Tourism: The Rise of Crowds and the Fall of Destinations

Virginia Policy Review 1

By Paul Cederoth

Introduction

Before the COVID-19 pandemic, there were five seasons: spring, summer, autumn, winter, and tourist. Across the globe, famous towns, monuments, and parks were alternately swarmed and left desolate by international visitors in line with school breaks, work vacations, and seasonal good weather. The tourist season itself is not new, but the last three decades in particular have given rise to a hitherto unknown phenomenon: overtourism. Places like the Great Wall of China, Walt Disney World, and the entire city of Paris, long popular destinations, have started to play host to ever-greater numbers of visitors, buoyed by greater global access to the Internet and growing travel from countries such as the United States, Russia, and China. As crowds grow larger, the visitors start to outnumber locals and the local economy pivots entirely to the tourist trade. Cabs stop ferrying people around town and instead offer scenic rides to tourists. Churches stop holding regular services and instead charge fees for entry. Destinations come to be so dominated by their status as tourist destinations, that the objects, people, or climate they advertise cease to exist in the way that made them famous in the first place. In time, as queues of visitors stretch to absurd lengths, there are simply so many people at a destination that there is quite literally nothing for anyone to see but other tourists. When a location is taken over like this, its entire existence comes to rest upon the continuing tourist trade. Cafes and shops that cater solely to visitors from out of town or country sell nothing of value to locals, and local monuments are effectively “abandoned” to the crowds. When those hordes of people disappear, however, the local economy is left devastated. The vulnerability of such “touristified” locations was exposed across the world during the shutdowns that followed the spread of COVID-19. The city of Venice has become the global standard for these negative side-effects of tourism thanks to its centuries of extreme popularity as a global tourist destination (De Marchi & Manente, 2019). All the negative consequences of overtourism have hit Venice with particular vigor, and its desertion during the pandemic was correspondingly catastrophic. But just as COVID-19 exposed Venice’s dependence on the tourist economy, so too has it given the city an

2 Volume XV, Issue I, Spring 2022

opportunity to develop new resilience. The break in the crowds gave Venice “breathing room” to take stock of itself and take time to prepare for the return of the crowds. New laws, including a ban on cruise ships in the Venetian lagoon and a tax on tourists who do not stay the night, have established a baseline for the city’s response to future overtourism (Buckley, 2021; CNN, 2020).

Defining the Problem

Before the COVID-19 pandemic, popular vacation destinations were growing ever more popular. In Venice, the number of tourist arrivals quintupled between the end of the 1980s and 2020 (Bertocchi et al., 2020). The city’s famous Carnevale festival drew over one million visitors over two weeks in 2010 (Madden, 2012). At the same time, the massive increase in popularity has led to overcrowding in popular tourist destinations, and raised demand for tightlylimited property in Venice (Madden, 2012). Tourists and their preferences now define Venice more than its art or history do, creating a situation of “overtourism” (Bouchon & Rauscher, 2020; Frey & Briviba, 2020; Zemła, 2020). Overtourism has generated a negative externality in Venice, with tourist demand driving prices beyond the reach of most native Venetians, crowds clogging main thoroughfares, and the local economy being forced to depend excessively on visitors. As the pandemic has now for several years interrupted ‘normal’ tourism patterns, cities like Venice face an important choice for the future of their citizens.

Background – Venice and the Growth of Tourism

The city of Venice has served as one of Europe’s main tourist destinations since the early seventeenth century, with its renowned gondolas, magnificent architecture, and annual Carnevale festival drawing travelers from across the globe (Madden, 2012). Then, as now, tourism was a crucial pillar of the Venetian economy, compensating for revenue lost during the long decline of the “Most Serene Republic’s” trade empire (Madden, 2012). Due to the rise of the Internet, budget airlines, cruise tours, and growth in global income (Bertocchi et al., 2020; Frey & Briviba, 2020), the tourism industry has grown to unprecedented levels: in 2018, Venice welcomed 25 million visitors, generating revenue of €2.2 billion, or roughly $1.9 billion, from tourism alone (De Marchi & Manente, 2019; de Best, 2022). Cities like Venice are now suffering from an overproduction of tourism, with crowds increasing in size yearly, far beyond the city’s optimal level. Areas frequented by tourists reach a certain point beyond which additional tourist development is actually harmful to the site—the ‘tourist carrying capacity’ (Bertocchi et al., 2020; Bertocchi & Visentin, 2019). As tourists fill the

Virginia Policy Review 3

city beyond carrying capacity, they modify its spaces, either through crowds, physical damage, or other disruptive means (Bertocchi & Visentin, 2019). Examples include the hours-long traffic jams around famous parts of Venice, such as the Piazza San Marco and the Rialto Bridge (Bertocchi & Visentin, 2019), or when a cruise ship injured four people after colliding with a pier in June 2019 (BBC, 2019). This can lead to disillusionment and resentment against tourists among locals, with a notable, non-Venetian example being 2017’s mass protest against ‘disorderly’ tourists at a Barcelona beach (López, 2020).

COVID-19 and the Power of Tourism

The Unparalleled Impact of the Pandemic Any future actions to contain overtourism must take into account the dramatic changes during 2020; the outbreak of COVID-19 and subsequent lockdowns initiated an unprecedented decline in international tourism. International tourist arrivals dropped 70% in Europe, in line with a global decline of 74%—in real terms, arrivals declined from 1.5 billion in 2019 to 381 million in 2020 (UNWTO, n.d.). For Venice specifically, it is estimated that the pandemic cost the city 13.2 million visitors in the past year, translating to €1.5 billion ($1.8 billion) in missed tourist revenue (Salerno & Russo, 2020; Brambilla, 2021). The future of tourism is not certain; while previous global shocks such as the 2009 financial crisis damaged international travel, the decline was not as great and rebound was rapid (Gossling et al., 2021; Papatheodorou et al., 2010). However, the pandemic’s impact on global travel vastly outweighs any previous shock in the modern era, and growth is likely to be slow, especially given the proven connection between travel and the spread of respiratory infection (Gossling et al., 2021). Many experts believe tourism will not return to prepandemic levels in Europe until 2024 or later (UNWTO, 2022). Therefore, Venice still has time to implement changes to the tourism paradigm before a potential return to the high travel volumes of the pre-pandemic world. At the same time, the city will have to sustain its economic health for several difficult seasons of below-average tourism.

How Tourism Holds Venice Hostage – Three Methods Tourists increasingly dictate the city’s amenities One consequence of sustained overtourism such as that experienced by Venice is the slow destruction of all non-tourism sectors of the economy, as tourists’ preferences and activities come to dominate the hospitality industry. The phenomenon of ‘tourist traps’ is well-established in Venice, a common

4 Volume XV, Issue I, Spring 2022

example being exorbitantly-priced restaurants that take advantage of the inability of foreigners to speak Italian (Mourby, 2018). Such a scheme allows for greater profits than catering more to Venetians’ needs, so restaurants become more tourist-oriented. This imperfect-information problem also extends to more legitimate establishments: a study conducted in 2019 found that, compared to Italians, foreigners tended to post online reviews of restaurants more frequently and have higher perceptions of quality than Italians dining at the same establishments (Ganzaroli et al., 2020). The result is that restaurants catering to the interests of tourists are ranked higher on travel websites such as TripAdvisor, and these rankings in turn draw more customers to the restaurant— regardless of how the Italians who created such fine cuisine would define quality (Ganzaroli et al., 2020). Thus, sectors such as the dining scene in Venice are increasingly defined by the preferences of tourists, diluting the experience of ‘authentic’ Venetian culture.

Historic destination businesses cannot survive without tourist customers The lack of tourists in 2020 and 2021, coupled with years of sporadic lockdowns, have had significant long-term effects on the Venetian economy (Salerno & Russo, 2020). Tourists dominate the local economy with their massive demand for sight-seeing, dining, and shopping. When the city is suddenly emptied of tourists, businesses are left in the lurch. Some major tourist destinations are at risk of permanent closure. For example, the 300-year-old Caffè Florian, located on the Piazza San Marco, has lost nearly all of its business in the past year, reducing it to critical financial straits (Sayej, 2021). The café is famous for its inclusion in multiple films and for being a favorite haunt of figures such as Ernest Hemingway and Andy Warhol (Sayej, 2021). If tourist numbers do not rise in the near future, it is likely Venice will lose more businesses such as Caffè Florian.

The ratio of tourists to residents continues to grow Most critical to the future of Venice is the demographic pressures exacerbated by tourism. The population of the historical center of Venice, which grew slowly from 150,000 to 170,000 from 1915 to 1950, has now dwindled to barely 50,000 permanent residents as people flee to the mainland, especially the industrial area of Marghera (Bertocchi & Visentin, 2019; Madden, 2012; Salerno & Russo, 2020). Though residents leave the historical center for many reasons, one crucial cause is the activities of “resident tourists”: wealthy non-Venetians seeking an experience of the city ‘away from the crowd’ will buy property in the city as vacation homes (Madden, 2012). The demand for this type of housing is relatively small, but since the historical center of Venice has a

Virginia Policy Review 5

finite number of buildings, prices have risen drastically, crowding out Venetians who cannot compete (Madden, 2012). Many remaining buildings are then converted into resort-style accommodations or rental spaces (Salerno & Russo, 2020). The rise of Airbnb and other short-term-rental services has accelerated this trend: in virtually the entire historic center of Venice, the number of shortterm bedspaces outnumbers the number of residents, sometimes by a factor of 20 (Salerno & Russo, 2020). As residents are crowded out of Venice, the city’s permanent population will continue to fall.

Existing Policies and Potential Impacts Numerous attempts have been made by the Venetian and Italian governments over the past decade to curb its destructive power. Policies have largely focused on two connected issues: the prevalence of ‘day-trippers’ and the intrusion of cruise ships. Cruise Ships Cruises are a popular target of public disdain and a symbol of the overtourism problem in Venice. The ships are larger and taller than the buildings of Venice and have increased their traffic in Venice concurrent with the rise of tourism: between 2004 and 2011, the number of tourists coming to Venice via cruise increased by over 100,000 every year, with 1.8 million arriving in 2011 (Buckley, 2021; Vianello, 2016). Concerns about the safety, environmental impact, and sheer grotesquerie of the cruise ships has increased as a result, with social movements such as the Comitato No Grandi Navi (“No Big Ships Committee”) lobbying continuously for the removal of all large-ton ships from the Venetian lagoon (Bertocchi & Visentin, 2019; Buckley, 2021; Vianello 2016). After the above-mentioned crash that injured four people in 2019, the Italian government and the City Council of Venice both attempted to re-route cruise ships to other parts of the lagoon, away from the historic city center (BBC, 2019; Buckley, 2021). Matters were finally put to rest on April 1, 2021, when the Italian government passed legislation banning all cruise ships from the Venetian lagoon (Buckley, 2021). Though cruise ships have been blamed for damaging the channels of the lagoon and other offenses, the greatest problem they posed was their cargo: day-trippers. Day-trippers Roughly 80% of visitors to Venice are people who remain just long enough to “experience” the city without staying overnight (Salerno & Russo, 2020). Such tourists are detrimental to the city both with the crowds they create and their failure to contribute to the local economy, since they would be

6 Volume XV, Issue I, Spring 2022

spending more money in Venice if they paid for things like meals and lodging (Madden, 2012). Multiple attempts have been made by the Venetian government to coax day-trippers into spending more currency in Venice. For example, vaporetto (water bus) prices were increased dramatically, since these boats are themselves a tourist draw (Madden, 2012). Restrictions on bed-and-breakfasts were also lifted in 2001, in an effort to facilitate easier overnight stays—and Airbnb has now accelerated the trend (Madden, 2012; Salerno & Russo, 2020). Most recently, the city has mandated an entry fee (hereafter referred to as the ‘day-trip tax’) for any visitor who does not have an overnight reservation booked, with the fee increasing based on the level of busyness in the city (CNN, 2020). Both the “tourist tax” and reservation requirements are among such controls to be implemented in the summer of 2022 (Speciale, 2021). Limitations to the Literature The simplest and most powerful limitation to current literature on tourism is that the pandemic and its associated restrictions are still ongoing. The summer of 2022, with its projections for subpar tourism, could damage the city still further. Likewise, some opponents of measures like the tourist tax argue that such measures will turn Venice into a theme park, rather than a working city (Speciale, 2021). Conclusions from the Literature The COVID-19 pandemic effectively paused tourism in Venice and other major tourist destinations, providing an effective counterfactual of a ‘tourist-free’ world for these areas. It has exposed the degree to which Venice is now dependent on the tourist economy, and allowed the Venetian and Italian governments to implement strategies to mitigate overtourism, revealing the present moment as an opportunity to work towards a solution.

A Path Forward

The Mayor of the Metropolitan City of Venice, Luigi Brugnaro, should take sustainable action to limit rental and vacation real estate purchases and subsidize permanent resident buying. Priority should be given to Venetians and those actually seeking to live full-time in the city by providing affordable, livable housing. Since the city cannot physically construct new buildings, it must make existing ones more available to residents. The city should place a limit on the number of housing units owned by people or companies who seek to profit from short-term rentals. Such a policy to stem the mass exodus and crowdingout of residents is desperately needed. Short-term-rental offerings under companies such as Airbnb are dominated not by individuals renting out their homes, but rather by

Virginia Policy Review 7

professionals renting multiple properties: such commercial renters control nearly 75% of short-term-rental listings, and often own entire buildings (Salerno & Russo, 2020). This exacerbates the supply problem created by second-homehunters (Madden, 2012). By placing a maximum on the number of buildings which can be owned by renters or non-residents, and taking revenue from the tax on day-tripper tourists to subsidize housing costs, this policy creates an effective price ceiling on housing for people who wish to reside full-time in Venice.

The best-case scenario for this policy is that the large-scale, short-term rental schemes decline to a more manageable level, and that residents return to the city. Ideally, this policy will stop the exodus of Venetian residents, because people will no longer incur insurmountable costs by continuing to live in the lagoon. Likewise, the financial incentive to sell one’s home to a rental company or a wealthy second-home-seeker will be reduced. There are drawbacks to intervening in the housing market in such a way. From an economic perspective, creating a price ceiling could create a shortage in the Venetian housing market, as consumers flock to take advantage of low housing costs. Similarly, limiting short-term rentals creates an incentive for tourists to day-trip since there will be fewer overnight beds available. However, it must be remembered that there will be a shortage of housing because people will actually be able to afford to live in Venice, rather than because they are being bought out of their homes. The day-tripping incentive is countered by existing or soon-to-be-implemented tourist control measures. This policy works both to reverse Venice’s population loss and limit the extent to which tourists can dictate its amenities by ensuring a steady population of permanent residents. Moreover, it is an equitable solution, since by establishing a price ceiling on residential purchases, the policy ensures that the market for homes is not restricted solely to the wealthiest households. Brugnaro should propose this policy to the City Council of Venice as part of his broader plan to lessen the harm done by overtourism and to bring Venice out of the pandemic in a position of strength. Since this is a policy that benefits people who either live or want to live full-time in Venice, another good step would be to publicize this potential policy, perhaps through social media campaigns or direct messaging to the Venetian citizenry. The COVID-19 crisis is by no means the first pandemic Venice has seen, nor is it the most dire threat the city has faced in its thirteen centuries. By implementing smart policies now, before the return of the great tourist crowds of the coming 2020s, Venice can continue to grow and thrive in the new horizons of the post-COVID world.

8 Volume XV, Issue I, Spring 2022

Paul Cederoth is a graduating 2nd -year MPP candidate and an editor at the Virginia Policy Review. His focuses at Batten include environmental, space, and national security policy. He graduated from the University of Virginia with a BA in History with minors in Economics and Astronomy. Paul has acted as a research assistant for the past year with a New Yorkbased think tank, and will be working in the federal consulting space next year.

References

Araya López, A. (2020). Policing the “Anti-Social” Tourist. Mass Tourism and

“Disorderly Behaviors” in Venice, Amsterdam and Barcelona.

PARTECIPAZIONE E CONFLITTO, 13(2), 1190–1207. https://doi.org/10.1285/i20356609v13i2p1190. Bertocchi, D., Camatti, N., Giove, S., & van der Borg, J. (2020). Venice and Overtourism: Simulating Sustainable Development Scenarios through a Tourism Carrying Capacity Model. Sustainability, 12(2), 512. https://doi.org/10.3390/su12020512. Bertocchi, D., & Visentin, F. (2019). “The Overwhelmed City”: Physical and Social Over-Capacities of Global Tourism in Venice. Sustainability, 11(24), 6937. https://doi.org/10.3390/su11246937. Binggeli, U., Constantin, M., & Pollack, E. (2020, October 20). COVID-19 tourism spend recovery in numbers | McKinsey. https://www.mckinsey.com/industries/travel-logistics-and-infrastructure/ourinsights/covid-19-tourism-spend-recovery-in-numbers. Buckley, J. (2021, April 1). Venice finally bans cruise ships from its lagoon. CNN. https://www.cnn.com/travel/article/venice-cruise-ship-ban/index.html. UN World Tourism Organization. (n.d.). COVID-19 and Tourism | 2020: A year in review. https://www.unwto.org/covid-19-and-tourism-2020. UN World Tourism Organization. (2022, January 18). Tourism Grows 4% in 2021 but

Remains Far Below Pre-Pandemic Levels. https://www.unwto.org/news/tourismgrows-4-in-2021-but-remains-far-below-pre-pandemic-levels. de Best, R. (2022, February 7). Euros to dollars 1999-2022. Statista. https://www.statista.com/statistics/412794/euro-to-u-s-dollar-annual-averageexchange-rate/. De Marchi, D., & Manente, M. (2020). Key themes for tourism development management Lessons from Venice. In H. Pechlaner, E. Innerhofer, & G.

Virginia Policy Review 9

Erschbamer (Eds.), Overtourism: Tourism Management and Solutions (pp. 125–134). Routledge. Frey, B. S., & Briviba, A. (2020). Revived Originals—A proposal to deal with cultural overtourism. Tourism Economics, 1354816620945407. https://doi.org/10.1177/1354816620945407. Ganzaroli, A., De Noni, I., & Bonera, M. (2020). The influence of foreigners’ buzzing on TripAdvisor ranking of restaurants in Venice: Implications for the sustainability of over-touristed heritage cities. Current Issues in Tourism. https://doi.org/10.1080/13683500.2020.1806791. Gössling, S., Scott, D., & Hall, C. M. (2021). Pandemics, tourism and global change: A rapid assessment of COVID-19. Journal of Sustainable Tourism, 29(1), 1–20. https://doi.org/10.1080/09669582.2020.1758708. Madden, T. F. (2012). Venice: A new history. Viking. Mourby, A. (2018, February 4). Can Venice turn the tide on “tourist trap” restaurants? CNN. https://www.cnn.com/travel/article/venice-tourist-traprestaurants/index.html. Papatheodorou, A., Rosselló, J., & Xiao, H. (2010). Global Economic Crisis and Tourism: Consequences and Perspectives. Journal of Travel Research, 49(1), 39–45. https://doi.org/10.1177/0047287509355327. Salerno, G.-M., & Russo, A. P. (2020). Venice as a short-term city. Between global trends and local lock-ins. Journal of Sustainable Tourism. https://doi.org/10.1080/09669582.2020.1860068. Sayej, N. (2021, January 18). Venice’s Storied Caffè Florian Is in Danger of Closing. Architectural Digest. https://www.architecturaldigest.com/story/venicesstoried-caffe-florian-danger-closing. Speciale, A. (2021, August 21). Venice to Charge Tourists for Entry From Summer 2022: La Stampa. Bloomberg. https://www.bloomberg.com/news/articles/202108-21/venice-to-charge-tourists-for-entry-from-summer-2022-la-stampa. Venice crash reignites calls for cruise ship ban. (2019, June 2). BBC News. https://www.bbc.com/news/world-europe-48489158. Venice to bring back entry fee for daytrippers to combat overtourism. (2020, November 20). CNN. https://www.cnn.com/travel/article/venice-entry-fee-2022/index.html. Vianello, M. (2016). The No Grandi Navi campaign: Protests against cruise tourism in Venice. In Protest and Resistance in the Tourist City (pp. 185–204). Routledge. https://doi.org/10.4324/9781315719306-16.

10 Volume XV, Issue I, Spring 2022

Zemła, M. (2020). Reasons and Consequences of Overtourism in Contemporary Cities-Knowledge Gaps and Future Research. Sustainability, 12(5), 1729. https://doi.org/10.3390/su12051729.