REC280 Study Guide - Quiz Guide: Creative Destruction, Disinvestment, Gross Domestic Product
24 Jun 2018
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Module 7 Economic Impacts of Tourism
Description and Learning Outcomes
In module 7, you will look at the economic aspects of tourism. After successfully completing this
module, you should be able to do the following.
Describe the economic characteristics of the tourism industry
Explain the positive and negative impacts of tourism development
Readings
Page & Connell (2009): Chapter 17 - Economic impacts
Slides
1. Introduction
The most significant reason for government and private sector businesses to develop
tourism is associated with economic gains
While the economic advantage of tourism is clear, many negative aspects are apparent
Early research focused on the positive economic impacts of the industry
2. Economic Characteristics of Tourism
Tourism is an invisible export industry – no tangible products
Tourists require supporting good and services – expansion of existing infrastructure and
services
Tourism is a fragmented product
Tourism is highly priced and income elastic
Tourism is a perishable product
Tourism is subject to unpredictable external influences
3. Magnitude of Economic Impacts
Type of tourism facilities and attraction for tourists
Volume and level of tourist spending
The level of economic development in the region
The extent to which tourist spending is maintained and re-circulated in the region
The extent of seasonality in the destination
4. Economic Benefits of Tourism
The Balance of Payment (BOP)
oThe balance of payment is a record of all transactions which have taken place
between residents of our country and the rest of the world
oIncludes all imports and exports of goods and services
oTourism exports are recorded under the "invisible exports" while tourism imports
are recorded under "invisible imports" sections of the BOP
find more resources at oneclass.com
find more resources at oneclass.com
5. Economic Benefits of Tourism
Income
oTourism assists in improving the overall economic status of a country
oContribute to Gross Domestic Product (GDP)
oFor Caribbean and Pacific Islands, over 40% of GDP comes from tourism
88% in the case of Maldives
2% of Canada’s GDP in 2008
6. Economic Benefits of Tourism
Employment
oDirect employment
Jobs created as a result of visitor expenditure and directly supporting
tourism activity (e.g., hotels)
oIndirect employment
Jobs created within the tourism supply sector but not as a direct result of
tourism activity (e.g., hotels may outsource laundry operations or
maintenance)
oInduced employment
Jobs created as a result of tourism expenditure as local residents spend
money earned from tourism
oTourism employs over 660,000 Canadians (direct jobs)
7. Economic Benefits of Tourism
Videos
oPower of Tourism (YouTube)
oEconomic Impact of Louisiana Tourism (YouTube)
8. Economic Costs of Tourism
Inflation
oTourism development creates inflationary effects on local economies
oIncreases in the price of goods and services and land
oLocal residents are therefore forced to enter competition for land and other
resources
9. Economic Costs of Tourism
Opportunity Costs
oOpportunity costs relate to the time, effort and money of developing tourism at
the expense of other areas of investment
oIf a government invests in tourism, then the money is unavailable for other uses
oMay be detrimental to the well-being of the local residents
find more resources at oneclass.com
find more resources at oneclass.com
oNecessitates a Cost Benefits Analysis approach (CBA)
10. Economic Costs of Tourism
Economic Dependency
oHeavy reliance on a single industry is a risky long-term strategy
oEconomic dependency of tourism has been criticized, particularly for less
developed economies and small islands
oMay have adverse consequences on economic development
11. Economic Costs of Tourism
Seasonality
oOne of the major disadvantages of developing tourism
oNegative economic effects on destinations
oDuring off-peak seasons, tourism businesses tend to lay off workers
oFamily businesses suffer
oAttractions close down
oLocal residents strive for income
12. Economic Costs of Tourism
Leakages
oForeign exchange generated from tourism may not benefit the local economy
oMulti-national corporations (MNCs) receive substantial proportion of the income
oRepatriation of profit
oNot sourcing services and goods locally
oOwnership of different sectors within the tourism industry
Module 8 Tourist Area Life Cycle (TALC):
Implications for Policies and Planning
Description and Learning Outcomes
In module 8, you will look at the Tourist Area Life Cycle model and learn how a destination
changes over time. After successfully completing this module, you should be able to do the
following.
Explain how a destination develops over time
Explain and compare changing demand and supply conditions as a destination evolves
over time
Readings
Tooman, L. A. (1997). Applications of the life-cycle model in tourism.
Getz, D. (1992). Tourism planning and destination life cycle.
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
In module 7, you will look at the economic aspects of tourism. Describe the economic characteristics of the tourism industry. Explain the positive and negative impacts of tourism development. Page & connell (2009): chapter 17 - economic impacts. The most significant reason for government and private sector businesses to develop tourism is associated with economic gains. While the economic advantage of tourism is clear, many negative aspects are apparent. Early research focused on the positive economic impacts of the industry: economic characteristics of tourism. Tourism is an invisible export industry no tangible products. Tourists require supporting good and services expansion of existing infrastructure and services. Tourism is highly priced and income elastic. Tourism is subject to unpredictable external influences: magnitude of economic impacts. Type of tourism facilities and attraction for tourists. The level of economic development in the region. The extent to which tourist spending is maintained and re-circulated in the region.
