MACRO PERSPECTIVE OF TOURISM AND HOSPITALITY
 A ‘characteristic commodity’ of a tourism industry is
The Economics of Tourism
 Fundamentally
- Measurement and understanding of decisions
about the use and allocation of scarce resources
- Scarce resources: resources for which potential
uses are greater than supply
- Thus, choices must be made about which uses to
support
 Two branches
- Macro: functioning of large-scale economic
systems such as labour markets, the effects of
inflation and governmental economic policies
- Micro: valuation, pricing, and decision-making by
individuals, families and businesses
What is Economics?
 Economics is a social science concerned with the
production, distribution, and consumption of goods
and services.
 It studies how individuals, businesses, governments,
and nations make choices about how to allocate
resources.
KEY TAKE AWAYS
 Economics is especially concerned with efficiency in
production and exchange and uses models and
assumptions to understand how to create incentives
and policies that will maximize efficiency.
 Economists formulate and publish numerous
economic indicators, such as gross domestic product
(GDP) and the Consumer Price Index (CPI).
Key Macro-economic Concepts
 Industry
- A group of businesses producing essentially the
same product using the same technology
- A hierarchical concept: can refer to a general
type of business such as ‘accommodation’ or to
specific forms such as hotels, motels, resorts
- New industries emerge over time and old ones
may disappear
Tourism Commodities
any service or good that earns a significant portion
of total revenues from persons engaged in tourism
- ‘significant portion’ is a matter of judgement
 This is called a ‘tourism commodity’
- E.g. hotel accommodations, passenger air
service, restaurant meals
- Based on classifications in the CPC
The Challenge of Tourism
 Tourism commodities are also purchased by people
not engage in tourism: e.g. restaurant meals
 Tourism commodities are also produced by non-
tourism businesses: e.g. some department stores
offer travel agency services
 Some tourism commodities are purchased
frequently by people not engages in tourism, e.g.
insurance (for flight cancellations or illness), or
clothing (purchased as a souvenir)
Economic Impact
 Measures the changes in an economy as tourism
increases or decreases
 Three basic types
- Direct: magnitude of visitor spending
- Indirect: magnitude of tourism businesses
purchasing supplies and services from other
businesses
- Induced: impact of employee spending in
community
 Employment impact: jobs created by tourism
 Other measures
 Employment impact: job creation driven by tourism
 Employment income: wages and salaries provided by
tourism
 Tourism value-added: the value of tourism goods
and services produced in a community, minus and
wages, salaries and benefits paid by the employer
  Others measures Key Understanding
- Wealth
Wages and salaries provided by tourism
Increase in property values Culture is the ‘way of life’ of people and includes
Investment income generated through characteristics such as language, religion, customs, food,
tourism clothing, architecture, livelihoods, art and technology
- Multipliers
Measure of overall increase in wealth  The world is divided up into different cultural groups
arising from visitor expenditure; and regions, each with a distinctive way of life.
associated with economic impact  Every culture, whether isolated or exposed to other
Several types, each must be used and groups, has adopted some attributes of other
interpreted with caution cultures
 Value  A country’s culture and heritage sites are an
- Exchange important part of what it offers to tourists
- Intrinsic  Cultural tourism is increasing as more people can
- Existence afford the time and money and are becoming more
- Option culturally aware.
 Assets  Pop culture, high culture and sports tourism are all
- Tangible versus intangible aspects of cultural tourism
- Constructed versus natural  Heritage conservancy looks at ways to protect the
 Consumer surplus oral and written traditions of a culture and its
 Opportunity costs landscapes, historic buildings and places, collections
 Economic rent and natural sites, all which appeal to many tourists.
 Public goods  Globalization of the music industry has resulted in
- Competitive versus non-competitive increased interest in the music of different cultures
 Merit goods  International sporting events encourage interaction
among cultures some sports tourism such as World
 Taxation
Cup soccer can result in economic benefits but also
PHP 482.15 BILLION VISITOR RECEIPTS IN 2019 have negative impacts on the environment and
people.
An increase of 18.80%

Key Word and Terms:

TOURISM AND CULTURE

WHAT IS CULTURE?
Alternative tourism – individually planned tourist activity
According to the definition adopted by the UNTWO General
that explores destinations or events that are considered out-
Assembly, at its 22nd session (2017), Cultural Tourism implies
of-the-ordinary
“A type of tourism activity in which the visitor’s essential
motivation is to learn, discover, experience and consume the Cultural tourism – travel that focuses on learning about
tangible and intangible cultural attractions/products in a characteristics of life of people in different destinations
tourism destination.
Cultural transmission – the transfer of traits when different
These attraction/products relate to a set of distinctive cultures meet Culture various characteristics of life shared by
material, intellectual, spiritual and emotional features of a a group of people in a particular community or nation
society that encompasses arts and architecture, historical
and cultural heritage, culinary heritage, literature, music,
creative industries and the living cultures with their
lifestyles, value systems, beliefs and traditions”.
Democratization – travel for all
Fully independent tourist (FIT) – traveler who makes all his
or her own travel arrangements
Heritage conservancy – preservation of important cultural
and physical environments
High culture – aspects of culture that include such activities
as opera, ballet, and theatre
Popular culture – current cultural practice and activities of a
society’s general public
Sports tourism – travel that focuses on attending sporting
events
Transculturation – the integration of different traits from
one culture to another
SOCIO-CULTURAL IMPACTS OF TOURISM
 Socio-cultural impacts of tourism are the effects on
host communities of direct and indirect relationship
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.
 These influences are not always apparent, as they
are difficult to measure, depend on value judgments
and are often indirect or hard to identify.
NEGATIVE SOCIO-CULTURAL IMPACTS OF TOURISM
CHANGE OR LOSS OF INDIGENOUS IDENTITY OR VALUES
Tourism can cause change/ loss of local identity and values
by:
1. COMMODIFICATION
2. STANDARDISATION
3. LOSS OF AUTHENTICITY/ STAGED AUTHENTICITY
4. ADAPTATION TO TOURIST DEMANDS
Commodification
 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 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 stage 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 hotels chains.
Loss of Authenticity and Staged Authenticity
 Adapting cultural expressions to the tastes of
tourists or even performing shows as if they were
“real life” constitutes “staged authenticity”
 As long as tourist just want a glimpse of the local
atmosphere, a quick glance at local life, without any
knowledge or even interest, staging will be
inevitable.