Although there is a communal incentive to protect the environment, maximizing the benefits in the long run, a company will conclude that it is in their best interest to utilize the ecotourism site beyond its sustainable level. By increasing the number of ecotourists, for instance, a company gains all the economic benefit while paying only a part of the environmental cost. In the same way, a company recognizes that there is no incentive to actively protect the environment; they bear all the costs, while the benefits are shared by all other companies. The result, again, is mismanagement. Taken together, the mobility of foreign investment and lack of economic incentive for environmental protection means that ecotourism companies are disposed to establishing themselves in new sites once their existing one is sufficiently degraded. In addition, the systematic literature review conducted by Cabral and Dhar (2019) have identified several challenges due to slow progression of ecotourism initiatives such as (a) economic leakages, (b) lack of government involvement, (c) skill deficiency among the local communities, (d) absence of disseminating environmental education, (e) sporadic increase in pollution, (f) conflict between tourism management personnel and local communities and (g) inadequate infrastructure development. Case studies
The purpose of ecotourism is to engage tourists in low impact, non-consumptive and locally oriented environments in order to maintain species and habitats — especially in underdeveloped regions.
Ecotourism can help bring in revenue for indigenous peoples.However, there needs to be a proper business plan and organizational structure, which helps to ensure that the generated money from ecotourism indeed flows towards the Indigenous peoples themselves, and the protection of the Indigenous territory. Debates around ecotourism focus on how profits off of Indigenous lands are enjoyed by international tourist companies, who do not share back with the people to whom those lands belong. Ecotourism offers a tourist-appealing experience of the landscape and environment, one that is different from the experience of the residents; it commodifies the lives of Indigenous people and their land which is not fair to its inhabitants.Indigenous territories are managed by governmental services (i.e. FUNAI in Brazil, ...) and these governmental services can thus decide whether or not to implement ecotourism in these Indigenous territories. Ecotourism can also bring in employment to the local people (which may be Indigenous people). Protected areas for instance require park rangers, and staff to maintain and operate the ecolodges and accommodation used by tourists. Also the traditional culture can act as a tourist attraction, and can create a source of revenue by asking payment for the showing of performances (i.e. traditional dance, ...) Ecotourism can also help mitigate deforestation that happens when local residents, under economic stress, clear lands and create smallholder plots to grow cash crops. Such land clearing hurts the environment. Ecotourism can be a sustainable and job-creating alternative for local populations.