ECONOMIC IMPACTS
OF TOURISM
OBJECTI
VES
Introduction of Economics
Explain the economic impacts of
tourism Discuss the responses of the
negative impacts
Case Study/News Article
Oikos (household)
Nomus
(management)
SCARCITY
Limited resources Unlimited wants
Economics refers to managing of scarce
resources which requires ALLOCATION to
solve scarcity...
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4 BASIC
ECO NOMI C
QUESTION
S
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ECONOMIC IMPACTS
• Much of tourism impacts are
predominantly the work of economists
and has concentrated on the effects of
INCOME and EMPLOYMENT.
• Economic impacts of tourism are linked to,
and cannot easily be separated from other
types of impact. (MASON, 2008)
MULTIPLIER EFFECT
• A very common tool for assessing
economic impacts of tourism and is
frequently has a prominent place in
gov't and int'l reports.
TOURISM MULTIPLIER EFFECT
MULTIPLIER EFFECT
• Takes place when spending is
circulated throughout an economy
• Conceptualizes what happens when
tourists spend money on a destination
• Shows and distinguish the direct and
indirect income derived from tourism
TOURIST SPEND SECOND ROUND ULTIMATE
FOR: OF BENEFICIARIES
EXPENDITURES
Lodging Wages and Gov't Workers
Salaries
Food Comissions / Tips Advertisers
Beverage Licenses Engineers
Clothing Utilities Sign Makers
Recreation Return to Gov't Farmers
Souvenirs Advertising Wholesale
Suppliers
POSITIVE
IM PAC T S OF
TOURISM
FOREIGN EXCHANGE EARNINGS
CONTRIBUTION TO GOV'T
REVENUES GENERATION OF
EMPLOYMENT
INTERNATIONAL TRADE
Balance of Payment
Infrastructure Investment
Contribution to local economies
N E G AT I V E
IM PAC T S OF
TOURISM
INFLATION
OPPORTUNITY
COSTS
DEPENDENCY
SEASONALITY
LEAKAGE
Enclave Tourism
Prostitution / Underground Economy
INFLATION
Increases in prices of land, houses and food
that can occur as a result of tourism.
• Prices for commodities can increase
when tourists place extra demands
on local services at a tourism
destination.
OPPORTUNITY COSTS
Engaging in tourism rather than another form
of economic activity.
EX:
In a coastal area, with a predominantly rural
farmland, opportunity costs refer to investing
in tourism instead of in arable farming, market
gardening or fishing.
OVER-DEPENDENCE ON TOURISM
Over time, the emphasis on tourism becomes
such that there is virtually no other approach
to development. As a result, the country
becomes dependent on tourism revenue to
the extent that any change in demand is likely
to lead to a major economic crisis.
RESPONSE TO THE NEGATIVE
IMPACTS
Ensure that the benefits of tourism are spread
as widely as possible throughout the host
community.
Reduce leakage
Making sure that tourists pay for a fair price.
Protect local businesses.
RESPONSE TO THE NEGATIVE
IMPACTS
Provide financial incentives, training and other
techniques for local ownership, management
and operation on different tourism facilities.
Develop the capability of local inbound
operators to handle local agency operations.
Expand the variety of available tourist
activities.
SOCIO-CULTURAL
IMPACTS OF TOURISM
OBJECTI
VES
Explain the socio-cultural impacts of
tourism Discuss the responses to the
negative impacts Identify the impacts
of tourism to tourists
SOCIOLOGY IS THE STUDY OF SOCIETY AND
IS CONCERNED WITH PEOPLE AND GROUPS,
THEIR INTERACTION, THEIR ATTITUDES AND
THEIR BEHAVIOR.
Culture is the complex whole that includes
knowledge, belief, art, morals, law, customs
and any other capabilities and habits acquired
by man as a member of a society.
CONTACT BETWEEN TOURISTS AND
GUESTS MAY ARISE IN THREE
SCENARIOS:
Tourist purchase of goods and services from local
people Tourists and local residents use of the
same facilities Purposeful meeting to exchange
ideas and information
FACTORS AFFECTING HOST-GUEST
CONTACT
Cultural Backgrounds of residents and tourists.
Type of tourists and travel motivation
Spatial concentration of tourism development
Relative strength of the cultures of residents and
tourists
Attitudes and perception of residents and tourists
Ratio of tourists to host population
Length of stay of tourists
SOCIO-CULTURAL IMPACTS
POSITIVE IMPACTS
The beneficial impacts of tourism on society include
the following:
The creation of employment
The revitalization of poor or non-industrialized
regions
Cultural involution
Cross-cultural exchange
Heritage conservation
POSITIVE IMPACTS
In developing countries, tourism can
encourage greater social mobility through
changes in employment from traditional
agriculture to service industries and may result
in higher wages and better job prospects
(Mason 2008).
NEGATIVE IMPACTS
Stress to both tourists and residents because
of overcrowding.
Traditional activities may decline because of
industrialization
Over dependence to tourism
Modification of their way of life because of
tourism's seasonality
NEGATIVE IMPACTS
Altered social values caused by tourist invasion
Commodification of human relationships
Loss of cultural character
Authenticity of handicrafts
Potential for conflict
EXAMPLES OF
CUSTOMS
Chinese people do not tip
It is poor manners to Filipinos to eat without
offering food to other people
Germans eat sandwiches with spoon and
fork
DEMONSTRATION EFFECT
Observing tourists will lead to behavioural
changes in the resident population
Young people are susceptible to
demonstration effect
Acculturation
PROSTITUTION
Only one form of SEX TOURISM (massage
parlors, sex shops, sex cinemas are other
examples)
Institutionalized in some countries
There is a growing scale of sex tourism and
increasingly involved international tourists
RESPONSE TO NEGATIVE IMPACTS
SWARBROOKE (2009) STATED THAT
SUSTAINABLE TOURISM MEANS TOURISM
WHICH IS SOCIALLY EQUITABLE
Fair Trade in tourism
Proper tourism management so as to maintain
the dignity and sense of pride of the local
community
Increase opportunities for everyone to have a
holiday
4 E'S
EQUAL
EQUITY
EQUITY OPPORTUNI
TIES
ETHICS EQUAL
PARTNERS
IMPACT OF TOURISM TO TOURISTS
OPPORTUNITY TO SEE NEW PARTS OF THE WORLD
INCREASED INTEREST IN CULTURAL TOURISM
Led to many people buying second homes and
retirement houses
Serves as antidote to stress
Escape from their monotonous lifestyle and
routine
ENVIRONMENTAL
IMPACTS OF
TOURISM
THE ENVIRONMENT IS BEING
INCREASINGLY RECOGNIZED AS
THE M A J O R R E SO U R C E FOR
TOURISM.
Tourism depends ultimately upon the
environment, as it is a m a j o r t o u r i s m
a t t ra c t i o n i t s el f , or is the context in
which tourism activity takes place.
Tourism-environment relationships are
complex.
Tourism benefits from being in a good
quality environment and this same
environment should benefit from
measures a i m e d a t p r o t e c t i n g a n d
m a i n t a i n i n g its v a l u e a s a tourist
resource.
Tourism has become a m a j o r c a u s e of
e n v i r o n m e n t a l d a m a g e to the
environment rather than a force for
enhancement and protection in the past
50 years.
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ECOLOGICAL IMPACTS OF TOURISM
THE EFFECTS ON PLANTS AS A RESULT OF
t r a m p l i n g by visitors.
The m o d i f i c a t i o n s to a n i m a l
b e h a v i o r as a result of tourists being
present in their habitat.
A t m o s p h e r e p o l l u t i o n caused
by passenger airlines.
The resulting contribution to g l o b a l
climate change.
Consequent effects on both terrestrial and
marine ecosystem.
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POSITIVE
ENVIRONMENTAL
IMPACTS
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S t i m u l a t e a w a r e n e s s to protect the
environment and/or landscape
and/or wildlife.
Tourism can help to p r o m o t e t h e
establishment of National Parks
and/or Wildlife Reserves.
Tourism can promote the preservation of
buildings/monuments and the
conservation of w i l d l i f e .
Tourism may provide money to m a i n t a i n
h i s to r i c b u i l d i n g s , heritage
sites a n d wildlife habitats.
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NEGATIVE
ENVIRONMENT
AL IMPACTS
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Tourism can lead to the creation of
u n s i g h t l y h u m a n s t r u c t u re s
such as buildings that do not fit
in with vernacular architecture.
Tourism may lead to d a m a g e
a n d / o r d i stu r b a n c e to
w i l d l i fe h a b i t a t s .
POLLUTION
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CARRYING CAPACITY
Also important in relation to
damage/disturbance in the environment.
E N V I R O N M E N T A L – physical
space and no. of people in a particular
space
E C O L O G I C A L – threshold measure,
which if exceeded will lead to actual
damage of habitat
P E R C E P T U A L – level of crowding that a
tourist is willing to tolerate before
deciding to go elsewhere.
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Tourists are likely to litter.
Tourism can contribute to
congestion in terms of
overcrowding of people as well as
traffic congestion.
Tourism can contribute to the
p o l l u t i o n of water courses
and beaches.
Tourism may result in
footpath erosion.
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RESPONSE TO NEGATIVE IMPACTS
H o l i s t i c T h i n k i n g : the Concept of
Ecosystems R e g u l a t i o n of the Negative
Impacts Encouraging G o o d P r a c t i c e
Keeping a S e n s e of P r o p o r t i o n
Raising A w a r e n e s s amongst Tourists and the
Industry
Paying a P r i c e that Covers the Environmental
Costs of Tourism
Maintaining a B a l a n c e Between Conservation
and Development
