SADEKE SMITH TOURISM IMPACTS ON JAMAICA COLBOURNE
Description: SADEKE SMITH TOURISM IMPACTS ON JAMAICA COLBOURNE COLLEGE In the last 30 years travel and tourism has become one of worlds largest industries - 11.5 of Gross World Product (GWP). Growth seems set to continue: by 2010 TT will contribute
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slide1. SADEKE SMITH
TOURISM IMPACTS ON JAMAICA COLBOURNE COLLEGE<br>
slide2. In the last 30 years travel and tourism has become one of world's largest industries - 11.5 % of Gross World Product (GWP).
Growth seems set to continue: by 2010 T&T will contribute 12.5% of (an expanded) GWP (WTTC 1998).
Already the main source of foreign currency for 38% of countries.
Among the top five sources of foreign currency for 83% of countries.
699 million international tourist arrivals in 2000, 29% in developing countries (4% in Africa). Travel and tourism: global picture<br>
slide3. Tourism based on natural or social features (such as sunshine, beaches, mountains, forests, or a colourful, interesting culture), offers a way to use these resources without necessarily degrading or depleting them.
Countries that have been endowed by nature or history with a good range of such features therefore have a genuine comparative advantage.
This has allowed the tourism industry in some countries to grow to become the dominant sector in the national economy. The role of tourism in development<br>
slide4. The industry employs nearly 74 million people directly (equivalent to the entire population of the ten countries that have just joined the EU), but also supports the jobs of over 140 million more, giving a total of nearly 215 million people (about 3.4% of the population of the planet) who are directly or indirectly engaged in the industry, and whose livelihoods therefore now depend - directly or indirectly - on the long-term future of the travel and tourism industries. Employment contribution (2004)<br>
slide5. The industry is currently forecast to show relatively rapid growth over the next decade, so that by 2014 the industry will be contributing about US$2.4 trillion in GDP directly, and about US$6.9 trillion in direct and indirect contributions.
It will by then employ some 87.4 million people directly, who will form part of the larger global total of just under 260 million people who will by then be directly or indirectly engaged in or supported by the industry. Growth projections<br>
slide6. New demand from the emerging economies.
Increased demand from expanding segments (such as affluent retired people).
Higher consumer expectations; the range of tourism options is expanding to include e.g. eco-tourism and adventure tourism.
The tourism industry is maturing, which encourages product differentiation to maintain competitive edge and profits.
Competition has kept prices low, which has increased demand.
Globalisation necessitates more business travel as companies spread operations over different countries. Growth factors<br>
slide7. 11.8% of Jamaica’s GDP derives directly from the industry,
36.0% of GDP derives directly or indirectly from the industry.
This compares with Caribbean averages of 4.5% and 14.8% respectively. Jamaica: economic dependency?<br>
slide8. By 2014 some 14.8 of Jamaica’s GDP will derive directly from the industry (up from 11.8%), and 42.9 of all GDP (up from 36.0%) will derive directly or indirectly from the industry.
This compares with the projected averages for the Caribbean of 5.2% (up from 4.5%) and 16.5% (up from 14.8%) respectively, indicating that the relative importance of the travel and tourism industry will rise for the region as a whole, but to a lesser extent than in Jamaica. Increasing economic dependency<br>
slide9. 10.7% of Jamaica’s workforce is directly employed and 31.8% of all jobs are supported by the travel and tourism industry.
This compares with the Caribbean averages of 5.2% and 15.5% respectively.
This also compares with the world averages of 2.8% and 8.1% respectively. Jamaica’s employment dependency<br>
slide10. By 2014 some 13.5% (up from 10.7%) of Jamaica’s workforce will be directly employed and 38.1% (up from 31.8%) of all jobs supported by the tourism industry.
This will compare with the projected Caribbean averages of 5.9% (up from 5.2%) and 17.1% (up from 15.5%) respectively, indicating that Jamaica is expected to continue to move further above the regional averages.
This also compares with the projected world averages for 2014 of 2.9% and 8.6%, which are expected to be relatively little-changed from 2004. Increasing employment dependency<br>
slide11. Five Caribbean nations lie in the global top twenty in terms of the percentage of total employment that is related directly or indirectly to the industry. Jamaica currently lies fifth in this group. Regional employment dependency<br>
slide12. This is a generic problem; Butler (1980) has noted that tourism products tend to go through an S-curve life cycle, with early exploration leading to development, followed by a mature or institutionalized phase. At that point the product must be rejuvenated (reinvented or repositioned), or else it will start to decline as other, less over-developed, less crowded, less polluted and despoiled sites, with fewer attendant social problems, take over their market share. The tourism life-cycle<br>
slide13. The S-curve Limit overcome, continued growth Plateau
Carrying capacity limit Growth Catastrophic collapse
Food supply exhausted
obsolescence<br>
slide14. Phases of growth: the S-curve Low High Inertia Exponential growth Linear Exhaustion, saturation
or competition limit growth Plateau Source: Clayton & Radcliffe, 1997 Catalyst or
combination<br>
slide15. Foreign exchange earnings
Contributions to government revenues
Employment generation
Infrastructure investment
Contribution to local economies POSITIVE ECONOMIC IMPACTS OF TOURISM:<br>
slide16. Tourism expenditures generate income to the host economy and can stimulate the investment necessary to finance growth in other economic sectors.
Some countries seek to accelerate this growth by requiring visitors to bring in a certain amount of foreign currency for each day of their stay.
An important indicator of the role of international tourism is its generation of 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. POSITIVE ECONOMIC IMPACTS OF TOURISM: Foreign exchange earnings<br>
slide17. Direct contributions are generated by taxes on incomes from tourism employment and tourism businesses, and by direct levies on tourists such as departure taxes.
Indirect contributions come from taxes and duties levied on goods and services supplied to tourists.
The WTO estimates that travel and tourism's direct, indirect, and personal tax contribution worldwide was over US$ 800 billion in 1998 - a figure it expects to double by 2010. POSITIVE ECONOMIC IMPACTS OF TOURISM: Contribution to government revenues<br>
slide18. The rapid expansion of international tourism has led to significant employment creation.
For example, the hotel accommodation sector alone provided around 11.3 million jobs worldwide in 1995.
Tourism can generate jobs directly through hotels, restaurants, nightclubs, taxis, and souvenir sales, and indirectly through the supply of goods and services needed by tourism-related businesses.
Tourism supports some 7% of the world's workers. POSITIVE ECONOMIC IMPACTS OF TOURISM: Employment generation<br>
slide19. Tourism can induce the local government to make infrastructure improvements such as better water and sewage systems, roads, electricity, telephone and public transport networks and airport development.
This can improve the quality of life for residents as well as facilitate tourism, where loans, grants and financial assistance can be provided. POSITIVE ECONOMIC IMPACTS OF TOURISM: Stimulation of infrastructure investment<br>
slide20. As the environment is a basic component of the tourism industry's assets, tourism revenues are often used to measure the economic value of protected areas.
Other local revenues that are not easily quantified, as not all tourist expenditures are formally registered.
Money is earned from tourism through informal employment (e.g. street vendors, informal guides, rickshaw drivers ”Asia” in Ja. we have robot taxis)
The positive side of informal 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.
The WTO estimates that tourism generates an indirect contribution equal to 100% of direct tourism expenditures. POSITIVE ECONOMIC IMPACTS OF TOURISM: Contribution to local economies<br>
slide21. The interacting drivers of change:
Growth in population.
Growth in per capita productivity, demand and impact.
Changing technology.
Changing socio-economic factors: cultural systems, values, expectations and behaviour. Before we get into the negatives How did we get into this situation?<br>
slide22. For most of human history there have been only a few million people alive at any one time.
Population was ~300m in 1AD. It took 1,500 years to double, reaching 600m in 1500AD. By 1750 the population was over 800m.
The new era started around 1750, as the first industrial revolution started to transform productivity. In the following 150 years the population doubled again, reaching 1.7b by 1900.
The rate continued to accelerate exponentially. By 1950 the population was almost 2.5b. Over the next 30 years it nearly doubled, reaching 4.8b by 1980. The population was 5.2b in 1990. It is now over 6b.
Population is now growing at 2% per annum. This adds 100m people/year, which means that population will double every 35 years…. A brief history of population<br>
slide23. It will be necessary to provide food, clothing, housing, fuel and water for at least 3bn more people, as well as absorbing them into labour markets.
Of the current population of 6.2bn, some 1.1b (18%) live in absolute poverty (defined as income of US$1.06/day).
Almost all the population increase will be in developing countries – by 2030 these countries will hold 85% of the world’s population. If the rate of economic growth in these countries is less than the rate of population increase, the level of poverty will rise. How well will we cope with the increase?<br>
slide24. The advanced technology and significant capital required to compete in some areas are a barrier to new entrants.
Lack of managerial and technical capacity is a problem in some developing nations; the lack of opportunities means that graduates emigrate to seek employment.
So it has been difficult for some developing nations to move beyond their traditional activity; exporting raw materials – but the viability of some of these exports is threatened by the long-term decline in commodity prices. Negative impacts<br>
slide25. There are many hidden costs to tourism, which can have unfavourable economic effects on the host community.
Often rich countries are better able to profit from tourism than poor ones.
Whereas the least developed countries have the most urgent need for income, employment and general rise of the standard of living by means of tourism, they are least able to realize these benefits.
Among the reasons for this are large-scale transfer of tourism revenues out of the host country and exclusion of local businesses and products<br>
slide26. In most all-inclusive package tours, about 80% of travellers' expenditures go to the airlines, hotels and other international companies, and not to local businesses or workers. In addition, significant amounts of income actually retained at destination level can leave again through leakage.<br>
slide27. A study of tourism 'leakage' in Thailand estimated that 70% of all money spent by tourists ended up leaving Thailand Estimates for other Third World countries range from 80% in the Caribbean to 40% in India.<br>
slide28. Leakage
Enclave tourism
Infrastructure cost
Increase in prices
Economic dependence
Seasonal character of jobs NEGATIVE ECONOMIC IMPACTS OF TOURISM:<br>
slide29. Import leakage
This commonly occurs when tourists demand standards of equipment, food, and other products that the host country cannot supply.
Especially in LEDC’s (less economic developed countries), food and drinks must often be imported, since local products are not up to the hotel's (i.e. tourist's) standards or the country simply doesn't have a supplying industry.
Much of the income from tourism expenditures leaves the country again to pay for these imports.
The average import-related leakage for most developing countries today is between 40% and 50% of gross tourism earnings for small economies and between 10% and 20% for most advanced and diversified economies. NEGATIVE ECONOMIC IMPACTS OF TOURISM: Leakage<br>
slide30. Export leakage
TNC's (trans national cooperation) have a substantial share in the export leakage.
Often, especially in poor developing destinations, they are the only ones that possess the necessary capital to invest in the construction of tourism infrastructure and facilities.
As a consequence of this, an export leakage arises when overseas investors who finance the resorts and hotels take their profits back to their country of origin. NEGATIVE ECONOMIC IMPACTS OF TOURISM: Leakage<br>
slide31. Local businesses often see their chances to earn income from tourists severely reduced by the creation of "all-inclusive" vacation packages.
When tourists 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.
All-inclusive hotels generate the largest amount of revenue but their impact on the economy is smaller per dollar of revenue than other accommodation types.
All-inclusives also import more and employed fewer people per dollar of revenue than other hotels.
Smaller trickle-down effect on local economies. NEGATIVE ECONOMIC IMPACTS OF TOURISM: Enclave tourism<br>
slide32. Current policy: maximise visitor numbers
Pro: Revenue
Con: Low margin, high load
Possible alternative strategy: maximise revenue/tourist by pitching at higher end of market.
Pro: higher margin, lower impact than mass market, better ratio of f/x + tax revenue to cost -> social benefits
Con: uneven distribution of benefits, access issues with large resorts in small islands, locals resent e.g. loss of traditional beach access, profits repatriated
Solutions: diverse product, range of niches, more participation, wider distribution of benefits Jamaica’s policy: mass tourism?<br>
slide33. Mass tourism generates economic benefits but also imposes a range of diverse burdens and impacts.
The growth of the tourism industry in most developing nations has generally been associated with increased demands for land, water, food and construction materials, increased environmental loading on coastal waters, reefs and watersheds, additional loading on the physical infrastructure of towns, wharfs, roads, water supply and sewage treatment systems, and a range of social and cultural impacts on relatively poor host communities. Costs and constraints<br>
slide34. The cruise ship industry provides another example of economic enclave tourism.
Non-river cruises carried some 8.7 million international passengers in 1999.
On many ships, especially in the Caribbean, guests are encouraged to spend most of their time and money on board, and opportunities to spend in some ports are closely managed and restricted. NEGATIVE ECONOMIC IMPACTS OF TOURISM: Enclave tourism<br>
slide35. Tourism development can cost the local government and local taxpayers a great deal of money.
Developers may want the government to improve the airport, roads and other infrastructure, and possibly to provide tax breaks and other financial advantages, which are costly activities for the government.
Public resources spent on subsidized infrastructure or tax breaks may reduce government investment in other critical areas such as education and health. NEGATIVE ECONOMIC IMPACTS OF TOURISM: Infrastructure cost<br>
slide36. Increasing demand for basic services and goods from tourists will often cause price hikes that negatively affect local residents whose income does not increase proportionately.
Tourism development and the related rise in real estate demand may dramatically increase building costs and land values.
This makes it more difficult for local people to meet their basic daily needs. NEGATIVE ECONOMIC IMPACTS OF TOURISM: Increase in prices<br>
slide37. Diversification in an economy is a sign of health, however if a country or region becomes dependent for its economic survival upon one industry, it can put major stress upon this industry as well as the people involved to perform well.
Many countries, especially developing countries with little ability to explore other resources, have embraced tourism as a way to boost the economy.
In The Gambia, for instance, 30% of the workforce depends directly or indirectly on tourism. In small island developing states, percentages can range from 83% in the Maldives to 21% in the Seychelles and 34% in Jamaica
Over-reliance on tourism carries risks to tourism-dependent economies. Economic recession, the impacts of natural disasters such as tropical storms and changing tourism patterns can all have a devastating effect. NEGATIVE ECONOMIC IMPACTS OF TOURISM: Economic dependence of the local community on tourism<br>
slide38. Problems that seasonal workers face include:
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. NEGATIVE ECONOMIC IMPACTS OF TOURISM: Seasonal character of jobs<br>
slide39. Highly dependent.
Heavy reliance on US feeder market (over 70% of arrivals) therefore more vulnerable to downturn there.
Internal issues: crime and harassment, inadequate infrastructure (roads, water treatment plant), environmental load, volume pressure on some attractions, beach access, labour relations, institutional framework, internal divisions e.g. between all-inclusives and SME’s, low per capita margins…
under-performing in relation to some other major regional destinations.
External issues: global slow-down, growing competition within region from e.g. Cuba. Jamaica’s profile<br>
slide40. Over the last century global industrial production increased about 100-fold (Graedel & Allenby 1995).
The rate of environmental damage increased commensurately, partly because the increases in industrial production and international trade were strongly correlated with increased consumption of resources. For example, between 1950 and 1997, fossil fuel consumption quadrupled, while the consumption of timber tripled, partly driven by the increase in the consumption of paper, which rose six-fold over the same period (Brown et al. 1998). Economic growth & environmental damage<br>
slide41. Association of Caribbean States. http:// www.acsaec.org/Tourism/Turagrmtindexeng.htm
Caribbean Tourism Organization. “Caribbean Tourism Organization Opens 23rd Conference with Challenges to Preserve, Protect & Improve Product”; http://travelfile.com/www/custom/1/012/3837/news/opening.ht mlx
The Courier. “Hospitality is Big Business: Jamaica’s Tourist Sector”; n. 138, March-April 1993
World Tourism Organization. “Tourism Grows Steadily Despite Asian Financial Crisis”;(http://www.worldtourism.org/pressrel/26_01_00/htm). Reference<br>
TOURISM IMPACTS ON JAMAICA COLBOURNE COLLEGE<br>
slide2. In the last 30 years travel and tourism has become one of world's largest industries - 11.5 % of Gross World Product (GWP).
Growth seems set to continue: by 2010 T&T will contribute 12.5% of (an expanded) GWP (WTTC 1998).
Already the main source of foreign currency for 38% of countries.
Among the top five sources of foreign currency for 83% of countries.
699 million international tourist arrivals in 2000, 29% in developing countries (4% in Africa). Travel and tourism: global picture<br>
slide3. Tourism based on natural or social features (such as sunshine, beaches, mountains, forests, or a colourful, interesting culture), offers a way to use these resources without necessarily degrading or depleting them.
Countries that have been endowed by nature or history with a good range of such features therefore have a genuine comparative advantage.
This has allowed the tourism industry in some countries to grow to become the dominant sector in the national economy. The role of tourism in development<br>
slide4. The industry employs nearly 74 million people directly (equivalent to the entire population of the ten countries that have just joined the EU), but also supports the jobs of over 140 million more, giving a total of nearly 215 million people (about 3.4% of the population of the planet) who are directly or indirectly engaged in the industry, and whose livelihoods therefore now depend - directly or indirectly - on the long-term future of the travel and tourism industries. Employment contribution (2004)<br>
slide5. The industry is currently forecast to show relatively rapid growth over the next decade, so that by 2014 the industry will be contributing about US$2.4 trillion in GDP directly, and about US$6.9 trillion in direct and indirect contributions.
It will by then employ some 87.4 million people directly, who will form part of the larger global total of just under 260 million people who will by then be directly or indirectly engaged in or supported by the industry. Growth projections<br>
slide6. New demand from the emerging economies.
Increased demand from expanding segments (such as affluent retired people).
Higher consumer expectations; the range of tourism options is expanding to include e.g. eco-tourism and adventure tourism.
The tourism industry is maturing, which encourages product differentiation to maintain competitive edge and profits.
Competition has kept prices low, which has increased demand.
Globalisation necessitates more business travel as companies spread operations over different countries. Growth factors<br>
slide7. 11.8% of Jamaica’s GDP derives directly from the industry,
36.0% of GDP derives directly or indirectly from the industry.
This compares with Caribbean averages of 4.5% and 14.8% respectively. Jamaica: economic dependency?<br>
slide8. By 2014 some 14.8 of Jamaica’s GDP will derive directly from the industry (up from 11.8%), and 42.9 of all GDP (up from 36.0%) will derive directly or indirectly from the industry.
This compares with the projected averages for the Caribbean of 5.2% (up from 4.5%) and 16.5% (up from 14.8%) respectively, indicating that the relative importance of the travel and tourism industry will rise for the region as a whole, but to a lesser extent than in Jamaica. Increasing economic dependency<br>
slide9. 10.7% of Jamaica’s workforce is directly employed and 31.8% of all jobs are supported by the travel and tourism industry.
This compares with the Caribbean averages of 5.2% and 15.5% respectively.
This also compares with the world averages of 2.8% and 8.1% respectively. Jamaica’s employment dependency<br>
slide10. By 2014 some 13.5% (up from 10.7%) of Jamaica’s workforce will be directly employed and 38.1% (up from 31.8%) of all jobs supported by the tourism industry.
This will compare with the projected Caribbean averages of 5.9% (up from 5.2%) and 17.1% (up from 15.5%) respectively, indicating that Jamaica is expected to continue to move further above the regional averages.
This also compares with the projected world averages for 2014 of 2.9% and 8.6%, which are expected to be relatively little-changed from 2004. Increasing employment dependency<br>
slide11. Five Caribbean nations lie in the global top twenty in terms of the percentage of total employment that is related directly or indirectly to the industry. Jamaica currently lies fifth in this group. Regional employment dependency<br>
slide12. This is a generic problem; Butler (1980) has noted that tourism products tend to go through an S-curve life cycle, with early exploration leading to development, followed by a mature or institutionalized phase. At that point the product must be rejuvenated (reinvented or repositioned), or else it will start to decline as other, less over-developed, less crowded, less polluted and despoiled sites, with fewer attendant social problems, take over their market share. The tourism life-cycle<br>
slide13. The S-curve Limit overcome, continued growth Plateau
Carrying capacity limit Growth Catastrophic collapse
Food supply exhausted
obsolescence<br>
slide14. Phases of growth: the S-curve Low High Inertia Exponential growth Linear Exhaustion, saturation
or competition limit growth Plateau Source: Clayton & Radcliffe, 1997 Catalyst or
combination<br>
slide15. Foreign exchange earnings
Contributions to government revenues
Employment generation
Infrastructure investment
Contribution to local economies POSITIVE ECONOMIC IMPACTS OF TOURISM:<br>
slide16. Tourism expenditures generate income to the host economy and can stimulate the investment necessary to finance growth in other economic sectors.
Some countries seek to accelerate this growth by requiring visitors to bring in a certain amount of foreign currency for each day of their stay.
An important indicator of the role of international tourism is its generation of 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. POSITIVE ECONOMIC IMPACTS OF TOURISM: Foreign exchange earnings<br>
slide17. Direct contributions are generated by taxes on incomes from tourism employment and tourism businesses, and by direct levies on tourists such as departure taxes.
Indirect contributions come from taxes and duties levied on goods and services supplied to tourists.
The WTO estimates that travel and tourism's direct, indirect, and personal tax contribution worldwide was over US$ 800 billion in 1998 - a figure it expects to double by 2010. POSITIVE ECONOMIC IMPACTS OF TOURISM: Contribution to government revenues<br>
slide18. The rapid expansion of international tourism has led to significant employment creation.
For example, the hotel accommodation sector alone provided around 11.3 million jobs worldwide in 1995.
Tourism can generate jobs directly through hotels, restaurants, nightclubs, taxis, and souvenir sales, and indirectly through the supply of goods and services needed by tourism-related businesses.
Tourism supports some 7% of the world's workers. POSITIVE ECONOMIC IMPACTS OF TOURISM: Employment generation<br>
slide19. Tourism can induce the local government to make infrastructure improvements such as better water and sewage systems, roads, electricity, telephone and public transport networks and airport development.
This can improve the quality of life for residents as well as facilitate tourism, where loans, grants and financial assistance can be provided. POSITIVE ECONOMIC IMPACTS OF TOURISM: Stimulation of infrastructure investment<br>
slide20. As the environment is a basic component of the tourism industry's assets, tourism revenues are often used to measure the economic value of protected areas.
Other local revenues that are not easily quantified, as not all tourist expenditures are formally registered.
Money is earned from tourism through informal employment (e.g. street vendors, informal guides, rickshaw drivers ”Asia” in Ja. we have robot taxis)
The positive side of informal 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.
The WTO estimates that tourism generates an indirect contribution equal to 100% of direct tourism expenditures. POSITIVE ECONOMIC IMPACTS OF TOURISM: Contribution to local economies<br>
slide21. The interacting drivers of change:
Growth in population.
Growth in per capita productivity, demand and impact.
Changing technology.
Changing socio-economic factors: cultural systems, values, expectations and behaviour. Before we get into the negatives How did we get into this situation?<br>
slide22. For most of human history there have been only a few million people alive at any one time.
Population was ~300m in 1AD. It took 1,500 years to double, reaching 600m in 1500AD. By 1750 the population was over 800m.
The new era started around 1750, as the first industrial revolution started to transform productivity. In the following 150 years the population doubled again, reaching 1.7b by 1900.
The rate continued to accelerate exponentially. By 1950 the population was almost 2.5b. Over the next 30 years it nearly doubled, reaching 4.8b by 1980. The population was 5.2b in 1990. It is now over 6b.
Population is now growing at 2% per annum. This adds 100m people/year, which means that population will double every 35 years…. A brief history of population<br>
slide23. It will be necessary to provide food, clothing, housing, fuel and water for at least 3bn more people, as well as absorbing them into labour markets.
Of the current population of 6.2bn, some 1.1b (18%) live in absolute poverty (defined as income of US$1.06/day).
Almost all the population increase will be in developing countries – by 2030 these countries will hold 85% of the world’s population. If the rate of economic growth in these countries is less than the rate of population increase, the level of poverty will rise. How well will we cope with the increase?<br>
slide24. The advanced technology and significant capital required to compete in some areas are a barrier to new entrants.
Lack of managerial and technical capacity is a problem in some developing nations; the lack of opportunities means that graduates emigrate to seek employment.
So it has been difficult for some developing nations to move beyond their traditional activity; exporting raw materials – but the viability of some of these exports is threatened by the long-term decline in commodity prices. Negative impacts<br>
slide25. There are many hidden costs to tourism, which can have unfavourable economic effects on the host community.
Often rich countries are better able to profit from tourism than poor ones.
Whereas the least developed countries have the most urgent need for income, employment and general rise of the standard of living by means of tourism, they are least able to realize these benefits.
Among the reasons for this are large-scale transfer of tourism revenues out of the host country and exclusion of local businesses and products<br>
slide26. In most all-inclusive package tours, about 80% of travellers' expenditures go to the airlines, hotels and other international companies, and not to local businesses or workers. In addition, significant amounts of income actually retained at destination level can leave again through leakage.<br>
slide27. A study of tourism 'leakage' in Thailand estimated that 70% of all money spent by tourists ended up leaving Thailand Estimates for other Third World countries range from 80% in the Caribbean to 40% in India.<br>
slide28. Leakage
Enclave tourism
Infrastructure cost
Increase in prices
Economic dependence
Seasonal character of jobs NEGATIVE ECONOMIC IMPACTS OF TOURISM:<br>
slide29. Import leakage
This commonly occurs when tourists demand standards of equipment, food, and other products that the host country cannot supply.
Especially in LEDC’s (less economic developed countries), food and drinks must often be imported, since local products are not up to the hotel's (i.e. tourist's) standards or the country simply doesn't have a supplying industry.
Much of the income from tourism expenditures leaves the country again to pay for these imports.
The average import-related leakage for most developing countries today is between 40% and 50% of gross tourism earnings for small economies and between 10% and 20% for most advanced and diversified economies. NEGATIVE ECONOMIC IMPACTS OF TOURISM: Leakage<br>
slide30. Export leakage
TNC's (trans national cooperation) have a substantial share in the export leakage.
Often, especially in poor developing destinations, they are the only ones that possess the necessary capital to invest in the construction of tourism infrastructure and facilities.
As a consequence of this, an export leakage arises when overseas investors who finance the resorts and hotels take their profits back to their country of origin. NEGATIVE ECONOMIC IMPACTS OF TOURISM: Leakage<br>
slide31. Local businesses often see their chances to earn income from tourists severely reduced by the creation of "all-inclusive" vacation packages.
When tourists 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.
All-inclusive hotels generate the largest amount of revenue but their impact on the economy is smaller per dollar of revenue than other accommodation types.
All-inclusives also import more and employed fewer people per dollar of revenue than other hotels.
Smaller trickle-down effect on local economies. NEGATIVE ECONOMIC IMPACTS OF TOURISM: Enclave tourism<br>
slide32. Current policy: maximise visitor numbers
Pro: Revenue
Con: Low margin, high load
Possible alternative strategy: maximise revenue/tourist by pitching at higher end of market.
Pro: higher margin, lower impact than mass market, better ratio of f/x + tax revenue to cost -> social benefits
Con: uneven distribution of benefits, access issues with large resorts in small islands, locals resent e.g. loss of traditional beach access, profits repatriated
Solutions: diverse product, range of niches, more participation, wider distribution of benefits Jamaica’s policy: mass tourism?<br>
slide33. Mass tourism generates economic benefits but also imposes a range of diverse burdens and impacts.
The growth of the tourism industry in most developing nations has generally been associated with increased demands for land, water, food and construction materials, increased environmental loading on coastal waters, reefs and watersheds, additional loading on the physical infrastructure of towns, wharfs, roads, water supply and sewage treatment systems, and a range of social and cultural impacts on relatively poor host communities. Costs and constraints<br>
slide34. The cruise ship industry provides another example of economic enclave tourism.
Non-river cruises carried some 8.7 million international passengers in 1999.
On many ships, especially in the Caribbean, guests are encouraged to spend most of their time and money on board, and opportunities to spend in some ports are closely managed and restricted. NEGATIVE ECONOMIC IMPACTS OF TOURISM: Enclave tourism<br>
slide35. Tourism development can cost the local government and local taxpayers a great deal of money.
Developers may want the government to improve the airport, roads and other infrastructure, and possibly to provide tax breaks and other financial advantages, which are costly activities for the government.
Public resources spent on subsidized infrastructure or tax breaks may reduce government investment in other critical areas such as education and health. NEGATIVE ECONOMIC IMPACTS OF TOURISM: Infrastructure cost<br>
slide36. Increasing demand for basic services and goods from tourists will often cause price hikes that negatively affect local residents whose income does not increase proportionately.
Tourism development and the related rise in real estate demand may dramatically increase building costs and land values.
This makes it more difficult for local people to meet their basic daily needs. NEGATIVE ECONOMIC IMPACTS OF TOURISM: Increase in prices<br>
slide37. Diversification in an economy is a sign of health, however if a country or region becomes dependent for its economic survival upon one industry, it can put major stress upon this industry as well as the people involved to perform well.
Many countries, especially developing countries with little ability to explore other resources, have embraced tourism as a way to boost the economy.
In The Gambia, for instance, 30% of the workforce depends directly or indirectly on tourism. In small island developing states, percentages can range from 83% in the Maldives to 21% in the Seychelles and 34% in Jamaica
Over-reliance on tourism carries risks to tourism-dependent economies. Economic recession, the impacts of natural disasters such as tropical storms and changing tourism patterns can all have a devastating effect. NEGATIVE ECONOMIC IMPACTS OF TOURISM: Economic dependence of the local community on tourism<br>
slide38. Problems that seasonal workers face include:
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. NEGATIVE ECONOMIC IMPACTS OF TOURISM: Seasonal character of jobs<br>
slide39. Highly dependent.
Heavy reliance on US feeder market (over 70% of arrivals) therefore more vulnerable to downturn there.
Internal issues: crime and harassment, inadequate infrastructure (roads, water treatment plant), environmental load, volume pressure on some attractions, beach access, labour relations, institutional framework, internal divisions e.g. between all-inclusives and SME’s, low per capita margins…
under-performing in relation to some other major regional destinations.
External issues: global slow-down, growing competition within region from e.g. Cuba. Jamaica’s profile<br>
slide40. Over the last century global industrial production increased about 100-fold (Graedel & Allenby 1995).
The rate of environmental damage increased commensurately, partly because the increases in industrial production and international trade were strongly correlated with increased consumption of resources. For example, between 1950 and 1997, fossil fuel consumption quadrupled, while the consumption of timber tripled, partly driven by the increase in the consumption of paper, which rose six-fold over the same period (Brown et al. 1998). Economic growth & environmental damage<br>
slide41. Association of Caribbean States. http:// www.acsaec.org/Tourism/Turagrmtindexeng.htm
Caribbean Tourism Organization. “Caribbean Tourism Organization Opens 23rd Conference with Challenges to Preserve, Protect & Improve Product”; http://travelfile.com/www/custom/1/012/3837/news/opening.ht mlx
The Courier. “Hospitality is Big Business: Jamaica’s Tourist Sector”; n. 138, March-April 1993
World Tourism Organization. “Tourism Grows Steadily Despite Asian Financial Crisis”;(http://www.worldtourism.org/pressrel/26_01_00/htm). Reference<br>