Skift Q&A: Why the business of global travel is under reported

Journalist Elizabeth Becker’s new title Overbooked: The Global Business of Travel and Tourism is the book that Skift wished it wrote (if travel information brands wrote books, that is). Unlike few others, Becker’s title approaches travel as the business behemoth it is, and dives into the nuts and bolts of tourism while simultaneously stripping away the pretenses.

The publication date of Becker’s book nicely coincided with our decision to begin a series of conversations with people we think are leading the way in travel, or who have something to say that the industry needs to hear. In the months ahead, we’ll be speaking to experts and entrepreneurs and leaders and critics who have particular insight into the current state of travel as well as where it’s headed.

And we’re happy to start with someone from the outside whose insight is much more knowledgeable than the majority of people on the inside.

Skift: Why did you do this book now? What was the kick-in-the-pants to get it started?

Elizabeth Becker: As you know from my bio, I’ve been the foreign correspondent and an editor at National Public Radio, and reported around the world for The Washington Post and New York Times. I’ve watched the evolution of tourism, but it was sort of out of the side of my eyes. You sort of noticed it, and then you did your real work.

Then my last stretch at the New York Times, I was the Times’ international economics correspondent. That’s what opened my eyes.

I mention in the French chapter, that I was doing a big piece on the Doha trade talks for the World Trade Organization. Agriculture was the big stumbling block. I’m interviewing the Deputy Minister of Agriculture in Paris. We end up with him telling me how important tourism was.

That kept happening, where I was reporting on an international economics story and some official in some foreign country would say how this was important for their tourism sector. When I tried to write about this for the Times, they said, “We have a travel section.” That’s when I saw this ghettoization of the tourism industry.

There’s a travel section where people talk about how nice it is to travel. The airline industry will get something, the airplane industry will get something, hotels will be written about, but no one looked about tourism as the industrial giant that it is.

That’s it. Once you get that kind of an idea in your head, you can’t get rid of it.

Skift: It’s an enormous industry, the largest global industry. How did you figure out where to start?

Elizabeth Becker: I was blessed with a fellowship at Harvard at the Shorenstein Center, the journalism center. I started by looking at the way it was reported. That’s in that first business chapter that you’ve already read, I hope.

That’s how I walked into it: looking at it from a journalist’s point of view. Why did I find so many stumbling blocks to writing it? That’s when I saw the big industry hiding behind the travel section. I wrote that piece. That was my paper for the Shorenstein Center.

After that, I started looking at the industry. You go to those conferences that people find boring, but are critical because then you know what the issues are. I went to the Madrid headquarters of the UNWTO to find out what those issues are.

I also looked at why, here in the United States in particular, we don’t talk about it. Other countries do talk it about it. They have top-ranking officials who are in charge of tourism. The United States doesn’t because of that political argument that I discuss in the book.

In a sense, as an American reporter looking at the world, I noticed that there was this difference with us Americans. We could not see tourism much less as an industry, but we also didn’t see any government role in it. That’s the theology against having to admit that some things need to be regulated, some things need to be watched, and that all things don’t automatically turn out perfectly.

Skift: You talk a bit about the French approach to tourism, in contrast to the U.S. one, in the France chapter. Can you revisit that a little bit?

Elizabeth Becker: When you think of tourism as a service industry, and you think that what it’s selling is a country. The French recognized this from a long time ago, that they were selling France and that they were inviting people to visit the country.

They had two goals. One was to make sure that France as country became more French, not less from the tourism. In other words, that it retained what it is that is France. Two, that people around the country benefited, not just a few businesses in Paris and Marseilles. That’s the model.

Then it has a special history. The French were the first to give their people paid vacations. This is between the wars, World War I and World War II. Then, interestingly enough, we Americans had a big role in their tourism industry at the end of World War II.

When the Marshall Plan was giving aid to different countries in Europe, the Americans suggested to the French — and the French accepted the idea — that the best way to help France recover after the war was to build up their tourism industry. The United States, our Marshall Plan, helped rebuild the French tourism industry. It was fascinating to find all that stuff.

Skift: One of the things you mentioned about France is that everybody is a stakeholder in it, not just a few people in Paris, as opposed to Venice, where foreign hotel companies and local politicians seem to be making out making out much better than the Venetians, who are slowly disappearing.

Elizabeth Becker: The French are regulators. There was a piece in the paper the other day about how they may have too many regulations. In this instance, they try very hard to make sure that hotels don’t take over parts of the city that should be left as residential. All their coast is public. There’s no private. They want, as you said, stakeholders. They want the people to help them decide what’s best for tourism development.

I used the city of Bordeaux in southwestern France as an example. For 10 years, the locals, under their mayor, Alain Juppé, worked bottom-up deciding what they wanted. They wanted to clean up the waterfront. They wanted to return the center of the city to pedestrian-only. They wanted good rapid transportation in the form of light rail around the city. They wanted to clean up all the buildings. They wanted to bring the opera house back to its former glory.

It took a decade, but it’s exactly what the people of Bordeaux wanted.

Skift: You talked a bit about zoning in there. We cover a lot of travel technology companies. One the big things now is peer-to-peer exchanges, whether it’s for transportation or for apartments. One of the complaints among the technology companies is that there are too many regulations.

Airbnb is against regulations for people renting out their homes to travelers, whereas in neighborhoods like the West Village in New York, which are basically taken over by people renting out their apartments, locals can’t live there anymore.

How do destinations find a right balance between being welcoming to visitors, and then also making sure that the people who live there can continue to live there?

Elizabeth Becker: It gets down to being very transparent about the decision. The local governments are making the decisions to allow this kind of opening up of the houses. Make it transparent. Make sure the public knows that the public has a say in it.

Each area has a different idea. Sometimes welcoming tourists is rather benign. Other times it will completely destroy the personality and what’s intriguing about a region or an area.

I don’t know that it always has to be the same answer for everything, but it must…The best things I saw included a strong, local, public voice and very transparent government behavior, especially when they decide, that for instance, they’re going to give up a stretch of public beach so they can sell it to a resort. That sort of thing. Too often those things aren’t public. They’re made as a fait accompli, and the locals are left out in the cold.

Skift: I want to flip closer to the end of the book. In the China chapter, you spend some time with the manager of the Marriott hotel in Beijing. Can you talk a bit about Marriott’s success in China, and also how it relates to outbound China travel? You also talk about people making a decision to do something in China, but then when Chinese come to America, they book a Marriott hotel because of that. Can you talk about that relationship?

Elizabeth Becker: That was one of the interesting surprises to me. Marriott very consciously and assiduously has worked to build up their hotels in China. I think more international hotels are being built in China today than just about any other place on earth.

Marriott wants local Chinese to see their hotels as a place they’re going to have their weddings, parties — where they’re going to have their business meetings, where they’re welcome for a lunch or a dinner, so that they have that brand identification.

And when Chinese go overseas, they’ll want to book the Marriott in Paris, they’ll want to book the Marriott in Abu Dhabi or Berlin and, obviously, in Washington. That’s starting to work.

Similarly, I twinned the Marriott person with a local Chinese travel operation called WildChina. Zhang Mei, the woman who runs that, has the same idea. She has a very high-end quality tour operation that brings foreigners to the United States. With the very strong aim of doing the reverse, now she’s starting to have an operation where she takes Chinese overseas.

Both of these operations saw that the money is going to be both directions. They use their position in China to then have the Chinese become their clients overseas. It was fascinating.
Skift: With WildChina in the book, I don’t think she was there yet with getting the outbound approval, at least to the point where I read it.

Elizabeth Becker: She was getting it.

Skift: She’s received it since then?

Elizabeth Becker: Yes.

Skift: hat’s good. I was rooting for her. It’s funny. My prior job, I was at Frommer’s.I was Arthur Frommer’s editor for six years for his blog.

Elizabeth Becker: Oh, really?

Skift: Yeah. He’s very budget-minded, as you cover in the introduction. He would cover the ongoing battles between China Spree, and a few of the other package operators, where you could go from New York to Beijing, Shanghai and Siam for ten days for $1,200, airfare included…which the WildChina operator shoots down, which I thought very interesting.

Elizabeth Becker: That’s why I put in one experience of Bonny Wolf and Michael Levy, who took one of those tours and couldn’t get good Chinese food. If you sign up for those tours, there’s no wiggle room. You get really awful food. You don’t feel like you’ve really seen the China you wanted to see. I’m now very suspicious of those tours.

Skift: Speaking of awful food and being stuck in crowds where you don’t want to be, let’s talk a bit about cruising. You cover it very well, in a way that’s not really talked about. In your chat with the Royal Caribbean CEO, he says all cruise critics are snobs.

I think that’s what often happens in the debate. Either you’re a snob saying “I’m not going to do the cruises,” or you love them. There’s very little dissection about, say, the wages that employees are paid or the economics of flying a flag from Panama or Liberia. Can you recount your experience interviewing the Royal Caribbean CEO? What stood out in your conversation with him?

Elizabeth Becker: First of all, I did this after I took a cruise, which I recommend for everybody if they have any questions about this. I was shocked that there was absolutely nothing to do in the whole ship. There were no lectures about the places we were going to.

They were always trying to get us to buy something, either diamonds or art auctions. The diamonds and the paintings, I found out later, are very suspicious money back. I wouldn’t buy anything from them. We were treated entirely like consumers rather than tourists who wanted to see a foreign country.

Then, to go on shore, they really wanted you buy a tour from them. If you didn’t, they warned you that something could go wrong and then you couldn’t get back on the ship. I found out later, of course, that they get something like 50 percent of the money from those tours. You feel like they’re picking your pockets all the time.

Then there’s the pollution aspect, the safety aspect, the poor wages. You wonder, “How can they operate like that when they’re an American company?” American companies don’t act like that. I found out later that, of course, they don’t pay the taxes and they don’t follow regulations because they flag in foreign countries.

With this in mind, I went to talk to the CEO. He didn’t give satisfactory answers. Like you said, he wasn’t used to these kinds of questions. When he did say it was elitist.

I said, “What is elitist about wondering why there’s not good wages, why the ocean’s being polluted, why people can’t get their money back on certain purchases?” and so on and so forth.

As you read in the book, he’s an absolutely lovely man. I’m not saying he wasn’t a nice man. He’s lovely. He’s the kind of person you would want to sit next to at a dinner party he’s so funny. Clearly very smart. But the product, it’s not the kind of cruise I thought it was going to be. It was a cruise that, as I said, destination nowhere.

When we’re tourists, we want to see foreign countries. It was getting claustrophobic, because it was as if you were on a floating hotel going anywhere and nowhere.

Skift: I want to jump back to Cambodia. You have this great quote from Roland Eng, “Left to itself, tourism development does not necessarily fill those holes” when speaking about economic development. Can you talk a bit about unregulated tourism development?

Elizabeth Becker: Roland Eng, just to add, he was the first minister of tourism. You can tell I’m so sad that he didn’t remain that. But he’s so sophisticated on all this.

Unregulated tourism can just mean money in, money out. That is, foreigners come, they spend X number of money on the hotel. That money doesn’t go to Cambodians. It goes to the foreign capital where they’re headquartered.

They take trips, and it’s a foreign operator. The hotel management is all foreigners. Locals, at best, get the lowest paying jobs. They squeeze out other opportunities so that Siem Reap, the province where Angkor is, which is the centerpiece of Cambodia tourism, that used to be per capita one of the wealthiest provinces, and now the per capita for Cambodians is one of the lowest.

Tourism has not helped in the classic developments of the goal of lifting people out of poverty. It’s doing the opposite. Foreigners tend to make the money. Of course, the other problem is corrupt officials. It’s a completely untransparent government where you can’t find out where the money is going, where the taxes are going.

There’s no question, all the companies that are making money are those that have very direct ties to top government officials, and government officials who make a paltry salary are billionaires, and tourism is one of the big reasons why they’ve become billionaires. Does that answer the question?

Skift: Yeah it does. Speaking a bit about that, in the Venice chapter you talk about the one Murano glass shop that’s on the street with all these high-end retailers that you can find anywhere in the world. That speaks a bit about the sameness of travel. Wherever you go, if it’s Fifth Avenue or the Champs-Élysées, or Omotesandō in Tokyo, or whatnot, the homogeneity of international shopping. What role does this sameness play in people’s decision to travel, and also in local development decisions?

Elizabeth Becker: The sameness is the result of a popular place becoming so popular that pretty soon the rents go up thanks to these international shops. They create a different atmosphere. They are the only ones who can afford to pay the high rents that are a result from winning more traffic. What this does, as you say, it erases a particular character of a place.

If locals say, as the professionals in Venice have said, “Can we stop this? We want to keep the Venetian character.” You have to be strong enough to go up against a local government that says, “I’m sorry, but we want all this tourism dollars. We like what it does.” You have a real dispute. You end up having that homogeneity. However, there are some tourists, a lot of tourists, who don’t really want a foreign place.

High-end Japanese department stores moving in around St. Marks area in Venice, because the Japanese want to shop there. Chinese tourists, when they go overseas, they want to eat Chinese food. They don’t want to eat French food. A lot of Americans would be appalled if they had to stay at local hotels. They want to stay at a Marriott when they go overseas.

It’s 50/50. I think my bias is always with the locals who get squeezed out.

Skift: Speaking of being squeezed out, you mentioned a bit about vacation homes, and real estate getting to the point where only non-locals can afford that. Whether that’s in London with financial tourists buying homes to protect their interest, or Mexican resorts with Cabo San Lucas, where only people from L.A. can afford to buy homes there.

What are some of the successful things you’ve seen destinations do where they’re able to both balance the interest of tourists wanting a second home, but then also protecting what makes a destination unique, and also the ability for locals to live there?

Elizabeth Becker: It’s not entirely a local decision. A lot of this is national laws, and even international laws. I mentioned at one point the World Trade Organization and different trade pacts. When the Central American Free Trade Agreement, between the United States and Central American countries, one of the things the United States was asking was to open up Costa Rica’s beaches to the foreign hotels.

The government said, “No,” and delayed signing the treaty until that was taken out.

Some of it’s national, some of it’s local, some of this is also international, that government can’t point blank say, “No. You can’t buy in here anymore.” However they are able to do regulations about what areas are residential, what are not. Then they are able to subsidize local ownership.

For instance in France, there’s a certain pot of money that locals tapped into to buy a bakery. If a local baker dies and there’s no one in the family to take it over, rather than put it on the open market so someone could buy the bakery and turn it into a vacation house, the mayor has the right to use the money to buy the bakery and then recruit another baker from a different part of France to go and work it. That’s one.

In Great Britain, a couple of years ago, a study was done to see why the rural areas were getting so poor. One of them was because of second homes. The officials who did the report and wrote it up recommended that there would be a period of letting these local people retain ownership for a while until they figured out a real solution. That didn’t fly at all.

There’s one part of Great Britain in Cornwall that has both the highest per capita income — because so many wealthy people have their second homes — and the greatest number of poor people, because they impoverished the locals.

Those are solutions that require the people to say, “No, we want to find a balance again.” That’s not always the case.

Skift: You talking about the media’s role at the beginning of the book. There’s great quote from Jane Wooldridge in the Miami Herald about saying, “It’s a pile of crap that we’re all pure,” in travel coverage. Can you speak a bit about the historical relationship between writers and the travel industry.

You alluded to it in the beginning a bit saying in the New York Times. where they’re like, “Oh, we have a travel section for that but we’re not going to cover that because it’s not happy news.”

Elizabeth Becker: There’s not a section of the paper where you don’t have real criticism where you describe the things, what’s good about them, and what’s bad about them. It’s only the good news. Can you imagine if the only movies you read about in your arts section were only the favorites of the reviewer, rather than a critique of what’s good and bad and indifferent?

The same for restaurants. The only restaurant you’d hear about was the good ones and never say anything bad. That’s not very good for consumers. It’s not very good for destinations. I asked Nancy Newhouse — I had met her a lot — who’s a former travel editor. She said, “We never did the 10 worst, we only did the 10 best.”

That is the mentality. They reported to find what was the best without saying what to avoid and what the effect all of this had on the destination.

Skift: It’s funny. I have a friend who was a food writer at the LA Times.’ She covered the business of food, and told me about a fight with the food section editor where my friend said, “Oh, this is just another bullshit trend piece.” The food editor was furious. She goes, “The most important thing is the trends and what the industry tells us to write about.”

This was only like five years ago. But I think travel is much the same way in that it’s just, “Let’s talk about the things that we love.”

Elizabeth Becker: You’re right. In food it would mostly be the restaurants on critiques that would be harsh.

Skift: Right. There’s so much pressure to make them happy today too. The last thing I wanted to ask you about is going back to cruising.

What responsibilities do travelers have, when they look and they see, “OK. This guy’s getting paid $50 a month”? One thing is, “Oh, just tip them heavily, and make up for it.”

But what’s the role of the traveler in making decisions that bring about better tourism? Is it skipping just the bargains, is it focusing on local operators? What choices can travelers make?

Elizabeth Becker: I would say the first thing is, know why you’re travelling. If you said to yourself, “I’m travelling on this cruise to get to know the world,” you’d say, well that’s the wrong thing to do because you’re not going to get to know the world on this cruise. If you’re travelling because you want to take five days off and just hang out and have fun with your family, I would say, Why not do it in the United States, where you’re not going to pollute the ocean, and cause all kinds of environmental degradation?

You would also get more for your money, because you wouldn’t be trapped on that ship, and you would be able to go to a resort where you could move around more. If you know why you’re travelling, you’re going to avoid 50 percent of the problem, and if you’re honest about it.

Say you want to go to Italy. By the way, I would say talk to your travel agents. I think travel agents are coming back into business, and in part because people now know it’s not so easy to have a good trip.

It takes a lot of hard work, figuring out what you want, doing your homework, and that sort of thing. The best thing the consumer can do is, be honest about why you’re traveling, get the best bargain. Yes, always get the best bargain, but if you’re traveling for foreign adventure, you’re going to end up going to some place that will show a lot more respect for the local culture.

I think it’s just automatic, but that means you did your homework. I think that’s what people don’t want to do, and that’s why I guess I think a very good travel agency is the good way to go too.

Environmental degradation, think about it. Do you really have to go half way around the globe for five days? Or maybe you want to go a little closer. There are lots of ways.

I can’t speak too highly of the National Geographic Organization for bringing a lot of these issues to the fore. If you have questions, check out their website.