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28 Mar, 2014

FREE Download: OECD report asserts balance is critical for Travel & Tourism policy-making

Exclusive report by Imtiaz Muqbil

A major report on travel & tourism policies in the OECD countries abounds with distinct references to the importance of balance in policy-making to manage everything from taxation to facilitation, branding to customer profiles, sustainability to seasonality. Released at ITB Berlin earlier this month, the report proves 100% accurate the February 1999 forecast by Travel Impact Newswire Executive Editor Imtiaz Muqbil that “The travel & tourism buzzword of the 21st century will be the search for balance.” (Click here to download the PATA publication containing this forecast).

The fourth edition of OECD Tourism Trends and Policies 2014, undertaken in partnership with the European Commission, highlights key reforms in tourism organisation and governance and provides a comprehensive analysis of tourism trends and policy developments in 48 OECD and partner countries. Writing in the foreword, OECD Secretary-General Angel Gurría, says, “It focuses on issues high on the national and international policy agenda, including travel facilitation and visa issues, and the evolving relationship between taxation and tourism.”

Says the preface, “Tourism has demonstrated remarkable resilience. The challenges posed by the global crisis, political turmoil, natural disasters and rising oil prices have not prevented tourism from becoming one of the largest and fastest growing sectors in the world economy. G20 countries also recognise it as a vehicle for job creation, economic growth and development.”

It adds, “International tourist arrivals are projected to surpass 1.8 billion by 2030, on the back of rapid growth in emerging tourism economies. Changing global market trends and travel behaviours offer both challenges and opportunities for OECD countries. Active and innovative policies are essential for tourism to remain a competitive sector and grow in the years to come – however, the way these policies are developed has changed profoundly as the range of policies influencing, and influenced by, tourism become more closely integrated.”

Two of its key areas of discussion are taxation and facilitation. The report notes that the potential for visa and travel facilitation policies to boost economies is the focus of much attention. Realising this potential requires a strategic, integrated approach with greater coherence among tourism and other policy domains, the report says. It also provides comparative data on taxation in tourism with new information on how tourism-related taxes support infrastructure and tourism development, including budgets related to marketing and promotion, safety and security, and environmental protection.

The Preface  says, “This publication remains an international reference and benchmark on how effectively countries are supporting competitiveness, innovation and sustainable tourism growth.”

The primary references to the word balance are in the context of measuring the direct contribution of tourism to national economies and the “Balance of Payments” factor. But a more careful persual of the report unearths key mentions of equally significant importance in citing the need for BALANCE in innovative policy-making and national agendas. One summary reference in the report says: “Rules and regulations are based on the unique set of policy priorities in each country, nationally and internationally. Policy makers are faced with a number of challenges when seeking to find the appropriate BALANCE between the various policy considerations, in order to develop a coherent mix of policies which deliver the best possible outcome overall.”

Here are some of the key references to balance and their context:


The report contains an exhaustive assessment of the relationship between taxation and tourism flows. It weighs both sides, accompanied by a comprehensive listing of the many different types of taxes in travel & tourism industry. The bottom-line conclusion is that tourism taxation has both plus and minus points, within the many different contexts in which taxes are applied.

What’s missing? The report suggests, “The policy environment would benefit from more detailed monitoring, evaluation and analysis of the impacts of existing taxes and incentives to ensure that policy makers have the necessary tools to implement evidence-based policies to support the long-term sustainable growth of the tourism industry. This combined with a more collaborative approach towards tourism taxation could also assist governments to better BALANCE the need to raise general tax revenue and fund key visitor facilities and services, against the concerns expressed by industry.


This is another key focus area in the OECD report. Various references make clear the need for balance. For example:

<> Facilitating travel is intrinsically linked with wider governance issues, as it involves finding the appropriate BALANCE between a range of economic, political and social considerations related to cross-border travel. Realising the potential for travel facilitation to boost international tourism requires a greater coherence between tourism and other policy domains, accompanied by appropriate support policies, to generate significant positive impacts on growth and job creation.

<> BALANCING security and freedom of travel: Governments must therefore consider whether existing policies and processes are suitable and sustainable, as increasing demand for travel is putting pressure on existing travel facilitation systems. The relationship between travel facilitation and travel flows is complex and the issue is more than a simple trade-off between travel mobility and security. Governments must find the appropriate BALANCE between policy considerations, which takes into account the impact of such restrictions on the overall goals of government policy, including the potential for such policies to inhibit economic growth and recovery.

<> The importance of striking a BALANCE between security and adequate border protection on the one hand and ease of travel on the other is being increasingly recognised and has been acknowledged by G20 Ministers at a meeting in Mexico in May 2012. Together with recognition of the need to facilitate the growth in tourism from new and emerging markets, this has led to visa liberalisation and innovation in entry policies at national and transnational levels.

<> Work by the OECD on digital identity management has highlighted that while electronic identity cards and ePassports can ease verification and authentication, they also require careful BALANCING of these benefits against security, privacy, costs, customer experience and other considerations.

<> Building the technological infrastructure also requires considerable investment and proper capacity planning to ensure the system is stable, usable, accessible and scaleable. Countries considering introducing eVisa systems, for example, need to BALANCE financial and other costs with available resources. Other technical issues include client servicing and providing support in a 24/7 environment.

<> Travel facilitation initiatives are similarly tailored and are based on BALANCING a unique set of economic, political and social considerations. Governments have implemented a variety of approaches, demonstrating the capacity of countries to take steps to facilitate legitimate travel within the context of existing policy, as well as through policy development.


Sustainability is a third key area where balance is mentioned. For example:

<> Sustainable growth has three elements – economic, environmental and social – and requires an appropriate BALANCE between the three.

<> In Portugal, the Environmental Impact Certificate tax was initially introduced in Portugal in 2000 with the purpose of promoting sustainable development, by taking a BALANCED approach to the management of natural resources in order to maintain environmental quality.

<> In Bulgaria, the focus is on the sustainable and BALANCED utilisation of cultural and natural resources. The development of cultural and historical tourism in Bulgaria is important in increasing the competitiveness of the entire sector and the effectiveness of regional tourism products through the sustainable and BALANCED utilisation of cultural and natural resources,” the report says.


<> In Turkey, the national tourism policy focuses on “promoting a BALANCED distribution of tourism across Turkey’s different regions, as well as ensuring BALANCED development.”

<> In Croatia, the focus of balance is also geographical. “The Strategy for Croatian Tourism Development to 2020 is designed to encourage a more BALANCED tourism development across the country in order to achieve EUR 7 billion of investment; increase foreign tourism expenditure by EUR 6 billion; grow the tourism sector workforce by 30 000 (20 000 jobs directly with the industry and 10 000 indirect jobs); increase bed capacity by 100 000; and spread tourism more equitably through the year.”

<> Wallonia-Brussels Tourism (WBT) pursues the same “balanced distribution” policy, as well as two other important sectors. “One policy objective is to develop innovation and improve the BALANCE between supply and demand in the various markets.” Another policy objective is to promote an internal balance. Says the report, “The ministry attaches great importance to the favourable development of the tourism labour market and to continuously improving the image, the competitiveness and the work-life BALANCE of jobs in tourism.”

<> In Latvia, policies are being designed to better BALANCE the seasonality factor in tourism flows. One sector identified is that of medical/wellness tourism. “Tourists on health-related trips tend to stay longer, and their choice of travel departure is not directly related to seasons,” the report says.

<> Balance can also be applied in branding, thus: “In a number of mature tourism destinations (Spain, the United Kingdom, the United States), countries are also seeking to strike a BALANCE between the role and value of national and regional brands on the one hand and promotional activities by industry service providers on the other to optimise marketing effectiveness.”

<> Finally, the report also refers to the shifting “balance of power” amongst buyers: “Digital technologies and social media are impacting on tourism in significant and sometimes unanticipated ways. The Internet has clearly established itself as the main platform to buy travel, accounting for 54% of bookings – well ahead of travel agencies, which have slipped back to 24% (IPK). More widespread access to the Internet across the globe has shifted the BALANCE of power from the providers of tourism services to consumers and facilitated a move to self-guided holidays and independent travel, even in more remote tourist regions.”


Collectively, these “nuggets” of gold mined from the OECD report provide a comprehensive framework for the application of the philosophy of balance industry-wide. If they are used in drafting national, regional and local tourism development plans, the travel & tourism industry can lead the world in drafting a new socio-cultural-economic-ecological order and set the standards for others business sectors to follow.

CLICK here to download the OECD report.