SodaCanyonRoad | The Devil's vineyard

The Devil's vineyard

George Caloyannidis | Jun 24, 2015 on: Tourism Issues

I just returned from a trip to Europe.

One of the visits was to the island of Sylt on Germany's North Sea. The island is connected to the mainland by bridge with road and train service. Its spectacular 25 mile long sandy beaches have always been the secret playground of the German rich and famous. Beautiful thatched roof homes used to comprise a cohesive country community, always a big part of the attraction.

In the last few decades, tourism discovered Sylt as an opportunity resource for exploitation. The massive proliferation of expensive hotels, second home buyers and Porches for rent have gradually pushed out the local population. The steadily diminishing number of children forced its first elementary school to close a few years ago, then the second one combined classrooms with children of different ages. Recently, the last school was forced to close leaving no alternative for the remaining children but to board the train to the mainland. Local residents complain that they no longer have neighbors they know or to talk to. While the local economy seems to be thriving, the social fabric has been torn to pieces. Low paying jobs are proliferating, the income gap stares one in the face... Stage 3.

The second, the historic city of Bruges in Belgium is as charming a mediaeval city as there is. Lovely steeped roofed brick homes, two incredible cathedrals, cobbled streets and canals bring tour bus after tour bus with 3 million tourists a year on to its 117,000 residents. Chocolate and waffle shops abound, restaurants are packed with tourists. The economy seems to thrive but the income gap widens. One can understand why locals hate living in what has become a Hansel and Gretel Disneyland... Stage 3.

Late last year, a few thousand locals staged massive protests against the onslaught of tourism in Barcelona. The least obscene banners proclaimed, "Don't step on Barcelona" and "Tourists don't trample on us". Similar scenario, with GDP declining and the national economy relying on EU bailouts. No difference in Portugal...Stage 3 1/2.

Greece which completely sold out to tourism after joining the EU, found out that the jobs it brought are the lowest paying ones. Subsidies to supplement them have proliferated and so have government jobs, the only ones paying decent wages. We all know how this bankrupt scenario has played out... Stage 4.

The literature on tourism generally recognizes 5 stages in its trajectory. The first, is purely supplemental and supportive to an existing economic base. Stage 2 leads to the local economy's increasing reliance on tourist dollars and is perceived by local governments and businesses as essential. Stage 3 sees the beginning dislocation of the local population, a gradual tearing of the social fabric, the proliferation of low paying jobs with the associated concentration of outsider investor wealth at the top. With those factors in place, turning back the clock is almost impossible. That process is irreversible by Stage 4. The deficit economy of tourism becomes evident as the 30 to 40-fold wear and tear of the infrastructure requires ever increasing funds for maintenance and further destructive expansion.

By stage 5, the Faustian Deal is complete. Local government has negotiated itself into the corner of no alternative than the vicious circle of even more and more tourism to pay the bill. It never catches up. Finally, tourism having left thriving communities in tatters both in terms of infrastructure and social capital, it moves on little by little to other destinations to devour.

The Napa Valley is steadily approaching the Stage 3 tipping point and the local population is starting to feel it in its bones.

Napa Valley Register version: Tourism's Faustian deal (read the comments)

Sandy Ericson - Jan 14, 2016 9:08AM

R.W. Butler: Tourist area life cycles synopsis and the full article

It just occurred to me that this is the "Platex Strategy" again! In the lingerie garment industry Platex would place a big order from the manufacturer . The company was thrilled and went out and bought machines, rented space and hired workers to make the order -- they could not turn down the order. The next order was for a lower price but the company had debts by then and so had to accept the price. The next order was even lower. Until you can guess the outcome but by then Platex was on to another company. In the industry this was a famous case study in business schools.