Economic, environmental & socio cultural considerations

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Economic, Environmental & Socio-cultural Considerations - Aritro Dasgupta

Measuring Economic Impacts 

Still not registered as a separate sector in many countries but included as part of services

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Thus very difficult to come up with exact measurement of tourism in the economy

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World Tourism Organization (WTO) has developed Standard International Classification of Tourism Activities (SICTA) to specify which are the activities which can be categorized under & measured by quantitative measures

Economic Measurements 

Income generated & contribution to GDP/GNP

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Net foreign exchange earned from international tourism

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Contribution to government revenues including tourist user taxes, airport departure taxes, customs duties on imported goods used in tourism, income taxes on tourism enterprises & employees, property taxes on tourism establishments etc.

Economic Measurements 

Local employment generated

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Multiplier effect

Local Employment Generation 

Direct employment

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Indirect employment

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Induced employment

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Construction employment

Multiplier Effect 

Multiplier is a factor of proportionality that measures how much an internal variable changes in response to a change in some external variable

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Internal variable is one which originates within the system

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External variable is one which originates outside the system

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It is the effect where the addition of certain variables leads to an exponential impact

Multiplier Effect 

In tourism sector, per unit of direct spending in the sector leads to generation of investment many times more

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Spending may be divided as- primary, secondary & induced

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Primary is the direct expenditure

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Secondary is the derived expenditure resulting from related activities

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Induced is the spending which results from an automatic rise in living standards which arises out of the above 2 causes

Multiplier Effect 

Multiplier effect is more high in tourism than in most other sectors because of the labour-intensive nature of the industry

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Effect is greater in underdeveloped countries with a greater dependence on tourism as a source of foreign exchange

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The spread of tourism revenue in an economy is usually more even due to the large number of players in the market

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Tourism revenue also stays within shores of a country, dos not get ‘shipped’ out

Features of Tourism Economics 

Helps justify & pay for transportation facilities

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Catalyst for expansion of other economic sectors

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For some forms of tourism, there may be no alternatives besides foreign investment If not carefully controlled, tourism can generate serious economic problems

Economic Problems of Tourism Economics 

Economic leakage

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Economic distortions may take place geographically if tourism is concentrated in 1 area

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Economic distortions may also take place if tourism attracts too many skilled employees from other industries; problem particularly acute in smaller states/countries

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Tourism may also induce financial burden on the local population

Enhancing Economic Benefits 

Techniques must be applied during planning process to enhance economic benefits of tourism

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Strengthening linkages between tourism & other economic sectors

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Usage of more local items for food, building materials, interior decoration

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Encouraging local ownership of tourism facilities

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Occasionally when capital is limited, foreign investment may be allowed initially

Enhancing Economic Benefits 

Foreign hotel management may take away a substantial chunk of revenue; however they provide professional management, international marketing, modern reservation techniques

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Maximizing local employment through proper training of personnel

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More shopping facilities may indirectly enhance economic benefits as greater sales will lead to increased sales taxes

Environmental Impacts

Positive Environmental Impacts 

Helps justify & pay for conservation of important natural areas & wildlife; particularly crucial for countries with limited resources

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Helps justify & pay for conservation of important archaeological & historic sites as attractions for tourists; sometimes entire districts/ towns preserved for such purposes

Positive Environmental Impacts 

Provides incentive for long term environmental clean-up

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Increases local environmental awareness

Negative Environmental Impacts 

Water pollution especially through improper sewage management

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Air pollution

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Noise pollution

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Visual pollution – poorly designed hotels, badly planned layout of facilities, inadequate landscaping, ugly advertising signs etc.

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Waste disposal problems

Negative Environmental Impacts 

Damage to archaeological historical sites

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Environmental hazards & land use problems

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Ecological disruption of natural areas

Environmental Protection Measures 

Install properly designed utility systems of water supply, electric power, sewage, solid waste disposal & drainage; recycling of waste water & use of solar heating devices

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Provide open space, parks & suitable landscaping

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Develop adequate road & transportation systems, emphasis on public transit; electric shuttle buses can be used in resorts

Environmental Protection Measures 

Apply environmentally suitable land use & site planning principles, zoning regulations, development standards, architectural design & control of advertising signs

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Manage visitor flows; technique of modeling

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Prohibit tourists to cut trees in camping & trekking areas, to collect rare plant & animal species or disturb natural behaviour patterns of wild animals; only controlled fishing & hunting

Environmental Protection Measures 

In marine areas, controls required on following: 

Operations related to ship bilge cleaning & ballast dumping

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Use of motorized boats

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Collection of live sea shells

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Use of boat anchors in corral bottom bays

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Spear fishing

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Disturbance of nesting turtles

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Mining of beach sand & coral for construction purposes

Socio Cultural Impacts

Positive Socio Cultural Impacts 

Improves living standards of people & helps pay for community facilities & services

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Conserves cultural heritage of area

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Reinforces / renews sense of pride by residents in their culture when they observe tourists appreciating it; especially for societies experiencing rapid change

Positive Socio Cultural Impacts 

Helps develop & maintain museums, theatres & other cultural facilities

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Opportunity for cross cultural exchange

Negative Socio Cultural Impacts 

Overcrowding & loss of convenience for local residents

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Loosening of sense of cultural identity

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Excessive commercialization & loss of authenticity of local customs, ceremonies, music, dance, crafts etc.

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‘Demonstration effects’

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Problems of drug abuse, alcoholism, crime, prostitution

Preventing Socio Cultural Problems 

Maintain authenticity of local dance, music, drama, arts, crafts & dress

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Preserve existing, distinctive local architectural styles & encourage new development including tourist facilities, to use local architectural motifs

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Make certain, residents have convenient access to tourist attractions

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Inexpensive/ subsidized facilities for residents

Preventing Socio Cultural Problems 

Educate residents about tourism- concepts, benefits & problems; involve them in policy development

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Inform tourists about local society

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Train employees to work in tourism effectively including language & social sensitivity

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Strict control on drugs, crime & prostitution

Environmental Impact Assessment (EIA) 

EIA is an assessment of the possible positive or negative impact that a proposed project may have on the environment, together consisting of the environmental, social & economic aspects

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If analysis finds a project to cause harm, then project must not get go-ahead

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Usually an EIA results in some modification of tourism projects

Components Examined Under EIA 

Environmental auditing procedures

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Limitations to natural resources

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Environmental problems & conflicts that may affect project viability

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Flora, fauna, soil, water, landscape, cultural sites etc.

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Use of renewable, non-polluting forms of energy if any

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Application of 3 Rs- Reduce, Reuse, Recycle

Thank You