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ES295 Lecture Notes - Ecotourism, Indirect Costs, Opportunity Cost

Environmental Studies
Course Code
David Morris

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March 14th
Chapter 5: Economic and Sociocultural Costs of Ecotourism
Direct Costs of Ecotourism
The Direct costs of ecotourism include:
o Start-up expenses
Acquisition of land, establishment of protected areas, superstructure or
infrastructure development
Infrastructure development includes trails, visitor centers, parking
facilities, etc.
o Ongoing Expenses
Maintenance of infrastructure, the promotion/marketing of ecotourism
to the public, or employee wages/labour costs
Ongoing expenses can include upkeep and maintenance of land and
Ongoing expenses depend on many factors, such as whether it is a
hard or soft ecotourism location, publicly or privately controlled, the
market image of the destination, the size of the operation, and many
These costs should NOT be considered to have a negative impact, since these are
inevitable expenses of any ecotourism activity. Also, these expenses clearly intend to
create beneficial outcomes
o This is unless the costs of the ecotourism activity are insufficient, too
excessive, improperly managed or allocated, or have a long-term dependence
on donors.
Indirect Costs of Ecotourism
The indirect costs of ecotourism include:
o Revenue Uncertainties
There are inherent demand-and-supply-side risks in all tourism
Tourism is a form of discretionary spending that consumers are likely
to curtail during times of economic or social uncertainty
On the supply side, political and social unrest are major risk factors in
many parts of the world, especially when tourists or ecotourists in
particular are targeted by dissidents and terrorists in areas where
government control is nominal
Disease outbreaks and seasonality are examples of unpredictable and
predictable supply-side factors that can cause significant fluctuations
in ecotourism destinations
o Revenue Leakage
90% of the revenue derived from ecotourists flows outwards to pay for
goods and services. Only 10% of the actual spending is retained to
expand or continue environmental sustainability.
Leakage usually isn’t a problem for local economies unless that
leakage is going to external or foreign businesses that have no vested
interest in the community. Leakage can be either a cost or benefit
depending how it occurs.
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