How Data Science Helps Destination Stakeholders Achieve Sustainability

Before COVID hit, destination stakeholders were concerned about the social, economic, and environmental impact of overtourism. On the one hand, tourists flocked to biodiverse hotspots thereby assuring service jobs, corporate hospitality investments, and tax revenues. On the other, local residents were facing high public infrastructure and social community costs.  In addition, there was growing residential resistance to travelers looking for their next viral Instagram post.

Throughout, many destination stakeholders had called for both simple sustainability standards and efficient data collection. Better yet, a way to combine the two so that strategic investment and decision-making would be easier. Data science, which combines modeling and statistical analysis, is the key to doing that.

Now, the impact of COVID-19, with its declining tourism arrivals and tax revenues, has hit.  In addition, there are policy changes that promote racial and social justice under discussion. That makes strategic decision-making more important than ever.

Development of ROI Financial Model for Sustainable Destinations

For those who have been advocating for destination sustainability, none of the social, economic, or environmental impacts of short-term destination planning are surprising. But a few of us with backgrounds in data analytics endeavored to go one step further. My contribution was to develop a return on investment (ROI) financial model that accounted for GSTC sustainable destination criteria along with other pertinent data including local tax incentives, productivity rates, and consumption benchmarks.

Destination Stakeholders Should Use ROI 

Calculation of the ROI of sustainability was not an entirely new concept. Previously, tourism companies determined ROI based solely on operational investments and cost savings.  These were usually found with renewable energy, water conservation, waste management, and food and beverage sourcing projects, among others.

The consistent issue was that ROI, calculated under those parameters, was typically negative for the first two years. So, it came as no surprise that destination stakeholders would choose to make other investments with quicker and higher rates of return.

The flaw in such ROI calculations was that they were not holistic in their approach.

By using an environmental scorecard approach, I built on the traditional operational and environmental elements and expanded it to include the costs for and benefits to employees, communities, and customers.

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