EconomicimpactsoftourismintheLivingstonearea,Zambia
Candidatenumber:104
Course:UTV3090
Spring2009
No.ofwords:7700
1
TableofContents
1. INTRODUCTION 2 1.1 BACKGROUND 2 1.2 OBJECTIVES AND RESEARCH QUESTIONS 2
2. THEORY AND DEFINITIONS 3 2.1 TOURISM 3 2.1.1 TOURISM EXPENDITURE AND ACCOUNTING 3 2.2 ECONOMIC IMPACT 3 2.2.1 MEASURING ECONOMIC IMPACTS 4 2.2.2 LEAKAGES 5 2.2.3 LINKAGES 6
3. METHODOLOGY 6 3.1 DATE AND LOCATION 6 3.2 DATA COLLECTION 6 3.3 INTERVIEWS 7 3.4 DATA SELECTION, QUALITY, REPLICATION AND ANALYSIS 8 3.5 INFORMANTS 8 3.6 ETHICAL CONSIDERATIONS 10
4. TOURISM IN LIVINGSTONE 10 4.1 SITES AND ATTRACTIONS 10 4.2 VISITORS 12
5. ECONOMIC IMPACTS 13 5.1 DIRECT INCOME OF THE VICTORIA FALLS AND MOSIOATUNYA NATIONAL PARK 14 5.2 INDIRECT INCOME 14
6. ECONOMIC BENEFITS AND DISADVANTAGES 15 6.1 INCREASED GOVERNMENT EARNINGS 15 6.1.1 ECONOMIC BENEFITS 15 6.1.2 ECONOMIC DISADVANTAGES 16 6.2 JOB CREATION 16 6.2.1 ECONOMIC BENEFITS 16 6.2.2 ECONOMIC DISADVANTAGES 17 6.3 IMPROVED INFRASTRUCTURE 18 6.3.1 ECONOMIC BENEFITS 18 6.3.2 ECONOMIC DISADVANTAGES 18 6.4 MACROECONOMIC STABILITY AND OTHER EFFECTS 19 6.4.1 ECONOMIC BENEFITS 19 6.4.2 ECONOMIC DISADVANTAGES 19
7. CONCLUSION 20
REFERENCES 20
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1.Introduction
1.1Background
In2008,thetourismsectoremployedover225millionpeopleandgenerated9,6%ofglobal
GDP, arguably being the second largest industry in the world (World Travel & Tourism
Council,2009,p.3).Whiletourismhistoricallyhasnotbeenviewedasaneffectivesectorfor
developmentinpoorcountries,thisattitudechangedinthemid1980’s(Vanhove,2005,p.
170‐171).Thetourismsectorisnowregardedasoneofthemajorcontributorstothegross
domesticproduct (GDP)ofmanyof thepoorest countriesof theworld (Lickorish, Jenkins,
1997,p.208).
The Least Developed Countries (LDCs) received only 1,4% of the international
tourismarrivalsin2006(Honeck,2008,tableA3).However,areportbytheWorldTourism
Organization [UNWTO] states that many of the LDCs have a comparative advantage in
tourism over developed countries, and that their growth in recent years has been faster
(UNWTO, n.d., p. 1‐2). The LDCs comparative advantages over developed countries are
according to the UNWTO (n.d., p. 1‐2) mainly due to lower price levels, climate, distinct
culture,andunspoilednatureand/orexoticsitesofinterest.
The UNWTO (n.d., p. 2) describes tourism as being “labour intensive, which is
particularlyimportantintacklingpoverty”.Somefurthercharacteristicsoftourismarethat
jobsusuallyrequirelittletraining,servicesofferedareconsumedatthepointofproduction,
tourismopensupadvantagesformicro‐entrepreneursandthattourisminfrastructurealso
canbenefitpoorcommunities.
1.2Objectivesandresearchquestions
ThispaperwillpresentastudyoftourismintheLivingstoneareaofZambia,withafocuson
the Mosi‐oa‐Tunya National Park and the Victoria Falls. The objective is to give a broad
overviewoftourisminthearea,itseconomicimpacts,anddiscussingtheeconomicbenefits
anddisadvantagestourismhasforthearea.Thestudywilladdressthefollowingquestions:
• HowdoestheVictoriaFallsandtheMosi‐oa‐TunyaNationalParkhaveaneconomic
impactontheLivingstoneareabygeneratingtourismrevenue?
• Whatarethemaineconomicbenefitsanddisadvantagesoftourisminthearea?
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2.Theoryanddefinitions
2.1Tourism
TheUNWTO(1995,p.10)hasdefinedtourismas“theactivitiesofpersonstravellingtoand
stayinginplacesoutsidetheirusualenvironmentfornotmorethanoneconsecutiveyearfor
leisure, business and other purposes”. Wall and Mathieson (2006, p. 19) have further
separatedtourismintothreebasicelements:
1. Adynamicelement:thedecisiontotravelandwhereto.2. Astayinthedestination:alltheinteractionwiththeeconomic,environmentaland
socialsystemsofthedestination.3. Aconsequentialelement:theeffectsresultedbytheformerelements.
Thetermstouristandvisitorareusedinterchangeablyinthispaper.
2.1.1Tourismexpenditureandaccounting
Tourismexpenditureisdefinedas“thetotalconsumptionexpendituremadebyavisitoror
onbehalfofavisitorforandduringhis/hertripandstayatdestination”(UNWTO,1995,p.
12).Themainchallengesofmeasuring thetourismsectorscontributionto theeconomy is
that most countries lack the data and information, and that tourism does not exist as a
distinct sector in any system of national accounts (Ennew, 2003, p. 9). An analysis of
tourisms economic impact will therefore vary according to which accounting system of
tourismisused.A largeamountoftourismspendingisdonein identifiablesectorssuchas
hotels, transport, recreational activities, etc.However, tourists also spendmoney inother
sectors not normally associated with tourism, such as food, clothing, gifts, and even the
hospitals industry has 2% of its output sold directly to tourists (Ennew, 2003, p. 9; Cai,
Leung, Mak, 2006, p. 37). The impact of tourism is therefore often underestimated by
governments(Hamilton,etal.2007,p.14).
2.2Economicimpact
Vanhove(2005,p.169),classifieseconomicimpactintosevenmajorgroups:
1. Incomegeneration.2. Employmentgeneration.3. Taxrevenuegeneration.4. Balanceofpaymenteffects.5. Improvementoftheeconomicstructureofaregion.6. Encouragementofentrepreneurialactivity.7. Economicdisadvantages.
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Becauseof limited space it is notpossible toelaborateoneachof thesepointshere. The
mostimportantandrelevantwillratherbediscussedinsection5and6inaccordancewith
empiricaldataandrelevanttheory.
2.2.1Measuringeconomicimpacts
The economic impact of tourism is generally measured through an economic impact
analysis,althoughaccordingtoStynes(n.d.,p.1),“Avarietyofmethods,rangingfrompure
guesswork to complex mathematical models, are used to estimate tourism’s economic
impacts”.Whiletheaimofthispapernotistocreateaneconomicimpactanalysis,itisstill
usefultotakeaquicklookatthebasics.Thiswillhelpustobetterunderstandhowtourism
affectsanarea. It is importanttonotethatthemodelused issimplified.Acomprehensive
studyof theeconomic impactswouldhave requiredamorecomplexmodel.Aneconomic
impactanalysisisusuallybasedaroundthefollowingsimplifiedequation(Stynes,n.d.,p.1):
Economic impacts = Number of Visitors x Average spending per visitor x Economic multipliers.
Thisequationbuildsonthefollowingconcepts(Stynes,Propst,Chang,Sun,2000,p.1.1‐1.2;
Vanhove,2005):
• Direct effects:Changes in sales, incomeand jobs in thosebusinesses that receive the
initial and direct visitor spending. For example hotels, restaurants, national park fees,
retailstores,etc.
• Multipliereffects (secondaryeffects):There‐circulationofmoneyspentby tourists in
thelocaleconomy.Consistofindirectandinducedeffects.
o Indirecteffects:Changesinsales,incomeandjobsinbusinesses/industriesthat
are“backwardlinked”.Thesefirmssupplythebusinessesthatdirectlyservethe
tourists. For example farmers or wholesalers that supply restaurants, or local
carpentersthatsupplyfurnituretohotels.
o Induced effects: Changes in economic activity resulting from household
spending earned from a direct or indirect effect from tourist spending. For
example local carpenters spending their income from sales to hotels on
groceries,clothing,housingandothergoodsandservicesinthelocalarea.
The illustrationbelowprovides a simplified viewof theeconomic impacts tourism
expenditurehasontheeconomy.
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Figure1–Economicimpactsfromtourismexpenditure.BasedonEnnew(2003,p.4),Foan,FrancoandJessen(2008,p.3‐4and,Stynes(2000,p.1.1‐1.2).
2.2.2Leakages
Anotherimportantconceptisthatofleakages.AccordingtoHemmatiandKoehler(2000,p.
25),
Financial leakages in tourism occur when revenue arising from tourism‐related
economic activities in destination countries are not available for (re‐)investment or
consumption of goods and services in the same countries: Financial resources "leak
away" from the destination country to another country, particularly when the tourism
company is based abroad and when tourism‐related goods & services are being
imported to the destination country.
55% of every dollar spent in developing countries is according to theWorld Bank leaked
backtodevelopedcountries(Boo,1990,p.13).AccordingtoLindberg(1991,p.24),leakages
suchasairtravelandmarketingareinevitable.However,hesuggeststwowaysofreducing
leakages. The first is for parks, hotels, businesses, etc. to use local goods and services
wheneverpossible.Thesecond is toplaceconditionswhengoodsandserviceshave tobe
imported,e.g.demandingthatmultinationalhotelchainstrainandemploy local residents.
Mitchell and Ashley (2007), however claim that leakages often are highly exaggerated.
Marketing, insurance, retailing, packing, and flights often amount to 50‐70% of the total
vacationcost.Manystudiesclassifythesecostsasleakages.MitchellandAshley(2007)reply
that“regardingthisasa‘leakage‘islikesuggestingthatstaffandaccommodationcostsfor
serving a cappuccino in a London café are ‘leakage’ from coffee plantations in Ethiopia!”.
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The percentage of leakages therefore varies greatly according to which definition of
leakageswasusedinthestudy.
2.2.3Linkages
Linkagesareconnectionsbetweenvarioussectorsandindustriesinaneconomy.Inthecase
of tourism, linkages often exist for example between hotels and providers of food and
drinks,but ingeneral spreadout intomostpartsof the localeconomy (Vanhove,2005,p.
173‐174).
Figure 2 – An example of linkages.
3.Methodology
Thisresearchpaperisbasedonaqualitativestudy.Quantitativeandqualitativestudiesare
sometimesseenasdirectopposites,butaccordingtoBrockingtonandSullivan(2003,p.59)
“qualitative methods can incorporate quantitative data and quantification”. Using both
methods is called the triangulationbetweenmethods (Jick, 1979, p. 602;McFee, 1992, p.
215‐217).While therewasnoquantitativedata gathereddirectly for this study, statistical
dataandreportsfromothersources/studiesareused.
3.1Dateandlocation
Thefieldstudywasconductedoverafive‐weekperiod,betweenthe18thofMarchand23rd
ofApril2009.Thefocusarea for the fieldstudywastheMosi‐oa‐TunyaNationalPark, the
VictoriaFalls,andthesurroundingLivingstoneareainZambia.Myplaceofresidenceduring
thestaywasinsidetheMosi‐oa‐TunyaNationalParkatalionrehabilitationprogramrunby
theAfricanLionEnvironmentalResearchTrust(ALERT).Myresearchwasnotbasedonany
oftheiractivities.
3.2Datacollection
Datacollectionwasmainlyconductedthroughopen‐endedinterviewswithinformantsand
observations of tourism in the Livingstone area. Informal conversations were also
conducted, but are used in addition to and not instead of interviews. The primary data
consists of interviews, conversations and observations only. All the statistics of tourist
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arrivals,etc.aregatheredfromsecondarydataacquiredfromreportsandorganizationsand
commissionswhereIconductedinterviews.
3.3Interviews
Interviewingisacomplexandtimeconsumingprocess.Toadequatelyaddressallaspectsof
thissubjectwouldrequiremorespacethanisavailablehere.Ihavethereforeonlycovered
someofthebasicandmostimportantaspects.
Theinterviewsconductedduringthefieldstudyweresemi‐structuredandemployed
openquestions.Thisenabledthe informanttoanswerthequestions intheirownwayand
providedflexibilityintheinterviewingprocess.Especiallystoriesornarrativesregardingthe
informantspersonalexperiencesarebestcapturedinasemi‐structuredinterview(Wengraf,
2001,p.5).Itwasofgreatimportancetobewell‐preparedfortheinterview,perhapseven
more importantthanif Ihadpreparedastructuredinterview,andcertainlyrequiredmore
timeforanalysisandinterpretationafterwards.
Disadvantages of conducting semi‐structured interviewswere that openquestions
could be harder for the informant to answer, were time‐consuming, and as mentioned,
answers received generally had to be analyzed more than structured questions probably
wouldhave.However,foralimitedstudylikethisIamconvincedthatopenquestionswere
moreappropriateandyieldedbetterresults thanforexampleastrictquestionnairewould
have.
According to Wengraf (2001, p. 28), “semi‐structured interviewing is very often
concernedtoexplorethesubjectiveworldoftheinterviewee,butthisdoesnotmeanthat
what they said is treateduncritically, acceptedat face value”. It is therefore important to
critically analyze the answers of the informant. Body language, tone of voice and the
discourse(s)areall importanttonote.Aninterviewaboutasensitiveorcontroversialtopic
willdependingonthediscoursesandviewsoftheinformanthaveverydifferentoutcomes,
andmightcreatepatternsofthingsthatarelikelytobesaid(“sayables”)andthingsthatare
unlikely or impossible to be said (“unsayables”)within that particular discourse (Wengraf,
2001,p.7).Onehastobecarefulaboutthesocialsettingtheinterviewisconductedin,your
behaviour, reactions to responses and the “power relationship” between you and the
informant(seminarinUTV2100,24.02.2009,UniversityofOslo).Greatcarehastobetaken
that the informant is not saying what he/she thinks you want to hear, or is modifying
answersbecauseofyourparticularstatusorrelationshiptotheinformant.Itisimportantto
beawareofdifferencesincultureandbehavioursothatthesedonotaffecttheinterviewor
youranalysisofit.
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During the interviews Ieitherusedanotebookoradigital recorder.Generally the
digital recorder was used in interviews that were conducted in offices or that were pre‐
arranged,whilethenotebookwasusedforshorterinterviewsinthefield.
3.4Dataselection,quality,replicationandanalysis
Thesamplingprocedureaimedtoincludeabroadvariationininformants.Sincethestudyis
qualitative,thereisnoneedforrandomselectioninordertoavoidsystematicbiasesinthe
sample. I did however try to interview people of different occupation, gender and social
status.AccordingtoMarshallandRossman(2006,p.63),
In the proposal, the researcher should anticipate questions about the credibility and
trustworthiness of the findings; poor sampling decisions may threaten these findings.
Due to the sample size, selection and type of study it is not possible to make a
generalization, but this was also not the point of the study. I have tried to include
information to make the study replicable, but it can generally be difficult for qualitative
studiestoeasilybereplicated(seminarinUTV2100,10.02.2009,UniversityofOslo).
Although there were a few gatekeepers before reaching some of the informants,
great caution was taken to ensure that these would not have an effect on who was
interviewedandwhattheystatedintheinterview.Noneoftheinterviewswhereconducted
withtheinformantssupervisorpresentorotherscenariosthatcouldhaveanimpactonthe
informantsanswers.Althoughthereisnospacefordiscussingthecredibilityofeachofthe
informantsstatementsinthispaper,attentionhasbeenpaidtotheirmotives.
After all the datawas collected the process of organizing it began. This included
writing rough transcripts of interviews that were recorded and the process of coding.
AccordingtoCoffeyandAtkinson(1996,p.26),“inpractice,codingcanbethoughtofasa
range of approaches that aid the organization, retrieval, and interpretation of data”. It is
however importanttorememberthattheprocessofcodingshouldnotbeasubstitutefor
analysis(Coffey,Atkinson,1996,p.26;Marshall,Rossman,2006,p.160).
3.5Informants
Intotaltherewere10interviewsconducted.Ofthese4werefemaleand6male.
Informant Position Location DateInformantno.1 ZambiaWildlifeAuthority[ZAWA]
researcher.ZAWAofficeLivingstone.
23.03.2009
Informantno.2 GuardintheMosi‐oa‐TunyaNationalPark.
Mosi‐oa‐TunyaNationalPark.
25.03.2009
Informantno.3 Streetvendor. Livingstone. 27.03.2009Informantno.4 Craftsmanandsouvenirsalesman. Livingstone. 27.03.2009
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Informantno.5 Farmer. MarketinLivingstone. 31.03.2009Informantno.6 LivingstoneTourismAssociation
[LTA]ProgrammeOfficer.LivingstoneTourismAssociationOfficein
Livingstone.
07.04.2009
Informantno.7 Souvenirsalesman. VictoriaFallsBridge. 09.04.2009Informantno.8 EmployeeatNationalHeritage
ConservationCommission[NHCC].NationalHeritageConservation
CommissionofficeinLivingstone,T1road.
15.04.2009
Informantno.9 GuideintheMosi‐oa‐TunyaNationalPark.
Mosi‐oa‐TunyaNationalPark.
16.04.2009
Informantno.10
ManagerofThorntreeRiverLodge. ThorntreeRiverLodgeinsidetheMosi‐oa‐TunyaNationalPark.
20.04.2009
Some of the informants wished to remain anonymous, while the rest had no special
preference. Sincenoneof the informants specificallywanted their name in the study, the
informantsarenumbered.This is toensurethe informantssafety,andwillbediscussed in
moredetailinthenextsection.
In addition to the interviews I also conducted several informal conversationswith
craftsmen, national park employees, taxi drivers, store employees, etc. I also attended a
two‐hourconferenceonhowtheglobaleconomiccrisis isaffectingthetourismindustry in
Livingstone. It was hosted by the Economics Association of Zambia [EAZ] on the 26th of
March2009attheProteaHotelLivingstone.
Observationsprovedtobemorehelpfulthanfirstexpected,especiallyinsituations
that could sometimes be too chaotic to easily arrange an interview (e.g. markets).
Observationsweredoneatthefollowinglocations:
Location Purpose Date
BusridefromLusakatoLivingstoneand
LivingstonetoLusaka.
MainlyfortransportationtoLivingstone,butitalsoprovidedanopportunitytoobservetheroadbetweenLusakaandLivingstoneandtoseeiftravelingbybusissuitablefor
tourists.
18.03.2009and22.03.2009.
Livingstone.
Conductingobservationstofindoutmoreabouttheeconomicimpactsoftourismandthechallengesandopportunitiesitcauses.
Several,probably10+visitstoLivingstone.
Mosi‐oa‐TunyaNationalPark.
Myaccommodationwassituatedinsidethenationalpark.AlthoughIcouldnotobservethewholeparkfromthislocation,Ididgetanoverviewoftheparkandwasableto
observeoneofthemostpopularactivitiesinthepark,whichistheelephantriding.
18.03.2009–22.03.2009.
LivingstoneAirport.
Togetafeelofthesizeoftheairport,whatstateitwasin,andobservethedifferent
typesofvisitors.
05.04.2009.
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VictoriaFallsBridge. Observingtourists,activitiesandstreetsalesmenontheVictoriaFallsbridge.
09.04.2009.
VictoriaFallsWorldHeritageSite.
Observingthetourists,craftsmenatthesouvenirmarket,etc.Collectinginformation
aboutentrancefees.
09.04.2009.
KazungulaFerrycrossing
WentovertheKazungulaFerrycrossingforatwo‐daytriptoBotswana.However,thisalsoallowedmetoobservethewaitingtimes,customsprocedures,ferry,andotherdifficultieswhentravelingto/from
Botswana.
17.04.2009and19.03.2009.
3.6Ethicalconsiderations
According to Scheyvens and Nowak, “the research process must ensure the participants
dignity,privacyandsafety”(Scheyvens,Storey,etal.2003,p.140).Informantswerealways
informedaboutthefollowingpoints:
• Thepurposeoftheresearch.• WhoIwasandwhyIwasconductingthestudy.• Howthedatacollectedwouldbeusedandpublished.• Thattheinformantcouldchoosetoremainconfidential.• My contact information if theywished, in case theywould like towithdraw their
statement(s).• Thattheinformantcouldreceiveacopythefinalizedresearchpaper.
In regards to the participants safety I did not follow any special precautions other than
commonsense.Mytopicofresearchisnotofthekindthatusuallyputspeopleindangerfor
expressingtheiropinions.However,sometimesresearchersunknowinglyput informants in
dangerbecauseofcultural, socialorpoliticaldifferences. Itcanbearguedthat informants
have the right to be credited for information provided, but since none of the informants
specifically requested to have their name in the report I chose to anonymize everyone.
(seminarinUTV2100,10.02.2009,UniversityofOslo).
4.TourisminLivingstone
4.1Sitesandattractions
Livingstoneissituatedinthesouth‐westernpartofZambia,approximately11kmfromthe
VictoriaFalls.ThetownofLivingstonewasestablishedin1905andnamedafterthefamous
BritishexplorerDr.DavidLivingstone.BeforethecapitalofNorthernRhodesia1wasmoved
from Livingstone to Lusaka in 1935, the townwas amajor European settlement (Zambia
TourismBoard,n.d.).In2000,thetownwasthe8thlargestinZambiawithapopulationof97
1ThenamewaschangedtoZambiauponindependencein1964(CentralIntelligenceAgency,2009).
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4882. Livingstone is almost entirely based around tourism activities, and has increasingly
been preferred by tourists over the once more popular town of Victoria Falls in nearby
ZimbabweduetotheMugaberegime(Mpofu,2009;Hamilton,etal.,2007,p.8).
Figure 3 – Map of Livingstone and surroundings. http://www.maps.google.com
TheVictoriaFallsweredesignatedaWorldheritagesite in1989 (EncyclopædiaBritannica,
2009), and are generally considered one of the top tourist destinations in Africa (Zijlma,
n.d.).However,Zambiaisstillonlyreceiving3%ofsub‐SaharanAfricantourists(Hamilton,et
al.,2007,p.5).Thepotential for increasingthenumberofvisitors is thereforesubstantial.
The Mosi‐oa‐Tunya National Park lies only a few kilometers outside of Livingstone. The
nationalparksareaisamere68squarekilometersanditonlycontainsthreeofthe“big5”3
(ZambianWildlifeAuthority,n.d.).However, ithas inpreviousyearsbeenthemostvisited
nationalparkinZambia,andhasonlyinrecentyearsbeensurpassedbytheSouthLuangwa
NationalPark(Hamilton,etal.,2007,p.9).
In a studyby theNaturalResourcesConsultativeForumconducted in cooperation
withtheWorldBank,54%oftouristssaidtheyhadtheVictoriaFallsastheirmainintention
ofvisitingZambia(Hamilton,etal.,2007,p.9).Zambia’swildlifeattracted28%oftourists,
whileadventure tourismaccounted for5%.BecauseofLivingstone’shighconcentrationof
2PopulationcensusbytheCentralStatisticalOfficeZambiain2000.Web:http://www.citypopulation.de/Zambia.html&http://www.zamstats.gov.zmCited:15.04.2009. 3Atermthatencompasseslion,elephant,buffalo,blackrhinoandhippo.
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adventure‐related activities, it is likely that most of these visitors travel to Livingstone.
AccordingtoHamiltonetal. (2007,p.9)andstatisticsobtainedfromtheZambianWildlife
Authority [ZAWA] (informant no. 1), the Mosi‐oa‐Tunya National Park received 19 972
visitors in2005,onlybehindSouthLuwangaNationalParkwith25814,andwellaheadof
thirdmostvisitednationalpark,KafueNationalParkwith6202visitors.
The Victoria FallsWorld Heritage Site received a total of 156 612 visitors in 2007
(statisticgatheredfrominformantno.8attheNationalHeritageConservationCommission).
Of these, 110 790 were Zambian and 44 267 were non‐Zambian. The actual number of
touristsviewing theVictoriaFalls couldpossiblybemuchhigher though.TheVictoriaFalls
canalsobeviewedforfreefromtheVictoriaFallsBridge.TheVictoriaFallsWorldHeritage
Site however, allows the falls to be viewed from a much closer distance. There is
unfortunatelynodataonthenumberoftouristsvisitingtheVictoriaFallsBridge.Fromthe
statistics presented in this chapterwe canestimate that Livingstoneprobably attracts 60‐
70% of international tourists visiting Zambia (this is however just an estimate and is not
confirmed).
TheactivitiesandattractionsofferedaremainlybasedontheVictoriaFallsandthe
Mosi‐oa‐Tunya National Park, and include safaris, elephant rides, bungee‐jumping, white
water rafting, river cruises, fishing, and mircolight and helicopter flights over the falls.
According to informant no. 6 at the LTA, a smaller percentage also come for the areas
history.LivingstonealsoofferstheLivingstoneMuseum,whichhoweverreceivesfewvisitors
(Mateke,2002),andtheMukunivillagewhichofferstouriststheexperienceofatraditional
Zambiavillage.TheVictoriaFallsandMosi‐oa‐TunyaNationalParkarethereforevitalforthe
area.InthewordsofasouvenirsalesmaninterviewedontheVictoriaFallsBridge,“weare
veryluckytohavetheVictoriaFallshere.Withoutthemwewouldhavenothing”(informant
no.7).TherewasabroadconsensusamongalltheotherinformantsaswellthattheVictoria
FallsareextremelyimportantforattractingtouriststotheLivingstonearea.
4.2Visitors
There is unfortunately no specific data available on the number of tourist arrivals in
Livingstone.ByusingsomeotherrelevantstatisticsIcanhowevermakearoughestimateof
visitor arrivals. According to the Ministry of Tourism, Environment & Natural Resources
(2008,p.9)therewere668862internationalvisitorstoZambia in2005,ofwhich176104
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couldbeclassifiedasnaturetourists4(Hamiltonetal.,2007,p.6).By2007,thenumberof
international visitors had risen to 897 413 (Ministry of Tourism, Environment andNatural
Resources, 2008, p. 9). The origin and purpose of visit for these international visitors is
showninthetablebelow(ibid):
Areaoforigin
Holiday Business Conference Study VFR5 Other Total
Africa 125793 270984 36680 8769 98660 119665 660551Europe 43950 46666 11844 2980 23184 17105 145729Americas 20579 12469 3859 1207 5855 6637 50606Asia&Oceania
13721 10434 2913 1132 5779 5578 40527
Total 204043 340553 55296 14088 133478 148985 897413
The next table shows the number of visitors entering the border posts that are in close
proximityofLivingstone.
VictoriaFalls Livingstoneairport Kazungula KatimaMulilo Total89440 73539 79871 49823 292673
According to Hanyona (2002), there were 300 000 visitors to the Victoria Falls on the
Zambian side in 2001 (although there is no year provided, so this is only an assumption
basedon the restof thearticle). Ifwe take the large increase in international visitors the
previous years into account,we canbequite sure that thenumber is higher today.At its
peak in the early 1990s, the town of Zimbabwe received over 800 000 tourists annually
(Hamilton,etal.,2007,p.8),andwiththedeclineoftouriststoZimbabwethelastfewyear
(Mpofu, 2009) the number of tourists visiting Livingstone could be 400‐500 000 per year
(including visitors for business and conferences, which according to the UNWTO also is
countedastourism).
5.Economicimpacts
Therewasabroadconsensusamongthe informantsthattheMosi‐oa‐TunyaNationalPark
and the Victoria Falls are the main source of revenue for the area. Even though the
informantswerechosenfromquitedifferentoccupationsandsocialstatuses,theeconomic
impactoftourismwassomethingtheyallrecognizedtobevital.
4AccordingtoasurveybyHamiltonetal.(2007,p.9),approx.88%oftouristsvisitingZambiacanbeclassifiedasnaturetourists.5Visitingfriendsand/orrelatives.
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5.1DirectincomeoftheVictoriaFallsandMosi‐oa‐TunyaNationalPark
TheZambianWildlifeAuthority [ZAWA] is administering theMosi‐oa‐TunyaNational Park,
while theNationalHeritageConservationCommission [NHCC] isadministering theVictoria
FallsWorldHeritageSite.ZAWAemploys62uniformedofficersandasupportivestaffof18
(interviewatZAWA, informantno.1).Accordingto the informant,ZAWA’smaineconomic
impactisthroughvariousfeescollectedfromthepark,whichinmostpartarefunnelledto
the government. Another economic impact is the conservation of the national park to
ensure that future generations also can benefit from the tourism revenue the park
generates.ZAWA’stotalrevenuefromtheMosi‐oa‐TunyaNationalParkfor2008amounted
to 602 253,47USD (ZAWA, 2009). Althoughnot amassive number by itself, this is only a
smallportionofthetotalrevenuetheareaiscollectingfromtourism.
AnestimateIhavecalculatedshowsthatTheNHCCpotentiallycollectedupto4426
700,00USD inrevenuethroughtheVictoriaFallsNationalHeritageSitefromnon‐Zambian
tourists in2007,whilerevenuefromZambianresidentswaspotentiallyupto46109USD6
(interview with informant no. 8 at the National Heritage Conservation Commission). It is
howeverimportanttomentionthatthesecalculationstakeintoaccountthatallvisitorsare
adults. The price for children’s entrance is 5 USD instead of 10 USD for adults for non‐
residents and 1080 Zambian Kwacha [ZMK] for children instead of 2160 ZMK for adult
residents.Theactualrevenuecollectedisthereforelowerthanthefiguresprovided.During
my observations in Livingstone, theMosi‐oa‐Tunya National Park, the Livingstone airport
and theVictoriaFalls Ididhoweverobserve few foreign touristswithchildren. I therefore
believethattherevenuecouldbearound3600000USDassumingthat20%ofvisitorsare
children. This is only an estimate. A detailed visitors report that separates adults and
childrenwasunfortunatelynotavailabletome.
5.2Indirectincome
While theVictoriaFallsWorldHeritageSiteandtheMosi‐oa‐TunyaNationalParkcollecta
fairamountofmoneyfromentrancefeesandtaxes,itistherevenueofthehotels,lodges,
touroperators,restaurants,stores,etc.thatgeneratemostoftheincomeforthearea.Ina
reportby theNaturalResourcesConsultativeForum(Hamilton,etal.,2007,p.5‐6), itwas
calculated that around 25% of international visitors could be classified as nature tourists.
ThismeansthattheyvisitedZambiawiththemainintentionofexperiencingZambia’snature
attractions.AccordingtoHamiltonetal.(2007,p.5),“...eachofthesenaturetouristsspent 6ConvertedfromZambianKwacha(ZMK)toUSDollars.ExchangeRate1USD=5190ZMK,21.05.2009.
15
about $1,100, generating a direct and indirect impact of nearly $2,300 in GDP, $1,300 in
wagesandnetincomeofunincorporatedbusiness,$420intaxrevenue,and$425inimports
ofgoodsandservices”.Thespendingof these touristsamountedto194millionUSD,with
themultipliereffectscominginaddition,whichthereportclaimswilldoublethenumber.If
we use the estimate made in section 4.1 that 60‐70% of international tourist arriving in
Zambiatravel toLivingstone, thenthismeansthatanapproximateof250‐280millionUSD
werechannelled throughLivingstonearea fromnature touristsonly in2005. Ifwe include
business and conference visitors, the number will be even higher. It is however again
importanttonotethattheseareestimatesonly.Leakagesmustalsobetakenintoaccount,
such as profits from many of the foreign‐owned hotels flowing out of the country and
importsoffood,drinksandothergoods.
6.Economicbenefitsanddisadvantages
Astudyofthis limitedsizecannotencompassall theeconomicbenefitsanddisadvantages
that tourismmighthave for theLivingstonearea. Ihave thereforechosen to focuson the
issuesthatIthroughinterviewsandobservationsfoundtobethemostimportant.Itisalso
importanttonotethatifthesocio‐economic,environmentalandculturalimpactsoftourism
wereevaluated alongside theeconomic impacts, thebenefits anddisadvantages couldbe
quitedifferentthaninthisstudythatfocusesontheeconomicimpactsonly.
6.1Increasedgovernmentearnings
6.1.1Economicbenefits
In section5.1 I estimated that the revenueof ZAWAand theNHCCwas approx. 4million
USD in 2008, but possibly higher.Most of this revenue is according to informant no. 1 at
ZAWA channeled to the government. Although hotels, guesthouses, tour operators, etc.
havenotbeenchargedVAT7thelastfewyearsasanincentivetoinvestintourismexpansion
(informantno.6atLTA;informantno.10atThorntreeLodge),thegovernmentstillbenefits
fromothertaxes,importdutiesandvisacosts(thetotalmacroeconomiceffectsofvisacosts
are however disputed). According to informant no. 6 at the LTA, the effects of the VAT
exemption for the tourism industry inLivingstonehasmorebenefits thandisadvantages if
one looks at the broad economic perspective. While the LTA is an organization that
promotes tourism and therefore is positive to theVAT exemption, I do agree on theVAT
exemption at least on a short termbasis of 5‐10 years. Zambia is expensive compared to
7Valueaddedtax.
16
neighboringcountriesandtheVATexemptioncanhelpinreducingthepricedifferences.Itis
unfortunatelynotpossibletocalculatetheamountofmoneygained/lostbecauseoftheVAT
exemptionduetoalackofdata.
EvenwhenconsideringtheVATexemption,thegovernmentsearningsfromtourism
shouldstillbequitesubstantial,consideringthatthe176000naturetouristsvisitingZambia
in 2005 contributed to 7% of government revenue when direct and indirect linkages are
counted.Ifweincludebusinessandconferencevisitors,andthefactthattherehasbeenan
increasefrom668862internationalvisitorsin2005to897413internationalvisitorsin2007,
tourismisdefinitelyaveryimportantpartofgovernmentearningsandaneconomicbenefit
totheLivingstonearea.
6.1.2Economicdisadvantages
Tourismcan inrarecaseshaveeconomicdisadvantagesforgovernmentearnings.Thiscan
occurifthecostofmaintaininginfrastructurefortourismisveryhigh,ifmostofthetourism
revenue is leakedoutof the country, tourismcreateshigh inflationby raisingprices, or if
tourismdivertsinvestmentsandlaborfromothersectorsmorebeneficialforthatparticular
countryorarea(Mathieson,Wall,1990).ForLivingstonehowever,thecaseisclearthatthe
economicbenefitsfaroutweightheeconomicdisadvantagesthattourismmightbring.Inthe
viewofinformantno.6atLTA,“IfitwerenotfortheVictoriaFallsandthepark,itwouldbe
likewhatweusuallycallghosttowns,becauseyoudon’tfindareason,aneconomicreason
thatiskeepingthetownactive”.Thisisalsotheviewofalltheotherinformantsinterviewed.
A town that has no economic activity cannot bring in government earnings. The case is
thereforeclearthattourismoverallisbeneficiaryforincreasinggovernmentearnings.
6.2Jobcreation
6.2.1Economicbenefits
According to informantno.6at LTA, “themainprivate sectorbusiness is just tourism, for
Livingstone”. Through direct and indirect linkages, most of the businesses are therefore
dependentontourism.Whilejobsinthetourismandservicesectorsometimespaylessthan
other sectors such as manufacturing (Mathieson, Wall, 1990), the wages in Zambia are
generallyquite lowandmost informantsmentionedthatpeoplearehappytoevenhavea
job. Informal conversations and interviews (informant no. 4; informant no. 7) with locals
17
working in the informal sector8 reveals that a significant percentage of the people in the
Livingstone area make a living from stray jobs, selling arts and crafts to tourists, money
changing, various repair services, etc. Identifying the exact percentage of the population
that isdependenton the informalsectorwouldrequireamorecomprehensivestudy. It is
thereforeuncertainhowmuchofthepopulationreallyisdependentontheinformalsector.
Itishoweverclearthattheinformalsectorisalmostentirelybasedaroundtourismthrough
direct or indirect linkages. According to Vanhove (2005) and the UNWTO (n.d., p. 1‐2)
tourism is also beneficial for micro scale entrepreneurs, such as artists starting small
souvenirshops.
AreportbytheWorldTravel&TourismCouncil(2009,p.4),expects72000jobsin
Zambiatobegenerateddirectlyand indirectly fromtourism in2009, representing4,1%of
totalemployment(WorldTravel&TourismCouncil,2009,p.4).Ifweuseestimatesmadein
section4.1 and4.2, thenbetween44000and50000 jobs in Livingstonearedirectly and
indirectly generated from the tourism sector. These are however estimates and are not
confirmedbystatisticaldata.Asmentionedinsection1.1,theUNWTOstatesthattourism‐
related jobsare labor intensive,andgenerallyrequire littletraining.This issupportedbya
studyinMexicobyBondandLadman(1972,p.46)whereinvestmentsinthetourismsector
createdover50%morejobsthaninvestmentsinthepetroleumindustryandmetalproducts
industry.AccordingtoMathiesonandWall(p.43),“thelabourrequirementsofthetourist
industry are often especially suited to conditions prevailing in developing countries”. In
total,tourismhasapositiveeconomicimpactonjobcreationintheLivingstonearea.
6.2.2Economicdisadvantages
Tourism in Livingstone has seasonal variances, as is the case in most other tourism
destinations in the world (Vanhove, 2005, p. 177). While the variances might not be as
extremeasforexample inskiresorts;statisticsfromtheMinistryofTourism,Environment
and Natural Resources (2008, p. 13) still show a difference of 69 152 visitors between
January(113279)andFebruary2007(44127).Therearehoweveronlythreemonthsofthe
year with less than 70 000 visitors, so the differences are not always this extreme.
Diversifyingtheeconomycouldprovidejobsindifferentsectorsthatcouldensurejobsyear‐
round. However, the Livingstone area offers few jobs in other sectors than tourism
(informant no. 6; informant no. 9; informant no. 10). Problems observed such as a low
percentage of higher education in Livingstone and Zambia in general (CIA, 2009),
8"Thenon‐structuredsectorthathasemergedintheurbancentresasaresultoftheincapacityofthemodernsectortoabsorbnewentrants"(ILOandUNDP,1972).
18
investmentsavailablearelow(informantno.10)andthefactthemainroutestoLivingstone
eithergoviatheVictoriaFallsBridgewhichhasweightrestrictions,theKazungulaferrylink
toBotswanawhere trucksoftenwait in line fordays,or the for themostpart inadequate
road to Lusaka (data gathered from observations and interviews) all cause challenges for
settingupexport‐oriented industrialproduction.Farmingwouldcouldbeanalternativeto
tourism, but has its own seasonalities. In addition, the Livingstone area is according to
informants (informant no. 4; informant no. 5; informant no. 6; informant no. 7) and
observationsquitesandywithsoilnotwellsuitedforagriculture.
6.3Improvedinfrastructure
6.3.1Economicbenefits
MathiesonandWall(1990)andVanhove(2005)claimthattourisminmostcasesincreases
the need for expanded and modernized infrastructure such as roads, electricity, water,
sanitation,airports,and inmore recentyears internetand telecommunicationaccess.The
expansion in infrastructurecanasnoted in section1.1 (UNWTO,n.d.,p.1‐2)benefitpoor
communitiesandthegeneralareawheretourismisconducted.Mostinformantsagreedthat
theinfrastructurehasbeenimprovedasaresultoftourism,butwerenotentirelyconvinced
of the short‐term benefits it has for the local population. Notable infrastructure
improvements the last few years have been in the field of internet access and
telecommunications. From observations and interviews I learned that it was first and
foremost the tourism industry thatwentonline, and that the rest of the sectors followed
after.Roadstoandfromthetouristattractionsareusuallyofaboveaveragestandard.
6.3.2Economicdisadvantages
Even though tourism increases the need for infrastructure, it does not always benefit the
localpopulation,andcaninsomecasesbeaneconomicdisadvantagetothearea,especially
iftourismishighlyseasonal(Mathieson,Wall,1990;Vanhove,Norbert,2005,p.177).More
infrastructurealso requireshighermaintenancecosts.While Iwasnotable toanalyze the
stateandcostofmaintainingtheinfrastructureinLivingstone;interviewsandobservations
have given me at least a partial view of the situation. In general, the road network in
Livingstone is inadequate. Potholes are frequent, andmany of the roads in town are not
paved.Theroad toVictoriaFallsand theMosi‐oa‐TunyaNationalParkarehoweverpaved
andinmuchbetterconditionthanthedirtroadsinpartoftown.Abiastowardthetourism
areasdoesexisthere,anditdoesnotseemlikethelocalpopulationgainsthatmuchfrom
improvedroads.Inregardstoelectricity,waterandsanitationitisdifficultformetomakea
19
conclusion du to little data and uncertainty of informants knowledge about the total
situation. However according to informants no. 3, 4, 5 and 7, who live in poorer areas
around Livingstone, not much of the infrastructure improvements have reached them
directly. But they seem to be optimistic about the benefits of improved infrastructure
reachingtheminthefuture.IntotalIwouldsaythatwhileimprovedinfrastructurehashad
aneconomicbenefitonthetourismsectorintheLivingstonearea,thebenefitsforthelocal
populationarenotasclear.ThiscouldhoweverchangeiftourismenablestheGDPinZambia
toriseandthegovernmentcanprovidebetterinfrastructureforall.
6.4Macroeconomicstabilityandothereffects
6.4.1Economicbenefits
AccordingtoMathiesonandWall(1990,p.44‐45),thealternativeforeignexchangeearner
for developing countries is generally the export of primary products9. The price for these
primaryproductsisgovernedbytheworldmarket.Zambiaisamajorcopperexporter,but
the drastic price falls the last years have made the situation difficult for this sector
(informant no. 1; 3; 6; 8). Tourismon the other hand has aswe have seen in section 4.2
steadilyincreased,exceptforthesecondhalfof2008duetotheglobalfinancialturmoil(EAZ
conference,26.03.2009).Thishashoweverhadaneffectonallsectors,notonlytourism.As
seen in section 6.2.1, the tourism sector employs over 50% more people for a given
investmentthanthepetroleumindustryormetalproductsindustry.Tourismgenerallyalso
createsmorelinkages,andthereforeincreasedtourismgrowthwillhaveaneffectonother
industries as well (Vanhove, 2005). For the Livingstone area, tourism creates
macroeconomicstability,andkeepsinvestmentsflowingin(althoughthesizeofthemcould
accordingtoinformantsbehigher).Beingsituatednexttoaworldheritagesite, it ishighly
unlikelythattouristssuddenlywillstopcoming.TourismtotheVictoriaFallsandtheMosi‐
oa‐TunyaNationalParkcanthereforeberegardedasaresourcethatwillgeneratejobsand
incomeforfuturegenerationsiftheyaremanagedproperly(informantno.1atZAWA)and
contributetoLivingstonebeinga“safe”destinationtoinvestin.
6.4.2Economicdisadvantages
AccordingtoinformantsandLimwanya(n.d.),rentandhousingpriceshaverisenduetonew
hotels and expanded tourism in Livingstone. The expanded tourism sector has brought in
newjobs,butthishasalsocausedpressureonthehousingmarket,andpriceshavegoneup.
9Rawmaterialsandfoodstuffs.
20
Houses that could have been rented out are often turned into guest houses or sold to
investors.Thechallengewillthereforebeforthegovernmenttobuildadditionalhousingto
combatthe increasedprices.AccordingtoVanhove(2005,p.175‐176,therise in landand
rent prices actually has a positive netmacroeconomic benefit for an area, but thosewho
ownnolandlooseout.Anotherimplicationoftourismcanbeincreasedinflation.Whilethis
can be connected to the rising housing prices, there is really no data for inflation in
Livingstone.Vanhove(2005,p.174‐175)claimsthattheincreaseinpricesoftenonlyoccurin
certainareasandcertaingoods.IfIwastomakeanassumptionIwouldsaythesameisthe
caseforLivingstone.Ididnotreallyhearmuchaboutinflationfromanyoftheinformants,
soIdonotrecognizeitasasignificantproblem,eventhoughIcannotruleitout.
7.Conclusion
ThisstudyhasshowedthattheVictoriaFallsandMosi‐oa‐TunyaNationalParkhaveamajor
impact on the economy of the Livingstone area by generating tourism‐related income.
Interviews and observations have revealed that without tourism there would be little
incomegeneratedinthearea.Therearefewalternativestotourismdutothegeographical
position, infrastructure and educational levels. The analysis has showed that the net
economicbenefitoftourismintheLivingstoneareaismainlypositiveinregardstoincreased
government earnings, job creation, infrastructure and macroeconomic stability. It is
however important to note that this study only considers the economic benefits and
disadvantages. A study thatwould have encompassed the socio‐economic, environmental
andculturalimpactswouldperhapshaverevealeddifferentresultsthanthisstudyhas.
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