Corporate Responsibility as Essential to Sustainable Tourism Yield

Tourism Review International, Vol. 11, pp. 00–00 Printed in the USA. All rights reserved.

1544-2721/07 $60.00 + .00 Copyright © 2007 Cognizant Comm. Corp. www.cognizantcommunication.com

CORPORATE RESPONSIBILITY AS ESSENTIAL TO SUSTAINABLE TOURISM YIELD

LARRY DWYER,* LEO JAGO,† MARG DEERY,† and LIZ FREDLINE‡ *School of Economics, University of New South Wales, Australia †STCRC Victoria University, Australia ‡Griffith University, Australia

In parallel with the development by other social scientists of the philosophy of corporate social responsibility (CSR) and, relatedly, triple bottom line reporting, tourism researchers have been developing indicators of tourism yield. The notion of “sustainable yield” includes the dimensions of economic, social, and environmental yield. This article first discusses the link between these developments highlighting the results of the authors’ attempts to develop financial, social, and environmental measures of tourism yield. It discusses these measures with regard to specific tourist markets. It also discusses the challenges faced in converting these independent measures into an overall measure or index of “sustainable yield” consistent with CSR reporting. Key words: Tourism yield; Corporate social responsibility; Financial yield; Environmental yield; Social yield

Introduction

tives, and understands that long-term viability depends on integrating all three objectives in decision making. Rather than regarding social and environmental objectives as costs, a sustainable enterprise seeks opportunities for profit in achieving these goals. Crucial to the achievement of sustainable tourism is corporate social responsibility (CSR). While there is no commonly accepted definition of CSR, the World Business Council for Sustainable Development (1997) states that:

For tourism development to have sustainable outcomes at the destination level, business operations must be sustainable. Sustainable development for business means adopting strategies and activities that meet the needs of the enterprise and its stakeholders today while protecting, sustaining, and enhancing the human and natural resources that will be needed in the future. The sustainable business has interdependent economic, social, and environmental objec-

Address correspondence to Larry Dwyer, School of Economics, Faculty of Business, University of New South Wales, Sydney, NSW 2052, Australia. Tel: 61 2 9385 2636; Fax: 61 2 9313 6337; E-mail: [email protected]

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DWYER ET AL. Corporate social responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large. (p. 7)

in the tourism industry, the WTTC has called upon “visionary business leaders” to lead the way in this respect. In the view of the WTTC (2002), The real challenge is to move beyond the current ad hoc approach, to evolve new patterns of Travel & Tourism business that integrate social, economic and environmental sustainability and to encourage a vast and fragmented industry to follow suit. In short, what is required is a greater leadership in corporate social responsibility within the Travel & Tourism industry. (p. 4)

This definition is somewhat narrow as it ignores the responsibility that business firms may have to the natural environment. A broader concept of CSR is advanced by the World Travel and Tourism Council (WTTC, 2002), which states that this means adopting open and transparent business practices that are based on ethical values. It means responsibly managing all aspects of operations for their impact not just on shareholders, but also on employees, communities and the environment. Ultimately, CSR is about delivering sustainable value to society at large, as well as to shareholders, for the long-term benefit of both. (p. 3)

Many large businesses worldwide include social and environmental commitments in their core mission statements. At the same time, a growing number are also adopting “triple bottom line reporting” in which social and environmental results are measured and reported next to financial results (Elkington, 1998). In fact, the ethical principles of CSR often underpin the case for triple bottom line (TBL) reporting. Both CSR and TBL can be used as a process for integrating sustainability into the business environment, creating a new measure of corporate performance of balancing traditional economic goals with social and environmental issues. Ironically, despite a substantial literature on issues relating to “sustainable tourism,” the relevance of TBL and CSR to tourism operations has gone largely unnoticed by researchers and practitioners (Dwyer, 2005). The WTTC encourages its members and the key players of the industry to show corporate social leadership and integrate social and environmental foci into its core values and operations to ensure the sustainable long-term growth and development of the travel and tourism industry. Among the benefits of CSR identified by the WTTC are the building of brand value and gaining market share with the growing number of environmentally and socially conscious tourists and other travelers and to be better positioned to assess and respond to risks and opportunities in the market. To hasten the adoption of CSR

Different types of tourists spend different amounts of money within a destination, buy different types of goods and services, and undertake different patterns of activities. They will thus have different types and levels of economic, social, and environmental impact. Moreover, the same group of tourists doing the same things may have a differential impact depending on the characteristics of the community they are visiting. Some communities are far more robust than others, while others have specific needs that tourism can help address. The impacts that particular groups of tourists have on their hosts vary depending on the interactions between at least four sets of variables (Dwyer et al., 2007) (Fig. 1): 1. 2. 3.

The characteristics of the tourists (including the volume and pattern of their spending). The characteristics of the tourism activity (what tourists do). The characteristics of the destination (its physical and social fabric).

Type of Tourist

Impacts Types of Activities

• economic • social • environmental

Type of Destination

Destination Management

Figure 1. A framework for determining the impacts of tourism on a community. Source: Dwyer et al. (2006).

CSR ESSENTIAL FOR SUSTAINABLE TOURISM YIELD 4.

Destination management practices (tourism planning, policy, regulations).

In parallel with the growing literature on CSR and TBL, there has been a resurgence of interest by tourism researchers in measuring tourism “yield,” based on recognition that access to “high-yield” tourists is an important aspect of business strategies to maintain and enhance destination tourism competitiveness (Dwyer & Forsyth, 1997; Dwyer et al., 2006; Northcote & Macbeth, 2006). Because each tourism market segment is potentially associated with economic, social, and environmental costs as a result of the mix of services utilized during their stay, on a wider perspective the notion of “yield” includes environmental and social value in addition to economic value. Thus, the concept of “sustainable yield” is understood to incorporate the costs and benefits associated with various tourism markets and can be examined according to the social, economic, and environmental impacts made by tourists (Dwyer et al., 2007). An operator seriously concerned to adopt the principles of CSR will need to consider the range of impacts of the tourists which it serves. The challenge for researchers and for the advocates of TBL reporting and CSR is to measure the economic, social, and environmental impacts associated with different types of tourists. Although the sustainable tourism yield literature has not, as yet, been linked to CSR or TBL in any comprehensive way, it does appear to be very relevant for a major problem faced by both the CSR and TBL philosophies—that is, quantifying the social and environmental effects of business activities. This article has two main aims. First, it discusses the link between the development of indicators of sustainable “yield” and the development of indicators for CSR reporting (in its more inclusive WTTC sense). This discussion is undertaken with special attention to specific inbound tourism markets. In particular, it highlights the results of the authors’ attempts to develop financial, social, and environmental measures of tourism yield. Although these measures were developed independently of research into CSR they may be seen to be very relevant to the latter notion and, indeed, provide measures that help organizations in their effort to adhere to CSR principles. Second, it discusses the challenges faced in converting these independent measures into an over-

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all measure or index of “sustainable yield” consistent with CSR reporting. Measuring Sustainable Yield Within the literature pertaining to the measurement of yield, there are a number of perspectives that can be taken. The following sections provide a brief overview of many of these perspectives including financial, environmental, and social yield. The overview of these perspectives provides the basis for discussion of the development of yield indicators. Financial Yield Advocates of TBL reporting and the adoption of CSR acknowledge that an important objective of firms is to make profits. Financial yield can be estimated in several ways. One method is to undertake surveys of the profitability of individual firms. It would be an enormous task to estimate the profitability of each of the thousands of firms comprising the tourism industry, the substantial majority of which do not publish annual reports and would regard such information as confidential. Another method is to employ an economic model to estimate the economic impacts of tourist visitation. For this purpose the authors used MR2NSW, a computable general equilibrium (CGE) model developed by the STCRC Centre for Tourism Economics and Policy Research. The advantages of CGE models over standard input–output models is that they allow for factor constraints, exchange rate changes, and government fiscal policies, each of which affects the size of economic impacts (Dwyer, Forsyth, & Spurr, 2004). Details of the model used can be found in Dwyer, Forsyth, Spurr, and Van Ho (2005). In order to examine aspects of yield, this article has used data on specific inbound tourism markets collected by Tourism Australia in its International Visitor Survey (IVS). This survey is administered via personal interview in the departure lounges of all Australia’s international airports. The interviews take place throughout the year and the sample is selected using a systematic stratified quota sampling technique. In the years reported in this article the sample sizes was approximately 20,000 per annum. The IVS collects data on a range of variables including number of nights spent in different locations,

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DWYER ET AL.

purpose of visit, accommodation and transport used, activities undertaken, and demographics. It also collects detailed tourist expenditure. Some indicators of expenditure for various niche markets are provided in Table 1 and the specific markets used as the focus for the measurement of yield are examined in the light of financial, environmental, and social yield. The first two columns of Table 1 shows total expenditure per trip and expenditure per visitor night, from a selected group of emerging special interest and demographic inbound markets to Australia. These markets were selected by the authors in acknowledgement of their importance to Australian inbound tourism. The expenditure data, which were purchased from Tourism Australia (2004), represent the average expenditure from each market over the 3-year period 2001–1002 to 2003–2004. There are a variety of economic yield measures that can be estimated by feeding the expenditure data into the MR2NSW model. These include the effects of tourism expenditure on economy-wide gross value added, gross operating surplus (GOS), and employment associated with each visitor market (Dwyer et al., 2006, 2007). The financial bottom line of operators, consistent with both CSR and TBL, is best approximated by the GOS measure. GOS by industry is directly derived from industry gross value added, which is the value of production minus the costs of material inputs used in the production. The yield rate represents the GOS due to sales to the particular niche market as

a percentage of tourism consumption in the niche market. Of the selected niche markets, the greatest generators of overall expenditure per trip are Backpackers followed by Malaysian repeaters and German holidaymakers. This depends on numbers of visitors, expenditure per day, and length of stay. The smallest expenditure injections per trip are associated with Japanese honeymooners, New Zealand matures, and Malaysian matures. The highest expenditure per visitor night is associated with Japanese honeymooners, Convention visitors, and Business travelers. Each of these markets is well above the average of $94 for all tourists for that period. The smallest expenditure per night is associated with Malaysian matures, Backpackers, New Zealand matures ,and UK repeaters. Table 1 also provides information on GOS as a percentage of the amount of expenditure injected from the selected niche markets. Eight of the selected markets, led by Canadian matures, New Zealand matures, and UK repeaters (8.74%), have a rate of yield higher than the average for all tourism to Australia, with Malaysian repeaters (4.81%), Malaysian first timers (5.20%), Hong Kong first timers (5.36%), and Convention visitors (6.79%) generating a below average yield rate of 7.16%. This information is displayed in Figure 2a. The greatest generator of economy-wide GOS per trip is Backpackers, followed by German

Table 1 Expenditure and Financial Yield Associated With Special Inbound Tourism Markets Niche Market Japanese Honeymooners Convention visitors German holidaymakers Backpackers NZ mature Malaysia first timers UK repeat Business Canadian mature Malaysian repeat Malaysian mature Hong Kong first timers All inbound visitors

Expenditure per Trip ($)

Expenditure per Visitor Night ($)

Economy-Wide GOS per Trip ($)

Real GOS/ Visitor Night ($)

Yield Rate (%)

Number of Jobs/ Million ($) Spent

1198 1602 3344 5086 1205 1806 2626 2030 2246 3576 1426 2381 2569

215 198 91 76 78 106 78 172 86 117 73 115 94

97.45 108.72 293.78 389.81 105.38 93.83 229.66 261.23 292.21 172.02 109.02 127.54 184.03

17.46 13.47 7.24 5.86 6.83 5.52 6.79 14.56 7.48 5.63 5.69 6.13 6.71

8.13 6.79 8.46 8.45 8.74 5.20 8.74 8.45 8.75 4.81 7.64 5.36 7.16

4.56 6.99 5.97 6.08 6.45 6.12 6.19 7.32 6.35 6.00 5.65 5.71 6.13

Results from author simulations using M2RNSW model, tourist expenditure data from Tourism Australia (2004), and averaged over the 3 years 2001/2002–2003/2004.

CSR ESSENTIAL FOR SUSTAINABLE TOURISM YIELD holidaymakers, and Business travelers. The smallest contribution to economy-wide GOS comes from Malaysian first timers, Japanese honeymooners, and New Zealand matures. The greatest contributions to GOS per visitor night come from Japanese honeymooners, Business travelers, and Convention visitors, which were well above the average for all visitors ($6.71), while the smallest contributions come from Malaysian visitors generally. This information is displayed in Figure 2b. The GOS financial yield measures capture the financial objective consistent with CSR and TBL reporting. It must be acknowledged that use of an average measure glosses over differences in profitability between operators in different segments of the tourism industry and different operators in the same or different locations. However, there is a lack of data on the profitability of different tourism market segments and industry sectors. This limits the application of financial yield measures at the level of the enterprise as opposed to the more aggregate industry level. A major advantage of the “aggregative” approach to estimating yield is that the data requirements to estimate the GOS for each enterprise in any destination are substantial and would require intensive study. While the GOS measures of yield serve as a good proxy for operator “financial bottom line,” they provide no information on the other two components

Niche market

(a)

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of “sustainable yield.” Hence, the attempt was made to quantify the environmental and social impacts of tourists from the same special niche markets. Environmental Yield Although the development of indicators of sustainable tourism at the destination level is progressing (Moore, Smith, & Newsome, 2003), we know of no previous attempts to develop measures of environmental yield for different tourist market segments. Different types of tourists tend to undertake different patterns of activities and thus generate different types and levels of impact. Using the same special niche markets as identified in the earlier section, the authors have developed preliminary measures of environmental yield per visit, per visitor night, and per dollar spent (Dwyer et al., 2006; Lundie, Dwyer, & Forsyth, in press). The direct (on-site) requirements of different tourists are assessed, while all remaining higher order requirements (for materials extraction, manufacturing, and services) are covered by input–output analysis (Lenzen 1998, 2001; Lenzen & Murray, 2001). The approach involves quantifying the environmental impacts for four indicators each important to Australia [i.e., primary energy (GJ), greenhouse gas emissions (kg CO2-equivalents), water usage (kL), and ecological footprint (ha)], based on

(b) Japanese honeymooners

Canadian mature (+55) UK repeaters

Business

NZ mature (+55)

Convention

German Holiday Makers

Canadian mature (+55)

Business

German holiday makers

Japanese honeymooners

NZ mature (+55)

Backpackers

UK repeaters

Malaysian mature (+55)

Hong Kong first timers

Convention

Backpackers

Hong Kong first timers

Malaysian mature (+55)

Average yield ( 7.16% )

Malaysia first timers Malaysian repeaters

0

1

2

3

4

5

6

GOS / expenditure (%)

7

8

Average $6 71

Malaysian repeaters Malaysia first timers

9

0

6 12 Real GOS / visitor night (AU$)

Figure 2. (a) GOS as proportion of expenditure by niche market. (b) Real GOS per visitor night by niche market.

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6.0 4.1 5.8 5.7 5.7 6.7 4.7 4.6 6.6 6.7 5.8 9.9 m2/$

5.7

9.23 0.09 1.81 7.0 0.06 1.4 10.4 0.09 1.9 8.0 0.07 1.5 8.1 0.07 1.5 10.1 0.10 2.0 9.6 0.10 2.0 9.8 0.09 1.8 9.4 0.08 1.7 10.1 0.08 2.1

Unit

MJ/$ kL/$ kg CO2/$

Energy Water use Greenhouse gas emissions Ecological footprint

Malaysian Business Japanese Convention Honeymooners Environmental Indicators

10.1 0.11 2.1

8.7 0.09 1.8

9.4 0.09 1.9

Holidaymakers Malaysian Backpackers German UK Repeat Mature Canadian Timers Hong Kong First Timers Malaysian NZ First Mature Mature

the type of accommodation associated with different tourist markets and the environmental effects of the types of goods and services purchased by the tourists. Further details of the approach used may be found in Lundie et al. (in press). Table 2 summarizes the environmental results per dollar spent by each of the tourism niche markets. Figures 3(a–d) displays the results. Each dollar spent requires roughly 9 MJ of primary energy, 0.1 kL of water, causes 1.81 kg of CO2eq. emissions, and an ecological footprint of 0.6 m2. However, there are significant differences between the different types of tourist. Above average energy use per dollar spend was associated with German holidaymakers, Canadian matures, Japanese honeymooners, New Zealand matures, Business travelers, Malaysian matures, Backpackers, and Convention visitors. With respect to water usage, above average consumption was associated with Japanese honeymooners, New Zealand mature, Malaysian matures, Backpackers, UK repeaters, German holidaymakers, and Canadian matures. Each of these markets, excepting Business travelers, was also associated with above average greenhouse gas emissions. Regarding ecological footprint, markets above average were Japanese honeymooners, Canadian, Malaysian, and New Zealand matures. For all four measures, below average impact was associated with Hong Kong and Malaysian first timers and Malaysian repeaters. From Table 1, the high financial yield markets are those with average yield above that for all tourists to Australia ($6.71). The low environmental yield markets are those that are associated with lower than average environmental impacts on any of the four environmental measures (Table 2). From a firm’s financial viewpoint, the preferred market segments will be those that generate higher expenditure per night. From an environmental viewpoint, the preferred markets are those that involve less energy and water use, fewer greenhouse gas emissions, and have a lower ecological footprint per night. These two objectives may not be compatible and operators may need to make trade-offs between them in the quest to promote sustainable tourism in their operations. The approach taken here represents an important step towards measuring “sustainable yield” consistently with CSR and TBL reporting. The use of a dollar of expenditure as the numeraire in estimating environmental indicators allows the intensities to be

Repeat Average

DWYER ET AL.

Table 2 Environmental Indicator Results per Dollar Spent by Tourists

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CSR ESSENTIAL FOR SUSTAINABLE TOURISM YIELD

German holidayers

(b)Canadian mature (+55)

Canadian mature (+55)

NZ mature (+55)

Japanese honeymooners

Malaysian mature (+55)

NZ mature (+55)

Back-packers

Business travelers

German holidayers

Niche Market

(a)

Malaysian mature (+55)

UK repeaters

Backpackers

Business travelers

Convention

Convention

UK repeaters

Japanese honeymooners

7

Hong Kong first timers

Malaysian first timers

Average 9.2 MJ/$)

Hong Kong first timers Malaysian repeaters 0

2

4

6

8

Malaysian first timers

Average 0.09 kL/$

Malaysian repeaters 0

10

0.02

Energy use (MJ/$)

0.04

0.06

0.08

0.1

0.12

Water use (kL/$)

(c)

(d) Japanese honeymooners

Japanese honeymooners

Canadian mature (+55)

NZ mature (+55)

Malaysian mature (+55)

Malaysian mature (+55)

NZ mature (+55)

Back-packers

German holidayers

German holidayers

Business travelers

UK repeaters

Backpackers

Business travelers

UK repeaters

Convention

Convention

Hong Kong first timers

Hong Kong first timers

Niche Market

Canadian mature (+55)

Average 1.8 kg CO2/$

Malaysian first timers Malaysian repeaters 0

0.5

1

1.5

2

2.5

Greenhouse gas emissions (kg CO2/$)

Average

Malaysian first timers

2

6 m /$ Malaysian repeaters 0

2

4

6

8

10

2

Ecological footprint impact (m /$)

Figure 3. (a) Energy use per dollar visitor expenditure. (b) Water use per dollar visitor expenditure. (c) Greenhouse gas emissions per dollar visitor expenditure. (d) Ecological footprint per dollar visitor expenditure.

applied to the financial accounts, and the trade-offs between economic and environmental impacts to be estimated (Lundie et al., in press). The approach is superior to extant approaches in that it attempts to evaluate rather than merely list the environmental effects of tourism for the entire supply chain and to

set these alongside standard economic yield measures. That said, the approach focuses on the impacts of tourist behavior to the neglect of other environmental performance variables. A more comprehensive accounting of the environmental impacts of tourism would, for example, include the

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DWYER ET AL.

adverse impacts of development which, in some cases, are irreversible. It is important to recognize also that these input– output analysis-based measures of the environmental effects of tourism are the environmental impacts directly and indirectly associated with the tourism industry output. As such, they do not measure the net environmental impacts on the economy as a whole, allowing for interindustry and interactive effects as CGE-based models do. Thus, in highlighting trade-offs, the environmental effects of tourists are best compared with the direct expenditure measures of economic yield as has been done above. However, other sectors of the economy will be positively or negatively affected by changes in tourism expenditure, and the resulting changes in the outputs of these sectors will have environmental impacts. Thus, the overall environmental impacts on a destination based on input–output analysis could be quite different from those calculated using a CGE model. Measuring the economy-wide or countrywide environmental impacts is thus also an important area for further research. Social Yield Various social indicators have been proposed in the CSR and TBL literature. Social performance addresses interactions between an organization and its community. It includes such issues as: employment generation, employee relations, health and safety of workers, ratio of wages to cost of living, nondiscrimination, respect for indigenous rights, impact of community involvement and customer satisfaction, heritage conservation, community and social impact, fair compensation, equal opportunity, avoidance of bribery and corruption, and use of child labor (Norman & MacDonald, 2003; Swarbrooke, 1999). For present purposes, social yield can be measured in different ways, including employment generated and impacts of tourist behavior. From a CSR perspective, it is the social yield that is perhaps most relevant. Using the WTTC definition provided in the introduction, CRS, in the tourism context, is concerned with the impact of tourism “on employees, communities and the environment” and the first two of these are discussed below. Social Yield as Employment Generated. The final column of Table 1 shows that, in terms of jobs

created or maintained per million dollars expenditure, the niche markets above the average (6.13 jobs) were: Business visitors, Convention visitors, and New Zealand matures. This information is displayed in Figure 4. Employment yield as a proxy for social yield can be estimated in terms of the employment generated in the economy as a whole per visitor-day (e.g., FTE per thousand visitor days) or, more typically, by employment per million dollars of tourist consumption. In terms of jobs created or maintained per million dollars expenditure, the niche markets above the average (6.13 jobs) were: Business, Convention visitors, and from New Zealand matures, while below average job creation per million dollars is associated with Japanese honeymooners, Malaysian matures, Hong Kong first timers, and Malaysian repeats. Social Impacts of Tourist Behavior. Our understanding of measures of social yield lags behind economic and environmental measures because social impact assessment techniques have only relatively recently attracted attention and are generally less developed at this stage. Researchers have examined the social impacts of tourism on communities from a range of theoretical and methodological perspectives (Easterling, 2004). As exhibited in Figure 1, the impacts that particular groups of tourists have on their hosts vary with four sets of variables: characteristics of the tourists; characteristics of the tourism activity; characteristics of the destination; and destination management practices (Butler, 1980; Faulkner & Tideswell, 1997). Building upon this work, the authors have undertaken some preliminary steps to assess the social component of sustainable tourism yield. The technique involves five steps: (i) profile destinations based on their characteristics; (ii) identify the characteristics that define the key market segments of tourists attracted to each destination; (iii) identify the types of activities that each market segment undertakes; (iv) identify the social impacts associated with various activities and travel behaviors; (v) consider the management practices of each destination and how effective they are in promoting positive impacts and ameliorating negative impacts associated with the tourists and their activities. In the first step, the robustness of the destination is evaluated using a checklist of variables. Destina-

CSR ESSENTIAL FOR SUSTAINABLE TOURISM YIELD

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Business Convention NZ mature (+55)

Niche Market

Canadian mature (+55) UK repeaters Malaysia first timers Backpackers Malaysian repeaters

Average 6.13

German holiday makers Hong Kong first timers Malaysian mature (+55) Japanese honeymooners 0

1

2

3

4

5

6

7

8

Number of jobs / AU$ million expenditure

Figure 4. Jobs created/maintained per million dollars expenditure by inbound market.

tion robustness can be discussed in terms of community size, stage of tourism development, the ratio of tourists to residents, and the environmental and cultural vulnerability, among others. This identifies communities that are likely to be affected differentially by tourism; for example, a smaller community in a more remote location that has few alternative industrial bases is likely to be more substantially affected by tourism than a larger community with a range of industries. The key market segments for each destination then need to be identified. These segments can then be analyzed in terms of the types of travel behaviors they undertake. Travel behaviors would include the activities they engage in, the types of accommodation and transport they use, and the time they spend in a destination. In Australia, some data on this are collected in the IVS (Tourism Australia, 2004). Table 3 provides a listing of activities for tourists from the 11 special niche markets where participation rates exceed the average for all Australian inbound tourism. Table 3 indicates that, for example, Japanese honeymooners and Backpackers are much more likely to go snorkeling or scuba diving than are Malaysian repeaters or New Zealand matures. On the other hand, Canadian matures are more likely to

seek out heritage tourism experiences than Hong Kong first timers. The next step involves linking specific activities to social impacts. In examining the social impact of these groups, it may be found that an influx of a particular type of tourist changes the character of the destination. There are no existing data so primary data collection is required from expert stakeholders. A Delphi study is proposed as the most appropriate data collection tool for this stage. Finally, destination management practices need to be taken into account as good management can be effective in ameliorating negative social impact and promoting social benefits. The final step—putting a monetary value on social impacts, additional to employment effects—remains elusive. Ultimately, it may be possible to identify a dollar value of the social yield of various market segments, but substantial research is required prior to this outcome being realized. At the present time the proposed method is untested and further research is required to ascertain its ease of use in practical application. However, the approach does represent some progress toward identifying the social impacts of visitors and comparing these with the economic and environmental impacts.

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DWYER ET AL.

Table 3 Activities in Australia Where Participation Rates Are Above Average: Selected Inbound Niche Markets Niche Market Japanese honeymooners Convention visitors Backpackers NZ mature Malaysia first timers UK repeat Business Canadian mature Malaysian repeat Malaysian mature Hong Kong first timers

Activities in Australia Snorkeling; Visit amusement or theme parks; Tourist trains; Go on guided tours or excursions; Scuba diving Visit casinos; Visit history or heritage buildings or monuments Scuba diving; Visit the outback; Visit an Aboriginal site/community; Whale/dolphin watching in the ocean; Experience Aboriginal art/craft and cultural displays Visit art/craft workshops/studios; Visit pubs, clubs, and discos; Play golf Visit farms; Visit amusement or theme parks; Visit wineries; Go whale or dolphin watching in the ocean; Visit wildlife parks/zoos/aquariums Attend an organized sporting event; Visit art/craft workshops/studios; Go whale/dolphin watching in the ocean; Visit wineries; Go fishing Business travelers have below average participation rates for all activities Visit an Aboriginal site/community; Experience Aboriginal art/craft and cultural displays; Visit the outback; Visit art/craft workshops/studios Visit farms; Play golf; Visit casinos; Go fishing; Go to markets (e.g., street, arts & crafts) Play golf; Visit farms; Go to markets (e.g., street, arts & crafts); Go shopping (for pleasure) Visit farms; Visit amusement or theme parks; Visit casinos; Go fishing; Tourist trains

Source: Authors based on IVS (Tourism Australia, 2004).

As such it is consistent with CSR and TBL reporting objectives. As no empirical data have yet been collected on the social impacts of specific tourist segments, a discussion is provided below of the potential impacts associated with certain market segments. This is provided in order to show how knowledge of the social yield of specific groups would be useful, in combination with measures of economic and environmental yield, in order to make judgments about the overall value in targeting specific segments. Social Impacts of Specific Market Segments. The financial yield measures presented earlier highlighted the importance of certain markets in terms of the financial returns they bring to the tourism sector. For example, the business segment is valuable in terms of both overall GOS and average daily GOS. Japanese honeymooners, who tend to spend large amounts over a relatively short stay, are very important in terms of their average daily GOS, while backpackers, who stay much longer but spend considerably less per day, are seen as low in terms of financial yield. However, in considering the sustainable yield of these market segments, it is important to consider the varying social impacts they may have on the community. Business travelers contribute more than any other segment in terms of the employment they create. However, business tourists may also have negative social impacts. They tend to use car-based trans-

port, particularly taxis, to a far greater extent than other tourists, and use public transport far less often due to the time pressures under which they operate. They therefore potentially contribute more to traffic congestion than do other market segments. Also, business tourists are far more likely to stay in capital cities and not travel to regional areas of Australia. For this reason, they do not distribute the benefits of tourism earnings or employment to the communities that need them most. Because Business tourists also have lower levels of visitation to tourist attractions, they do not support the development of tourist infrastructure to the same extent as other groups, although, on the other hand, they do not contribute to overcrowding at these facilities either. Japanese honeymooners are an interesting group because they spend very large amounts of money over a relatively short period of time (average 5.6 days). However, they do not contribute strongly to employment in the destination, a consequence of the capital intensity and import leakages associated with the types of goods and services that they purchase. Moreover, Japanese visitors are culturally distant to Australians and this has been identified as a potential cause of negative social outcomes such as cultural misunderstanding and even loss of local identity for destinations that try so hard to cater to the needs of tourists that the needs of locals are forgotten. Certainly in some destinations, concerns have

CSR ESSENTIAL FOR SUSTAINABLE TOURISM YIELD been raised about the extent of Japanese signage and businesses catering solely to Japanese tourists. As shown in Table 3, Japanese honeymooners have a higher tendency to engage in some of the adventure type activities, including snorkeling and scuba diving, and they also love swimming at the beach. This is probably because they have limited to opportunities to experience these activities at home. However, there have been a number of cases of Japanese tourists drowning in Australia because they are unused to swimming at surf beaches. Australian Surf Life Saving organizations have invested heavily in trying to overcome this problem, which represents an additional cost of hosting these guests. Backpackers are generally regarded as low-yield tourists because they spend relatively little each day. However, because they stay an average of nearly 67 days, their total expenditure is high. These tourists tend to interact more with the local communities in which they stay, and they are far more likely than most other groups to travel to regional areas, and therefore deliver the economic benefits of tourism more broadly. Many backpackers take advantage of working holidaymaker visas to earn money during their stay in order to further finance their trip. In times of high unemployment, this might be considered a negative social impact, but in the current Australian economic climate, their contribution to the labor market is valued. As identified in Figure 1, there are a great number of variables underpinning tourism’s impacts to consider, and the process is likely to be dynamic. One of the aims in developing a framework through which to consider social yield is to assist in identifying and targeting the market segments most likely to bring the highest social benefit/cost ratio, but it can also be used to identify potential problems before they can have substantial negative effect and introduce appropriate destination management strategies. Conclusions In view of the saying “What isn’t measured, isn’t managed,” it is essential that firms adopting CSR and TBL continue the attempt to quantify the social and environmental as well as the economic impacts of their operations. This article has explored the potential role that the research literature on tourism

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yield can play in the development of indicators for CSR reporting. Although much of the work is preliminary, the measures developed in this article go some way towards quantifying the notion of “sustainable yield.” They also are capable of providing guidance to firms as to what markets they should target in order to promote “sustainable” tourism development. Neither CSR nor TBL is about compartmentalizing activities/projects in the “three bottom lines,” but rather is about integrating core principles that reflect a commitment to a sustainable organization and society. The exciting challenge for organizations is to now discover new ways to join the economic, environmental, and social bottom lines together. At this time, no method has been developed for “merging” these impacts into a single measure of sustainability. As indicated, there are particular problems of converting social impacts into dollar amounts. The subjectivity of perception of many social impacts precludes their quantification in many cases. While the environmental impacts, at least in principle, seem more amenable to quantitative analysis, the assignment of dollar values to these impacts depends on assumptions that can be the subject of debate. Despite the present difficulty of combining economic, social, and environmental measures into a single “index of sustainability,” the measures are valuable in allowing tourism operators to better understand the “trade-offs” that may need to be made in tourism development and marketing activity. For example, they allow an operator to “weigh up” the potential financial gains from developing some niche market with the potential social and environmental costs that will be imposed on the destination by additional tourism from that market. None of this implies that the achievement of sustainable tourism is solely the responsibility of operators. As indicated above, destination management practices including tourism planning and policy and regulations set the context for sustainable operations and must be undertaken in parallel with operator focus on visitor impacts. Nevertheless, the results do provide operators with important information on the different impacts associated with different visitor markets. The results can help to develop strategies to achieve highest sustainable yield, and are thus consistent with the philosophy of CSR and TBL report-

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ing. Achieving long-term sustainable and profitable tourism products would secure a competitive advantage for any tourist destination with benefits to all tourism stakeholders. The results improve the capacity for management decision making by tourism stakeholders to promote “high-yield” sustainable tourism that enhances competitiveness in the tourism industry. Because the ultimate objective of achieving destination competitiveness is to improve the quality of life of residents, the above approaches to quantifying the different dimensions of sustainable yield can help to achieve this result. References Butler, R. W. (1980). The concept of a tourist area cycle of evolution: Implications for the management of resources. Canadian Geographer, 24, 5–12. Dwyer, L. (2005). Relevance of triple bottom line reporting to achievement of sustainable tourism: A scoping study. Tourism Review International, 9(1), 79–94. Dwyer, L., & Forsyth, P. (1997). Measuring the benefits & yield from foreign tourism. International Journal of Social Economics, 223–236. Dwyer, L., Forsyth, P., Fredline, L., Jago, L., Deery, M., & Lundie, S. (2006, December). Concepts of tourism yield and their measurement. STCRC Technical Report, Gold Coast. Dwyer, L., Forsyth, P., Fredline, L., Jago, L., Deery, M., & Lundie, S. (2007). Yield measures for Australia’s special interest inbound tourism markets. Tourism Economics, 13(3), 421–440. Dwyer, L., Forsyth, P., & Spurr, R. (2004). Evaluating tourism’s economic effects: New and old approaches. Tourism Management, 25, 307–317. Dwyer, L., Forsyth, P., Spurr, R., & Ho, T. (February, 2005). Economic impacts and benefits of tourism in Australia: A general equilibrium approach. STCRC Sustainable Tourism Technical Report.

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