2. Key Perspectives to Tourism
• Tourism impacts are likely to change over
time as a destination area develops
(Butler, 1980).
• The impacts are also affected by time
(when), location (where) and seasonality.
• Tourism impacts also occur beyond the
destination.
3. Key Perspectives to Tourism
• Tourism also has an impact on tourists
themselves.
4. Advantages to Tourism
• Tourism brings much needed investment
into an area.
• Tourism provides employment for local
people.
• The money that tourism brings in can be
used to improve the infrastructure of the
area.
5. Advantages to Tourism
• Income from tourism may be used to help
conserve the natural environment that is the
reason why visitors come in the first place.
• The country can benefit from overseas
investment, primarily in the tourist
industry, but also in other related industries.
• Tourism may help to preserve local cultures
and communities, as they become a tourist
attraction.
6. Disadvantages to Tourism
• The jobs for the locals are often badly
paid, with very poor working conditions.
• The huge number of tourists coming to the
attractions could easily damage the
environment.
• Increasing numbers of tourists brings
problems such as littering, pollution and
footpath erosion.
• Local cultures could be devalued by tourism.
8. Some Fundamental Truths
about Tourism
1. Tourism consumes resources and
creates waste.
2. Tourism has the ability to over-consume
resources.
3. Tourism competes with other resource
users and needs to do this to survive.
4. Tourism is private sector dominated.
9. Some Fundamental Truths
about Tourism
5. Tourism is multi-faceted and is therefore
almost impossible to control.
6. Tourists are consumers, not
anthropologists.
7. Tourism is entertainment.
8. Unlike other industrial activities, tourism
imports the clients rather than export a
product.
10. Activity
• How do McKercher’s ‘fundamental truths’
affect your views on tourism impacts?
• To what extent do you agree with
McKercher’s ‘fundamental truths’.
13. What is Economics?
• The study of methods of allocating scarce
resources and distributing the products of
those resources, and the study of the
consequences of these methods of
allocation and distribution. (Craven, 1990)
15. Microeconomics v.
Macroeconomics
MICROENOMICS MACROECONOMICS
The firm How the national economy
The consumer operates
Production and selling Employment and unemployment
The demand for goods Inflation
The supply of goods National production and
consumption
The money supply in the country
16. Economic Cycles
• Short-term economic cycles
- periods of dramatic change (seasonality)
• Medium-term economic cycles
- changes over a period of several years
(may be due to natural disasters)
17. Long Term Economic Cycles
• Long-term economic cycles
- the growth of a destination and its
ultimate decline
- (boom, recession, depression, recovery)
19. Economic Benefits of Tourism
• Foreign Exchange Earnings
– Travel and Tourism expenditures
– Generate income to the host economy and
can stimulate the investment necessary to
finance growth in other economic sectors.
– accelerate this growth by requiring visitors to
bring in a certain amount of foreign currency
for each day of their stay.
20. Economic Benefits of Tourism
• Foreign Exchange Earnings
– Tourism is one of the top five export
categories for as many as 83% of countries
and is a main source of foreign exchange
earnings for at least 38% of countries.
21. Economic Benefits of Tourism
• Contribution to Government Revenues
– Direct contributions
– Indirect contributions
22. Economic Benefits of Tourism
• Generation of Employment Opportunities
– Direct Employment
– Indirect Employment
– Induced Employment
23. Economic Benefits of Tourism
• Infrastructure Investment
– Tourism can induce the local government to
make infrastructure improvements such as
better water and sewage
systems, roads, electricity, telephone and
public transport network
– This can improve the quality of life for
residents as well as facilitate tourism.
24. Economic Costs of Tourism
• Inflation
– Increase in prices of land, houses and food
that can occur as a result of tourism.
25. Economic Costs of Tourism
• Inflation
– Increase in prices of land, houses and food
that can occur as a result of tourism.
– Lies heavily on the demand.
26. Economic Costs of Tourism
• Opportunity Costs
– the cost of engaging in tourism rather than
another form of economic activity.
27. Economic Costs of Tourism
• Dependency
– a place becomes over-dependent on tourism
that other industries are abandoned.
– Over-reliance on tourism carries risks to
tourism-dependent economies.
28. Economic Costs of Tourism
• Seasonality
– One of the major disadvantages in tourism
– Its effect to jobs, investments and tourism-
related enterprises
29. Economic Costs of Tourism
• Leakage
– Goes out of the local economy to pay for
imported items, expatriate salaries or
franchise fees.
30. Economic Costs of Tourism
• Leakage
– occurs through;
1. Repatriation of profits generated from foreign
capital investment;
2. Vertical integration;
3. Not sourcing goods and services locally.
31. Economic Costs of Tourism
• Enclave Tourism
– Remain for their entire stay at the same cruise
ship or resort, which provides everything they
need and where they will make all their
expenditures, not much opportunity is left for
local people to profit from tourism.
32. Economic Costs of Tourism
• Seasonal Character of Jobs
– Job (and therefore income) insecurity
– No guarantee of employment from one
season to the next
– Difficulties in getting training, employment-
related medical benefits, and recognition of
their experience
– Unsatisfactory housing and working
conditions.
33. Economic Costs of Tourism
• Prostitution and the Underground
Economy
– Sex Sector, prostitution, which many regard
as a by product of tourism, has been
estimated to contribute between 2%-14% of
the GDP of Indonesia, Malaysia, Thailand and
the Philippines.
– 2% - earnings of the prostitute themselves
– 14% - incomes of people indirectly benefiting
from prostitution
