Economic Transformation Through Tourism

1. ECONOMIC TRANSFORMATION
THROUGH TOURISM
Group No. 5
13th Batch GMCS Training
The Institute of Chartered Accountants of Nepal
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Presented by:
-Prabina K.C.
-Nisha Aryal
-Rakshya Kharel
-Satyendra Sharma Satyam
-Sanish Shrestha

2. NAMASTE
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3. WHAT IS TOURISM?
“People travelling to and staying in places outside
their usual environment for not more than one
consecutive year for leisure, business and other
purpose.”
- World Tourism Organization
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4. WHAT IS TOURISM? (CONTD…)
 Tourism is an effective tool for
 Job creation,
 Development, and
 Economic growth
 Tourism is one of the largest and fastest growing
sectors of the world economy.
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5. TOURISM IS COMPLEX
 It needs to be managed
 When tourism growth goes
unmanaged, the result can be:
 unsustainable use of natural, cultural, and
social asset base
 increased crime, income inequality, and the
mistreatment of women and children
 increased reliance on imported goods and
services
 Foreign culture influences
There are risks involved in tourism
development, but the risks of not being
involved are greater.
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6.  Tourism is “an activity essential to the life of nations
because of its direct effects on the social, cultural,
educational and economic sectors of national
societies and on their international relations.”
- Manila Declaration on World Tourism (1980)
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7. TYPES AND FORMS OF TOURISM
 Types of Tourism
 Domestic Tourism
 Inbound tourism
 Outbound tourism
 Forms of Tourism
 Adventure tourism
 Cultural tourism
 Religious tourism
 Eco tourism
 Sports tourism
 Business tourism
 Medical tourism
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Gateway of Tourists, TIA

8. ECONOMY OF NEPAL
 Three Pillars – Government, Private, Cooperative
 Tourist Income as major source of convertible
foreign exchange Rs. 51,977.40 million (F.Y. 2016-
17).
 Other sectors of the economy cannot be grown in
short time because it requires huge investment in
time and money.
 Growth in tourism industry is viable as Nepal has
enormous potential in terms of diverse flora and
fauna.
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9. PROSPECTS OF TOURISM
 Nepal’s cultural and ethnic diversity is huge
considering the size of Nepal on the face of the
earth which covers just 0.03% of the world.
 Nepal has more than 125 ethnic groups who speak
123 different languages and follow more than 10
different religions.
 Nepal is the home to 7 of the top 10 tallest
mountain peaks in the world.
 There are 10 World Heritage Sites listed by
UNESCO.
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10. NEPAL
THE HOME OF CULTURAL DIVERSITY
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“g]kfn rf/ hft, 5TtL; j0f{sf] ;femfkm'naf/L xf] .”– Then
King P.N. Shah

11. IMPACTS OF TOURISM
1. Socio-Cultural Impact
Tourism encourages the preservation of historical places,
traditional customs, festivals and handicrafts which would
otherwise have vanished or lost with time. The social interaction
between the guest and the host creates a better cultural
understanding. This allows raising global awareness of critical
issues such as poverty.
2. Environmental Impact
It would help to raise a global awareness about the
environmental values and help protect the natural areas by
increasing their economic importance. Better and economical
use of the environmental resources might be successful then
after.
3. Economic Impact 11

12. HOW CAN WE MANAGE THE IMPACTS OF
TOURISM?
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13. ECONOMIC IMPACT OF TOURISM
 Creation of employment
opportunities
 Enhancement of standard of
living
 Creation of new industries and
infrastructures in rural and urban
areas
 Investment in and development
of infrastructure in urban areas
 Increase in Government
Revenue (Tax and Non-tax)
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14. ECONOMIC TRANSFORMATION
 Economic transformation
 refers to the continuous process of moving
labor and other resources from lower- to
higher-productivity sectors and (2) raising
within-sector productivity growth
 emphasizes the movement from low- to high-
productivity activities within and across all
sectors (which can be tasks or activities that
are combinations of agriculture, manufacturing
and services).
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15. ECONOMIC TRANSFORMATION THROUGH
TOURISM
 Tourism industry is a complex industry which
requires huge capital investment and resources.
 Development of tourism industry requires
establishment of backward linkages.
 A backward linkage is created when a project
encourages investment in facilities that enable the
project to succeed. E.g.: To develop a tourist
destination, investment has to be made in hotels,
roads, communication facilities and market for
agricultural produce.
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16. TRANSFORMATIONAL EFFECT OF TOURISM:
THAILAND (1960 – 2005)
 1969 - Tourism Organization of Thailand set up by the
Thai government
 1997-1981 - Support for tourism to increase foreign
exchange earnings and reduce trade deficit
 1982 - Tax breaks to stimulate hotel construction
 1989-1997 - Surge in foreign direct investment and in
public investment in infrastructure
 Now, tourism industry contributes 20.60% of GDP for
Thailand.
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17. INPUTS FOR DEVELOPMENT OF TOURISM
INDUSTRY
 Stable political system
 Favorable immigration policy
 FDI in large projects
 Competent manpower
 Participation of local community
 Improved infrastructure
 Promptness in service delivery
 Hassel-free regulation
 Availability of ancillary services
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18. PROCESSING FOR DEVELOPMENT OF
TOURISM INDUSTRY
 Efficient operation of travel agencies
 Local flavor with international comfort
 Pooling and aggregator
 Hospitality management
 Tourist profiling
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19. OUTPUT FROM TOURISM INDUSTRY
 FOREX Inflow
 Job creation and Improvement of livelihood
 Global recognition
 Maintenance of Infrastructure
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20. NEGATIVE IMPACT OF TOURISM
 Deterioration of cultural identity
 Unsustainable use of natural, cultural and social asset
base/ prostitution
 Increased crime, income inequality
 Increased reliance on imported goods and services
 Indulgence of tourists in undesirable activities such as
smuggling of contraband goods.
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21. WAY FORWARD
Policy Reforms
Capacity Building
Private Sector Linkages
Product Competiveness
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22. POLICY REFORMS
 Business enabling policy
 Public/Private Dialogue
 Implementation research
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Old
Ways
New
Ways
Reform Strategies

23. CAPACITY BUILDING
 Technical/vocational education
 Development in entrepreneurial traits
 Research and analysis
 SME Training
 Skill training and workforce planning
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24. PRIVATE SECTOR LINKAGES
 Access to finance
 Integrated value-chain strengthening
 Support to professional associations
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Private
Sectors
Participation

25. PRODUCT COMPETIVENESS
 Product innovation and competitiveness projects
 Infrastructure upgrading
 Product development
 Investment promotion
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26. DDP TO GDP
 ljZjf; (Biswas)
 Aspirations of Nepali people:
 ljs]Gb|Ls/0f
(Bikendrikaran/Decentralization)
 :jfledfg(Swaviman/Dignity)
 ;d[l4(Samriddhi/Prosperity)
 All these aspirations can be
fulfilled through development of
tourism
 Thus, focus on DDP through
tourism will lead to growth in GDP
and hence the economy will
transform
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The total contribution of
Travel & Tourism to
GDP was Rs. 177.9bn,
7.5% of GDP in 2016,
and is forecast to rise
to 8.3% of GDP in
2027.

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