Tourism can contribute to both equity and economic growth. By prioritizing inclusivity in their efforts to attract new visitors, destination marketing organizations and tourism groups can benefit both the local economy and underserved residents.

By Steven Pedigo

For better or worse, tourism has left an indelible mark on the global economy. Today, the tourism industry represents nearly 10% of the world’s GDP ($7 trillion) and 11% of jobs nationwide. This trend is likely to continue as travel becomes increasingly popular and accessible around the globe. Even in the midst of a fraught political landscape, tourism encourages the steady exchange of goods and ideas—a key element of economic growth. At the same time, the tourism industry has given rise to a number of troubling externalities such as gentrification and a lack of affordability in cities.

Cities have the chance to use tourism to fund better livability.

Cities have the chance to use tourism to fund better livability.

Tourism Builds Cities

In the past, cities have weighed these concerns when deciding whether to invest in or scale back on their tourism industries. But there is reason to believe that tourism can contribute to both equity and economic growth. By prioritizing inclusivity in their efforts to attract new visitors, destination marketing organizations and tourism groups can benefit both the local economy and underserved residents. In fact, many of the cities with the strongest tourism industries are known for their diversity and inclusion. Today’s most-visited cities in the United States include diverse international hubs like New York, Los Angeles, Chicago, Washington, D.C., San Francisco, and Miami. (The few exceptions to this list are sprawling cities like Orlando and Las Vegas, which are famous for their visitor attractions.)

More recently, mid-sized creative cities like Nashville and Austin have begun to attract a growing share of tourists by improving their openness to new people and modes of thinking. While Nashville’s “music city” brand has captured an array of artists, performers, and producers, Austin’s South by Southwest festival offers something for nearly every member of the Creative Class. Over time, these cities have developed a reputation for their welcoming atmospheres and willingness to provide opportunities for newcomers.

Tourism needs to focus on residents first.

DMOs need to focus on residents first.

Residents, Then Tourists

But, in order to position themselves as inclusive destinations, urban areas must also cater to the needs of current residents. This starts by making their downtown areas more accessible to minorities, students and low-income populations.

In New York, for instance, Mayor Bill de Blasio teamed up with the NYC Department of Cultural Affairs and Hester Street Collaborative—a nonprofit planning, design, and development organization that specializes in underserved communities—to release CreateNYC, the city’s first comprehensive cultural plan. Given the role of art and music in the city’s tourism economy, the plan ensures that artists and performers can live, work, and raise families in New York City. With hospitality and food service now acting as New York’s sixth-largest industry, these changes will have a profound impact on the local economy. Most importantly, improvements to the city’s tourism sector will directly affect those in need: According to a recent report, the hospitality industry is now one of the fastest-growing fields of employment for less-skilled workers in New York City.

Visionary cities are tapping hospitality revenues to build affordable housing.

Visionary cities are tapping hospitality revenues to build affordable housing.

Challenging Affordability

Another challenge for urban tourism offices is a lack of affordability. In San Francisco, for instance, many hotel owners and managers report a decline in revenue and visitor satisfaction due to troubling scenes of homelessness on the streets outside. In response to this challenge, the county of Santa Clara (part of the Bay Area metropolitan area) has developed a longstanding mission to reduce the size of its homeless population. In 2007, Santa Clara formed a public-private partnership called Destination: Home, which convened local leaders, housing authorities and government officials to create a community-wide strategy for mitigating homelessness. From 2015 to 2017, the county permanently housed around 3,000 families by building supportive and low-income housing units. And they’re not the only ones: In 2016, Nashville’s economic development office supported an inclusionary zoning measure to allow for the construction of more affordable housing.

Other cities have been even more creative in improving affordability. In May, the Alexandria City Council agreed on a proposal to raise local taxes on restaurant meals by one percent. The proceeds will be set aside for the preservation or construction of affordable housing, or to provide financial assistance to renters and homeowners. With the new tax in place, the city hopes to raise an additional $4.75 million a year, which will go toward constructing or preserving 2,000 affordable housing units by 2025. These efforts will also establish the city as an inclusive destination that welcomes visitors from all backgrounds. Indeed, the growth of tourism in places like Austin, Nashville, and Philadelphia demonstrates the vital role of inclusion in a city’s brand. (Consider Austin’s slogan, “You’ll Fit Right In,” or Philadelphia’s “City of Brotherly Love.”)

As national governments grow isolationist, cities' reputations are at risk.

As national governments grow isolationist, cities’ reputations are at risk.

Cities Vs. Hateful Rhetoric

Efforts to emphasize diversity and inclusion are especially important in light of the current political climate. In the eight days after President Trump proposed a travel ban that targeted majority-Muslim nations, international travel to the U.S. fell by 6.5%. This reflects an even larger decline in tourism since Trump was elected president. While all U.S. cities are affected by this rhetoric, certain cities have taken a major hit to their reputation. In Charlottesville, for instance, the deadly “Unite the Right” rally left the city struggling to revamp its image. Just weeks after the incident, the city formed an economic recovery team to position Charlottesville as “a small university town, made up of artists and academics and thought leaders and entrepreneurs and innovators.” Part of this effort included a new slogan, “Cville Stands For Love.”

A similar scenario unfolded in Texas in response to a proposal to restrict bathroom use for transgender residents. Fearing the effects of lost tourism revenue, a number of Texas business and tourism representatives gathered in protest in front of the state capitol in July 2017. A month later, the Texas Travel Industry Association also expressed their opposition via a letter to Governor Greg Abbott. The letter cited a study from The Perryman Group, which found that the bathroom bill could result in $3.3 billion in economic losses—the majority of which would impact the travel and tourism industry. Their efforts eventually led to the bill’s failure.

DMOs have the potential to upgrade service jobs into careers.

DMOs have the potential to upgrade service jobs into careers.

Cities Need to Tap Tourism

Indeed, while tourism is not impervious to political tailwinds, it has a major influence on equity and affordability in cities. In particular, urban tourism groups and destination marketing organizations can help upgrade service-based hospitality jobs into sustainable, family-supporting careers. By forming public-private partnerships, these groups can also ensure that low-income residents are not priced out of their neighborhoods. As part of this mission, organizations should consider developing affordable workforce housing on the sites of major convention centers, which contribute significantly to the local economy. City governments might also consider a hospitality tax to help fund essential services like transportation.

Whatever strategy they choose to adopt, cities and tourism groups must demonstrate a commitment to inclusive prosperity through both words and action. By making their communities more open and equitable—and transmitting this message to the general public—tourism offices can position their cities as premier destinations for residents and visitors alike.

Steven Pedigo is a clinical professor and the director of the NYU Schack Institute of Real Estate Urban Lab and an Associate Partner, Economic Development at Resonance. This article was co-written by Aria Bendix, a program associate at the NYU Schack Institute of Real Estate.