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Regulation Catches up with Innovation: The Case of Short-Term Rentals

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The World Tourism Organization (UNWTO) has published the first systematic overview of how both national governments and local authorities are addressing and managing new business models in the accommodation industry. The so-called “sharing economy” has experienced significant growth over recent years and is poised to outpace the growth of traditional accommodation. Drawing on case studies from around the world, “New Business Models in the Accommodation Industry” analyses existing rules and regulations for the sector.

Drawing on 21 global case studies, the new UNWTO report notes that most of the measures implemented refer to areas of ‘fair competition’ and ‘consumer protection’, specifically measures related to taxation and registration and permits In comparison, measures relating to ‘planning and sustainability’, are less commonplace. At the same time, the report highlights the challenges destinations face in implementing rules and regulations, with a lack of local capacity and a lack of clarity over whose responsibility it is to monitor and regulate short-term tourist accommodation.

Commenting, UNWTO Secretary-General Zurab Pololikashvili said: “There are significantly more regulations than we thought and it is encouraging to see destinations taking the initiative. However, many challenges remain, including the practical implementation of rules and regulations relating to the short-term tourist rental market. Good governance and effective cooperation between the public and private sectors are key to successfully meeting these challenges.”

Case studies analysed for the “New Business Models in the Accommodation Industry” include European countries such as the Netherlands, Italy and Spain, which are home to some of the world’s most popular cities for tourists, as well as countries in the Americas such as Mexico and from across Asia as is the case of Japan.

The report was produced with the support of the Secretariat of Tourism of Mexico.

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Tourism Can Be Key Part of New EU Green Deal

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The Green Deal will form an integral part of the Commission’s strategy to implement the UN’s 2030 Agenda and its Sustainable Development Goals and pledges to make Europe the first carbon-neutral continent by 2050. Recognizing the role that tourism will play in achieving this, UNWTO used the occasion of FITUR to provide a platform for EU and non-EU stakeholders, including representatives from both the public and private sectors. Established at the start of a new five-year period for the European Commission, this platform will advocate for tourism to be a central part of the Green Deal.

UNWTO Secretary-General Zurab Pololikashvili said: “The tourism sector has an obligation to use its unique power to lead the response to the climate emergency and ensure responsible growth. UNWTO is committed to accelerating progress towards low carbon emission tourism, and I am delighted to see that, in this regard, UNWTO and the European Commission are on the same page.

The Secretary of State for Tourism of Spain, the country that hosts UNWTO, Isabel Oliver, added: “A more prominent presence in the political structure of the European Union would allow the importance of tourism to be put on the agenda as a lever to achieve the challenges that European policy has identified, including the Green Deal.

The FITUR event also provided a platform for Croatia, which currently holds the Presidency of the Council of the European Union, to present its priorities for tourism. Frano Matusic, Secretary of State for Tourism of Croatia, addressed his fellow Ministers and public and private sector leaders, highlighting his country’s commitment to sustainability and low-carbon growth.

Mr. Matusic, said: “Tourism is a significant economic factor in the world GDP, but at the same time it affects the preservation of cultural heritage, the environment, the labor market, infrastructure, etc. As these challenges are common to all Member States, it is important to address these issues in a systematic manner at the both European and global level. Implementation and promotion of sustainable development policies are the backbone of Croatia’s EU Council Presidency in the field of tourism, and Croatia will therefore continue to strengthen its co-operation initiative precisely to ensure tourism’s success in the future.

According to the latest UNWTO data, the EU28 Member States received 577 million international tourists in 2019, a 3% increase on the previous year. In 2018, receipts generated by international tourism generated 407 billion euros across all 28 states, around 33% of the world total. The UNWTO data also shows that Europe continues to be the leading global region for tourist numbers, welcoming 51% of all arrivals in 2019.  

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Winners of the 2nd UNWTO tourism startup competition in Madrid

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The World Tourism Organization (UNWTO), in association with Turismo de Portugal and Globalia, the leading tourism group in Spain and Latin America, have named the eight winners of the 2nd Tourism Startup Competition. Launched in 2018, this initiative works to identify and reward the new companies that will lead the transformation of the global tourism sector within the framework of innovation and sustainability.

The final event took place in Wakalua, the tourism innovation hub promoted by Globalia in collaboration with UNWTO. This event was held on eve of FITUR, Spain’s biggest and most important tourism trade fair and was attended by UNWTO Secretary-General Zurab Pololikashvili and the CEO of Globalia, Javier Hidalgo as well as representatives from the collaborating companies that will participate in the promotion, investment search and implementation of projects with the winner companies.

Among the stakeholders was Miguel Arias, Global Entrepreneurship Director of Telefónica, Luis Araujo, President of Tourism of Portugal. Joining them was Begoña Gomez, Director of the Africa Center, Rufino Selva, adjunct director general of the Society of Thematic Projects of the Valencia Community, Raquel Rodrigo, Senior Analyst of Amadeus and Julie Moorhouse, responsible for the New Concepts in Intu Costa del Sol.

In the Deep Tech category, rethinking the location and geolocation, driven by Amadeus, the winner is Klustera (Mexico), which works in the field of digital transformation and human behavior.

Within the Intelligent Mobility category, awarded in alliance with Telefónica, the winning startup is Eccocar (Spain), company that allows vehicles and fleets to be managed more ecologically.

In the Smart Destinations category, awarded with the collaboration of the Digital District of Valencia, the award went to Visualfy (Spain) which aims to help people with hearing loss overcome barriers and enjoy their leisure time.

Within the category of Disruptive Hospitality, awarded in partnership with Intu Costa del Sol, the award to Questo (Romania) which helps create unique experiences in destinations inspired by movies, books or local legends.

In the Rural Development section, promoted by Globalia, the winner is Like Local (The Netherlands) which connects tourists local communities in developing countries in order to offer more authentic and personal travel experiences.

The Innovative Solutions in Tourism award went to HiJiffy (Portugal), a startup that centralizes, automates and measures all hotel customer service activities.

The winners of the Social Innovator’s Retreat competition at the IE Africa Center are Enjoy Agriculture (Senegal), a startup that provides experiences for tourists related to agrotourism, and EBikes4Africa (Namibia), which offers electric bikes for both local citizens and tourists.

Finally, the Special Recognition in Sustainability prize, supported by UNWTO and Globalia has gone to Live Electric Tours (Portugal), which offers tours in 100% electric vehicles.

“Growth and consolidation are usually the biggest challenges at the beginning of any project, and our startup competition has, thanks to the support of UNWTO and our partners, become a benchmark within the sector. We have received proposals from more than 150 countries and in this second edition they come from more mature emerging companies. In fact, 10% of the companies that presented themselves invoiced more than 500,000 euros in 2018,” said Javier Hidalgo, CEO of Globalia.

Zurab Pololikashvili underlined that “innovation offers many solutions to big challenges with of the tourism sector as a global economic leader that is growing faster than the global economy, generating employment and granting opportunities for all”. He added that “without the support of Globalia we could not have identified and promoted the potential of these companies, which – no doubt – will be very successful in the future.

Luís Araújo, President of Turismo de Portugal, added: “Innovation is a major force for growth and sustainability, providing the ingredients for a long-term success in the tourism sector. The UNWTO Tourism Startup Competition’s finalist applications highlight the most innovative solutions to the future of the tourism sector. This provides a great opportunity to establish international contacts and to push innovation to the next level.”

In its first two editions, the UNWTO Tourism Startup Competition has received proposals from almost 5,000 startups. This year, the Wakalua innovation hub hosted the winning companies and will follow-up with them in Barrabes.biz, the consultancy specialized on innovation which is also a collaborator as an associate. The Globalia and UNWTO Startup Competition has become a milestone in the transformation of the tourism sector.

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International tourism growth continues to outpace the global economy

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According to the first comprehensive report on global tourism numbers and trends of the new decade, the latest UNWTO World Tourism Barometer, this represents the tenth consecutive year of growth.

All regions saw a rise in international arrivals in 2019. However, uncertainty surrounding Brexit, the collapse of Thomas Cook, geopolitical and social tensions and the global economic slowdown all contributed to a slower growth in 2019, when compared to the exceptional rates of 2017 and 2018. This slowdown affected mainly advanced economies and particularly Europe and Asia and the Pacific.

Looking ahead, growth of 3% to 4% is predicted for 2020, an outlook reflected in the latest UNWTO Confidence Index which shows a cautious optimism: 47% of participants believe tourism will perform better and 43% at the same level of 2019. Major sporting events, including the Tokyo Olympics, and cultural events such as Expo 2020 Dubai are expected to have a positive impact on the sector.

Responsible growth

Presenting the results, UNWTO Secretary-General Zurab Pololikashvili stressed that “in these times of uncertainty and volatility, tourism remains a reliable economic sector”. Against the backdrop of recently downgraded global economic perspectives, international trade tensions, social unrest and geopolitical uncertainty, “our sector keeps outpacing the world economy and calling upon us to not only grow but to grow better”, he added.

Given tourism’s position as a top export sector and creator of employment, UNWTO advocates the need for responsible growth. Tourism has, therefore, a place at the heart of global development policies, and the opportunity to gain further political recognition and make a real impact as the Decade of Action gets underway, leaving just ten years to fulfill the 2030 Agenda and its 17 Sustainable Development Goals.

The Middle East leads

The Middle East has emerged as the fastest-growing region for international tourism arrivals in 2019, growing at almost double the global average (+8%). Growth in Asia and the Pacific slowed down but still showed above-average growth, with international arrivals up 5%.

Europe where growth was also slower than in previous years (+4%) continues to lead in terms of international arrivals numbers, welcoming 743 million international tourists last year (51% of the global market). The Americas (+2%) showed a mixed picture as many island destinations in the Caribbean consolidated their recovery after the 2017 hurricanes while arrivals fell in South America due partly to ongoing social and political turmoil. Limited data available for Africa (+4%) points to continued strong results in North Africa (+9%) while arrivals in Sub-Saharan Africa grew slower in 2019 (+1.5%).

Tourism spending still strong

Against a backdrop of global economic slowdown, tourism spending continued to grow, most notably among the world’s top ten spenders. France reported the strongest increase in international tourism expenditure among the world’s top ten outbound markets (+11%), while the United States (+6%) led growth in absolute terms, aided by a strong dollar.

However, some large emerging markets such as Brazil and Saudi Arabia reported declines in tourism spending. China, the world’s top source market saw outbound trips increase by 14% in the first half of 2019, though expenditure fell 4%.

Tourism delivering ‘much-needed opportunities’

“The number of destinations earning US$1 billion or more from international tourism has almost doubled since 1998,” adds Mr Pololikashvili. “The challenge we face is to make sure the benefits are shared as widely as possible and that nobody is left behind. In 2020, UNWTO celebrates the Year of Tourism and Rural Development, and we hope to see our sector lead positive change in rural communities, creating jobs and opportunities, driving economic growth and preserving culture.”

This latest evidence of the strength and resilience of the tourism sector comes as the UN celebrates its 75th anniversary. During 2020, through the UN75 initiative the UN is carrying out the largest, most inclusive conversation on the role of global cooperation in building a better future for all, with tourism to be high on the agenda.

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