities, and/or when these companies are based in another country.

The causes for leakages depend on the destination and its development. In small economies, the typical import-related leakage is between 40% and 50% of gross tourism earnings and between 10% and 20% in more differentiated and advanced economies (Wiranatha, Antara and Suryawardani 2017 ). In general, large-scale leakage has been associated with destinations dominated by major international hotel groups, tour companies, and airlines. This results in a decrease in the multiplier effect for the...

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Jönsson, C. (2023). Leakage (Economic) in Tourism. In: Jafari, J., Xiao, H. (eds) Encyclopedia of Tourism. Springer, Cham. https://doi.org/10.1007/978-3-319-01669-6_527-2

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Starting a Tourism Business in Thailand

Thailand is a popular destination for travelers; as a result, tourism businesses such as tour guide operators, diving shops, and hotels in Thailand have proved profitable over the years. 

However, several regulations and requirements must be met to establish and run a tourism business in the country successfully. This blog post will explore the steps required to start a tourism business in Thailand, including obtaining the necessary permits, finding a suitable location, and navigating the local market. 

• Foreigners cannot generally own 100% of a business related to tourism in Thailand as specified by the Foreign Business Act. 
• The BOI offers some promotions for a limited number of business activities related to tourism, allowing up to 100% foreign ownership.
• A Thai company with at least one Thai national shareholder (who owns > 50% of the shares) can carry out a tourism business .
• Tourism businesses require business licenses/certificates to operate legally.

Can a foreigner 100% own a tourism business?

Unfortunately, operating a tourism business is restricted under the Foreign Business Act (FBA). Therefore, the FBA makes it generally not possible to have a 100% foreign-owned tourism business for most activities, including:

• travel agencies, 
• tour operators,
• hotels and resorts.

There is an exception for a limited number of business activities promoted by the BOI, as explained in the next section.

However, while it is restricted, foreigners can invest in a tourism business with a Thai partner. The Thai partner must hold more than 50% of the shares and shall not be a nominee.

For more information about the FBA in Thailand, please see this post .

BOI promotions for tourism projects

Thailand’s Board of Investment (BOI) offers promotions for tourism companies in Thailand. The BOI provides various incentives, such as 100% foreign ownership, tax exemptions and reductions, investment privileges, and assistance with government procedures to encourage investment in targeted industries, including tourism.

Projects eligible for BOI promotions related to tourism have been split into two groups; Tourism promotion services and activities to support tourism.

Tourism Promotion Services includes the following:

• Ferry services or Tour boat services (or rental of the ferries or boats).
• Tour boat port services.
• Amusement parks with a minimum investment of 500 million baht.
• Thai cultural or craft centers with a minimum investment of 30 million baht.
• Open zoo with a minimum investment of 500 million baht.
• Museum with a minimum investment of 30 million baht.
• Race tracks with the Federation International de L’Automobile (FIA) or Federation International de Motocyclisme (FIM) standard.
• Cable cars with a minimum investment capital of 100 million baht.
• Cruise terminal.
• Man-made attractions with a minimum investment capital of 100 million baht.

Activities to Support Tourism includes the following:

• Hotels with a minimum of 100 rooms and a minimum investment of 2 million baht per room. Or a hotel with less than 100 rooms with a minimum investment of 500 million baht.
• Convention halls with a minimum convention area of 4,000 square meters.
• International exhibition centers with a minimum indoor area of  25,000 square meters.

What incentives does the BOI offer for tourism projects?

Tourism businesses are eligible for 100% foreign ownership and a 5-year exemption from corporate income tax (CIT) equal to 100% of the investment (excluding land cost and working capital). Additionally, there may be exemptions on import duties for machinery and raw materials used for export production. However, this exemption is not limited to tourism businesses and applies to most businesses in other categories.

For hotels, the CIT exemption policy varies based on location. In provinces that are popular tourist destinations, there is a 0-year CIT exemption, but hotel owners have the right to use the land freely and employ craftsmen. In other locations, the CIT exemption is four years, and there may also be exemptions on import duties for machinery and raw materials used for export production.

Provinces that are considered famous for tourism are Krabi, Bangkok, Kanchanaburi, Chachoengsao, Khon Kaen, Chon Buri, Chiang Mai, Nakhon Pathom, Nakhon Ratchasima, Nonthaburi, Pathum Thani, Prachuab Khiri Khan, Phra Nakhon Si Ayutthaya, Phang-nga, Phetchaburi, Phuket, Rayong, Songkhla, Samut Prakan, Samut Sakhon, Saraburi, and Surat Thani.

Choosing the best business structure for a tourism business

A Limited Company is Thailand’s most popular business structure for entrepreneurs due to the flexibility offered to business owners. Foreigners can either establish a Limited Company as a joint venture with a Thai National or as a 100% foreign-owned entity (subject to the Foreign Business Act as discussed above).

Limited Liability means that the shareholder in a Thai Limited Company can only ever be liable for the capital they invested only.

As mentioned above, the Foreign Business Act limits the activities of 100% foreign-owned entities, with tourism as one example. As a result, a Limited Company would need to have most of its shares owned by a Thai national (nominee shareholders are not permitted).

Under the Foreign Business Act, Foreigners can have majority voting rights and control in a Thai limited company through preference shares and weighted voting rights.

Just like any other business, a retail business in Thailand must be registered with the Department of Business Development (DBD) before being allowed to operate. Our team of experts will be able to help foreign investors to gather the necessary documentation and to apply for business registration.

What do you need to run a tourism-related business in Thailand?

To run a tourism business in Thailand, you may need to obtain the following permits and licenses:

• TAT tourism license
• Work permit for foreign employees
• Hotel or tourism-related licenses (where applicable)

Note that the specific permits and licenses required may vary depending on the type of tourism business you plan to run, so it’s best to consult with a local lawyer or business consultant to ensure that you have all the necessary approvals.

What is the TAT tourism license in Thailand?

The TAT tourism license in Thailand refers to the Tourist Authority of Thailand (TAT) license, a license issued by the Thai government to authorize a business to operate in the tourism industry. The TAT license is a key requirement for businesses operating in the tourism sector, including hotels, travel agencies, and tour operators, among others. 

The license helps ensure that the business meets specific standards and regulations and allows the government to monitor and regulate the industry. A business must complete the necessary paperwork to obtain a TAT license, pay the required fees, and pass any inspections or assessments deemed necessary by the TAT.

Anyone interested in operating a tourist business must apply for a TAT license (Tourism Authority of Thailand) with the Tourist Business and Guide Registration Office.

To apply for a TAT tourism license, a business must be:

• Being registered under Thai Law
• Having as its business purpose is to support business tourists in Thailand
• All unlimited liabilities must be of Thai nationality
• For a limited company, at least half of the directors must be of Thai Nationality, and natural persons of Thai nationality must own at least 51% of the capital.

The following fees apply for businesses applying for a TAT tourism license:

• Outbound: security of 200,000 THB and a government fee of 500 THB
• Inbound: security of 100,000 THB and a government fee of 500 THB
• Domestic: security of 50,000 THB and a government fee of 300 THB

Do I need any other business licenses for a tourism business?

A tourism business may need further licenses outside the TAT tourism license. However, the required licenses depend on the activities of the business.

For example, a hotel will require a hotel license and a restaurant license should the hotel contain a restaurant.

Hotel License: A hotel business license in Thailand permits a business to operate a hotel or similar accommodation. The license is issued by the Tourism Authority of Thailand (TAT) and is mandatory for all hotels operating in the country. To obtain a hotel business license, the hotel must satisfy the following requirement:

• Building and safety regulations: The hotel must meet the building and safety standards set by the local government.
• Health and hygiene regulations: The hotel must meet the health and hygiene standards set by the local health department.
• Business registration: The hotel business must be registered with the Department of Business Development.
• Tax ID number: The hotel must obtain a Tax ID from the Revenue Department.
• Insurance: The hotel must have liability insurance.
• Environmental Impact Assessment (EIA): Some hotels may be required to complete an EIA to assess the potential environmental impacts of hotel operations.

The hotel business license is valid for one year and must be renewed annually. Failure to obtain a hotel business license or renew the license can result in fines or the closure of the business.

Restaurant License: A restaurant business license in Thailand is a government-issued permit to operate a food service establishment in the country. It certifies that the business meets the requirements and regulations set by the government, such as health and safety standards and taxes. Obtaining a restaurant business license is mandatory for all restaurants operating in Thailand. For more information, please take a look at this article .

Can I hire foreign staff?

One of the essential requirements for opening a business in Thailand is related to hiring employees. The requirements for hiring foreigners in Thailand largely depend on the structure used to incorporate the company.

Assuming the tourism business will be incorporated using the most common structure, the Thai Limited Company , the following criteria must be met to hire foreign employees.

• A ratio of 4 Thai employees per foreign employee hired is generally required to support a Work Permit.
• There is also a minimum capital requirement of 2 million Baht per foreign employee.

Once these requirements have been satisfied, the employee can apply for a business visa and work permit .

How can Belaws help?

You can talk directly to one of our experts for more information about how our experts can help you start a tourism business in Thailand.

This article is for information purposes only and does not constitute legal advice .

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Consultations can be hosted via WhatsApp or Video Conferencing software for your convenience. A consultation with one of our legal experts is undoubtedly the best way to get all the information you need and answer any questions you may have about your new business or project.

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Frequently asked questions

• travel agencies,

However, while it is a restricted activity, some options are available to foreign entrepreneurs. For example, establishing a company with a Thai partner (who owns more than 50% of the shares) or obtaining a BOI promotion.

How much does it cost to start a business in Thailand?

The cost of starting a business in Thailand can vary greatly depending on the type of business and its size. Some initial costs to consider include company registration fees, legal and accounting fees, visa and work permit costs, and operational costs such as equipment and office space.

What kind of business can I start in Thailand?

A foreigner can start a variety of businesses in Thailand, including tourism, manufacturing, and services. Popular industries include food and beverage, real estate, and IT.

Can a foreigner open a restaurant in Thailand?

Yes, a foreigner can open a restaurant in Thailand. They are required to comply with local regulations and laws, including registering the business, obtaining necessary licenses and permits, and obtaining a work visa if required.

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Welcome to ‘Talking Economics’, the blog of the Institute of Policy Studies of Sri Lanka (IPS), Sri Lanka’s apex socio-economic policy think tank.

Sri Lanka’s Tourism Industry and the Foreign Ownership Debate

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The tourism sector is one of Sri Lanka’s success stories of the post-war economy. The industry represents Sri Lanka’s third largest foreign exchange earner, accumulating $2.8 bn in earnings last year. In 2015, the sector recorded close to 1.8 mn tourist arrivals, equating to a compound annual growth rate of 22% over the past five years. These results have been achieved through targeted investments in infrastructure development, tourist attractions, and strategic promotional campaigns. However, the industry holds further potential; critical to unlocking this is the issue of foreign land ownership.

Unmet Demand

Buoyed by the evident capacity for growth, foreign investment has begun to capitalize on the opportunity that tourism presents. Foreign investment into the hotel industry has experienced significant inbound growth since the end of the war (see Figure 1).

Projects underway indicate a pipeline of 8,000 new rooms in the country (3,500 within the next five years). This sizeable expansion has led to some forecasts of an oversupply of hotel rooms. However, the potential for growth in demand is also understated. Despite encouraging growth statistics, Sri Lanka is yet to find its niche in the fast changing global tourist landscape. According to the World Travel and Tourism Council (see Figure 2), tourism’s total contribution to both GDP and employment of Sri Lanka is comparatively lower than regional competitors such as Maldives, Cambodia, Thailand and Malaysia. Sri Lanka can, for example, do more to take advantage of opportunities in the MICE (Meeting, Incentive, Conference and Exhibitions) space given its heavy-weighting to high-end and Colombo-based hotels. Shopping and nightlife also hold potential for tourism with several new shopping malls under development. Harnessing these prospects is something that foreign competition and ideas can catalyze.

A closer examination of supply also shows that the proliferation of new projects is concentrated in the luxury space with 60% of proposed new supply falling into the upscale category. Outside of the high-end segment, supply is limited. Mid-scale projects constitute just 10% of new supply. Similarly, on location, 65% of proposed projects are situated in Colombo. Opportunities for development therefore lie in the rest of the country; particularly in the North, East, and Central regions.

Inconsistent investment policies, particularly on land ownership, are a major sticking-point in Sri Lanka’s investment case. Also in need of attention are issues of air connectivity, domestic infrastructure and roads. Better connectivity is important in allowing Sri Lanka to benefit from its proximity to key feeder markets such as India and the Middle East. Finally, the expected termination of the “minimum room rate” in Colombo can be another important step in removing distortionary regulations.

Not for Sale

Land ownership laws have a history of unpredictability in Sri Lanka. The past 24 months have seen a series of proposals, reversals and back-tracking that has left investors perplexed. Sri Lanka’s need for FDI-led growth is undisputed, yet the position of current policy damages Sri Lanka’s attractiveness.

Whilst land ownership laws have always had restrictions, the current legislation, Land (Restrictions on Alienation) Act, No.38 of 2014 , places a complete ban on the purchase of land by foreigners (individuals or companies with foreign shareholding of 50% or more). Foreign individuals may only lease land to a maximum term of 99 years, and must pay a lease tax of 15%. Perhaps most punitively, the law also stipulates that this lease tax is applied retroactively from 1 st January 2013 and paid upfront on the total value of the lease.

Revisiting the Legislation

In the 2016 Budget, the Finance Minister announced plans to reverse restrictions imposed by the new Land Act. Specifically, the restrictions on land ownership by foreign nationals are to be lifted, including the removal of the 15% tax on land leases and associated conditions. As at 1 st January 2016, the tax imposed on leasing land to foreigners was removed; however, freehold ownership continues to be prohibited.

Reports in June suggest the government is making headway in deregulating the ownership of freehold land. Proposals include allowances conditional on nominal investments. Foreigners will be able to purchase government-owned lands for personal purposes on the condition that this comes with a US$ 1,000,000 investment. 10-year temporary visas will also be made available for foreigners investing in excess of US$ 300,000.

Is there a Case for Liberalizing Land Ownership?

The case for foreign land ownership is contentious. Since land is a finite resource and a key factor of production, governments can be motivated to reserve its management and utilization for locals. Of the plethora of rationales for controlling land, the most pertinent for Sri Lanka are that of economic control as well as security. Also compelling is the preservation of the ‘social fabric’ of communities. Foreign-based speculation in land can be particularly disruptive in developing countries. The practise of buying up undeveloped land and ‘banking’ for capital appreciation can exaggerate the appreciation of land values and sometimes prevent development in the area.

On the other hand, some liberalization of land ownership can be viewed as a positive step to enhance Sri Lanka’s push for FDI. Such a move could signal a renewed commitment to a recovery in FDI inflows, which have suffered in the past 18 months. The ability to acquire property, with secure rights of ownership or lease, at transparent prices and with limited restrictions, is often considered an essential ingredient in investment decisions. Deregulation does not only encourage investment in land, but may more importantly also provide an ancillary to investment in business. For example, land owned by an investor can be used as security for a capital raising.

The approach to land ownership of the majority of countries globally is that of an intermediate path. Restrictions are placed on land essential for “key sectors” such as designated areas for agriculture or mining. This introduces far greater flexibility than a complete ban on foreign ownership.

In order to attract FDI flows into Sri Lanka, regionally competitive deregulation and policy consistency needs to be considered. Thailand and the Maldives each provide interesting comparisons (see Figure 3).

Creating the Right Environment

Whilst ostensibly Sri Lanka has seen progress in attracting major investment from outside players such as Hong Kong-based Shangri-La Hotels and India’s ITC Group, the reality is that these investments have transpired by circumventing the restrictions. The majority of key investments from foreign players are undertaken through the Strategic Development Projects Act, which allows for the freehold of land as well as significant tax exemptions. Without these allowances, the Sri Lankan investment climate presents a far less attractive proposition that may not justify investments of this scale and risk.

Sri Lanka is competing with other FDI destinations in the South and South East Asian region. In this context, stable policy and more flexible land allocation could encourage the investment needed to grow.

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23 Best & Fun Things to Do in Santa Clara (CA)

In search of the best and fun things to do in Santa Clara, CA?

Santa Clara is a city in Santa Clara County, California, with a population of nearly one hundred and twenty-five according to the last census.

For over two hundred years, the city has existed as a Spanish Mission. Santa Clara is famous for its flourishing tech industry, known as Silicon Valley worldwide.

There is a touch of everything here for a fun vacation, these cuts across places to visit, events, fun adventures, and more.

Planning an exploration of Santa Clara? Here are the top things to do in Santa Clara, CA.

Things to Do in Santa Clara, CA

1. mission santa clara.

Mission Santa Clara is currently located on the campus of Santa Clara University, it was founded by Franciscans in the 1770s.

Fire, earthquakes, and floods eradicated the original building, so the location was changed, and a new one was established in 1822.

Mission Santa Clara was built to convert the Ohlone people, and the Franciscans were doing just fine until measles and smallpox attacked Ohlone.

The mission is one of the historic sites in the city, and it was gifted to the Jesuits in 1857, who built California’s first institute of higher education, Santa Clara University.

Mission Santa Clara is open seven days a week. Although it is no longer carrying out the function it was built for, it now serves as a museum and Chapel.

It is open to everyone, and visitors can take self-guided tours with the help of brochures found close to the entrance.

Address: 500 El Camino Real, Santa Clara, California 95053, United States.

2. The Central Park Library

The Central Park Library is one of the three libraries in Santa Clara under the Santa Clara City Library. The other two include the Northside Branch Library and the Mission Branch Library.

This library is the largest library facility in Santa Clara, with more than 80, 000 Square feet of floor space packed with a massive library collection.

The Central Park Library consists of large community rooms, group study rooms, public art, and many more.

The library has more than one hundred public computers, a computer training facility with a high-speed internet connection for personal laptops.

Central Park Library features a children’s garden, fireplaces, and a large collection of educational and innovative programs materials.

There is a fully packed bookstore with a contemporary collection of books, a nice cafe, and lovely park views.

Address: 2635 Homestead Rd, Santa Clara, CA 95051, United States

3. California’s Great America

For an exceptional outdoor experience in Santa Clara, spend a day at California’s Great America with your friends and family.

California’s Great America is a massive and exhilarating fun park with many eye-catching attractions and activities.

The park features various kinds of roller coasters, including a twenty-story drop tower and the Xtreme Skyflyer that serves as hang gliding and skydiving found high above the park.

California’s Great America features rides for the family, such as a carousel, bumper cars, a flume ride, and more.

There is an amazing playground with lots of play equipment for the little ones to explore and have a great time.

California’s Great America features numerous water slides, cabana rentals, a wave pool, and a lazy river where visitors can relax and cool off.

Address: 4710 Great America Parkway, Santa Clara, California 95054, United States

4. Beat The Lock Escape Rooms

Beat The Lock Escape Rooms will be one of the highlights of your visit to Santa Clara with your friends and family.

Don’t forget to add a visit to Beat The Lock Escape Rooms to your checklist of things to do in Santa Clara.

Beat The Lock Escape Rooms offer visitors a unique sixty minutes of wonderful experience with their loved ones.

Each escape room requires a group of at least two to fourteen people who would be locked up in a themed room and made to find ideas, clues, crack codes, and solve puzzles to help them escape before the time elapses.

Beat The Lock Escape Rooms is an excellent place for nice team-building events by law enforcement, churches, companies, youth groups, sports teams, military, and others.

It is open for different special events and offers catering services for engagements parties, bachelor/bachelorette parties, birthday parties, reunions, anniversaries, and more.

Address: 1171 Homestead Rd University Plaza, Suite 280, Santa Clara, CA 95050-5478 United States

5. 49ers Museum

 The 49ers Museum is a favorite location for football fans, especially 49ers fans, and it is open every day of the week throughout the year.

The museum is located in Levi’s Stadium, which is the home of the San Francisco 49ers consisting of a whopping eleven fantastic galleries and spaces for exhibitions.

The 49ers Museum is exciting and interactive; it features an education center that uses football as a case study to enlighten about math & art, technology, engineering, field trips, and science.

You will find a twenty-minute introductory movie close to the museum’s entrance with a vast exhibit of 49ers memorabilia such as helmets, Jerseys, super bowl rings, balls, and cleats.

There is an interactive area where visitors could try on helmets and Jerseys, learn 49ers cheers and throw a football.

49ers Museum features lifelike statues of players, including past and present, with a site of the 49er’s history.

Address: Levi’s Stadium, 4900 Marie P. DeBartolo Way, Santa Clara, California 95054, United States

6. The South Bay Historical Railroad Society

The volunteers who operate this museum staff the Edward Peterman Museum of Railroad History, buildings, and the society’s library.

The South Bay Historical Railroad Society displays a wide collection of historical artifacts such as a velocipede, locomotive headlights, signals, and more.

The Museum contains two nice operational model train tracks, one in N gauge and the other in OH, including maintaining a business class car from the Oregon-Washington Railroad exemplifying the different periods in railway history.

The South Bay Historical Railroad Society comprises a library filled with railroad-related books and materials.

Address: 1005 Railroad Avenue, Santa Clara, California 95050, United States

7. Anderson Lake County Park

Visiting Anderson Lake County Park is one of the best things to do in Santa Clara for a spectacular experience.

Anderson Lake County Park stretches to a landscape of four thousand, two hundred and seventy-five acres.

The park is home to the Coyote Creek parkway with numerous trails, the Burnett Park area, the Jackson Ranch historic park site, and the Moses L. Rosendin Park.

Anderson Lake County Park is a fantastic location for picnickers, powerboat enthusiasts, equestrians, nature lovers, and bicyclists.

It is a great spot for fishing, jet skis, and swimming; the park is filled with beautiful wildflowers, cottonwood trees, sycamore, and more.

Anderson Lake County Park is a must-visit if you truly want to explore the outdoor pursuits offering exciting recreational activities.

Address: 19245 Malaguerra Ave, Morgan Hill, CA 95037, United States

8. Harris-Lass House Museum

The museum was built in a symmetrical Italianate style in 1865, and it was expanded and renovated in the 1890s.

The Harris-Lass House Museum is the last farm property in Santa Clara, consisting of a nice farmhouse.

The Museum contains a summer kitchen, a classic California barn, a Heritage Orchard, a tank house, and a landscaped garden.

Harris-Lass House Museum is remarkably furnished with Lass Family belongings, and it is open for occasional docent-led tours and school and group tours.

A ddress: 1889 Market Street, Santa Clara, California 95050, United States

Also, check out our guide on things to do in San Juan Capistrano , things to do in Indio and fun things to do in Visalia for a memorable vacation

9. K1 Speed Santa Clara

K1 Speed Santa Clara is an exciting destination for families, friends, and co-workers to experience incredibly fun.

This family-friendly fun center features fast indoor electric go-karts, state-of-the-art safety barriers, and a professionally-designed track.

K1 Speed Santa Clara consists of many meeting rooms and an arcade room that features different varieties of games.

There is a snack bar that offers delicious meals and chilled drinks for reasonable costs; this is the best place for motorsports lovers.

K1 Speed Santa Clara is a wonderful venue for corporate events, social outings, fun date night ideas, company parties, bachelor or bachelorette parties, birthday parties, and much more.

 The fun offered here will give you a feel of adrenaline rush, K1 Speed Santa Clara guarantees you a fun experience, and it is open for all skill levels.

Address: 2925 Mead Ave, Santa Clara, CA 95051, United States

10. Headen-Inman House

Headen-Inman House was originally built in 1913, but the recent building was in 1985, and its location was changed.

The beautiful bungalow was established in Arts and crafts style; it was transformed into a lovely museum containing several items.

Headen-Inman House features a collection of furniture owned by the Inam family, as well as dining room furniture, an old pump organ, and a bedroom suite.

There is a reserved room specifically for photographs and artifacts that demonstrates the history of Santa Clara.

The Santa Clara founders and pioneers room consists of credible information about the early settlers in the region.

Address: 1509 Warburton Avenue, Santa Clara, California 95050, United States .

11. The de Saisset Museum

The de Saisset Museum was established in 1955, and it is located adjacent to Mission Santa Clara at the Santa Clara University.

The museum started as an art gallery showcasing more than one hundred works made by the Painter Ernest de Saisset.

It combines both art and history with diverse and easily accessible exhibits, with great emphasis on art from the San Francisco Bay Area and the Santa Clara Valley.

The de Saisset Museum also houses European and American artworks from the Renaissance. In addition, the museum has an impressive collection of Mission-era Liturgical vestments and an exhibit on California history.

Address: 500 El Camino Real, Santa Clara, California 95053, United States

12. Henry Schmidt Park

Henry Schmidt Park should certainly be on your list of things to do in Santa Clara, CA. It is home to the “Henry Schmidt Park Walls of Fame.”

This eight-acre park showcases sports memories of Henry Schmidt, a forty years old who dedicated himself to training athletes.

Henry Schmit coached Santa Clara University Bronco athletic teams and the San Francisco 49ers; the sports display is in the large neighborhood building.

Henry Schmidt Park features basketball courts, four tennis courts, the Tom Barrett softball field, a large play area, and an exercise course.

Picnic facilities are available in the picnic area with bbq grills and restrooms, including a playground.

Address: 555 Los Padres Blvd, Santa Clara, CA 95050, United States

13. Santa Clara Art & Wine Festival

Santa Clara Art & Wine Festival is one event you shouldn’t miss in Santa Clara.

The Festival is open to both tourists and residents alike for free, and it is an extremely exciting family event in Santa Clara.

Santa Clara Art & Wine Festival is held in the city’s central park and usually features numerous talented local and regional artists.

The festival features about two hundred vendors selling different merchandise like a wide variety of California’s best wines, fine arts & crafts, and gourmet food.

Santa Clara Art & Wine Festival features twenty-five community groups serving International foods, micro-brewed beer, and fine wines, with live entertainment on three stages.

The festival also features the ever-popular kids’ kingdom and a new shaded Craft Beer Garden.

Address: Location is Central Park, 969 Kiely Blvd, Santa Clara, California United States

14. Fleming’s Prime Steakhouse & Wine Bar

If you haven’t visited Fleming’s Prime Steakhouse & Wine Bar, you’re missing out; add dining at this lovely restaurant to your list of things to do in Santa Clara, CA.

Fleming’s Prime Steakhouse & Wine Bar offers the best sevice when serving amazing prime steak, handcrafted cocktails, and wines.

This restaurant offers an extensive food menu which includes French onion soup, Miso Glazed Chilean Sea Bass, fleming’s salad, sweet chilli calamari, lobster bisque, Crème Brûlée, key lime pie, caesar salad, Filet Mignon Sandwiches, and more.

Fleming’s Prime Steakhouse & Wine Bar comprises a full-service bar that offers wines like loosen bros, maso canali, Kim Crawford, duck horn, Francis coppola, goldeneye, and more.

If you’re planning a special occasion, hosting a business date, or you just want to enjoy a delicious meal with great services, Fleming’s Prime Steakhouse & Wine Bar is the best option.

Fleming’s Prime Steakhouse & Wine Bar also offers online delivery if you can’t come yourself or simply want to enjoy the meal in the comfort of your home or wherever you are.

Address: 2762 Augustine Dr Suite 110, Santa Clara, CA 95050, United States

15. Santa Clara Farmers’ Market

If you’re searching for a place to shop, add shopping at Santa Clara Farmers’ Market to your list of things to do in Santa Clara, CA.

Santa Clara Farmers’ Market offers a wide variety of commodities, starting from seasonal produce & freshly baked goods, prepared food items to health & body products.

The market is open all year-round on Saturdays only from 9am-1pm, offering goods for affordable prices you can’t get elsewhere.

Santa Clara Farmers’ Market offers fresh and healthy produce to encourage the public to always choose the best products.

The market offers you an opportunity to meet and interact with locals and ask them questions about the town.

Address: 950 Jackson St, Santa Clara, CA 95050, United States

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16. Levi’s Stadium

 A day at Levi’s Stadium is one of the top things to do in Santa Clara, CA. It has a sixty-eight thousand seating capacity.

Levi’s Stadium is home to the National Football League’s San Francisco 49ers, and it is one of the country’s premier professional football stadiums.

The stadium is the venue for the 49ers season; the pre-season begins from August to its final season-ending in early January.

Levi’s Stadium is a host of world-class entertainment and concerts that are always held daily.

The stadium is available for public tours, which may be booked through Ticketmaster; the public tour includes a 90-minute tour of the stadium and admission to the 49ers Museum.

A group of more than twenty people can organize a private tour, and the stadium features a restaurant, Bourbon Steak, that offers delicious American fares.

Address: 4900 Marie P. DeBartolo Way, Santa Clara, California 95054, United States

17. Voyager Coffee

The best way to start your day is by drinking a flavorful cup of coffee, and Voyager Coffee serves the most delightful coffee in Santa Clara.

Voyager Coffee was founded in 2016 and has continually served the public with world-class coffee they can’t get anywhere else.

The owners and staff ensure the customers are happy by providing a comfortable environment to feel free and interact with other guests and form new friendships.

They offer fresh and delicious pastry and baked foods, tea, coffee, and other non-coffee drinks, served however you want it.

Voyager Coffee offers drinks like Chai latte, drip coffee, Americana, mocha, cold brew, drinking chocolate, London fog, cappuccino, macchiato, and more.

Aside from drinks, they also offer meals like Avocado toast, almond butter toast, nut & honey, cinnamon rolls, Chocolate Almond Croissant, Pesto Ricotta Toast, chocolate cake, and so on.

Many of their coffees sport internationally influenced flavors, and they’re often infused with things like orange essence and cherry blossom water.

Address: 3985 Stevens Creek Blvd, Santa Clara, CA 95051, United States

18. Triton Museum of Art

 Whether you’re an art lover or not, add a visit to the Triton Museum of Art to your list of fun things to do in Santa Clara, CA.

Triton Museum of Art’s primary mission is to promote local, regional, and national art by showcasing the various artworks.

The Museum collects and displays historical and contemporary California artworks with a duty to motivate cultural and gender inclusiveness.

Triton Museum of Art enlightens the public on art and the creative process; the building itself is a piece of art with a curved glass wall.

The Museum is home to the historic 1866 Jamison-Brown house and a seven-acre sculpture garden.

Address: 1505 Warburton Avenue, Santa Clara, California 95050, United States

19. Central Park

Are you ready for a terrific fun moment with your dear friends and family? Then, visiting Central Park should be on your Santa Clara to-do list.

Central Park is a center for recreational activities, and it houses the George F. Haines International Swim Center and a 30, 000 square foot Community Recreation Center.

The park consists of two softball fields, two lighted tennis courts, basketball courts, a green bowling lawn, an exercise course, and more.

Central Park also consists of a fantastic amphitheater and a beautiful children’s playground with lots of fun equipment.

This park is a perfect venue for group and family picnics at designated areas with barbecue pits and public restrooms.

Address: 969 Kiely Blvd., Santa Clara, California 95051, United States.

20. Montague Park

Montague Park is a wonderful 5.5-acre park with several facilities suitable for both adults and children.

The park is home to a neighborhood recreation facility that features two tennis courts, a large multi-purpose room, and restrooms.

Montague Park features a children’s play area with several play apparatus for them to explore and have a memorable experience.

There is a picnic area with picnic tables and bbq grills perfect for a small family outing or friends gathering to grab a meal together.

Montague Park is adjacent to the Montague Swim Center, which offers recreational swim and swimming lessons during the summer months.

Address: 3595 MacGregor Ln, Santa Clara, CA 95054, United States

21. Santa Clara Fire Museum

The Santa Clara Fire Museum is housed in an old training center behind the Santa Clara Fire House in Santa Clara.

 The museum contains numerous memorabilia from 1855 when the Santa Clara Fire Department was established.

The Santa Clara Fire Museum showcases photographs, documents, and fire equipment like fire extinguishers, nozzles, and hoses.

The museum features an excellently refurbished Model T Ford truck purchased by the Santa Clara Fire Department. It was used as a she truck from 1921-1945, and it has been well refurbished by volunteers.

The Santa Clara Fire Museum is open to everyone as well as school groups with educational programs relating to fire safety.

Address: 1900 Walsh Avenue, Santa Clara, California 95050, United States

22. Ulistac Natural Area

Ulistac Natural Area is a forty-one acre open space that brings you close and helps you communicate with nature.

The area is committed to preserving the native Californian vegetation and wildlife with a variety of natural habitats.

Ulistac Natural Area consists of riparian woodland, grassland, savannah, wetlands, coastal scrub, and other natural habitats.

This nature preserve features a bird and butterfly garden with nectar plants, including monkeyflower and fuchsia, that attract hummingbirds and a wide range of butterflies.

Ulistac Natural Area consists of natural trails featuring interpretative signs, and it was once a seasonal camp for the Ohlone Indians.

This preserve was used as a golf course in the mid-20th century, as grazing land for sheep and cattle during the Spanish and Mexican conquest era, and as agricultural land for 19th-century Chinese settlers.

Address: 4910 Lick Mill Road, Santa Clara, California 95054, United States

23. War Memorial Playground

 For your next family outing, add a visit to War Memorial Playground to your list of fun things to do in Santa Clara.

War Memorial Playground is a one-acre park perfect for families with children who want to share an intimate moment.

The playground is small but unique, with large sculpted ants and an anthill for climbing. They were designed and made by Francine Agapoff, California artists.

War Memorial Playground is ideal for preschoolers and toddlers with their guidance; for their utmost safety, dogs are prohibited from the park.

There are sandboxes for kids to play in and a flagpole with memorial plaques underneath it to commemorate those that died during the war.

War Memorial Playground provides benches for the adults to sit on while the little ones play around with picnic areas.

Address: 295 Monroe Street, Santa Clara, California 95050, United States

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Plan your trip to Santa Clara

Santa Clara offers something for everyone, making this city an exciting place to visit for the entire family.

Santa Clara should be your next vacation destination as there are several fun options to pick from. Whether you’re in the mood to go out and have great fun or simply want to relax, enjoy a delicious meal, read a novel, or discover new things.

Start planning a trip to Santa Clara, CA.

Home » Travel Guides » United States » California (CA) » 15 Things to Do in Santa Clara (CA)

15 Things to Do in Santa Clara (CA)

Santa Clara is a city of nearly 125,000 residents that’s located in Santa Clara County, about 75 kilometers south of San Francisco .

The city was founded more than 200 years ago as a Spanish Mission. Now, it’s most well-known for its booming tech industry that’s commonly referred to around the world as Silicon Valley.

Though it’s common knowledge to most football fans, it’s a surprise to many to discover that the relatively small city is also the home of the National Football League’s San Francisco 49ers.

Visitors to Santa Clara have abundant activity options at their fingertips without venturing outside city limits, so staying engaged and entertained shouldn’t be an issue.

1. Levi’s Stadium

With a capacity of nearly 70,000, Levi’s Stadium on Marie P. DeBartolo Way in Santa Clara is one of the country’s premier professional football stadiums.

The 49ers play their home games here, and during the off-season, the stadium hosts a variety of annual events, including concerts featuring big names in the music industry.

Taking a family to a football game isn’t the least expensive activity option in the area, but for those who’ve never taken in a pro game, it’s an exhilarating experience that may be worth the cost.

Guided tours are also regularly available, and the bars and restaurants around the stadium are fun to visit year-round.

2. Ulistac Natural Area

Despite its large population and the overall hustle and bustle, the Bay Area features plenty of urban parks and natural areas that are convenient options for those interested in enjoying the great outdoors.

The Ulistac Natural Area is located on Lick Mill Road in Santa Clara. It is comprised of more than 40 acres that include a variety of distinct environments.

The natural area straddles the Guadalupe River and is home to an array of plants and animals that are well-suited to its riparian habitat.

A particularly popular attraction for bird watchers, it features a number of well-marked nature trails dotted with interpretive signs.

3. Santa Clara Art & Wine Festival

Californians take their art and wine seriously, and there’s no better way to combine the two than by visiting the Santa Clara Art & Wine Festival.

The event is held in the city’s Central Park and features nearly 200 vendors from across the country selling fine art and crafts, gourmet food, and a vast selection of California’s best wines.

Proceeds are donated to worthwhile causes that benefit residents in need. It all takes place in the early fall when the central California weather is perfect for outdoor activities.

Other highlights include live entertainment and lots of art-related activities for kids.

4. The de Saisset Museum

Though he’s not exactly a household name for those who don’t typically travel in West Coast art circles, Ernest de Saisset was one of the Bay Area’s most prominent artists in the 19th century.

Saisset was a French immigrant who enrolled in Santa Clara University and studied painting as a young man.

The museum that now bears his name is located on the university’s campus. It includes a collection of more than 100 of his most impressive works.

It’s as much a historical attraction as it is an art one, and it also has other works from European and American artists dating back hundreds of years.

5. Intel Museum

Intel is one of the titans of the tech world. Over the years, it has been responsible for some of the most significant technological leaps forward in computer hardware.

The Intel Museum is located on the campus of the company’s world headquarters in Santa Clara, and it’s regularly open to the public.

Even for those who don’t fall into the tech-savvy category, it’s a fascinating place that’s definitely worth an hour or two of time.

Though it may sound dry to technophobes, it’s packed with interactive exhibits for visitors of all ages, so it’s great for kids with short attention spans too.

6. Santa Clara Farmers’ Market

There’s really no better way to rub elbows with locals, enjoy pleasant weather, and have access to tons of great products you won’t find elsewhere than by visiting a farmers’ market.

The Santa Clara Farmers’ Market is open year-round and features a little bit of everything – from seasonal produce and fresh baked goods to health and body products and prepared food items.

Held on Jackson Street near the downtown area, it’s common to find different items each time you go.

Spending a few bucks is a great way to support local farmers and entrepreneurs, and don’t be shy about asking them for suggestions for things to see and do while in town.

7. California’s Great America

There’s no shortage of theme parks in the Golden State, but there’s one clear choice for those visiting Santa Clara.

California’s Great America is located on Great America Parkway just outside of town. It features tons of rides, dining options, kid’s activities, and a water park that’s a huge draw during the hot summer months.

Though Great America can really draw a crowd during peak times when kids are enjoying their summer vacations, previous guests have noted that wait times for rides weren’t overly long.

Many families choose to spend an entire day on-site to avoid wasting valuable recreational time in the car.

8. Mission Santa Clara

Mission Santa Clara is one of the city’s premier historic sites, and it’s now conveniently located on the campus of Santa Clara University.

The mission was established by Franciscans in the 1770s to spread Christianity to the area’s Native American population.

Sadly, things didn’t go according to plan; due to several natural disasters, the mission was forced to move from its original site to where it is now.

Over the years, it was also run by the Jesuits. Though it’s no longer functioning in its original role, it now doubles as a museum and chapel that are open to visitors.

9. The Triton Museum of Art

Though guests tend to visit the Triton Museum of Art for the works in its collection, its stunning contemporary architecture usually makes a big impression as well.

The museum’s collection includes works from all over the country, but its emphasis is on pieces created by Bay Area artists using local people and scenery as inspiration.

The grounds also include a sprawling outdoor sculpture garden spread over nearly seven acres, and a home from the mid-1860s that’s among the most well-preserved examples of historic American architecture in the area.

The museum is located on Warburton Avenue, and most visitors spend a few hours on-site.

10. Santa Clara Players

The Santa Clara Players traces its roots all the way back to the early ‘60s, when a group of local performers began putting on small shows for the community.

Now nearly seven decades later, they’re still going strong. Their annual performances run the gamut from dramatic theater and mystery to satire and humor.

The players are part of a community theater group staffed by talented volunteers dedicated to providing high-quality, family-friendly entertainment at a reasonable cost.

They’re located on Don Avenue in Santa Clara and offer lots of volunteer opportunities for budding actors and stagehands.

11. Central Park

Featuring lots of wide-open spaces and massive swimming and community rec centers, Santa Clara’s Central Park is a go-to destination for activity minded visitors looking to make the most of their limited vacation time without traveling to more distant attractions.

The park is centrally located on Keily Boulevard, has ample parking, and features lots of outdoor amenities and recreational activity options.

From tennis and basketball to softball, lawn bowling, and a big playground, there’s really no excuse for getting bored while on-site. For those looking to spend a relaxing afternoon, there are a lake, built-in BBQs, and public restrooms.

12. The 49ers Museum

Even for those who won’t be in Santa Clara during the regular season, the 49ers stadium and museum are fun attractions worth visiting for sports-minded visitors.

The museum is located inside Levi’s Stadium and features nearly a dozen distinct galleries that are open to the public year-round.

It’s a fun and educational experience for visitors of all ages. In addition to football, its exhibits touch on science, technology, and art in a way that engages and entertains young and old minds alike.

Most guests check out the introductory video in the visitor’s center before showing themselves through the impressive collection of trophies, balls, and Super Bowl memorabilia on display.

13. The Santa Clara Fire Museum

The Santa Clara Fire Department’s roots run all the way back to the 1850s when it was founded.

The museum is now located on Walsh Avenue in an unused training center behind the city’s new fire station.

It sports an impressive collection of equipment and historical memorabilia that give visitors unique insights into the lives of fire and rescue personnel in years past.

The museum’s highlights include a fully restored Model-T fire truck that served for two decades, beginning in the 1920s.

The knowledgeable local volunteer staff also offer regular programs geared at educating the public about fire safety and prevention issues.

14. Edward Peterman Museum of Railroad History

The Edward Peterman Museum of Railroad History is run by a local historical society. It is housed in the depot of a now-defunct railroad on Railroad Avenue in Santa Clara.

Like many local historical attractions, the museum is staffed by local volunteers who love answering questions and showing first-time visitors around.

The museum’s exhibits include a variety of railroad equipment and memorabilia, including signals, safety equipment, and historical photographs dating back over 100 years.

The museum is regularly open to the public. It maintains an extensive library of books relating to railroad development and local history as well.

15. Voyager Coffee

Though it has only been around since 2016, Voyager Coffee’s owner and staff are dedicated to the noble pursuit of making their customers happy.

They do this largely by providing world-class coffee, but also by offering a comfortable space in which guests have opportunities to build relationships with like-minded customers.

Many of their coffees sport internationally influenced flavors, and they’re often infused with things like orange essence and cherry blossom water.

Don’t worry if you prefer your coffee straight-up, because they’ve got more traditional brews as well.

They offer fresh pastry and baked goods, tea, and other non-coffee drinks too.

15 Things to Do in Santa Clara (CA):

• Levi's Stadium
• Ulistac Natural Area
• Santa Clara Art & Wine Festival
• The de Saisset Museum
• Intel Museum
• Santa Clara Farmers’ Market
• California's Great America
• Mission Santa Clara
• The Triton Museum of Art
• Santa Clara Players
• Central Park
• The 49ers Museum
• The Santa Clara Fire Museum
• Edward Peterman Museum of Railroad History
• Voyager Coffee