The private sector plays a very important role in tourism planning and development. Private organisations can bring significant investment into a destination and contribute to the development of the tourism industry and the wider economy. However, this needs to be overseen and managed appropriately by the relevant stakeholders. As explained in different levels of tourism policy and planning, tourism planning takes place at levels ranging from local (grassroots) to international, and private sector businesses play a key role at each level.
- What is the role of the private sector in tourism planning and development?
- Private tourism businesses can provide a forum for discussing and resolving common problems associated with tourism enterprises
- Private tourism businesses make coordinated recommendations to the government office for improvements in the tourism sector
- Private tourism businesses can provide representation on tourism boards and committees
- Private tourism businesses can conduct research, marketing and training related to the private sector
- Private tourism businesses can sponsor special events
- Private tourism businesses can work with local government
What is the role of the private sector in tourism planning and development?
Private sector organisations are businesses that ultimately seek to make a profit. They are not owned by the government, but by private individuals, entrepreneurs or shareholders. In tourism they include hotels, airlines, tour operators, travel agents, attractions, restaurants and transport companies.
Many private sector organisations are involved in tourism planning, some playing a more pivotal role than others. Their main contributions can be summarised in six points:
Private tourism businesses can provide a forum for discussing and resolving common problems associated with tourism enterprises
Private organisations tend to have more money and time to invest in tourism development planning. Because they are typically money-oriented, they will spend time thinking analytically about the best approaches to take to tourism development and which routes will likely yield the best economic outcomes. However, they may fail to adequately consider the wider social and environmental impacts.
Private tourism businesses make coordinated recommendations to the government office for improvements in the tourism sector
Whilst the public sector has their own staff and their own procedures, input from the private sector can be invaluable. Private sector organisations, either individually or collectively, will often guide government towards making certain decisions.
This can be both positive and negative for tourism development. In The Gambia, for example, the government announced a ban on all-inclusive holidays in 2013 to increase the economic benefits of tourism for local businesses. After tour operators threatened to withdraw from the destination, the policy was reversed – illustrating the power of the private sector and the risk of economic leakage associated with all-inclusive and enclave tourism.
Private tourism businesses can provide representation on tourism boards and committees
Members of private sector tourism businesses will typically be asked to provide representation on various boards and committees. Again, this adds insight into issues that may not always be considered in the same light by the public sector.
Private tourism businesses can conduct research, marketing and training related to the private sector
One of the notable roles of the private sector in tourism planning and development is its ability to invest time and money into aspects such as marketing and training. This can help to promote the destination overall and can also help to up-skill staff in the local area. On the downside, some private sector tourism businesses import staff from other countries, which can cause economic leakage.
Private tourism businesses can sponsor special events
Many private sector tourism organisations will sponsor events. This can help to enhance publicity and to bring in additional revenue to the tourism industry. Well-known examples include British Airways, which was an official partner of the London 2012 Olympic and Paralympic Games, and Emirates, which sponsors Arsenal Football Club and the Emirates Stadium.
Private tourism businesses can work with local government
Private tourism businesses can act as a spokesperson for the local business community, giving local people a voice that might be heard more than it otherwise would. They also often work in partnership with local authorities through destination management organisations (DMOs) and public-private partnerships. In England, for example, Local Visitor Economy Partnerships (LVEPs), accredited by VisitEngland since 2023, bring together businesses and local government to plan and promote destinations.
The role of the private sector in tourism: To conclude
The private sector is essential to tourism planning and development, providing investment, expertise, marketing, training and employment. However, because private businesses are driven by profit, their involvement needs to be balanced with the interests of local communities and the environment through effective public sector planning and partnership. Global bodies such as the World Travel and Tourism Council also represent the private sector in discussions with governments.
The private sector in tourism: FAQs
Below are answers to some of the most common questions about the private sector in tourism.
What is the private sector in tourism?
The private sector in tourism includes businesses owned by individuals or shareholders, such as hotels, airlines, tour operators, travel agents, attractions and restaurants, which aim to make a profit.
What role does the private sector play in tourism planning?
The private sector invests in facilities, advises government, sits on tourism boards, carries out marketing, research and training, sponsors events and works in partnership with local government.
What are the disadvantages of private sector involvement in tourism?
Profit-driven businesses may overlook social and environmental impacts, cause economic leakage and put pressure on governments to change policies.
What is a public-private partnership in tourism?
A public-private partnership is a collaboration between government and private businesses to plan, fund, manage or promote tourism, such as a destination management organisation.
What is the difference between the public and private sector in tourism?
The public sector is owned and funded by government and focuses on planning, regulation and public benefit, while the private sector is commercially owned and focuses on profit.
Further reading
If you found this article helpful, the following posts may also be of interest:
- Different levels of tourism policy and planning
- Why tourism development planning is important
- Stakeholders in tourism
- Types of travel and tourism organisations
- The World Travel and Tourism Council
- The economic impacts of tourism
