Imagine you are in charge of a city. You care about your constituents and want to provide them with the services they need, but you are hamstrung by an inadequate budget. Unlike the federal government, you cannot print money or take on unlimited debt. This challenge is one faced by just about every single municipal government.
Now, imagine further that someone offers you a deal. Every day, they will come into your city and go door to door throwing piles of money on the floor, asking for little more in return than you putting up with their presence. Would you accept? Of course you would—that’s a great deal!
That hypothetical is what tourism is, or at least what governments should let it be. Demand for tourism means that there are people who are trying to enter the city and spend their money without requiring expensive public services. Tourism also represents a chance to raise prestige and renown, helping to attract greater outside investment. Unfortunately, across the world, politicians have implemented various anti-tourist housing restrictions, making it more expensive and less enjoyable for tourists to visit their cities. This is a policy misstep and needlessly hampers already struggling localities.
Florence, Italy, is a city whose economy is built on tourism. The sector brings in an annual 2.5 billion euros, or approximately 2.7 billion US dollars. Nevertheless, last year, the city banned short-term rentals from its center, citing a lack of affordable housing. Similar laws cracking down on Airbnbs have been enacted in highly visited cities like Amsterdam, San Francisco, and Santa Monica. New York, meanwhile, has made it prohibitively difficult to build new hotels, even as the city’s tourism generated $74 billion in 2023. While each of these municipalities has different circumstances influencing their policy choices, they all drive down available lodging in the most desirable locations, making the experience for tourists less convenient and more expensive. Inevitably, those tourists will choose to vacation elsewhere, removing cash and customers from the local economy.
Regions that have inadvertently lost their tourism sectors have predictably suffered dire economic consequences, making it foolish to try and mimic them. Take, for example, Maui in Hawaii. In August 2023, devastating wildfires swept through the island, killing almost 100 people and displacing thousands. In addition to that loss of life, the fires obliterated the state’s tourism industry, as vacationers canceled trips to even unaffected islands in the archipelago. On Maui, the number of tourists was cut to a quarter of its pre-fire total, cutting daily revenues by $13 million. Unemployment on the island has skyrocketed above 11 percent and is not projected to reach normal levels for several years, largely driven by the loss of this key sector. The state’s leadership recognized the impending economic woes, and, even while engaged in search-and-rescue and rebuilding operations, worked to reinvite visitors. Governor Josh Green explained, “When you come you will support our local economy and help speed the recovery of the people who are suffering right now.”
Considering all the evidence of the benefits brought by a robust tourism industry, why are so many municipalities seemingly committing self-sabotage? In truth, there are rational arguments against mass tourism—but they simply pale in comparison to its benefits.
One common refrain is that short-term rental properties eat away at units that should go toward the residential housing supply, raising prices for locals. This argument has theoretical merit amid real problems: Many cities are struggling with housing shortages, driving crises in affordability. Airbnbs and other short-term rentals have the potential to significantly diminish the available housing supply in areas already facing shortages. However, the reality in many cities is that Airbnbs do not constitute a significant portion of the housing supply shortcomings. Consider, for instance, San Francisco. A 2022 investigation by the San Francisco Chronicle found that the city had just under 2,000 Airbnbs listed that were both short-term and currently active. The state of California, meanwhile, estimates that the city should be adding 10,259 units each year until 2031 in order to address the housing affordability crisis. That sums to 82,072 new homes. Banning Airbnb would be a drop in the bucket compared to the necessary systematic zoning overhauls and investments. The marginal benefit that banning short-term rentals would have on the housing crisis does not outweigh the overall economic benefits of tourism.
Another common anti-tourism argument is that the industry has neo-colonialist, exploitative undertones. This framework is most often applied to tourism in developing, historically colonized regions, like the Caribbean. Critics argue that the tourism industry relies on wealthy foreigners coming into the country and staying at multinational hotels owned by other, even wealthier foreigners, providing no benefit to locals while using their land. However, tourists do not stay within the bounds of their accommodations. They move throughout the locale, spending money and bringing in foreign capital that, if properly taxed, utilized, and distributed, has the potential to help lift a nation out of poverty.
This anti-visitor sentiment is even less justifiable in wealthier regions. A prime example of this is Barcelona, a city within which popular anti-tourist demonstrations have erupted. Protestors have vandalized messages like “tourists go home” and “tourism is killing neighborhoods,” even attacking tour buses, slashing the tires on rented bicycles, and harassing foreign restaurant diners. These protestors positioned their demonstration as part of a larger leftist agenda, explaining that the tourism industry is one segment of the capitalist system they seek to destroy as a whole. This argument suggests that tourism commodifies local populations, transforming their culture into something to be shallowly admired by outsiders. While companies in the tourism sector are undoubtedly participants in capitalism, to destroy that industry before building any alternative feels inherently short-sighted and bound to cause immense economic suffering in the short run. Furthermore, this argument taken to an extreme provides cover for dangerous isolationism and xenophobia.
Municipalities hoping to cultivate a flourishing tourism industry do not necessarily have to snub locals’ opinions. This is not a utopian vision—its practicality has already been demonstrated. In Reykjavik, Iceland, a recently booming tourist hotspot, officials have made a concerted effort to grow the city’s tourism sector rapidly while still appeasing residents. One way they have accomplished this has been by marketing the city not just to tourists but also to locals, “to develop awareness and understanding of the mutual interests of residents and the tourist industry, and the economic and cultural value that a strong and sustainable tourist industry can bring to city residents.” The city has set a specific and measurable aim to have 80 percent resident approval of its tourism industry, to be accomplished both through marketing and nuisance reduction via public transportation, sustainability, and increased community involvement.
With the guidance of careful government policy, tourism is a net positive. The way to get residents on board with an extensive tourism industry is clear-cut: explain to them why it is beneficial and minimize disruptive impacts by keeping up with demand for lodging, services, and commercial space, as well as directing the new revenue into local communities.
Other cities should follow the lead of Reykjavik’s tourism industry. Without a well-thought-out marketing drive and careful harm mitigation, backlash to tourism is somewhat inevitable. Individual citizens, in their likely day-to-day frustrations with noisy tourists, are not thinking about large-scale economic impacts—that is the job of the government.