Tourists pay entrance and activity fees for access to a protected area (PA) or natural site of interest, for use of its facilities, and for specific site-based recreational activities. Revenues from these fees can contribute to biodiversity conservation through retention by specific sites or protected area systems, revenue sharing agreements with communities, and earmarked transfers from the central government or agencies.
Key words: tourism, user fees, entrance fees, activity fees, protected areas, biodiversity conservation.
How does it work?
This user fee mechanism is derived from the ‘user-pays’ principle; tourists gain great value in experiencing PAs and sites of interest, and charging fees for that experience captures a part of that value. If revenues can be directly retained by a PA system – through a park account or environmental/conservation trust fund – or otherwise earmarked (ringfenced) for conservation use, these revenues can be an essential source of financing for PAs and other natural sites. Fees can also be a tool for visitor management, depending on the price elasticity of demand.
The two types of fees are:
- Entrance fees: fees charged to tourists for access to or use of facilities inside a PA or natural site of interest. For example, the Galapagos National Park charges entrance fees up to US$100 per person, depending on age and residency, 45 percent of which goes directly back to the Galapagos National Park Service. In 2006, this generated approximately US$10.5 million.
- Activity fees: fees charged to tourists to participate in a recreational activity in a PA or natural site of interest – scuba diving, snorkelling, camping, mooring a boat, hiking, wildlife viewing, etc. For example, Bonaire National Marine Park operates a ‘Nature Fee’ system for scuba diving and other water-based activities (up to US$25 per person). The park is financed solely through these fees, and legislation requires that revenues from the fees be used for management of the park.
These two solutions can be used in combination and together with other complementary financing tools. This entry focuses on financing PAs through entrance and activity fees, but revenues can be channelled into other conservation efforts, such as species conservation at local, regional, or national levels. A range of other finance solutions capture revenues from tourism. These include concessions, taxes, and donations from visitors and businesses, not featured here; neither do we include site-based revenues from activities conducted in and around PAs that are not related to tourism – such as research, film-making, and subsistence fishing and hunting.
Key design elements of entrance and activity fees are the price (including market segmentation), location of site or activity, type of activity, use of proceeds, and type of actor (private, non-government organization [NGO], government, etc.) Fees are mostly charged per individual (or, for entrance fees, per vehicle) and per entry, usually for a specified period of time (e.g. per day or per year). For example, Bonaire National Marine Park offers divers the choice of an annual pass or daily fee, whereas the Galapagos National Park charges a one-time fee for the entire duration of stay (up to three months). South African National Parks (SANParks) offers an annual ‘Wild Card’ membership that gives an individual/couple/family unlimited entry to 80+ national parks, reserves and resorts around southern Africa. A combination of per-day fees and annual pass or loyalty card options helps tailor fee systems to different types of visitors, which can be beneficial both in terms of revenue generation and visitor acceptance of fees.
Fees are commonly fixed, but they can be differentiated according to specific factors such as age, day of the week, or residency. Pricing should a) reflect ability to pay; b) be in proportion to benefits received; and c) cover the costs of management and administration. Higher fees can maximize revenues for conservation (assuming all, or a fixed proportion, of revenues are reinvested) and are often used in ecologically unique or pristine areas, where the user receives high benefits. However, higher fees can also affect the visitor profile – for instance, by preventing local people from accessing PAs. Lower fees, or preferably pricing systems differentiated by factors such as residency, may therefore be necessary to achieve social objectives such as local visitation. Pricing can also affect overall visitor numbers. The degree to which price influences demand is measured by the price elasticity of demand. In inelastic markets (e.g. areas with unique wildlife or landscapes– see Serengeti National Park and marine parks in South East Asia) an increase in price may not have major impacts on visitation. In highly elastic markets where price has a powerful influence on visitor numbers (e.g. when close substitutes are available at lower cost), an increase in price may reduce the number of visitors. This elasticity can be harnessed to minimize tourism-induced change through differential pricing between zones within a PA, or between PAs within a network, which can reduce congestion or pressure on sensitive areas. However, in areas of high ecological risk, direct management regulations such as setting a hard limit on visitor numbers or improving trail systems are usually more appropriate.
Pricing can also be differentiated by type of activity, sometimes with the aim of minimizing negative ecological and biophysical impacts of tourism, and sometimes with the aim of maximizing revenue generation (people are often willing to pay relatively high fees for specific activities, such as scuba diving). For example, in Bonaire National Marine Park, non-residents engaging in water-based activities must purchase and display a tag (annual pass) that costs US$25 for scuba diving and US$10 for all other water-based activities. However, the more complicated the pricing strategy, the more complicated and time-consuming the fee collection and reporting system will be.
- Regulatory entity/ies: The government entity/ies mandated to regulate and govern entrance and activity fee mechanisms at national and subnational levels may include the ministry responsible for environmental policy, laws, regulations, monitoring and evaluation; the ministry responsible for making budget allocations to PAs; and government or parastatal entities responsible for helping to market PA tourism at the national, regional, and local levels.
- Protected area authority/ies or partners: Depending on the model of PA management, the authority might be a government entity, a parastatal agency, an NGO, a private company, a community-based organization, or a Public-Private Partnership (PPP) of two or more of these groups working in partnership or under the auspices of an agreement. The vast majority of PAs are public, or under PPPs, but tourism fees are also implemented in private protected Areas.
- Government entities: Where the government is directly responsible for PA management, this is often done through specific sub-departments or parastatal agencies (see below). Responsibilities for PA management may be the responsibility of local, state or national government and often involves a combination of different government levels. In many cases, different PA types are managed by different divisions of government or agencies. For example, in Tanzania, national parks are managed by Tanzania National Parks, game reserves and wildlife management areas are managed by the Wildlife Division/Tanzania Wildlife Management Authority, and the Ngorongoro Conservation Area has its own designated management authority.
- Parastatal agencies: Some countries have assigned the management of PAs or other sites to parastatal (also called quasi-governmental) agencies for improved management efficiency. These public sector organisations tend to manage their own budgets. They can capture and spend revenue, and contract directly with staff and partners, thus giving them greater flexibility than the government to establish, capture, and spend revenue streams from entrance and activity fees. An example is South Africa’s KwaZulu-Natal Nature Conservation Service, which became a parastatal in 1998.
- NGOs: Where NGOs directly manage PAs or conservation sites, they may set, collect and spend entrance and activity fees. For example, the foundation STINAPA Bonaire manages two MPAs in Bonaire. In other circumstances, NGOs are partners that provide technical support and represent community or other interest groups in discussions on entrance and activity fees.
- Private companies: Companies may be directly responsible for or partners in PA management. They typically seek to maximize profit and minimize costs, but they may also take an active role in promoting a PA or other site and thus may seek to negotiate lower tourism fees. For example, Zanzibar’s Chumbe Island Coral Park is managed by a private company.
- Community-based organizations: Some PAs are under systems of community-based management, which involves the participation of local communities with current or historic ownership or use rights over the PA (see Namibia). They usually seek to maximize tourism revenues and protect their resources, but often require government approval for fee adjustments.
- Service provider(s): Any government entity, private company, community-based organization, or NGO that provides a nature-based service for which the fee is charged.
- Local communities: Local people may seek employment and business opportunities from tourism and can experience other positive or negative impacts in and around their local area. A well-managed tourism operation in or around PAs can generate substantial employment and other livelihood opportunities for local communities, but it is important for the views and concerns of community stakeholders to be built into tourism management plans.
- Tourists: A large body of research indicates that foreign and domestic tourists tend to be willing to pay to use PAs or to participate in nature-based activities. Communication to these primary stakeholders is essential and can be financially beneficial.
- Private companies: Beyond involvement in PA management or tourism service delivery, private companies may have other economic interests (e.g. resource extraction) in PAs.
Potential in monetary terms
Travel and tourism is one of the world’s largest and fastest growing industries. The World Travel & Tourism Council (WTTC) estimated that international tourist arrivals reached 1,239 million in 2016, generating expenditure of US$1,401.5 billion, which is projected to increase by 4.5 percent per year by 2027. Including domestic tourists, travel and tourism was estimated to make up 10.2 percent of global GDP in 2016, and forecast to rise to 11.4 percent of GDP in 2027. Nature-based tourism and ecotourism make up an increasing proportion of this industry. Research on terrestrial PAs alone indicates that PA visits generate an annual US$600 billion in direct in-country expenditure and US$250 billion in consumer surplus – compared to less than US$10 billion spent on PA conservation.
The financial benefits of tourism are largely captured by hotels, transport, and other sectors, and not always by PAs, so entrance and activity fees provide an essential means for PA authorities to generate revenues from tourism for PA management. A 2010 survey of PA financing compared 20 countries in Latin America and the Caribbean (LAC), and found that tourism entrance and activity fees generated US$39.6 million per year for PA systems – 76 percent of total revenue generated by PAs in the region, and nearly 10 percent of total funding available for PAs in the region. In most LAC countries, these revenues are generated by only a few PAs, which suggests that with investment in the right infrastructure, entrance and activity fees could generate much greater revenues. A 2017 study of the contribution of tourism revenues to public PA finance in southern Africa also found entrance fees to be significant – contributing, for example, a reported annual US$0.52 million in Madagascar, US$6.5 million in Namibia, US$65.6 million in Tanzania, and US$3.8 million (59 percent of total revenues) in the Seychelles.
When tourism volume is high and management is efficient, entrance and activity fees can be the most significant source of self-generated PA revenues, providing a potentially large portion of annual operation costs (e.g. human resources, maintenance, equipment, and utilities) – but rarely total costs. The monetary potential (in terms of revenues) is increased in unique environments where fees can be set relatively high, depending on levels of visitation. Entrance fees alone represented over 80 percent of total site-based revenues in more than half of the LAC countries, and in Paraguay, Chile, and Mexico entrance fees provided 100 percent of site-based revenues. Across LAC, entrance fees generated nearly 8 percent of total funding for PA systems in the region. In the Galapagos National Park, Ecuador, entrance fees cover 46 percent of operation costs[SA1] , while in Komodo National Park, Indonesia, they contribute only 6.9 percent of park management costs.
In marine environments, scuba diving has great potential to generate high revenues – usually through activity fees, and sometimes through entrance fees to a PA where the diving takes place. Countries with Marine Protected Areas (MPAs) that already cover most or all of their expenses through fees include Belize (Hol Chan Marine Reserve), Egypt (Ras Mohammed National Park), Bonaire, and Palau. Divers are willing to pay significant sums to protect marine habitats across the world – particularly in the Caribbean and South East Asia. It has been suggested that diving fees could potentially make up 78 percent of the financial shortfall in Caribbean MPAs, if more were to charge fees.
When is it feasible?
Policy and legislative frameworks should: 1) allow the implementation of entrance and/or activity fees, 2) allow a managing entity the flexibility to adjust fees according to visitor preferences and economic conditions, and 3) guarantee the return of a percentage (if not all) of fee revenues to PA management and adjacent communities. Policy frameworks must be supported by legislation if they are to endure changes in administration. In the US, for example, the federal Recreational Fee Demonstration Program (first authorized in 1996) gave each of the four land management agencies autonomy to charge, collect, and retain fees independent of Congress, thus allowing them the flexibility to respond to changes in visitor preferences and optimal pricing. In Tanzania, the three PA management authorities can also set their own pricing structures administratively, but this has led to internal price competition. Collaboration on pricing between management authorities within a country is likely to be beneficial for overall conservation impact.
Retention of revenues by management entities is critical for maximizing recovery of PA costs and for the long-term sustainability of revenue streams. When legislation prevents government PA agencies from retaining and reinvesting revenues (as in most LAC countries), they are instead sent to a central treasury and earmarked for redistribution to the budget for PA systems. However, since budget allocations tend not to reflect financial returns from tourism, PA managers may lack motivation to efficiently collect fees. Evidence for this can be seen in Sulawesi’s Bunaken National Park, where, despite being required by law to charge entrance fees, managers did not charge fees for the first decade of its existence because legislation required all revenues to be channelled to the central treasury. It has been argued, for this reason, that legislation should allow at least partial revenue retention at the site or PA where fees were collected, which also allows users to experience the benefits of their fees. Entrance fees were properly implemented in Bunaken once legislation was passed at the provincial level reserving 80 percent of entrance fee revenue for the park itself. However, within PA networks there are often PAs that do not generate significant revenues from tourism and thus require support from other more popular PAs – see Ezemvelo KZN Wildlife (EKZNW), KwaZulu-Natal’s wildlife agency. In these circumstances, the majority of revenues may need to be retained at the PA system or network level for net conservation benefit.
Minimum investment required and running costs
Investment required will depend on the current stage of development of a site and its capacity to develop, implement, and monitor the impact of tourism fee mechanisms. Minimum investment may include additional salaries for PA rangers and financial administration; installation and maintenance of required infrastructure, e.g. ticket sales booths; and costs associated with training, security, marketing, and research to establish optimal pricing structures. In less popular sites, entrance and/or activity fees may not cover investment and running costs, and therefore may not be feasible.
Appropriate time and context
Entrance fees are the most common tool for generating revenues from tourism for PAs (in developed and developing countries) since they can be relatively straightforward to establish. It is usually more cost-effective and acceptable to tourists to pay a single entrance fee rather than multiple small activity fees. However, in MPAs and very large terrestrial PAs with multiple points of entry, it can be more practical to charge fees at points of activity.
According to the International Union for the Conservation of Nature (IUCN), the following factors determine whether entrance and/or activity fees are appropriate:
- The overriding management objectives of the site – for instance, visitor management, cost recovery, generation of profit, and generation of local business opportunities are all objectives that can be achieved using fees.
- The market demand to accept the fees, which depends mostly on a site’s uniqueness and location.
- The sociopolitical dynamics of the country affect acceptability of fees (e.g.– for example, in some countries people may not view it as appropriate to charge citizens to access public land).
- The current stage of development of the site and the capacity to develop, implement, and monitor the impact of initiatives – including staff skilled in financial analysis and administration, marketing, ecotourism, and conservation; infrastructure for the management and visitor services needed; or the financial resources required to establish this staffing and infrastructure, including aspects as simple as ticket sales booths and PA rangers.
It should also be noted that tourism itself is not appropriate in all circumstances; for instance, some PAs may be too environmentally or culturally sensitive to support any level of visitation. For example, in Chiribiquete National Park in the Colombian Amazon, only overflights within carefully controlled flyways are allowed. Visitors are not allowed to enter the park on foot or by boat to prevent resource impacts and, more important, contact with undocumented, voluntarily isolated indigenous tribes living deep within the jungle.
What are the pros, cons, and risks?
- Fees can lead to economic efficiency in terms of maximizing social benefits – nature-based tourism typically generates costs, and free access would lead to marginal users receiving less benefit than the cost that their visit generated.
- Fees are equitable across users and non-users (in contrast to taxes) – i.e. the benefits received by a visitor can clearly be identified, and those who do not pay the fees can generally be excluded.
- If revenues are earmarked/directly retained by a PA management entity, they can act as an incentive for cost-saving, accountability, and improved management (depending on institutional capacity), creating a positive cycle leading back to increased revenue generation.
- Fees can be beneficial for local businesses, since free or underpriced access to recreation opportunities on public land may take away opportunities from private businesses operating elsewhere.
- Fees can be used as a visitor management tool, and extra staff employed to collect fees can provide a management presence and means to inform and educate visitors, with potential to minimize negative impacts on wildlife or biophysical resources.
- Revenues can be used to enhance site quality, which in turn increases acceptance of the fees among visitors and the tourism industry, and can potentially attract more tourists. If this tourism is well managed, it can have the following benefits:
- Stimulate the local economy through employment and entrepreneurship in the tourism supply chain;
- Build awareness and support among visitors on the importance of conservation;
- Provide a major incentive for communities in or near PAs to safeguard wildlife and avoid illegal or destructive activities, through direct social and economic benefits.
- Charging fees for access to and activities in specific sites of interest can raise awareness of the importance of these sites to local and regional economies, justifying political support and better funding for management
- If multi-tiered fee systems are not used (some countries have explicit or perceived legislative prohibitions on this) low-income or other socio-economic groups may be disproportionately affected by fees or excluded from benefiting from nature.
- It can be costly to collect fees and PAs frequently lack the capacity, infrastructure, and financial resources required.
- Fee revenues can rarely cover all PA costs and, without other complementary measures, may offer only limited relief for large funding gaps.
- If the generation of revenues is highly concentrated in a few PAs, the remaining PAs and overall conservation impact may be further compromised.
- Inefficient fee collection, including corruption and bribery at collection points, particularly if institutions and audit systems are weak.
- Staff can end up focusing on maximizing fee collection and neglecting PA management (especially if staff is limited).
- Revenues can be vulnerable to political interference or sudden policy changes (especially if they are channelled into a central treasury) and even if revenues are earmarked, politicians might reduce budget allocations by the amount generated through tourism fees, further compromising financial sustainability.
- The volatility and seasonality of tourism demand can make tourism revenues an unpredictable and unreliable source of finance for conservation.
- Earmarked revenues can incentivize PA or site staff to allow levels of visitation that compromise conservation and social values.
- Low public acceptance of fees resulting from concerns around the exclusion of citizens from public natural land and marine areas, or double taxation (i.e. residents paying taxes and user fees).
- In areas with limited economic opportunities, fees may lead to reduced tourism spending and subsequent opposition from the tourism industry.
How can the design enhance impact?
If tourism is managed to minimize negative impacts, entrance and activity fees can have a wide range of environmental, economic, and social benefits. IUCN has developed a comprehensive set of guidelines for sustainable tourism and visitor management in PAs, which include best practices for managing tourism revenues and costs to achieve conservation benefits.
One way of maximizing socio-economic benefits is to design a multi-tiered fee structure or incorporate fee waivers for specific groups (even if only for one day a month or outside of peak times). The structure should be designed with specific socio-economic objectives of the site or PA in mind. For example, offering discounts and waivers to national residents, local communities, schools, children, university students, and researchers can encourage learning and help to build public support for conservation in the site itself and beyond. Scaling fees by residency can be a particularly useful tool to capture the relatively high willingness to pay from international visitors, without excluding residents. For example, to enter the Galapagos National Park, foreign visitors over 12 years old pay US$100 and foreign children pay US$50, whereas Ecuadorian nationals over 12 pay US$6 and Ecuadorian children pay US$3. On the other hand, mountain gorilla viewing activity fees in Volcanoes National Park, Rwanda, are fixed at US$1,500 for all nationalities and socio-economic groups (due to the uniqueness of the experience) and socio-economic objectives are pursued in alternative ways.
A good communication strategy is critical to public acceptance of fee systems and will affect how much visitors are willing to pay. Management authorities should be transparent about how revenues are used and particularly how they contribute to conservation – advertising this information on websites, social media, signage, and interpretive materials on site. Strong evidence of the importance of this transparency is available from marine parks and Annapurna conservation area, Nepal. A targeted marketing campaign involving tourism agencies and the private sector can be used to help attract a regular flow of visitors or specific groups of visitors.
If a management entity is given the autonomy to collect and retain tourism fees and allocate revenues, then it must have enough institutional capacity and accountability to effectively and efficiently management these revenues (efficient management is closely linked to the recovery of PA operating costs from tourism). This may require the development of a capacity-building programme consisting of short courses and workshops, staff exchanges, mentoring, conferences, and twinning of PAs. If institutional capacity within the government entities responsible for PA management is very poor, management by parastatal agencies or public-private partnerships (PPPs) will usually allow PAs to capture revenues with greater efficiency (particularly in developing countries). PPPs enable management entities to leverage the expertise of tourism businesses, resulting in a higher quality experience that visitors are likely to be more willing to pay for. In countries with legal restrictions on the generation and retention of revenues by government entities, these management models may also offer more flexibility for the site to retain entrance and activity fee revenues rather than channel them into the central treasury.
Community engagement and partnerships can build support for tourism fee systems and minimize conflict, and direct involvement or employment in activities such as fee collection and spot-checking of visitor compliance can be mutually beneficial. For example, Bunaken National Park is co-managed by an advisory board representing a range of stakeholders, including local communities. The board has designed a practical and efficient entrance fee system that generates revenues for the park and its residents, funding a joint patrol system, which directly involves local individuals in monitoring and enforcement; conservation projects; and a small grants programme for community development projects. Building community revenue-sharing agreements like this into the design of a fee system can maximize socio-economic benefits for local communities. In Rwanda, 5 percent of revenue from mountain gorilla tourism is invested into communities adjacent to the PA, although the structure of this scheme has received some criticism.
Guidelines and Case Studies
- Tourism and Visitor Management in Protected Areas: Guidelines for sustainability (IUCN).
- Sustainable Financing of Protected Areas: A global review of challenges and options (IUCN).
- Understanding tourism revenues for effective management plans (WWF).
- Financial Sustainability of Protected Areas in Latin America and the Caribbean: Investment Policy Guidance (UNDP & TNC).
- Financing marine conservation (WWF).
- Natural Areas Revenue Generation through Visitor Fees.
- Trends in Park Tourism: Economics, Finance and Management.
- Improving Protected Area Finance Through Tourism.
- United States National Parks (Summer 2005 and Silver 2005)
- Bonaire National Marine Park
- Komodo National Park, Indonesia
- Galapagos Islands, Ecuador[SA1]
- Bunaken National Park in Sulawesi, Indonesia (UNDP 2012 and IUCN 2006)
- South African National Parks
- Marine parks in South East Asia (Pascoe et al. 2014; Depondt & Green 2006)
- Latin America and the Caribbean