Tourist Trap

Tourism is good. Regulating tourism is better.

Dear Friends,

Iris and I celebrated our birthdays with two dear friends in Barcelona. We ate, walked, drank, and acted silly. We might have occasionally been the loud Americans, even if only two of us are American.

Sadly though, we didn’t get squirted by water guns. (And really, anyone who eats at Taco Bell in Barcelona deserves a good water gun squirt.)

The water gun victims reacted by either giving up their table or pulling out their phones to record the spectacle. I woulda gone straight for the water balloons to show these whiny Catalonians and their rat tail mullets what’s up.

But I get it. “In addition to being annoying,” writes Matt Yglesias, “tourists are cringe.” They walk too slowly, speak too loudly, and dress too terribly. Plus, they really do change the local culture … at least in a handful of neighborhoods.¹

Barcelona was plastered with stickers and graffiti that read, “Refugees welcome, tourists go home.” I admire the sentiment, but tourism makes up 12% of Spain’s GDP and 10% of its jobs … so somebody please make a sticker explaining how to provide services for refugees without money from tourism.²

The Tourist Trap

Tourism is like oil: a country is better off with it than without it. But both oil extraction and tourists need regulation to minimize their harm.

Janan Ganesh worries that Europe — once famous for its German cars, French airplanes, and Italian leather — now makes so much money from tourism that it is forgetting how to innovate or manufacture:

The danger is that Europe becomes the geostrategic equivalent of a person too beautiful to ever need do or say anything interesting. It can be flattered into not noticing that the century is being authored elsewhere. And so the phrase “tourist trap” acquires a new meaning. The entrapped aren’t the visitors. The locals are the ones with the problem, and the problem is a sort of lucrative stagnation.

A recent Wall Street Journal article describes how the economies of Southern Europe recovered faster than Northern Europe post-Covid thanks to free-spending American tourists. Local governments are now flush with unexpected tax revenue, but will they invest it in education and job growth for local residents?³

Some economists and others worry swelling tourism might be aggravating Europe’s existing economic challenges. Serving foreigners is difficult to scale up and is more exposed to economic headwinds. Like the discovery of oil, southern Europe’s new focus on tourism can crowd out higher-value activities by hogging capital and workers, a phenomenon some economists have dubbed the “beach disease.”

”Portugal isn’t an industrialized country. It’s just the playground of the EU,” said Priscila Valadão, a 43-year-old administrative assistant in Lisbon.

The new consensus on regulating tourism

Roughly 30% of California’s 39 million residents are of Mexican origin.⁴ By comparison, 19,000 Americans live in Oaxaca, less than half a percent of the state’s population.

I’ve mostly stopped going to dinners with my fellow Americans here because I’m deathly bored by their obsessive, self-flagellating talk about gentrification. If they think they’re doing harm by spending money in Oaxaca, then they should go home and spend money in San Francisco, New York, or wherever. This is what I tell them. And then it gets awkward.

Their obsession with gentrification started in February after a group of local residents visited a coffee shop catering to tourists with menus in English. They asked for a menu in Spanish⁵ and the (local) barista responded that they should learn English. It was the tipping point, and prompted a big protest for the following week with all the usual slogans: “migrants yes, gringos no; tourism is neocolonialism; Oaxaca is not for sale.” Oaxaca’s first indigenous governor sensibly responded that Oaxaca’s economy benefits from tourism and that telling Americans to leave is akin to Americans telling Mexicans to leave.

But he needs to do more than lecture Oaxacans, who regularly experience the downsides of tourism without seeing its upsides. Fortunately, I sense a new consensus emerging both in Mexico and Europe around sensible policies like:

1. Raise the local tax on Airbnb: Currently, Airbnb pays the Oaxacan government 3% of all revenue from local properties. The Oaxacan government should communicate how it has used that money so far. Then it should raise the tax from 3% to 12% with a clear plan as to how it will invest the additional income. It would be fascinating to see the Airbnb tax go up to 30% in the most affected neighborhoods like Jalatlaco.

2. Be transparent about tax revenue from tourism: Similarly, show tourists and locals alike how revenue from airport, hotel, and Airbnb taxes are used. If Airbnbs are driving up the cost of rent, how can the tax income from tourism help incentivize affordable housing?

3. Charge tourists and foreigners more money for museums and other tourist destinations. Make them free for locals, or at least for local students. Set tourist capacity limits as necessary.

4. Encourage better behavior from tourists: Fund local students to launch a welcoming, funny campaign that educates visitors to better fit in and respect the culture they are visiting.

5. Offer a “neighbors discount.” I’m told that nearly every restaurant in Puerto Vallarta offers a discount for local residents if they ask for it. Basically, the price on the menu is for tourists and locals pay something like 30% less if they show their ID card.

6. Use tourism income to invest in education and more scalable industries, as Oaxaca has done with its new Interoceanic Corridor connecting the Caribbean with the Pacific.

Tourism has become a bigger headache because more of us have become tourists. “Traveling the world was once reserved for the very rich,” writes Chelsea Leu. Now, 1.5 billion people travel internationally each year and that number is only going up. With a little regulation, it can do a lot of good … both for the tourists and for the places they visit.

5 Provocative Pieces

1. The Case Against Travel — Agnes Callard observes that we focus more on impressing our friends back home than how our presence affects the people around us: “Travel turns us into the worst version of ourselves while convincing us that we're at our best. Travel gets branded as an achievement: see interesting places, have interesting experiences, become interesting people.”

2. On Dromomania — Sophie Fuji shares a confessional about her travel addiction and lists its downsides, including “One develops a bias towards moving, instead of a bias towards action. Moving is the most passive thing that feels active.”

3. How much can you really learn about a country from visiting it? — Noah Smith warns that we mistakenly take our anecdotes from a trip as representative of a much larger, more complex society. We often learn more about a place by reading books than by visiting for a week. Ideally, we can do both.

4. Don’t Give Up on Tourism. Just Do It Better — Chelsea Leu reviews Paige McClanahan’s book, The New Tourist.

McClanahan sketches out a spectrum with two contrasting types at the ends, which she politely (and optimistically) dubs the “old” and “new” tourist. The old tourist is essentially the boorish figure from the headlines—solipsistic, oriented toward the self, someone who superimposes their fantasies onto a place and then is outraged when their expectations aren’t met. What sets apart the new tourist is a focus on the place they’re visiting. Don’t make it about you, in short: Make it about where you are.

5. Why You Should See Mexico City Like a Tourist by Ana Karina Zatarain. In Agnes Callard’s piece linked above, she includes an anecdote about an American couple that go to great lengths in search of “authentic Mexico.” They finally stumble upon a religious festival in a small, remote village that is unmarked on maps. They can’t stop telling their friends about how magical it was. But when they return to the village with a friend, they forget about the festival and are entirely concerned with whether their friend is impressed. We’ve all fallen victim to this. Or at least I have. Ana Karina Zatarain makes a convincing case that you only do yourself a disservice by avoiding Mexico City’s traditional tourist destinations in search of something that feels (or comes off to others as) more authentic.

One of my favorite parts of travel is coming back home. The rainy season finally arrived to Oaxaca and everywhere is green, lush, and shrouded in mist.

Until next week,

David

1. For whatever reason, tourists seem to like to all stay in whatever neighborhood reminds them of Brooklyn. Here in Oaxaca, that neighborhood is Jalatlaco. You can go there to take pictures that look like Mexico while visiting cafes, stores, and restaurants straight out of Brooklyn. The journalist Lisbeth Mejía Reyes published a great series of articles a few months back exploring how Jalatlaco transformed from a tight-knit neighborhood of leather tanneries to a tourist destination of Airbnbs, cafes, and boutiques where you hear more English than Spanish.

2. 12% sounds like a lot, but it’s not that far above the world average of 9%.

3. 40% of Portugal’s working-age population has less than a high school diploma compared to less than 17% in France and Germany.

4. Without them, the state’s population and economy would decline. (Not to mention the cuisine!) Chicanos, or students of Mexican origin, now make up the largest ethnic group in the University of California system.

5. To understand the difference between a cappuccino in Spanish versus English, I suppose?