Transcript TOURISM POLICY AND PLANNING CHAPTER 4

TOURISM POLICY AND PLANNING
CHAPTER 4
PROF. DR. KEMAL BİRDİR
MERSİN UNIVERSITY
MARCH 2016
Tourism as a commercial and
economic activity
• Every morning in Africa, a gazelle wakes up. It
knows it must run faster than the fastest lion
or it will be killed. Every morning in Africa, a
lion wakes up. It knows it must run faster than
the slowest gazelle or starve to death. It
doesn’t matter if you are a lion or a gazelle,
when the sun comes up, you had better be
running.
Tourism as a commercial and
economic activity
• When strategically well-planned and executed,
tourism provides an economic stream both
into and throughout a country or
state/province and is an incentive to preserve
the best things the destination has to offer –
from its scenic coastlines, its wildlife habitats,
its historic districts, its local culture, folklore or
heritage.
Tourism as a commercial and
economic activity
• Through collective promotion, coordination and
marketing of a variety of attractions, the local
communities will have the opportunity to increase
economic development, realize increased revenues,
create new jobs, benefit from a diverse economy, add
new products, generate additional income, spawn new
businesses and contribute to overall economic
integration while enriching the public and private
sector partnerships and improving the quality of life of
the local citizenry. Figure 4.2 illustrates the schema of
tourism as a commercial and economic activity.
Indications herald that tourism will grow steadily over the
next 20 years as we see a worldwide increase in leisure time and
disposable income for millions of people in both the developed
and developing countries of
the world.
Historical information provided by the United Nations
World Tourism Organization (2005) tells us: ‘[s]ince 1950, when
international travel started to become accessible to the general
public, tourist activity has risen from 25 million to around 800
million arrivals (or more) in 2005.
International tourism receipts have risen from US $2.1
billion to US $623 billion in 2005’. Indeed, for the most part,
shorter working hours, greater individual prosperity, faster and
less expensive travel, the impact of advanced technology and the
consumers’ use of the Internet have all helped make the travel
and tourism industry the fastest-growing industry in the world.
Impact of business and international education travellers
further affect this growth.
Global importance
• As an economic factor, tourism is growing faster
than the rest of the world economy in terms of
visitor expenditures, export output, capital
investment, income and employment.
• The UNWTO has displayed the impact that
international tourism has worldwide in ‘Tourism
Highlights 2006 edition’ by summarizing
International Tourist Arrivals (Table 4.1) and
International Tourism Receipts (Table 4.2).
Tourism as an economic development tool
• Tourism:
a. stimulates the development of basic infrastructure
(such as airports, harbours, roads, sewers and electrical
power);
b. contributes to the growth of domestic industries that
supply the tourism industry (e.g., transportation,
agriculture, food processing, commercial fishing,
lumbering construction);
c. attracts foreign investment (especially in hotels); and
d. facilitates the transfer of technology and technical
know-how.
DEMAND SIDE OF TOURISM
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Tourist’s demands and preferences
New product expectations
Experience as a mean of travel activity
New trends and tendencies
SUPPLY SIDE OF TOURISM
• A. Pricing
– the affordability of destination
– an unfavourable exchange rate
– a drop in traveller’s discretionary income
• B. Quality
– adequate accommodations
– substitution of activities
– local environment
SUPPLY SIDE OF TOURISM
• C. Knowledge of location
– good transportation
– security/safety of place
– visitor information
COOPETITION
• is the need for cooperation among tourism
destinations in order to better market the tourism
product effectively and meet the competition at the
regional or global level.
• In effect, this means that local communities that
might otherwise compete against each other need to
form partnerships or alliances to better market their
tourism products and to increase the number of
visitors from further distances
Comparative advantage
• Comparative advantage in the supply of
tourism resources, services and facilities.
– Such as good beaches, beautiful mountains,
historic monuments, progressive transportation
systems and other supply side attractions having
potential as tourism ‘products’ are as important to
a country as the production and export of more
tangible products such as oil and steel
EMPLOYMENT AND INCOME
• While creating jobs, international tourism is an
important generator of national income as well.
Foreign visitors make large expenditures on a wide
variety of goods and services, and these yield a
substantial increase in income.
• They are interested in shopping for high-quality
goods, good dining, general sightseeing and cultural
activities, which in turn represent a significant source
of foreign exchange receipts
MULTIPLIER EFFECT
• A number which indicates the magnitude of a particular macroeconomic
policy measure. In other words, the multiplier attempts to quantify the
additional effects of a policy beyond those that are immediately
measurable.
• For example, a decrease in taxation will have more of an effect than just
the value of the reduced taxes. It will lead to greater disposable income,
which might cause an increase in consumption, which in turn might
increase employment in industries, which enjoy greater demand and so
on. So the total effect of the implemented policy equals the effect of the
policy measure, times the multiplier. This is true of most macroeconomic
policy measures, because the actual effect of the measure cannot be
quantified by the effect of the measure itself.
MULTIPLIER EFFECT
• there are five main types of multipliers, which are generally accepted:
1. Transactions or sales multipliers. An increase in tourist expenditure will
generate additional business revenue. This multiplier measures the
ratio between the two changes.
2. Output multiplier. This relates the amount of additional output
generated in the economy as a consequence of an increase in tourist
expenditure. The main difference with the transactions or sales
multiplier is that the output multiplier is concerned with changes in
the actual levels of production and not with the volume and value of
sales.
3. Income multiplier. This measures the additional income created in the
economy as a consequence of the increased tourist expenditure.
4. Government revenue multiplier. This measures the impact on
government revenue as a consequence of an increase in tourist
expenditure.
5. Employment multiplier. This measures the total amount of employment
created by an additional unit of tourism expenditure.