Ch14 And 17


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Ch14 And 17

  1. 2. Chapter 14 Tourism’s Economic Impact
  2. 3. Learning Objectives <ul><li>Know the economic generators and impact of tourism </li></ul><ul><li>Perceive the economic importance of tourism in various regions of the world </li></ul><ul><li>Understand multipliers </li></ul><ul><li>Know about balance of payments </li></ul><ul><li>Comprehend elasticity and inelasticity </li></ul><ul><li>Know about tourism satellite accounts </li></ul>
  3. 4. Three Major Goals of Tourism 1) Maximize the amount of psychological experience for tourists. 2) Maximize the profits for firms providing goods and services to tourists. 3) Maximize the direct (primary) and indirect (secondary) impacts of tourist expenditures on a community or region. These goals are often compatible but in certain situations they can be incompatible.
  4. 5. Constraints Faced in Tourism Goal Attainment <ul><li>Demand </li></ul><ul><li>Supply of attractive resources </li></ul><ul><li>Technical and environmental constraints </li></ul><ul><li>Time constraints </li></ul><ul><li>Indivisibilities </li></ul><ul><li>Legal constraints </li></ul><ul><li>Self-imposed constraints </li></ul><ul><li>Lack of knowledge </li></ul><ul><li>Limits on supportive resources </li></ul>
  5. 8. <ul><li>There are other local revenues that are not easily quantified, as not all tourist expenditures are formally registered in the macro - economic statistics . </li></ul><ul><li>Money is earned from tourism through informal employment such as street vendors, informal guides, rickshaw drivers, etc . </li></ul><ul><li>The positive side of informal or unreported employment is that the money is returned to the local economy, and has a great multiplier effect as it is spent over and over again . </li></ul>
  6. 9. Economic Multipliers <ul><li>Direct Effect </li></ul><ul><ul><li>Result from visitors spending money in tourist enterprises and providing a living for the owners and managers and creating jobs for employees. </li></ul></ul><ul><li>Indirect Effect </li></ul><ul><ul><li>This is the multiplier impact. This is where visitor spending circulates and recirculates. </li></ul></ul><ul><li>Employment Multiplier </li></ul><ul><li>Income Multiplier </li></ul>
  7. 10. Income Multiplier Formula Multiplier = where M = marginal (extra) P = propensity (inclination) C = consume (spending) MPC S = savings (money out of circulation) MPS A more simpler formula is Multiplier = 1/MPS Example $1,000 of tourist expenditure and an MPC of 1/2. Multiplier = = $2,000
  8. 11. <ul><li>A study of tourism 'leakage' in Thailand estimated that 70% of all money spent by tourists ended up leaving Thailand ( via foreign - owned tour operators, airlines, hotels, imported drinks and food, etc .). </li></ul><ul><li>Estimates for other Third World countries range from 80% in the Caribbean to 40% in India . Source: Sustainable Living </li></ul>
  9. 12. What is income elasticity of demand? <ul><li>Price elasticity of demand? </li></ul>Can you draw and label a product life cycle? Ideas from your other classes (prerequisites) are often applied to Tourism
  10. 13. <ul><li>Income Elasticity </li></ul><ul><li>The change(%) in quantity demanded in response to a given change(%) in income, price remaining unchanged </li></ul>Price Elasticity The change in demand resulting from change in price. Most tourism products are price elastic.
  11. 15. Chapter 17 <ul><li>Tourism </li></ul><ul><li>and the Environment </li></ul>
  12. 16. <ul><li>Recognize the world-wide importance of natural resource conservation and sustainable tourism development. </li></ul><ul><li>Learn how ecotourism can benefit local people. </li></ul><ul><li>Understand the dangers and limitations of ecotourism. </li></ul><ul><li>Understand tourist codes of ethics and guidelines. </li></ul><ul><li>Learn current environmental practices of tourism organizations and suppliers. </li></ul><ul><li>Learn how to maintain natural destinations. </li></ul>Learning Objectives
  13. 17. WTTC  Key Environmental Issues  <ul><li>Global warming </li></ul><ul><li>Depletion of the ozone layer </li></ul><ul><li>Acid rain </li></ul><ul><li>Depletion and pollution of water resources </li></ul><ul><li>Depletion and pollution of land resources </li></ul>
  14. 18. <ul><li>An average golf course in a tropical country such as Thailand needs 1500kg of chemical fertilizers, pesticides and herbicides per year and uses as much water as 60,000 rural villagers . </li></ul><ul><li>Source: Tourism Concern </li></ul>
  15. 19. <ul><li>109 nations have coral reefs </li></ul><ul><li>In 90, reefs are being damaged by tourism activity </li></ul>
  16. 20. WTTC Implications of Resource Depletion <ul><li>Political instability or increased competition for land could lead to loss of potential new tourism destinations and degradation of existing destinations. </li></ul><ul><li>Loss of landscape and wildlife could cause a decrease in customer satisfaction with tourism products and hence lower propensity to travel to some destinations. </li></ul><ul><li>Higher fuel prices could lead to operational price increases and corresponding decreases in the number of travelers in this “price-sensitive market.” </li></ul>
  17. 21. Elements of the WTTC Vision of Travel & Tourism and the Environment <ul><li>Travel & Tourism is an integral aspect of modern societies </li></ul><ul><li>Global awareness of environmental damage is developing rapidly </li></ul><ul><li>The resources of the world’s largest industry can and must be harnessed to achieve environmental goals </li></ul><ul><li>The industry has the potential to influence billions of customers per years and to use its leverage to achieve beneficial environmental effects </li></ul><ul><li>The customer challenge will exert a growing pressure to achieve environmental improvements </li></ul><ul><li>Environmental lobbies will add pressure to develop good environmental practice </li></ul><ul><li>Self-regulation must be developed rapidly and effectively and used to influence the development of appropriate and workable regulations </li></ul><ul><li>Corporate environmental mission statements are a vital first step toward self-regulation </li></ul><ul><li>Environmental leadership must come from the major international companies </li></ul>
  18. 22. The Premises of Sustainable Development <ul><li>The Premise of Interdependency </li></ul><ul><li>The Premise of Multidisciplinarity </li></ul><ul><li>The Premise of Previous Experience </li></ul><ul><li>The Premise that Nature is Better </li></ul><ul><li>The Premise of Politics and Power </li></ul>
  19. 23. Sustainable Development and Tourism: The Critical Areas <ul><li>Defining the Relevant Population/Community </li></ul><ul><li>Defining the Time Horizon </li></ul><ul><li>Defining the Dimensions of Sustainability </li></ul><ul><li>Defining the Values that Underlie Sustainable Development </li></ul>
  20. 24. Sustainable Development in Tourism: A Possible Allocation of Responsibility
  21. 25. Sustainable Tourism  An Agenda for Action  <ul><li>ACTIVITIES: </li></ul><ul><li>Coordinating the development of a tourism philosophy and vision for the community/ region </li></ul><ul><li>Specifying the major goals of the community/region with respect to tourism </li></ul><ul><li>Obtaining consensus concerning the social, physical, and cultural carrying capacity of the community/region in question </li></ul><ul><li>Identifying the specific action initiatives necessary to meet the tourism development objectives while respecting the destination’s carrying capacities </li></ul><ul><li>Gaining agreement on the measures to be used in monitoring the impacts of tourism in the community/region </li></ul><ul><li>Gathering and disseminating information concerning the impacts of tourism on the community/region </li></ul>
  22. 26. <ul><li>PROGRAM ELEMENTS: </li></ul><ul><li>Maximum total visitation levels to a community/region </li></ul><ul><li>An obligatory tax to support tourism infrastructure planning, development, and maintenance </li></ul><ul><li>Community-supported legislation to protect and preserve unique resources and heritage sites </li></ul><ul><li>Community and industry consensus concerning architectural and signage standards </li></ul><ul><li>Support for standards and certification programs that encourage staff development and the delivery of high-quality service </li></ul>Sustainable Tourism  An Agenda for Action 
  23. 27. <ul><li>Responsible travel to natural areas that conserves the environment and sustains the well-being of local people </li></ul><ul><li>Environmentally friendly travel that emphasizes seeing and saving natural habitats and archeological treasures </li></ul><ul><li>A tool for conservation </li></ul><ul><li>Ecologically responsible tourism </li></ul>Definitions of Ecotourism Some definitions of ecotourism are as follows:
  24. 28. <ul><li>Provides jobs and income for local people </li></ul><ul><li>Makes possible funds to purchase and improve protected or natural areas to attract more ecotourists in the future </li></ul><ul><li>Provides environmental education for visitors </li></ul><ul><li>Encourages heritage and environmental preservation and enhancement </li></ul>Benefits and Importance of Ecotourism
  25. 29. Translating Idealism into Sustainable Tourism - What Managers Need to Know - <ul><li>Measures of </li></ul><ul><li>The general relationship between tourism and the environment </li></ul><ul><li>The effects of environmental factors on tourism </li></ul><ul><li>The impacts of the tourism industry on the environment </li></ul>
  26. 30. Types of Indicators <ul><li>Core indicators of sustainable tourism which have been developed for general application to all destinations </li></ul><ul><li>Destination-specific indicators applicable to particular ecosystems or types of tourism. These indicators fall into two categories: </li></ul><ul><ul><li>Supplementary ecosystem-specific indicators for application to particular ecosystems (e.g., coastal areas, parks and protected areas, or mountainous regions). </li></ul></ul><ul><ul><li>Site-specific indicators that are developed uniquely for the particular site. These indicators reflect important factors of the site. Which may not be adequately covered by the core and supplementary eco-system-specific indicator sets, but are nonetheless needed for management of the particular site. </li></ul></ul>
  27. 31. Core Indicators of Sustainable Tourism
  28. 32. Tourism Industry Associations of Canada <ul><li>Enjoy our diverse natural and cultural heritage and help us to protect and preserve it. </li></ul><ul><li>Assist us in our conservation efforts through the efficient use of resources, including energy and water. </li></ul><ul><li>Experience the friendliness of our people and the welcoming spirit of our communities. Help us to preserve these attributes by respecting our traditions, customs, and local regulations. </li></ul><ul><li>Avoid activities which threaten wildlife or plant populations, or which may be potentially damaging to our natural environment. </li></ul><ul><li>Select tourism products and services that demonstrate social, cultural, and environmental sensitivity. </li></ul>
  29. 33. Common Features of All Codes <ul><li>the need to make an overall commitment to the physical and human environment, to accept responsibility for environmental damage and take corrective action where necessary, and to promote and reward outstanding environmental performance; </li></ul><ul><li>the need to develop policies and strategies that take account of land-use planning regulations and the need to protect some areas from further development; </li></ul><ul><li>the need to develop management policies that enhance beneficial and minimize adverse impacts on the environment; and </li></ul><ul><li>the need to cooperate with other firms, sectors and countries. </li></ul>
  30. 34. <ul><li>“ development that meets the needs of the present without compromising the ability of future generations to meet their own needs” </li></ul>Idea of Sustainable Development
  31. 35. Possible Negative Ecological Impacts of Tourism <ul><li>when visitor use is greater than the environments’ ability to cope with this use within the limits of acceptable change. </li></ul><ul><li>where it causes increased consumption of scarce resources so that local communities are forced to compete with tourism for use of resources. </li></ul>
  32. 36. Other Possible Negative Impacts <ul><li>overuse of water resources </li></ul><ul><li>taking land out of production </li></ul><ul><li>impact on animals </li></ul><ul><li>land degradation, erosion </li></ul><ul><li>damage vegetation </li></ul><ul><li>destruction of land forms </li></ul><ul><li>destruction or defacing features </li></ul><ul><li>visual degradation </li></ul><ul><li>pollution </li></ul>