The document discusses several key perspectives on the impacts of tourism. It outlines both the economic advantages and disadvantages of tourism. The advantages include foreign investment and employment opportunities for local communities. However, tourism can also cause issues like seasonal unemployment, income leakage from the local economy, and overreliance on the tourism industry. The document provides an overview of different economic factors to consider regarding tourism's impacts on a destination.

1. The Impacts of
Tourism
School of Hospitality Management

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.
School of Hospitality Management

3. Key Perspectives to Tourism
• Tourism also has an impact on tourists
themselves.
School of Hospitality Management

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.
School of Hospitality Management

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.
School of Hospitality Management

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.
School of Hospitality Management

7. Some Fundamental Truths
about Tourism
• A Case Study by McKercher in 1993
School of Hospitality Management

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.
School of Hospitality Management

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.
School of Hospitality Management

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’.
School of Hospitality Management

11. Impacts of Tourism
ECONOMIC IMPACTS
SOCIO-CULTURAL IMPACTS
ENVIRONMENTAL
IMPACTS
School of Hospitality Management

12. Tourism and its
Economic
Benefits
School of Hospitality Management

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)
School of Hospitality Management

14. COMMODITIES
RESOURCES 1. Goods – tangible products
1. Natural 2. Services – intangible products
2. Labor
3. Capital
SCARCITY
ECONOMICS
School of Hospitality Management

15. Microeconomics v. Macroeconomics
MICROENOMICS MACROECONOMICS
The firm How the national economy operates
The consumer Employment and unemployment
Production and selling Inflation
The demand for goods National production and consumption
The supply of goods The money supply in the country
School of Hospitality Management

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)
School of Hospitality Management

17. Long Term Economic Cycles
• Long-term economic cycles
- the growth of a destination and its
ultimate decline
- (boom, recession, depression, recovery)
School of Hospitality Management

18. The Economic Characteristics of the
tourism Industry
Travel and Travel and
Tourism Tourism
Industry Economy
School of Hospitality Management

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.
School of Hospitality Management

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.
School of Hospitality Management

21. Economic Benefits of Tourism
• Contribution to Government Revenues
– Direct contributions
– Indirect contributions
School of Hospitality Management

22. Economic Benefits of Tourism
• Generation of Employment Opportunities
– Direct Employment
– Indirect Employment
– Induced Employment
School of Hospitality Management

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.
School of Hospitality Management

24. Economic Costs of Tourism
• Inflation
– Increase in prices of land, houses and food
that can occur as a result of tourism.
School of Hospitality Management

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.
School of Hospitality Management

26. Economic Costs of Tourism
• Opportunity Costs
– the cost of engaging in tourism rather than
another form of economic activity.
School of Hospitality Management

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.
School of Hospitality Management

28. Economic Costs of Tourism
• Seasonality
– One of the major disadvantages in tourism
– Its effect to jobs, investments and tourism-
related enterprises
School of Hospitality Management

29. Economic Costs of Tourism
• Leakage
– Goes out of the local economy to pay for
imported items, expatriate salaries or
franchise fees.
School of Hospitality Management

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.
School of Hospitality Management

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.
School of Hospitality Management

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.
School of Hospitality Management

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
School of Hospitality Management

34. THANK YOU!!!
School of Hospitality Management