Tourism Costs and Benefits

Costs

Social Costs

May attract visitors whose lifestyles and ideas conflict with the community's. An example may be the visitors' use of drugs and alcohol.

May change individual behaviour and family relationships.

May lead to an increase in sexually transmitted diseases.

Loss of traditional values and culture through imitation of visitor behaviour or cultural diffusion resulting from normal, everyday interaction.

May create crowding and congestion.

May compete with residents for available services, facilities, and existing recreation opportunities.

May result in harassment of visitors perceived to be wealthy and an increase in crime.

Can involve violations of human rights. People have been displaced from their land and beaches have been reserved for hotel guests while access is barred to local people.

Benefits

Social Benefits

Brings in outside dollars to support community facilities and services that otherwise might not be developed.

Encourages civic involvement and pride.

Provides cultural exchange between hosts and guests.

Encourages the preservation and celebration of local festivals and cultural events.

Facilities and infrastructure developed for tourism can also benefit residents.

Encourages the learning of new languages and skills.

Tourism related funds have contributed towards schools being built in some areas.

 

Environmental Benefits

Fosters conservation and preservation of natural, cultural and historical resources.

Encourages community beautification and revitalization.

Could be considered a clean industry.

Environmental Costs

May threaten specific natural resources such as beaches and coral reefs or historical sites.

May increase litter, noise, and pollution.

Brings increased competition for limited resources such as water and land, resulting in land degradation, loss of wildlife habitats and deterioration of scenery. Tourism seasonality

Directly contributes to sewage and solid waste pollution.

Emissions generated by forms of transport  are one of the main environmental problems of tourism.

Economic Benefits

Helps diversify and stabilize the local economy.

Provides governments with extra tax revenueseach year through accommodation and restaurant taxes, airport taxes, sales taxes,park entrance fees, employee income tax etc..

Creates local jobs and business opportunities. These include those jobs directly related to tourism (hotel and tour services) and those that indirectly support tourism (such as food production and housing construction).

The multiplier effect:

o Brings new money into the economy. Tourist money is returned to the local economy as it is spent over and over again.

o Helps attract additional businesses and services to support the tourist industry.

Tourist multiplier effect

Is labour-intensive.

Earns valuable foreign exchange.

Economic Costs

Tourism development of infrastructure (airports, roads, etc.) can cost the local government a great deal of money.

May inflate property values and prices of goods and services.

Leakages:

o If outside interests own the tourism development, most of the economic benefits will leave the community.

o Considerable amount of foreign exchange revenues leaks back out of the destination countries for tourism-related imports.

Tourist multiplier effect

Employment tends to be seasonal. Workers may be laid off in the winter season.

Tourism seasonality

Many jobs in the tourism industry are poorly paid. This is a particular problem in LEDCs where the local workforce lack the skills to fill the better paid management positions.

Tourist numbers can be adversely affected by events beyond the control of the destination e.g. terrorism,  economic recession. This is a big problem in LEDC countries dependent on tourism.

Tourism dependency

Tourism follows a "product life cycle", with a final stage of decline, where the destination no longer offers new attractions for the tourist, and the quality has diminished with the rise of competition and tourist saturation.

Tourism life cycle model

Dependence on tourism

Diversification in an economy is a sign of health. If a country, or region within a country, becomes dependent for its economic survival on one industry and that industry fails then the social consequences can be devastating. Overdependence on one or two industries is also often accompanied by underdevelopment within other sectors of the economy such as education, health, and the manufacturing and agricultural industries.

The tourism industry is extremely vulnerable to economic, social, and political changes in either the generating or host countries. 

The table below shows international tourism receipts as a per cent of export earnings for selected countries around the world.  Countries with a high percentage are more at risk to any decline in tourism and travel. Others are less vulnerable to the ill effects of a decline in tourism, because their economies are more diversified.  Japan is a good example.