KPIs Driving Change – How to Measure the Sustainability of Tourism

The long-term sustainability of economic, environmental and social systems is gaining high importance and guidelines for the responsible management of tourism are being set up.

The pursuit of sustainability in tourism is a noble goal, but how can we truly determine whether a destination is sustainable, and to what extent? How do we measure the impact of our efforts? Policymaking as well as private initiatives depend on access to comprehensive information to grasp the urgency of challenges, to identify causes, to create awareness and understanding and, finally, to verify the effectiveness of measures.

Evidence-based information needs to be able to determine whether tourism is developing in a sustainable manner or how far the development has progressed and whether there may still be a need for stronger political commitments to accelerate sustainability performances.

Sustainability indicators are established tools for assessing and monitoring sustainable development strategies. They inform about the impacts of tourism activities and determine whether these are acceptable or not. As such, sustainability indicators can lead to better decisions and more effective actions by simplifying and aggregating the information available to policymakers while also communicating the ideas, thoughts and values of different stakeholder groups.

As an ‘early warning system’, sustainability measurements enable evidence-based decisions on strategies and measures. They create knowledge as a requirement for taking responsibility. Meaningful indicators draw conclusions about the state or the change of relevant economic or social-ecological systems, with the parameters relating to causes or effects. This information can be used as a baseline for identifying issues for a destination and assessing them on a continuous basis in order to reduce future risks to tourism and the overall region.

The challenge, however, lies in selecting the appropriate and really measurable KPIs that ensure an objective evaluation. How can we use KPIs and effective monitoring to support the journey toward genuine sustainability? These questions are at the heart of the discussions within our “Tourism Impact Alliance” project. In 2023, we facilitated a multi-month “Impact Panel”, a Think Tank that featured insightful discussions with key stakeholders from destinations and certification organizations. We have continued this process within our project team, certifiers and with destination partners especially in Latin America.

Destinations as active shapers of a regenerative economy
The fate of our planet is no longer just about companies and destinations ‘fulfilling’ the sustainability requirements of society and politics – it is more about actively shaping a sustainable and regenerative economy that ensures the restoration and regeneration of ecosystems. A regenerative economy within a destination also requires social participation, the empowerment of women and the overcoming of social inequalities. Destinations have the potential to influence consumption patterns and lifestyles. The key question is whether these offerings contribute to achieving the UN’s sustainability goals and operating within planetary boundaries, or if the destination’s business model and its service providers adhere to a linear ‘take-make-dispose’ logic that depletes finite resources and leads to environmental pollution.

Destinations and the companies involved can play a crucial role in advancing a regenerative economy. The selection of KPIs is also a key element of strategic goal orientation: should the emphasis be on monetary indicators and the growth of gross national product, or should intangible benefits and the common good be prioritized? The focus on KPIs and clear qualitative criteria can have a strong impact when consistently focused on objectives: what is identified as unsustainable in the sustainability assessment should no longer take place. A paradigm shift and a change of direction in the destinations is possible – clear baseline and target values with KPIs are an important tool here. To this end, we will develop a complementary ‘maturity score’.

Searching the best Impact KPIs: A common KPI catalogue for destinations
There is already a long history of proposals, studies, manuals, and catalogues on tourism indicators. We take these insights into account and combine them with our practical experience. Our goal is to develop a pragmatic proposal, fully aware of the challenges in identifying a single set of indicators suitable for all. We aim to avoid burdensome and lengthy data collection processes that fail to bring about meaningful improvements in the realities of the destinations, thereby preventing the creation of unnecessary data repositories. Our focus is on creating a practical catalogue that drives tangible improvements on the ground, rather than merely generating theoretical concepts. We trust in a collaborative process that leverages the creativity and collective intelligence of all stakeholders involved.

The power of KPIs
We recognize that measuring sustainability performance is crucial for improved management and successful transformation processes. However, we do not believe in a ‘KPI miracle effect,’ where simply implementing indicators will automatically lead to significant improvements. Dr. Gloria Crabolu’s study on destinations that applied the European Tourism Indicator System provides a sobering insight: only 8% were able to demonstrate tangible improvements. We need to do better.

Key considerations in the joint development process
Our focus is on developing a concise KPI catalogue that can be applied universally across destinations. Although not every KPI will be relevant to all destinations, each destination should select the KPIs that best align with its tourism strategy and sustainability goals.

To ensure comparability between destinations and drive meaningful improvements, we aim to establish a set of 5 to 10 KPIs. These indicators must be relevant, globally applicable, comparable, and straightforward to measure.

We understand data collection is often challenging or may not be feasible at all. Sustainability indicators often suffer from data gaps and constraints related to time and space. It has been noted that infrequently collected, large-scale data can hinder the overall interpretation of indicators. Destinations, in particular, struggle with measuring complex issues such as environmental impacts or tourism pressure, especially when tourism is dispersed and varies in density across regions. This situation underscores the need for clear data definitions and methodological clarity for each indicator.

Another challenge in establishing indicators is securing motivation or ‘buy-in’ from entities to provide data. Encouraging companies and destinations to supply and share data is seen as crucial. To achieve this, the benefits and goals of assessing sustainability data must be communicated effectively.

We recognize the challenges of data collection. However, this does not serve as an argument against having a KPI catalogue. We will gather KPIs wherever possible and complement it with a ‘Maturity Score’ model.

We start small and simple, but starting nonetheless. While the initial version may not be perfect, it will evolve and improve over time – we are a learning system.

Systemic Indicators for the holistic nature of destination systems
We have engaged in extensive discussions on how to account for the complex systems within a destination. Even the most well-crafted KPI catalogue cannot fully capture this complexity. KPIs, by nature, are linear and one-dimensional. Therefore, we need an additional tool that addresses qualitative and systemic elements, incorporating impact orientation. We are currently developing a proposal for a maturity model inspired by natural systems and the cooperative models found in ecosystems. More details will be shared in the next newsletter.

Interested in knowing more about the common core set of KPIs?
Please get in touch and we will send you our current proposal for the KPI catalogue, inform you about further developments. We will be taking on board feedback until mid-November and then publishing a KPI catalogue that will be tested in pilot destinations.

We look forward to your feedback to create good solutions with a lasting impact!

Contact: Koschwitz@tourcert.org