Study Finds Tour Operator Model Retains 72% Revenue Locally and Mitigates Overtourism

Culture Discovery Vacations (CDV) has released a research paper documenting 19 years of operational data from its tour operator model, which retains 72% of gross revenue within local communities. The study, titled “Existential Sustainability: A Structural Approach to Anti-Extractive Tourism,” is available on the Social Science Research Network (SSRN).

The paper compares CDV’s model to industry standards, which typically retain 20-30% of revenue locally. CDV’s model also reports net profit margins of 18%, which the study states are comparable to those of conventional tour operators. The model is based on three structural constraints: refusal of all vendor commissions and incentives, volume caps limiting groups to 12-18 travelers and approximately 14 weeks per destination annually, and a requirement that all business partners be 100% locally owned family businesses.

The study presents data from two Italian destinations. In Soriano nel Cimino, where CDV has operated since 2006, the population has remained stable at 8,000, and local business ownership has stayed above 95%. CDV’s 37-38 partner families have continued to operate their businesses, with all partners remaining family-owned. The company reports distributing approximately €286,200 ($312,000) annually to local partners in Soriano nel Cimino, with 100% partner retention over 19 years, except for retirements.

In contrast, in Civita di Bagnoregio, where CDV ceased operations in 2018, the annual number of visitors increased to 850,000, and the resident population declined from 18 to 11. Commercial infrastructure in Civita shifted to multiple hotels, restaurants, and souvenir shops, and the last grocery store closed. CDV ended operations in Civita after determining that the original cultural experience product was no longer viable.

The study notes that while CDV’s volume discipline maintained its partnerships in Soriano nel Cimino, it could not prevent broader changes in Civita di Bagnoregio resulting from high visitor numbers. The research suggests that destination-level policy coordination is necessary to address such transformations.

The paper’s release coincides with ongoing discussions about managing tourism’s impact in destinations such as Venice, Amsterdam, and Barcelona, where measures including visitor taxes and accommodation restrictions have been implemented.

The research proposes that municipalities consider local ownership requirements for tourism businesses, prohibition of commission-based vendor relationships, and operator volume constraints as conditions for licensing. The study argues that these structural interventions can address revenue extraction issues in tourism before restrictive management measures become necessary.