MODULE 7
IMPACT OF TOURISM AND HOPSITALITY
LEARNING OBJECTIVE
At the end of this module, the students should be able to:
1. Discuss the economic impacts of tourism and hospitality.
2. Explain the social impacts of tourism and hospitality.
3. Discuss the tourism and hospitality impacts on culture.
4. Discuss the environmental effects of tourism and hospitality.
This module will discuss both advantages and disadvantages of tourism and hospitality in
the aspects of economic, social, culture and of the environment.
INTRODUCTION
The Tourism has evolved from ancient times until today but the rapid growth of
tourism and hospitality in the twentieth century has produces both problems and benefits
for destination countries. It has had visible impacts on the sociocultural and
socioeconomic environment. Although tourism and hospitality can bring economic
advantages to a destination country. It also brings with it serious long-term problems
which, without careful control and planning, can threaten the community.
POINT OF DISCUSSION
Tourism is not limited only to activities in the accommodation and hospitality
sector, transportation sector and entertainment sector with visitor attractions, such as,
theme parks, amusement parks, sports facilities, museums etc., but tourism and its
management are closely connected to all major functions, processes and procedures that
are practiced in various areas related to tourism as a system. Also, tourism industry
involves the functions of planning, organizing, coordinating, training and monitoring
evaluating at all levels (international, national, regional, local).
Therefore, tourism integrated into the functional unit of the economy (Simoni &
Mihai, 2012). Although people had always travelled not only for leisure purposes or for
relaxation, there had also been those who had travelled for entertainment and business
purposes, either to a meeting, conference, workshop, event and etc., and these people or
tourists had contributed to the growth of the destinations they had visited directly or
indirectly, and at large developed the event tourism industry as a whole. One will agree
that tourism whether on a large scale or low scale, in no small measure affects the host
community. This is particularly evident during the period of the events and sometimes
afterwards. Tourism is an economic sector able to offer a significant contribution to the
economic growth of a region and to the labor market, and creates occupation
opportunities directly and indirectly through the supply of goods and the necessary
services for tourist activities. Moreover, tourism produces social benefits to the region (i.e.
small and medium-sized enterprises’ development, creation of new jobs, improvement of
infrastructure etc.). Culturally, tourism is considered as an element of community
enrichment; this is attributed to the meeting of different cultures. Also, tourism can
positively contribute to the maintenance of natural environment by protecting, creating or
maintaining national parks or other protected areas.
THE TOURISM INDUSTRY
Defining the tourist industry is difficult. Tourism means different things to different
people, because it is an abstraction of a wide range of consumption activities which
demands products and services from a wide range of industries in the economy. For
example, OECD (1991) observes that "tourism is a concept that can be interpreted
differently depending on the context. 'Tourism' may cover the tourists, or what the tourists
do, or the agents which cater to them, and so on." Similarly, WTO (1995) defines tourism
as "the activities of persons traveling to and staying in places outside their usual
environment for no more than one consecutive year for leisure, business and other
purposes", while at the same time WTO (1996) states that "tourism is thus a rather
general term, which can refer to the consumption of tourists, to the production units
supplying goods and services particularly to tourists, or even to a set of legal units or of
geographical areas related in a way or other to tourists." To summarize in more concise
terms, tourism can be defined as a set of socioeconomic activities carried out either by or
for tourists. Those carried out by tourists correspond to what tourists do, while those
carried out for tourists correspond to what other socioeconomic institutions do to support
the needs of tourists. What is worth emphasizing is that tourism so defined is neither a
pure demand-side phenomenon nor a pure supplyside one (United Nation and World
Tourism Organization, 1993). The tourism industry, in common with many other
industries, is made up of a number of sectors. The tourism industry sectors and elements
provide in figure 1.
ACCOMMODATION
• Hotels • Bed & Breakfast
• Motels • Backpackers
• Serviced • Caravan Parks
Apartments • Cabins
• Camping • Houseboats
Grounds • Resorts
• Farm Stays
• Guest
Houses
TOURISM
ATTRACTIONS HOLIDAY
INDUSTRY • Educational
• Theme • Events (all
Parks types)
• Natural • Indigenous
Areas
• Cultural TOUR
OPERATORS
• Cultural
• Day Tours Tours
• Adventure • Overnight
Tours Tours
• General • Cruises
Sightseeing
• Special
Interest Tours CARRIERS
• Airlines • Trains
• Coaches • Hire Charter/Cars
PROMOTIONS & DISTRIBUTION
• Travel Agents • Tour Wholesaler &
• Inbound Agents Packaging Agents
CO-ORDINATION AGENCIES
• Industry • Local Tourist
Associations Associations
• Local Government • Commonwealth
• Tourism New South Government
Wales
RETAIL SERVICES SUPPORT
•
Fig 1: Elements of the
Shop and Tourism
• Food and Beverage Facilities
Industry
Production – • Visitor Services
art/craft/souve
nir
Figure 1. Elements of the Tourism Industry
As well as, there are three main types of tourism: domestic tourism, incoming
or inbound tourism and outbound tourism (Cooper et al., 1993).
Domestic Tourism
This is when people take holidays, short breaks and day trips in their own
country. Examples would be:
− A couple taking a weekend breaks in their own country;
− The supporters of a football team going to an away game featuring their local team;
− A family visiting relations in another part of the country, even if they live
only a few miles away.
Incoming/Inbound Tourism
This describes people entering the country in question from their home country,
so it is a type of international tourism. Examples could be:
− A party of Japanese visitors coming to Europe on a trip;
− Teams from different countries entering a country for an international
event, such as the Olympic Games;
− Families from Pakistan entering England to visit relations.
Outbound Tourism
This term applies when people travel away from their home country to visit
other international countries for leisure or business. Examples of this could be:
− A family from Belgium going on holiday to Austria;
− Business people from the UK travelling to America to visit a major exhibition;
− A day tripper from southern Malaysia visiting Singapore.
IMPORTANCE OF TOURISM
Tourism has of late made fast strides in the country. The primary purpose of
promoting tourism in developing countries has been to earn foreign currency.
The avenues of employment by way of promoting tourism comes the next.
It also serves as a potent instrument for eliminating poverty, for ending
unemployment, for promoting dialogue among civilizations and for providing
channels in which streams of different culture could meet and mingle and
create a new ethic-scope on which a fair, just, humane and enlightened order
could he built for the entire human race."
Tourism plays an extremely important role in the economic and social
development of most countries in the word. It is the largest generator of
employment and its services range from travel, accommodation, catering and
maintenance of culture and traditions especially the handicraft industry and to
preservation of eco-system.
SOCIAL AND CULTURAL IMPACT OF TOURISM
Tourism may have many different effects on the social and cultural aspects of
life in a particular region or area, depending on the cultural and religious
strengths of that region. The interaction between tourists and the host
community can be one of the factors that may affect a community as tourists
may not be sensitive to local customs, traditions and standards. The effect
can be positive or negative on the host community (Mathieson & Wall, 1982).
− Local communities can mix with people from diverse backgrounds with
different lifestyles which through ‘demonstration effect’ may lead to the
development of improved lifestyles and practices from the tourists’
examples;
− There can be an improvement in local life through better local facilities and
infrastructure (developed to sustain tourism) which could lead to better
education, health care, employment opportunities and income;
− More cultural and social events available for local people such as
entertainment, exhibitions etc.
− Improved sports and leisure facilities created for the tourists which local
people may use, particularly out of the tourist season;
− Conservation of the local cultural heritage of an area and rebirth of its
crafts, architectural traditions and ancestral heritage;
− Urban areas which may be in decline can be revived and the movement of
people from rural areas to urban areas for employment may be reversed
as jobs will be available in the tourism industry;
Increase in youth exchange programmers, village tourism, home swap
programmers and voluntary work overseas.
ECONOMIC IMPACT OF TOURISM
The major benefit of tourism for a region or country is economic as it provides
an opportunity for job creation and generation of revenue at international,
national, regional and local levels. Tourism can also benefit economies at
regional and local levels, as money comes into urban and rural areas which in
turn stimulates new business enterprises and promotes a more positive image
in an area (Cooper et al., 1993).
Impact of Tourism on Income Creation
One of the important economic features of the tourism industry is that an
income earned in places of residence is spent in places "visited" (Holloway &
Robinson, 1995). Tourism is an instrument in transferring a vast sum of money
from "income generating" countries to "income receiving" countries. The
money spent by tourist does tend to percolate through many levels.
Tourism as a source of income is not easy to measure at least with any
degree of accuracy. However, the most common method for estimating the
income generated from tourism is to determine the "multiplier effect" in a
destination. The flow of money generated by tourists by tourist spending,
multiples, as it passes through various segments of the economy. A tourist
makes an initial expenditures into the society, which is received as income by
local tour operators, shopkeepers, hotels, taxi drivers etc.
Thus, money spent by tourists generates income in multiple times than the
original spending. This is called "multiplier effect". Tourism; particularly
international tourism helps the economy of a country with a number of multiple
of the tourist's original dollar. The multiplier effect of tourism can be measured
by the following aspects:
1. Sales multiplier
2. Output multiplier
3. Income multiplier
4. Employment multiplier.
Tourism as a Source of Foreign Exchange Earning
The tourism in India is of crucial importance in relation to its critical position of
balance of payment problem and as an important source of foreign exchange
earnings. It is the most convenient way of earnings in foreign exchange, when
compared with the export of manufactured goods. The problem of packing
and transport does not arise in this industry.
The department of tourism, government of India works out quick estimates every year by
multiplying the number of tourist arrivals by the estimated per capital expenditure
of a foreign tourist. The tourist has to spend in India whether traveling by air,
railway, roadways, houseboats etc., while making his tour in any part of tourist
interest in India. The tourism experts have universally accepted that as soon
as a country is able to earn foreign exchange from the tourism, which is a
minimum of 10 percent of the merchandise exports, that country can be called
a "tourism country".
Employment Generation Effects of the Tourism
Another major direct economic effect of tourism relates to employment
(Inskeep, 1991). The unemployment impact of tourism is diffused widely over
the economy affecting almost all parts of the services and other sectors.
The tourism industry is highly labor intensive service industry and hence, it is a
valuable source of employment. It provides employment several times more
than normal manufacturing industries. Several type of business firms such as
hotels, motels, restaurants, transport agencies, travel agents, tour operators,
gift shops, car and rickshaw drivers, guide etc. flourish from tourism.
It employs large number of people and provides a wide range of jobs, which
are intended from unskilled to highly specialized one. Then, there are other
supporting industries, small and large, which in turn, cater to the needs of
tourism industries directly, or indirectly providing and supplying the
requirement of the tourists. The following list ranks various businesses, with
the highest employer at the top:
− Food service
− Entertainment
− Accommodation
− Automobile transportations
− Public transportations
− Travel arrangers.
Tourism Impact on Balance of Payment
It is not only developing countries but also some developed countries that
need to improve their balance of payments through tourism. Tourism is one of
the most important export industries of Europe and America. It can make a
vital contribution to narrow any trade deficits of any country.
Developing countries having a deficit balance of payments find it to their
advantage to receive foreign tourists to compensate for negative trade
balance (Mill, 1990). So tourism industry can play an important role in
economic development for a developing country like India. It helps in
improving the countries adverse balance of payment position because the
tourism industry is the second largest export earner industry in the word.
Infrastructure Development and Tourism
Tourism necessities help in creation of infrastructure utilities and amenities,
which are not only used by the visitors but become valuable to the local
population as well. The economic importance of tourism in national economy
can be appreciated with reference to its contribution in infrastructure
development (Mathieson & Wall, 1982).
Tourist arrivals in a country increase effective demand for the infrastructure
facilities. The government must encourage the private sector to put up tourist
infrastructure. An attempt must be made to develop infrastructure in a planned
manner so as to avoid
congestion, overcrowding and damage to the environment. That is where the role
of the government is important.
Contribution of Tourism to National Income
Tourism gives impetus to national income. International tourism and domestic
tourism both have the same effect on the national income (Mill, 1990).
Tourism has to pay for different types of services and goods in the host
country. So tourism constitutes a demand for services and that of consumer
goods.
The construction of accommodation, urbanization for tourist purpose,
infrastructure installation, increased tourist transport and equipment etc. are
the examples of how tourist transport encourages investment opportunities
within the state. When tourists pay for goods and services in another country,
these amounts are reflected as national travel receipts for such country.
Instrument of National Integration
National integration is a very important aspect for any country of the word
rather than any other economic and social aspect. It is a very significant
instrument for India, especially which is the largest secular democratic country
of the word believing in the concept of "unity in diversity" domestic tourism
increase the national integration.
Increases In Investment Opportunities
As per the studies of the WTO and other related studies tourism is one of the
fastest growing industry in the world with various multiple activities. These, the
inputs are the basic incentives to the traders for the expansion of their
business or for launching new products in this segment.
Helpful to Balanced Regional Development
Balanced regional development is an important factor for optimum, smooth and
overall development of a country (Inskeep, 1991). The tourism industry can
develop particular tourist areas in each district. Tourism can develop all these
regions of the country. As a matter of fact tourism has helped in the regional
development of the various districts of India including the surrounding towns
and markets.
Helpful in Reduction of Poverty
Almost all the developing countries are trapped in vicious circles of poverty
with low per capital income and low national incomes. Tourism activities can
reduce the poverty through the increase in national income, employment
generation; foreign currency earnings, regional development, promotion of
local handicrafts and many more (Mill & Morrison, 1992).
Expansion of Literacy and Education
Tourism also helps in expansion of education and literacy in a big way. It
helps us to broader our mental attitude by interacting with various people their
languages and cultures. Hotel management institutes, food craft institute,
fashion design schools, colleges and university departments run these
tourism-related courses.
UNIVERSITY OF RIZAL SYSTEM
Province of Rizal
Tourism and Tax Earnings
Tourism activities increase the tax-revenue of the centre and the state
governments (Gee et al., 1989). Many types of taxes are included in
tourist-related goods and services. All tourist earnings increase many
economic activities in the countries and these economic activities are a
big source of taxable earnings for the governments.
Increase in the Standard of Living
Due to numerous economic benefits of tourism and its potential growth it
helps in the increase of standard of living of the people by offering new
and better jobs, which in terms helps them to improve the quality of life
and their families.
Improvement in Health and Family Welfare
Tourism helps in the improvement of health and family welfare by
adopting the direction of the advance countries in this direction. Health
conference, convention, seminars, exchange of views of the leading
experts "helps in this" regard.
ENVIRONMENTAL IMPACTS OF TOURISM
An attractive environment appeals to tourists, whether natural or built, and
the development of tourism in a locality will relate to the surrounding area.
The term ‘environment’ refers to the physical setting in which tourism
takes place – this could be coastal resorts, historic cities, mountain
ranges, pictures villages, sites of cultural interest including museums and
national monuments – and which provides the stimulus for travel.
Tourism itself will affect the environment in both positive and negative
ways. The following lists summarize these effects:
− Increased investment in the area (may improve facilities, access and
enable development);
− Conservation of features encouraged (buildings, wildlife, countryside);
− Increased income for upkeep and preservation of facilities.
There are pressure groups that campaign to preserve the environment and
try to prevent over-development, such as Friends of the Earth and
Tourism Concern. Government departments in many countries aim to
achieve sensitive tourism development that is respectful of local
environments and customs.
The more involved a local community is with the development of tourism
in an area, the less damaging the impact of tourism may be on that area.
However, the local community may see the benefits of tourism
development without being fully aware of the negative effects or costs to
the community. Or they may focus on the threats to the environment
without seeing the positive aspects. This is where local tourism forums
UNIVERSITY OF RIZAL SYSTEM
Province of Rizal
(such as regional tourist boards) can help focus the issues and provide an
opportunity for discussion and analysis as well as raising public
awareness.
Summary
1. The development and growth of tourism and hospitality made both
positive and negative impacts in the economy, social, cultural and
environment of a country or of the destination area.
2. Negative impacts of tourism and hospitality in the economy include:
inflation and land value, high leakages, seasonality, opportunity costs
and overdependence on tourism and hospitality as the primary source
of income while the positive impacts of tourism and hospitality in the
economy include; income, employment, balance of payments and
investment and development.
3. The positive social effects of tourism and hospitality are classified into
four groups, namely: social change, and multicultural understanding
adaption to the realities of modern life and improvement of the host
country’s lifestyle, use of foreign language and improved health
conditions and disease control. The negative social effect include:
social saturation, changes in the social structure, behavior and roles,
community problems and negative demonstrative effects.
4. The two most important positive effects of tourism and hospitality on
culture are the promotion of intercultural communication and the
renaissance of native culture while the negative effects include the
loss and destruction of a country’s traditional art and native culture.
5. The negative environmental impact of tourism and hospitality include
environmental conflicts, geological conflicts and resident conflicts
while the positive environmental impact include conservation of
environment, development of attractions, historic preservation and
resident benefits.
6. The proper planning, controlling of development growths and
implementation of the guidelines to protect and prevent negative
impacts of tourism and hospitality can greatly reduce the effects.
Reference:
Mylene A. Yeung, Macro Perspective of Tourism and Hospitality, Edric Publishing
House, 2019
UNIVERSITY OF RIZAL SYSTEM
Province of Rizal
SELF-LEARNING
1. What is QUESTION/REFLECTION
the impact of COVID 19 on Tourism and Hospitality Industry?
2. List down some issues on Tourism and Hospitality Industry?
3. What major challenges does tourism and hospitality is facing right now?
SELF-ASSESSMENT: CASE STUDY
JUMBO MOUNTIAN RESORT
Jumbo Mountain resort near Inver mere has long been one of the most
controversial tourism developments in British Columbia. Proponents claim that
it will add a world-class skiing resort product to the economy. Opponents
argue that the environmental impacts are not worth the limited economic return
it offers, including threatening grizzly bears and other sensitive species
(Lavoie, 2014)
The planning process for the resort has taken over 20 years with initial permits
issued in 2004. Since then the project faced several delays in order to clear
conditions of its environmental assessment. In December 2014, the project
was delayed again as the government asked for more time to evaluate
whether the newly poured foundations for lodge buildings were located in
avalanche zones (Shaw, 2014)
Conduct your own research about Jumbo Mountain Resort using a minimum of
three sources, and answer the questions below:
a. WHAT ARE SOME OF THE ENVIRONMENTAL IMPACTS LISTED BY
THOSE OPPOSED TO THE RESORT?
b. HOW MIGHT THESE IMPACTS BE MITIGATED? WHAT STEPS IS THE
COMPANY TAKING TO DO THIS?
c. IN ADDITION TO ENVIRONMENTAL IMPACTS AND AVALANCHE RISK,
HAVE THERE BEEN THERE ANY, OTHER CHALLENGES TO THE
RESORT?
UNIVERSITY OF RIZAL SYSTEM
Province of Rizal
d. GIVEN DOCUMENTED RECORD WARM TEMPERATURES AND LOW
SNOWFALL IN OTHER RESORT AREAS OF THE PROVINCE, AND THE
CURRENTLY STABLE SNOW CONDITONS OF JUMBO, DO YOU THINK
IT’S A GOOD LONG-TERM INVESTMENT? WHY OR WHY NOT?
e. WHAT IS THE PROGRESS OF THE PROJECT TODAY? DO A SCAN OF
SOCIAL AND NEWS SITES AND TRY TO DETERMINE WHERE PUBLIC
OPINION LIES.
f. HOW IS THE COMPANY RESPONDING TO CRITICS REGARDING ITS
ENVIRONMENTAL STEWARSHIP STRATEGIES? WHAY PLATFORMS
IS IT USING TO COMMUNICATE?
KEY ANSWERS HERE!
DEADLINE…
APRIL 15, 2021
@11:59P.M.
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