Economic Influence and Stakeholder Impacts
- Economic influence of tourism is shaped by multiple stakeholders: policy makers, public authorities, TNCs, and local businesses and communities.
- The interplay between these stakeholders generates benefits and costs.
Benefits of Tourism
1. Infrastructure Investment
- Tourism often drives investment in critical infrastructure like airports, roads, and resorts.
- These improvements benefit not only tourists but also local communities by enhancing connectivity and access to services.
- Infrastructure is usually financed by public authorities, not TNCs.
Infrastructure built for tourism can also support other sectors, such as trade and healthcare, amplifying its economic impact.
2. Job Creation and Foreign Exchange Earnings
- Tourism is labour-intensive, creating jobs in hospitality, transportation, and entertainment.
- It also generates foreign exchange earnings, which help countries stabilize their economies and reduce trade deficits.
- Think of tourism as a spotlight.
- When a country hosts international visitors, it showcases its culture, landscapes, and potential for investment, much like a performer on a global stage.
Costs of Tourism
1. Economic Leakage
- A significant portion of tourism revenue often returns to the headquarters of transnational corporations (TNCs) in high-income countries (HICs).
- This reduces the economic benefits for host countries.
Don't assume that all tourism revenue stays in the host country. Economic leakage is a major issue, especially when TNCs dominate the industry.
2. Environmental Degradation and Overdevelopment
- Tourism can lead to deforestation, pollution, and the destruction of natural habitats.
- Overdevelopment often strains local ecosystems, reducing their ability to provide essential services like clean water and air.
Sustainable tourism practices, such as eco-friendly resorts and waste management systems, can help mitigate environmental impacts.
3. Marginalization of Local Businesses and Communities
- Large TNCs often outcompete local businesses, leading to the closure of small hotels, restaurants, and shops.
- Additionally, tourism development can displace communities, prioritizing tourist needs over local well-being.
How can we balance the economic benefits of tourism with the ethical responsibility to protect local communities and environments?
Case studyCaribbean Tourism and Cruise Lines
Benefits
- Economic Growth: Tourism contributes significantly to GDP, providing jobs and foreign exchange.
- Infrastructure Development: Investments in ports and airports benefit both tourists and locals.
- Cultural Exchange: Tourism fosters global understanding and appreciation of Caribbean culture.
Costs
- Economic Leakage: Most profits return to foreign-owned cruise lines and hotel chains.
- Environmental Damage: Coral reefs and beaches suffer from pollution and overuse.
- Social Displacement: Local communities are often marginalized, with limited access to tourist areas.
Role of TNCs in the growth of tourism in Thailand
- Infrastructure Development: Major international hotel chains, such as Marriott and Hilton, have invested in Thailand, enhancing accommodation standards and increasing the country’s capacity to host international tourists. Their presence has boosted local economies through job creation and infrastructure improvements.
- Branding and Marketing: TNCs have played a key role in marketing Thailand as a global tourist destination. Companies like TUI Group organize package tours that highlight Thailand’s beaches and cultural attractions, expanding its reach in international markets and driving tourist arrivals.
- Training and Standards: TNCs have introduced global service standards and training programs in Thailand’s tourism sector, improving overall service quality and enhancing the skills of the local workforce, thereby increasing the country's appeal to upscale travelers.
Can you identify one benefit and one cost of tourism in your own country or a destination you've visited?
Balancing Benefits and Costs
- To maximize the benefits of tourism while minimizing its costs, stakeholders must work together.
- This includes governments, TNCs, local communities, and tourists themselves.
Strategies for Sustainable Tourism
- Promote Local Ownership: Encourage local businesses to participate in the tourism industry.
- Implement Environmental Regulations: Protect natural resources through sustainable practices.
- Foster Community Involvement: Ensure that local voices are heard in tourism planning and decision-making.
Avoid assuming that tourism is inherently sustainable. Without careful planning, its negative impacts can outweigh the benefits.
Self reviewWhat are three strategies that could reduce the negative impacts of tourism in a popular destination?
Reflection and Broader Implications
- By understanding its benefits and costs, we can make informed decisions about the role of tourism in sustainable development.
- Tourism can be used as an engine of economic growth and a way of lifting people out of poverty, but it needs to managed carefully balancing the role of TNCs and local businesses and communities.
Tourism is a double-edged sword: it can drive economic growth but also exacerbate inequality and environmental degradation.
Theory of KnowledgeHow does the concept of economic leakage challenge the idea that tourism is always beneficial for host countries? What ethical considerations arise when prioritizing tourism over local needs?
