Negative Economic Impacts of Tourism Essay

There are many hidden costs to touristry, which hindquarters nurture unfavorable scotch effects on the host community. Often rich countries are better able to profit from touristry than poor ones. Whereas the least developed countries have the most urgent need for income, employment and general chuck issue of the standard of living by means of touristry, they are least able to realize these benefits. Among the reasons for this are large transfer of touristry tax grosss out of the host country and exclusion of local anesthetic anaesthetic businesses and products.LeakageThe count income for an subject is the amount of tourist expenditure that remains loc entirelyy after taxes, profits, and wages are paid removed the area and after imports are purchased these subtracted amounts are called making water. In most all-inclusive package tours, about 80% of travelers expenditures go to the airlines, hotels and other world(prenominal) companies (who oft have their headquar ters in the travelers home countries), and not to local businesses or workers. In addition, signifi crumbt amounts of income actually retained at address level move leave alone again through with(predicate) leakage. A study of tourism leakage in Thailand estimated that 70% of all bills spent by tourists ended up leaving Thailand (via conflicting-owned tour operators, airlines, hotels, imported drinks and food, etc.). Estimates for other Third universe of discourse countries range from 80% in the Caribbean to 40% in India.Of each US$ 100 spent on a vacation tour by a tourist from a developed country, only virtually US$ 5 actually stays in a developing-country destinations miserliness. The figure beneath shows how the leakage happens.There are two main ways that leakage occursImport leakageThis normally occurs when tourists demand standards of equipment, food, and other products that the host country thronenot supply. Especially in less-developed countries, food and drinks must often be imported, since local products are not up to the hotels (i.e. tourists) standards or the country simply doesnt have a supplying industry. Much of the income from tourism expenditures leaves the country again to pay for these imports. Theaverage import-related leakage for most developing countries today is between 40% and 50% of gross tourism earnings for grim economies and between 10% and 20% for most advanced and diversified economies, according to UNCTAD.Export leakage multinational corporations and large foreign businesses have a substantial share in the import leakage. Often, especially in poor developing destinations, they are the only ones that possess the necessary capital to invest in the wind of tourism infrastructure and facilities. As a consequence of this, an export leakage arises when overseas investors who finance the resorts and hotels engross their profits back to their country of origin. A 1996 UN report evaluating the contribution of tourism to nat ional income, gross levels of incomes or gross foreign exchange, found that net earnings of tourism, after deductions were made for all necessary foreign exchange expenditures, were much more significant for the industry. This report found significant leakage associated with (a) imports of materials and equipment for construction (b) imports of consumer goods, especially food and drinks (c) repatriation of profits earned by foreign investors (d) overseas promotional expenditures and (e) amortization of external debt incurred in the development of hotels and resorts.The impact of the leakage varied greatly across countries, depending on the structure of the economy and the tourism industry. From the data presented in this study on the Caribbean, St. Lucia had a foreign exchange leakage rate of 56% from its gross tourism receipts, Aruba had 41%, Antigua and Barbuda 25% and Jamaica 40%.Source Caribbean VoiceEnclave tourismLocal businesses often see their chances to earn income from tou rists severely reduced by the creation of all-inclusive vacation packages. When tourists remain for their faultless stay at the same cruise ship or resort, which provides everything they need and where they willing gear up all their expenditures, not much opportunity is left for local tidy sum to profit from tourism. The Organization of American States (OAS) carried out a survey of Jamaicas tourist industry that looked at the role of the all-inclusivescompared to other types of accommodation. It found that blanket(prenominal) hotels generate the largest amount of revenue but their impact on the economy is smaller per dollar of revenue than other accommodation subsectors. It also concluded that all-inclusives imported more, and employed fewer raft per dollar of revenue than other hotels.This information confirms the concern of those who have argued that all-inclusives have a smaller trickle-down effect on local economies The cruise ship industry provides another example of eco nomic enclave tourism. Non-river cruises carried some 8.7 million international passengers in 1999. On many ships, especially in the Caribbean (the worlds most popular cruise destination with 44.5% of cruise passengers), 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.Other negative impactsInfrastructure cost touristry development can cost the local politics and local taxpayers a great deal of money. Developers may want the political sympathies 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.Increase in prices change magnitude demand for basic services and goods from tourists will often cause price hikes that nega tively affect local residents whose income does not increase proportionately. A San Francisco State University study of Belize found that, as a consequence of tourism development, the prices for locals increased by 8%. Tourism development and the related rise in real nation demand may dramatically increase building costs and land values. Not only does this make it more difficult for local people, especially in developing countries, to meet their basic daily needs, it can also result in a dominance by outsiders in land markets and in-migration that erodes economic opportunities for the locals, eventually disempowering residents. In Costa Rica, close to 65% of the hotels belong to foreigners. Long-term tourists living in flash homes, and the so-called amenity migrants (wealthyor retired people and liberal professionals moving to attractive destinations in order to bang the atmosphere and peaceful rhythms of life) cause price hikes in their advanced homes if their numbers attain a legitimate critical mass. Economic dependence of the local community on tourismDiversification in an economy is a sign of health, however if a country or region becomes dependent for its economic excerption 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, according to the WTO. Over-reliance on tourism, especially mass tourism, carries significant risks to tourism-dependent economies. Economic recess and the impacts of natural disasters such as tropical storms and cyclones as well as changing tourism patterns can have a lay waste to effect on the local touri sm sector.Seasonal character of jobsThe seasonal worker character of the tourism industry creates economic problems for destinations that are heavily dependent on it. Problems that seasonal workers manifestation include job (and so income) insecurity, usually with no guarantee of employment from one season to the next, difficulties in getting t raining, employment-related medical benefits, and recognition of their experience, and unsatisfactory housing and working conditions.Other industry impacts affecting tourismEconomic crises, like the Asian crisis that hit Thailand, Malaysia and Indonesia a few years ago, can be devastating to inbound tourism flows. The financial turmoil triggered a sharp fall in tourism flows to bear upon countries during 1997 and 1998. In the Philippines, the crisis and the temporary closure of Philippine Airlines affected inbound arrivals significantly as there was a decline of almost 3.3% in 1998.Economic effects PositiveTourism creates jobs, both thro ugh direct employment within the tourism industry and indirectly in sectors such as retail and transportation. When these people spend their wages on goods and services, it leads to what is known as the multiplier effect, creating more jobs. The tourism industry also provides opportunities for small-scale business enterprises, which is especially important in rural communities, and generates extra tax revenues, such as airport and hotel taxes, which can be used for schools, housing and hospitals.Economic Effects NegativeSuccessful tourism relies on establishing a basic infrastructure, such as roads, visitor centers and hotels. The cost of this usually falls on the government, so it has to come out of tax revenues. Jobs created by tourism are often seasonal and seedy paid, yet tourism can push up local property prices and the cost of goods and services. Money generated by tourism does not always benefit the local community, as some of it leaks out to huge international companies, s uch as hotel chains. Destinations dependent on tourism can be adversely affected by events such as terrorism, natural disasters and economic recession. favorable Effects PositiveThe improvements to infrastructure and new leisure amenities that result from tourism also benefit the local community. Tourism encourages the preservation of traditional customs, handicrafts and festivals that expertness otherwise have been allowed to wane, and it creates civic pride. Interchanges between hosts and guests create a better cultural understanding and can also help raise global awareness of issues such as poverty and human rights abuses.Social Effects NegativeVisitor behavior can have a detrimental effect on the quality of life of the host community. For example, crowding and congestion, drugs and alcohol problems, prostitution and increased crime levels can occur. Tourism can even infringe on human rights, with locals being displaced from their land to make way for new hotels or barred from beaches. Interaction with tourists can also lead to an erosion of traditional cultures and values.Environmental Effects PositiveTourism particularly nature and ecotourism helps promote conservation of wildlife and natural resources such as rain forests, as these are now regarded as tourism assets. It also helps generate funding for maintaining animal conserve and marine parks through entrance charges and guide fees. By creating alternative sources of employment, tourism reduces problems such as over-fishing and deforestation in developing nations.Environmental Effects NegativeTourism poses a threat to a regions natural and cultural resources, such as water supply, beaches, coral reefs and heritage sites, through overuse. It also causes increased pollution through traffic emissions, littering, increased sewage production and noise.Tourism and run1. Define the following termsHospitalityTourismLeisureTravelAttractions (20mks) 2. In your own opinion, what will make you choose to travel to Country A than to Country B during your holiday? (20mks) 3. What are the cocksure economic impacts of Tourism in Kenya? (20mks) 4. People do travel for a particular purpose therefore what are the different types of tourism? (20mks) 5. The no. of tourist in a destination varies over time, what are the different reasons for that to happen? (20mks)