Measuring Economic Impacts Still not registered as a separate sector in many countries but included as part of services. Thus very difficult to come up with exact measurement of tourism in the economy. World Tourism Organization (WTO) has developed Standard International Classification of Tourism Activities (SICTA) to specify which are the activities which can be categorized under & measured by quantitative measures.

1. ECONOMIC,
ENVIRONMENTAL &
SOCIO-CULTURAL
CONSIDERATIONS
- Aritro Dasgupta
1

2. Measuring Economic Impacts
 Still not registered as a separate sector in
many countries but included as part of
services
 Thus very difficult to come up with exact
measurement of tourism in the economy
 World Tourism Organization (WTO) has
developed Standard International
Classification of Tourism Activities (SICTA) to
specify which are the activities which can be
categorized under & measured by quantitative
measures
2

3. Economic Measurements
 Income generated & contribution to GDP/GNP
 Net foreign exchange earned from
international tourism
 Contribution to government revenues including
tourist user taxes, airport departure taxes,
customs duties on imported goods used in
tourism, income taxes on tourism enterprises
& employees, property taxes on tourism
establishments etc.
3

4. Economic Measurements
 Local employment generated
 Multiplier effect
4

5. Local Employment Generation
 Direct employment
 Indirect employment
 Induced employment
 Construction employment
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6. Multiplier Effect
6
 Multiplier is a factor of proportionality that
measures how much an internal variable
changes in response to a change in some
external variable
 Internal variable is one which originates within
the system
 External variable is one which originates
outside the system
 It is the effect where the addition of certain
variables leads to an exponential impact

7. Multiplier Effect
7
 In tourism sector, per unit of direct spending in the
sector leads to generation of investment many
times more
 Spending may be divided as- primary, secondary
& induced
 Primary is the direct expenditure
 Secondary is the derived expenditure resulting
from related activities
 Induced is the spending which results from an
automatic rise in living standards which arises out
of the above 2 causes

8. Multiplier Effect
8
 Multiplier effect is more high in tourism than in
most other sectors because of the labour-
intensive nature of the industry
 Effect is greater in underdeveloped countries with
a greater dependence on tourism as a source of
foreign exchange
 The spread of tourism revenue in an economy is
usually more even due to the large number of
players in the market
 Tourism revenue also stays within shores of a
country, dos not get ‘shipped’ out

9. Features of Tourism Economics
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 Helps justify & pay for transportation facilities
 Catalyst for expansion of other economic
sectors
 For some forms of tourism, there may be no
alternatives besides foreign investment If not
carefully controlled, tourism can generate
serious economic problems

10. Economic Problems of Tourism
Economics10
 Economic leakage
 Economic distortions may take place
geographically if tourism is concentrated in 1
area
 Economic distortions may also take place if
tourism attracts too many skilled employees
from other industries; problem particularly
acute in smaller states/countries
 Tourism may also induce financial burden on
the local population

11. Enhancing Economic Benefits
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 Techniques must be applied during planning
process to enhance economic benefits of
tourism
 Strengthening linkages between tourism &
other economic sectors
 Usage of more local items for food, building
materials, interior decoration
 Encouraging local ownership of tourism
facilities
 Occasionally when capital is limited, foreign
investment may be allowed initially

12. Enhancing Economic Benefits
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 Foreign hotel management may take away a
substantial chunk of revenue; however they
provide professional management,
international marketing, modern reservation
techniques
 Maximizing local employment through proper
training of personnel
 More shopping facilities may indirectly
enhance economic benefits as greater sales
will lead to increased sales taxes

13. Environmental Impacts
13

14. Positive Environmental Impacts
14
 Helps justify & pay for conservation of
important natural areas & wildlife; particularly
crucial for countries with limited resources
 Helps justify & pay for conservation of
important archaeological & historic sites as
attractions for tourists; sometimes entire
districts/ towns preserved for such purposes

15. Positive Environmental Impacts
15
 Provides incentive for long term environmental
clean-up
 Increases local environmental awareness

16. Negative Environmental
Impacts16
 Water pollution especially through improper
sewage management
 Air pollution
 Noise pollution
 Visual pollution – poorly designed hotels,
badly planned layout of facilities, inadequate
landscaping, ugly advertising signs etc.
 Waste disposal problems

17. Negative Environmental
Impacts17
 Damage to archaeological historical sites
 Environmental hazards & land use problems
 Ecological disruption of natural areas

18. Environmental Protection
Measures18
 Install properly designed utility systems of
water supply, electric power, sewage, solid
waste disposal & drainage; recycling of waste
water & use of solar heating devices
 Provide open space, parks & suitable
landscaping
 Develop adequate road & transportation
systems, emphasis on public transit; electric
shuttle buses can be used in resorts

19. Environmental Protection
Measures19
 Apply environmentally suitable land use & site
planning principles, zoning regulations,
development standards, architectural design &
control of advertising signs
 Manage visitor flows; technique of modeling
 Prohibit tourists to cut trees in camping &
trekking areas, to collect rare plant & animal
species or disturb natural behaviour patterns
of wild animals; only controlled fishing &
hunting

20. Environmental Protection
Measures20
 In marine areas, controls required on
following:
 Operations related to ship bilge cleaning & ballast
dumping
 Use of motorized boats
 Collection of live sea shells
 Use of boat anchors in corral bottom bays
 Spear fishing
 Disturbance of nesting turtles
 Mining of beach sand & coral for construction
purposes

21. Socio Cultural Impacts
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22. Positive Socio Cultural Impacts
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 Improves living standards of people & helps
pay for community facilities & services
 Conserves cultural heritage of area
 Reinforces / renews sense of pride by
residents in their culture when they observe
tourists appreciating it; especially for societies
experiencing rapid change

23. Positive Socio Cultural Impacts
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 Helps develop & maintain museums, theatres
& other cultural facilities
 Opportunity for cross cultural exchange

24. Negative Socio Cultural Impacts
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 Overcrowding & loss of convenience for local
residents
 Loosening of sense of cultural identity
 Excessive commercialization & loss of
authenticity of local customs, ceremonies,
music, dance, crafts etc.
 ‘Demonstration effects’
 Problems of drug abuse, alcoholism, crime,
prostitution

25. Preventing Socio Cultural
Problems25
 Maintain authenticity of local dance, music,
drama, arts, crafts & dress
 Preserve existing, distinctive local architectural
styles & encourage new development
including tourist facilities, to use local
architectural motifs
 Make certain, residents have convenient
access to tourist attractions
 Inexpensive/ subsidized facilities for residents

26. Preventing Socio Cultural
Problems26
 Educate residents about tourism- concepts,
benefits & problems; involve them in policy
development
 Inform tourists about local society
 Train employees to work in tourism effectively
including language & social sensitivity
 Strict control on drugs, crime & prostitution

27. Environmental Impact Assessment
(EIA)27
 EIA is an assessment of the possible positive
or negative impact that a proposed project
may have on the environment, together
consisting of the environmental, social &
economic aspects
 If analysis finds a project to cause harm, then
project must not get go-ahead
 Usually an EIA results in some modification of
tourism projects

28. Components Examined Under
EIA
 Environmental auditing procedures
 Limitations to natural resources
 Environmental problems & conflicts that may
affect project viability
 Flora, fauna, soil, water, landscape, cultural
sites etc.
 Use of renewable, non-polluting forms of
energy if any
 Application of 3 Rs- Reduce, Reuse, Recycle
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29. Thank You
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