Economics of Wildlife Tourism: an Interview with Clem Tisdell

Economics of Wildlife Tourism: an Interview with Clem Tisdell

Ronda: Clem Tisdell is Emeritus Professor of Economics at the University of Queensland, and one of our leading experts on the economics of wildlife tourism.  Clem, we’re delighted that you will be speaking as a keynote on the economics  of wildlife tourism at our national wildlife tourism workshop next May and that you will staying on for further discussions during the Workshop.

You’ve been described as one of Australia’s most prolific authors of economics literature generally, and quite a few of your papers have involved the economics of wildlife tourism and of wildlife conservation, involving animals as diverse as glow worms, birds, turtles, whales and elephants to name just a few.  How did you first get involved in these fields?

Clem: It’s a long story. Biology was one of my favourite subjects at school and I became fascinated by ecology. I was also interested in economics at school. Later I completed a PhD economics thesis at the Australian National University which was subsequently published by Princeton University Press. It was about the theoretical effects of uncertainty on economic decisions and economic efficiency. After finishing it I continued publishing articles on this theme. One day, one of my former co-supervisors rang me up and said my article (which he had seen) was good but why not try to do something different. It was then that I decided to write about issues in ecological economics. Initially, I wrote three papers which were published – one on economics of providing national parks, another on the conservation and utilisation of wildlife and one to do with kangaroos. After that an opportunity came up to contribute to an ASEAN-Australian Joint Research project on service industries. It was requested that I should write on R&D services on which I had already written a lot. Instead I suggested that I write about tourism. This was accepted. After I shifted to Newcastle University (NSW), I wanted to do more on wildlife. A member of the local NSW Department of Primary Industry suggested I do some work on wild pigs. This included all sorts of aspects, including their recreational use. As a result, I authored a large book on the subject (Wild Pigs: Environmental Pest or Economic Resource?) and had an invitation to join the IUCN Specialist Group on the Suidae and Peccaries, which at the time, I felt I could not accept. My interest in all the other species you mentioned developed subsequently and each has its own story. I shall spare you the details here.

 

Ronda: I suppose my own interests in this topic would be threefold (and I’m not expecting immediate answers on these):

1. How can we determine the value of wildlife to the tourism industry and thus to Australia’s economy as a whole, and is there a substantial unrealised potential here?

2. Is there opportunity for speciliased tour operations such as birdwatching, whale-watching, wildlife safaris and visits to zoos and wildlife parks to be more financially viable than many currently are, and also for more general tourism operations to increase their profits by value-adding with quality wildlife experiences?

3. how can studies of economics (including the economics of tourism) and ecology be best combined to facilitate conservation of wildlife and their habitats?

We can explore each of these in more depth at the workshop next May, but are there any brief points you’d like to make now?  And are there other major aspects you’d like to see included in discussions?

Clem: Because I have been interested in biodiversity conservation, in recent decades, my main objective has been to examine the role that tourism (especially wildlife tourism) plays in nature conservation. What mechanisms are involved? How do economic factors influence the role of tourism in nature conservation?

1.      Unrealised potential.

Australia’s wildlife is (to a large extent) unique and, as far as I can make out, has not been the major focus of the marketing of Australia’s tourism potential abroad. My impression is that only fragmented (general) mentioning of opportunities for wildlife tourism in Australia occurs in promotional presentations. No tourist guide solely focused on opportunities for wildlife tourism in Australia seems to be available. A suitable guide could cater both for generalists (and to some extent specialists) interested in nature-based tourism. Wildlife in Africa is more prominently promoted. However, the results of studies which were supported for the CRC for Sustainable Tourism demonstrate that most overseas visitors to Australia are very interested in its wildlife and that most want to see some of it while in Australia. Nevertheless, most visitors are (I believe) unaware of the full diversity of Australian wildlife and the range of opportunities for viewing this wildlife. This is one of the reasons why the full economic potential of Australian wildlife is not fully realised.

A second factor which would add economic value to Australian wildlife tourism would be easier access of commercial tour operators to national parks and protected areas so they can provide more guided tours for visitors. My surveys of visitors to several national parks in Queensland found that there is a demand for such tours in national parks and a willingness to pay for these. It is then a question of whether the amount of visitors are willing to pay to participate in such tours is adequate to make them economic in a locality. As a rule, due to lack of resources, government staff are unable to supply these services to the extent demanded. Also some NGOs protecting natural areas do not want tourists. Yet, if some of these protected areas were open to regulated tourism, this would add economic value, have little or no negative effect on wildlife conservation, and in all probability would increase support for wildlife conservation.

Determining the value of wildlife to the tourism industry and its value to Australia’s economy:

There are a number of ways in which the value of wildlife to the Australian tourist industry could be assessed. For example, how much extra spending on tourism occurs because of the presence of Australian wildlife? How much extra employment is generated because of this? A comprehensive study of this has not been completed but studies have been done to estimate the economic impacts of national parks and the Great Barrier Marine Park on tourism. I was also the principal researcher in a study designed to determine how much extra tourism income was earned in the Bundaberg region as a result of turtle-watching at Mon Repos. All these studies highlight the major contribution of wildlife tourism to some regional economies (which in many cases is greater than that of established agricultural industries) and to the Australian economy as a whole.

It should, however, be stressed that the economic values of wildlife should not be measured solely by the expenditure it generates. The use of wildlife for tourism only represents part of the economic value of wildlife. Even if individuals pay nothing to observe wildlife, they may still get economic values from the experience. Furthermore, many individuals are willing to pay for the continuing existence of wildlife species, independently of whether they see them or expect to see them In order to support the conservation of particular wildlife species, it is also the case that many tourists are prepared to pay a larger sum than they are willing to pay to see them. Consequently, in most cases, the economic value of wildlife for tourism understates their total economic value.

2.      Economic viability of specialised tour operators

This is a difficult question to answer in a general way. In some cases, wildlife tourist operators could promote each other more than they do at present. For example, in the Northern Territory there are both nature-based saltwater crocodile tours on rivers (e.g. the Adelaide River) and some crocodile farms catering for tourists. Those engaging in one of these tourist attractions should be made aware of the other attraction. Tour agencies could put together a package that involves both. Ideally tourists should be made aware of the connection between farmed crocodiles, crocodiles in the wild and their conservation.

Tour operations in wildlife tourism are extremely diverse in their economic structure and combinations of resources. Some virtually cater for mass tourism such as little penguin viewing at Phillip Island. In many cases, tours are restricted in the numbers they can cater for, for example, the viewing of tree-kangaroos at night. The labour intensity and capital intensity of the resources used in such tourism also varies a lot. Some operators are able to employ labour full-time whereas others rely entirely on casual (often part-time) labour and frequently depend solely on the owner-operator for their functioning. Some such as zoos and wildlife parks require considerable investment in land by their owners. As land values change, they sometimes find it profitable to sell this land, move elsewhere or cease business. Because of this diversity, it is difficult to give general advice on how tourist operations can be improved financially.

General tourism operations.

Whether or not general tourism operators are likely to be able to increase their profits by value-adding with quality wildlife experiences is worth considering. Much depends on the tourist segment that these operators cater for. Some already add wildlife experiences to their tours for example, visits to Lone Pine, or to O’Reillys and trips to see glow worms at Springbrook National Park. As far as foreign tourists are concerned, account needs to be taken of their preferences. Do Chinese tourists, Japanese tourists and others have the same interest in wildlife tourism as German tourists? Also the tour operator has to consider the likelihood of the focal wildlife being actually seen on the tour and their accessibility. Furthermore, the extent needs to be considered to which several tour operators will or should rely on specialist tour guides to provide the quality wildlife experiences.

 

3. Ecology and economics facilitating conservation of wildlife

Ecology studies the relationship between organisms and their environment. Economics is concerned with how scarce resources can be used to most effectively obtain what people want. The value that individuals place on alternative possibilities is usually measured by economists by the monetary amount they would be willing to pay for their supply. If, for example, individuals want to conserve a species, economists would ask how much are they willing to pay to achieve this. If that amount exceeds what it costs to conserve the species, then conserving it is economic and it ought to be conserved. However, it may not be conserved in practice because of so called market failures. Those wanting to save the species may not pay at all or only pay a portion of what they would be willing to pay to save it. Thus, those who might save it (e.g. landholders), have no economic incentive to save it because of market failures. These failures cannot always be economically eliminated. Therefore, some measures need to be adopted by governments/public bodies to protect wildlife and biodiversity generally. Economic and ecological data combined enable plans to be devised to do this in the most economic manner. Both are essential.

It should, however, be kept in mind that economics is based on a specific set of value assumptions. It is, for example, anthropocentric and the views of all count equally but only to the extent that they are willing to pay. That raises the philosophical question of whether a species should be saved if it is uneconomic to conserve it, that is, costs more to save than individuals are willing to pay.

Despite this philosophical issue, economics is valuable. Combined with ecology it can identify the most economical way of saving a species. This is not always why that appears to be correct at first sight. Even the International Union for the Conservation of Nature (IUCN) has made mistakes in that regards, as I point out in a recent article in Ecological Economics. Furthermore, economics is valuable in determining whether or not sustainable use of wildlife species is likely to result in their conservation.

The above having been said, it should also be noted that both the applications of economics and ecology involve decision-making under uncertainty. Therefore, some precaution needs to be exercised in making decisions about wildlife conservation.

 

Ronda: In a paper for the Sustainable Tourism CRC, you found the presence of birds contributed in a major way to the attraction of O’Reilly’s Rainforest Retreat and thus the amount of money brought in by tourists. You stated in this paper that the economic potential of Australian birds and insects (the latter mostly referring to glow worms) is under-rated.  In other papers you also mention tree kangaroos and other less-popularized species as examples. Would this under-rating of value, and thus presumably the potential for increased realisation of the value,  apply both to the Australian economy as a whole and also to local small businesses, including peripherals  such as neighbouring cafes, service stations etc.?

Clem: While Australia has interesting wildlife, most of its native terrestrial mammals are nocturnal. This means that many of its wildlife tourism encounters occur at night or early or late in the day. This restricts the scope for wildlife tourism. Exceptions include most birds, some insects and most marine-based wildlife. The diversity and the multitude of Australian birds as well as their bright colours and the unusual habits of many are a major tourist attraction. Apart from seeing Australian birds, wildlife tourists and recreationists mostly enjoy hearing them. They are a major wildlife tourism asset as is clear from surveys in which I was involved at O’Reillys. But it is also true elsewhere for example, at the Mareeba Tropical Wetlands Reserve. In absence of birds, it was found that the number of visitors to O’Reillys would fall substantially and therefore, earnings at the site and nearby would diminish. How much local small businesses earn from wildlife tourism varies a lot. In many (but not all) cases, tourists/visitors coming to wildlife attractions are day visitors who travel from larger urban cities a few hours away by road. Most of their spending is in fact incurred in the town centre which they use as a base rather than in the locality where the wildlife is situated. Even when money is spent locally, much of it ‘leaks out’. For example, much of the food provided at O’Reillys would come from the Gold Coast and elsewhere. However, local employment is provided.

Ronda: Increase in tourism of course needs to progress in an ecologically sustainable way.  One of the questions we plan to discuss at Workshop concerns the most effective management and legislative tools  to ensure that part of the tourism dollar goes towards protecting the resource. I imagine you have a few ideas on this . Did you want to perhaps mention an example or two of something that has worked well, perhaps contrasting with an example of something that has not really worked?

Yes, this is an important issue. Often private businesses are some NGOs utilising wildlife conservation to earn revenue from tourism have an economic incentive to invest in measures that conserve their wildlife assets. For example, a number of private landholders conserving Yellow-eyed Penguins in the Otago Peninsula in New Zealand have an incentive to do this. Also the Otago Peninsula Trust (which manages the Royal Albatross Colony at Taiaroa Head and obtains revenue from it) has an incentive to do this. However, their conservation efforts alone are insufficient to save the Yellow-eyed Penguin and the Royal Albatross from extinction. These efforts must be supplemented by other conservation measures, such as those of the Yellow-eyed Penguin Trust and government action,. There are also many other issues that need to be considered. They can be discussed later. The Mareeba Wetlands Trust provides a worthwhile example of an NGO that uses entry fees plus donations to fund wildlife conservation. In some instances, tour operators pay for access to properties for conducting wildlife tours but not all tour operators are in a position to do so because they have little or no economic surplus. There is also the difficult issue of whether money earned from wildlife tourism at a particular site should be exclusively used for conservation at this site or elsewhere.

Ronda. The majority of your papers are based on Australian examples, but you have also published on the economics wildlife tourism and wildlife conservation in Sri Lanka, New Zealand,  Antarctica and other regions. You have for instance recently published a paper where you examine the trade-offs between oil  palm plantations and orangutan conservation in Borneo. Could factoring in ecotourism centred on orangutan and other wild primates alter the predictions in any important way? And are there places in Australia where such models could be applied to threatened species and habitat clearing for various industries?

Clem: Most of the case studies of wildlife conservation and tourism in which I have been involved use principles that can be applied elsewhere. Concerning the conservation of orangutans, unfortunately, the economic costs of conserving these is high. This is because they require a very large continuous forested area of land to ensure the conservation of their minimum viable population. And the economic returns from logging the tropical forests where they occur and converting this land to oil palm production are high. The economic return from in situ wildlife (orangutans) tourism in forested areas gives Borneo and Sumatra a lower economic return than they can earn from the conversion of the forest to oil palm production, given the very large area that needs to be set aside to save the orangutan. That is not to say that efforts should not be made to save the orangutan but it is an uphill battle form an economic point of view.

On the other hand, in some cases, the landholders cost of contributing to the conservation of some wildlife species can be relatively low and sometimes the earnings from utilising wildlife for tourism is positive. As mentioned earlier, some private landholders find it profitable as a result of wildlife tourism to contribute to the conservation of Yellow-eyed Penguins on their properties on the Otago Peninsula in New Zealand, and similarly the Otago Peninsula Trust obtains positive returns from conserving Royal Albatross. Wildlife which feeds at sea and visits the shoreline or areas close to it (for nesting and breeding) seems to impose little cost on landholders and these species often become economic tourist attractions. In Australia, for example, the Mon Repos turtle rookery occupies relatively little land as does the fairy penguin colony at Phillip Bay. Both are utilised for tourism. Economic factors play a major role in determining whether wildlife tourism is able to make a major contribution to the conservation of wildlife species. It can make a critical contribution to their conservation, but it cannot always save wildlife species, including species that it would be worthwhile saving when their total economic value is taken into account

Ronda. In a 1995 paper you pointed to the need to assess economic and social aspects of SCUBA diving in heavily-used areas, to identify biological and social thresholds (including the perception of wilderness and pristine habitat by divers) and implement management plans accordingly.  Do the current plans for marine parks in Australian waters present a reasonable compromise between recreational activities, biodiversity conservation and commercial activities such as fishing and mining (including oil-drilling)? I realize this is an enormous question, which we will also discuss at the Workshop, but are you able to summarise an overall perspective and point to any urgent measures needed, including major gaps in our knowledge?

Clem: It is more than a decade now since I was involved in joint research on conservational and recreational efforts of scuba diving. Many of the managerial issues considered by Davis and myself are still relevant no doubt. Over use and inappropriate use of dive areas have negative consequences for the sustainability of the resources attracting divers. It is therefore, necessary to devise strategies to deal with these issues, for example, limit dive numbers, require a certain degree of competence from divers and these requirement may be varied by dive sites. Also in some cases, another consideration is how many divers to allow at a dive site at any one time. Some divers react negatively to large numbers whereas others do not. Davis obtained some evidence indicating that Japanese divers were more favourable to larger numbers of divers than were Australians.

As for whether Australian marine areas are being managed (developed) optimally, this is a big issue. I am sure there are areas where improvements are possible but I would need to do sustained up-to-date research on the subject before giving a considered opinion.

Ronda. Anything else you’d suggest our delegates could be mulling over in preparation for the discussions at the Workshop?

Clem: Here are a few queries which I have

i.         Should Australian governments be more active in marketing and supporting wildlife-based tourism in Australia? What measures should be taken?

ii.         How could the access of the wildlife tourism industry to Australian wildlife resources be improved? Take into account wildlife on government land (including marine areas), private land and land controlled by NGOs. Also consider land owned by Australian Aborigines and Torres Strait Islands because this is particularly important in northern Australia.

iii.         Are there views about the comparative roles that governments, private landholders and NGOs should play in conserving Australia’s wildlife species? Is there a case for establishing more trusts of the type which seems to work successfully in New Zealand?

iv.         Are there wildlife resources in Australia to which access is too limited from the point of view of the wildlife tourism industry?

v.         To what extent should entry to and practices in the wildlife tourism industry be regulated by governments?

Ronda: Many thanks for your time and your insights Clem.  WE are looking forward to some updates and some lively and productive discussions at the workshop in May.

To readers of this website – please feel free to add comments and queries in the comments section below.