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ECONOMIC, ENVIRONMENTAL & SOCIO-CULTURAL CONSIDERATIONS

- Aritro Dasgupta

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Measuring Economic Impacts Still not registered as a separate sector

in many countries but included as part of services

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

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

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Economic Measurements

Income generated & contribution to GDP/GNP

Net foreign exchange earned from international tourism

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.

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Economic Measurements

Local employment generated Multiplier effect

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Local Employment Generation Direct employment Indirect employment Induced employment Construction employment

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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

Internal variable is one which originates within the system

External variable is one which originates outside the system

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

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Multiplier Effect

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

Spending may be divided as- primary, secondary & induced

Primary is the direct expenditure Secondary is the derived expenditure resulting

from related activities Induced is the spending which results from an

automatic rise in living standards which arises out of the above 2 causes

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Multiplier Effect

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

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

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

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

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Features of Tourism Economics Helps justify & pay for transportation

facilities Catalyst for expansion of other economic

sectors For some forms of tourism, there may be

no alternatives besides foreign investment If not carefully controlled, tourism can generate serious economic problems

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Economic Problems of Tourism Economics

Economic leakage Economic distortions may take place

geographically if tourism is concentrated in 1 area

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

Tourism may also induce financial burden on the local population

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Enhancing Economic Benefits Techniques must be applied during planning

process to enhance economic benefits of tourism

Strengthening linkages between tourism & other economic sectors

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

Encouraging local ownership of tourism facilities

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

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Enhancing Economic Benefits Foreign hotel management may take

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

Maximizing local employment through proper training of personnel

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

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Environmental Impacts

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Positive Environmental Impacts Helps justify & pay for conservation of

important natural areas & wildlife; particularly crucial for countries with limited resources

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

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Positive Environmental Impacts Provides incentive for long term

environmental clean-up Increases local environmental awareness

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Negative Environmental Impacts Water pollution especially through

improper sewage management Air pollution Noise pollution Visual pollution – poorly designed hotels,

badly planned layout of facilities, inadequate landscaping, ugly advertising signs etc.

Waste disposal problems

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Negative Environmental Impacts

Damage to archaeological historical sites

Environmental hazards & land use problems

Ecological disruption of natural areas

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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

Provide open space, parks & suitable landscaping

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

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Environmental Protection Measures Apply environmentally suitable land use

& site planning principles, zoning regulations, development standards, architectural design & control of advertising signs

Manage visitor flows; technique of modeling

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

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Environmental Protection Measures In marine areas, controls required on

following: Operations related to ship bilge cleaning &

ballast dumping Use of motorized boats Collection of live sea shells Use of boat anchors in corral bottom bays Spear fishing Disturbance of nesting turtles Mining of beach sand & coral for

construction purposes

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Socio Cultural Impacts

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Positive Socio Cultural Impacts Improves living standards of people &

helps pay for community facilities & services

Conserves cultural heritage of area Reinforces / renews sense of pride by

residents in their culture when they observe tourists appreciating it; especially for societies experiencing rapid change

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Positive Socio Cultural Impacts Helps develop & maintain museums,

theatres & other cultural facilities Opportunity for cross cultural exchange

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Negative Socio Cultural Impacts Overcrowding & loss of convenience for

local residents Loosening of sense of cultural identity Excessive commercialization & loss of

authenticity of local customs, ceremonies, music, dance, crafts etc.

‘Demonstration effects’ Problems of drug abuse, alcoholism,

crime, prostitution

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Preventing Socio Cultural Problems Maintain authenticity of local dance,

music, drama, arts, crafts & dress Preserve existing, distinctive local

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

Make certain, residents have convenient access to tourist attractions

Inexpensive/ subsidized facilities for residents

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Preventing Socio Cultural Problems Educate residents about tourism-

concepts, benefits & problems; involve them in policy development

Inform tourists about local society Train employees to work in tourism

effectively including language & social sensitivity

Strict control on drugs, crime & prostitution

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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

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

Usually an EIA results in some modification of tourism projects

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Components Examined Under EIA Environmental auditing procedures Limitations to natural resources Environmental problems & conflicts that

may affect project viability Flora, fauna, soil, water, landscape, cultural

sites etc. Use of renewable, non-polluting forms of

energy if any Application of 3 Rs- Reduce, Reuse, Recycle

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Thank You