Closing the ecotourism-conservation loop in the Peruvian Amazon

Annual revenue flow to developing countries for ecotourism could be as large as US$ 29 billion, providing an enormous financial incentive against habitat loss and exploitation. However, surprisingly little quantitative evidence exists on the profitability of the rainforest ecotourism sector, which determines the incentive and capacity of the sector to engage in conservation. A Peruvian rainforest ecotourism cluster generated US$ 11.6 million in 2005. The after-tax profit margin was at least 14% and has increased with tourist volume. High profitability, coupled with new legislation, has allowed operators to put 54 358 ha of rainforest near the new Interoceánica Sur highway under private management and to engage in conservation actions. A previously published microeconomic contract model of protected-areas management identifies two key features of rainforest tourism that link ecotourism to conservation: (1) tourists demand an immersive experience, which incentivizes the acquisition of large amounts of forest cover, and (2) institutional reforms have increased the expected effectiveness of conservation actions. In Peru, these conditions appear to be met, so that profits from ecotourism can combine with new land tenure rights to create a governance structure within which the industry can act as an independently financed partner to the conservation community.