ECONOMIC IMPACTS OF

TOURISM

BBA-HO&M
OBJECTIVES


Introduction of Economics

Explain the economic impacts of tourism

Discuss the responses of the negative impacts

Case Study/News Article
 Oikos
(household)

OIKONOMIA

or
ECONOMICS
OIKONOMUS
Nomus
(management)

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 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 NOMIC
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.
• Ecnomic 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.
 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
OBJECTIVES


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 S O 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 to ur is t
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
e s t a b l i s h m e n t of National Parks
and/or Wildlife Reserves.
Tourism can promote the preservation of
buildings/monuments and the
c o n s e r v a t i o n 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 t o r i c b u i l d i n g s , h e r i t a g e sites
a n d wildlife habitats.

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 NEGATIVE
ENVIRONMENTAL
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
co n g e s t i o n 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 o f 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