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.
