RepublicofofScience

Makilala Institute the Philippines

and Technology
Province of Cotabato
Municipality of Makilala

Concepcion, Makilala, Cotabato

Tourism Business 2
Second Semester
Course Number: _TOB2____ Instructor: Ms. Lj Joy L. Taeza, BS Econ., MBA
Course Title or Description: Tourism Business Mobile No.09616670614
Credit Units: 3__ E-mail Address: ljjoy0505@gmail.com
Module No.:9-12_____
Duration: Week 9-12

I. Learning Outcomes
 To explicate the role of tourism in economic development
 To analyze the economic impact of tourism on a destination area
 To classify the strategies which can maximize the economic effect of tourism
 To be familiar with social tourism

II. Topic/ Subject Matter

 The Economics and Sociology of Tourism
III. References
Cruz, Zenaida L.Ph.D. Principles of Tourism.Rex Printing Company, Inc. Quezon
City.
IV. Course Content
The Role of Tourism in Economic Development
Tourism is an invisible export which differs from international trade in many ways.
 In tourism, the consumer collects the product from the exporting country,
thereby eliminating the freight costs for the exporter, except in cases in
which the airline used are those of the tourist receiving country.
 It also brings many more nonmonetary benefits and costs than other export
industries such as social, cultural and environmental benefits and costs.
 Tourism is a multifaceted industry that directly affects several sectors in the
economy such as hotels, shops, restaurants, local transport firms,
entertainment establishments, handicraft producers and indirectly affects
many others such as equipment manufacturers and utilities.
Economic Impact
Tourist expenditures also increase the level of economic activity in the host area
directly. Many countries have utilized tourism as a means to increase foreign
exchange earnings to produce investment necessary to finance economic growth.
Tourism’s economic impact on a destination area can be immense since it provides a
source of income, employment and foreign exchange.

How to take full advantage of the economic effect of tourism?

Growth theories
Some economic growth theories have been proposed to capitalize on the economic
effect of tourism within a destination area. These are the theory of balanced growth
and the theory of unbalanced growth.
Proponents of the theory of balanced growth suggest that tourism should be viewed
as an important part of a broad-based economy. This theory stresses that tourism
needs the support of other industries. Its objective is to integrate tourism with other
economic activities. To obtain maximum economic benefit, tourism goods and
services should be locally produced.
 Economic Strategies

The key to maximizing the economic effects of tourism is to maximize the amount of
revenue and jobs developed within the region. To attain this objective, some
economic strategies have been adopted such as import substitution, incentives and
foreign exchange.

Import Substitution

It imposes quotas or tariffs on the importation of goods which can be developed

locally. It also grants subsidies, grants or loans to local industries to encourage the
use of local materials. Its objective is to minimize the leakage of money.

Incentives
The wise use of incentives can encourage the influx of capital, both local and foreign,
necessary to develop tourism supply. Common forms of incentives are:
1. Tax exemptions/reductions on imported machinery, materials, etc.
2. Reduction in company taxation by means of favorable depreciation allowances
on investment, or special treatment in relation to excise taxes, sales taxes,
income taxes, turnover taxes, profit taxes or property taxes.
3. Tax holidays (limited period)
4. Guarantee of stabilization of tax conditions (for up to 20 years)
5. Grants (for up to 30% of total capital costs)
6. Subsidies (guaranteeing minimum level of profit, occupancy, etc.)
7. Loans at low rates of interest
8. Provision of land freehold at nominal or little cost or at low rents.
9. Free and unrestricted repatriation of all or part of invested capital profits,
dividends and interest subject to tax provisions.
10. Guarantees against nationalization or appropriation.
The Social Nature of Travel
Travel is brought about by the social nature of man. Human beings, as social animals,
feel comfortable in a tour group. They feel that their trip is more pleasant and freer from
anxiety if they join a group tour.
The Social Effect of Tourism
Tourism is concerned with the movement of and contact between people in different
geographical locations. This involves:
a. Social relations between people who would not normally meet
b. The confrontation of different cultures, ethnic groups, life-styles, languages, levels of
prosperity, etc.
c. Behavior of people released from many of the social and economic constraints of
everyday life
d. The behavior of the host population, which has to reconcile economic gain and benefits
with the costs of living with strangers

Income and Social Status

Income and social status have a great influence on travel. Rich persons as well as
persons with higher social status travel more than those with lower income and social class
status. Higher income tourists stay longer and spend more per day than those with lower
incomes.

Education
There is a strong association between education and travel. Generally speaking, the
better educated members of the population have a greater desire to travel. Researchers have
found that the more educated the travelers are, they tend to be more cultured in their tastes.
They prefer activities which require the development of interpretative and expressive skills such
as attending plays, concerts, art museums, reading books, etc.
Life stages of the family

The presence of children in the family limits travel. More leisure time is spent at home.
As the children grow up and leave home, the married couples renew interest in travel. Couples
in this life stage usually have more discretionary income and are more financially capable to
travel.

Preferences of the International Tourist

The preferences of the international tourist are divided into four categories, namely:

1. Complete relaxation to constant activity

2. Traveling near one’s home environment to a totally strange environment
3. Complete dependence on group travel to traveling alone
4. Order to disorder

Relaxation versus Activity

Work has become less tiresome and people have become used to greater leisure.
Relaxation has become possible through-out the year.

Familiarity versus Novelty

In general, most tourists, on their first trip abroad, tend to seek familiarity rather than
novelty. They search for something that will remind them of home, whether it be food,
newspapers, living quarters or another person from their own country. As soon as they find a
place where they feel at home, these tourists will go back to the same place for a number of
times. Not until they have gained more experience in traveling will they want to go to a new
environment to see customs and cultures different from their own, to mix with people who
speak differently, eat differently and dress differently.
At present, there is an increasing positive attitude for novelty, for change. People accept
innovations in industry, education, family life, the arts, social relationships, etc. Tourists move
away from traditional resorts to new tourist destination.

Dependence versus autonomy

Tourists joined package tours in which transportation, lodging, food, sightseeing,

entertainment were fixed in advance by the tour agency. At present, there is the emergence of
a group of tourists who would like to acquire a sense of personal autonomy regarding their
leisure time. They would like to travel on their own and not part of a group.

Order versus Disorder

The tourists sought holidays which enforced the traditional concept of conformity- set
meals at fixed times, guide books which told them the right places to visit, resorts where their
fellow tourists were tidy, well-behaved, properly dressed, etc. They avoided situations where
their adult-imposed sense of orderliness might be offended.

Types of Tourist Roles

a. Organized Mass Tourist

This type of tourist is the least adventurous. He buys a package tour in which the
itinerary of his trip is fixed in advance and his stops are well-prepared and guided.
He seldom makes decisions for himself. He prefers a familiar environment rather
than a new environment.
 b. Individual Mass Tourist
The individual mass tourist is similar to the organized mass tourist except that
the individual mass tourist has a certain degree of control over his time and itinerary
and is not bound to a group.

The Explorer

This type of tourist arranges his trip by himself and looks for comfortable
accommodations and reliable means of transportation. He tries to associate with the
people he visits and to speak their language. The explorer dares to leave his country
much more than the previous two types, but goes back to it when the experience
becomes too rough. Although novelty dominates, the explorer does not adopt
completely the lifestyle of the host country. He still retains some of the basic
practices and comforts of his native way of life.

The drifter

The drifter goes farthest away from the accustomed ways of life of his own country. He
is almost totally immersed in his host culture. He tries to live the way the people he visits live
and to share their shelter, food, and habits. He retains only the most basic of his native
customs. He arranges his own trip and does not seek the help of a tour agency. He does not
have a fixed itinerary. Innovation is at its highest; knowledge disappears almost completely.

Psychology of travel!

Promotion generates interest in a destination but much more persuasive is the interest
created by a good book, a movie or a television program. Many school teachers go to different
places every summer. College students also go in large numbers either on their own or as part
of study groups sponsored by universities. Thus, students combine travel with learning and
receive academic credit for doing so.

Personal Values

The idea of personal values is an important travel motivator. Many people are urged to
travel to satisfy personal values such as the search for spiritual experience, nationalism and
naturalness. Pilgrimages to religious sites or holy places such as Vatican, Lourdes, etc.

Cultural Experience

Cross-cultural exchanges, experiencing how other people live and fostering international
considerate are some of the reasons to satisfy curiosity about other cultures, lifestyles and
places. Travelers may have the feeling of becoming part of the culture by attendance of
cultural presentations anywhere in the world.

Shopping and Bargain Hunting

Bargain hunting or being able to get special merchandize at low cost is a travel
motivator. Tourists are looking for places that are inexpensive. Tourists are looking for places
that are inexpensive. They shop not only on the trip but also for a particular trip. For persons
living in high-cost areas, travel and vacationing in low-cost countries can save money. For
instance, Americans find it more expensive to rent a house in New York than in the Philippines.

Professional and Business Motives

 A great number of people travel for professional and business motives. Conference and
conventions about education, commerce and industry increase annually. More than ½ of all
airline travel is done by business travelers. A tourist may be attending a convention in Las Vegas
but may spend half of his time gambling in casino.

Search for Natural Beauty

Travel can satisfy one’s search for beauty in the situation and in the scenery. Examples
are sunset, trees, mountains, waterfalls, flowers, beaches, valleys, bays, rivers, etc. and it
pleasurable to the onlooker. Most people are inspired by the beauty of nature. The trips of city
dwellers to the rural areas on week-ends show man’s need to see the beautiful scenery-trees,
grass, streams and the sky.

The Learning Process of a Tourist

The tourist compares various alternatives with a list of criteria to determine which
replacements will most likely satisfy a specific motive. The resulting inclination will have an
effect on the choice to buy. This inclination may be positive or negative, depending on how well
a chosen alternative will meet the inspiration. The number of alternatives will vary according to
the features of travelers. The level of satisfaction depends on one’s expectation of a situation as
well as one’s perception of a definite situation.

Classification of Travelers Based on Purpose of Travel

The two major classifications of travelers based on travel purpose are the business
travelers and the pleasure/personal travelers.
A. Business Travelers
 Regular business travelers
 Business travelers attending meetings, conventions and congresses
 Incentive travelers
Travel Constraints
The main constraints to travel are:
1. Lack of money
2. Lack of time
3. Lack of safety and security
4. Physical disability
5. Family commitments
6. Lack of interest in travel
7. Fears of travel

There are several details why people travel. The basic travel motivators can be divided
into four classes: the physical motivators, the cultural motivators, the interpersonal
motivators and the status and prestige motivators. Several tourist motivations are listed in
travel literature. Travel is a means to satisfy a need and want. For the individual to be
motivated to satisfy a need, an objective must be present. An individual learns of the
alternative ways of sustaining his needs from personal involvements and from information
gained from the commercial or social setting. The replacements are linked to the person’s
motives by a set of decision criteria.
Travel restraints are the following: lack of money, lack of time, lack of safety and
security, physical incapacity, family commitments, lack of interest in travel and fears of
travel.

V. Activity/Exercise
1. Why have several developing countries used tourism development as a help to
economic growth?
2. How is tourism different from international trade?
3. Explain the undesirable economic aspects of tourism.

VI. Assessment/Evaluation
1. Discuss the strategies that can maximize the economic effect of tourism.
2. How are needs, wants and motives related to travel?
3. Discuss the travel constraints. In what way do they inhibit travel?

Live Life to the Fullest! -Mam LJ