The Impact of tourism

and hospitality

Chapter 6
The Impacts of Tourism and
Hospitality

1.ECONOMIC
2.SOCIAL
3.CULTURAL
4.ENVIRONMENTAL
Positive economic effects of tourism and
hospitality

1.Income
2.Employment
3.Balance of Payment
4.Investment and Development
INCOME
• The tourism and Hospitality industry obviously
generates income within a destination country.
• Nations wanting to increase their income have
used tourism and hospitality as a means for
reasonably quick development.
• Tourism income, in general, comes from wages
and salaries, interest, rent, and profits.
INCOME

• Income is also generated from interest, rent

and profits on tourism and hospitality
businesses.
• Income is also obtained from direct taxation
or indirect taxation. Imposing value-added
tax (VAT) on hotel bills is an example of
indirect taxation.
Direct taxation is levied directly on individuals or
entities and cannot be transferred to another party.
An example of direct taxation is the income tax.

Indirect taxation, is imposed on goods and services rather

than directly on individuals or entities. Unlike direct taxes,
indirect taxes can be passed on to consumers through the
price of goods and services. One common example of indirect
taxation is the sales tax.
INCOME
• The sum of all income in a country is called
National Income.
• Multipliers are means of estimating how
much extra income is produced in an
economy as a result of the initial spending or
injection of cash.
EMPLOYMENT

• The tourist industry offers more employment

opportunities than other economic sectors.
• Tourism and hospitality generates
employment faster for developing nations
than for the developed ones.
3 TYPES OF EMPLOYMENT

• DIRECT EMPLOYMENT- is generated as a result

of providing goods and services directly to
tourist in hotels, restaurants, bars and etc.
• INDIRECT EMPLOYMENT- consist of those
positions that are associated with other
tourism-related activities but are used by both
the local resident and tourist.
3 TYPES OF EMPLOYMENT

• INDUCED EMPLOYMENT- refers to people

working in positions only peripherally related to
tourism and hospitality, but generated because
of it.
BALANCE OF PAYMENTS
• Balance of payments is an accounting flow of
goods, services, and funds in and out of the
country during a given period.
• Most countries, particularly those with the good
tourism and hospitality facilities but little
industrial or agricultural export potential,
appreciate the contribution that incoming
tourists can make to their balance of payments
account.
INVESTMENT AND DEVELOPMENT

• Once an area has become economically

successful, businessmen and government
agencies may be influenced to invest in tourism
and hospitality and other industries in that area.
This is known by economist as an accelerator
concept.
NEGATIVE ECONOMIC EFFECTS OF
TOURISM AND HOSPITALITY

1.INFLATION AND LAND VALUES

2.HIGH LEAKAGES
3.SEASONALITY
4.OVERDEPENDENCE ON TOURISM AND
HOSPITALITY
INFLATION AND LAND VALUES

• The inflationary effects of tourism and

hospitality can arise in different ways.
• Example: rich tourist can afford to buy item at
high prices.
• Retailers then realize that their profits can be
greatly increased by certain products and
provide more expensive goods and services.
HIGH LEAKAGES

• Leakages occurs from a variety of sources.

• It occurs from the cost of goods and services
that must be imported to satisfy the needs of
tourists.
SEASONALITY

• Many tourist regions experience low returns on

investment because of seasonal flunctuations in
demand.
• The seasonality demand is reflected in hotel
occupancy rates.
OVERDEPENDENCE ON TOURISM AND HOSPITALITY
• Tourism is highly susceptible to changes from
within and outside the industry.
• Example, changes from within price and
fashions. Outside changes are global economic
trend or political situations.
• The decrease in demand for a destination results
in underutilization of services, unemployment,
and loss of income.
 SOCIAL IMPACTS OF TOURISM AND
HOSPITALITY

* The social impacts of tourism and hospitality refer

To the changes in the quality of life residents of
tourist destinations.
*The objective of social tourism is to ensure that
tourism is accessible to all people.
CLASSIFICATIONS OF TOURIST/VISITORS

1.The explorer- this type of visitor is interested in

being an active participant-observer among the
population.
2.Elite- this type of tourist is few in number, he can
afford to pay well for unusual vacations. He is well
traveled and known as “the Jet setter”.
CLASSIFICATIONS OF TOURIST/VISITORS

3. Offbeat- this tourist adapts well to simple

accommodations and services provided for the
occasional quest.
4. Unusual tourist- this tourist loves sub-exotic
cultural sites and the unusual or primitive sites as
long as he can quickly and safely return to more
familiar surroundings.
CLASSIFICATIONS OF TOURIST/VISITORS

5. Incipient Mass Tourist- this is a visitor who looks

for the amenities of Western societies in hotels and
other traveled facilities. He is a mixture of both
pleasure seeker and business traveler.
6. Mass Tourist- he comes from the middle class. He
arrives in a destination with other tourist.
CLASSIFICATIONS OF TOURIST/VISITORS

7. Charter Tourist- these comes “en masse” with

others of his kind creating an extremely high
amount of business and receiving a high degree of
standardization in service and products.
Positive Social Effects of Tourism and
Hospitality
1.Creates social change and multicultural
understanding.
2.Encourages adoption to the realities of modern
life and improvement of the host country’s
lifestyle.
3.Promotes the use of foreign language.
4.Improved health conditions and diseases control.
Negative Social Effects of Tourism and
Hospitality
1. Social Saturation
2. Changes in the Social Structure, Behavior and
Roles.
3. Community Problems
4. Negative Demonstrative Effects
Culture Impacts of Tourism And
Hospitality

Acculturation is defined as those changes

that occur in a culture through borrowing
from other cultures.
Cultural Convergence is the tendency of
the world cultures to become more a like
Positive Culture Impacts of Tourism And
Hospitality

1. Intercultural Communication
Mobility- is a prerequisite of tourism and
hospitality, is necessary for different social
groups, nationalities and cultures to meet
and interact.
Positive Culture Impacts of Tourism And
Hospitality

2. Renaissance of Native Culture

Environmental Impacts of Tourism And
Hospitality

Positive:
1. Conservation
2. Development of attractions
a. Historic Preservation
b. Resident Benefits
Environmental Impacts of Tourism And
Hospitality

Negative:
1. Environmental conflicts
a. Air Pollution
b. Water Pollution
c. Noise Pollution
d. Problems Associated with wild fire.
Environmental Impacts of Tourism And
Hospitality

Negative:
2. Geological Conflicts
3. Resident Conflicts
THANK YOU!