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ECONOMIC IMPACTS OF
TOURISM
Prepared By:
Ma'am L
OBJECTIVES

Introduction of Economics

Explain the economic impacts of tourism

Discuss the responses of the negative impacts

Case Study/News Article
11/25/12
ECONOMICS
Oikos
(household)
Nomus
(management)
OIKONOMIA
or
OIKONOMUS
11/25/12
SCARCITY
Limited resources Unlimited wants
Economics refers to managing of scarce
resources which requires ALLOCATION to
solve scarcity...
4 BASIC
ECONOMIC
QUESTIONS
11/25/12
11/25/12
11/25/12
11/25/12
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)
ECONOMIC IMPACTS
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
FOR:
SECOND ROUND
OF
EXPENDITURES
ULTIMATE
BENEFICIARIES
Lodging Wages and
Salaries
Gov't Workers
Food Comissions / Tips Advertisers
Beverage Licenses Engineers
Clothing Utilities Sign Makers
Recreation Return to Gov't Farmers
Souvenirs Advertising Wholesale
Suppliers
POSITIVE
IMPACTS OF
TOURISM

Foreign Exchange Earnings

Contribution to Gov't Revenues

Generation of Employment

International Trade

Balance of Payment

Infrastructure Investment

Contribution to local economies
NEGATIVE
IMPACTS 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

Muslims eat only with their right hand

It is poor manners to Filipinos to eat without
offering food to other people

Germans eat sandwiches with spoon and fork

Most Asian women shave their axilliary hair,
some Europeans don't
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
EQUITY
EQUAL
PARTNERS
EQUAL
OPPORTUNI
TIES
ETHICS
4 E'S
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
11/25/12
ENVIRONMENTAL
IMPACTS OF
TOURISM
11/25/12
The environment is being increasingly
recognized as the major resource for
tourism.
Tourism depends ultimately upon the
environment, as it is a major tourism
attraction itself, or is the context in which
tourism activity takes place.
Tourism-environment relationships are
complex.
11/25/12
Tourism benefits from being in a good
quality environment and this same
environment should benefit from
measures aimed at protecting and
maintaining its value as a tourist
resource.
Tourism has become a major cause of
environmental damage to the
environment rather than a force for
enhancement and protection in the past
50 years.
11/25/12
ECOLOGICAL IMPACTS OF TOURISM
The effects on plants as a result of
trampling by visitors.
The modifications to animal
behavior as a result of tourists being
present in their habitat.
Atmosphere pollution caused by
passenger airlines.
The resulting contribution to global
climate change.
Consequent effects on both terrestrial and
marine ecosystem.
11/25/12
POSITIVE
ENVIRONMENTAL
IMPACTS
11/25/12
Stimulate awareness to protect the
environment and/or landscape and/or
wildlife.
Tourism can help to promote the
establishment of National Parks and/or
Wildlife Reserves.
Tourism can promote the preservation of
buildings/monuments and the
conservation of wildlife.
Tourism may provide money to maintain
historic buildings, heritage sites
and wildlife habitats.
11/25/12
NEGATIVE
ENVIRONMENTAL
IMPACTS
11/25/12
Tourism can lead to the creation of
unsightly human structures
such as buildings that do not fit in
with vernacular architecture.
Tourism may lead to damage
and/or disturbance to wildlife
habitats.
POLLUTION
11/25/12
CARRYING CAPACITY
Also important in relation to
damage/disturbance in the environment.
ENVIRONMENTAL – physical space
and no. of people in a particular space
ECOLOGICAL – threshold measure,
which if exceeded will lead to actual
damage of habitat
PERCEPTUAL – level of crowding that a
tourist is willing to tolerate before deciding
to go elsewhere.
11/25/12
Tourists are likely to litter.
Tourism can contribute to congestion
in terms of overcrowding of people as
well as traffic congestion.
Tourism can contribute to the
pollution of water courses and
beaches.
Tourism may result in footpath
erosion.
11/25/12
RESPONSE TO NEGATIVE IMPACTS
Holistic Thinking : the Concept of Ecosystems
Regulation of the Negative Impacts
Encouraging Good Practice
Keeping a Sense of Proportion
Raising Awareness amongst Tourists and the
Industry
Paying a Price that Covers the Environmental Costs
of Tourism
Maintaining a Balance Between Conservation and
Development

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Overview of tourism impacts

  • 2. OBJECTIVES  Introduction of Economics  Explain the economic impacts of tourism  Discuss the responses of the negative impacts  Case Study/News Article
  • 4. 11/25/12 SCARCITY Limited resources Unlimited wants Economics refers to managing of scarce resources which requires ALLOCATION to solve scarcity...
  • 10. 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) ECONOMIC IMPACTS
  • 11. 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.
  • 12. 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
  • 13. TOURIST SPEND FOR: SECOND ROUND OF EXPENDITURES ULTIMATE BENEFICIARIES Lodging Wages and Salaries Gov't Workers Food Comissions / Tips Advertisers Beverage Licenses Engineers Clothing Utilities Sign Makers Recreation Return to Gov't Farmers Souvenirs Advertising Wholesale Suppliers
  • 15.  Foreign Exchange Earnings  Contribution to Gov't Revenues  Generation of Employment  International Trade  Balance of Payment  Infrastructure Investment  Contribution to local economies
  • 18. 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.
  • 19. 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.
  • 20. 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.
  • 21. 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.
  • 22. 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.
  • 24. OBJECTIVES  Explain the socio-cultural impacts of tourism  Discuss the responses to the negative impacts  Identify the impacts of tourism to tourists
  • 25.  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.
  • 26. 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
  • 27. 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
  • 29. 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
  • 30. 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).
  • 31. 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
  • 32. NEGATIVE IMPACTS  Altered social values caused by tourist invasion  Commodification of human relationships  Loss of cultural character  Authenticity of handicrafts  Potential for conflict
  • 33. Examples of Customs  Chinese people do not tip  Muslims eat only with their right hand  It is poor manners to Filipinos to eat without offering food to other people  Germans eat sandwiches with spoon and fork  Most Asian women shave their axilliary hair, some Europeans don't
  • 34. DEMONSTRATION EFFECT  Observing tourists will lead to behavioural changes in the resident population  Young people are susceptible to demonstration effect  Acculturation
  • 35. 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
  • 37.  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
  • 39. IMPACT OF TOURISM TO TOURISTS
  • 40.  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
  • 42. 11/25/12 The environment is being increasingly recognized as the major resource for tourism. Tourism depends ultimately upon the environment, as it is a major tourism attraction itself, or is the context in which tourism activity takes place. Tourism-environment relationships are complex.
  • 43. 11/25/12 Tourism benefits from being in a good quality environment and this same environment should benefit from measures aimed at protecting and maintaining its value as a tourist resource. Tourism has become a major cause of environmental damage to the environment rather than a force for enhancement and protection in the past 50 years.
  • 44. 11/25/12 ECOLOGICAL IMPACTS OF TOURISM The effects on plants as a result of trampling by visitors. The modifications to animal behavior as a result of tourists being present in their habitat. Atmosphere pollution caused by passenger airlines. The resulting contribution to global climate change. Consequent effects on both terrestrial and marine ecosystem.
  • 46. 11/25/12 Stimulate awareness to protect the environment and/or landscape and/or wildlife. Tourism can help to promote the establishment of National Parks and/or Wildlife Reserves. Tourism can promote the preservation of buildings/monuments and the conservation of wildlife. Tourism may provide money to maintain historic buildings, heritage sites and wildlife habitats.
  • 48. 11/25/12 Tourism can lead to the creation of unsightly human structures such as buildings that do not fit in with vernacular architecture. Tourism may lead to damage and/or disturbance to wildlife habitats. POLLUTION
  • 49. 11/25/12 CARRYING CAPACITY Also important in relation to damage/disturbance in the environment. ENVIRONMENTAL – physical space and no. of people in a particular space ECOLOGICAL – threshold measure, which if exceeded will lead to actual damage of habitat PERCEPTUAL – level of crowding that a tourist is willing to tolerate before deciding to go elsewhere.
  • 50. 11/25/12 Tourists are likely to litter. Tourism can contribute to congestion in terms of overcrowding of people as well as traffic congestion. Tourism can contribute to the pollution of water courses and beaches. Tourism may result in footpath erosion.
  • 51. 11/25/12 RESPONSE TO NEGATIVE IMPACTS Holistic Thinking : the Concept of Ecosystems Regulation of the Negative Impacts Encouraging Good Practice Keeping a Sense of Proportion Raising Awareness amongst Tourists and the Industry Paying a Price that Covers the Environmental Costs of Tourism Maintaining a Balance Between Conservation and Development