Entrance and Activity Fees (Tourism)

1.   Understanding Entrance and Activity Fees

1.3          Potential in Monetary Terms

The travel and tourism industry is one of the world’s largest and fastest growing industries. The World Travel & Tourism Council (WTTC) estimated that international tourist arrivals reached nearly 1.3 billion in 2016, generating expenditure of US$1.4 trillion, which is projected to increase by 4.5 percent per year by 2027 (WTTC 2017). Including domestic tourists, travel and tourism was estimated to make up 10.2 percent of global GDP in 2016 and forecast to rise to 11.4 percent of GDP in 2002. Nature-based tourism and ecotourism make up an increasing proportion of this industry (Epler Wood 2002; Balmford et al. 2009). Research on terrestrial PAs alone indicates that PA visits generate an annual US$600 billion in direct in-country expenditure and US$250 billion in consumer surplus – compared to less than US$10 billion estimated to be directly spent annually on PA management worldwide (Balmford et al. 2015).

The financial benefits of tourism are largely captured by hotels, transport, and other sectors, but not always captured by PAs, so entrance and activity fees provide an essential means for PA authorities to generate revenues from tourism for allocation to PA management. The most thorough survey of PA financing to date compared 20 countries in Latin America and the Caribbean (LAC), and found that entrance and activity fees generated US$39.6 million per year for PA systems – 76 percent of total revenue generated by PAs in the region, and nearly 10 percent of total funding available for PAs in the region (Bovarnick et al. 2010). In most LAC countries, these revenues are generated by only a few PAs, which suggests that with investment in the right infrastructure, entrance and activity fees could generate much greater revenues.

When tourism demand is high and management is efficient, entrance fees can be the most significant source of self-generated PA revenues, providing a potentially large portion of annual operation costs (e.g. human resources, maintenance, equipment, and utilities) – but rarely total costs. Revenue potential is increased in unique environments where fees can be set relatively high, depending on levels of visitation. Entrance fees alone represented over 80 percent of total site-based revenues in more than half of the LAC countries, and in Paraguay, Chile, and Mexico, entrance fees provided 100 percent of site-based revenues (Bovarnick et al. 2010). Across LAC, entrance fees generated nearly eight percent of total funding for PA systems in the region. In the Galapagos National Park, entrance fees cover 46 percent of operation costs (Epler 2007), while in Komodo National Park, Indonesia, they contribute only 6.9 percent of park management costs (Walpole et al. 2008).

In marine environments, scuba diving has the potential to generate high revenues – usually through activity fees, or sometimes through entrance fees to a PA where the diving takes place. Countries with Marine Protected Areas (MPAs) that already cover most, or all, of their expenses through fees include Belize (Hol Chan Marine Reserve), Egypt (Ras Mohammed National Park), Bonaire, and Palau (Lindberg 2001). Divers are willing to pay significant sums to protect marine habitats across the world – particularly in the Caribbean and South East Asia (Roberts & Hawkins 2000; Depondt & Green 2006). It has been suggested that diving fees could potentially make up 78 percent of the financial shortfall in Caribbean MPAs (Green & Donnelly 2003), if more were to charge fees.