TOUR 3008- Tourism Impact Analysis

• The Economic Environment in Tourism

  tourism is considered an economic cure for many countries, particularly those in the developing world. They rely significantly on tourism to generate income, produce foreign exchange and use it an as economic tool to restructure and diversify their economies. additionally, it serves as a means of correcting unevenness in income and employment, and is responsible for gaining revenues from tourism
• Economic Characteristics of the Tourism Industry

  • tourism is often seen as an industry bringing desperately needed foreign exchange and employment
  • it is closely associated with the erosion of traditional lifestyles, inflation and overdependence on an unreliable, single industry
• Invisible Export Industry 


  no tangible product; consumers purchase without seeing the product first-hand
• Required supporting goods and services

  expansion of existing infrastructure, or new ones must be created
• Fragmented product


  consists of a number of elements making measurement of impacts difficult
• Tourists Motivation and Tastes


  these are complex, often incompatible and vary among travellers
• Subject to Unpredictable external influences

  Terrorist activities, energy shortages, climatic conditions, currency exchange rates, political unrest, disease outbreak, APD tax
• Factors Influencing Economic Impacts

  1. the type of tourism activity and attraction for tourists
  2. the volume and level of tourist spending
  3. the level of economic development in the region
  4. the extent to which tourist spending is maintained and re-circulated in the region
  5. the extent of seasonality in the region
• Economic Benefits of Tourism:

  • Balance of payments and foreign exchange earnings
  • Improvement of economic structure
  • Generation of income
  • Generation of employment
  • Inflation and higher land use
  • Encouragement of entrep activities
  • Overdependence on tourism
  • Opportunity costs
• Leakages:


  repatriation of profits; payment for holidays made in the tourist generating region with high levels of importation
• Creation of external costs:

  increased cost of garbage collection and disposal as well as increased maintenance cost for tourist attractions damaged by over-crowding
• Negative economic impacts of tourism:

  1. Seasonal employment
  2. Dependence on tourism
  3. Inflation and cost of living
  4. Leakage of revenue
• Seasonal Employment 


  with the tourism industry having various peak seasons, some staff would only be hired to work during those seasons and be let go during the off season. this can lead to instability for the locals that rely on tourism-related jobs to sustain their livelihoods.
• Dependence on Tourism

  The overreliance on tourism can lead economies to external shock and fluctuation on tourist demand. Destinations that rely heavily on tourism may suffer immensely during an economic downturn, natural disasters and global crises.
• Inflation and Cost of Living

  Tourism can drive up the cost of living in popular destinations as the demand for goods and services increase. this can result in inflationary pressures, making it difficult for those with fixed incomes to afford basic necessities such as food, housing and transportation.
• Leakages in Revenue 


  A great portion of the tourism revenue that is earned in a country often leaks out due to multi-national corporations and foreign-owned businesses. this can be seen in a franchise where an international corporation expands itself into a different country, however, most of the earnings go back to the home country.
• Multiplier Effect


  the measure of the power that an initial expenditure has on the output, income, and employment levels as the spending works it way through the intermediate suppliers within the host country; a summation of the direct, indirect, and induced spending impact.
• Direct Effect

  • the initial spending of tourists on goods and services e.g. accommodation, meals and transportation
  • can be measured by tracking visitor expenditure using surveys, ticket sales data and hotel occupancy rates
• Indirect Effect

  • refers to the secondary effect tourism spending has on other industries within the destination
  • is measured by estimating the additional economic activity generated by the secondary transactions
• Induced Effect

  • The tertiary effect tourism spending has on other industries within the destination through household income and consumer spending
  • when the tourism industry hires employees and pay wages, local residents have more disposable income to spend on goods and services
  • is measured by estimating the additional spending generated by increased household income within the destination
• Sustainability in Tourism

  Sustainable Tourism is a concept that covers the entire tourism experience, taking into consideration the economic, social and environmental issues in improving the tourists' experiences
• Impacts of Environmental Degradation with respect to Water front dev

  1. the reclamation of land which poses long term environmental issues
  2. the destruction of ecosystems in the area
  3. the disturbance of wildlife
  4. the disruption to feeding and breeding patterns
  5. the release of sewage/waste water into nearby rivers, seas and mangroves, affecting water quality
• Commodification


  this refers to the conversion of a destination's culture into a commodity in response to the perceived or actual demand of the tourist market
• Effects of Commodification:

  • reduces authenticity of culture
  • the local identity and cultural values of a destination are destroyed
  • a destination's culture becomes standardized
  • a local phenomenon is turned into a global one for economic gains
  • other relevant cultural and social impacts
• Tools of Sustainability:

  1. Area Protection
  2. Consultation techniques
  3. Codes of conduct
  4. Greenwashing
  5. Environmental impact assessment
  6. Sustainability indicators
  7. Carrying capacity
  8. Limits to acceptable change
  9. Ecolabelling
  10. Foot printing
• Area Protection


  Countries where high percentages of their land area is under some form of legislated protection might be considered as practicing more sustainable tourism in comparison to those with low portions of their land protected.
• Consultation Techniques: 


  sustainable tourism must be built by, through and with the commitment of the local communities
• Codes of conduct 


  They attempt to influence attitudes and modify behaviour ; almost all codes are voluntary
• Greenwashing 


  the activity of giving a positive public image to putatively environmentally unsound practices
• Environmental Impact Assessment

  means of identifying impacts, but also enabling the integration of the environment and management
• Sustainability Indicators

  indicators help to both measure the level of engagement of tourists and their contributions to conservation. the results can help direct programs to better engage them in conservation and measure the level of response in footprinting
• Carrying Capacity 


  the level of human activity and development that an area can absorb before compromising the environment and the quality of the human experience
• Limits of Acceptable Change

  the LAC is a system developed to help managers logically respond to increased demand through a series of planning steps that consider not only current, but also future conditions of an area
• Ecolabelling 


  refers to the level of responsibility with which the tour company or hotel carry out their operations, so that all aspects of the tour are arranged on an ethical basis, taking due consideration of the local people, the local environment and the labour of employees.
• Foot printing 


  provides a mean of quantifying environmental impacts in a single easily identifiable indicator- quantifies the area used by a given holiday