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Social entrepreneurship in tourism: Like NGOs but sustainable

Don't worry, we speak : Español (Spanish), too!

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Contxto – Back when I lived in Lima and I realized how present the ecotourism experience is compared to Mexico. I traveled to many hidden places that I wouldn’t have been able to reach without proper and local guidance.

I spent a fair amount of money without exceeding my budget on a super big and famous tourism firm. And got great experiences. 

Not that normal tourism business is wrong, it’s just the old fashioned ways of doing things has its drawbacks.

The small agencies I got to travel with seemed like they had pretty good deals with local people, instead of using them as an entertainment tool. We traveled in small groups and the locals were excited that we consumed their wares. This whole arrangement seemed like social entrepreneurship to me. And kept me wondering why it wasn’t more popular.

Eco-tourism is a trend that has been growing among countries, especially in Latin America. “Why’s this?”, you may wonder. Well, its because eco-tourism stands out from normal tourism in the following ways:

  • Their low energy and water consumption
  • They don’t resort to outsourcing 
  • Working with locals who know the places and people 
  • Making fair alliances with natural reserves and their communities
  • Educating tourists about the surroundings based on respect and admiration

But seriously, why should I care about eco-tourism? Well, according to the United Nations General Assembly, doing things like this could create a sustainable circular economy.

Also, the World Tourism Organization tells us that eco-tourism makes up 6 percent of the world’s GDP. And, Latin America and the Caribbean alone contain over 50 percent of the world’s biodiversity, according to the Americas Quarterly.

This type of tourism is no news to Europe, but luckily, it is starting to take form in Latin America. And with so much at stake, the least thing we could do is some research and find solutions. We want you, entrepreneur. 

What even is an eco-tourism startup?

It’s clear that each country is different. Governments’ prioritization of tourism directly affects economic development. But social entrepreneurship is especially important because it can redefine what “good business” means.

So, finding investors who value social impact is crucial, so it can guide entrepreneurs and navigate the path of having business success and doing good things. Even if the government doesn’t help directly.

How about we get the definition between an NGO and social entrepreneurship right away?

Both are not mutually exclusive. In fact, social entrepreneurship can be found in NGOs, since both are intended to find solutions to a social problem.

But entrepreneurship usually has more of a for-profit aim that could lead to creating a project or startup. Aligning solutions between the social problem and creating one for possible clients. 

If a startup is created upon this basis another possible problem becomes apparent: not everyone is willing to pay for such a rustic, specialized service.

“Why should I pay for something I can get for cheaper with a charity?”

While NGOs do not necessarily hold a responsibility towards those who donate, startups need to make sure a circular economy runs smoothly. Plus, social startups can’t run on fundraising. They must get venture capitalists’ (VCs) attention to sell them an idea, execute it, and start making some money.

Steve Moilanen—social entrepreneur and creator of Solstice, an affordable renewable energy enterprise—says that the failure to understand the financial difference between the two is part of the reason why social entrepreneurship hasn’t prospered efficiently yet.

Here comes the bad news…

There is a side we haven’t talked about; is it possible that social entrepreneurship is taking advantage of consumers’ desire to do good? Is consumption the equivalent of caring?

Bill Gates comes to the rescue saying that “sometimes market forces fail to make an impact […] not because there’s no demand, […] but because we don’t spend enough time studying the needs and requirements of the market.”

When talking about tourism, it isn’t about a whole guilt trip of not having made better choices before, but of being aware that we need “global growth strategies, fundamentally driven by private investment and entrepreneurship. The goal would not be charity, but a mutual interest in building more poles of growth”, according to Robert Zoellick.

I believe that this position is entirely applicable to tourism. I have seen with my own eyes how social entrepreneurship in tourism is indeed profitable and, with the right investment, can create successful enterprises.

Enterprises such as Olas Verdes, from Costa Rica. It was the first social and tourism-related company to ever receive more than twenty certificates in Leadership in Energy and Environmental Design (or LEED for short) in Latin America. 

Olas Verdes shows the consumer how their fee boosts local farmers, schools, and biodiversity. And not only depending on seasonal changes, because the profits earned are invested into new skills to improve everyone’s abilities in the long run. 

So, what was wrong with normal tourism? Am I not helping there as well? 

Now you must be thinking; what was wrong with normal tourism?

Well, dear reader, the lack of awareness of multiple problems that affect, not only tourists, but local communities is what made a crucial change. Ceballos-Lascuráin, Mexican environmentalist architect and eco-tourism consultant, first addressed the doubt some tourists started to have: Isn’t eco-tourism simply a new name for an old activity?

What we could call “traditional” tourism usually just makes a public statement about their “socially responsible” ways, without actually proving or showing it, competing with local economies, and even making a profit through natural reserves’ exploitation.

So it isn’t only about the whimsical experience and leaving the tourist with a clear conscience that they’ve done a good job and polluted less.

It’s also about how profitable the market can become, even during unstable seasonal changes. Creating economic growth, filling gaps in existing services, reinvesting profits into the local economy, and acceleration in a later stage strategy and financial services below market rate loan funding.

And, as mentioned earlier, an eco-tourism startup should be aware of how much damage it is sparing local areas from massive tourism. This awareness incentivizes investors to support social causes.

We all love a little trip somewhere, so next time, why not do some research on social enterprises that do eco-tourism? You help your own economy, others’ economy and not just feel like you gave away your money. Everybody wins!

Related articles: Tech and startups from Central America!

-IvP

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