Over $720 million in profit from tourism in Peru’s protected natural areas

When evaluating a business proposition, we often consider two economic variables: revenue versus investment. If you earn 40 times what you put in, that’s quite clearly a profitable venture. This happens to be the exact result of a new study by the Conservation Strategy Fund (CSF) on the local economic impact of tourism in Peru’s protected areas. CSF works in economically-based conservation solutions – with support from the Andes Amazon Fund (AAF). Economists and biologists worked together for the CSF study, setting out to analyze if tourism is profitable or not for the country.

One of the most significant findings was that in 2017, tourism in Peru’s protected natural areas generated $720 million. Additionally, 36,000 jobs were created in and around natural protected areas, which meant that $165 million of that money was direct income to households and wages.

The study also found that the economic revenue produced in 2017 from tourism in protected natural areas was 40 times greater than the amount invested by the state in the management and handling of these ecosystems.

“Now what business activities kick-started by the state with a core investment generates a return of 40:1?” said Gabriel Quijandría, former assistant minister for Strategic Development of Natural Resources for the Ministry of Environment and current director of CSF’s North Andes Amazon division. “You would only need one hand to count them, if there even are any. Furthermore, I doubt that many business activities that were historically and enthusiastically kick-started by the state produced this level of return, not palm oil or agriculture in the Amazon, none of them could ever generate a return on such a scale.”

For Quijandría, the results of this survey dispel any notion that “protected areas are useless and unproductive.”

He added frankly that, “[When] we grant areas a protected status or we allocate a state budget to such areas, we are not simply frittering money away. Rather, we are creating the conditions to produce economic profit in order to stimulate local social development, which in turn will foster momentum in private-sector activities associated with tourism in protected areas. This must be recognized.”

The potential of protected natural areas

Information for the study was compiled by experts from the CSF in five protected areas and a prospective regional conservation area. All in all, 537 studies were carried out across the Paracas National Reserve, Machu Picchu,  the Tambopata National Reserve, the Nor Yauyos Cochas Landscape Reserve, the Pacaya Samiria National Reserve and in Ausangate, a zone with a pending status as a Regional Conservation Area.

Both local Peruvians and foreign tourists were interviewed in order to separately measure the affluence and investment of both groups.

The research was carried out on the whole National System of Natural Areas Protected by the State (the Sinanpe), that is to say the ensemble all of the protected natural areas that are under the direct control of the central government.

Economic analyst José Carlos Rubio from the CSF (who was one of the authors of the report) explained that they compared and contrasted the result of their research by using the 2016 visitor records from the National Service of Areas Protected by the State (the Sernanp) as a starting point. They took into account that this initial step includes samples that are representative of all the different ecosystems in Peru. Finally, they used an economic methodology called “matching” in order to make calculations about all areas of the Sinape.

“What we wanted from choosing this sample was to obtain something representative of all the different ecosystems that exist in the different protected areas that welcome tourists and the different levels of tourist flows that they receive, as well as the different types of tourists,” he explained.

Even though experts were aware that four of the protected natural areas from the sample are the most visited in the country – Machu Picchu, Titicaca, Huascarán and Tampobata – a finding they consider to be relevant is that there are also 17 protected natural areas that collectively bring in more than $300,000.

And this was one of the points that the head of the Sernanp, Pedro Gamboa, emphasized during the presentation of this study.

“If only we had understood how significant the contribution that tourism in natural protected areas was for the local economy, but we never thought of anything on this level,” Gamboa said. “What’s even more surprising about the findings of this study is that there are protected areas that we thought would generate a lesser income for the local population; we found the example of Tambopata to be especially surprising.”

Kurt Holle, one of the founders of Rainforest Expeditions, who promote sustainable tourism and scientific research in Tambopata, recognizes that there has been an increase in the number of visits from both foreign tourists and Peruvians alike and that “this is a very good trend.”

When asked what he thinks should be improved to boost visitor numbers in protected natural areas, Holle stated that the first thing to understand is that these natural areas are very isolated. “If you think about it, it’s a long journey from Lima to any of the national parks. Lachay, Paracas is the closest, but to go anywhere else you’d need to endure a full-on expedition.”

For Holle, we therefore need to start by “recognizing that our geography, our locations make it difficult for Peruvians to be able to make use of the protected areas. This must be recognized. We also need to see how we can confront this, how creative we can be and how we can get more Peruvians to protected areas so they feel like these areas are an important part of their lives.”

One of the findings that Rubio from the CSF emphasizes that he recommends being taken into account by the government is that protected areas do in fact often determine where tourists decide to go.

The districts in Peru that have a natural protected area receive between 30-100 percent more visitors than those who don’t have one. This information is important in calling for investment in tourist infrastructure. Protected areas could be dynamic economic axes for sustainable tourism, which is very important,” he noted.

The head of Sernanp emphasized the results of the study when he confirmed an increase in revenue due to the concept of visiting protected natural areas. “We have had a record amount of revenue, of course we’re far from our potential earnings,” he stated. He also added that this amount represents 20-25 percent of the institution’s budget.

Beneficial for local populations?

The CSF economic analyst stated that tourism in protected natural areas could be just as attractive as other activities propelled by the State. “What we know is that tourism now accounts for 10 percent of GDP (Gross Domestic Product) and judging by what we’re seeing, tourism in protected areas accounts for around a third of that 10 percent of GDP.”

In this instance, Gabriel Quijandría highlighted the importance of the economic dynamic generated surrounding protected areas. For the head of the CSF, the “Jobs that are being created by tourism in protected natural areas creates income in impoverished areas with low levels of social and economic development. Therefore, these jobs are highly valuable in terms of the change they could generate in people’s living conditions.”

He added that Peru’s investment in protected natural areas should also include the protection of endangered species.

“If you don’t control the mining and illegal deforestation that is happening in and around protected areas, you’re putting the vital earning potential that the country needs in danger.” Additionally, he pointed out that if, as the study indicates, for every dollar invested you’re getting back forty, “it’s time to see if perhaps a substantial budget increase for the Sernanp is in order, given this level of response.”

Experts from the CSF claim that if the most significant source of income is indeed protected natural areas, then regional conservation areas also have a lot of potential. Two of them – Ausangate and Gocta – were included in the study as they yield revenue from tourism, even though their regional conservation status is still pending.  According to the study, Ausangante brought in $9 million in 2017, and Gocta $10 million, money that benefited the local population directly.

Enrique Ortiz, director of the Andes Amazon Fund (AAF), the institution that supports the elaboration of the study, affirmed that if it really is very necessary to invest in improving the visitor experience in protected natural areas, the most important is guaranteeing that the local population benefits from tourism.  “Mechanisms should be brought in so that regional conservation areas share the benefits with those living in and around these lands.”

New protected areas

Experts interviewed as part of the study all agree that it is still worthwhile to continue designating new protected areas, in addition to improving those that already exist.

As far as Ortiz is concerned, you just need to look at the figures which, as he points out, are based on modest calculations to understand that protected natural areas “do contribute to the economy” and that they could be a veritable cash cow long-term.  He also added that “protected areas are an important part of the national economy in terms of direct revenue, job creation and how the government plans to distribute this income. For the local authorities and the population in protected areas, they are a good investment for the country and not a burden.”

There are still ecosystems out there that the Sinanpe doesn’t deal with, and some areas of the country are still in the process of applying to become new protected areas.

“We still haven’t met all of the international commitments that we have in terms of the area size of protected land,” Rubio from the CSF said. “We must fulfill these commitments fearlessly. We need to throw ourselves into this investment which, as we are seeing, is highly profitable for the society. And it’s a sustainable source of income unlike other activities that are also important for the country, but that will only yield profit on the short term, such as mining or other extractive activities where once the resource has dried up, so do the economic benefits.”

The study only focused on measuring the direct local economic impact of tourism in protected natural areas and, therefore, experts said that their calculations are moderate. This is why Quijandría and Rubio from the CSF insist upon the importance of periodically carrying out and implementing fully representative studies in order to “clearly demonstrate the benefits of conservation and contributing to the decision making process.”

Banner image by Liz Villanueva.

This story was reported by Mongabay’s Latin America (Latam) team and was first published in Spanish on our Latam site on March 6, 2018.

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