According to the Oregon Tourism Commission, tourism is a $10 billion industry in Oregon, generating $1.2 billion in local and state tax revenue in 2021. But a report from Oregon State University’s Sustainable Tourism Lab found residents often aren’t educated on tourism policies that affect their communities.
The lab was founded in 2021 to help communities create tourism plans that balance the needs of residents and visitors, a key feature of sustainability, according to the lab’s researchers. It recently released its first annual report, which aimed to measure how people in eight locations, including Oregon, Washington and Hawaii, feel about tourism in their communities. Todd Montgomery, director of OSU’s Sustainable Tourism Lab, joins us to tell us more about the report’s findings.
This transcript was created by a computer and edited by a volunteer.
Dave Miller: This is Think Out Loud on OPB. I’m Dave Miller. According to the Oregon Tourism Commission, tourists spent nearly $11 billion in Oregon in 2021, generating over a billion dollars in local and state tax revenue. But tourism also generates backlash, misgivings about traffic, environmental degradation or changes to what makes a place special to begin with. The Sustainable Tourism Lab at Oregon State University is studying the ways that tourist locations can thread this needle and can be a net positive. Todd Montgomery is the director of the lab. He joins us to talk about sustainable tourism and the results of a recent survey of people in eight Pacific Northwest and Pacific Island communities. Welcome to Think Out Loud.
Todd Montgomery: Thanks for having me.
Miller: There are a few different ways to think about sustainable tourism so I thought we could start by breaking them down. What does it mean economically?
Montgomery: That’s what most people see as the benefit to tourism.
It’s a financial impact, it’s jobs, it’s business, it’s really just the economic viability of the community and just one economic driver of that community.
Miller: What about environmental sustainability when it comes to tourism?
Montgomery: Well, most tourist destinations, particularly in the Northwest, exist because of something that nature or the environment provides—snow or a mountain or river or beach. So when we think about sustainable tourism, we’re thinking about preserving those sites and those interests for future generations of both community and travelers alike.
Miller: And then there’s maybe the hardest one to wrap one’s head around is what sustainability means in terms of just a community more broadly. How do you think about that?
Montgomery: The community pieces, in some ways, are just as important as those other two. The community is the host, it’s their town, their people, their friends, their family, the activities that they do and making sure that the community is seeing benefits to tourism and not just a certain segment of the community, the entire community, across all iconic and device spectrums. It is important but it’s really just the impact of tourism of letting people into your community and sharing that experience with them.
Miller: You’ve worked in the industry, and now as an academic, for decades now. I’m curious what you’ve seen personally that got you interested in the issue of the sustainability of tourism or tourist locations.
Montgomery: I started my job after undergrad in Asia Pacific with a large corporate hotel chain and one of my jobs was to help identify the next big spot for tourism, the next upcoming destination. And, specifically, my role was to go in there and look at what the pricing capacity for that destination was. What would be the revenue stream, what would the prices that would/could customers afford or be enticing to them?
Through those years that the models that I built, I was recognizing that there was a life cycle to a destination. So just like any product or service, there’s that exploration or discovery, growth, maturity and then something happens after that–rejuvenation, stagnation or decline. And I was seeing that in the pricing data and at the time—this is early 2000s—I was really quite proud of of what I was doing because we visited these sites before development, we would see that these communities were a lot of times in poverty and this was a big economic boom for them.
Miller: Just so I can understand the work you were doing, I’m imagining some island somewhere that has a little bit of tourist infrastructure but maybe not a big fancy resort hotel yet. And it was up to you to say “actually there’s an opportunity here, our investors could make money, this would be a good place and we can charge x amount per room?”
Montgomery: That’s exactly right. So usually it was the dive community because like I said, I was in Asia Pacific, so there was a dive spot or something, a surfing spot, something that that the environment provided. So my job was to go in there and look at that and then support work and work with local leaders to help develop that along with the hotel chain.
Miller: Is it fair to say that you would come back 10 years later and get disillusioned because you’d seen what had followed?
Montgomery: Absolutely. Over the years I saw just a term that I’ve used “the turn and burn destinations.” So there would be something they’re there for the coral, maybe they’re there for a beach and then the coral would be ruined through overuse or not properly managed. A lot of times for development there were foreign investments so one wouldn’t necessarily see any local community members getting benefits outside of the landowners. What this study is about is they were dealing with the costs of tourism, but not necessarily seeing the benefits of tourism. And from that destination life cycle, that’s when things [were at] that inflection point, that was at that point where the community really had to decide what they wanted to do in terms of tourism going forward.
Miller: On some level, is it too late at that point? How much can be done at that Inflection point, you’re talking about where a community has, in their mind, seen enough of the drawbacks of the visitors coming–even if they’re bringing tourist dollars with them–that they’re fed up and they don’t want tourism anymore. They don’t like the direction their place has taken. Is it too late at that point to actually improve the situation?
Montgomery: Every destination is different, [ranging from] something about the infrastructure, the development or the environment. For example, one of the places I’ve spent many years is in the northern Mariana Islands just north of Guam, south of Japan. People came there for the environment. Big hotels popped up, less recreational areas and then most recently, about three or four years ago, a very large foreign investor from China came in and built an incredibly large casino infrastructure or building about that size, and it’s concrete because there are typhoons. They ran into trouble. The building was never finished. And now there’s this gigantic unfinished half casino infrastructure on one of the premier beaches of that community. And so I use that example because I think that’s supporting what you’re saying. In that situation I wouldn’t say they’re too late, but boy they’ve got a burden and there’s no easy way to hide that large building.
For other destinations, depending on what they have, what they offer, there’s absolutely things that people can do. There’s regeneration, you hear that a lot of talk about tourism. There’s things you can do with the products and services. But for me it really comes back to what the development was, where it was done and was it close to what the reason that people came to the destination in the first place.
Miller: I want to turn to the results of this recent survey that you and your team did, talking to people in communities around the Pacific Northwest and in islands in the Pacific as well. What do you see as the biggest surprises from the responses that came in?
Montgomery: Well, I’d say there are two big surprises. The first one is, we knew the environment was going to be important. So we asked about the environmental impacts of tourism in a lot of different ways. Across the board of all demographics, the impact of the environment of tourism was their number one concern. And also we asked, “how would you like tax revenue collected through tourism to be reinvested?” Once again, the environment was the top priority. I really think from the community perspective, people felt like they were absorbing costs associated with accessibility to certain activities, trails, traffic and so forth. And so that was number one and we knew the environment was important. We know that’s a major reason for people to travel, but we did not expect it to be across the board like it was.
Second, we saw that there’s typically a fairly large misunderstanding of tax revenue being collected from tourists, typically through the transient room tax. So there’s a lot of misinformation and people that just simply didn’t know. And then the second piece of that was that they didn’t really understand how that tax revenue was being regenerated. So, for example, in some communities, about 70% of that revenue goes back to the General Fund which goes to fire, police and safety and maybe 30% goes into a variety of promotion or tourism or reinvestment in the community. So that misinformation piece was pretty important to us because what we’re trying to do in this study–this is part of a five-year project and we just finished year one–is trying to quantify perceptions and get that benchmark of what people think, so that we can then know what actions communities take in the future. So they know whether they were successful or not, if they did move the needle or not.
Miller: Did responses vary in meaningful ways, in terms of race or age of respondents?
Montgomery: Not in race, but more so in the years of residency in that community. So there’s a very strong relationship between how long somebody had lived in that community and how they felt about tourism. Just as you might imagine, the longer they live somewhere, the less they like tourism or the more costly they see tourism. We also saw that that age did play a role there. Income was another one we thought would be a factor but it wasn’t.
We did see that typically demographics on nonwhite people who earned less than $35,000 and people who had just moved to the community then would be about 7-8 points higher in terms of seeing more benefits than costs than other demographics. One of the things that I really enjoy about tourism and travel is that we’re a very diverse industry. Our workforce is one of the most diverse across the US and our customer base is quite diverse. So making sure that all of those communities that are absorbing the costs of tourism also see the benefits is really important. And part of the study is to help understand that.
Miller: We got a comment from Kathleen O’Brien-Blair on Facebook who didn’t hold back. She said, “No thanks. We need solid nonpolluting manufacturing jobs, paying thriving union wages as the majority of our economy in order to onshore our supply chains.” How do you think about the opportunity cost in a place that is trying to really foster tourism, perhaps to the exclusion of other aspects of their economy?
Montgomery: That’s a great question and that’s a great comment and it’s not something that we haven’t heard before. We included places like Hawaii and Alaska and some tourist destinations where as a percentage of GDP, tourism was the major factor in town. But when you come to Oregon, we’re quite diverse. We’re a diverse economic state. We have a lot of destinations that have tourism and also have other industries there. And I think what we’ve learned through COVID is that diversity can come in and be pretty helpful when things like that happen.
To her comment, I would say that absolutely a diverse range of jobs and opportunities is what I think what any state or any community would want, but we wouldn’t want to exclude an economic driver that does offer benefits and solutions. Kind of going back to those early years before joining OSU, I saw people brought out of poverty. We’re working with communities right now that don’t really have any economic driver in any way to sustain and build future generations, and for some of those destinations, tourism is the opportunity. So I think you have to take kind of the big picture of all this, look at the benefits and costs and also understand that each destination has a unique set of factors and there’s not one universal solution to all of them. But understanding and quantifying is the right first step.
Miller: Where are you excited to travel next?
Montgomery: Well, we have a partner with the University of Costa Rica in March. Much like Hawaii, Costa Rica is really grappling with this, tourism and the environment, the rainforest, beaches. That’s a big thing. And what we’re doing is we’re looking at a village that used to be kind of that classic example of a sleepy village before tourists started coming and we’re looking and measuring that. And then the university down there has helped us to identify the next big thing, the next sleepy village, and we’re going to measure what the community thinks of tourism there as well. So it will be a very nice contrast, very interesting comparison.
Miller: Because someone is still doing that job that you used to do to discover those places and develop that.
Montgomery: Absolutely.
Miller: Todd Montgomery, thanks very much for joining us.
Montgomery: I appreciate it. Thanks for the time.
Miller: Todd Montgomery is the director of the Sustainable Tourism Lab at Oregon State University.
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