LECTURE NOTES 2

IMPACTS OF TOURISM
For decades tourism industry growth has been a major contributor to increased
economic activity throughout the world. Most people generally think of tourism in
terms of economic impacts, jobs, and taxes. However, the range of impacts from
tourism is broad and often influences areas beyond those commonly associated with
tourism.
There are three major categories of tourism impacts that will be
individually analyzed:
1. ECONOMIC IMPACT
2. SOCIO-CULTURAL IMPACT
3. ENVIRONMENTAL IMPACT
Each category includes positive and negative impacts. Not all impacts are applicable
to every community because conditions or resources differ. Some are dependent on
particular natural resource features (mountains, sea side, spas) or development and
spatial patterns (special "tourist zones"). Others relate to the social condition of the
community, particularly the ability to culturally or socially connect with tourists.
Still others relate to types and intensity of tourism developments, i.e., approval or
hostility toward tourist activities.
Community and tourism leaders must balance an array of impacts that may either
improve or negatively affect communities and their residents. Equally, community
sensitivity to tourism means avoiding undue burdens on the industry that could
thwart its success. Tourism should not be expected to solve all community problems.
While creative strategic development of tourism amenities and services can enhance
the community or correct local deficiencies, tourism, like all business development,
must assure that its products attract customers. Overbearing rules and restrictions,
and overburdening taxes can make tourism businesses less attractive or competitive.
1. THE ECONOMIC IMPACT OF TOURISM
The tourism industry generates substantial economic benefits to both host countries
and tourists' home countries. Especially in developing countries, one of the primary
motivations for a region to promote itself as a tourism destination is the expected
economic improvement.
As with other impacts, this massive economic development brings along both
positive and negative consequences.
a. Positive impacts
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The main positive economic impacts of tourism relate to foreign exchange
earnings, infrastructure development, contributions to government revenues, and
generation of employment and business opportunities.
Foreign exchange
Tourism expenditures and the export and import of related goods and services
generate income to the host economy and can stimulate the investment necessary to
finance growth in other economic sectors. Some countries seek to accelerate this
growth by requiring visitors to bring in a certain amount of foreign currency for each
day of their stay and do not allow them to take it out of the country again at the end
of the trip.
An important indicator of the role of international tourism is its
generation of foreign exchange earnings. Tourism is one of the top five
export categories for as many as 83% of countries and is a main source
of foreign exchange earnings for at least 38% of countries.
Source: World Tourism Organization
One reason for tourisms inability to provide as much foreign exchange as desired
has to do with the highly competitive nature of the industry. Although tourism
growth has been substantial during the last twenty years, competition for travelers
has also been intense.
China is a case in point. In 1978 it opened its doors to the outside world, after being
closed since WWII and experienced what has been called a tourist tidal wave (i.e.
large number of tourists flooding the country) in the early years, the country had
difficulty in meeting travelers needs, especially with hotel rooms, inland
transportation, guides etc.. Visitors accepted the lack of services as part of the
tourist adventure, but the novelty quickly wore off. As a result of the Tiananmen
event, international visitors almost came to a halt. Today, China regained a lot of
the lost tourist market share, but the country economic welfare is due more to a
highly diversified economy led by a strong manufacturing sector than to the return
of the tourist.
This problem is also felt by other developing countries in their quest for foreign
exchange. To have long-term success, the level of services and facilities must be of
tourist class quality. Many developing countries do not have capital or expertise to
develop a tourism industry from scratch. Instead, they rely on multinational
companies to provide not only the capital needed for development, but also the
expertise needed for management. These types of arrangements increase leakages
and reduce the amount of foreign exchange.
Compounding the leakages problem is the provision of quality service, which is a
function of the host countrys educational system. Without basic grounding for
tourists needs and requirements, service levels are apt to be less than desirable,
resulting in declining visitation over time.
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The statement that tourism is an excellent earner of foreign exchange is
not axiomatic, but rather circumstantial. Tourism may actually benefit the
developed world more than the developing world.
Infrastructure development
When sufficient infrastructure is not available to handle the present needs of a
community, tourism may be the economic agent responsible for developing one.
Tourism can induce the local government to make infrastructure improvements such
as better water and sewage systems, roads, electricity, telephone and public
transport networks, all of which can improve the quality of life for residents as well
as facilitate tourism. The impressive performance of the tourism sector in Cyprus is
credited for considerable infrastructure improvement.
Taxes and employment generation
Government revenues from the tourism sector can be categorized as direct and
indirect contributions. Direct contributions are generated by taxes on incomes from
tourism employment and tourism businesses, and by direct levies on tourists such as
departure taxes. Indirect contributions are those originated from taxes and duties
levied on goods and services supplied to tourists.
Tourism development creates jobs and can also alter established employment
patterns, with a labor shift from high unemployment rural areas to more densely
populated tourism centers. This migration of labor keeps the labor cost low, but this
does not necessarily mean that the other goods and services remain moderately
priced.
Contribution to local economies
Tourism can be a significant, even essential, part of the local economy. As the
environment is a basic component of the tourism industry's assets, tourism revenues
are often used to measure the economic value of protected areas. For example,
Dorrigo National Park in New South Wales, Australia, has been estimated to
contribute 7% of gross regional output and 8.4% of regional employment. The
importance of tourism to local economies can also be illustrated by the impacts when
it is disrupted: the catastrophic 1997 floods that closed Yosemite National Park in
California cause locally severe economic losses to the areas around the park.
There are other local revenues that are not easily quantified, as not all tourist
expenditures are formally registered in the macro-economic statistics. Money is
earned from tourism through informal employment such as street vendors, informal
guides, rickshaw drivers, etc. The positive side of informal or unreported
employment is that the money is returned to the local economy, and has a great
multiplier effect as it is spent over and over again. The World Travel and Tourism
Council estimates that tourism generates an indirect contribution equal to 100% of
direct tourism expenditures.
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b. Negative impacts
There are many hidden costs to tourism, which can have unfavorable economic
effects on the host community. Often rich countries are better able to profit from
tourism than poor ones. Whereas the least developed countries have the most urgent
need for income, employment and general rise of the standard of living by means of
tourism, they are least able to realize these benefits. Among the reasons for this are
large-scale transfer of tourism revenues out of the host country and exclusion of local
businesses and products.
Infrastructure cost
Tourism development can cost the local government and local taxpayers a great deal
of money. Developers may want the government to improve the airport, roads and
other infrastructure, and possibly to provide tax breaks and other financial
advantages, which are costly activities for the government. Public resources spent on
subsidized infrastructure or tax breaks may reduce government investment in other
critical areas such as education and health.
Increase in prices
Increasing demand for basic services and goods from tourists will often cause price
hikes that negatively affect local residents whose income does not increase
proportionately.
As with any type of development, new businesses will have an impact on local
resources prices and labor supply.
Changes in land prices are often the first indicator of the economic effect of tourism.
Not only does this make it more difficult for local people, especially in developing
countries, to meet their basic daily needs, it can also result in a dominance by
outsiders in land markets and in-migration that erodes economic opportunities for
the locals, eventually disempowering residents. Long-term tourists living in second
homes, and the so-called amenity migrants (wealthy or retired people and liberal
professionals moving to attractive destinations in order to enjoy the atmosphere and
peaceful rhythms of life) cause price hikes in their new homes if their numbers
attain a certain critical mass.
While a rise in land value benefits those investing in land, there is usually a
concurrent rise in property taxes. Land speculation rarely benefits local population,
as they generally enjoy a small share of land value increase.
Other land users, like agricultural producers, are often forced to sell because they
are unable to pay the inflated property taxes.
Increasing levels of tourism also affect labor. Tourism can create jobs, but it can also
lead to inflation. The level of inflation depends on the available labor supply in the
area. If one must choose between two areas for tourism development investment,
choosing the one with an excess supply of labor will have less of an inflationary
impact on the areas economy. Unfortunately, it is not always possible to pick areas
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for their respective labor supply conditions as for other characteristics (natural
resources attractively) that make an area more appealing.
Tourism-related businesses can offset labor shortage and resulting wage inflation by
importing labor, thereby increasing the size of the labor pool. This scenario is more
likely to happen in areas subject to seasonal tourism.
Tourism development produces higher prices for consumer goods more often than do
other types of industrial development. The reason for this is the amount of
discretionary income in the hands of visitors. People pay higher prices for products
while traveling than they would at home. Businesses that cater to tourists as well as
locals price their products to receive the highest return. Whenever product demand
increases, prices increase. Locals are often forced to pay increased prices simply
because they live in an area experiencing higher product demand due to tourist
flows this trend is most noticeable in areas which are highly dependant on
tourism.
Economic dependence of the local community on tourism
Diversification in an economy is a sign of health; however, if a country or region
becomes dependent for its economic survival upon one industry, it can put major
stress upon this industry as well as the people involved to perform well. Many
countries, especially developing countries with little ability to explore other
resources, have embraced tourism as a way to boost the economy.
In small island developing states, percentages can range from 83% in the Maldives
to 21% in the Seychelles and 34% in Jamaica, according to the WTO. Over-reliance
on tourism, especially mass tourism, carries significant risks to tourism-dependent
economies. Economic recession and the impacts of natural disasters such as tropical
storms and cyclones as well as changing tourism patterns can have a devastating
effect on the local tourism sector.
Seasonal character of jobs
The seasonal character of the tourism industry creates economic problems for
destinations that are heavily dependent on it. Problems that seasonal workers face
include job (and therefore income) insecurity, usually with no guarantee of
employment from one season to the next, difficulties in getting training,
employment-related medical benefits, and recognition of their experience, and
unsatisfactory housing and working conditions.
Enclave tourism
Local businesses often see their chances to earn income from tourists severely
reduced by the creation of "all-inclusive" vacation packages. When tourists remain
for their entire stay at the same cruise ship or resort, which provides everything
they need and where they will make all their expenditures, not much opportunity is
left for local people to profit from tourism.
The Organization of American States (OAS) carried out a survey of Jamaica's tourist
industry that looked at the role of the all-inclusives compared to other types of
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accommodation. It found that all-inclusive hotels generate the largest amount of
revenue but their impact on the economy is smaller per dollar of revenue than other
accommodation subsectors. It also concluded that all-inclusives imported more, and
employed fewer people per dollar of revenue than other hotels. This information
confirms the concern of those who have argued that all-inclusives have a smaller
trickle-down effect on local economies.
The cruise ship industry provides another example of economic enclave tourism. On
many ships, especially in the Caribbean (the world's most popular cruise destination
with 44.5% of cruise passengers), guests are encouraged to spend most of their time
and money on board, and opportunities to spend in some ports are closely managed
and restricted.
Figure 2.1. A review of the economic impacts of tourism
Economic Impacts of Tourism
Positiv
e
impacts
Contributes to income and standard of
living
Improves local economy
Increases employment opportunities
Improves investment, development, and
infrastructure spending
Increases tax revenues
Improves public utilities infrastructure
Improves transport infrastructure
Increases opportunities for shopping
Economic impact (direct, indirect,
induced spending) is widespread in the
community
Creates new business opportunities
Negativ
e
impacts
Increases price of goods and services
Increases price of land and housing
Increases cost of living
Increases potential for imported labor
Cost for additional infrastructure
(water, sewer, power, fuel, medical, etc.)
Increases road maintenance and
transportation systems costs
Seasonal tourism creates highris!,
under or unemployment issues
Competition for land with other (higher
value) economic uses
"rofits may be exported by nonlocal
owners
#obs may pay low wages
Source: adapted from Kreag, G. (2005), The Impacts of Tourism
c. Economic multipliers and leakages
The analysis of the economic impacts in the previous sections has looked at tourism
contributions to national income and the economy at a single point in time (i.e. static
analysis). However, tourism expenditure, like any other form of expenditure, also
has dynamic or multiplier effects, due to the circular flow of income and expenditure
in the economy.
Thus, in addition to the direct impact of tourism expenditures on an area (as seen
above), there are also secondary impacts. The secondary or multiplier impact comes
into play as visitor spending circulates and re-circulates. The direct effects are the
easiest to understand because they result from the visitor spending money in tourist
enterprises and providing a living for the owners and managers and creating jobs for
employees.
So the direct benefits of tourism are realized through direct tourist expenditures for
goods and services in the destination, in the form of business receipts, income,
employment, and government receipts from the sectors that directly receive the
tourism expenditure.
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Indirect benefits are generated by the circulation of the tourism expenditure in the
destination through inter-business transactions in the domestic economy. For
example, indirect benefits can be generated from the investment and spending by
the businesses which benefit directly from tourism expenditures. The direct business
receipts, when re-funneled as investments or used to purchase other goods and
services from domestic suppliers (who, in turn, purchase goods and services from
other domestic suppliers), stimulate income and employment in other sectors.
In addition, tourism spending within the destination can create induced benefits. As
income levels rise due to the direct and indirect effects of the change in the level of
tourism expenditure, some of the additional personal income (related to the change
in tourism expenditures) is spent within the destination. This results in induced
benefits, such as higher levels of income and jobs in the local goods and service
sector. Hence, tourist spending creates direct benefits in tourism-related services
and sectors such as accommodation, hospitality, attractions, events, and
transportation, and indirect and induced benefits in other sectors such as
agriculture, construction, and manufacturing. Indirect and induced benefits are also
referred to as the secondary effect.
Figure 2.2. The tourism income multiplier effect
Direct Motel Indirect Induced
Impact Owner Impact Impact
Tourist pen!s" pen!s" #4$ on emplo%ees #1$ on #2$ on #1$
#1$$ on motel groceries clothes saves
#2$ on importe! foo!s
#2$ on local foo!s from farmer
who spen!s" #1$ on #1$
importe! foo! saves
#2$ saves
Some of the factors which affect the multiplier are the size of the local economy, the
propensity of tourists and residents to buy imported goods or services, and the
propensity of residents to save rather than spend (where saving reflects money kept
out of circulation, and not re-invested).
In mathematical terms, the multiplier can be shown as:
Multiplier = 1/(1 - C + M)
&
where C = marginal propensity to consume (the proportion of any increase in income
spent on consumption of goods and services), and
where M = marginal propensity to import (the proportion of any increase in income
spent on imported goods and services).
Multipliers measure the effect of revenues introduced into an economy.
So, when a tourists spending injects funds into the economy of a host area, an
economic effect occurs that is a specified number of times what was originally spent.
Initially, this effect is thought of as an income multiplier (which measures the extra
domestic income, primary and secondary, generated by an extra unit of tourism
expenditure), as tourist expenditures become income directly and indirectly to local
people.
However, there are additional economic phenomena. Increased spending
necessitates more jobs, which results in an employment multiplier (which measures
the increased number of primary and secondary jobs created by an extra unit of
tourism expenditure).
Because money changes hands a number of times during a year, there is a
transactions multiplier.
This is of particular interest to governmental tax officials where sales taxes are
imposed. As business grows in a tourist destination area, more infrastructure and
superstructure are constructed. This results in a capital multiplier.
A government multiplier can also be calculated, which measures the government
revenue created by an extra unit of tourism expenditure.
Tourism researchers and economists have tried to estimate the tourism income
multiplier for countries, regions and even cities.
Multipliers are an indicator of the economic independence of a country. The higher
the multiplier, the more economically self-sufficient the country is. Some countries
such as Canada, Ireland, Turkey, the U.K. and the U.S. have multiplier factors of
approximately 2 or more. Other countries experience much lower multipliers, for
example 0.64 for Iceland and 0.39 for Western Samoa. Although island countries
tend to depend on tourism for economic growth, they also have very quick leakages
and, therefore, very low output multipliers because almost all goods associated with
tourism need to be imported to the area.
Example:
If governments spend an extra $10m on building hotels the incomes of factors of production
involved in the building industry increases by $10m. Some of this increase in income will be
spent on local consumer goods. The increase in consumption arising out of a change in
income is called the marginal propensity to consume (MPC). It is defined as the proportion
of each extra unit of income that is spent.
Of course, this extra income will generate extra leakages. The amount of any change in
income that is leaked out of the circular flow of income is called the marginal rate of
leakage. This will be made up from the marginal propensity to save (MPS), the marginal
rate of taxation (MRT) and the marginal propensity to import (MPM)
Let us suppose that in our example when the income of the hotel builders increases by $10m
'
that $6m is spent on consumption. The marginal propensity to consume can be calculated
using the following formula.
MPC =
DC
DY
MPC =
6
10
MPC =
0.6
60% of every dollar earned is spent on consumer goods. The other 40% leaks out of the
circular flow of income in the form of savings, taxation and imports. The amount can be
calculated using the following formula.
MPS =
DS S = Savings
DY
MRT =
DT T = taxation
DY
MPM =
DM M = imports
DY
Let us suppose that MPS =0.2, MRT= 0.1 and MPM=0.1. It should be apparent that if we
add the MPC, MPS, MRT and MPM the result will be 1. They are, after all, proportions of a
whole. It should be remembered that the propensities are usually expressed as a decimal.
(
It is possible to use a formula to allow us to calculate the size of the multiplier process. From
this it is thus possible to calculate the size of the change of national income following a
change in the level of export spending.
DNY = DX x K
K = the multiplier coefficient ( the amount any change in income induced spending is
multiplier by to arrive at the resultant change in national income)
K =
1
1 - MPC
Alternatively
K =
1
Marginal rate of
leakage
In our example
K =
1
1 - 0.6
K =
2.5
1$
Alternatively
K =
1
MPS + MRT + MPM
K =
1
0.2 + 0.1 + 0.1
K = 2.5
Continuing with the calculation
DNY = DG x K
DNY = D$100 x 2.5
= $250m
Thus the increase in export spending of $100 has led to a larger increase in national income
of $250. This is called the multiplier effect. It has arisen because of the extra consumer
spending that has been generated out of any change in income being passed on to generate
more income to other factors of production. The size of the multiplier will depend upon the
size of the MPC and thus the size of the marginal rate of leakage (MPS, MRT and MPM).
The direct income for an area is the amount of tourist e)pen!iture that remains in the
local econom% after ta)es* profits* an! wages are pai! outsi!e the area an! after imports
are purchase!+ these su,tracte! amounts are calle! leakage.
Revenues may leak out of the local economy in the form of payment for imported
goods and for promotion and advertising by companies based outside the destination
(import leakages), repatriation of profits to foreign corporations and salaries to non-
local managers (export leakages) or money saved (without re-investment). Tourism-
related commodities and services purchased from within the destination reduce
leakages through the creation of economic interrelationships among the goods and
service providers in the destination.
The degree to which a local area is able to retain tourist income depends on how self-
sufficient the local economy is. As previously mentioned, if the local economy is able
to produce the goods and services tourists buy, the greater will be the multiplier
effect. The more goods that have to be imported from outside the region, the smaller
the multiplier will be.
In most all-inclusive package tours, about 80% of travelers' expenditures go to the
airlines, hotels and other international companies (who often have their
headquarters in the travelers' home countries), and not to local businesses or
workers. In addition, significant amounts of income actually retained at destination
level can leave again through leakage.
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A study of tourism leakages in Thailand, for example, estimated that
70% of all money spent by tourists ended up leaving Thailand (via
foreign-owned tour operators, airlines, hotels, imported drinks and
food, etc.). Estimates for other Third World countries range from 80%
in the Caribbean to 40% in India.
Source: Sustainable Living, Agenda 21
Of each US$ 100 spent on a vacation tour by a tourist from a developed country, only
around US$ 5 actually stay in a developing-country destination's economy. Figure
2.3 shows how the leakage happens.
There are three main ways that leakage occurs:
1. Import leakage
This commonly occurs when tourists demand standards of equipment, food, and
other products that the host country cannot supply. Especially in less-developed
countries, food and drinks must often be imported, since local products are not up to
the hotel's (i.e. tourist's) standards or the country simply doesn't have a supplying
industry. Much of the income from tourism expenditures leaves the country again to
pay for these imports.
The average import-related leakage for most developing countries today is between
40% and 50% of gross tourism earnings for small economies and between 10% and
20% for most advanced and diversified economies, according to UNCTAD.
2. Export leakage
Multinational corporations and large foreign businesses have a substantial share in
the import leakage. Often, especially in poor developing destinations, they are the
only ones that possess the necessary capital to invest in the construction of tourism
infrastructure and facilities. As a consequence of this, an export leakage arises when
overseas investors who finance the resorts and hotels take their profits back to their
country of origin.
3. Savings that are not loaned to another spender within a year and have the
same effect as importsnot stimulating the economy.
A UN report evaluating the contribution of tourism to national
income, gross levels of incomes or gross foreign exchange, found that
net earnings of tourism, after deductions were made for all necessary
foreign exchange expenditures, were much more significant for the
industry. This report found significant leakage associated with: (a)
imports of materials and equipment for construction; (b) imports of
consumer goods, particularly food and drinks; (c) repatriation of
profits earned by foreign investors; (d) overseas promotional
expenditures and (e) amortization of external debt incurred in the
development of hotels and resorts. The impact of the leakage varied
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greatly across countries, depending on the structure of the economy
and the tourism industry.
Figure 2.3. How leakages happen
Source: UNEP (2002), Negative economic impacts from tourism
d. Methods for estimating economic impacts
The main methods for estimating economic impacts of tourism are:
Input-output analysis
Cost-benefit analysis
Tourism satellite accounts
Input-Output analysis
This kind of analysis helps to demonstrate how economic sectors are related, the
number of linkages among them, and the effect of these linkages. Input-output
analysis is a means of analyzing inter-industry relationships by tracking the flow of
goods and services in an areas economy through the chain of producers, suppliers,
and intermediaries, to the final buyer.
Input-output analysis commences with the development of a table that illustrates, in
matrix form, how transactions flow through the economy over a given time period.
The rows of the matrix indicate the sales of the total output by each sector to every
other sector. The columns demonstrate the inputs required by every sector from the
other sectors.
For example, when assessing tourism accommodation, the rows in the table would
demonstrate the output or revenues generated by each industry from the sale of
products or services, including accommodation, meals, tour guides, and related
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services such as laundry, or medical services. The columns would indicate the inputs
(goods, services, labor and capital) that go into the output of the accommodation
sector, including food, utilities, paper products, advertising and promotion services,
wage and salary levels, and other factors.
Using a combination of matrix manipulations, multipliers can be calculated to
provide an assessment of the effects of different sectors on each other. While input-
output tables are helpful in understanding the linkages of the sectors in the
economy, they are limited to providing a snapshot of inter-industry economic actions
at a single point in time.
Cost-Benefit analysis
By using a number of economic tools and methods, destinations are able to obtain a
large array of economic information on tourism which can be used to make decisions.
In assessing this information, analysts, planners, and managers have to determine
not just whether jobs and wealth are created, but also how tourisms benefits are
distributed, what economic, social, and cultural impact costs result from the
development process, and whether the benefits outweigh the costs.
This analysis requires the integration of economic data with other data (such as
environmental, social, and cultural) to provide a reasonable indication of whether
tourism is a good strategy for the destination.
Cost-benefit analysis is an important activity to perform, but is also difficult to carry
out, since a number of the costs are very difficult to quantify. While advances are
being made in developing full-cost, environmentally based accounting, some
measures may need to remain qualitative rather than quantitative.
Another challenge in cost-benefit analysis lies in identifying the parties who benefit
and those who pay the costs of tourism.
Cost-benefit analysis does not have to be applied to the industry as a whole; often, it
is more appropriate to conduct smaller cost-benefit analyses on specific issues to
provide information on specific aspects of tourism.
Tourism Satellite Account
Tourism is the first activity to use worldwide Satellite Account standards to
measure its impact on national economies, as approved by the UN in March 2000.
What is a Tourism Satellite Account (TSA)
Tourism is an amalgam of industries such as transportation, accommodation, food
and beverage services, recreation, entertainment and travel agencies.
Tourism is a unique phenomenon as it is defined by the consumer or the visitor.
Visitors buy goods and services both tourism and non-tourism alike. The key from a
measurement standpoint is associating their purchases to the total supply of these
goods and services within a country.
The TSA is a new statistical instrument designed to measure these goods and
services according to international standards of concepts, classifications and
definitions which will allow for valid comparisons with other industries and
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eventually from country to country and between groups of countries. Such measures
will also be comparable with other internationally recognized economic statistics.
Why is a TSA needed?
There is an acute shortage of information on the increasing role of tourism in
national economies worldwide, hence the need for reliable data relative to the
importance and magnitude of tourism using the same concepts, definitions and
measurement approaches as other industries.
With the TSA, governments, entrepreneurs and citizens will be better equipped for
designing public policies and business strategies for tourism and for evaluating their
effectiveness and efficiency.
TSA Economic Concepts
The Travel & Tourism Satellite Account is based on a demand-side concept of
economic activity, because the industry does not produce or supply a homogeneous
product or service like traditional industries (agriculture, electronics, steel, etc).
Instead, Travel & Tourism is an industrial activity defined by a diverse collection of
products (durables and non-durables) and services (transportation, accommodations,
food and beverage, entertainment, government services, etc) that are delivered to
visitors.
A. There are two basic aggregates of demand in the TSA:
1. Travel & Tourism Consumption, i.e. value of products and services
consumed by visitors:
Personal Travel & Tourism, more formally known as consumer expenditures,
which capture spending by economy residents on traditional Travel & Tourism
services (lodging, transportation, entertainment, meals, financial services, etc) and
goods (durable and nondurable) used for Travel & Tourism activities.
Business Travel by government and industry, which mirrors Personal Travel &
Tourisms spending on goods and services (transportation, accommodation, meals,
entertainment, etc), but represents intermediate inputs used in the course of
business or government work.
Government Expenditures (Individual) by agencies and departments which provide
visitor services such as cultural (art museums), recreational (national park) or
clearance (immigration/ customs) to individual visitors.
Visitor Exports, which include spending by international visitors on goods and
services.
2. Travel & Tourism Demand builds on Travel & Tourism consumption to
include Travel & Tourism products and services associated with residual
components of final demand. It is used to construct a broader, economy-wide
impact of Travel & Tourism.
The residual elements of Travel & Tourism demand are:
Government Expenditures (Collective ) made by agencies and departments
associated with Travel & Tourism, but generally made on behalf of the community
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at large, such as tourism promotion, aviation administration, security services and
resort area sanitation services.
Capital Investment by Travel & Tourism providers (the private sector) and
government agencies (the public sector) to provide facilities, equipment and
infrastructure to visitors.
Exports (Non-Visitor) which include consumer goods sent abroad for ultimate sale
to visitors (such as clothing, electronics or petrol) or capital goods sent abroad for
use by industry service providers (such as aircraft or cruise ships).
B. By employing input/output modeling separately to these two aggregates (Travel
& Tourism Consumption and Travel & Tourism Demand), the Satellite Account is
able to produce two different and complementary aggregates of Travel & Tourism
Supply: the Travel & Tourism Industry (direct impact only) ,and the Travel &
Tourism Economy (the broader economy-wide impact, direct and indirect, of
Travel & Tourism)
1. Through this process, the Satellite Account is also able to determine that
portion of supply, which it Imports from abroad.
2. Next, the satellite account breaks down both aggregates of supply (Industry
and Economy) into the direct and indirect impacts of Gross Domestic Product
(GDP), the main descriptor of economic production, as well as the various
components of GDP (Wages & Salaries, Indirect/Transaction Taxes,
Operating Surplus, Depreciation and Subsidies).
3. Beyond the regular TSA accounts, a separate analysis is also provided of
Personal Income Taxes paid by Travel & Tourism generated employment and
Corporate and Property Taxes paid by Travel & Tourism companies.
C. Finally, one of the most important elements of the Travel & Tourism Satellite
Account are the Employment results, which can now be quantified for the basic
Travel & Tourism Industry and the broader Travel & Tourism Economy
1. T&T Industry Employment generally includes those jobs with face-to-face
contact with visitors (airlines, hotels, car rental, restaurant, retail,
entertainment, etc).
2. T&T Economy Employment includes T&T Industry Employment plus those
faceless jobs associated with:
Industry suppliers (airline caterers, laundry services, food suppliers, wholesalers,
accounting firms, etc).
Government agencies, manufacturing and construction of capital goods and
exported goods used in Travel & Tourism.
Supplied commodities (steel producers, lumber, oil production, etc
2. THE ENVIRONMENTAL IMPACT OF TOURISM
The quality of the environment, both natural and man-made, is essential to tourism.
However, tourism's relationship with the environment is complex. It involves many
16
activities that can have adverse environmental effects. Many of these impacts are
linked with the construction of general infrastructure such as roads and airports,
and of tourism facilities, including resorts, hotels, restaurants, shops, golf courses
and marinas. The negative impacts of tourism development can gradually destroy
the environmental resources on which it depends.
On the other hand, tourism has the potential to create beneficial effects on the
environment by contributing to environmental protection and conservation. It is a
way to raise awareness of environmental values and it can serve as a tool to finance
protection of natural areas and increase their economic importance.
A. Impact areas
There are three main tourism impact areas: natural resources, pollution and
physical impacts.
a. Depletion of natural resources
Tourism development can put pressure on natural resources when it increases
consumption in areas where resources are already scarce:
water resources
Water, and especially fresh water, is one of the most critical natural resources. The
tourism industry generally overuses water resources for hotels, swimming pools, golf
courses and personal use of water by tourists. This can result in water shortages and
degradation of water supplies, as well as generating a greater volume of waste
water.
In dryer regions like the Mediterranean, the issue of water scarcity is of particular
concern. Because of the hot climate and the tendency of tourists to consume more
water when on holiday than they do at home, the amount used can run up to 440
liters a day. This is almost double what the inhabitants of an average Spanish city
use.
Golf course maintenance can also deplete fresh water resources. In recent years, golf
tourism has increased in popularity and the number of golf courses has grown
rapidly. Golf courses require an enormous amount of water every day and, as with
other causes of excessive extraction of water, this can result in water scarcity. If the
water comes from wells, over pumping can cause saline intrusion into groundwater.
Golf resorts are more and more often situated in or near protected areas or areas
where resources are limited, exacerbating their impacts.
An average golf course in a tropical country such as Thailand needs
1500 kg of chemical fertilizers, pesticides and herbicides per year and
uses as much water as 60,000 rural villagers.
Source: http://www.tourismconcern.org.uk
local resources
Tourism can create great pressure on local resources like energy, food, and other raw
materials that may already be in short supply. Greater extraction and transport of
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these resources exacerbates the physical impacts associated with their exploitation.
Because of the seasonal character of the industry, many destinations have ten times
more inhabitants in the high season as in the low season. A high demand is placed
upon these resources to meet the high expectations tourists often have (proper
heating, hot water, etc.).
land degradation
Important land resources include minerals, fossil fuels, fertile soil, forests, wetland
and wildlife. Increased construction of tourism and recreational facilities has
increased the pressure on these resources and on scenic landscapes. Direct impact
on natural resources, both renewable and nonrenewable, in the provision of tourist
facilities can be caused by the use of land for accommodation and other
infrastructure provision, and the use of building materials.
Forests often suffer negative impacts of tourism in the form of deforestation caused
by fuel wood collection and land clearing. For example, one trekking tourist in Nepal
- an area already suffering the effects of deforestation - can use four to five
kilograms of wood a day.
b. Pollution
Tourism can cause the same forms of pollution as any other industry: air emissions,
noise, solid waste and littering, releases of sewage, oil and chemicals, even
architectural/visual pollution.
air pollution and noise
Transport by air, road, and rail is continuously increasing in response to the rising
number of tourists and their greater mobility. One consequence of this increase in
air transport is that tourism now accounts for more than 60% of air travel and is
therefore responsible for an important share of air emissions. Recent studies
estimated that a single transatlantic return flight emits almost half the CO
2
emissions produced by all other sources (lighting, heating, car use, etc.) consumed by
an average person yearly.
Transport emissions and emissions from energy production and use are linked to
acid rain, global warming and photochemical pollution. Air pollution from tourist
transportation has impacts on the global level, especially from carbon dioxide (CO
2
)
emissions related to transportation energy use. And it can contribute to severe local
air pollution.
Noise pollution from airplanes, cars, and buses, as well as recreational vehicles such
as snowmobiles and jet skis, is an ever-growing problem of modern life. In addition
to causing annoyance, stress, and even hearing loss for it humans, it causes distress
to wildlife, especially in sensitive areas. For instance, noise generated by
snowmobiles can cause animals to alter their natural activity patterns.
solid waste and littering
In areas with high concentrations of tourist activities and appealing natural
attractions, waste disposal is a serious problem and improper disposal can be a
major despoiler of the natural environment - rivers, scenic areas, and roadsides. For
example, cruise ships in the Caribbean are estimated to produce more than 70,000
tons of waste each year. Today some cruise lines are actively working to reduce
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waste-related impacts. Solid waste and littering can degrade the physical
appearance of the water and shoreline and cause the death of marine animals.
In mountain areas, trekking tourists generate a great deal of waste. Tourists on
expedition leave behind their garbage, oxygen cylinders and even camping
equipment. Such practices degrade the environment with all the detritus typical of
the developed world, in remote areas that have few garbage collection or disposal
facilities. Some trails in the Peruvian Andes and in Nepal frequently visited by
tourists have been nicknamed "Coca-Cola trail" and "Toilet paper trail".
The Wider Caribbean Region, stretching from Florida to French
Guiana, receives 63,000 port calls from ships each year, and they
generate 82,000 tons of garbage. About 77% of all ship waste comes
from cruise vessels. The average cruise ship carries 600 crew members
and 1,400 passengers. On average, passengers on a cruise ship each
account for 3.5 kilograms of garbage daily - compared with the 0.8
kilograms each generated by the less well-endowed folk on shore.
Source: UNEP (1999), Our Planet, UNEP magazine for environmentally
sustainable development, volume 10, no. 3
sewage
Construction of hotels, recreation and other facilities often leads to increased sewage
pollution. Wastewater has polluted seas and lakes surrounding tourist attractions,
damaging the flora and fauna. Sewage runoff causes serious damage to coral reefs
because it stimulates the growth of algae, which cover the filter-feeding corals,
hindering their ability to survive. Changes in salinity and siltation can have wide-
ranging impacts on coastal environments. And sewage pollution can threaten the
health of humans and animals.
aesthetic pollution
Often tourism fails to integrate its structures with the natural features and
indigenous architectural of the destination. Large, dominating resorts of disparate
design can look out of place in any natural environment and may clash with the
indigenous structural design.
A lack of land-use planning and building regulations in many destinations has
facilitated sprawling developments along coastlines, valleys and scenic routes. The
sprawl includes tourism facilities themselves and supporting infrastructure such as
roads, employee housing, parking, service areas, and waste disposal.
c. Physical impacts
Attractive landscape sites, such as sandy beaches, lakes, riversides, and mountain
tops and slopes, are often transitional zones, characterized by species-rich
ecosystems. Typical physical impacts include the degradation of such ecosystems.
An ecosystem is a geographic area including all the living organisms (people, plants,
animals, and microorganisms), their physical surroundings (such as soil, water, and
air), and the natural cycles that sustain them. The ecosystems most threatened with
1(
degradation are ecologically fragile areas such as alpine regions, rain forests,
wetlands, mangroves, coral reefs and sea grass beds. The threats to and pressures
on these ecosystems are often severe because such places are very attractive to both
tourists and developers.
In industrial countries, mass tourism and recreation are now fast
overtaking the extractive industries as the largest threat to mountain
communities and environments. Since 1945, visits to the 10 most
popular mountainous national parks in the United States have
increased twelve-fold. In the European Alps, tourism now exceeds 100
million visitor-days. Every year in the Indian Himalaya, more than
250,000 Hindu pilgrims, 25,000 trekkers, and 75 mountaineering
expeditions climb to the sacred source of the Ganges River, the
Gangotri Glacier. They deplete local forests for firewood, trample
riparian vegetation, and strew litter. Even worse, this tourism
frequently induces poorly planned, land-intensive development.
Source: People & the Planet, http://oneworld.org
Physical impacts are caused not only by tourism-related land clearing and
construction, but by continuing tourist activities and long-term changes in local
economies and ecologies.
Physical impacts of tourism development:
Construction activities and infrastructure development
The development of tourism facilities such as accommodation, water supplies,
restaurants and recreation facilities can involve sand mining, beach and sand dune
erosion, soil erosion and extensive paving. In addition, road and airport construction
can lead to land degradation and loss of wildlife habitats and deterioration of
scenery.
Deforestation and intensified or unsustainable use of land
Construction of ski resort accommodation and facilities frequently requires clearing
forested land. Coastal wetlands are often drained and filled due to lack of more
suitable sites for construction of tourism facilities and infrastructure. These
activities can cause severe disturbance and erosion of the local ecosystem, even
destruction in the long term.
Marina development
Development of marinas and breakwaters can cause changes in currents and
coastlines. Furthermore, extraction of building materials such as sand affects coral
reefs, mangroves, and hinterland forests, leading to erosion and destruction of
habitats. In the Philippines and the Maldives, dynamiting and mining of coral for
resort building materials has damaged fragile coral reefs and depleted the fisheries
that sustain local people and attract tourists.
Overbuilding and extensive paving of shorelines can result in destruction of habitats
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and disruption of land-sea connections (such as sea-turtle nesting spots). Coral reefs
are especially fragile marine ecosystems and are suffering worldwide from reef-
based tourism developments. Evidence suggests a variety of impacts to coral result
from shoreline development, increased sediments in the water, trampling by tourists
and divers, ship groundings, pollution from sewage, overfishing, and fishing with
poisons and explosives that destroy coral habitat.
Physical impacts from tourist activities:
Trampling
Tourists using the same trail over and over again trample the vegetation and soil,
eventually causing damage that can lead to loss of biodiversity and other impacts.
Such damage can be even more extensive when visitors frequently stray off
established trails.
Anchoring and other marine activities
In marine areas (around coastal waters, reefs, beach and shoreline, offshore waters,
uplands and lagoons) many tourist activities occur in or around fragile ecosystems.
Anchoring, snorkeling, sport fishing and scuba diving, yachting, and cruising are
some of the activities that can cause direct degradation of marine ecosystems such
as coral reefs, and subsequent impacts on coastal protection and fisheries.
Alteration of ecosystems by tourist activities
Habitat can be degraded by tourism leisure activities. For example, wildlife viewing
can bring about stress for the animals and alter their natural behavior when
tourists come too close. Safaris and wildlife watching activities have a degrading
effect on habitat as they often are accompanied by the noise and commotion created
by tourists as they chase wild animals in their trucks and aircraft. This puts high
pressure on animal habits and behaviors and tends to bring about behavioral
changes. In some cases, as in Kenya, it has led to animals becoming so disturbed
that at times they neglect their young or fail to mate. This is why African animals
are being protected and actively managed as an economic resource for tourism
development: each lion is estimated at 27,000 USD annually, while each elephant is
estimated at 610,000 USD per year.
d. Global environmental impacts affecting tourism
Natural disasters
Catastrophes like floods, earthquakes, wildfires, volcanoes, avalanches, drought and
diseases can have a serious effect on inbound and domestic tourism and thus on local
tourism industries.
Climate change
Tourism not only contributes to climate change, but is affected by it as well. Climate
change is likely to increase the severity and frequency of storms and severe weather
events, which can have disastrous effects on tourism in the affected regions. Some of
the other impacts that the world risks as a result of global warming are drought,
diseases and heat waves.
These negative impacts can keep tourists away from the holiday destinations. Global
warming may cause:
21
Less snowfall at ski resorts, meaning shorter skiing seasons in the Alpine
region. In already hot areas like Asia and the Mediterranean, tourists will
stay away because of immense heat, and out of fear of diseases and water
shortages.
Harm to vulnerable ecosystems such as rainforests and coral reefs because of
rising temperatures and less rainfall. A major risk to coral reefs is bleaching,
which occurs when coral is stressed by temperature increases, high or low
levels of salinity, lower water quality, and an increase in suspended
sediments. These conditions cause the zooxanthallae (the single-celled algae
which forms the colors within the coral) to leave the coral. Without the algae,
the coral appears white, or "bleached" - and rapidly dies. The Great Barrier
Reef, which supports a US$ 640 million tourism industry, has been
experiencing coral bleaching events for the last 20 years.
Rising sea levels, the result of melting glaciers and polar ice. Higher sea
levels will threaten coastal and marine areas with widespread floods in low-
lying countries and island states, increasing the loss of coastal land. Beaches
and islands that are major tourism attractions may be the first areas to be
affected.
Increased events of extreme weather, such as tornadoes, hurricanes and
typhoons. These are already becoming more prevalent in tourist areas in the
Caribbean and South East Asia.
B. How tourism can contribute to environmental conservation
The tourism industry can contribute to conservation through:
a. Financial contributions
Direct financial contributions
Tourism can contribute directly to the conservation of sensitive areas and habitat.
Revenue from park-entrance fees and similar sources can be allocated specifically to
pay for the protection and management of environmentally sensitive areas. Special
fees for park operations or conservation activities can be collected from tourists or
tour operators.
Contributions to government revenues
Some governments collect money in more far-reaching and indirect ways that are
not linked to specific parks or conservation areas. User fees, income taxes, taxes on
sales or rental of recreation equipment, and license fees for activities such as
hunting and fishing can provide governments with the funds needed to manage
natural resources. Such funds can be used for overall conservation programs and
activities, such as park ranger salaries and park maintenance.
For For Costa Rica, for example, tourism represents 72% of national monetary
reserves, generates 140,000 jobs and produces 8.4% of the gross domestic product.
The country has 25% of its territory classified under some category of conservation
management.
22
b. Improved environmental management and planning
Sound environmental management of tourism facilities and especially hotels can
increase the benefits to natural areas. But this requires careful planning for
controlled development, based on analysis of the environmental resources of the
area. Planning helps to make choices between conflicting uses, or to find ways to
make them compatible. By planning early for tourism development, damaging and
expensive mistakes can be prevented, avoiding the gradual deterioration of
environmental assets significant to tourism.
Cleaner production techniques can be important tools for planning and operating
tourism facilities in a way that minimizes their environmental impacts. For
example, green building (using energy-efficient and non-polluting construction
materials, sewage systems and energy sources) is an increasingly important way for
the tourism industry to decrease its impact on the environment. And because waste
treatment and disposal are often major, long-term environmental problems in the
tourism industry, pollution prevention and waste minimization techniques are
especially important for the tourism industry.
c. Environmental awareness raising
Tourism has the potential to increase public appreciation of the environment and to
spread awareness of environmental problems when it brings people into closer
contact with nature and the environment. This confrontation may heighten
awareness of the value of nature and lead to environmentally conscious behavior
and activities to preserve the environment.
If it is to be sustainable in the long run, tourism must incorporate the principles and
practices of sustainable consumption. Sustainable consumption includes building
consumer demand for products that have been made using cleaner production
techniques, and for services - including tourism services - that are provided in a way
that minimizes environmental impacts. The tourism industry can play a key role in
providing environmental information and raising awareness among tourists of the
environmental consequences of their actions.
d. Protection and preservation
Tourism can significantly contribute to environmental protection, conservation and
restoration of biological diversity and sustainable use of natural resources. Because
of their attractiveness, pristine sites and natural areas are identified as valuable
and the need to keep the attraction alive can lead to creation of national parks and
wildlife parks.
In Hawaii, new laws and regulations have been enacted to preserve the Hawaiian
rainforest and to protect native species. The coral reefs around the islands and the
marine life that depend on them for survival are also protected. Hawaii now has
become an international center for research on ecological systems - and the
promotion and preservation of the islands' tourism industry was the main
motivation for these actions.
Grupo Punta Cana, a resort in the Dominican Republic, offers an example of how
luxury tourism development and conservation can be combined. The high-end resort
23
was established with the goal of catering to luxury-class tourists while respecting
the natural habitat of Punta Cana. The developers have set aside 10,000 hectares of
land as a nature reserve and native fruit tree garden. The Punta Cana Nature
Reserve includes 11 fresh water springs surrounded by a subtropical forest where
many species of unusual Caribbean flora and fauna live in their natural state.
Guests can explore a "nature path" leading from the beach through mangroves,
lagoons of fresh water springs and dozens of species of Caribbean bird and plant life.
The Punta Cana Ecological Foundation has begun reforesting some parts of the
reserve that had been stripped of their native mahogany and other trees in the past.
Other environmentally protective policies have been put into effect at the resort,
such as programs to protect the offshore barrier reefs and the recycling of
wastewater for use in irrigating the grounds. The fairways of the resort's new golf
course were planted with a hybrid grass that can be irrigated with sea water The
grass also requires less than half the usual amounts of fertilizer and pesticides.
Tourism has had a positive effect on wildlife preservation and protection efforts,
notably in Africa but also in South America, Asia, Australia, and the South Pacific.
Numerous animal and plant species have already become extinct or may become
extinct soon. Many countries have therefore established wildlife reserves and
enacted strict laws protecting the animals that draw nature-loving tourists. As a
result of these measures, several endangered species have begun to thrive again.
e. Alternative employment
Tourism can provide an alternative to development scenarios that may have greater
environmental impacts. The community-owned school, located in the Maya
Biosphere Reserve, combines individual language courses with home stay
opportunities and community-led eco-tours. It receives around 1,800 tourists yearly,
mostly from the US and Europe, and employs almost 100 residents, of whom around
60% were previously engaged in mostly illegal timber extraction, hunting and
milpas, or slash-and-burn agriculture.
f. Regulatory measures
Regulatory measures help offset negative impacts; for instance, controls on the
number of tourist activities and movement of visitors within protected areas can
limit impacts on the ecosystem and help maintain the integrity and vitality of the
site. Such limits can also reduce the negative impacts on resources.
Limits should be established after an in-depth analysis of the maximum sustainable
visitor capacity. This strategy is being used in the Galapagos Islands, where the
number of ships allowed to cruise this remote archipelago is limited, and only
designated islands can be visited, ensuring visitors have little impact on the
sensitive environment and animal habitats.

Figure 2.3. A review of the environmental impacts of tourism
Environmental Impacts of Tourism
24
Positiv
e
impacts
"rotection of selected natural
environments or prevention of further
ecological decline
"reservation of historic buildings and
monuments
Improvement of the area$s appearance
(visual and aesthetic)
% &clean& industry (no smo!estac!s)
'inancial contributions
Improved environmental management
and planning
Environmental awareness raising
%lternative employment opportunities
Negativ
e
impacts
"ollution (air, water, noise, solid waste,
and visual)
(oss of natural landscape and
agricultural lands to tourism
development
(oss of open space
)estruction of flora and fauna
(including collection of plants, animals,
roc!s, coral, or artifacts by or for
tourists)
)egradation of landscape, historic sites,
and monuments
*ater shortages
Introduction of exotic species
)isruption of wildlife breeding cycles
and behaviors
Source: adapted from Kreag, G. (2005), The Impacts of Tourism
C. Environmental management
Having established that a high-quality natural environment is essential for tourism,
a key question is how it can be maintained. Given that the negative impacts of
tourism are partly related to the number of users of natural resources, an obvious
starting point in the environmental management of tourism would be to control this
number.
One technique that attempts to do this is carrying-capacity analysis. The WTO
defines carrying capacity as being fundamental to environmental protection and
sustainable development. It refers to a maximum use of any site without causing
negative effects on the resources, reducing visitor satisfaction, or exerting adverse
impact upon the society, economy and culture of the area. Carrying capacity limits
can sometimes be difficult to quantify, but they are essential to planning for tourism
and recreation.
There are different elements to the concept of carrying capacity:
Physical capacity the limit on the actual number of users that can be
accommodated in a region. Such things as the number of roads, the size of
parking lots and the amount of water resources influence the physical
carrying capacity of an area.
Environmental capacity the maximum level of users that an area can
accommodate before environmental damage is incurred. It is related to the
trampling of grassland at picnic sites, disturbance of wildlife or physical
erosion of important historic monuments. Environmental capacity will
depend on the type of use made to an area. In addition, different types of
environments are affected more or less by use.
Psychological or perceptual carrying capacity - the limit on the number of
users that an area can accommodate before visitors perceive a decline in the
desirability of an area; it is reflected in the expressed level of visitor
satisfaction associated with a destination. It depends on visitors attitudes to
both the number and behavior of other users, e.g. crowded and noisy
25
environment, on visitors tolerance of the physical wear and tear or pollution
at a destination.
A number of factors are likely to influence the carrying capacity of any particular
destination, as follows:
o Fragility of the landscape to development and change
o Existing level of tourism development
o Number of visitors
o Behavior of tourists
o Environmental education of tourists and local people
o Efficiency of environmental management
o Levels of economic development
3. THE SOCIO-CULTURAL IMPACT OF TOURISM
The socio-cultural impacts of tourism are the effects on host communities of direct
and indirect relations with tourists, and of interaction with the tourism industry.
For a variety of reasons, host communities often are the weaker party in interactions
with their guests and service providers, leveraging any influence they might have.
These influences are not always apparent, as they are difficult to measure, depend
on value judgments and are often indirect or hard to identify.
The impacts arise when tourism brings about changes in value systems and
behavior and thereby threatens indigenous identity. Furthermore, changes often
occur in community structure, family relationships, collective traditional life styles,
ceremonies and morality.
But tourism can also generate positive impacts as it can serve as a supportive force
for peace, foster pride in cultural traditions and help avoid urban relocation by
creating local jobs. As often happens when different cultures meet, socio-cultural
impacts are ambiguous: the same objectively described impacts are seen as
beneficial by some groups, and are perceived as negative - or as having negative
aspects - by other stakeholders.
According to Ritchie and Zins (1978), curiosity is one of the key motivators of travel.
Curiosity means desire to learn about things foreign. For tourists, the cultures of
foreign countries are naturally what they are most curious about.
There are basically three things to bear in mind. Culture is something that:
a. is learned;
b. is shared, it is something collective.
c. includes much more than the performing arts or high culture.
Twelve elements of culture have been identified as attractions for tourists:
a. Language
The learning of and the ability to use a foreign language by a tourist provides a
means for developing an interest in another culture.
b. Traditions
26
Traditions that characterize a destination or a country provide a focal point of
interest for tourists who seek to learn about the way of life in the host community.
c. Handicrafts
Handicrafts provide a source of interest for tourists who wish to see the
craftsmanship of a traditional or popular item. Handicraft items can also be
purchased by tourists as souvenirs.
d. Food
Trying and enjoying the cuisine or food at a destination is one of the main activities
tourists engage in when traveling.
e. Art
Art, being country or culture-specific, often reflects the past and present cultural
heritage of the host community.
f. History
The oral, written, and landscape history of an area reflects its past and serves as a
reminder for both locals and tourists of the way of life of the host society in earlier
times.
Important events which shaped the existing nature of an area and its people also
provide insights for tourists about the community.
g. Works and technology
Technology particular to a destination area, either in the past or at present, is a
source of interest for tourists. They provide knowledge about the nature of the hosts
economy and lifestyle.
h. Religion
Religion of particular significance to an area influences the lifestyle and festivities of
the host community. It is a source of interest amongst tourists as it provides further
insights about the spiritual aspects of the culture of the host community.
i. Architecture
Architectural features provide physical evidence of the cultural attributes of an area.
Often a distinctive architectural style is associated with a particular community or
country.
Architecture also reflects the availability of local building materials, the way the
community adapts to climatic conditions, or a particular design style.
j. Dress
The styles of dress of the local residents are usually a feature of popular interest to
tourists. The styles of dress also highlight distinctive characteristics of an area.
Items of dress and clothing unique to an area make good souvenirs too.
For the wearer, his or her status and self-esteem is enhanced as the dress and
clothing become an object of discussion or admiration.
k. Educational systems
Educational features help provide tourists with some indications of the nature and
level of sophistication of the host society.
l. Leisure activities
The leisure pursuits of the host community provide insights into the manner in
which local people spend their spare and non-obligated time. Tourists may, as
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spectators, watch the leisure activities as a form of entertainment or, at times, be
the participants themselves.
A. Negative socio-cultural impacts
According to Jafari (1987), tourists exist in a non-ordinary world at the destination,
while host societies remain in their own ordinary world. This differentiation is in
reality a clash of cultures.
Tourist cultures are formed by observing the behavior of other tourists similarly
instructed in the ways of the culture by tourists who preceded them. If the tourist
culture is based on play, pleasure and free spending of money which make it all
possible, then the degree of differences between the tourists non-ordinary world and
the ordinary world of the hosts is high. The tourist culture may be viewed as the
dominant culture, as it exemplifies a sense of freedom from the constraints of
ordinary life.
The inability of host societies to become a part of tourist culture, to free them form
ordinary life, can cause negative reactions throughout the host society:
Demonstration effect
It is a term given to the notion of local people seeking to imitate the consumption
patterns of visitors and their standard of living. In other word, foreigners bring
along their values while vacationing in a destination and have them transferred to
and adopted by the host population.
Acculturation theory assumes that when two cultures interact, the dominant culture
overpowers the weaker one, resulting in changes within the weaker culture.
Marginal man
It refers to a person who is living on the outside bound arias of both the host and the
tourist culture, with full assimilation into either one impossible. The marginal man
has not adopted a set of norms and standards acceptable to either culture and his
behavior is considered deviant by both groups, further separating the marginal man
from both cultures.
Culture shock
It is one of the few socio-cultural impacts that affects tourists and it appears when
tourists adjust to different languages, lifestyles, dress and other aspects of behavior
acceptable in the destination but different from home environment. The greater the
difference in culture of the tourists home environment and what he encounters at
the destination, the greater the cultural distance and hence culture shock.
Change or loss of indigenous identity and values
Tourism can cause change or loss of local identity and values, brought about by
several closely related influences:
- Commoditization
Tourism can turn local cultures into commodities when religious rituals, traditional
ethnic rites and festivals are reduced and sanitized to conform to tourist
expectations, resulting in what has been called "reconstructed ethnicity." Once a
destination is sold as a tourism product, and the tourism demand for souvenirs, arts,
entertainment and other commodities begins to exert influence, basic changes in
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human values may occur. Sacred sites and objects may not be respected when they
are perceived as goods to trade.
- Standardization
Destinations risk standardization in the process of satisfying tourists' desires for
familiar facilities. While landscape, accommodation, food and drinks, etc., must meet
the tourists' desire for the new and unfamiliar, they must at the same time not be
too new or strange because few tourists are actually looking for completely new
things. Tourists often look for recognizable facilities in an unfamiliar environment,
like well-known fast-food restaurants and hotel chains.
- Loss of authenticity and staged authenticity
Adapting cultural expressions and manifestations to the tastes of tourists or even
performing shows as if they were "real life" constitutes "staged authenticity". As long
as tourists just want a glimpse of the local atmosphere, a quick glance at local life,
without any knowledge or even interest, staging will be inevitable.
- Adaptation to tourist demands
Tourists want souvenirs, arts, crafts, and cultural manifestations, and in many
tourist destinations, craftsmen have responded to the growing demand, and have
made changes in design of their products to bring them more in line with the new
customers' tastes. While the interest shown by tourists also contributes to the sense
of self-worth of the artists, and helps conserve a cultural tradition, cultural erosion
may occur due to the commoditization of cultural goods.
Culture clashes
Because tourism involves movement of people to different geographical locations,
and establishment of social relations between people who would otherwise not meet,
cultural clashes can take place as a result of differences in cultures, ethnic and
religious groups, values and lifestyles, languages, and levels of prosperity.
The result can be an overexploitation of the social carrying capacity (limits of
acceptable change in the social system inside or around the destination) and cultural
carrying capacity (limits of acceptable change in the culture of the host population)
of the local community.
The attitude of local residents towards tourism development may unfold through the
stages of euphoria, where visitors are very welcome, through apathy, irritation and
potentially antagonism, when anti-tourist attitudes begin growing among local
people.
Cultural clashes may further arise through:
- Economic inequality
Many tourists come from societies with different consumption patterns and lifestyles
than what is current at the destination, seeking pleasure, spending large amounts of
money and sometimes behaving in ways that even they would not accept at home.
One effect is that local people that come in contact with these tourists may develop a
sort of copying behavior, as they want to live and behave in the same way.
Especially in less developed countries, there is likely to be a growing distinction
between the 'haves' and 'have-nots', which may increase social and sometimes ethnic
tensions. In resorts in destination countries such as Jamaica, Indonesia or Brazil,
tourism employees with average yearly salaries of US$ 1,200 to 3,000 spend their
2(
working hours in close contact with guests whose yearly income is well over US$
80,000.
- Dependency
When tourism supplants economic enterprises or creates a strong economic system,
dependency relationships can result. This is most likely in developing countries
which do not have the capital or expertise to develop their own tourism industry.
Instead, they rely on businesses from developed world to bring tourists into the area,
build facilities and manage the industry. The result is high leakages, as tourist
money does not stay in the local area.
- Irritation due to tourist behavior
Tourists often, out of ignorance or carelessness, fail to respect local customs and
moral values. When they do, they can bring about irritation and stereotyping. They
take a quick snapshot and are gone, and by so acting invade the local peoples' lives.
- Job level friction
In developing countries especially, many jobs occupied by local people in the tourist
industry are at a lower level, such as housemaids, waiters, gardeners and other
practical work, while higher-paying and more prestigious managerial jobs go to
foreigners or "urbanized" nationals. Due to a lack of professional training, as well as
to the influence of hotel or restaurant chains at the destination, people with the
know-how needed to perform higher level jobs are often attracted from other
countries. This may cause friction and irritation and increases the gap between the
cultures.
- Relocation and Displacement
Relocation is an accepted phenomenon in western societies. People move freely
within their country in pursuit of employment opportunities or in search of a better
quality of life. New tourism development can provide employment opportunities to
an area, as well as immigrants.
Displacement occurs whenever people move from the area because tourism
development occurs. People on fixed income may not be able to afford higher
property taxes which accompany an increase in assessed value. Displacement causes
culture change.
Physical influences causing social stress
The physical influences that the increasing tourism flows, and its consequent
development, have on a destination can cause severe social stress as it impacts the
local community. Socio-cultural disadvantages evolve from:
- Resource use conflicts
These conflicts refer to competition between tourism and local populations for the
use of prime resources like water and energy because of scarce supply. Stress to local
communities can also result from environmental degradation and increased
infrastructure costs for the local community - for example, higher taxes to pay for
improvements to the water supply or sanitation facilities.
- Cultural deterioration.
Damage to cultural resources may arise from vandalism, littering, pilferage and
illegal removal of cultural heritage items. A common problem at archaeological sites
in countries such as Egypt, Colombia, Mexico and Peru is that poorly paid guards
3$
supplement their income by selling artifacts to tourists. Furthermore, degradation of
cultural sites may occur when historic sites and buildings are unprotected and the
traditionally built environment is replaced or virtually disappears.
- Conflicts with traditional land-uses
These conflicts occur especially in intensely exploited areas such as coastal zones,
which are popular for their beaches and islands. Conflicts arise when the choice has
to be made between development of the land for tourist facilities or infrastructure
and local traditional land-use. The indigenous population of such destinations is
frequently the loser in the contest for these resources as the economic value which
tourism brings often counts for more.
As an example of how local people can suffer from tourism development, in coastal
areas construction of shoreline hotels and tourist faculties often cuts off access for
the locals to traditional fishing ground and even recreational use of the areas.
Ethical issues
Partly due to the above impacts, tourism can create more serious situations where
ethical and even criminal issues are involved.
- Crime generation
Crime rates typically increase with the growth and urbanization of an area, and
growth of mass tourism is often accompanied by increased crime. Tourism can also
drive the development of gambling, which may cause negative changes in social
behavior.
- Child labor
International Labor Organization (ILO) studies show that many jobs in the tourism
sector have working and employment conditions that leave much to be desired: long
hours, unstable employment, low pay, little training and poor chances for
qualification. In addition, recent developments in the travel and tourism trade
(liberalization, competition, concentration, drop in travel fares, growth of
subcontracting) and introduction of new technologies seem to reinforce the trend
towards more precarious, flexible employment conditions. For many such jobs young
children are recruited, as they are cheap and flexible employees.
An estimated 13-19 million children and young people below 18 years
of age (10-15 per cent of all employees in tourism) are employed in the
industry worldwide. However, these figures take no account of the
number of children working in the informal sector in ancillary
activities.
Child labor in tourism is common in both developing and in developed
countries. Many boys and girls below 12 years of age are engaged in
small business activities related to hotels and restaurants, the
entertainment sector or the souvenir trade, often as porters or street or
beach vendors. They are frequently subjected to harsh working and
employment conditions.
Source: ILO
31
- Prostitution and sex tourism
The commercial sexual exploitation of children and young women has paralleled the
growth of tourism in many parts of the world. Though tourism is not the cause of
sexual exploitation, it provides easy access to it. Tourism also brings consumerism to
many parts of the world previously denied access to luxury commodities and
services.
B. Positive socio-cultural impacts
Tourism can contribute to positive developments, not just negative impacts. It
has the potential to promote social development through employment creation,
income redistribution and poverty alleviation. Other potential positive impacts of
tourism include:
Tourism as a promoter of peace
Traveling brings people into contact with each other and, as tourism has an
educational element, it can foster understanding between peoples and cultures and
provide cultural exchange between hosts and guests.
Strengthening communities
Tourism can add to the vitality of communities in many ways. One example is that
events and festivals of which local residents have been the primary participants and
spectators are often rejuvenated and developed in response to tourist interest.
The jobs created by tourism can act as a vital incentive to reduce emigration from
rural areas. Local people can also increase their influence on tourism development,
as well as improve their job and earnings prospects, through tourism-related
professional training and development of business and organizational skills.
Facilities developed for tourism can benefit residents
As tourism supports the creation of community facilities and services that otherwise
might not have been developed, it can bring higher living standards to a destination.
Benefits can include upgraded infrastructure, health and transport improvements,
new sport and recreational facilities, restaurants, and public spaces as well as an
influx of better-quality commodities and food.
Revaluation of culture and traditions
Tourism can boost the preservation and transmission of cultural and historical
traditions, which often contributes to the conservation and sustainable management
of natural resources, the protection of local heritage, and a renaissance of indigenous
cultures, cultural arts and crafts.
Tourism encourages civic involvement and pride
Tourism also helps raise local awareness of the financial value of natural and
cultural sites and can stimulate a feeling of pride in local and national heritage and
interest in its conservation. More broadly, the involvement of local communities in
tourism development and operation appears to be an important condition for the
conservation and sustainable use of biodiversity.
These are some positive consequences of tourism that can arise only when tourism is
practiced and developed in a sustainable and appropriate way. Involving the local
population is essential. A community involved in planning and implementation of
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tourism has a more positive attitude, is more supportive and has a better chance to
make a profit from tourism than a population passively ruled - or overrun - by
tourism. One of the core elements of sustainable tourism development is community
development, which represents a process and a capacity to make decisions that
consider the long-term economy, ecology and equity of all communities.
Figure 2.4. A review of the socio-cultural impacts of tourism
Socio-cultural Impacts of Tourism
Positiv
e
impacts
Improves +uality of life
'acilitates meeting visitors (educational
experience)
"ositive changes in values and customs
"romotes cultural exchange
Improves understanding of different
communities
"reserves cultural identity of host
population
Increases demand for historical and
cultural exhibits
,reater tolerance of social differences
Satisfaction of psychological needs
Increasing selfesteem of hosts and
tourists
-educing negative perceptions and
stereotypes
"ositive changes in the way of life
.eritage conservation
Negativ
e
impacts
Excessive drin!ing, alcoholism, gambling
Increased underage drin!ing
Crime, drugs, prostitution
Increased smuggling
(anguage and cultural effects
/nwanted lifestyle changes
)isplacement of residents for tourism
development
0egative changes in values and customs
'amily disruption
Exclusion of locals from natural
resources
0ew cli+ues modify social structure
0atural, political, and public relations
calamities
Cultural shoc!
Commoditi1ation of culture
Source: adapted from Kreag, G. (2005), The Impacts of Tourism
C. The socio-cultural impact model
Doxey (1976) identified four stages in the development process which help
determine when social impacts are most likely to occur (see figure 2.5):
1. Euphoria
Local residents support tourism development and are willing and eager to share
their community with visitors. New employment opportunities, increased income,
and escalating property values are often cited as positive benefits. Development
opponents are few in number. This stage is most likely to occur when local
economies have been in a dormant stage for a period of time and tourism brings new
opportunities for growth and expansion. Local support for the tourism industry is
based on economic projections that ignore or downplay social costs.
Most likely few residents have had any experiences with an economic tourism boom
and are unaware of the potential negative consequences.
2. Apathy
Eventually, the growth that fuelled tourism development begins to slow. Land values
and business expansion, although continuing their upward rise, are no longer
increasing at the same rate. The level of tourism reaches a point where the novelty
of arriving visitors gives way to the acceptance of tourism as part of the communitys
economic base. The social structure of the area most likely changes with new
migrants arriving in search of jobs and family roles change as different members
33
find employment within the industry. The promise of economic good times which
pervaded the euphoria stage is now viewed as accruing to only a limited number of
residents, with the rest not realizing or believing the potential.
3. Irritation
If the level of tourism activity continues to expand, either through increases in
arrivals or season extension, a stage of irritation may occur. Most likely, tourism
development has been unplanned and has spread into environmentally sensitive
areas. Locals must now share with outsiders what used to be their own recreation
areas. Concurrently, prices rise at a much faster rate than local incomes. If the
environment is drastically modified through development, visitor numbers may
decrease, resulting in an overabundance of facilities and eventually economic
decline. During the irritation stage, the social and environmental impacts of
unplanned tourism development begin to receive attention. Local residents perceive
a loss of place and blame tourists for it.
4. Antagonism
As the sense of loss of place becomes more profound, residents blame tourists for
the changes rather than the unplanned and uncontrolled developments. Most likely,
the type of tourist that arrived when the area was in the euphoria stage has been
replaced with an entirely new type of visitor that is less interested in local customs
and traditions and more drawn to specific physical attractions.
Antagonistic activity can occur in any area, but is more apparent where a wide gap
between the lifestyle of tourist and of residents exists.
Even though tourist arrivals increase from point A to B, social impact decreases; this
is the stage of euphoria. The dashed line AD depicts social impact levels which
existed prior to tourism development. As tourists continue to arrive and facility
development increases, the nature of host-guest relationship begins to change.
Euphoria gives way to apathy. Eventually, a point C is reached where apathy gives
way to irritation.
If a social carrying capacity could be determined, it would be somewhere between
point B and point C or where the level of social impact is less than that existing
before tourism growth and development. Anything beyond C results in greater level
of social impact than before development, meaning beyond the point of diminishing
returns.
Figure 2.5. Doxeys Irridex
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Source: adapted from Doxey (1975)
Tourist arrivals
Irritation
C
C A
B Apathy
Irritation
Antagonism
D
Levels
of
social
impact
35