13.3 The development of international tourism

Reasons for, and trends in, the growth of tourism

Tourism has developed into a major global industry, which is still expanding rapidly. International tourist arrivals reached a record of almost 900 million in 2007 and international travel receipts totalled over $800 billion. Between 2000 and 2007 international tourist arrivals rose over 40%. A range of factors have been responsible for the growth of global tourism. Table 13.2 subdivides these factors into economic, social and political reasons and also includes factors that can reduce levels of tourism, at least in the short term.

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Tourism is travel away from the home environment (a) for leisure, recreation and holidays, (b) to visit friends and relatives, and (c) for business and professional reasons. International tourist arrivals are tourists travelling to a country that is not their place of residence, for more than one day but no longer than a year. International tourism receipts are money spent by visitors from abroad in a destination country.

Table 13.2 Factors affecting global tourism

Economic

Social

Political

Steadily rising incomes – tourism grows on average 1.3 times faster than GDP. The decreasing real costs (with inflation taken into account) of holidays. The widening range of destinations within the middle-income range. The heavy marketing of shorter foreign holidays aimed at those who have the time and disposable income to take an additional break. The expansion of budget airlines. ‘Air miles’ and other retail reward schemes aimed at travel and tourism. ‘Globalisation’ has increased business travel considerably. Periods of economic recession can reduce levels of tourism considerably. An increase in the average number of days of paid leave. An increasing desire to experience different cultures and landscapes. Raised expectations of international travel with increasing media coverage of holidays, travel and nature. High levels of international migration over the last decade or so means that more people have friends and relatives living abroad. More people are avoiding certain destinations for ethical reasons. Many governments have invested heavily to encourage tourism. Government backing for major international events such as the Olympic Games and the World Cup. The perceived greater likelihood of terrorist attacks in certain destinations. Government restrictions on inbound/outbound tourism. Calls by non-governmental organisations to boycott countries such as Burma.

Figure 13.7 shows the regional share of tourist arrivals in 2007. Although the developed regions of the world remain the largest tourism destinations, their dominance is reducing. For example, Europe and North America accounted for 69% of international arrivals in 2000, but by 2007 this had fallen to 62%. Between 2000 and 2007 the fastest rates of growth were in the Middle East, Asia and Africa. Many developing countries have become more open to foreign direct

investment in tourism compared with two or three decades ago. Tourism is one of the top five export categories for as many as 83% of countries and is the main source of foreign exchange for at least 38% of countries.

Middle East 5% Africa 5%

Americas 15%

Asia 21% Europe 54%

Figure 13.7 Share of tourist arrivals, 2007

However, tourism is vulnerable to ‘external shocks’. Periods of economic recession, characterised by high unemployment, modest wage rises, and high interest rates, affect the demand for tourism in most parts of the world.

The social and cultural impact

Many communities in the developing world have suffered considerable adverse cultural changes, including: l the loss of locally owned land l the abandonment of traditional values and practices l displacement of people to make way for tourist developments l abuse of human rights by governments and companies in the quest to maximise profits l alcoholism and drug abuse l crime and prostitution, sometimes involving children l visitor congestion at key locations hindering the movement of local people l denying local people access to beaches to provide ‘exclusivity’ for visitors l the loss of housing for local people as more visitors buy second homes in popular tourist areas

The attitudes towards tourism of host communities can change over time. An industry that is usually seen as very beneficial initially can eventually become the source of considerable irritation, particularly where there is a big clash of cultures. However, tourism can also have positive social and cultural impacts, such as: l increasing the range of social facilities for local people l helping develop foreign language skills in host communities

The economic impact

The World Travel and Tourism Council has developed Travel and Tourism Satellite Accounting to show the full economic impact of tourism. By including all the direct and indirect economic implications of tourism it is clear that the industry has a much greater impact than most people think (Figure 13.8).

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Expert tip

It is easy to fall into the trap of only seeing disadvantages in terms of the cultural impact of tourism because so much has been written about this topic. However, it is always important to consider the other side of the coin even if you can only come up with a few points.

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What is commonly thought of as the ‘tourism industry’ is only the tip of the iceberg

Tourism economy (direct effect), accommodation, recreation, catering, entertainment, transportation

Tourism economy (indirect effect), manufacturing, chemicals, computers, concrete, financial services, foods and beverages, furniture and fixtures, iron/steel, laundry services, metal products, mining, oil/gas suppliers, plastics, printing/publishing, rental car, resort development, sanitation services, security, ship building, suppliers, textiles, utilities, wholesalers, wood

Figure 13.8 Satellite accounting ‘iceberg’

Tourism undoubtedly brings valuable foreign currency to developing countries and a range of other obvious benefits but critics argue that its value is often overrated for the following reasons: l Economic leakages (Figure 13.9) from developing to developed countries run at a rate of between 60% and 75%. l Tourism is labour intensive, providing a range of jobs especially for women and young people. However, most local jobs created are low paid and seasonal. l Money borrowed to invest in the necessary infrastructure for tourism increases the national debt. l At some destinations tourists spend most of their money in their hotels with minimum benefit to the wider community. l Tourism might not be the best use for local resources, which could in the future create a larger multiplier effect if used by a different economic sector. l Locations can become over-dependent on tourism.

The tourist industry has a huge appetite for basic resources, which often impinges heavily on the needs of local people. In such situations tourist numbers may exceed the carrying capacity of a destination by placing too much of a burden on local resources.

Total money spent on tourism to this destination LEDC tourist destinations

Transport costs paid to airlines and other carriers The cost of goods and services imported for the tourist industry

Foreign debt relating to tourism Payments to foreign owners of hotels and other facilities

Remittances sent home by foreign workers

Payments to foreign companies to build tourist infrastructure

Leakages

Figure 13.9 Economic leakages

However, supporters of the development potential of tourism argue that: l it benefits other sectors of the economy, providing jobs and income through the supply chain; this is called the multiplier effect (Figure 13.10) because jobs and money multiply as a result of tourism development

Economic leakages comprise the part of the money a tourist pays for a foreign holiday that does not benefit the destination country because it goes elsewhere, such as payments to foreign owners of hotels. The carrying capacity of a destination is the number of tourists a destination can take without placing too much pressure on local resources and infrastructure. The multiplier effect occurs when a new or expanding economic activity in a region creates new employment and increases the amount of money circulating in that region. In turn, this attracts further economic development, creating more employment, services and wealth.

l

l

l

l

it is an important factor in the balance of payments of many nations it provides governments with considerable tax revenues by providing employment in rural areas it can help to reduce rural–urban migration a major tourism development can act as a growth pole, stimulating the economy of the larger region it can create openings for small businesses in which start-up costs and barriers to entry are generally low it can support many jobs in the informal sector, where money goes directly to local people

Expansion of local job opportunities and population Establishment of hotels and other tourist facilities

Improvement of physical and cultural infrastuctures

Inflow of business and capital to satisfy increased local demand

Substantial rise in per capita incomes Higher business and personal tax base increases local government spending power

Figure 13.10 The multiplier effect of tourism

The environmental impact

Tourism that does not destroy what it sets out to explore has come to be known as ‘sustainable’. This is the kind of development that meets present needs without compromising the prospects of future generations. Following the 1992 Earth Summit in Rio de Janeiro, the WTTC and the Earth Council drew up an environmental checklist for tourist development, which included: l waste minimisation l re-use and recycling l energy efficiency l water management

In so many developing countries newly laid golf courses have taken land away from local communities while consuming large amounts of scarce freshwater. In both Belize and Costa Rica coral reefs have been blasted to allow for unhindered watersports. Education about the environment being visited is a key factor in reducing the environmental impact of tourism. The environmental impact of tourism is not always negative. Landscaping and sensitive improvements to the built environment have significantly improved the overall quality of some areas. On a larger scale, tourist revenues can fund the designation and management of protected areas such as national parks and national forests.

The life cycle model of tourism

Butler’s model of the evolution of tourist areas (Figure 13.11) attempts to illustrate how tourism develops and changes over time:

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l In the first stage the location is explored independently by a small number of visitors. l If visitor impressions are good and local people perceive that real benefits are to be gained then the number of visitors will increase. l In the development stage, holiday companies take control of organisation and management with package holidays becoming the norm. l Eventually growth ceases as the location loses some of its former attraction.

At this stage local people have become all too aware of the problems created by tourism. l Finally, decline sets in, but efforts will be made to re-package the location which, if successful, may either stabilise the situation or result in renewed growth (rejuvenation).

Stagnation Facilities: saturated

Fashionable facilities: growing Consolidation

Development Rejuvenation

Stabilisation

Decline

Exploration Involvement

Time

Figure 13.11 Butler’s model of the evolution of tourism in a region

The model provides a useful summary of the stages that a number of holiday resorts, particularly in the Mediterranean, have been through. However, research has shown that it does not apply well to all locations. Prosser (1995) summarised the criticisms of the model: l doubts on there being a single model of tourism development l limitations on the capacity issue l lack of empirical support for the concept l limited practical use of the model

Also, it does not include the possible role of local and national governments in the destination country or the impact of, say, a low-cost airline choosing to add a destination to its network.

Recent developments in international tourism

More specialised types of tourism have become increasingly popular. One result of this has been the development of niche tourism. Niche market tour operators have increased in number to satisfy the rising demand for specialist holidays, which include: l theme parks and holiday village enclaves l gambling destinations l cruising l heritage and urban tourism l wilderness and ecotourism l religious tourism l sports tourism

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Niche tourism is tourism that deals in a specialised product. Destination footprint is the environmental impact caused by an individual tourist on holiday in a particular destination.